-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Oi1Zy5syyHhz4WAgkvleJdtAlrD4WJjJ0mLC2hwXH6eGKxHhML3RtKRQf6w4PXav SnH2YWymMJsMAtNutiLySA== 0000950144-98-012434.txt : 19981113 0000950144-98-012434.hdr.sgml : 19981113 ACCESSION NUMBER: 0000950144-98-012434 CONFORMED SUBMISSION TYPE: S-4/A PUBLIC DOCUMENT COUNT: 7 FILED AS OF DATE: 19981112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: COX RADIO INC CENTRAL INDEX KEY: 0001018522 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 581620022 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4/A SEC ACT: SEC FILE NUMBER: 333-61179 FILM NUMBER: 98745439 BUSINESS ADDRESS: STREET 1: C/O COX ENTERPRISES INC STREET 2: 1400 LAKE HEARN DR CITY: ATLANTA STATE: GA ZIP: 30319 BUSINESS PHONE: 4048435000 MAIL ADDRESS: STREET 1: C/O COX ENTERPRISES INC STREET 2: 1400 LAKE HEARN DR CITY: ATLANTA STATE: GA ZIP: 30319 S-4/A 1 COX RADIO, INC. 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 12, 1998 REGISTRATION NO. 333-61179 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- AMENDMENT NO. 1 TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- COX RADIO, INC. (Exact name of Registrant as specified in its charter) DELAWARE 4832 58-1620022 (State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification incorporation or organization) Classification Code Number) Number)
1400 LAKE HEARN DRIVE, N.E., ATLANTA, GEORGIA 30319 (Address, including zip code, and telephone number, including area code, of Registrant's principal executive office) --------------------- MARITZA C. PICHON CHIEF FINANCIAL OFFICER COX RADIO, INC. 1400 LAKE HEARN DRIVE, N.E. ATLANTA, GEORGIA 30319 (404) 843-5000 (Name, address, including zip code, and telephone number, including area code, of Registrant's agent for service) --------------------- PLEASE ADDRESS A COPY OF ALL COMMUNICATIONS TO: STUART A. SHELDON, ESQ. DOW, LOHNES & ALBERTSON, PLLC 1200 NEW HAMPSHIRE AVENUE, N.W. WASHINGTON, D.C. 20036 (202) 776-2000 --------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after this Registration Statement becomes effective. --------------------- If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. [X] CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF TO BE REGISTERED REGISTERED PRICE PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE(2) - -------------------------------------------------------------------------------------------------------------------- 6.250% Notes due 2003............ $100,000,000 100% $100,000,000 $29,500.00 6.375% Notes due 2005............ $100,000,000 100% $100,000,000 $29,500.00 - --------------------------------------------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457 of the Securities Act of 1933, as amended. (2) Previously paid. --------------------- THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 EXPLANATORY NOTE This Registration Statement covers the registration of the $100,000,000 aggregate principal amount of 6.250% Notes due 2003 (the "2003 Notes") and of the $100,000,000 aggregate principal amount of 6.375% Notes due 2005 (the "2005 Notes" and, together with the 2003 Notes, the "New Notes"), which are being issued by Cox Radio, Inc. (the "Company") in exchange for 6.250% Notes due 2003 and the 6.375% Notes due 2005 with terms substantially identical to the New Notes (collectively, the "Old Notes"). The Old Notes were previously issued and sold by the Company in an offering exempt from the registration requirements of the Securities Act of 1933, as amended. The complete Prospectus contained herein relates to the issuance and exchange of the New Notes for the Old Notes. ii 3 PROSPECTUS SUBJECT TO COMPLETION DATED NOVEMBER 12, 1998 (COX RADIO INC. LOGO) OFFER TO EXCHANGE 6.250% NOTES DUE 2003 AND 6.375% NOTES DUE 2005 WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT FOR ANY AND ALL OUTSTANDING 6.250% NOTES DUE 2003 AND 6.375% NOTES DUE 2005 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 14, 1998, UNLESS EXTENDED Cox Radio, Inc. ("Cox Radio" or the "Company") hereby offers, upon the terms and subject to the conditions set forth in this Prospectus and the accompanying Letter of Transmittal (which together constitute the "Exchange Offer"), to exchange $1,000 principal amount of 6.250% Notes due 2003 (the "2003 New Notes") and $1,000 principal amount of 6.375% Notes due 2005 (the "2005 New Notes" and, together with the 2003 New Notes, the "New Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement (as defined herein) of which this Prospectus constitutes a part, in exchange, respectively, for each $1,000 principal amount of 6.250% Notes due 2003 (the "2003 Old Notes") and $1,000 principal amount of 6.375% Notes due 2005 (the "2005 Old Notes" and, together with the 2003 Old Notes, the "Old Notes" and, collectively with the New Notes, the "Notes"), respectively. As of the date of this Prospectus, $100,000,000 aggregate principal amount of 2003 Old Notes and $100,000,000 aggregate principal amount of 2005 Old Notes are outstanding. The form and terms of the New Notes are the same in all material respects as the form and terms of the Old Notes for which they are to be exchanged, except that (i) the issuance of the New Notes will have been registered under the Securities Act and, therefore, the New Notes will not bear legends restricting the transfer thereof and (ii) holders of the New Notes will not be entitled to certain rights of holders of Old Notes under the Registration Rights Agreement (as defined herein). The New Notes will evidence the same debts as the Old Notes (which they replace) and will be issued under and be entitled to the benefits of the Indenture dated as of May 26, 1998 (the "Indenture") by and between the Company and The Bank of New York, as Trustee (the "Trustee"), governing the Old Notes. See "The Exchange Offer" and "Description of the Notes." The Company will accept for exchange any and all Old Notes that are validly tendered on or prior to 5:00 p.m., New York City time, on the Expiration Date. The Exchange Offer is not conditioned upon any minimum aggregate principal amount of Old Notes being tendered for exchange. However, the Exchange Offer is subject to certain conditions, which may be waived by the Company, and to the terms and provisions of the Registration Rights Agreement. Old Notes may be tendered only in denominations of $1,000 and integral multiples thereof. The Exchange Offer will expire at 5:00 p.m., New York City time, on December 14, 1998 (the "Expiration Date"), unless the Company, in its sole discretion, extends the Exchange Offer (in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended). Old Notes tendered pursuant to the Exchange Offer may be withdrawn at any time prior to 5:00 p.m. New York City time on the business day prior to the Expiration Date; otherwise such tenders are irrevocable. SEE "RISK FACTORS" BEGINNING ON PAGE 18 FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PARTICIPANTS IN THE EXCHANGE OFFER. --------------------- THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The New Notes are redeemable, at the option of the Company, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of their principal amount and (ii) the sum of the present values of the principal amount and the remaining scheduled payments of interest thereon, discounted to the redemption date on a semiannual basis at the Treasury Rate (as defined herein) plus 10 basis points in the case of the 2003 New Notes and 15 basis points in the case of the 2005 New Notes, plus in either case, accrued interest thereon to the date of redemption. See "Description of the Notes." The New Notes will mature on May 15, 2003 with respect to the 2003 New Notes and May 15, 2005 with respect to the 2005 New Notes, unless redeemed prior thereto. The New Notes are senior unsecured obligations of the Company and rank pari passu with all existing and future unsecured and unsubordinated obligations of the Company. Each of the Company's existing or future subsidiaries (the "Note Guarantors") that guarantees amounts payable by the Company under the Credit Agreement (as defined herein) or under any future senior, unsecured credit facility between the Company and its lenders thereunder will fully and unconditionally guarantee (each, a "New Note Guarantee") all amounts payable under the New Notes as long as such Subsidiary is a guarantor under the Credit Agreement or such future credit facility. The New Note Guarantees, if any, will be senior unsecured obligations of the applicable Note Guarantors and will rank pari passu with all existing and future unsecured and unsubordinated obligations of such Note Guarantors. The New Note Guarantees, if any, will be the same in all material respects as the form and terms of the guarantees in respect of the Old Notes. The initial note guarantors for the Old Notes were WSB, Inc. and WHIO, Inc., each a Delaware corporation (collectively, the "Initial Note Guarantors"). WSB, Inc. was merged with and into the Company on November 10, 1998 and WHIO, Inc. was merged with and into the Company on November 1, 1998, and, therefore, are no longer Note Guarantors. As of the date of this Prospectus, the Notes do not have the benefit of any Note Guarantees. November 12, 1998 4 (Cover page continued) The Exchange Offer is being made to satisfy certain obligations of the Company under the Registration Rights Agreement dated as of May 26, 1998 (the "Registration Rights Agreement") among the Company, the Initial Note Guarantors and NationsBanc Montgomery Securities LLC ("NationsBanc"), Chase Securities Inc. ("Chase") and J.P. Morgan Securities Inc. ("J.P. Morgan" and together with NationsBanc and Chase, the "Initial Purchasers"). Upon consummation of the Exchange Offer, holders of Old Notes that were not prohibited from participating in the Exchange Offer and did not tender their Old Notes will not have any registration rights under the Registration Rights Agreement with respect to such untendered Old Notes and, accordingly, such Old Notes will continue to be subject to the restrictions on transfer contained in the legend thereon. Based upon interpretations by the staff of the Securities and Exchange Commission (the "Commission") set forth in certain no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than a broker-dealer, as set forth below, or any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act of 1933, as amended (the "Securities Act")) without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business and that such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes. See "The Exchange Offer -- Resale of the New Notes." Holders of Old Notes wishing to accept the Exchange Offer must represent to the Company, as required by the Registration Rights Agreement, that such conditions have been met and that such holder is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act. Each broker-dealer that is the beneficial owner (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act")), of New Notes for its own account pursuant to the Exchange Offer (a "Participating Broker-Dealer") must represent that the Old Notes tendered in exchange therefor were acquired as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of up to 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes or who is an affiliate of the Company may not rely on the position of the staff of the Commission enunciated in no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. No affiliate of the Company may rely on such no-action letters and any such affiliate must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. The Company has not entered into any arrangement or understanding with any person to distribute the New Notes to be received in the Exchange Offer. The Old Notes were originally issued and sold on May 26, 1998 in an offering of $200,000,000 aggregate principal amount of the Old Notes (the "Offering"). The Offering was exempt from registration under the Securities Act in reliance upon the exemptions provided by Rule 144A under the Securities Act and Section 4(2) of the Securities Act. Accordingly, the Old Notes may not be reoffered, resold or otherwise pledged, hypothecated or transferred in the United States unless so registered or unless an exemption from the registration requirements of the Securities Act and applicable state securities laws is available. Upon completion of the Exchange Offer, Old Notes which have not been exchanged for New Notes will remain outstanding. See "The Exchange Offer -- Consequences of Failure to Exchange." i 5 The Company will not receive any proceeds from the Exchange Offer. There has not previously been any public market for the Old Notes or the New Notes. The Company does not intend to list the New Notes on any securities exchange or to seek approval for quotation through any automated quotation system. The Initial Purchasers (as defined herein) indicated to the Company that they intend to effect offers and sales of the New Notes in market-making transactions at negotiated prices related to prevailing market prices at the time of sale, but are not obligated to do so and such market-making activities may be discontinued at any time. The Initial Purchasers may act as principal or agent in such transactions. There can be no assurance that an active market for the New Notes will develop or that such trading market will be liquid. See "Risk Factors -- Lack of Public Market for the Notes." Moreover, to the extent that Old Notes are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Old Notes could be adversely affected. THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE OBLIGOR ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION. NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE ACCOMPANYING LETTER OF TRANSMITTAL NOR ANY EXCHANGE MADE HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE HEREOF. --------------------- TABLE OF CONTENTS Available Information....................................... iv Incorporation of Certain Documents by Reference............. iv Prospectus Summary.......................................... 1 Pro Forma Combined Statement of Operations.................. 15 Certain Definitions and Market and Industry Data............ 17 Risk Factors................................................ 18 Use of Proceeds............................................. 22 Capitalization.............................................. 23 The Company................................................. 24 Business.................................................... 25 Legislation and Regulation.................................. 36 Management.................................................. 37 Security Ownership of Certain Beneficial Owners............. 38 Description of Certain Indebtedness......................... 39 The Exchange Offer.......................................... 40 Description of the Notes.................................... 50 Certain United States Federal Income Tax Considerations..... 61 Plan of Distribution........................................ 67 Legal Matters............................................... 67 Experts..................................................... 67
ii 6 CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS THIS PROSPECTUS INCLUDES "FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF SECTION 27A OF THE SECURITIES ACT OF 1933, AS AMENDED, AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED. ALL STATEMENTS REGARDING THE COMPANY'S AND ITS SUBSIDIARIES EXPECTED FINANCIAL POSITION, BUSINESS AND FINANCING PLANS ARE FORWARD-LOOKING STATEMENTS. ALTHOUGH THE COMPANY AND ITS SUBSIDIARIES BELIEVE THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-LOOKING STATEMENTS ARE REASONABLE, THEY CAN GIVE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE TO HAVE BEEN CORRECT. IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM SUCH EXPECTATIONS ("CAUTIONARY STATEMENTS") ARE DISCLOSED IN THIS PROSPECTUS, INCLUDING, WITHOUT LIMITATION, IN CONJUNCTION WITH THE FORWARD-LOOKING STATEMENTS INCLUDED IN THIS PROSPECTUS AND UNDER "RISK FACTORS." ALL SUBSEQUENT WRITTEN AND ORAL FORWARD-LOOKING STATEMENTS ATTRIBUTABLE TO THE COMPANY, ITS SUBSIDIARIES OR PERSON ACTING ON BEHALF OF ANY OF THEM ARE EXPRESSLY QUALIFIED IN THEIR ENTIRETY BY THE CAUTIONARY STATEMENTS. iii 7 AVAILABLE INFORMATION The Company has filed with the Commission a Registration Statement on Form S-4 (of which this Prospectus is a part and which term shall encompass any amendments thereto) pursuant to the Securities Act with respect to the Exchange Offer. As permitted by the rules and regulations of the Commission, this Prospectus does not contain all of the information set forth in the Registration Statement and the exhibits and schedules thereto. For further information about the Company and the Exchange Offer, reference is hereby made to the Registration Statement and to such exhibits and schedules. Statements contained herein concerning the provisions of any documents filed as an exhibit to the Registration Statement or otherwise filed with the Commission are not necessarily complete, and in each instance reference is made to the copy of such document so filed. Each such statement is qualified in its entirety by such reference. As of the date of this Prospectus, the Company is subject to the information reporting requirements of the Exchange Act. In addition, under the Indenture governing the Notes, the Company will be required to furnish to the Trustee and to registered holders of the Notes audited annual consolidated financial statements, unaudited quarterly consolidated financial reports and certain other reports. The Registration Statement, the exhibits and schedules forming a part thereof and the reports and other information filed by the Company with the Commission pursuant to the informational requirements of the Exchange Act may be inspected without charge and copied upon payment of certain fees at the public reference facilities maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the following Regional Offices of the Commission: New York Regional Office, Seven World Trade Center, 13th Floor, New York, New York 10048, and Chicago Regional Office, Northwestern Atrium, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. The Commission also maintains a World Wide Web site on the Internet at http://www.sec.gov that contains reports and other information regarding registrants that file electronically with the Commission. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE GENERAL The following documents filed by the Company with the Commission are incorporated into this Prospectus by reference: 1. The Company's Current Report on Form 8-K dated April 14, 1997 (Commission File No. 1-12187); 2. The Company's Annual Report on Form 10-K for the year ended December 31, 1997 (Commission File No. 1-12187); 3. The Company's Quarterly Report on Form 10-Q for the quarter ended June 30, 1998 (Commission File No. 1-12187); 4. The Company's Proxy Statement for the 1998 Annual Meeting of Stockholders filed pursuant to Section 14(A) of the Exchange Act; and 5. The Company's Current Report on Form 8-K dated June 4, 1998 (Commission File No. 1-12187). All documents subsequently filed by the Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and prior to the termination of this Exchange Offer shall be deemed to be incorporated by reference into this Prospectus and to be a part of this Prospectus from the date of filing of such document. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. As used herein, the terms "Prospectus" and "herein" mean this Prospectus, including the documents incorporated or deemed to be incorporated herein by reference, as the same may be amended, supplemented or otherwise modified from time to time. Statements contained in this Prospectus as to the contents of any iv 8 contract or other document referred to herein do not purport to be complete, and where reference is made to the particular provisions of such contract or other document, such provisions are qualified in all respects by reference to all of the provisions of such contract or other document. The Company will provide without charge to any person to whom this Prospectus is delivered, on the written or oral request of such person, a copy of any or all of the future documents incorporated by reference herein (other than exhibits, unless such exhibits are specifically incorporated by reference in such documents). Requests for such documents should be directed to: Maritza Pichon, Chief Financial Officer, Cox Radio, Inc., 1400 Lake Hearn Drive, N.E., Atlanta, Georgia 30319. v 9 PROSPECTUS SUMMARY The following information is qualified in its entirety by the more detailed information and financial statements appearing elsewhere in, or incorporated by reference in, this Prospectus. The information in, or incorporated by reference in, this Prospectus, other than the historical financial data, gives effect to certain planned acquisitions and dispositions by the Company. See "Business -- Pending Transactions." Consummation of the Pending Transactions (as defined herein) is contingent on certain approvals; there can be no assurance that the approval of the Federal Communications Commission ("FCC") to the Pending Transactions will be obtained or that other closing conditions to the Pending Transactions will be satisfied or waived. THE COMPANY Cox Radio, Inc., a Delaware corporation ("Cox Radio" or the "Company"), is one of the ten largest radio broadcasting companies in the United States, based on both net revenues and number of stations as of August 1, 1998. Cox Radio, upon completion of the Pending Transactions, will own or operate, or provide sales and marketing services for 58 radio stations (41 FM and 17 AM) clustered in 13 markets, including the 18 stations acquired from NewCity Communications, Inc. ("NewCity") during 1997 (the "NewCity Acquisition"). On a pro forma basis after giving effect to the Recent Transactions and the Pending Transactions for the entire year, Cox Radio would have generated net revenue of $237.4 million and Broadcast Cash Flow (as defined herein) of $80.2 million for the year ended December 31, 1997. Cox Radio is an indirect majority-owned subsidiary of Cox Enterprises, Inc., a Delaware corporation ("CEI"). CEI indirectly owns approximately 69% of the Company's Common Stock (as herein defined) and has approximately 96% of the voting power of Cox Radio. The Company has two classes of common stock outstanding, Class A Common Stock, par value $1.00 per share (the "Class A Common Stock"), and Class B Common Stock, par value $1.00 per share (the "Class B Common Stock"), collectively defined as the "Common Stock." The Class A Common Stock is publicly traded on The New York Stock Exchange ("NYSE") under the symbol "CXR." CEI's wholly-owned subsidiary, Cox Broadcasting, Inc., a Delaware corporation ("Cox Broadcasting"), is the sole stockholder of the shares of the Company's Class B Common Stock. CEI, a privately-held corporation headquartered in Atlanta, is one of the largest media companies in the United States, with consolidated 1997 revenues of approximately $4.9 billion. CEI, which has approximately 100 years of experience in the media and communications industry and over 60 years experience in the radio broadcasting business, publishes 16 daily and 11 weekly newspapers, owns and/or operates eleven television stations and owns approximately 75% of Cox Communications, Inc. ("CCI"), a publicly traded broadband communications company (NYSE: COX) with approximately 3.8 million cable television customers. CEI is also the world's largest operator of auto auctions through Manheim Auctions. Cox Radio, as part of CEI, has been a pioneer in radio broadcasting, building its first radio station in 1934, acquiring its flagship station, WSB-AM in Atlanta in 1939 and launching its first FM station, WSB-FM in Atlanta in 1948. Prior to Cox Radio's initial public offering in September 1996, CEI transferred all of its U.S. radio operations to Cox Radio (the "Cox Radio Consolidation"). Cox Radio seeks to maximize the revenues and Broadcast Cash Flow of its radio stations by operating and developing clusters of stations in demographically attractive and rapidly growing markets, including major markets such as Los Angeles and Atlanta and Sunbelt markets such as Miami, Tampa, Orlando, San Antonio and Birmingham. During the past five years, the 13 markets in which the Company's stations currently operate generated, on an aggregate basis, greater radio advertising revenue growth than the average of 5.3%, which was calculated using revenue projections obtained from the Radio Advertising Bureau, for the U.S. radio industry as a whole. The NewCity Acquisition enhanced the clustering of the Company's radio stations by increasing the total number of markets in which Cox Radio owned and/or operated radio stations to 12 and by strengthening the Company's penetration in those markets. The Long Island Acquisition increased the number of markets where Cox Radio owns and/or operates radio stations to 13. Cox Radio owns or operates four or more stations in 10 of its 13 markets. As a result of the Company's management, programming and sales efforts, the Company's radio stations are characterized by strong ratings and above average power ratios. The Company's stations are diversified in terms of format, target audience, geographic location and stage of development. Cox Radio has a track record of acquiring, repositioning and improving the operating performance of previously underperforming stations. 1 10 Management believes that a number of the Company's stations have significant growth opportunities or turnaround potential and can therefore be characterized as start-up or developing stations. Generally, the Company considers start-up or developing stations to include those which have been recently acquired by the Company and offer the greatest potential for growth. Currently, the Company considers 29 of its stations to be start-up or developing stations. Cox Radio believes these stations can achieve significant Broadcast Cash Flow growth by employing the Company's operating strategy. Management believes that its mix of stations in different stages of development enables it to maximize the Company's growth potential. Cox Radio's senior operating management is comprised of six individuals with an average of over 24 years of experience in the radio broadcasting industry, including an average of over 15 years with Cox Radio. The Company believes that this experienced senior management team is well positioned to manage larger radio station clusters and take advantage of new opportunities arising in the U.S. radio broadcasting industry. The following table sets forth certain information with respect to Cox Radio and its markets:
PRO FORMA COMPANY DATA MARKET DATA ------------------------------------------------- ------------------------------------------------- 1997 COMBINED POWER 1997 NUMBER 1997 STATION RATIO FOR MARKET 1997 ADVERTISING OF COMBINED GROUP RADIO RADIO MARKET REVENUE 1997 STATIONS STATION AUDIENCE STATIONS ADVERTISING RADIO GROWTH METRO --------- GROUP MARKET OWNED OR REVENUE ADVERTISING CAGR MARKET MARKET FM AM MARKET SHARE SHARE(A) OPERATED(B) RANK(C) REVENUE(D) 1992-97 RANK(E) - ------ --- --- ------------ -------- ----------- ----------- ----------- ----------- ------- Los Angeles.......... 3 1 13.2 9.1 1.5 1 $575 6.3% 2 Atlanta.............. 2 2 30.6 18.5 1.7 10 222 14.8 12 Miami................ 2 -- 9.9 11.0 0.9 12 198 12.7 11 Tampa................ 3 1 13.3 13.9 1.0 19 102 10.0 21 Orlando.............. 5 2 31.7 30.6 1.0 28 76 9.2 38 San Antonio.......... 5 3 33.9 30.5 1.1 32 68 8.7 33 Long Island.......... 3 -- 27.0(f) 9.6 2.8 48 41 5.7 16 Louisville........... 3 -- 7.3 8.5 0.9 47 41 7.2 52 Birmingham........... 5 2 41.5 36.3 1.1 50 40 9.2 55 Tulsa................ 3 2 40.0 32.8 1.2 55 35 10.1 60 Dayton............... 3 2 31.2 22.8 1.4 58 34 7.2 54 Syracuse............. 3 2 49.9 32.1 1.6 71 24 4.8 71 Bridgeport........... 1 -- 18.8 14.6 1.3 90 17 7.2 114
- --------------- (a) Audience share data based upon all persons aged 25-54. (b) A station's or station group's power ratio is defined as such station's or station group's revenue market share divided by audience market share of adults 25-54. (c) Ranking of the principal radio market served by the stations among all radio markets in the United States by 1997 market revenue, according to BIA's Investing in Radio, 1998 ("BIA"). (d) In millions of dollars. (e) Ranks assigned by BIA based on population in the market. (f) Revenue market share obtained from Inside Radio's Who Owns What, May 4, 1998. OPERATING STRATEGY The following is a summary of the key elements of the Company's operating strategy: Clustering of Stations. Cox Radio operates its stations in clusters to (i) enhance net revenue growth by increasing the appeal of the Company's stations to advertisers and enabling such stations to compete more effectively with other forms of advertising and (ii) achieve operating efficiencies by consolidating broadcast facilities, eliminating duplicative positions in management and production and reducing overhead expenses. Management believes that operating several radio stations in each of its markets will enable its sales teams to offer advertisers more attractive advertising packages. 2 11 Development of Underperforming Stations. The Company's management has demonstrated its ability to acquire underperforming radio stations and develop them into consistent ratings and revenue leaders. The Company's historic margins reflect the acquisition and continued development of underperforming stations, as well as the fact that increases in net revenue are typically realized subsequently to increases in audience share. Implementation of the Company's Management Philosophy. The Company's local station operations are supported by a lean corporate staff which employs a management philosophy emphasizing (i) market research and targeted programming; (ii) a customer-focused selling strategy; and (iii) marketing and promotional activities. Market Research and Targeted Programming. Cox Radio's research, programming and marketing strategy combines extensive research with an assessment of competitors' vulnerabilities and market dynamics in order to identify specific audience opportunities within each market. Cox Radio also retains consultants and research organizations to continually evaluate listener preferences. Using this information, Cox Radio tailors the programming, marketing and promotions of each Cox Radio station to maximize its appeal to its target audience. Cox Radio's disciplined application of market research enables each of its stations to be responsive to the changing preferences of its targeted listeners. Customer-Focused Selling Strategy. The Company utilizes a unique, customer-focused approach to selling advertising known as the Consultative Selling System. The Company's sales personnel are trained to approach each advertiser with a view towards solving the marketing needs of the customer. In this regard, the sales staff consults with customers, attempts to understand their business goals and offers comprehensive marketing solutions, including the use of radio advertising. Instead of merely selling station advertising time, the Company's sales personnel are encouraged to develop innovative marketing strategies for the station's advertising customers. Marketing and Promotional Activities. The Company's stations regularly engage in significant local promotional activities, including advertising on local television and in local print media, participating in telemarketing and direct mailings and sponsoring contests, concerts and events. Cox Radio also engages in joint promotional activities with other media in its markets to further leverage the Company's promotional spending. Strong Management Teams. In addition to relying upon its experienced senior operating management, the Company places great importance on the hiring and development of strong local management teams and has been successful in retaining experienced management teams that have strong ties to their communities and customers. The Company invests significant resources in identifying and training employees to create a talented team of managers at all levels of station operations. Local managers are empowered to run the day-to-day operations of their stations and to develop and implement policies that will improve station performance and establish long-term relationships with listeners and advertisers. ACQUISITION STRATEGY In the ordinary course of its business, Cox Radio seeks opportunities to acquire radio stations that it believes will provide added value to the Company. During the last several years, the Company has implemented its strategy of clustering radio stations in several of its existing markets by acquiring additional radio stations. The radio stations acquired by Cox Radio in the past have primarily been underperforming, and Cox Radio has generally improved the operating and financial performance of such stations. The Company intends to continue to make acquisitions where permissible in the markets in which it operates and may also make opportunistic acquisitions in additional markets in which the Company believes that it can cost-effectively achieve a leading position in terms of audience and revenue share. The nature and timing of further acquisitions are uncertain and difficult to estimate. 3 12 RECENT TRANSACTIONS Orlando Acquisition In March 1997, the Company exchanged WCKG-FM and WYSY-FM in Chicago for WHOO-AM, WHTQ-FM and WMMO-FM in Orlando (the "Orlando Acquisition"). The Orlando Acquisition resulted in a pre-tax gain of approximately $49 million. In addition to receiving the three Orlando stations, Cox Radio also received cash proceeds of approximately $20 million. Prior to the NewCity Acquisition, the Orlando stations were operated by NewCity since July 1996 under an LMA (as defined herein). Tampa Acquisition In March 1997, the Company acquired WFNS-AM in Tampa for an aggregate consideration of $1.5 million (the "Tampa Acquisition"). The Company had been operating this station pursuant to an LMA or a JSA (as defined herein) since June 1995. Los Angeles Acquisition In April 1997, Cox Radio completed its acquisition of the license and certain assets of KRTO-FM in Los Angeles for $19 million in cash (the "Los Angeles Acquisition"). NewCity Acquisition In April 1997, the Company, through the merger of its wholly owned subsidiary, New Cox Radio II, Inc., with and into NewCity, with NewCity surviving as a wholly owned subsidiary of Cox Radio, acquired all of the issued and outstanding capital stock of NewCity in the NewCity Acquisition. Cox Radio purchased the stock of NewCity for an aggregate consideration of approximately $253 million, including approximately $87 million in assumption of NewCity indebtedness and approximately $3 million in working capital adjustments. To consummate the NewCity Acquisition, the Company utilized approximately $56 million of amounts due from CEI and borrowed approximately $110 million pursuant to the Company's $300 million, five-year, senior, unsecured revolving credit facility with certain banks (the "Credit Agreement"), including Chase Bank of Texas, N.A. (formerly Texas Commerce Bank National Association), as Administrative Agent. On April 2, 1997, NewCity was merged with and into the Company, with the Company as the surviving corporation. NewCity's subsidiaries were subsequently consolidated into Cox Radio. In October 1997, the Company disposed of the assets of American Comedy Network, a former subsidiary of NewCity, for aggregate proceeds of approximately $1.1 million including certain non-compete agreements. Birmingham Acquisitions I and II and Birmingham Disposition In November 1998, the Company consummated the acquisition of radio stations WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition I") for an aggregate consideration of $17 million. Since August 1, 1997, the Company had been operating WBHJ-FM and WBHK-FM under an LMA. In May 1997, the Company agreed to acquire WENN-FM and WAGG-AM in Birmingham, Alabama, for consideration of $15 million (the "Birmingham Acquisition II"). In July 1997, the Company assigned its right to purchase WENN-FM for consideration of $14.5 million to a third party (the "Birmingham Disposition"). The Company consummated these transactions during November 1997. San Antonio Transactions In September 1997, the Company acquired KISS-FM, KSMG-FM and KLUP-AM in San Antonio, Texas for an aggregate consideration of $30.4 million plus certain non-compete agreements (the "San Antonio Acquisition I"). In March 1998, the Company acquired KONO-FM and KONO-AM in San Antonio for $23 million (the "San Antonio Acquisition II"). 4 13 In December 1997, the Company acquired an option to purchase radio station KRIO-FM, serving the San Antonio market, for a purchase price of $9 million. The Company entered into an agreement to assign this option in January 1998 for an aggregate consideration of $250,000 (the "San Antonio Disposition"). The closing of the San Antonio Disposition occurred in May 1998. Dayton Acquisition In October 1998, the Company consummated the acquisition of radio stations WCLR-FM, WZLR-FM and WPTW-AM, serving the Dayton, Ohio market for approximately $6 million (the "Dayton Acquisition"). The Company had been operating these stations pursuant to an LMA since December 1997. Long Island Acquisition In May 1998, the Company acquired the assets of radio stations WBLI-FM, WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for consideration of $48 million (the "Long Island Acquisition"). The Orlando Acquisition, the Tampa Acquisition, the Los Angeles Acquisition, the NewCity Acquisition, the Birmingham Acquisitions I and II, the Birmingham Disposition, the San Antonio Acquisition I, the San Antonio Acquisition II, the San Antonio Disposition, the Dayton Acquisition and the Long Island Acquisition are collectively referred to herein as the "Recent Transactions". PENDING TRANSACTIONS Birmingham Acquisition III In September 1997, the Company announced that it had entered into an agreement in principle with a third party to construct, program and own WEDA-FM, a new Class A FM radio station, in Homewood, Alabama to serve the Birmingham market (the "Birmingham Acquisition III"). The FCC approved the third party's application for the new construction permit and settlement of the comparative hearing among the three applicants for the construction permit. As part of the agreement in principle, the third party has constructed the station and the Company has agreed to enter into an LMA for the station commencing in November 1998. The Company also acquired an option to purchase the station for an aggregate consideration of $5.5 million and the assumption of debt in an amount not to exceed $200,000. The Company expects to consummate the Birmingham Acquisition III in the fourth quarter of 1998 or the first half of 1999. Orlando Exchange In February 1998, the Company entered into an agreement to acquire the assets of radio station WTLN-FM serving the Orlando, Florida market for consideration of $14.5 million. In a related transaction, the Company entered into an agreement to dispose of the assets of radio station WTLN-AM (formerly known as WZKD-AM), also serving the Orlando, Florida market, for $500,000 (the "Orlando Exchange"). Pending certain regulatory approvals, the Company anticipates closing the Orlando Exchange in the fourth quarter of 1998 or the first half of 1999. Long Island Disposition In October 1998, the Company entered into an agreement with a third party to dispose of the assets of radio station WGBB-AM (the "Long Island Disposition") for $1.7 million. Pending certain regulatory approvals, the Company anticipates closing the Long Island Disposition in the first half of 1999. Tampa Exchange In September 1998, the Company entered into an agreement in principle to acquire the assets of radio station WLVU-FM, serving the Tampa, Florida market. The Company has entered into a TBA for WLVU-FM commencing in September 1998. In a related transaction, the Company entered into an agreement to dispose of the assets of radio station WSUN-FM, also serving the Tampa, Florida market (the 5 14 "Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates closing the Tampa Exchange in the first half of 1999. The Birmingham Acquisition III, the Orlando Exchange, the Long Island Disposition and the Tampa Exchange are collectively referred to herein as the "Pending Transactions". WSB, INC. AND WHIO, INC. MERGERS WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware corporation ("WHIO" and, together with WSB, the "Initial Note Guarantors"), were merged with and into the Company on November 10, 1998, and November 1, 1998, respectively (collectively, the "Mergers"). As a result of such Mergers, the Initial Note Guarantors are no longer Note Guarantors and, as of the date hereof, the Notes do not have the benefit of any Note Guarantees. LICENSE DROP-DOWN The Company anticipates transferring the licenses, permits and authorizations it holds from the Federal Communications Commission (the "FCC") in respect of the radio stations it owns (other than in respect of the radio stations it owns in the states of California and Florida) to CXR Holdings, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company ("CXR Holdings"), upon receipt of consent from the FCC and the satisfaction of certain other conditions (the "License Drop-Down"). The Company has received the consent of the FCC with respect to most of the stations that will be involved in the License Drop-Down and expects to apply for and receive such FCC consents in respect of the remaining stations. The Company currently anticipates that the License Drop-Down will be consummated in the first quarter of 1999. If the License Drop-Down is consummated, CXR Holdings will become a Note Guarantor. There can be no assurance as to the timing of the License Drop-Down or if the License Drop-Down shall occur at all (in which case, CXR Holdings will not become a Note Guarantor). 6 15 THE EXCHANGE OFFER Securities Offered......... $100,000,000 aggregate principal amount of 6.250% Notes due 2003 (the "2003 New Notes") and $100,000,000 aggregate principal amount of 6.375% Notes due 2005 (the "2005 New Notes" and, together with the 2003 New Notes, the "New Notes"). The Exchange Offer......... $1,000 principal amount of 2003 New Notes will be issued in exchange for each $1,000 principal amount of 2003 Old Notes and $1,000 principal amount of 2005 New Notes will be issued in exchange for each $1,000 original principal amount of 2005 Old Notes. As of the date hereof, $200,000,000 principal amount of Old Notes are outstanding. The Company will issue the New Notes to holders on or promptly after the Expiration Date. Based upon interpretations by the staff of the Commission set forth in no-action letters issued to third parties, the Company believes that New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder of such New Notes (other than a broker-dealer as set forth below, or any such holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business and that such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes. Holders of Old Notes wishing to accept the Exchange Offer must represent to the Company, as required by the Registration Rights Agreement, that such conditions have been met and that such holder is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act. Any Participating Broker-Dealer that acquired Old Notes for its own account as a result of market-making activities or other trading activities may be a statutory underwriter. Each Participating Broker-Dealer that is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of New Notes for its own account pursuant to the Exchange Offer must represent that the Old Notes tendered in exchange therefor were acquired as a result of market-making activities and acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of up to 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes or who is an affiliate of the Company may not rely on the position of the staff of the 7 16 Commission enunciated in such no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. Expiration Date............ 5:00 p.m., New York City time, on December 14, 1998 unless the Exchange Offer is extended, in which case the term "Expiration Date" means the latest date and time to which the Exchange Offer is extended. Conditions to the Exchange Offer...................... The Exchange Offer is subject to certain conditions, which may be waived by the Company. See "The Exchange Offer -- Conditions." The Exchange Offer is not conditioned upon any minimum principal amount of Old Notes being tendered. Procedures for Tendering Old Notes.................. Each holder of Old Notes wishing to accept the Exchange Offer must complete, sign and date the accompanying Letter of Transmittal, or a facsimile thereof or transmit an Agents' Message (as defined herein) in connection with a book-entry transfer, in accordance with the instructions contained herein and therein, and mail or otherwise deliver such Letter of Transmittal, or such facsimile on such Agent's Message, together with the Old Notes and any other required documentation to the Exchange Agent (as defined herein) at the address set forth herein prior to 5:00 p.m., New York City time, on the Expiration Date. By executing the Letter of Transmittal or Agent's Message, each holder will represent to the Company that, among other things, the New Notes acquired pursuant to the Exchange Offer are being obtained in the ordinary course of business of the person receiving such New Notes, whether or not such person is the holder, that neither the holder nor any such other person has any arrangement or understanding with any person to participate in the distribution of such New Notes and that neither the holder nor any such other person is an "affiliate," as defined under Rule 405 of the Securities Act, of the Company. See "The Exchange Offer -- Purpose and Effect of the Exchange Offer" and "-- Procedures for Tendering." Untendered Old Notes....... Following the consummation of the Exchange Offer, holders of Old Notes eligible to participate, but who do not tender their Old Notes, will not have any further exchange rights and such Old Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Old Notes could be adversely affected. Consequences of Failure to Exchange................. The Old Notes that are not exchanged pursuant to the Exchange Offer will remain restricted securities. Accordingly, within the time period referred to in Rule 144(k) under the Securities Act, such Old Notes may be resold only (i) to the Company, (ii) to a "qualified institutional buyer" (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A, (ii) inside the United States to an 8 17 institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that, prior to such transfer, furnishes to the Trustee a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Old Notes (the form of which letter can be obtained from the Trustee and, if such transfer is in respect of an aggregate principal amount of Old Notes of less than $100,000, an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act, (iv) outside the United States in compliance with Rule 904 under the Securities Act, (v) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) or (vi) pursuant to an effective registration statement under the Securities Act. See "The Exchange Offer -- Consequences of Failure to Exchange." Shelf Registration Statement................ If, because of any change in law, regulation or in the applicable interpretations of the staff of the Commission, the Company is not permitted to effect the Exchange Offer or, for any reason, the Exchange Offer Registration Statement is not declared effective within 180 days after the date of issuance of the Old Notes or in certain other circumstances, then the Company shall use its best efforts to (a) as promptly as practicable, file a shelf registration statement (the "Shelf Registration Statement") covering the Old Notes, (b) cause the shelf registration statement to be declared effective under the Securities Act and (c) keep the shelf registration statement effective until the earlier of two years after the initial sale of the Old Notes to the Initial Purchasers (as defined herein) or such time as all of the applicable Old Notes have been sold thereunder or otherwise cease to be registrable securities within the meaning of the Registration Rights Agreement. Special Procedures for Beneficial Owners........ Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. If such beneficial owner wishes to tender on such owner's own behalf, such owner must, prior to completing and executing the Letter of Transmittal and delivering its Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such owner's name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. The Company will keep the Exchange Offer open for not less than thirty calendar days in order to provide for the transfer of registered ownership. Guaranteed Delivery Procedures............... Holders of Old Notes who wish to tender their Old Notes and whose Old Notes are not immediately available or who cannot deliver their Old Notes, the Letter of Transmittal or any other documents required by the Letter of Transmittal to the Exchange Agent (or comply with the procedures for book-entry transfer) prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery proce- 9 18 dures set forth in "The Exchange Offer -- Guaranteed Delivery Procedures." Withdrawal Rights.......... Tenders may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. Acceptance of Old Notes and Delivery of New Notes.... The Company will accept for exchange any and all Old Notes which are properly tendered in the Exchange Offer prior to 5:00 p.m., New York City time, on the Expiration Date. The New Notes issued pursuant to the Exchange Offer will be delivered promptly following the Expiration Date. See "The Exchange Offer -- Terms of the Exchange Offer." Federal Income Tax Consequences............. The exchange pursuant to the Exchange Offer will not be a taxable event for federal income tax purposes. See "Certain United States Federal Income Tax Considerations." Use of Proceeds............ There will be no cash proceeds to the Company from the Exchange Offer. Exchange Agent............. The Bank of New York. 10 19 THE NEW NOTES The New Notes.............. $100,000,000 aggregate principal amount of 6.250% Notes due 2003 (the "2003 New Notes") and $100,000,000 aggregate principal amount of 6.375% Notes due 2005 (the "2005 New Notes" and, together with the 2003 New Notes, the "New Notes"). General.................... The form and terms of the New Notes are the same in all material respects as the form and terms of the Old Notes (which they replace), except that (i) the New Notes have been registered under the Securities Act and, therefore, will not bear legends restricting the transfer thereof, and (ii) the holders of New Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Old Notes in certain circumstances relating to the timing of the Exchange Offer, which rights will terminate when the Exchange Offer is consummated. See "The Exchange Offer -- Purpose and Effect of the Exchange Offer." The New Notes will evidence the same debts as the Old Notes and will be entitled to the benefits of the Indenture. See "Description of the Notes." Interest Payment Dates..... May 15 and November 15. Stated Maturity Dates...... May 15, 2003 in the case of the 2003 New Notes and May 15, 2005 in the case of the 2005 New Notes. Note Guarantees............ Pursuant to the Note Guarantees, the New Notes will be fully and unconditionally guaranteed by the Note Guarantors, if any. The Note Guarantors will be each existing or future subsidiary of the Company that guarantees amounts payable under the Credit Agreement or under any future senior unsecured credit facility between the Company and the third party lenders thereunder on the date hereof or in the future. Each Note Guarantor's Note Guarantee shall terminate immediately upon the termination of such Note Guarantor's guarantee pursuant to the Credit Agreement or any such future credit facility without further action by any party. As of the date of this Prospectus, the Notes do not have the benefit of any Note Guarantee. WSB, Inc. was merged with and into the Company on November 10, 1998 and WHIO, Inc. was merged with and into the Company on November 1, 1998, and, therefore, are no longer Note Guarantors. Optional Redemption........ The New Notes will be redeemable at the option of the Company, in whole or in part, at any time or from time to time, for an amount equal to the greater of (i) 100% of the principal amount of the New Notes to be redeemed, and (ii) the sum, as determined by the Quotation Agent, of the present values of the principal amount and the remaining scheduled payments of interest on the New Notes to be redeemed from the redemption date to May 15, 2003 in the case of the 2003 New Notes and May 15, 2005 in the case of the 2005 New Notes, in each case, discounted on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Treasury Rate plus 10 basis points in the case of the 2003 New Notes and 15 basis points in the case of the 2005 New Notes, plus in either case, accrued interest thereon to the date of redemption. See "Description of the Notes -- Optional Redemption." 11 20 Ranking.................... The New Notes will be senior unsecured obligations of the Company ranking pari passu in right of payment with all other existing and future unsubordinated unsecured indebtedness of the Company, which, as of March 31, 1998, on a pro forma basis after giving effect to the Offering, the application of the net proceeds of the Offering, the Pending Transactions and the Long Island Acquisition totalled approximately $315.2 million. The New Notes will be effectively subordinated to all indebtedness and other liabilities of the Company's subsidiaries, except in respect of the Note Guarantees of the Note Guarantors. Certain Covenants.......... The Indenture contains covenants for the New Notes including, but not limited to, covenants with respect to the following matters: (i) limitations on liens of the Company and Restricted Subsidiaries (as defined herein); (ii) limitations on consolidation, merger and sale of assets by the Company and the Note Guarantors; and (iii) limitations on the indebtedness of the Company's Restricted Subsidiaries. See "Description of the Notes -- Certain Covenants." RISK FACTORS Potential investors should consider carefully certain factors relating to an investment in the New Notes. See "Risk Factors." 12 21 SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA The following summary consolidated financial and other data have been derived from the Consolidated Financial Statements of Cox Radio. The consolidated statement of operations data and other operating data for the years ended December 31, 1993, 1994, 1995, 1996 and 1997 and the consolidated balance sheet data as of December 31, 1994, 1995, 1996 and 1997 have been derived from the audited Consolidated Financial Statements of Cox Radio. The statement of operations data and other operating data for the six-month periods ended June 30, 1997 and 1998, and the balance sheet data as of December 31, 1993 and June 30, 1997 and 1998 have been derived from unaudited Consolidated Financial Statements of Cox Radio, which, in the opinion of management, include all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of the Company's results of operations for such period or financial position at such date. The pro forma combined financial data for the year ended December 31, 1997 assume the Recent Transactions and the Pending Transactions had occurred at the beginning of the year. See "Incorporation of Certain Documents by Reference." See "Certain Definitions and Market Industry Data" following "Pro Forma Combined Statement of Operations" for certain defined terms and information concerning market and industry data used herein.
AS OF AND FOR THE SIX MONTH PERIOD AS OF AND FOR THE YEAR ENDED DECEMBER 31, ENDED JUNE 30, --------------------------------------------------------------- ----------------- PRO FORMA 1993 1994 1995 1996 1997 1997 1997 1998 ------ ------ ------ ------ ------- --------- ------ ------ (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA) STATEMENT OF OPERATIONS DATA: Net revenues(1)................. $ 95.0 $111.5 $123.6 $132.9 $ 199.6 $237.4 $ 83.5 $121.2 Station operating expenses...... 67.9 76.3 90.0 91.9 129.8 157.1 55.6 80.4 Corporate general and administrative expenses(2).... 2.5 2.7 5.9 5.3 6.9 7.4 3.5 3.9 Depreciation and amortization... 7.3 6.9 7.2 8.1 17.5 22.0 7.2 11.0 ------ ------ ------ ------ ------- ------ ------ ------ Operating income................ 17.3 25.6 20.5 27.6 45.4 50.9 17.2 25.9 Interest expense................ 5.6 5.2 6.0 4.6 9.4 19.4 2.1 7.7 Net income (loss)............... (1.1)(3) 11.2 8.2 14.9 49.7(4) 17.0 38.1(4) 9.1 Basic earnings (loss) per common share......................... (.06) .57 .42 .69 1.75 .60 1.35 .32 Diluted earnings (loss) per common share.................. (.06) .57 .42 .69 1.75 .60 1.34 .32 BALANCE SHEET DATA: Cash and cash equivalents....... $ 1.7 $ 1.9 $ 1.7 $ 10.6(5) $ 6.2 $ 6.2 $ 11.6 $ 7.1 Intangible assets, net.......... 114.2 120.1 126.8 138.1 518.9 622.3 496.0 578.3 Total assets.................... 168.3 180.0 191.8 261.7 654.6 735.0 620.8 735.7 Total debt (including amounts due to/from CEI).............. 89.7 120.3 125.1 -- 232.6 315.6 222.2 287.8 Shareholders' equity............ 64.2 40.4 47.2 235.8 287.3 254.6 274.2 297.3 OTHER OPERATING DATA AND FINANCIAL DATA: Broadcast cash flow(6).......... $ 27.1 $ 35.2 $ 33.6(7) $ 41.0 $ 69.8 $ 80.3 $ 27.9 $ 40.8 Broadcast cash flow margin(6)... 28.5% 31.6% 27.2% 30.9% 35.0% 33.8% 33.4% 33.7% EBITDA.......................... $ 24.6 $ 32.5 $ 27.7(7) $ 35.7 $ 62.9 $ 72.9 $ 24.4 $ 36.9 EBITDA to interest ratio........ 4.4x 6.3x 4.6x 7.8x 6.7x 3.8x 11.6x 4.8x Debt to EBITDA ratio............ 3.6x 3.7x 4.5x -- 3.7x 4.3x 5.1x 3.8x Earnings to fixed charges ratio......................... 3.1x 4.9x 3.4x 6.0x 4.8x 2.6x 8.2x 3.4x Net cash provided by operating activities.................... $ 11.4 $ 14.1 $ 14.0 $ 26.9 $ 42.2 $ 52.6 $ 12.4 $ 17.1 Net cash used in investing activities.................... (6.1) (12.3) (17.3) (62.6) (285.1) (368.1) (285.3) (74.8) Net cash provided by (used in) financing activities.......... (4.8) (1.6) 3.1 44.6 238.5 321.5 273.8 58.6
13 22 - --------------- (1) Total revenues less advertising agency commissions. (2) Certain executives participated in CEI's Unit Appreciation Plan ("UAP"). Because CEI is, and Cox Radio was, a private company, the benefits under the UAP are generally payable in cash. This cash payment option resulted in charges to compensation expense of $0.9 million, $0.8 million, $1.6 million, and $2.5 million for the years ended December 31, 1993, 1994, 1995 and 1996, respectively. This compensation expense is included in historical corporate general and administrative expenses. Public companies traditionally implement stock award plans that provide for the issuance of stock to participants and do not result in compensation expense under applicable accounting standards. The Company implemented the Cox Radio, Inc. Long-Term Incentive Plan in 1996 and, therefore, has not incurred this expense since 1996. In addition, for the year ended December 31, 1995, corporate general and administrative expenses include a nonrecurring corporate charge. (3) Includes a $7.6 million noncash charge for the cumulative effect of accounting changes. (4) Includes an after-tax gain on the sale of WCKG-FM/WYSY-FM (Chicago) of approximately $29.3 million. (5) 1996 amount includes $9.1 million in restricted cash, representing the net proceeds from the disposal of WIOD-AM (Miami), net of the cash used to acquire radio stations KRAV-FM and KGTO-AM (Tulsa). (6) "Broadcast cash flow" consists of operating income plus depreciation and amortization and corporate general and administrative expenses. "Broadcast cash flow margin" is broadcast cash flow as a percentage of net revenues. "EBITDA" is operating income plus depreciation and amortization. Although broadcast cash flow, broadcast cash flow margin and EBITDA are not recognized under GAAP, they are accepted by the broadcasting industry as generally recognized measures of performance and are used by analysts who report publicly on the condition and performance of broadcasting companies. For the foregoing reasons, the Company believes that these measures are useful to investors. However, investors should not consider these measures to be an alternative to operating income as determined in accordance with GAAP, an alternative to cash flows from operating activities (as a measure of liquidity) or an indicator of the Company's performance under GAAP. (7) Declines in broadcast cash flow and EBITDA from the prior year are due mainly to the impact of the baseball strike on advertiser spending, the cost of sports programming rights in Atlanta, start-up costs related to acquisitions or LMAs consummated in late 1994 and early 1995 and a nonrecurring corporate charge in 1995. 14 23 PRO FORMA COMBINED STATEMENT OF OPERATIONS (UNAUDITED) The pro forma combined statement of operations assumes the Recent Transactions and the Pending Transactions had occurred at the beginning of the year. No pro forma adjustments have been made for the Tampa Acquisition, the Birmingham III Acquisition, the Los Angeles Acquisition, the Long Island Disposition and the Tampa Exchange due to immateriality. Additionally, a pro forma balance sheet at June 30, 1998 and a pro forma statement of operations for the six months ended June 30, 1998 are not included as the effect of pro forma adjustments is immaterial.
YEAR ENDED DECEMBER 31, 1997 ------------------------------------------------------------------------------------------------------- PRO FORMA ADJUSTMENTS FOR THE RECENT TRANSACTIONS (EXCLUDING THE PRO FORMA FOR PRO FORMA NEWCITY THE RECENT ADJUSTMENTS FOR PRO FORMA FOR ACQUISITION) AND TRANSACTIONS AND HISTORICAL HISTORICAL THE NEWCITY THE NEWCITY THE PENDING THE PENDING COX RADIO NEWCITY(1) ACQUISITION ACQUISITION(1) TRANSACTIONS(2) TRANSACTIONS ---------- ---------- --------------- --------------- ------------------- ------------------- (IN THOUSANDS, EXCEPT PER SHARE DATA) Net revenues.......... $199,572 $15,683 $ 547(3) $214,708 $ 22,650 $237,358 Costs and expenses: Operating........... 50,220 5,628 -- 55,848 5,821 61,669 Selling, general and administrative.... 79,544 6,625 (71)(3) 86,098 9,357 95,455 Corporate general and administrative.... 6,885 476 -- 7,361 -- 7,361 Depreciation and amortization...... 17,456 837 1,063(4) 19,356 2,653 22,009 -------- ------- ------- -------- -------- -------- Operating income...... 45,467 2,117 (1,539) 46,046 4,819 50,865 Interest expense...... (9,364) (2,389) (499)(5) (12,252) (7,190) (19,442) Other, net............ 48,428 (521) 521(6) 48,428 (49,129)(7) (701) -------- ------- ------- -------- -------- -------- Income (loss) before income taxes........ 84,531 (793) (1,517) 82,222 (51,500) 30,721 Income taxes(8)....... 34,807 250 (457) 34,600 (20,861) 13,738 -------- ------- ------- -------- -------- -------- Net income (loss)..... $ 49,724 $(1,043) $(1,059) $ 47,622 $(30,639) $ 16,983 ======== ======= ======= ======== ======== ======== Per share data: Basic and diluted net income per common share...... $ 1.75 $ .60 ======== ======== Basic pro forma shares outstanding....... 28,344 28,344 ======== ======== Diluted pro forma shares outstanding....... 28,494 28,494 ======== ========
- --------------- (1) Represents the historical operations of NewCity for the three month period ended March 31, 1997. Such financial statements were prepared in accordance with generally accepted accounting principles. (2) Reflects the historical operations and related pro forma adjustments for the Recent Transactions (excluding the NewCity Acquisition) and the Pending Transactions. Pro forma adjustments have been made for the Orlando Acquisition, consummated in March 1997; the Birmingham Acquisition I, consummated in November 1998; the San Antonio Acquisition I, consummated in September 1997; the Dayton Acquisition, consummated in October 1998; the San Antonio Acquisition II, consummated in March 1998; the Long Island Acquisition, consummated in May 1998; and the Orlando Exchange which is expected to be consummated in the fourth quarter of 1998 or the first half of 1999. For each of the above acquisitions, amortization was calculated assuming an amortization period of 40 years. (3) Represents LMA fees and expenses charged between the Company and NewCity related to certain of the Company's stations that were operated under LMA agreements by NewCity. 15 24 (4) Reflects additional amortization expense related to approximately $250 million in intangibles and goodwill arising from the NewCity Acquisition. Intangible assets and goodwill are being amortized over 40 years. (5) Reflects adjustments to interest expense resulting from the borrowing of approximately $192.1 million to consummate the NewCity Acquisition and related tender for certain senior subordinated notes issued by NewCity. (6) Reflects adjustments to other expenses representing costs incurred by NewCity directly related to the NewCity Acquisition. (7) Reflects adjustments to the pre-tax gain on the disposition of WCKG-FM and WYSY-FM related to the Orlando Acquisition. (8) An effective tax rate of 45% was used to calculate the adjustments reflected in footnotes 2, 3, 5, and 6. No tax effect is reflected for a portion of the adjustment in footnote 4 because the amortization of goodwill arising from the NewCity Acquisition is not deductible for tax purposes. 16 25 CERTAIN DEFINITIONS AND MARKET AND INDUSTRY DATA The terms "Broadcast Cash Flow," "broadcast cash flow margin" and "EBITDA" are referred to in various places in this Prospectus. Broadcast Cash Flow consists of operating income plus depreciation and amortization and corporate general and administrative expenses. Broadcast cash flow margin is Broadcast Cash Flow as a percentage of net revenues. EBITDA consists of operating income plus depreciation and amortization. Although Broadcast Cash Flow, broadcast cash flow margin and EBITDA are not recognized under generally accepted accounting principles ("GAAP"), the Company believes they are accepted by the broadcasting industry as generally recognized measures of performance and are used by analysts who report publicly on the condition and performance of broadcasting companies. For the foregoing reasons, the Company believes that these measures will be useful to investors. However, Broadcast Cash Flow, broadcast cash flow margin and EBITDA should not be considered as an alternative or as a substitute for net income, cash flows from operating activities and other income and cash flow statement data prepared in accordance with GAAP, or as a measure of liquidity or profitability. Unless otherwise indicated herein, (i) market ranking by radio advertising revenue, radio market advertising revenue and radio market advertising data used to calculate compounded annual growth rate ("CAGR") have been obtained from Investing in Radio 1998 Market Report, a publication of Broadcasting Investor Analysts ("BIA"); (ii) total industry listener and revenue levels have been obtained from the Radio Advertising Bureau ("RAB"); (iii) all audience share data and audience rankings, including ranking by population, except where specifically stated to the contrary, have been derived from surveys of Adults 25 to 54, listening Monday through Sunday, 6 a.m. to 12 midnight, and are based on the average of the Winter, Spring, Summer and Fall Market Reports (each an "Arbitron Market Report") either ending in the year presented or the four most recent Arbitron Market Reports, as reported by Arbitron, Radio Market Reports, Metro or Target Audience Trends, The Arbitron Company ("Arbitron"); (iv) revenue share data in each market presented have been obtained from the Miller, Kaplan Market Revenue Report (published monthly), a publication of Miller, Kaplan, Arase & Co., Certified Public Accountants ("Miller Kaplan") or The Hungerford Market Report, a publication of Hungerford, Aldrin, Nichols & Carter Certified Public Accountants ("Hungerford"); and (v) total advertising revenue has been obtained from Duncan's Radio Market Guide (1997 ed.) ("Duncan's") compiled by Duncan's American Radio. Duncan's definition of "total advertising revenue" includes television, radio, newspaper, outdoor and cable. The terms local marketing agreement ("LMA"), joint sales agreement ("JSA") and time brokerage agreement ("TBA") are referred to in various places in this Prospectus. An LMA or TBA refers to an agreement under which a radio station agrees to provide, on a cooperative basis, all or certain of the programming, sales, marketing and similar services for a different radio station in the same market. A JSA refers to an agreement, similar to an LMA, under which a radio station agrees to provide all or certain of the sales and marketing services for another station while the owner of such other radio station provides all of the programming for such other radio station in the same market. The term "duopoly," as used in various places in this Prospectus, refers to the ownership of two or more AM or two or more FM radio stations in the same geographic market. A station's or station group's "power ratio" is defined as such station's or station group's revenue market share divided by audience market share of adults 25-54. 17 26 RISK FACTORS An investment in the New Notes offered hereby involves certain risks. Prospective investors should carefully consider the following risk facts, in addition to the other information contained elsewhere in this Prospectus. CONSEQUENCES OF EXCHANGING OR FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES Holders of Old Notes who do not exchange their Old Notes for New Notes pursuant to the Exchange Offer will continue to be subject to the restrictions on transfer of such Old Notes set forth in the legends thereon. In general, the Old Notes may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. After the Exchange Offer, the Company does not intend to register the Old Notes under the Securities Act. Based upon interpretations by the staff of the Commission set forth in certain no-action letters issued to third parties, the Company believes that New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder of such New Notes (other than a broker-dealer, as set forth below, or any such holder which is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business and that such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes. Each Participating Broker-Dealer that is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of New Notes for its own account pursuant to the Exchange Offer must represent that the Old Notes tendered in exchange therefor were acquired as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes or who is an affiliate of the Company may not rely on the position of the staff of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988) or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. See "Plan of Distribution." No affiliate of the Company may rely on such no-action letters and any such affiliate must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. The Company has not entered into any arrangement or understanding with any person to distribute the New Notes to be received in the Exchange Offer. To comply with the securities laws of certain jurisdictions, it may be necessary to qualify for sale or register the New Notes prior to offering or selling such New Notes. The Company currently does not intend to register or qualify the sale of the New Notes in any such jurisdiction. Upon consummation of the Exchange Offer, holders that were not prohibited from participating in the Exchange Offer and did not tender their Old Notes will not have any registration rights under the Registration Rights Agreement with respect to such nontendered Old Notes, and accordingly, such Old Notes will continue to be subject to the restrictions on transfer contained in the legend thereon. See "The Exchange Offer -- Consequences of Failure to Exchange." Issuance of the New Notes in exchange for the Old Notes pursuant to the Exchange Offer will be made only after a timely receipt by the Company of such Old Notes, a properly completed and duly executed Letter 18 27 of Transmittal and all other required documents. Therefore, holders of the Old Notes desiring to tender such Old Notes in exchange for New Notes should allow sufficient time to ensure timely delivery. The Company is under no duty to give notification of defects or irregularities with respect to the tenders of Old Notes for exchange. Old Notes that are not tendered or are tendered but not accepted will, following the consummation of the Exchange Offer, continue to be subject to the existing restrictions upon transfer thereof, and, upon consummation of the Exchange Offer, certain registration rights with respect to the Old Notes under the Registration Rights Agreement will terminate. In addition, any holder of Old Notes who tenders in the Exchange Offer for the purpose of participating in a distribution of the New Notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. Each broker-dealer that is the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. See "Plan of Distribution." To the extent that Old Notes are tendered and accepted in the Exchange Offer, the trading market for untendered and tendered but unaccepted Old Notes could be adversely affected. See "The Exchange Offer." RISKS ASSOCIATED WITH ACQUISITION STRATEGY A principal component of the Company's business strategy is the acquisition of additional radio stations. In addition to the Pending Transactions, Cox Radio intends to continue to evaluate the acquisition of additional radio stations or radio station groups. There can be no assurance that future acquisitions will be available on attractive terms. In addition, there can be no assurance that any synergies or savings will be achieved as a result of any acquisitions, that the integration of Cox Radio and new stations or management groups can be accomplished successfully or on a timely basis or that the Company's acquisition strategy can be implemented. Although Cox Radio has entered into definitive agreements regarding the Pending Transactions, there can be no assurance that any of the Pending Transactions will be consummated. Consummation of each of the Pending Transactions is subject to certain closing conditions, including the receipt of FCC approval, which receipt cannot be assured. COMPETITION The radio broadcasting industry is a highly competitive business. The Company's radio stations compete against other radio stations and other media (including new media technologies that are being developed or introduced) for audience share and advertising revenue. Factors that are material to a station's competitive position include management experience, the station's audience share rank in its market, transmitter power, assigned frequency, audience characteristics, local program acceptance, and the number and characteristics of other stations in the market area. Recent changes in the law and in FCC rules and policies have increased the number of radio stations a broadcaster may own in a given market and permit, within limits, joint arrangements with other stations in a market relating to programming, advertising sales, and station operations. Management believes that radio stations that elect to take advantage of these opportunities may, in certain circumstances, have lower operating costs and may be able to offer advertisers more attractive rates and services. No assurance can be given that any of the Company's stations will be able to maintain or increase its current audience ratings and advertising revenue share. GOVERNMENT REGULATION OF BROADCASTING INDUSTRY The radio broadcasting industry is subject to extensive and changing regulation. Among other things, the Communications Act of 1934, as amended (the "Communications Act"), and FCC rules and policies limit the number of stations that one entity can own in a given market. The Communications Act and FCC rules and policies also require FCC approval for transfers of control of licensees and assignments of FCC licenses. The filing of petitions or complaints against Cox Radio or other FCC licensees could result in the FCC delaying the grant of, or refusing to grant, its consent to the assignment of licenses to or from an FCC licensee or the transfer of control of an FCC licensee. In certain circumstances, the Communications Act and FCC rules will operate to impose limitations on alien ownership and voting of the Common Stock. There can be no 19 28 assurance that there will not be changes in the current regulatory scheme, the imposition of additional regulations or the creation of new regulatory agencies, which changes could restrict or curtail the ability of Cox Radio to acquire, operate and dispose of stations or, in general, to compete profitably with other operators of radio and other media properties. Each of the Company's radio stations operates pursuant to one or more licenses issued by the FCC. Pursuant to Congress' mandate in the Telecommunications Act of 1996 (the "1996 Act"), which significantly amended the Communications Act, the FCC adopted a rule extending radio license terms from seven to eight years. All licenses renewed as part of the current renewal cycle will have a term of eight years. The Company's licenses expire at various times through the year 2006. Although Cox Radio has applied or will apply to renew these licenses, third parties may challenge the Company's renewal applications. While Cox Radio is not aware of facts or circumstances that would prevent the Company from having its current licenses renewed, there can be no assurance that the licenses will be renewed. Failure to obtain the renewal of any of Cox Radio's broadcast licenses or to obtain FCC approval for an assignment or transfer to Cox Radio of a license in connection with a radio station acquisition may have a material adverse effect on the Company's business and operations. In addition, if Cox Radio or any of its officers, directors or significant stockholders materially violates the FCC's rules and regulations or the Communications Act, is convicted of a felony or is found to have engaged in unlawful anticompetitive conduct or fraud upon another government agency, the FCC may, in response to a petition from a third party or on its own initiative, in its discretion, commence a proceeding to impose sanctions upon Cox Radio which could involve the imposition of monetary fines, the revocation of Cox Radio's broadcast licenses or other sanctions. If the FCC were to issue an order denying a license renewal application or revoking a license, Cox Radio would be required to cease operating the applicable radio station only after Cox Radio had exhausted all rights to administrative and judicial review without success. IMPORTANCE OF LOS ANGELES AND ATLANTA RADIO STATIONS In 1997, the Company's four radio stations in Los Angeles and four radio stations in Atlanta generated approximately 26.7% and 23.8%, respectively, of Cox Radio's net revenues. On a pro forma basis after giving effect to the Recent Transactions and Pending Transactions, such radio stations in Los Angeles and Atlanta would have generated approximately 24.3% and 21.5%, respectively, of Cox Radio's net revenues in 1997. A significant decline in net revenues from the Company's stations in these markets, as a result of a ratings decline or otherwise, could have a material adverse effect on Cox Radio's financial position and results of operations. CONTROL BY CEI; POTENTIAL CONFLICTS OF INTEREST CEI, through wholly-owned subsidiaries, owns approximately 69% of the outstanding Common Stock and has approximately 96% of the voting power of Cox Radio. As a result, CEI has sufficient voting power to elect all the members of the Board of Directors of Cox Radio (the "Cox Radio Board") and effect transactions without the approval of Cox Radio's public stockholders. Cox Radio's Amended and Restated Certificate of Incorporation (the "Cox Radio Certificate") and Amended and Restated Bylaws (the "Bylaws") also contain certain anti-takeover provisions. The interests of CEI, which operates businesses in other industries, including television broadcasting, broadband communications, auto auctions and newspapers, may from time to time diverge from the interests of Cox Radio. In addition, from time to time, the Company enters into transactions with CEI or its affiliates and has entered into a credit facility with CEI. Conflicts of interest between Cox Radio and CEI could arise with respect to business dealings between them, including potential acquisitions of businesses or properties, the issuance of additional securities and the election of new or additional members of the Cox Radio Board. The Audit Committee of the Cox Radio Board consists of independent directors and addresses certain potential conflicts of interest that may arise between the Company and CEI. There can be no assurance that any conflicts of interest will be resolved in favor of Cox Radio. ABSENCE OF PUBLIC MARKET; RESTRICTIONS ON RESALES There presently is no active trading market for the Notes and none may develop. If the New Notes are traded after their initial issuance, they may trade at a discount from their initial offering price, depending upon 20 29 prevailing interest rates, the market for similar securities, the financial condition, performance and prospects of the Company and other factors beyond the control of the Company, including general economic conditions. There can be no assurance as to the development or liquidity of any market for the New Notes. FORWARD LOOKING STATEMENTS This Prospectus contains forward-looking statements which can be identified by terminology such as "believes," "anticipates," "intends," "expects" and words of similar import. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, events or developments to be materially different from any future results, events or developments expressed or implied by such forward-looking statements. Such factors include, among others, the following: general economic and business conditions, both nationally and in the regions in which the Company operates; technology changes; competition; changes in business strategy or development plans; the ability to attract and retain qualified personnel; existing governmental regulations and changes in, or the failure to comply with, governmental regulations; liability and other claims asserted against the Company; Year 2000 issues and Year 2000 readiness disclosures; and other factors referenced in this Prospectus, including, without limitation, under the captions "Summary," "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business." GIVEN THESE UNCERTAINTIES, PROSPECTIVE INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON SUCH FORWARD-LOOKING STATEMENTS. The Company disclaims any obligation to update any such factors or to publicly announce the result of any revisions to any of the forward-looking statements contained herein to reflect future results, events or developments. 21 30 USE OF PROCEEDS This Exchange Offer is intended to satisfy certain of the Company's obligations under the Purchase Agreement and the Registration Rights Agreement. The Company will not receive any cash proceeds from the issuance of the New Notes offered hereby. In consideration for issuing the New Notes contemplated in this Prospectus, the Company will receive Old Notes in like principal amount, the form and terms of which are the same in all material respects as the form and terms of the New Notes (which replace such Old Notes), except as otherwise described herein. The net proceeds to the Company from the Offering were approximately $198.4 million, after deducting the discount due the Initial Purchasers and commissions and other expenses payable by the Company. The Company used the net proceeds from the Offering to repay indebtedness outstanding under the Credit Agreement, as a result of which the aggregate principal amount of borrowings outstanding under the Credit Agreement, as of June 30, 1998, was approximately $100.0 million and, as of June 30, 1998, approximately $200.0 million was available for the Company to borrow on a revolving basis to finance future acquisitions thereunder. The weighted average per annum interest rate applicable to borrowings under the Company's Credit Agreement for the six months ended June 30, 1998 was 6.5%, and the maturity date for such borrowings was March 7, 2002. See "Description of Certain Indebtedness." Affiliates of NationsBanc Montgomery Securities LLC, Chase Securities Inc. and J.P. Morgan Securities Inc. are lenders under the Credit Agreement and received their proportionate share of the repayment thereof. 22 31 CAPITALIZATION The following table sets forth the capitalization of the Company as of June 30, 1998. Such capitalization reflects the proceeds from the sale of the Old Notes, which occurred on May 26, 1998. No effect on the capitalization of the Company will occur upon consummation of the Exchange Offer herein.
AS OF JUNE 30, 1998 -------------- (IN THOUSANDS) ACTUAL -------------- LONG-TERM DEBT: Credit Agreement............................................ $100,000 Amounts due from CEI........................................ (12,612) Other long-term debt........................................ 740 2003 Notes.................................................. 99,910 2005 Notes.................................................. 99,725 -------- Total long-term debt.............................. 287,763 SHAREHOLDERS' EQUITY: Preferred Stock, $1.00 par value; 5,000,000 shares authorized; none outstanding............... -- Common Stock Class A Common Stock, $1.00 par value; 70,000,000 shares authorized 8,874,361 shares issued and outstanding................ 8,874 Class B Common Stock, $1.00 par value; 45,000,000 shares authorized 19,577,672 shares issued and outstanding............... 19,578 Additional paid-in capital.................................. 251,454 Retained earnings........................................... 17,355 -------- Total shareholders' equity........................ 297,261 -------- Total capitalization.............................. $585,024 ========
23 32 THE COMPANY Cox Radio, Inc. ("Cox Radio" or the "Company") is one of the ten largest radio broadcasting companies in the United States, based on both net revenues and number of stations as of November 1, 1998. Upon completion of all the Pending Transactions, Cox Radio will own or operate, or provide sales and marketing services for, 58 radio stations (41 FM and 17 AM) clustered in 13 markets, including 18 stations acquired from NewCity Communications, Inc. ("NewCity") during 1997 (the "NewCity Acquisition"). On a pro forma basis, after giving effect to the Recent Transactions and the Pending Transactions, Cox Radio would have generated net revenue of $237.4 million and Broadcast Cash Flow of $80.2 million for the year ended December 31, 1997. Cox Radio is an indirect majority-owned subsidiary of Cox Enterprises, Inc. ("CEI"). CEI indirectly owns approximately 69% of the Company's Common Stock (defined below) and has approximately 96% of the voting power of Cox Radio. The Company has two classes of common stock outstanding, Class A Common Stock, par value $1.00 per share (the "Class A Common Stock"), and Class B Common Stock, par value $1.00 per share (the "Class B Common Stock"), collectively defined as the "Common Stock." CEI's wholly-owned subsidiary, Cox Broadcasting, Inc. ("Cox Broadcasting"), is the sole stockholder of shares of the Company's Class B Common Stock. CEI, a privately-held corporation headquartered in Atlanta, Georgia, is one of the largest media companies in the United States, with consolidated 1997 revenues of approximately $4.9 billion. Prior to Cox Radio's initial public offering in September 1996, CEI transferred all of its U.S. radio operations to Cox Radio (the "Cox Radio Consolidation"). Cox Radio, as part of CEI, was a pioneer in radio broadcasting, building its first station in 1934, acquiring its flagship station, WSB-AM (Atlanta), in 1939 and launching its first FM station, WSB-FM (Atlanta), in 1948. The Company's principal executive offices are located at 1400 Lake Hearn Drive, N.E., Atlanta, Georgia 30319, and its telephone number is (404) 843-5000. 24 33 BUSINESS Cox Radio seeks to maximize the revenues and Broadcast Cash Flow of its radio stations by operating and developing clusters of stations in demographically attractive and rapidly growing markets, including major markets such as Los Angeles and Atlanta and Sunbelt markets such as Miami, Tampa, Orlando, San Antonio and Birmingham. During the past five years, the 13 markets in which the Company's stations now operate have generated, on an aggregate basis, greater radio advertising revenue growth than the average of 5.3%, which was calculated using revenue projections obtained from the Radio Advertising Bureau (the "RAB"), for the U.S. radio industry as a whole. The NewCity Acquisition enhanced the clustering of the Company's radio stations by increasing the total number of markets in which Cox Radio owned and/or operated radio stations to 12 and by strengthening the Company's penetration in those markets. The Long Island Acquisition increased the number of markets in which Cox Radio owns or operates radio stations to 13. Cox Radio operates four or more radio stations in 10 of its 13 markets. As a result of the Company's management, programming and sales efforts, the Company's radio stations are characterized by strong ratings and above average power ratios (defined as revenue share divided by audience share). The Company's stations are diversified in terms of format, target audience, geographic location and stage of development. Cox Radio has a track record of acquiring, repositioning and improving the operating performance of previously underperforming stations. Management believes that a number of the Company's stations have significant growth opportunities or turnaround potential and can therefore be characterized as start-up or developing stations. Generally, the Company considers start-up or developing stations to include those which have been recently acquired by the Company and offer the greatest potential for growth. Currently, the Company considers 29 of its stations to be start-up or developing stations. Cox Radio believes these stations can achieve significant Broadcast Cash Flow growth by employing the Company's operating strategy. Management believes that its mix of stations in different stages of development enables it to maximize the Company's growth potential. Cox Radio's senior operating management is comprised of six individuals with an average of over 24 years of experience in the radio broadcasting industry, including an average of over 15 years with Cox Radio. The Company believes that this experienced senior management team is well positioned to manage larger radio station clusters and take advantage of new opportunities arising in the U.S. radio broadcasting industry. OPERATING STRATEGY The following is a description of the key elements of the Company's operating strategy: Clustering of Stations. Cox Radio operates its stations in clusters to (i) enhance net revenue growth by increasing the appeal of the Company's stations to advertisers and enabling such stations to compete more effectively with other forms of advertising and (ii) achieve operating efficiencies by consolidating broadcast facilities, eliminating duplicative positions in management and production and reducing overhead expenses. Management believes that operating several radio stations in each of its markets will enable its sales teams to offer advertisers more attractive advertising packages. Furthermore, as radio groups achieve significant audience share, they can deliver to advertisers the audience reach that historically only television and newspapers could offer, with the added benefit of frequent exposure to advertisers' target customers. Management believes that the Company's clusters of stations, and their corresponding audience share, provide opportunities to capture an increased share of total advertising revenue in each of the Company's markets. Development of Underperforming Stations. The Company's management has demonstrated its ability to acquire underperforming radio stations and develop them into consistent ratings and revenue leaders. The Company's historic margins reflect the acquisition and continued development of underperforming stations, as well as the fact that increases in net revenue are typically realized subsequently to increases in audience share. Management believes that a number of the Company's stations have significant growth opportunities or turnaround potential and can therefore be characterized as developing stations. 25 34 Implementation of the Company's Management Philosophy. The Company's local station operations are supported by a lean corporate staff which employs a management philosophy emphasizing (i) market research and targeted programming; (ii) a customer-focused selling strategy; and (iii) marketing and promotional activities. Market Research and Targeted Programming. Cox Radio's research, programming and marketing strategy combines extensive research with an assessment of competitors' vulnerabilities and market dynamics in order to identify specific audience opportunities within each market. Cox Radio also retains consultants and research organizations to continually evaluate listener preferences. Using this information, Cox Radio tailors the programming, marketing and promotions of each Cox Radio station to maximize its appeal to its target audience. Cox Radio's disciplined application of market research enables each of its stations to be responsive to the changing preferences of its targeted listeners. This approach focuses on the needs of the listener and its community and is designed to improve ratings and maximize the impact of advertising for the Company's customers. Through its research, programming and marketing, Cox Radio also seeks to create a distinct and marketable local identity for each of its stations in order to enhance audience share and listener loyalty and to protect against direct format competition. To achieve this objective, the Company employs and promotes distinct high-profile on-air personalities and local sports programming at many of its stations. For example, the Company broadcasts (i) "Dr. Laura" in Los Angeles, Atlanta, Dayton, Syracuse, Tulsa and Orlando; (ii) "Rush Limbaugh" in Los Angeles, Orlando, Syracuse and Tulsa; (iii) "Clark Howard" in Atlanta, Orlando, Dayton and Syracuse; (iv) the Atlanta Braves in Atlanta and Tampa; and (v) the Orlando Magic in Orlando. Customer-Focused Selling Strategy. The Company utilizes a unique, customer-focused approach to selling advertising known as the Consultative Selling System. The Company's sales personnel are trained to approach each advertiser with a view towards solving the marketing needs of the customer. In this regard, the sales staff consults with customers, attempts to understand their business goals and offers comprehensive marketing solutions, including the use of radio advertising. Instead of merely selling station advertising time, the Company's sales personnel are encouraged to develop innovative marketing strategies for the station's advertising customers. Marketing and Promotional Activities. The Company's stations regularly engage in significant local promotional activities, including advertising on local television and in local print media, participating in telemarketing and direct mailings and sponsoring contests, concerts and events. Special events may include charitable athletic events, events centered around a major local occasion or local ethnic group and special community or family events. Cox Radio also engages in joint promotional activities with other media in their markets to further leverage the Company's promotional spending. These promotional efforts help the Company's stations add new listeners and increase the amount of time spent listening to the stations. Strong Management Teams. In addition to relying upon its experienced senior operating management, the Company places great importance on the hiring and development of strong local management teams and has been successful in retaining experienced management teams that have strong ties to their communities and customers. The Company invests significant resources in identifying and training employees to create a talented team of managers at all levels of station operations. These resources include: (i) Gallup/SRI, which helps the Company identify and select talented individuals for management and sales positions; (ii) Center for Sales Strategy ("CSS"), an independent sales and management training company which trains and develops managers and sales executives; and (iii) a program of leadership development conducted by the Company's senior operating management and outside consultants. Local managers are empowered to run the day-to-day operations of their stations and to develop and implement policies that will improve station performance and establish long-term relationships with listeners and advertisers. The compensation of the senior operating management team and local station managers is largely dependent upon financial performance and linked to participation in the Company's Long-Term Incentive Plan. 26 35 ACQUISITION STRATEGY In the ordinary course of its business, Cox Radio seeks opportunities to acquire radio stations that it believes will provide added value to the Company. During the last several years, the Company has implemented its strategy of clustering radio stations in several of its existing markets. The radio stations acquired by Cox Radio in the past have primarily been underperforming, and Cox Radio has generally improved the operating and financial performance of such stations. The Company intends to continue to make acquisitions where permissible in the markets in which it operates and may also make opportunistic acquisitions in additional markets in which the Company believes that it can cost-effectively achieve a leading position in terms of audience and revenue share. The nature and timing of further acquisitions, are uncertain and difficult to estimate. Market Selection Considerations. Cox Radio's acquisition strategy has been focused primarily on clustering stations in its existing markets; however, in the future, Cox Radio will increasingly seek to make opportunistic acquisitions in additional markets. Management believes that Cox Radio will have the financial resources and management expertise to continue to pursue its acquisition strategy. Certain future acquisitions may be limited by the multiple and cross-ownership rules of the Federal Communications Commission ("FCC"). See "Legislation and Regulation." Station Considerations. Cox Radio expects to concentrate on acquiring radio stations that offer, through application of Cox Radio's operating philosophy, the potential for improvement in the station's performance, particularly its Broadcast Cash Flow. Such stations may be in various stages of development, presenting Cox Radio with an opportunity to apply its management techniques and to enhance asset value. In evaluating potential acquisitions, the Company considers the strength of a station's broadcast signal. A powerful broadcast signal enhances delivery range and clarity, thereby influencing listener preference and loyalty. Cox Radio also assesses the strategic fit of an acquisition with its existing clusters of radio stations. When entering a new market, Cox Radio expects to acquire a "platform" upon which to expand its portfolio of stations and to build a leading cluster of stations. STATION OPERATIONS The Company's stations, including the stations to be acquired in the Pending Transactions, are located in markets which, during the last five years, have generated, on an aggregate basis, greater radio advertising revenue growth than the average of 5.3% for the U.S. radio industry as a whole, in each case calculated using revenue projections obtained from RAB. These markets include six Sunbelt markets and four markets which management believes have a disproportionately small number of radio stations relative to the size of the potential market audience. In most of the Company's markets, radio captures a small percentage of the total advertising dollars spent, with local advertisers accounting for the majority of the spending. Clustering creates an opportunity to increase radio's share of a market's advertising revenues. The following table summarizes certain information relating to radio stations owned or operated by the Company, assuming the consummation of the Pending Transactions:
AUDIENCE 1997 SHARE IN RANK IN AUDIENCE SHARE IN TARGET TARGET ADULTS 25-54 MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP - ------------------------------- ------------------ ------------------ ----------- ----------- ----------------- LOS ANGELES KFI-AM....................... Talk Adults 35-54 4.5 5 3.5 KOST-FM...................... Adult Contemporary Women 25-44 5.0 3 4.0 KACE-FM...................... R&B Oldies African American 11.4(2) 4(2) 1.6(2) Adults 35-54 KRTO-FM...................... R&B Oldies African American -- -- -- Adults 35-54
27 36
AUDIENCE 1997 SHARE IN RANK IN AUDIENCE SHARE IN TARGET TARGET ADULTS 25-54 MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP - ------------------------------- ------------------ ------------------ ----------- ----------- ----------------- ATLANTA WSB-AM....................... News/Talk Adults 35-64 11.4 1 8.0 WSB-FM....................... Adult Contemporary Women 25-54 7.9 4 6.1 WJZF-FM...................... Jazz Men 25-54 3.6 13 3.4 WCNN-AM(3)................... News/Talk Adults 35-64 1.2 18 1.0 MIAMI WFLC-FM...................... Hot Adult Adults 25-54 4.5 6 4.5 Contemporary WHQT-FM...................... Urban Adult Adults 25-54 6.5 1 6.5 Contemporary TAMPA(4) WWRM-FM...................... Soft Adult Women 35-54 10.9 1 6.8 Contemporary WCOF-FM...................... 70's Oldies Adults 25-44 7.5(5) 5(5) 6.7(5) WFNS-AM...................... 70's Oldies Adults 25-44 -- -- -- WSUN-AM(6)................... News Adults 25-54 .4 27 .4 ORLANDO WDBO-AM...................... News/Talk Adults 35-64 6.3 5 4.1 WWKA-FM...................... Country Adults 25-54 8.4 1 8.4 WCFB-FM...................... Urban Adult Women 25-54 5.3(7) 7(7) 4.7(7) Contemporary WTLN-AM(8)................... Urban Adult Women 25-54 -- -- -- Contemporary WHOO-AM...................... Standards Adults 55+ 14.0 2 .8 WHTQ-FM...................... Classic Rock Men 25-54 8.0 2 5.3 WMMO-FM...................... Rock Adult Adults 25-54 6.2 5 6.2 Contemporary WTLN-FM(9)................... Religious Adults 25-54 1.1 18 1.1 SAN ANTONIO KCYY-FM...................... Country Adults 25-54 6.2 6 6.2 KKYX-AM...................... Classic Country Adults 35-64 2.5 15 1.2 KCJZ-FM...................... Smooth Jazz Adults 25-54 3.6 11 3.6 Adult Oriented KISS-FM...................... Rock Adults 18-49 7.1 4 4.7 KSMG-FM...................... Hot Adult Adults 25-54 7.2 3 7.2 Contemporary KLUP-AM...................... Adult Standards Adults 35-64 2.2 16 .7 KONO-FM...................... Oldies Adults 25-54 6.9(10) 4(10) 6.9(10) KONO-AM...................... Oldies Adults 25-54 -- -- -- LOUISVILLE WRKA-FM...................... Oldies Adults 35-54 8.6 4 6.3 WRVI-FM...................... Rock Adult Adults 25-49 1.9 15 1.7 Contemporary WLSY-FM...................... R&B Oldies Adults 35-54 .5 27 .5 BIRMINGHAM(11) WZZK-FM...................... Country Adults 25-54 11.6 1 11.6 WEZN-AM(12).................. Stardust Adults 50+ 7.8 4 1.7 WODL-FM...................... Oldies Adults 25-54 6.7 6 6.7 WBHJ-FM...................... Contemporary Hit Adults 18-34 13.6 1 4.5 Urban WBHK-FM...................... Urban Adult Adults 25-54 8.1 3 8.1 Contemporary WAGG-AM...................... Gospel Adults 25-54 3.7 11 3.7
28 37
AUDIENCE 1997 SHARE IN RANK IN AUDIENCE SHARE IN TARGET TARGET ADULTS 25-54 MARKET AND STATION TARGET DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC DEMOGRAPHIC CALL LETTERS(1) FORMAT GROUP GROUP GROUP GROUP - ------------------------------- ------------------ ------------------ ----------- ----------- ----------------- DAYTON WHIO-AM...................... News/Talk Adults 35-64 5.4 4 3.9 WHKO-FM...................... Country Adults 25-54 14.2 1 14.2 WCLR-FM...................... Oldies Adults 35-54 6.4(13) 4(13) 4.7(13) WZLR-FM...................... Oldies Adults 35-54 -- -- -- WPTW-AM...................... Local Programming Adults 35+ .3 39 -- TULSA KRMG-AM...................... News/Talk Adults 25-54 7.2 4 7.2 KWEN-FM...................... Country Adults 25-54 11.1 2 11.1 KJSR-FM...................... 70's Oldies Adults 25-54 8.1 3 8.1 KRAV-FM...................... Adult Contemporary Adults 25-54 5.7 7 5.7 KGTO-AM...................... Standards Adults 55+ 10.2 3 .7 BRIDGEPORT WEZN-FM...................... Adult Contemporary Adults 25-54 14.6(14) 1(14) 14.6(14) SYRACUSE WSYR-AM...................... News/Talk Adults 35-64 8.6 4 5.4 WYYY-FM...................... Adult Contemporary Adults 25-54 9.8 2 9.8 WBBS-FM...................... Country Adults 25-54 12.1 1 12.1 WHEN-AM...................... Sports/Talk Men 25-54 3.6 9 2.1 WWHT-FM...................... Adult Hit Radio Women 18-34 10.1 4 2.7 LONG ISLAND WBLI-FM...................... Hot Adult Adults 25-54 4.5 5 4.5 Contemporary WBAB-FM...................... Adult Oriented Men 25-54 6.1(15) 3(15) 5.1(15) Rock WHFM-FM...................... Adult Oriented Men 25-54 -- -- -- Rock WGBB-AM(16).................. To be determined Not Applicable -- -- -- Source: Arbitron 1997 Market Reports four-book average
- --------------- (1) Metropolitan market served; city of license may differ. (2) Audience share and audience rank information for KACE-FM and KRTO-FM are combined because the stations are simulcast. (3) Station operated by Cox Radio pursuant to an LMA. (4) WLVU-FM, which Cox Radio has been operating pursuant to an LMA only since September 12, 1998, is excluded from this listing because no audience data are available. (5) Audience share and audience rank information for WCOF-FM and WFNS-AM are combined because the stations are simulcast. (6) Station to be sold by Cox Radio pursuant to the Tampa Exchange. (7) Audience share and audience rank information for WCFB-FM and WTLN-AM are combined because the stations are simulcast. (8) Formerly known as WZKD-AM. Station to be sold by Cox Radio pursuant to the Orlando Exchange. (9) Station to be acquired by Cox Radio pursuant to the Orlando Exchange. (10) Audience share and audience rank information for KONO-FM and KONO-AM are combined because the stations are simulcast. (11) WEDA-FM, which Cox Radio has been operating pursuant to an LMA since November 1998, is excluded from this listing because the station has just commenced operations and no audience data are available yet. (12) Audience share and rank data is based only on Arbitron Market Report for Fall 1997 because format was only applicable for that period. (13) Audience share and audience rank information for WCLR-FM and WZLR-FM are combined because the stations are simulcast. (14) Audience share and rank data is based only on Arbitron Market Reports for Fall 1997 and Spring 1997 because Arbitron does not produce Summer and Winter Arbitron Market Reports for the Bridgeport/Fairfield County market. (15) Audience share and audience rank information for WBAB-FM and WHFM-FM are combined because the stations are simulcast. (16) Station to be sold by Cox Radio pursuant to the Long Island Disposition.
29 38 The following table sets forth certain information relating to each of the markets in which the Company's stations operate or will operate upon consummation of the Pending Transactions:
1997 MARKET RADIO'S RADIO 1997 1997 MARKET PERCENTAGE OF ADVERTISING ADVERTISING METRO TOTAL RADIO 1997 TOTAL REVENUE GROWTH REVENUE MARKET ADVERTISING ADVERTISING ADVERTISING CAGR MARKET RANK(A) RANK(B) REVENUE(C) REVENUE(D) REVENUE 1992-97 - ------ ----------- -------- ------------ ----------- ------------- -------------- Los Angeles.......... 1 2 $3,293 $575 16.3% 6.3% Atlanta.............. 10 12 886 222 21.7 14.8 Miami................ 12 11 918 198 19.0 12.7 Tampa................ 19 21 524 102 17.4 10.0 Orlando.............. 28 38 387 76 18.3 9.2 San Antonio.......... 32 33 384 68 19.8 8.7 Louisville........... 47 52 224 41 15.4 7.2 Long Island.......... 48 16 --(e) 41 --(e) 5.7 Birmingham........... 50 55 207 40 17.3 9.2 Tulsa................ 55 60 159 35 20.2 10.1 Dayton............... 58 54 197 34 15.1 7.2 Syracuse............. 71 71 123 24 18.7 4.8 Bridgeport........... 90 114 151 17 18.4 7.2
- --------------- (a)Ranking of the principal radio market served by the stations among all radio markets in the United States by 1997 market revenue, according to BIA's Investing in Radio, 1998. (b)Ranks assigned by BIA based on population in the market. (c)Includes television, radio, newspaper, outdoor and cable. Source, Duncan's Radio Market Guide, 1997. Dollars in millions. (d)Dollars in millions. (e)Because the Long Island/Nassau-Suffolk market advertising dollars, exclusive of radio advertising dollars, are commingled with the New York City market, this information is not applicable for comparative purposes. As a result of the Company's management, programming and sales efforts, the Company's radio stations are characterized by strong ratings and above average power ratios. A third of the Company's stations are ranked first or second in terms of audience share in their target demographic groups. In five of the Company's markets, the Company's station groups ranked number one with respect to combined station revenue market share. RECENT TRANSACTIONS Orlando Acquisition In March 1997, the Company exchanged WCKG-FM and WYSY-FM in Chicago for WHOO-AM, WHTQ-FM and WMMO-FM in Orlando (the "Orlando Acquisition"). The Orlando Acquisition resulted in a pre-tax gain of approximately $49 million. In addition to receiving the three Orlando stations, Cox Radio also received cash proceeds of approximately $20 million. Prior to the NewCity Acquisition, the Orlando stations were operated by NewCity since July 1996 under an LMA. Tampa Acquisition In March 1997, the Company acquired WFNS-AM in Tampa for an aggregate consideration of $1.5 million (the "Tampa Acquisition"). The Company had been operating this station pursuant to an LMA or a JSA since June 1995. Los Angeles Acquisition In April 1997, Cox Radio completed its acquisition of the license and certain assets of KRTO-FM in Los Angeles for $19 million in cash (the "Los Angeles Acquisition"). 30 39 NewCity Acquisition In April 1997, the Company, through the merger of its wholly owned subsidiary New Cox Radio II, Inc. with and into NewCity, with NewCity surviving as a wholly owned subsidiary of Cox Radio, acquired all of the issued and outstanding capital stock of NewCity in the NewCity Acquisition. Cox Radio purchased the stock of NewCity for an aggregate consideration of approximately $253 million, including approximately $87 million in assumption of NewCity indebtedness and approximately $3 million in working capital adjustments. To consummate the NewCity Acquisition, the Company utilized approximately $56 million of amounts due from CEI and borrowed approximately $110 million pursuant to the Company's Credit Agreement. On April 2, 1997, NewCity was merged with and into the Company, with the Company as the surviving corporation. NewCity's subsidiaries were subsequently consolidated into Cox Radio. In October 1997, the Company disposed of the assets of American Comedy Network, a former subsidiary of NewCity, for aggregate proceeds of approximately $1.1 million including certain non-compete agreements. Birmingham Acquisitions I and II and Birmingham Disposition In November 1998, the Company consummated the acquisition of radio stations WBHJ-FM and WBHK-FM in Birmingham, Alabama (the "Birmingham Acquisition I") for an aggregate consideration of $17 million. Since August 1, 1997, the Company had been operating WBHJ-FM and WBHK-FM under an LMA. In May 1997, the Company agreed to acquire WENN-FM and WAGG-AM in Birmingham, Alabama, for consideration of $15 million (the "Birmingham Acquisition II"). In July 1997, the Company assigned its right to purchase WENN-FM for consideration of $14.5 million to a third party (the "Birmingham Disposition"). The Company consummated these transactions during November 1997. San Antonio Transactions In September 1997, the Company acquired KISS-FM, KSMG-FM and KLUP-AM in San Antonio, Texas for an aggregate consideration of $30.4 million plus certain non-compete agreements (the "San Antonio Acquisition I"). In March 1998, the Company acquired KONO-FM and KONO-AM in San Antonio for $23 million (the "San Antonio Acquisition II"). In December 1997, the Company acquired an option to purchase radio station KRIO-FM, serving the San Antonio market, for a purchase price of $9 million. The Company entered into an agreement to assign this option in January 1998 for an aggregate consideration of $250,000 (the "San Antonio Disposition"). The closing of the San Antonio Disposition occurred in May 1998. Dayton Acquisition In October 1998, the Company consummated the acquisition of radio stations WCLR-FM, WZLR-FM and WPTW-AM, serving the Dayton, Ohio market for approximately $6 million (the "Dayton Acquisition"). The Company had been operating these stations pursuant to an LMA since December 1997. Long Island Acquisition In May 1998, the Company acquired the assets of radio stations WBLI-FM, WBAB-FM, WHFM-FM and WGBB-AM, serving the Nassau-Suffolk, New York market for consideration of $48 million (the "Long Island Acquisition"). The Orlando Acquisition, the Tampa Acquisition, the Los Angeles Acquisition, the NewCity Acquisition, the Birmingham Acquisitions I and II, the Birmingham Disposition, the San Antonio Acquisition I, the San Antonio Acquisition II, the San Antonio Disposition, the Dayton Acquisition and the Long Island Acquisition are collectively referred to herein as the "Recent Transactions". 31 40 PENDING TRANSACTIONS Birmingham Acquisition III In September 1997, the Company announced that it had entered into an agreement in principle with a third party to construct, program and own WEDA-FM, a new Class A FM radio station in Homewood, Alabama to serve the Birmingham market (the "Birmingham Acquisition III"). The FCC approved the third party's application for the new construction permit and settlement of the comparative hearing among the three applicants for the construction permit. As part of the agreement in principle, the third party has constructed the station and the Company has agreed to enter into an LMA for the station commencing in November 1998. The Company also acquired an option to purchase the station for an aggregate consideration of $5.5 million and the assumption of debt in an amount not to exceed $200,000. The Company expects to consummate the Birmingham Acquisition III in the fourth quarter of 1998 or the first half of 1999. Orlando Exchange In February 1998, the Company entered into an agreement to acquire the assets of WTLN-FM serving the Orlando, Florida market for consideration of $14.5 million. In a related transaction, the Company entered into an agreement to dispose of the assets of WTLN-AM (formerly known as WZKD-AM), also serving the Orlando, Florida market for $500,000 (the "Orlando Exchange"). Pending certain regulatory approvals, the Company expects to complete the Orlando Exchange in the fourth quarter of 1998 or the first half of 1999. Long Island Disposition In October 1998, the Company entered into an agreement with a third party to dispose of the assets of radio station WGBB-AM (the "Long Island Disposition") for $1.7 million. Pending certain regulatory approvals, the Company anticipates closing the Long Island Disposition in the first half of 1999. Tampa Exchange In September 1998, the Company entered into an agreement in principle to acquire the assets of radio station WLVU-FM, serving the Tampa, Florida market. The Company has entered into a TBA for WLVU-FM commencing in September 1998. In a related transaction, the Company entered into an agreement to dispose of the assets of radio station WSUN-FM, also serving the Tampa, Florida market (the "Tampa Exchange"). Pending certain regulatory approvals, the Company anticipates closing the Tampa Exchange in the first half of 1999. The Birmingham Acquisition III, the Orlando Exchange, the Long Island Disposition and the Tampa Exchange are collectively referred to herein as the "Pending Transactions". WSB, INC. AND WHIO, INC. MERGERS WSB, Inc., a Delaware corporation ("WSB"), and WHIO, Inc., a Delaware corporation ("WHIO" and, together with WSB, the "Initial Note Guarantors"), were merged with and into the Company on November 10, 1998 and November 1, 1998, respectively (collectively, the "Mergers"). As a result of such Mergers, the Initial Note Guarantors are no longer Note Guarantors and, as of the date hereof, the Notes do not have the benefit of any Note Guarantees. LICENSE DROP-DOWN The Company anticipates transferring the licenses, permits and authorizations it holds from the FCC in respect of the radio stations it owns (other than in respect of the radio stations it owns in the states of California and Florida) to CXR Holdings, Inc., a Nevada corporation and a wholly-owned subsidiary of the Company ("CXR Holdings"), upon receipt of consent from the FCC and the satisfaction of certain other conditions (the "License Drop-Down"). The Company has received the consent of the FCC with respect to most of the stations that will be involved in the License Drop-Down and expects to apply for and receive such FCC consents in respect of the remaining stations. The Company currently anticipates that the License Drop- 32 41 Down will be consummated in the first quarter of 1999. If the License Drop-Down is consummated, CXR Holdings will become a Note Guarantor. There can be no assurance as to the timing of the License Drop-Down or if the License Drop-Down shall occur at all (in which case, CXR Holdings will not become a Note Guarantor). COMPETITION; CHANGES IN THE BROADCASTING INDUSTRY The radio broadcasting industry is a highly competitive business. The success of each of the Company's stations depends largely upon its audience ratings and its share of the overall advertising revenue within its market. The Company's radio stations compete for listeners directly with other radio stations in their respective markets primarily on the basis of program content that appeals to a target demographic group. By building a strong listener base consisting of a specific demographic in each of its markets, Cox Radio is able to attract advertisers seeking to reach those listeners. The Company's stations compete for advertising revenue directly with other radio stations and with other electronic and print media within their respective markets. Factors that are material to a station's competitive position include management experience, the station's audience share rank in its market, transmitter power, assigned frequency, audience characteristics, local program acceptance, and the number and characteristics of other stations in the market area. Cox Radio attempts to improve its competitive position with promotional campaigns aimed at the demographics targeted by its stations and by sales efforts designed to attract advertisers. Recent changes in the law and in FCC rules and policies have increased the number of radio stations a broadcaster may own in a given market and permit, within limits, joint arrangements with other stations in a market relating to programming, advertising sales, and station operations. Management believes that radio stations that elect to take advantage of these opportunities may, in certain circumstances, have lower operating costs and may be able to offer advertisers more attractive rates and services. Although the radio broadcasting industry is highly competitive, some barriers to entry exist. The operation of a radio broadcast station requires a license from the FCC and the number of radio stations that a single entity may own and operate in a given market is limited by the availability of FM and AM radio frequencies allotted by the FCC to communities in that market, as well as by the FCC's multiple ownership rules, which regulate the number of stations that may be owned and controlled by a single entity. The FCC recently adopted rules to implement the use of competitive bidding procedures (auctions) to award licenses or construction permits for new broadcast stations and to resolve pending and future applications by licensees proposing major changes to their existing facilities, where such applications are mutually exclusive with other licensees' applications. The Company's stations compete for advertising revenue with other radio stations and with other electronic and print media. Potential advertisers can substitute advertising through broadcast television, cable television systems (which can offer concurrent exposure on a number of cable networks to enlarge the potential audience), daily, weekly, and free-distribution newspapers, other print media, direct mail, and on-line computer services for radio advertising. Competing media commonly target the customers of their competitors, and advertisers regularly shift dollars from radio to these competing media and vice versa. Accordingly, there can be no assurance that any of the Company's stations will be able to maintain or increase its current audience ratings and advertising revenue share. In addition, the radio broadcasting industry is subject to competition from new media technologies that are being developed or introduced, such as the delivery of audio programming by cable television systems, by satellite digital audio radio service ("satellite DARS" or "SDARS"), and by digital audio broadcasting ("DAB"), and the possible authorization by the FCC of a new service of microbroadcasting (low powered, limited coverage radio stations). DAB and SDARS provide for the delivery by terrestrial or satellite means of multiple new audio programming formats with compact disc quality sound to local and national audiences. The delivery of information through the Internet also could create a new form of competition. The radio broadcasting industry historically has grown despite the introduction of new technologies for the delivery of entertainment and information, such as broadcast television, cable television, audio tapes and compact discs. A growing population and greater availability of radios, particularly car and portable radios, have contributed to this growth. There can be no assurance, 33 42 however, that the development or introduction in the future of any new media technology will not have an adverse effect on the radio broadcasting industry. Cox Radio cannot predict what other matters might be considered in the future by the FCC, nor can it assess in advance what impact, if any, the implementation of any FCC proposals or changes might have on its business. YEAR 2000 ISSUES AND YEAR 2000 READINESS DISCLOSURE The Company recognizes the importance of the Year 2000 issue and is taking a proactive approach intended to facilitate an appropriate transition into the year 2000. The "Year 2000 issue" is the result of computer programs and embedded computer microprocessors being unable to distinguish between the year 1900 and the year 2000, or misinterpreting the date field. Any of the Company's systems that have time-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000, which could result in miscalculations or system failures. A system or application is deemed "Year 2000 compliant" when it continues to produce understandable, accurate and predictable results which conform to the original functional specifications, regardless of the millennium change. State of Readiness The Company has implemented a project team utilizing both internal and external resources, including those of majority shareholder, Cox Broadcasting, Inc., to develop its Year 2000 initiative, which may, as necessary, involve upgrading or replacing affected computer systems, software and equipment with embedded chips, and preparing contingency and disaster recovery plans. The Company has substantially completed an inventory of current systems and operations to identify any information technology and non-information technology systems (including equipment with embedded chips) that do not properly recognize dates after December 31, 1999. The project team has developed a plan to assess, remediate, test, and, sufficiently in advance of the Year 2000, ascertain that the systems of the Company that are critical to the Company's operations will properly recognize such dates. The plan includes on-site audits at each of the Company's radio stations. The project team has commenced the audit process which is scheduled to be complete by the end of the second quarter of 1999. Based on the results of the inventory, the Company began in second quarter of 1998 to remediate noncompliant systems. The Company anticipates that remediation will be complete by the end of third quarter 1999. The Company uses CEI's financial and human resources information systems, which are being tested by CEI. The Company has substantially completed a formal communication program with its significant vendors to determine the extent to which the Company is vulnerable to those third parties who fail to remediate their own Year 2000 non-compliance. The Company is to a large degree dependent on vendor remediation and testing of vendor systems. The Company's two most significant vendors are Marketron, which provides the Company's traffic and billing system, and ADP, which provides payroll services. The Company uses Marketron's Version 28 running on DOS 6.2, which Marketron has indicated is Year 2000 compliant and ADP Version 2.5 running on Windows 95, which ADP has indicated is Year 2000 compliant. The Company has not performed its own tests on these systems, and no assurance can be given at this time that these systems are compliant. Costs As of September 30, 1998, approximately $120,000 of outside consulting costs have been incurred related to the Company's Year 2000 initiative. The Company will incur capital expenditures and internal staff costs as well as additional outside consulting and other expenditures related to this initiative. The Company expects these costs to total approximately $2 million, based on currently available information. Total incremental expenses (including depreciation and amortization) of bringing current systems into compliance, writing off existing non-compliant systems, and capital replacements have not had a material impact on the Company's 34 43 financial condition to date and are not at present, based on known facts, expected to have a material impact on the Company's financial condition. Risks and Most Reasonably Likely Worst Case Scenario If systems critical to the Company's operations are not Year 2000 compliant, the most reasonably likely worst case scenario would include service interruptions resulting from failure in electrical power and satellite feeds providing news, weather and syndicated shows for broadcast and failure of equipment with embedded chips including master clocks, studio equipment, transmission equipment and telephone, security and environmental control systems. Based on the information currently available, the Company is not aware of any likely Year 2000 non-compliance by the Company or its vendors or customers that will materially affect the Company's business operations; however, the Company does not control the systems of other companies, and cannot assure that such systems will be timely converted and, if not converted, would not have an adverse effect on the Company's business operations. Furthermore, no assurance can be given at this time that any or all of the Company's systems are or will be Year 2000 compliant, or that the ultimate costs required to address the Year 2000 issue or the impact of any failure to achieve substantial Year 2000 compliance by the Company, its vendors or customers will not have a material adverse effect on the Company's financial condition. Like most other businesses, the Company is dependent on general service outside vendors including providers of electrical power, telephony, water, fuel for vehicles and other necessary commodities. The Company also relies upon the interstate banking system and related electronic communications for such functions as transmitting financial data from field locations to the home office and sweeping cash into lockboxes. The Company is currently not aware of any material non-compliance by these providers that will materially affect the Company's business operations, however, the Company does not control these systems and cannot assure that they will be converted in a timely fashion and if not converted would not have an adverse effect on the Company's business operations. Contingency Plans The Year 2000 project team is working with each station to expand and modify existing emergency contingency plans to encompass potential Year 2000 exposures, including increased risk of loss of electrical power, and satellite failures resulting in need for alternate delivery system for programming, potential multiple systems failures and other relevant issues. It is anticipated that contingency plans will be in place for each station by third quarter 1999. 35 44 LEGISLATION AND REGULATION The ownership, operation and sale of radio stations, including those licensed to Cox Radio, are subject to the jurisdiction of the FCC, which acts under authority granted by the Communications Act of 1934, as amended (the "Communications Act"). Among other things, the FCC assigns frequency bands for broadcasting, determines the particular frequencies, locations and operating power of stations, issues, renews and modifies station licenses, determines whether to approve changes in ownership or control of station licenses, regulates equipment used by stations, adopts and implements regulations and policies that directly or indirectly affect the ownership, operation, program content, employment practices, and business of stations, and has the power to impose penalties, including license revocations, for violations of its rules or the Communications Act. The Telecommunications Act of 1996 (the "1996 Act"), which significantly amended the Communications Act in numerous respects, dramatically changed the ground rules for competition and regulation in virtually all sectors of the telecommunications industry, including broadcasting, local and long-distance telephone services, cable television services and telecommunications equipment manufacturing. In addition, the 1996 Act imposed numerous requirements on the FCC to launch new inquiries and rulemaking proceedings, perhaps 80 in all, involving a multitude of telecommunications issues, including those described herein that will directly affect the broadcast industry. The 1996 Act mandated that such rulemaking proceedings be completed within certain time frames, in some cases as short as six months. Some of these proceedings have been completed while others remain pending. Broadcast station licenses are subject to renewal upon application to the FCC. Pursuant to Congress' mandate in the 1996 Act, the FCC adopted a rule extending radio license terms from seven to eight years. All licenses renewed as part of the current renewal cycle will have a term of eight years. The FCC will renew a broadcast license if it determines that the "public convenience, interest or necessity" will be served thereby. Each of the Company's radio stations operates pursuant to one or more licenses issued by the FCC that presently have a maximum term of seven years. The Company's licenses expire at various times through the year 2006. Although Cox Radio has applied or will apply to renew these licenses, third parties may challenge the Company's renewal applications. Historically, Cox Radio's management has not experienced any material difficulty in obtaining renewal from the FCC of any of the broadcast licenses for stations under its control. See "Risk Factors-Government Regulation of the Broadcasting Industry." 36 45 MANAGEMENT The following table sets forth the name and age of the directors and executive officers of Cox Radio as of November 1, 1998:
NAME AGE POSITION WITH COX RADIO ---- --- ----------------------- Nicholas D. Trigony.................... 58 Chairman of the Board of Directors Robert F. Neil......................... 39 President and Chief Executive Officer, Director Richard A. Ferguson.................... 53 Vice President and Chief Operating Officer, Director Maritza Pichon......................... 44 Chief Financial Officer Marc W. Morgan......................... 49 Senior Group Vice President Robert B. Green........................ 45 Group Vice President James T. Morely........................ 49 Senior Group Vice President Richard A. Reis........................ 44 Group Vice President James C. Kennedy....................... 50 Director David E. Easterly...................... 56 Director Ernest D. Fears, Jr.................... 66 Director Paul M. Hughes......................... 60 Director
37 46 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS The following table provides information as of March 18, 1998 with respect to the shares of Class A Common Stock and Class B Common Stock beneficially owned by each person known by the Company to own more than 5% of any class of the outstanding voting securities of the Company.
PERCENT OF PERCENT OF VOTE CLASS A CLASS B CLASS OF OF ALL CLASSES OF NAME OF BENEFICIAL OWNER COMMON STOCK COMMON STOCK COMMON STOCK COMMON STOCK - ------------------------ ------------ ------------ ------------ ----------------- Cox Enterprises, Inc.(1)(2)(3).......... -- 19,577,672 100.00% 95.67% J.&W. Seligman & Co. Incorporated(4).... 1,189,000 -- 13.41 0.58 Baron Capital Group, Inc.(5)............ 920,000 -- 10.37 0.45 Massachusetts Financial Services Company(6)............................ 864,600 -- 9.75 0.42 College Retirement Equities Fund(7)..... 636,800 -- 7.18 0.31 Mellon Bank Corporation(8).............. 458,250 -- 5.17 0.22
- --------------- (1) The address for CEI is 1400 Lake Hearn Drive, N.E., Atlanta, Georgia 30319. (2) All the shares of Common Stock of the Company that are beneficially owned by CEI are held of record by Cox Broadcasting. Cox Broadcasting holds 19,577,672 shares of Class B Common Stock that are convertible into the same number of shares of Class A Common Stock. All the shares of outstanding capital stock of Cox Broadcasting are beneficially owned by Cox Holdings, Inc., and all of the shares of outstanding capital stock of Cox Holdings, Inc. are beneficially owned by CEI. The beneficial ownership of the outstanding capital stock of CEI is described in footnote (3) below. (3) There are 202,448,312 shares of common stock of CEI outstanding, with respect to which (i) Barbara Cox Anthony, as trustee of the Anne Cox Chambers Atlanta Trust, exercises beneficial ownership over 58,316,422 shares (28.8%); (ii) Anne Cox Chambers, as trustee of the Barbara Cox Anthony Atlanta Trust, exercises beneficial ownership over 58,316,422 shares (28.8%); (iii) Barbara Cox Anthony, Anne Cox Chambers and Richard L. Braunstein, as trustees of the Dayton Cox Trust A, exercise beneficial ownership over 82,745,685 shares (40.9%); and (iv) 244 individuals and trusts exercise beneficial ownership over the remaining 3,069,783 shares (1.5%). Thus, Barbara Cox Anthony and Anne Cox Chambers, who are sisters, together exercise sole or shared beneficial ownership over 199,378,529 shares (98.5%) of the common stock of CEI. In addition, Garner Anthony, the husband of Barbara Cox Anthony, holds beneficially and of record 14,578 shares of common stock of CEI. Barbara Cox Anthony disclaims beneficial ownership of such shares. Barbara Cox Anthony and Anne Cox Chambers are the mother and aunt, respectively, of James C. Kennedy, the Chairman of the Board of Directors and Chief Executive Officer of CEI and a director of the Company. (4) The information contained in this table with respect to J.&W. Seligman & Co. Incorporated is based on a Schedule 13G reporting ownership as of January 31, 1998 by J.&W. Seligman & Co. Incorporated; William C. Morris; and Seligman Communications & Information Fund, Inc. The address for the reporting persons is 100 Park Avenue, New York, New York 10017. (5) The information contained in this table with respect to Baron Capital Group, Inc. is based on a joint filing on Schedule 13G reporting ownership as of December 31, 1997 by Baron Capital Group, Inc., BAMCO, Inc., Baron Capital Management, Inc., Baron Asset Fund, and Ronald Baron. The address for each of the reporting parties is 767 Fifth Avenue, 24th Floor, New York, New York 10153. (6) The information contained in this table with respect to Massachusetts Financial Services Company is based on a filing on Schedule 13G reporting ownership as of December 31, 1997. The address for the reporting person is 500 Boylston Street, Boston, Massachusetts 02116. (7) The information contained in this table with respect to College Retirement Equities Fund is based on a joint filing on Schedule 13G reporting ownership as of December 31, 1997 by College Retirement Equities Fund and TIAA-CREF Mutual Funds. The address for each reporting party is 730 Third Avenue, New York, New York 10017. (8) The information contained in this table with respect to Mellon Bank Corporation is based on a joint filing on Schedule 13G reporting ownership as of December 31, 1997 by the following direct or indirect subsidiaries of Mellon Bank Corporation: Boston Safe Deposit and Trust Company; Mellon Bank, N.A.; Mellon Capital Management Corporation; Mellon Equity Associates; The Boston Company Asset Management, Inc.; The Dreyfus Corporation; Boston Group Holdings, Inc.; The Boston Company, Inc.; and MBC Investment Corporation. The address of Mellon Bank Corporation and for all reporting persons is One Mellon Bank Center, Pittsburgh, Pennsylvania 15258. 38 47 DESCRIPTION OF CERTAIN INDEBTEDNESS THE CREDIT AGREEMENT On March 7, 1997, Cox Radio entered into a $300 million, five-year, senior, unsecured revolving credit facility (the "Credit Agreement") with certain guarantors and banks, including Chase Bank of Texas, N.A. (formerly Texas Commerce Bank National Association), as Administrative Agent, NationsBank of Texas, N.A., as Syndications Agent, and Citibank, N.A., as Documentation Agent. The loan proceeds were used to finance the payment of the consideration payable in the NewCity Acquisition, repay certain secured debt of NewCity and finance certain acquisitions. The remaining credit availability may be used to finance additional acquisitions and for other corporate purposes. The Credit Agreement has restrictions on the payment of dividends, certain mergers, consolidations or dispositions of assets and establishes limitations on, among other things, additional indebtedness and transactions with affiliates. The total principal amount outstanding under the Credit Agreement was $100.0 million as of June 30, 1998 and the weighted average per annum interest rate applicable to borrowings thereunder for the six months ended June 30, 1998 was 6.5%. Future borrowings under the Credit Agreement will accrue interest at the London Interbank Offered Rate plus a specified margin. THE CEI CREDIT FACILITY The Company has entered into a revolving credit facility with CEI (the "CEI Credit Facility"). Borrowings by the Company under the CEI Credit Facility are typically repaid by the Company within 30 days. Borrowings under the CEI Credit Facility accrue interest at CEI's commercial paper rate plus .40%. As of June 30, 1998, no amounts were outstanding under the CEI Credit Facility. ADDITIONAL FINANCING The Company expects to enter into a new credit facility pursuant to which the lenders thereunder would commit to lend $100 million to the Company on a revolving basis for acquisitions and general corporate purposes. Loans pursuant to such commitment are expected to bear interest on terms similar to the terms of the Credit Agreement. 39 48 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER The Old Notes were originally sold by the Company on May 26, 1998 to the Initial Purchasers pursuant to the Purchase Agreement. The Initial Purchasers subsequently placed the Old Notes with qualified institutional buyers pursuant to Rule 144A under the Securities Act. As a condition of the Purchase Agreement, the Company entered into the Registration Rights Agreement with the Initial Purchasers pursuant to which the Company has agreed, for the benefit of the holders of the Old Notes, at the Company's cost, to use its best efforts to (i) cause the Exchange Offer Registration Statement to be declared effective under the Securities Act within 180 days after the date of the original issuance of the Old Notes and (ii) keep the Exchange Offer open for not less than 30 calendar days (or longer if required by applicable law) after the date on which notice of the Exchange Offer is mailed to the holders of the Old Notes. For each 2003 Old Note validly tendered pursuant to the Exchange Offer and not validly withdrawn by the holder thereof, the holder of such 2003 Old Note will receive a 2003 New Note having a principal amount equal to that of the surrendered 2003 Old Note and for each 2005 Old Note validly tendered pursuant to the Exchange Offer and not validly withdrawn by the holder thereof, the holder of such 2005 Old Note will receive a 2005 New Note having a principal amount equal to that of the surrendered 2005 Old Note. Based upon interpretations by the staff of the Commission set forth in certain no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than a broker-dealer, as set forth below, or any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business and that such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes. See "The Exchange Offer -- Resale of the New Notes." Holders of Old Notes wishing to accept the Exchange Offer must represent to the Company, as required by the Registration Rights Agreement, that such conditions have been met and that such holder is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act. Each Participating Broker-Dealer must represent that the Old Notes tendered in exchange therefor were acquired as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of up to 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes or who is an affiliate of the Company may not rely on the position of the staff of the Commission enunciated in Exxon Capital Holdings Corporation (May 13, 1988) or similar no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. No affiliate of the Company may rely on such no-action letters and any such affiliate must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. As contemplated by the above-mentioned no-action letters and the Registration Rights Agreement, each holder accepting the Exchange Offer is required to represent to the Company in the Letter of Transmittal that (i) the New Notes are to be acquired by the holder or the person receiving such New Notes, whether or not such person is the holder, in the ordinary course of business, (ii) the holder or any such other person (other 40 49 than a broker-dealer referred to in the next sentence) is not engaging and does not intend to engage, in a distribution of the New Notes, (iii) the holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the New Notes, (iv) neither the holder nor any such other person is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act, and (v) the holder or any such other person acknowledges that if such holder or any other person participates in the Exchange Offer for the purpose of distributing the New Notes, it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale of the New Notes and cannot rely on such no-action letters. As indicated above, each Participating Broker-Dealer that receives New Notes for its own account in exchange for Old Notes must acknowledge that it (i) acquired the Old Notes for its own account as a result of market-making activities or other trading activities, (ii) has not entered into any arrangement or understanding with the Company or any "affiliate" of the Company (within the meaning of Rule 405 under the Securities Act) to distribute the New Notes to be received in the Exchange Offer and (iii) will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of such New Notes. For a description of the procedures for resales by Participating Broker-Dealers, see "Plan of Distribution." The Company has not entered into any arrangement or understanding with any person to distribute the New Notes to be received in the Exchange Offer. If, because of any change in law, regulation or in the applicable interpretations of the staff of the Commission, the Company is not permitted to effect the Exchange Offer or, for any reason, the Exchange Offer Registration Statement is not declared effective within 180 days after the date of issuance of the Old Notes or in certain other circumstances, then the Company shall use its best efforts to (a) as promptly as practicable, file a shelf registration statement (the "Shelf Registration Statement") covering the Old Notes, (b) cause the shelf registration statement to be declared effective under the Securities Act and (c) keep the shelf registration statement effective until the earlier of two years after the initial sale of the Old Notes to the Initial Purchasers or such time as all of the applicable Old Notes have been sold thereunder or otherwise cease to be registrable securities within the meaning of the Registration Rights Agreement. The Company will, in the event of the filing of the Shelf Registration Statement, provide to each applicable holder of the Old Notes copies of the prospectus which is a part of the Shelf Registration Statement, notify each such holder when the Shelf Registration Statement has become effective and take certain other actions as are required to permit unrestricted resales of the Old Notes. A holder of the Old Notes that sells such Old Notes pursuant to the Shelf Registration Statement generally will be required to be named as a selling security holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a holder (including certain indemnification obligations). In addition, each holder of the Old Notes will be required to deliver information to be used in connection with the Shelf Registration Statement and to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Old Notes included in the Shelf Registration Statement and to benefit from the provisions set forth below. Each holder will be deemed to have agreed that, upon receipt of notice from the Company of the occurrence of any event which makes any statement in the prospectus which is part of the Shelf Registration Statement (or, in the case of Participating Broker-Dealers, the prospectus which is part of the Exchange Offer Registration Statement) untrue in any material respect or which requires the making of any changes in such prospectus in order to make the statements therein not misleading or of certain other events specified in the Registration Rights Agreement, such holder (or Participating Broker-Dealer, as the case may be) will suspend the sale of Old Notes pursuant to such prospectus until the Company has amended or supplemented such prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented prospectus to such holder (or Participating Broker-Dealer, as the case may be) or the Company has given notice that the sale of the Notes may be resumed. 41 50 If the Company shall give such notice to suspend the sale of the Old Notes, it shall extend the relevant period referred to above during which the Company and the Note Guarantors, if any, are required to keep effective the Shelf Registration Statement (or the period during which Participating Broker-Dealers are entitled to use the prospectus included in the Exchange Offer Registration Statement in connection with the resale of New Notes) by the number of days during the period from and including the date of the giving of such notice to and including the date when holders shall have received copies of the supplemented or amended prospectus necessary to permit resales of the Notes or to and including the date on which the Company has given notice that the sale of Notes may be resumed. If the Company or any Note Guarantor, if any, fails to comply with the Registration Rights Agreement or if the Exchange Offer Registration Statement or the Shelf Registration Statement fails to become effective, then liquidated damages (the "Liquidated Damages") shall become payable in respect of the Notes as follows: (i) If neither the Exchange Offer Registration Statement nor the Shelf Registration Statement is declared effective by the Commission on or prior to the 180th day after the Closing Date (in the case of an Exchange Offer Registration Statement) or on or prior to the later of (A) the 40th day after the date such Registration Statement was required to be filed and (B) the 180th day after the Closing Date (in the case of a Shelf Registration Statement), then Liquidated Damages shall accrue on the principal amount of the Notes at a rate of 0.25% per annum; or (ii) if (A) the Company has not exchanged the New Notes for all Old Notes validly tendered or any Note Guarantor has not executed a New Note Guarantee, if any, in respect of such New Notes, in accordance with the terms of the Exchange Offer on or prior to the 45th day after the date on which the Exchange Offer Registration Statement was declared effective or (B) if applicable, the Shelf Registration Statement has been declared effective and such Shelf Registration Statement ceases to be effective or usable for resales at any time prior to the second anniversary of the Closing Date (other than after such time as all Notes have been disposed of thereunder or otherwise cease to be registrable securities within the meaning of the Registration Rights Agreement), then Liquidated Damages shall accrue on the principal amount of the Notes at a rate of 0.25% per annum, commencing on (x) the 46th day after such effective date, in the case of (A) above, or (y) the day such Shelf Registration Statement ceases to be effective or useable for resales, in the case of (B) above; provided, however, that the Liquidated Damages rate on the principal amount of Notes may not exceed in the aggregate 0.25% per annum; provided, further, however, that (1) upon the effectiveness of the Exchange Offer Registration Statement or a Shelf Registration Statement (in the case of clause (i) above), (2) upon the exchange of New Notes for all Old Notes validly tendered and execution by each Note Guarantor of a Note Guarantee, if any, in respect thereof (in the case of clause (ii) (A) above) or upon the effectiveness or availability of the Shelf Registration Statement which had ceased to remain effective or useable for resales (in the case of clause (ii) (B) above), then Liquidated Damages on the principal amount of Old Notes as a result of such clause (or the relevant subclause thereof) shall cease to accrue. Any amounts of Liquidated Damages due pursuant to the foregoing paragraphs will be payable in cash on May 15 and November 15 of each year to the holders of record on the last day of the month preceding the month in which the relevant payment date falls. The summary herein of certain provisions of the Registration Rights Agreement does not purport to be complete and is subject to, and is qualified in its entirety by, all the provisions of the Registration Rights Agreement, a copy of which is filed as an exhibit to the Registration Statement of which this Prospectus is a part. Following the consummation of the Exchange Offer, holders of the Old Notes who were eligible to participate in the Exchange Offer but who did not tender their Old Notes will not have any further registration rights and such Old Notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such Old Notes could be adversely affected. 42 51 TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this Prospectus and in the Letter of Transmittal, the Company will accept any and all Old Notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the Expiration Date. The Company will issue $1,000 principal amount of 2003 New Notes in exchange for each $1,000 principal amount of 2003 Old Notes and $1,000 principal amount of 2005 New Notes in exchange for each $1,000 principal amount of 2005 Old Notes accepted in the Exchange Offer. Holders may tender some or all of their Old Notes pursuant to the Exchange Offer. However, Old Notes may be tendered only in integral multiples of $1,000. The form and terms of the New Notes are the same in all material respects as the form and terms of the Old Notes, except that (i) the New Notes have been registered under the Securities Act and hence will not bear legends restricting the transfer thereof and (ii) the holders of the New Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Old Notes in certain circumstances relating to the timing of the Exchange Offer, all of which rights will terminate when the Exchange Offer is terminated. The New Notes will evidence the same debts as the Old Notes (which they replace) and will be entitled to the benefits of the Indenture. The forms and terms of any New Note Guarantee, if any, will be the same in all material respects as the guarantees in respect of the Old Notes. As of the date of this Prospectus, $200,000,000 aggregate principal amount of Old Notes are outstanding. The Company has fixed the close of business on November 12, 1998 as the record date for the Exchange Offer for purposes of determining the persons to whom this Prospectus and the Letter of Transmittal will be mailed initially. Holders of Old Notes do not have any appraisal or dissenters' rights under the Delaware General Corporation Law or the Indenture in connection with the Exchange Offer. The Company intends to conduct the Exchange Offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the Commission thereunder. The Company shall be deemed to have accepted validly tendered Old Notes when, as and if the Company has given oral or written notice thereof to the Exchange Agent. The Exchange Agent will act as agent for the tendering holders for the purpose of receiving the New Notes from the Company. If any tendered Old Notes are not accepted for exchange because of an invalid tender, the occurrence of certain other events set forth herein or otherwise, the certificates for any such unaccepted Old Notes will be returned, without expense, to the tendering holder thereof as promptly as practicable after the Expiration Date. Holders who tender Old Notes in the Exchange Offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letter of Transmittal, transfer taxes with respect to the exchange of Old Notes pursuant to the Exchange Offer. The Company will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the Exchange Offer. See "-- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS The term "Expiration Date" shall mean 5:00 p.m., New York City time, on December 14, 1998, unless the Company, in its sole discretion, extends the Exchange Offer, in which case the term "Expiration Date" shall mean the latest date and time to which the Exchange Offer is extended. In order to extend the Exchange Offer, the Company will notify the Exchange Agent of any extension by oral or written notice and will mail to the registered holders an announcement thereof, each prior to 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. The Company reserves the right, in its sole discretion, (i) to delay accepting any Old Notes, to extend the Exchange Offer or to terminate the Exchange Offer if any of the conditions set forth below under "-- Conditions" shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the Exchange Agent or (ii) to amend the terms of the Exchange Offer in any manner. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof to the registered holders. 43 52 PROCEDURES FOR TENDERING Only a holder of Old Notes may tender such Old Notes in the Exchange Offer. To tender in the Exchange Offer, a holder must complete, sign and date the Letter of Transmittal, or a facsimile thereof, have the signatures thereon guaranteed if required by the Letter of Transmittal or transmit an Agent's Message (as defined below) in connection with a book-entry transfer, and mail or otherwise deliver such Letter of Transmittal or such facsimile, or Agent's Message, together with the Old Notes and any other required documents, to the Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. To be tendered effectively, the Old Notes, Letter of Transmittal or Agent's Message, and other required documents must be completed and received by the Exchange Agent at the address set forth below under "Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration Date. In addition, either (i) certificates for such Old Notes must be received by the Exchange Agent prior to the Expiration Date along with the Letter of Transmittal, (ii) a timely confirmation of a book-entry transfer (a "Book-Entry Confirmation") of such Old Notes into the Exchange Agent's account at The Depository Trust Company ("DTC" or the "Book-Entry Transfer Facility") pursuant to the procedure for book-entry transfer described below, must be received by the Exchange Agent prior to the Expiration Date or (iii) the holder must comply with the guaranteed delivery procedures described below. Delivery of the Old Notes may be made by book-entry transfer in accordance with the procedures described below. Confirmation of such book-entry transfer must be received by the Exchange Agent prior to the Expiration Date. DELIVERY OF DOCUMENTS TO THE BOOK ENTRY TRANSFER FACILITY IN ACCORDANCE WITH ITS PROCEDURE DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. DTC has authorized DTC participants that hold Old Notes on behalf of beneficial owners of Old Notes through DTC to tender their Old Notes as if they were holders. To effect a tender of Old Notes, DTC participants should either (i) complete and sign the Letter of Transmittal (or a manually signed facsimile thereof), have the signature thereon guaranteed if required by the instructions to the Letter of Transmittal, and mail or deliver the Letter of Transmittal (or such manually signed facsimile) to the Exchange Agent pursuant to the procedure set forth in "Procedures for Tendering" or (ii) transmit their acceptance to DTC through the DTC Automated Tender Offer Program ("ATOP") for which the transaction will be eligible and follow the procedure for book-entry transfer set forth in "-- Book-Entry Transfer." By executing the Letter of Transmittal or Agent's Message, each holder will make to the Company the representations set forth above under the heading "-- Purpose and Effect of the Exchange Offer." The tender by a holder and the acceptance thereof by the Company will constitute an agreement between such holder and the Company in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal or Agent's Message. THE METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL OR AGENT'S MESSAGE AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OLD NOTES SHOULD BE SENT TO THE COMPANY. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS. Any beneficial owner whose Old Notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the Letter of Transmittal. Signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution (as defined below) unless the Old Notes tendered pursuant thereto are tendered 44 53 (i) by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the Letter of Transmittal or (ii) for the account of an Eligible Institution. In the event that signatures on a Letter of Transmittal or a notice of withdrawal, as the case may be, are required to be guaranteed, such guarantee must be by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"). If the Letter of Transmittal is signed by a person other than the registered holder of any Old Notes listed therein, such Old Notes must be endorsed or accompanied by a properly completed bond power, signed by such registered holder as such registered holder's name appears on such Old Notes with the signature thereon guaranteed by an Eligible Institution. If the Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and evidence satisfactory to the Company of its authority to so act must be submitted with the Letter of Transmittal. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Old Notes and withdrawal of tendered Old Notes will be determined by the Company in its sole discretion, which determination will be final and binding. The Company reserves the absolute right to reject any and all Old Notes not properly tendered or any Old Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right in its sole discretion to waive any defects, irregularities or conditions of tender as to particular Old Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in the Letter of Transmittal) will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Company shall determine. Although the Company intends to notify holders of defects or irregularities with respect to tenders of Old Notes, neither the Company, the Exchange Agent nor any other person shall incur any liability for failure to give such notification. Tenders of Old Notes will not be deemed to have been made until such defects or irregularities have been cured or waived. Any Old Notes received by the Exchange Agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the Exchange Agent to the tendering holders, unless otherwise provided in the Letter of Transmittal, as soon as practicable following the Expiration Date. ACCEPTANCE OF OLD NOTES FOR EXCHANGE; DELIVERY OF NEW NOTES For each Old Note accepted for exchange, the holder of such Old Note will receive a New Note having a principal amount equal to that of the surrendered Old Note. For purposes of the Exchange Offer, the Company shall be deemed to have accepted properly tendered Old Notes for exchange when, as and if the Company has given oral or written notice thereof to the Exchange Agent. In all cases, the issuance of New Notes for Old Notes that are accepted for exchange pursuant to the Exchange Offer will be made only after timely receipt by the Exchange Agent of certificates for such Old Notes or a timely Book-Entry Confirmation of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility, a properly completed and duly executed Letter of Transmittal or Agent's Message and all other required documents. If any tendered Old Notes are not accepted for any reason set forth in the terms and conditions of the Exchange Offer, such unaccepted or non-exchanged Old Notes will be returned without expense to the tendering holder thereof (or, in the case of Old Notes tendered by book-entry transfer into the Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the book-entry transfer procedures described below, such non-exchanged Old Notes will be credited to an account maintained with such Book-Entry Transfer Facility) as promptly as practicable after the Expiration Date. 45 54 BOOK-ENTRY TRANSFER The Exchange Agent will establish a new account or utilize an existing account with respect to the Old Notes at DTC promptly after the date of this Prospectus, and any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Notes may make a book-entry tender of Old Notes by causing DTC to transfer such Old Notes into the Exchange Agent's account in accordance with DTC's procedures for such transfer. However, although tender of Old Notes may be effected through book-entry transfer into the Exchange Agent's account at DTC, the Letter of Transmittal (or a manually signed facsimile thereof), properly completed and validly executed, with any required signature guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any other required documents, must, in any case, be received by the Exchange Agent at its address set forth below under the caption "Exchange Agent" on or prior to the Expiration Date, or the guaranteed delivery procedures described below must be complied with. The confirmation of book-entry transfer of Old Notes into the Exchange Agent's account at DTC as described above is referred to herein as a "Book-Entry Confirmation." Delivery of documents to DTC in accordance with DTC's procedures does not constitute delivery to the Exchange Agent. The term "Agent's Message" means a message transmitted by DTC to, and received by, the Exchange Agent and forming a part of a Book-Entry Confirmation, which states that DTC has received an express acknowledgment from the participant in DTC tendering the Old Notes stating (i) the aggregate principal amount of Old Notes which have been tendered by such participant, (ii) that such participant has received and agrees to be bound by the terms of the Letter of Transmittal and (iii) that the Company may enforce such agreement against the participant. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available, (ii) who cannot deliver their Old Notes, the Letter of Transmittal or any other required documents to the Exchange Agent or (iii) who cannot complete the procedures for book-entry transfer, prior to the Expiration Date, may effect a tender if: (a) the tender is made through an Eligible Institution; (b) prior to the Expiration Date, the Exchange Agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the holder, the certificate number(s) of such Old Notes and the principal amount of Old Notes tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) (or in the case of a book-entry transfer, an Agent's Message) together with the certificate(s) representing the Old Notes (or a confirmation of book-entry transfer of such Notes into the Exchange Agent's account at the Book-Entry Transfer Facility), and any other documents required by the Letter of Transmittal will be deposited by the Eligible Institution with the Exchange Agent; and (c) the certificate(s) representing all tendered Old Notes in proper form for transfer (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account at the Book-Entry Transfer Facility), together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and all other documents required by the Letter of Transmittal are received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to holders who wish to tender their Old Notes according to the guaranteed delivery procedures set forth above. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of Old Notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration Date. 46 55 To withdraw a tender of Old Notes in the Exchange Offer, a telegram, telex, letter or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to 5:00 p.m., New York City time, on the business day prior to the Expiration Date. Any such notice of withdrawal must (i) specify the name of the person having deposited the Old Notes to be withdrawn (the "Depositor"), (ii) identify the Old Notes to be withdrawn (including the certificate number(s) and principal amount of such Old Notes, or, in the case of Old Notes transferred by book-entry transfer, the name and number of the account at the Book-Entry Transfer Facility to be credited), (iii) be signed by the holder in the same manner as the original signature on the Letter of Transmittal by which such Old Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Trustee with respect to the Old Notes register the transfer of such Old Notes into the name of the person withdrawing the tender and (iv) specify the name in which any such Old Notes are to be registered, if different from that of the Depositor. All questions as to the validity, form and eligibility (including time of receipt) of such notices will be determined by the Company, whose determination shall be final and binding on all parties. Any Old Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no New Notes will be issued with respect thereto unless the Old Notes so withdrawn are validly retendered. Any Old Notes which have been tendered but which are not accepted for exchange will be returned to the holder thereof without cost to such holder as soon as practicable after withdrawal, rejection of tender or termination of the Exchange Offer. Properly withdrawn Old Notes may be retendered by following one of the procedures described above under "-- Procedures for Tendering" at any time prior to Expiration Date. CONDITIONS Notwithstanding any other term of the Exchange Offer, the Company shall not be required to accept for exchange, or exchange New Notes for, any Old Notes, and may terminate or amend the Exchange Offer as provided herein before the Expiration Date, if: (a) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or any material adverse development has occurred in any existing action or proceeding with respect to the Company or any of its subsidiaries; or (b) any law, statute, rule, regulation or interpretation by the staff of the Commission is proposed, adopted or enacted, which, in the sole judgment of the Company, might materially impair the ability of the Company to proceed with the Exchange Offer or materially impair the contemplated benefits of the Exchange Offer to the Company; or (c) any governmental approval has not been obtained, which approval the Company shall, in its sole discretion, deem necessary for the consummation of the Exchange Offer as contemplated hereby. If the Company determines in its reasonable discretion that any of the conditions are not satisfied, the Company may (i) refuse to accept any Old Notes and return all tendered Old Notes to the tendering holders, (ii) extend the Exchange Offer and retain all Old Notes tendered prior to the expiration of the Exchange Offer, subject, however, to the rights of holders to withdraw such Old Notes (see "-- Withdrawal of Tenders") or (iii) waive such unsatisfied conditions with respect to the Exchange Offer and accept all properly tendered Old Notes which have not been withdrawn. 47 56 EXCHANGE AGENT The Bank of New York has been appointed as Exchange Agent for the Exchange Offer. Questions and requests for assistance, requests for additional copies of this Prospectus or of the Letter of Transmittal and requests for Notice of Guaranteed Delivery should be directed to the Exchange Agent addressed as follows: By Registered or Certified Mail: By Overnight Courier: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7 East Ground Level New York, New York 10286 Corporate Trust Services Window Attention: Reorganization Section New York, New York 10286 Attention: Reorganization Section By Hand: By Facsimile Transmission (For Eligible Institutions Only) The Bank of New York (212) 815-6339 101 Barclay Street Ground Level Corporate Trust Services Window New York, New York 10286 Attention: Reorganization Section
Confirm by Telephone: Christopher Davis (212) 815-4997 DELIVERY TO AN ADDRESS OR TRANSMISSION VIA A FACSIMILE NUMBER OTHER THAN SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. FEES AND EXPENSES The expenses of soliciting tenders will be borne by the Company. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by officers and regular employees of the Company and its affiliates. The Company has not retained any dealer-manager in connection with the Exchange Offer and will not make any payments to brokers, dealers or others soliciting acceptances of the Exchange Offer. The Company, however, will pay the Exchange Agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection therewith. The cash expenses to be incurred in connection with the Exchange Offer will be paid by the Company. Such expenses include fees and expenses of the Exchange Agent and Trustee, accounting and legal fees and printing costs, among others. ACCOUNTING TREATMENT The New Notes will be recorded at the same carrying value as the Old Notes, which is face value, as reflected in the Company's accounting records on the date of exchange. Accordingly, no gain or loss for accounting purposes will be recognized by the Company. The expenses of the Exchange Offer will be expensed over the term of the New Notes. CONSEQUENCES OF FAILURE TO EXCHANGE The Old Notes that are not exchanged for New Notes pursuant to the Exchange Offer will remain restricted securities. Accordingly, such Old Notes may be resold only (i) to "qualified institutional buyers" 48 57 (as defined in Rule 144A under the Securities Act) in compliance with Rule 144A, (ii) to a limited number of institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) that, prior to such transfer, furnish to the Trustee a signed letter containing certain representations and agreements relating to the restrictions on transfer of the Old Notes (the form of which letter can be obtained from the Trustee) and, if such transfer is in respect of an aggregate principal amount of Old Notes at the time of transfer of less than $100,000, an opinion of counsel acceptable to the Company that such transfer is in compliance with the Securities Act, (iii) outside the United States in compliance with Rule 904 under the Securities Act, (iv) pursuant to the exemption from registration provided by Rule 144 under the Securities Act (if available) or (v) pursuant to an effective registration statement under the Securities Act. RESALE OF THE NEW NOTES Based upon interpretations by the staff of the Commission set forth in certain no-action letters issued to third parties, the Company believes that the New Notes issued pursuant to the Exchange Offer in exchange for Old Notes may be offered for resale, resold and otherwise transferred by any holder thereof (other than a broker-dealer, as set forth below, or any such holder that is an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act) without compliance with the registration and prospectus delivery requirements of the Securities Act, provided that such New Notes are acquired in the ordinary course of such holder's business and that such holder has no arrangement or understanding with any person to participate in the distribution of such New Notes. See "The Exchange Offer -- Resale of the New Notes." Holders of Old Notes wishing to accept the Exchange Offer must represent to the Company, as required by the Registration Rights Agreement, that such conditions have been met and that such holder is not an "affiliate" of the Company within the meaning of Rule 405 under the Securities Act. Each Participating Broker-Dealer that receives New Notes for its own account pursuant to the Exchange Offer must represent that the Old Notes tendered in exchange therefor were acquired as a result of market-making activities or other trading activities and must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This Prospectus, as it may be amended or supplemented from time to time, may be used by any broker-dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of up to 90 days after the Expiration Date, it will make this Prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution." Any holder who tenders in the Exchange Offer with the intention to participate, or for the purpose of participating, in a distribution of the New Notes or who is an affiliate of the Company may not rely on the position of the staff of the Commission enunciated in such no-action letters and, in the absence of an exemption therefrom, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. Failure to comply with such requirements in such instance may result in such holder incurring liability under the Securities Act for which the holder is not indemnified by the Company. No affiliate of the Company may rely on such no-action letters and any such affiliate must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction. The Company has not entered into any arrangement or understanding with any person to distribute the New Notes to be received in the Exchange Offer. 49 58 DESCRIPTION OF THE NOTES GENERAL Each of the 2003 New Notes and the 2005 New Notes, like the Old Notes, will be a separate series of securities issued under the Indenture, dated as of May 26, 1998 (the "Indenture"), among the Company, the Initial Note Guarantors (as defined herein) and The Bank of New York, as trustee (the "Trustee"). Copies of the Indenture are available upon request from the Company. The following summary of certain provisions of the Indenture does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all the provisions of the Indenture, including the definitions of certain terms therein and those terms made a part thereof by the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"). Whenever particular defined terms of the Indenture not otherwise defined herein are referred to, such defined terms are incorporated herein by reference. The form and terms of the New Notes are the same in all material respects as the form and terms of the Old Notes (which they replace) except that (i) the issuance of the New Notes have been registered under the Securities Act and, therefore, the New Notes will not bear legends restricting the transfer thereof, and (ii) the holders of New Notes will not be entitled to certain rights under the Registration Rights Agreement, including the provisions providing for an increase in the interest rate on the Old Notes in certain circumstances relating to the timing of the Exchange Offer, which rights will terminate when the Exchange Offer is consummated. A copy of the Indenture has been filed as an exhibit to the Registration Statement of which this Prospectus forms a part. Certain definitions of terms used in the following summary are set forth under "-- Certain Definitions" below. The Old Notes and the New Notes are sometimes referred to herein collectively as the "Notes." The 2003 New Notes and the 2005 New Notes will be senior unsecured obligations of the Company ranking pari passu in right of payment with all other existing and future unsubordinated unsecured obligations of the Company, initially limited to $100 million and $100 million aggregate principal amount, respectively, and will mature on May 15, 2003 and May 15, 2005, respectively, unless previously redeemed. Interest on the New Notes will accrue at the rates shown on the front cover of this Prospectus from the Closing Date or from the most recent Interest Payment Date to which interest has been paid or provided for, payable semiannually (to Holders of record at the close of business on April 30 or October 31 immediately preceding the Interest Payment Date) on May 15 and November 15 of each year. Principal of, and premium, if any, and interest on, the Notes will be payable at the office or agency of the Company in the Borough of Manhattan, the City of New York (which initially will be the principal corporate trust office of the Trustee at 101 Barclay Street, Floor 21W, New York, New York 10286); provided, that, at the option of the Company, payment of interest may be made by check mailed to the Holders at their addresses as they appear in the Security Register. Interest will be computed on the basis of a 360-day year of twelve 30-day months. The New Notes will be issued only in fully registered form, without coupons, in denominations of $1,000 principal amount and any integral multiple thereof. See "-- Book-Entry; Delivery and Form." No service charge will be made for any registration of transfer or exchange of Notes, but the Company may require payment of a sum sufficient to cover any transfer tax or other similar governmental charge payable in connection therewith. Subject to the covenants described below under "Covenants" and applicable law, the Company may issue additional Notes under the Indenture. The New Notes offered hereby, the Old Notes and any such additional Notes subsequently issued would be treated as a single class for all purposes under the Indenture. OPTIONAL REDEMPTION The New Notes will be redeemable at the option of the Company, in whole at any time or in part from time to time, on at least 30 days but not more than 60 days prior written notice mailed to the registered holders thereof, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be 50 59 redeemed, and (ii) the sum, as determined by the Quotation Agent (as defined herein), of the present values of the principal amount and the remaining scheduled payments of interest on the Notes to be redeemed from the redemption date to May 15, 2003 in the case of the 2003 New Notes and May 15, 2005 in the case of the 2005 New Notes (the "Remaining Life"), in each case, discounted on a semiannual basis (assuming a 360-day year consisting of 30-day months) at the Treasury Rate (as defined herein) plus 10 basis points in the case of the 2003 New Notes and 15 basis points in the case of the 2005 New Notes, plus in either case, accrued interest thereon to the date of redemption. If money sufficient to pay the redemption price of and accrued interest on all of the Notes of a particular series (or portions thereof) to be redeemed on the redemption date is deposited with the Trustee or a Paying Agent on or before the redemption date and certain other conditions are satisfied, then on and after such date, interest will cease to accrue on such Notes (or such portion thereof) called for redemption. "Comparable Treasury Issue" means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the Remaining Life that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity with the Remaining Life of the Notes to be redeemed. "Comparable Treasury Price" means, with respect to any redemption date, the average of five Reference Treasury Dealer Quotations for such redemption date, after excluding the highest and lowest of such Reference Treasury Dealer Quotations, or, if the Trustee obtains fewer than three such Reference Treasury Dealer Quotations, the average of all such quotations. "Quotation Agent" means the Reference Treasury Dealer appointed by the Company. "Reference Treasury Dealer" means (i) NationsBanc Montgomery Securities LLC, Chase Securities Inc. and J.P. Morgan Securities Inc. and their respective successors; provided, however, that if the foregoing shall cease to be primary U.S. Government securities dealers in New York City (a "Primary Treasury Dealer"), the Company shall substitute therefor another Primary Treasury Dealer, and (ii) any other Primary Treasury Dealer selected by the Company. "Reference Treasury Dealer Quotations" means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Trustee, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third business day preceding such redemption date. "Treasury Rate" means, with respect to any redemption date, the rate per annum equal to the semiannual yield to maturity of the Comparable Treasury Issue, calculated on the third business day preceding such redemption date using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such redemption date. NOTE GUARANTEES The Indenture requires the Company to cause each of its Subsidiaries that guarantee, on the date hereof or in the future, indebtedness under the Credit Agreement and indebtedness under any future senior unsecured credit facility between the Company and the third party lenders thereunder to fully and unconditionally guarantee, as primary obligors and not merely as sureties, pursuant to a Note Guarantee, on an unsubordinated, unsecured basis, the due and punctual payment of the principal of, interest on and other amounts payable under the Notes, when and if the same shall become due and payable, whether at stated maturity, by declaration of acceleration, upon redemption or otherwise; provided, however, that in the event that any such Subsidiary is released from its guarantee of indebtedness under the Credit Agreement or such future credit facility, then such Subsidiary will also be immediately released from its obligations under its Note Guarantee without further action by any party. The Old Notes were initially guaranteed by WSB and WHIO. WSB and WHIO were merged with and into Cox Radio on November 10, 1998 and November 1, 1998, respectively (collectively, the "Mergers"), and, therefore, no longer guarantee indebtedness under the Credit Agreement or any other senior unsecured credit facility between the Company and third party lenders. 51 60 Consequently, WSB and WHIO no longer guarantee the due and punctual payment of the principal or interest on or other amounts payable under the Notes. If the License Drop-Down is consummated, CXR Holdings will become a Note Guarantor; however, there can be no assurance that the License Drop-Down will be consummated by any particular date or at all. Each Note Guarantee, if any, will be limited to an amount not to exceed the maximum amount that can be guaranteed by the applicable Note Guarantor without rendering such Note Guarantee, as it relates to such Note Guarantor, voidable under applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting creditors' rights generally. CERTAIN COVENANTS The Indenture contains certain covenants including, among others, the following: Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, create, incur or assume any Lien (other than Permitted Liens) on Restricted Property to secure the payment of Indebtedness of the Company or any Restricted Subsidiary if, immediately after the creation, incurrence or assumption of such Lien, the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries that is secured by Liens (other than Permitted Liens) on Restricted Property would exceed the greater of (i) $30 million or (ii) 15% of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries (whether or not so secured), unless effective provision is made whereby the Notes (together with, if the Company shall so determine, any other Indebtedness ranking equally with the Notes, whether then existing or thereafter created) are secured equally and ratably with (or prior to) such Indebtedness (but only for so long as such Indebtedness is so secured). The foregoing limitation does not apply to (i) Liens existing on the Closing Date; (ii) Liens granted after the Closing Date on any assets or Capital Stock of the Company or its Restricted Subsidiaries created in favor of the Holders; (iii) Liens with respect to the assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the Company or another Restricted Subsidiary to secure Indebtedness owing to the Company or such other Restricted Subsidiary; (iv) Liens securing Indebtedness which is incurred to refinance secured Indebtedness which is permitted to be incurred under the "Limitation on Indebtedness of Restricted Subsidiaries" covenant; provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets securing the Indebtedness being refinanced; (v) Liens securing Indebtedness permitted under the "Limitation on Indebtedness of Restricted Subsidiaries" covenant; or (vii) Permitted Liens. Limitation on Indebtedness of Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary to incur any Indebtedness if, immediately after the incurrence or assumption of such Indebtedness, the aggregate outstanding principal amount of all Indebtedness of the Restricted Subsidiaries would exceed the greater of (i) $30 million or (ii) 15% of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries; provided that, in any event, a Restricted Subsidiary may incur Indebtedness to extend, renew or replace Indebtedness of such Restricted Subsidiary to the extent that the principal amount of the Indebtedness so incurred does not exceed the principal amount of the Indebtedness extended, renewed or replaced thereby immediately prior to such extension, renewal or replacement plus any premium, accrued and unpaid interest or capitalized interest payable thereon. Designation of Subsidiaries. The Company may designate a Restricted Subsidiary as an Unrestricted Subsidiary or designate an Unrestricted Subsidiary as a Restricted Subsidiary at any time, provided that (i) immediately after giving effect to such designation, the Leverage Ratio of the Restricted Group is not greater than 7:1 and the Company and the Restricted Subsidiaries are in compliance with the "Limitation on Liens" and "Limitation on Indebtedness of Restricted Subsidiaries" covenants, and (ii) an Officers' Certificate with respect to such designation is delivered to the Trustee within 75 days after the end of the fiscal quarter of the Company in which such designation is made (or, in the case of a designation made during the last fiscal quarter of the Company's fiscal year, within 52 61 120 days after the end of such fiscal year), which Officers' Certificate shall state the effective date of such designation. Mergers or Sales of Assets. The Indenture will provide that neither the Company nor any Note Guarantor may merge into or consolidate with another corporation or sell or lease all or substantially all its assets to another corporation unless (i) either (A) the Company or such Note Guarantor is the surviving corporation or (B) the resulting, surviving or transferee corporation is organized under the laws of a state of the United States or the District of Columbia and expressly assumes all obligations under the Notes or the Note Guarantees, as applicable, and all other applicable covenants and conditions of the Indenture, and (ii) immediately after and giving effect to such transaction, no Event of Default has occurred. The Indenture will not contain any provisions affording holders of Notes any additional protection in the event that the Company enters into a highly leveraged transaction. DEFINITIONS "Asset Acquisition" means (i) an investment by the Company or any of its Restricted Subsidiaries in any other Person where such Person shall become a Restricted Subsidiary or shall be merged into or consolidated with the Company or any of its Restricted Subsidiaries; or (ii) an acquisition by the Company or any of its Restricted Subsidiaries of the property and assets of any Person other than the Company or any of its Restricted Subsidiaries that constitute substantially all of a division or line of business of such Person. "Asset Disposition" means the sale or other disposition by the Company or any of its Restricted Subsidiaries (other than to the Company or another Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of any Restricted Subsidiary or (ii) all or substantially all of the assets that constitute a division or line of business of the Company or any of its Restricted Subsidiaries. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in equity of such Person, whether outstanding on the Closing Date or issued thereafter. "Capitalized Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person. "Closing Date" means the date on which the Old Notes were originally issued under the Indenture. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "GAAP" means such accounting principles as are generally accepted in the United States of America as of the date or time of any particular computation. "Indebtedness" means, without duplication, with respect to any Person: (i) any indebtedness of such Person (A) for borrowed money or (B) evidenced by a note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any property or assets, including securities; (ii) any guarantee by such Person of any indebtedness of others described in the preceding clause (i); and (iii) any amendment, extension, renewal or refunding of any such indebtedness or guarantee. The term "Indebtedness" excludes (i) any indebtedness of the Company or any Restricted Subsidiary to the Company or another Restricted Subsidiary, (ii) any guarantee by the Company or any Restricted Subsidiary of indebtedness of the Company or another Restricted Subsidiary, (iii) trade accounts payable, (iv) money borrowed and set aside at the time of the incurrence of any Indebtedness in order to prefund the payment of the interest on such Indebtedness so long as such money is held to secure the payment of such interest, (v) liabilities for federal, state, local or other taxes and (vi) letters of credit, performance bonds and similar 53 62 obligations issued in favor of governmental authorities as a term of any governmental franchise, license, permit or authorization held by such Person or any of its Subsidiaries. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation. The amount of Indebtedness issued with original issue discount is the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. "Interest Rate Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement. "Leverage Ratio" with respect to the Restricted Group means, as of the date of and after giving effect to any designation of an Unrestricted Subsidiary as a Restricted Subsidiary or any designation of a Restricted Subsidiary as an Unrestricted Subsidiary, in each case in accordance with the "Designation of Subsidiaries" covenant, the ratio of (i) the aggregate outstanding principal amount of all Indebtedness of the Restricted Group as of such date to (ii) the product of four times the Restricted Group Cash Flow for the most recent full fiscal quarter for which financial information is available on such date; provided that, in making the foregoing calculation, (A) pro forma effect shall be given to any Indebtedness to be incurred or repaid on the date of incurrence of any Indebtedness (the "Transaction Date"); (B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions (including giving pro forma effect to the application of proceeds of any Asset Disposition) that occur from the beginning of the fiscal quarter through the Transaction Date (the "Reference Period"), as if they had occurred and such proceeds had been applied on the first day of such Reference Period and, in the case of any Asset Acquisition, giving pro forma effect to any cost reductions the Company anticipates if the Company delivers to the Trustee an officer's certificate executed by the Chief Financial Officer of the Company certifying to and describing and quantifying with reasonable specificity the cost reductions expected to be attained within the first year after such Asset Acquisition; and (C) pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Company or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; provided that to the extent that clause (B) or (C) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the fiscal quarter immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed of for which financial information is available. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Permitted Liens" means: (i) Liens for taxes, assessments, governmental charges or claims that are not yet delinquent or are being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (ii) statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising in the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; (iv) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations (including obligations under franchise agreements), bankers' acceptances, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive 54 63 of obligations for the payment of borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of the Company or any of its Restricted Subsidiaries; (vi) Liens upon real or personal property acquired after the Closing Date; provided that (a) such Lien is created solely for the purpose of securing Indebtedness incurred, in accordance with the "Limitation on Indebtedness of Restricted Subsidiaries" covenant to finance the cost (including the cost of design, development, acquisition, installation, integration, improvement or construction) of the item of property or assets subject thereto and such Lien is created prior to, at the time of or within six months after the later of the acquisition, the completion of construction or the commencement of full operation of such property, (b) the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any such Lien shall not extend to or cover any property or assets other than such item of property or assets and any improvements on such item; (vii) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (viii) Liens on property of, or on shares of Capital Stock or Indebtedness of, any Person existing at the time such Person becomes, or becomes a part of, any Restricted Subsidiary; provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets acquired; (ix) Liens in favor of the Company or any Restricted Subsidiary; (x) Liens arising from the rendering of a final judgment or order against the Company or any Restricted Subsidiary that does not give rise to an Event of Default; (xi) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof; (xii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (xiii) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Interest Rate Agreements and Currency Agreements and forward contracts, options, future contracts, futures options or similar agreements or arrangements designed solely to protect the Company or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities; (xiv) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business in accordance with industry practice; (xv) Liens resulting from deposits made in connection with any proposed Asset Acquisition; provided that such deposit does not exceed 10% of the estimated purchase price for such Asset Acquisition; and (xvi) Liens on or sales of receivables, including related intangible assets and proceeds thereof where, in the good faith determination of the Company, the Company has received the fair market value of such receivables. "Person" means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other entity. "Principal Property" means, as of any date of determination, any property or assets owned by any Restricted Subsidiary other than (i) any such property which, in the good faith opinion of the Board of Directors, is not of material importance to the business conducted by the Company and its Restricted Subsidiaries taken as a whole and (ii) any shares of any class of stock or any other security of any Unrestricted Subsidiary. "Restricted Group" means, as of any date of determination, the Company and the Restricted Subsidiaries as of such date. "Restricted Property" means, as of any date of determination, any Principal Property and any shares of stock of a Restricted Subsidiary owned by the Company or a Restricted Subsidiary. "Restricted Subsidiary" means each Subsidiary of the Company other than the Unrestricted Subsidiaries. "Stated Maturity" means, with respect to any security, the date specified in such security as the fixed date on which the final payment of principal of such security is due and payable, including pursuant to any mandatory redemption provision (but excluding any provision providing for the repurchase of such security at 55 64 the option of the holder thereof upon the happening of any contingency unless such contingency has occurred). "Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that has been designated as an Unrestricted Subsidiary as permitted by the covenant described under "Designation of Subsidiaries" and not thereafter redesignated as a Restricted Subsidiary as permitted thereby and (ii) each Subsidiary of any Unrestricted Subsidiary. DEFAULTS An Event of Default with respect to the Notes of any series is defined in the Indenture as (i) a default in the payment of interest on such Notes when due, continued for 30 days, (ii) a default in the payment of principal of, or premium, if any, on, any such Note when due at its Stated Maturity, upon optional redemption, upon declaration or otherwise, (iii) the failure by the Company or the Note Guarantors to comply with their respective obligations under "-- Certain Covenants -- Mergers or Sales of Assets" above, (iv) the failure by the Company to comply within 60 days after notice with any of its other agreements contained in the Indenture, including its obligations under the covenants described above in "-- Certain Covenants" under "-- Limitation on Liens," "-- Limitation on Indebtedness of Restricted Subsidiaries" or "-- Designation of Subsidiaries," (v) Indebtedness of the Company or any Restricted Subsidiary is not paid within any applicable grace period after final maturity or is accelerated by the holders thereof because of a default and the total amount of such Indebtedness unpaid or accelerated exceeds the greater of $25 million or 30% of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries, (vi) certain events of bankruptcy, insolvency or reorganization of the Company or a Restricted Subsidiary (the "bankruptcy provisions") or (vii) the Company or any Restricted Subsidiary shall fail within 60 days to pay, bond or otherwise discharge any uninsured judgment or court order for the payment of money in excess of $25 million, which is not stayed on appeal or is not otherwise being appropriately contested in good faith. However, a default under clause (iv) with respect to the 2003 New Notes or the 2005 New Notes will not constitute an Event of Default until the Trustee or the holders of 25% in principal amount of the outstanding Notes of such series notify the Company of the default and the Company does not cure such default within the time specified after receipt of such notice. If an Event of Default (other than one relating to the bankruptcy provisions) occurs and is continuing with respect to the 2003 New Notes or the 2005 New Notes, the Trustee or the holders of at least 25% in principal amount of the outstanding Notes of such series may declare the principal of and accrued but unpaid interest on all such Notes to be due and payable. Upon such a declaration, such principal and interest shall be due and payable immediately. Under certain circumstances, the holders of a majority in principal amount of the outstanding 2003 New Notes or 2005 New Notes, as the case may be, may rescind any such acceleration with respect to such Notes and its consequences. If an Event of Default relating to the bankruptcy provisions occurs and is continuing, the principal of and interest on all such Notes will ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any holders of such Notes. Subject to the provisions of the Indenture relating to the duties of the Trustee, in case an Event of Default occurs and is continuing thereunder, the Trustee will be under no obligation to exercise any of the rights or powers under the Indenture at the request or direction of the holders of any Notes unless such holders have offered to the Trustee reasonable indemnity or security against any loss, liability or expense. Except to enforce the right to receive payment of principal, premium (if any) or interest when due, no holder of a Note may pursue any remedy with respect to the Indenture or the Notes unless (i) such holder has previously given 56 65 the Trustee notice that an Event of Default is continuing, (ii) holders of at least 25% in principal amount of the outstanding 2003 New Notes or 2005 New Notes, as applicable, have requested the Trustee to pursue the remedy, (iii) such holders have offered the Trustee reasonable security or indemnity against any loss, liability or expense, (iv) the Trustee has not complied with such request within 60 days after the receipt thereof and the offer of security or indemnity and (v) the holders of a majority in principal amount of such outstanding Notes have not given the Trustee a direction inconsistent with such request within such 60-day period. Subject to certain restrictions, the holders of a majority in principal amount of the 2003 New Notes or 2005 New Notes, as the case may be, are given the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or of exercising any trust or power conferred on the Trustee. The Trustee, however, may refuse to follow any direction that conflicts with law or the Indenture or that the Trustee determines is unduly prejudicial to the rights of any other holder of a Note or that would involve the Trustee in personal liability. The Indenture provides that if a Default occurs and is continuing and is actually known to the Trustee, the Trustee must mail to each holder of the applicable Notes notice of the Default within 90 days after it occurs. Except in the case of a Default in the payment of principal of, premium (if any) or interest on any Note, the Trustee may withhold notice if and so long as a committee of its trust officers determines that withholding notice is not opposed to the interest of the holders of such Notes. In addition, the Company is required to deliver to the Trustee, within 120 days after the end of each fiscal year, a certificate indicating whether the signers thereof know of any Default that occurred during the previous year. The Company also is required to deliver to the Trustee, within 30 days after the occurrence thereof, written notice of any event which would constitute certain Defaults, their status and what action the Company is taking or proposes to take in respect thereof. MODIFICATION AND WAIVER Modification and amendments of the Indenture may be made by the Company and the Trustee with the consent of the holders of a majority in aggregate principal amount of the Notes then outstanding of any series affected thereby (including consents obtained in connection with a tender offer or exchange for the Notes) and any past default or compliance with any provisions may also be waived with such a consent of the holders of a majority in principal amount of such Notes then outstanding; provided, however, that no such modification or amendment may, without the consent of the holder of each Note affected thereby, (a) change the Stated Maturity of the principal of, or any premium or installment of interest on, or any Liquidated Damages payable in respect of, any Note, (b) reduce the principal amount of, or the rate (or modify the calculation of such rate) of interest on, or any Liquidated Damages with respect to, or any premium payable upon redemption of, any Note, (c) change the obligation of the Company to pay Liquidated Damages with respect to any Note or reduce the amount of any Note provable in bankruptcy, (d) change the redemption provisions of any Note, (e) change the place of payment or the coin or currency in which the principal of, any premium or interest on or any Liquidated Damages with respect to any Note is payable, (f) impair the right to institute suit for the enforcement of any payment on or after the Stated Maturity of any Note (or, in the case of redemption, on or after the Redemption Date), (g) reduce the percentage and principal amount of the outstanding Notes, the consent of whose holders is required in order to take certain actions, (h) reduce the requirements for quorum or voting by holders of the Notes, (i) modify any of the provisions of the Indenture regarding the waiver of past defaults or the waiver of certain covenants by the holders of the Notes except to increase any percentage vote required or to provide that certain other provisions of the Indenture cannot be modified or waived without the consent of the holder or each Note affected thereby, (j) make any changes that adversely affect the right to exchange any Note for other securities in accordance with its terms, or (k) modify any of the above provisions. The Indenture may be amended or supplemented without the consent of any holder of a Note (i) to cure any ambiguity, defect or inconsistency in the Indenture or in the Notes of any series; (ii) to provide the assumption of all the obligations of the Company under the Notes or any Note Guarantor under its Note Guarantee and, in each case, the Indenture by any corporation in connection with a merger, consolidation, transfer or lease of such entity's property and assets as an entirety or substantially as an entirety, as provided for in the Indenture; (iii) to provide for uncertificated Notes in addition to or in place of certificated Notes; (iv) to make any change that does not adversely affect the rights of any holder of Notes; 57 66 (v) to provide for the issuance of and establish the form and terms and conditions of a series of Notes or to establish the form of any certifications required to be furnished pursuant to the terms of the Indenture or any series of Notes; (vi) to add to rights of holders of Notes; or (vii) to secure any Notes as provided under "-- Certain Covenants -- Limitation on Liens" above. The holders of a majority in aggregate principal amount of the Notes of any series may, on behalf of the holders of all Notes of such series, waive compliance by the Company with certain restrictive provisions of the Indenture. The holders of a majority in aggregate principal amount of Notes of any series may, on behalf of all holders of Notes of such series, waive any past default and its consequences under the Indenture with respect to the Notes of such series, except a default (a) in the payment of principal of (or premium, if any) or any interest on or any Liquidated Damages with respect to Notes of such series or (b) in respect of a covenant or provision of the Indenture that cannot be modified or amended without the consent of the holder of each Note of any series. Under the Indenture, the Company and the Note Guarantors are required to furnish the Trustee annually a statement as to the performance by the Company and the Note Guarantors of their respective obligations under the Indenture and as to any default in such performance. The Company is also required to deliver to the Trustee, within five days after occurrence thereof, written notice of any Event of Default or any event which after notice or lapse of time or both would constitute an Event of Default. The consent of the holders of the Notes is not necessary under the Indenture to approve the particular form of any proposed amendment. It is sufficient if such consent approves the substance of the proposed amendment. After an amendment under the Indenture becomes effective, the Company is required to mail to holders of the related Notes a notice briefly describing such amendment. However, the failure to give such notice to all holders of such Notes, or any defect therein, will not impair or affect the validity of the amendment. DISCHARGE, DEFEASANCE AND COVENANT DEFEASANCE The Company may discharge certain obligations to holders of any series of Notes that have not already been delivered to the Trustee for cancellation and that either have become due and payable or will become due and payable within one year (or scheduled for redemption within one year) by depositing with the Trustee, in trust, funds in U.S. dollars in an amount sufficient to pay the entire indebtedness on such Notes with respect to principal (and premium, if any) and interest to the date of such deposit (if such Notes have become due and payable) or to the Maturity thereof as the case may be. The Indenture provides that, unless the following provisions are made inapplicable to the Notes of or within any series, the Company may elect either (a) to defease and be discharged from any and all obligations with respect to such Notes (except for, among other things, the obligation to pay Liquidated Damages, if any, and other obligations to register the transfer or exchange of such Notes, to replace temporary or mutilated, destroyed, lost or stolen Notes, to maintain an office or agency with respect to such Notes and to hold moneys for payment in trust) ("defeasance"), or (b) to be released from its obligations with respect to such Notes under the covenants described under "Certain Covenants -- Limitation on Liens" and "-- Limitation on Indebtedness of Restricted Subsidiaries" above and its obligations with respect to any other specified covenant, and any omission to comply with such obligations shall not constitute a default or an Event of Default with respect to such Notes ("covenant defeasance"). Defeasance or covenant defeasance, as the case may be, shall be conditioned upon the irrevocable deposit by the Company with the Trustee, in trust of an amount in U.S. dollars or Government Obligations (as defined below), or both, which through the scheduled payment of principal and interest in accordance with their terms will provide money in an amount sufficient to pay the principal of (and premium, if any) and interest on such Notes on the scheduled due date therefor. Such a trust may only be established if, among other things, (i) the applicable defeasance or covenant defeasance does not result in a breach or violation of, or constitute a default under, the Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound, (ii) no Event of Default or event which with notice or lapse of time or bother would become an Event of Default with respect 58 67 to the Notes to be defeased shall have occurred and be continuing on the date of establishment of such a trust and, with respect to defeasance only, at any time during the period ending on the 123rd day after such date and (iii) the Company has delivered to the Trustee an Opinion of Counsel (as specified in the Indenture) to the effect that the holders of such Notes will not recognize income, gain or loss for U.S. federal income tax purposes as a result of such defeasance or covenant defeasance and will be subject to U.S. federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance or covenant defeasance had not occurred, and such Opinion of Counsel, in the case of defeasance, must refer to and be based upon a letter ruling of the Internal Revenue Service received by the Company, a Revenue Ruling published by the Internal Revenue Service or a change in applicable U.S. federal income tax law occurring after the date of the Indenture. "Government Obligations" means securities which are (i) direct obligations of the United States of America, for the payment of which its full faith and credit is pledged or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America, the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States of America which, in the case of clauses (i) and(ii), are not callable or redeemable at the option of the issuer or issuers thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or any other amount with respect to any such Government Obligation held by such custodian for the account of the holder of such depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian with respect to the Government Obligation or the specific payment of interest on or principal of or any other amount with respect to the Government Obligation evidenced by such depository receipt. In the event the Company effects covenant defeasance with respect to any Notes and such Notes are declared due and payable because of the occurrence of any Event of Default other than an Event of Default relating to a breach of the related covenant (which would no longer be applicable to such Notes after such covenant defeasance) or with respect to any other covenant as to which there has been covenant defeasance, the Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on such Notes at the time of the Stated Maturity but may not be sufficient to pay amounts due on such Notes at the time of the acceleration resulting from such Event of Default. However, the Company would remain liable to make payment of such amounts due at the time of acceleration. FORM, DENOMINATION AND REGISTRATION Old Notes will be exchanged for one or more permanent global New Notes in definitive, fully registered form without interest coupons (each a "Global Note"; and collectively, the "Global Notes") and will be deposited with the Trustee as custodian for, and registered in the name of a nominee of, DTC. The New Notes will be issued only in fully registered form, without coupons, in denominations of $1,000 and integral multiples thereof thereafter. Ownership of beneficial interests in a Global Note will be limited to persons who have accounts with DTC ("participants") or persons who hold interests through participants. Ownership of beneficial interests in the Global Notes will be shown on, and the transfer of these ownership interests will be effected only through, records maintained by DTC or its nominee (with respect to interests of participants) and the records of participants (with respect to interests of persons other than participants). So long as DTC or its nominee is the registered owner or holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner or holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes. In addition, no beneficial owner of an interest in a Global Note will be able to transfer that interest except in accordance with DTC's applicable procedures (in addition to those under the Indenture referred to herein). Payment on Global Notes will be made to DTC or its nominee, as the registered owner thereof. None of the Company, the Trustee or any Paying Agent will have any responsibility or liability for any aspect of the 59 68 records relating to or payments made on account of beneficial ownership interests in the Global Notes or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. The Company expects that DTC or its nominee will credit direct participants' accounts on the payment date with payments in respect of a Global Note in amounts proportionate to their respective beneficial interest in the principal amount of such Global Note as shown on the records of DTC or its nominee, unless DTC has reason to believe that it will not receive payment on the payment date. The Company also expects that payments by participants to owners of beneficial interest in such Global Note held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers registered in "street name." Such payments will be the responsibility of such participants. Transfers between participants in DTC will be effected in the ordinary way in accordance with DTC rules. The laws of some states require that certain persons take physical delivery of securities in definitive form. Consequently, the ability to transfer beneficial interest in a Global Note to such persons may be limited. Because DTC can only act on behalf of participants, who in turn act on behalf of indirect participants and certain banks, the ability of a person having a beneficial interest in a Global Note to pledge such interest to persons or entities that do not participate in the DTC system, or otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate of such interest. The Company believes that it is the policy of DTC that it will take any action permitted to be taken by a holder of Notes only at the direction of one or more participants to whose account interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such participant or participants has or have given such direction. The Indenture provides that if (i) the Depository notifies the Company that it is unwilling or unable to continue as Depository or if the Depository ceases to be eligible under the Indenture and a successor depository is not appointed by the Company within 90 days, (ii) the Company determines that the Notes of any series shall no longer be represented by Global Notes and executes and delivers to the Trustee a Company Order to such effect or (iii) an Event of Default with respect to the Notes of any series shall have occurred and be continuing, the Global Notes will be exchanged for Notes in certificated form of like tenor and of an equal aggregate principal amount, in authorized denominations. Such certificated Notes shall be registered in such name or names as the Depository shall instruct the Trustee. It is expected that such instructions may be based upon directions received by the Depository from participants with respect to ownership of beneficial interests in Global Notes. DTC has advised the Company as follows: DTC is a limited-purpose trust company organized under the New York Banking Law, a "banking organization" within the meaning of the New York Banking Law, a member of the Federal Reserve System, a "clearing corporation" within the meaning of the New York Uniform Commercial Code and a "clearing agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC holds securities that its participants deposit with DTC and facilitates the settlement among participants through book-entry changes in participants' accounts, thereby eliminating the need for physical movement of securities certificates. Direct participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to the DTC system is also available to others such as securities brokers and dealers, banks and trust companies that clear through or maintain a custodial relationship with a direct participant, either directly or indirectly. The rules applicable to DTC and its participants are on file with the Commission. Although DTC has agreed to the foregoing procedures in order to facilitate transfers of interests in the Global Notes among participants of DTC, it is under no obligation to perform or continue to perform such procedures, and such procedures may be discontinued at any time. None of the Company, the Note Guarantors and the Trustee will have any responsibility for the performance by DTC or its participants or indirect participants of their respective obligations under the rules and procedures governing their operations. 60 69 CONCERNING THE TRUSTEE The Bank of New York is the Trustee under the Indenture (the "Trustee") and has been appointed by the Company as Registrar and Paying Agent with regard to the Notes. The holders of a majority in principal amount of the outstanding debt securities of any series will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that if an Event of Default occurs (and is not cured), the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent man in the conduct of his own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of such Notes, unless such holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense and then only to the extent required by the terms of the Indenture. GOVERNING LAW The Indenture and the Notes are governed by, and construed in accordance with, the laws of the State of New York without giving effect to applicable principles of conflicts of law to the extent that the application of the law of another jurisdiction would be required thereby. CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS GENERAL The following is a summary of the material United States federal income, estate and gift tax consequences of the purchase, ownership and disposition of the Notes, but is not purported to be a complete analysis of all potential tax effects. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), existing and proposed regulations promulgated thereunder, published rulings and court decisions, all as in effect and existing on the date hereof and all of which are subject to change at any time, which change may be retroactive or prospective. Unless otherwise specifically noted, this summary applies only to those persons that hold the Notes as capital assets within the meaning of Section 1221 of the Code. This discussion assumes that the Notes will be treated as indebtedness for United States federal income tax purposes. THIS SUMMARY IS FOR GENERAL INFORMATION ONLY AND DOES NOT ADDRESS THE TAX CONSEQUENCES TO TAXPAYERS WHO ARE SUBJECT TO SPECIAL RULES (SUCH AS FINANCIAL INSTITUTIONS, TAX-EXEMPT ORGANIZATIONS, INSURANCE COMPANIES, S CORPORATIONS, REGULATED INVESTMENT COMPANIES, REAL ESTATE INVESTMENT TRUSTS, BROKER-DEALERS, TAXPAYERS SUBJECT TO THE ALTERNATIVE MINIMUM TAX AND PERSONS THAT WILL HOLD THE NOTES AS PART OF A POSITION IN A "STRADDLE" OR AS PART OF A "CONSTRUCTIVE SALE" OR A "HEDGING" OR "CONVERSION" TRANSACTION) OR ADDRESS ASPECTS OF FEDERAL TAXATION THAT MIGHT BE RELEVANT TO A PROSPECTIVE INVESTOR BASED UPON SUCH INVESTOR'S PARTICULAR TAX SITUATION. THIS SUMMARY DOES NOT ADDRESS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION. PROSPECTIVE INVESTORS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE UNITED STATES FEDERAL TAX CONSEQUENCES OF OWNING AND DISPOSING OF THE NOTES (INCLUDING THE INVESTOR'S STATUS AS A UNITED STATES HOLDER OR A NON-UNITED STATES HOLDER), AS WELL AS ANY TAX CONSEQUENCES THAT MAY ARISE UNDER THE LAWS OF ANY STATE, MUNICIPALITY, FOREIGN COUNTRY OR OTHER TAXING JURISDICTION. 61 70 EFFECT OF EXCHANGE OF OLD NOTES FOR EXCHANGE NOTES The Company believes that the exchange of Old Notes for New Notes pursuant to the Exchange Offer will not be treated as an "exchange" for federal income tax purposes because the New Notes will not be considered to differ materially in kind or extent from the Old Notes. Rather, the New Notes received by a holder will be treated as a continuation of the Old Notes in the hands of such holder. As a result, holders will not recognize any taxable gain or loss or any interest income as a result of exchanging Old Notes for New Notes pursuant to the Exchange Offer. The holding period of the New Notes will include the holding period of the Old Notes, and the basis of the New Notes will equal the basis of the Old Notes immediately before the exchange. UNITED STATES HOLDERS General The following is a general discussion of certain United States federal income tax consequences of the ownership and sale or other disposition of the Notes by a beneficial owner that, for United States federal income tax purposes, is a "United States person" (a "United States Holder"). For purposes of this discussion, a "United States person" means a citizen or individual resident (as defined in Section 7701(b) of the Code) of the United States; a corporation or partnership (including any entity treated as a corporation or partnership for United States federal income tax purposes) created or organized in or under the laws of the United States, any state thereof or the District of Columbia unless, in the case of a partnership, Treasury regulations provide otherwise; an estate the income of which is subject to United States federal income tax without regard to its source; or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. Notwithstanding the preceding sentence, certain trusts in existence on August 20, 1996, and treated as United States persons prior to such date that elect to continue to be so treated also shall be considered United States persons. Payments of Interest Payments of interest on a Note generally will be taxable to a United States Holder as ordinary interest income at the time such payments are accrued or are received (in accordance with the United States Holder's regular method of tax accounting). Amortizable Bond Premium A United States Holder that purchases a Note for an amount in excess of its principal amount will be considered to have purchased the Note at a premium and may elect to amortize such premium, using a constant yield method, over the remaining term of the Note (or, if a smaller amortization allowance would result, by computing such allowance with reference to the amount payable on an earlier call date and amortizing such allowance over the shorter period to such call date). The amount amortized in any year will be treated as a reduction of the United States Holder's interest income from the Note. Bond premium on a Note held by a United States Holder that does not make such an election will decrease the gain or increase the loss otherwise recognized on disposition of the Note. The election to amortize bond premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by the electing United States Holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service (the "Service"). Market Discount If a United States Holder purchases, subsequent to its original issuance, a Note for an amount that is less than its stated redemption price at maturity, the amount of the difference generally will be treated as "market discount," unless such difference is less than a specified de minimis amount. The United States Holder will be required to treat any gain recognized on the sale, exchange, redemption, retirement or other disposition of the Note as ordinary income to the extent of the accrued market discount that has not previously been included in 62 71 income. In addition, the United States Holder may be required to defer, until the maturity date of the Note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such Note. Any market discount will be considered to accrue ratably during the period from the date of acquisition to the maturity date of the Note, unless the United States Holder elects to accrue market discount on a constant interest method. A United States Holder of a Note may elect to include market discount in income currently as it accrues (under either the ratable or constant interest method). This election to include currently, once made, applies to all market discount obligations acquired in or after the first taxable year to which the election applies and may not be revoked without the consent of the Service. If the United States Holder of a Note makes such an election, the foregoing rules with respect to the recognition of ordinary income on sales and other dispositions of such instruments, and with respect to the deferral of interest deductions on debt incurred or maintained to purchase or carry such debt instruments, would not apply. Sale, Exchange or Redemption of the Notes Generally, a sale, exchange or redemption of the Notes will result in taxable gain or loss equal to the difference between the amount of cash or other property received and the United States Holder's adjusted tax basis in the Note. A United States Holder's adjusted tax basis for determining gain or loss on the sale or other disposition of a Note will initially equal the cost of the Note to such Holder and will be increased by any market discount previously included in income by such United States Holder, and decreased by any amortized premium previously deducted from income by the United States Holder. Except as described above with respect to market discount, such gain or loss will be capital gain or loss. Capital gain or loss will be long-term gain or loss if the Note was held by the United States Holder for more than one year, otherwise such gain or loss will be short-term. United States Holders that are corporations will generally be taxed on net capital gains at a maximum rate of 35%. In contrast, United States Holders that are individuals will generally be taxed on net capital gains at a maximum rate of (i) 39.6% for property held 12 months or less, and (ii) 20% for property held more than 12 months. Special rules (and generally lower maximum rates) apply for individuals in lower tax brackets. Any capital losses realized by a United States Holder that is a corporation generally may be used only to offset capital gains. Any capital losses realized by a United States Holder that is an individual generally may be used only to offset capital gains plus $3,000 of other income per year. FOREIGN HOLDERS The following is a general discussion of certain United States federal income and estate and gift tax consequences of the ownership and sale or other disposition of the Notes by any beneficial owner of a Note that is not a United States Holder (a "Non-United States Holder"). Resident alien individuals will be subject to United States federal income tax with respect to the Notes as if they were United States Holders. Interest Under current United States federal income tax law, and subject to the discussion of backup withholding below, interest paid on the Notes to a Non-United States Holder will not be subject to the normal 30% United States federal withholding tax; provided that (i) the interest is "effectively connected with the conduct of a trade or business in the United States" by the Non-United States Holder and the Non-United States Holder timely furnishes the Company with two duly executed copies of Internal Revenue Service Form 4224 (or any successor form), or (ii) all of the following conditions of the portfolio interest exception (the "Portfolio Interest Exception") are met: (A) the Non-United States Holder does not, actually or constructively, own 10% or more of the total combined voting power of all classes of stock of the Company entitled to vote, (B) the Non-United States Holder is not a controlled foreign corporation that is related, directly or indirectly, to the Company through stock ownership, (C) the Non-United States Holder is not a bank receiving interest pursuant to a loan agreement entered into in the ordinary course of its trade or business, and (D) either (1) the Non-United States Holder certifies to the Company or its agent, under penalties of perjury, that it is a 63 72 Non-United States Holder and provides its name and address, or (2) a securities clearing organization, bank or other financial institution that holds customers' securities in the ordinary course of its trade or business (a "Financial Institution"), and holds the Notes in such capacity, certifies to the Company or its agent, under penalties of perjury, that such statement has been received from the beneficial owner of the Notes by it or by a Financial Institution between it and the beneficial owner and furnishes the Company or its agent with a copy thereof. The foregoing certification may be provided by the Non-United States Holder on Internal Revenue Service Form W-8 (or any successor form). Such certificate is effective with respect to payments of interest made after the issuance of the certificate in the calendar year of its issuance and the two immediately succeeding calendar years. On October 14, 1997, the final regulations were published in the Federal Register (the "1997 Final Regulations") that affect the United States federal income taxation of Non-United States Holders. The 1997 Final Regulations are effective for payments after December 31, 1999, regardless of the issue date of the instrument with respect to which such payments are made, subject to certain transition rules discussed below. The discussion under this heading and under "Backup Withholding Tax and Information Reporting," below, is not intended to be a complete discussion of the provisions of the 1997 Final Regulations. Prospective Holders of the Notes are urged to consult their tax advisors concerning the tax consequences of their investment in light of the 1997 Final Regulations. The 1997 Final Regulations provide documentation procedures designed to simplify compliance by withholding agents. The 1997 Final Regulations generally do not affect the documentation rules described above, but add other certification options. Under one such option, a withholding agent will be allowed to rely on an intermediary withholding certificate furnished by a "qualified intermediary" (as defined below) on behalf of one or more beneficial owners (or other intermediaries) without having to obtain the beneficial owner certificate described above. Qualified intermediaries include: (i) foreign financial institutions or foreign clearing organizations (other than a United States branch or United States office of such institution or organization), or (ii) foreign branches or offices of United States financial institutions or foreign branches or offices of United States clearing organizations, which, as to both (i) and (ii), have entered into withholding agreements with the Service. In addition to certain other requirements, qualified intermediaries must obtain withholding certificates, such as revised Internal Revenue Service Form W-8 (discussed below), from each beneficial owner. Under another option, an authorized foreign agent of a United States withholding agent will be permitted to act on behalf of the United States withholding agent (including the receipt of withholding certificates, the payment of amounts of income subject to withholding and the deposit of tax withheld), provided that certain conditions are met. For purposes of the certification requirements, the 1997 Final Regulations generally treat as the beneficial owners of payments on a Note those persons that, under United States federal income tax principles, are the taxpayers with respect to such payments, rather than persons such as nominees or agents legally entitled to such payments. In the case of payments to an entity classified as a foreign partnership under United States tax principles, the partners, rather than the partnership, generally must provide the required certifications to qualify for the withholding tax exemption described above (unless the partnership has entered into a special agreement with the Service). A payment to a United States partnership, however, is treated for these purposes as payment to a United States payee, even if the partnership has one or more foreign partners. The 1997 Final Regulations provide certain presumptions with respect to withholding for Holders not furnishing the required certifications to qualify for the withholding tax exemption described above. In addition, the 1997 Final Regulations will replace a number of current tax certification forms (including Internal Revenue Service Form W-8) with a single, revised Internal Revenue Service Form W-8 (which, in certain circumstances, requires information in addition to that previously required). Under the 1997 Final Regulations, this revised Form W-8 will remain valid until the last day of the third calendar year following the year in which the certificate is signed. The 1997 Final Regulations provide transition rules concerning existing certificates, such as Internal Revenue Service Form W-8. Valid withholding certificates that are held on December 31, 1999 will generally remain valid until the earlier of December 31, 2000 or the date of their expiration. Existing certificates that 64 73 expire in 1999 will not be effective after their expiration. Certificates dated prior to January 1, 1998 will generally remain valid until the end of 1998, irrespective of the fact that their validity expires during 1998. In the event that the interest paid on the Notes is effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder, the Non-United States Holder will generally be taxed on a net income basis (that is, after allowance for applicable deductions) at the graduated rates that are applicable to United States persons in essentially the same manner as if the Notes were held by a United States person, as discussed above. In the case of a Non-United States Holder that is a corporation, such income may also be subject to the United States federal branch profits tax (which is generally imposed on a foreign corporation upon the deemed repatriation from the United States of effectively connected earnings and profits) at a 30% rate, unless the rate is reduced or eliminated by an applicable income tax treaty and the Non-United States Holder is a qualified resident of the treaty country. If the interest on the Notes is not "effectively connected" and does not qualify for the Portfolio Interest Exception, then the interest will be subject to United States federal withholding tax at a flat rate of 30% (or a lower applicable income tax treaty rate upon delivery of the appropriate certification of eligibility for treaty benefits). Gain on Sale or Other Disposition Subject to special rules applicable to individuals as described below, a Non-United States Holder will generally not be subject to regular United States federal income or withholding tax on gain recognized on a sale or other disposition of the Notes, unless the gain is effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder or of a partnership, trust or estate in which such Non-United States Holder is a partner or beneficiary. Gains realized by a Non-United States Holder that are effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder will generally be taxed on a net income basis (that is, after allowance for applicable deductions) at the graduated rates that are applicable to United States persons, as described above, unless exempt by an applicable income tax treaty. In the case of a Non-United States Holder that is a corporation, such income may also be subject to the United States federal branch profits tax (which is generally imposed on a foreign corporation upon the deemed repatriation from the United States of effectively connected earnings and profits) at a 30% rate, unless the rate is reduced or eliminated by an applicable income tax treaty and the Non-United States Holder is a qualified resident of the treaty country. In addition to being subject to the rules described above, an individual Non-United States Holder who holds the Notes as a capital asset will generally be subject to tax at a 30% rate on any gain recognized on the sale or other disposition of such Notes if (i) such gain is not effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder, and (ii) such individual is present in the United States for 183 days or more in the taxable year of the sale or other disposition and either (A) has a "tax home" in the United States (as specially defined for purposes of the United States federal income tax), or (B) maintains an office or other fixed place of business in the United States and the gain from the sale or other disposition of the Notes is attributable to such office or other fixed place of business. Individual Non-United States Holders may also be subject to tax pursuant to provisions of United States federal income tax law applicable to certain United States expatriates (including certain former long-term residents of the United States). Under the 1997 Final Regulations, withholding of United States federal income tax may apply to payments on a taxable sale or other disposition of the Notes by a Non-United States Holder who does not provide appropriate certification to the withholding agent with respect to such transaction. Federal Estate and Gift Taxes A Note beneficially owned by an individual who is neither a United States citizen nor a domiciliary of the United States at the time of death will not be subject to United States federal estate tax as a result of such 65 74 individual's death; provided that any interest thereon would have been eligible for the Portfolio Interest Exception described above in "Certain United States Federal Income Tax Considerations -- Foreign Holders -- Interest," if such interest had been received by the individual at the time of death. An individual who is not a United States citizen will not be subject to United States federal gift tax on a transfer of Notes, unless such person is a domiciliary of the United States or such person is subject to provisions of United States federal gift tax law applicable to certain United States expatriates (including certain former long-term residents of the United States). BACKUP WITHHOLDING TAX AND INFORMATION REPORTING Under current United States federal income tax law, information reporting requirements apply to interest paid to, and to the proceeds of sales or other dispositions before maturity by, certain non-corporate persons. In addition, a 31% backup withholding tax applies if a non-corporate person (i) fails to furnish such person's Taxpayer Identification Number ("TIN") (which, for an individual, is his or her Social Security Number) to the payor in the manner required, (ii) furnishes an incorrect TIN and the payor is so notified by the Service, (iii) is notified by the Service that such person has failed properly to report payments of interest and dividends, or (iv) in certain circumstances, fails to certify, under penalties of perjury, that such person has not been notified by the Service that such person is subject to backup withholding for failure properly to report interest and dividend payments. Backup withholding does not apply to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. In the case of a Non-United States Holder, under current United States federal income tax law, backup withholding and information reporting do not apply to payments of interest with respect to a Note, or to payments on the sale or other disposition of a Note, if such Holder has provided to the Company or its paying agent the certification described in clause (ii)(D) of "Certain United States Federal Income Tax Considerations -- Foreign Holders -- Interest" or has otherwise established an exemption. Under current United States federal income tax law, (i) interest payments with respect to a Note collected outside the United States by a foreign office of a custodian, nominee or broker acting on behalf of a beneficial owner of a Note, and (ii) payments on the sale or other disposition of a Note to or through a foreign office of a broker are not generally subject to backup withholding or information reporting. However, if such custodian, nominee or broker is a "United States Person" (as defined in Section 7701(a)(30) of the Code), a controlled foreign corporation for United States tax purposes or a foreign person 50% of more of whose gross income is effectively connected with the conduct of a United States trade or business for a specified three-year period (a "U.S. Related Person"), such custodian, nominee or broker may be subject to certain information reporting (but not backup withholding) requirements with respect to such payments, unless such custodian nominee or broker has in its records documentary evidence that the beneficial owner is not a United States person and certain conditions are met or the beneficial owner otherwise establishes an exemption. Backup withholding may apply to any payment that such custodian, nominee or broker is required to report if such person has actual knowledge that the payee is a United States person. Payments to or through the United States office of a broker will be subject to backup withholding and information reporting unless the Holder certifies, under penalties of perjury, that it is not a United States person or otherwise establishes an exemption. The 1997 Final Regulations modify certain of the certification requirements for backup withholding and expand the group of U.S. Related Persons. It is possible that the Company or its paying agent may request new withholding exemption forms from Holders in order to qualify for continued exemption from backup withholding when the 1997 Final Regulations become effective. Backup withholding tax is not an additional tax. Rather, any amounts withheld from a payment to a Holder under the backup withholding rules are allowed as a refund or a credit against such Holder's United States federal income tax; provided that the required information is furnished to the Service. 66 75 PLAN OF DISTRIBUTION Each Participating Broker-Dealer that receives New Notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such New Notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer (other than an affiliate of the Company) in connection with resales of New Notes received in exchange for Old Notes where such Old Notes were acquired as a result of market-making activities or other trading activities. The Company has agreed that for a period of 90 days after the Expiration Date, it will make this Prospectus, as amended or supplemented, available to any Participating Broker-Dealer for use in connection with any such resale. The Company will not receive any proceeds from any sales of the New Notes by Participating Broker-Dealers. New Notes received by Participating Broker-Dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the New Notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such Participating Broker-Dealer and/or the purchasers of any such New Notes. Any Participating Broker-Dealer that resells the New Notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such New Notes may be deemed to be an "underwriter" within the meaning of the Securities Act and any profit on any such resale of New Notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver and by delivering a prospectus, a Participating Broker-Dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 90 days after the Expiration Date, the Company will promptly send additional copies of this Prospectus and any amendment or supplement to this Prospectus to any Participating Broker-Dealer. The Company has agreed to pay all expenses incident to the Exchange Offer other than commissions or concessions of any brokers or dealers and will indemnify the holders of the Old Notes (including any broker-dealers) against certain liabilities, including liabilities under the Securities Act. The Initial Purchasers have indicated to the Company that they intend to effect offers and sales of the New Notes in market-making transactions at negotiated prices related to prevailing market prices at the time of sale, but are not obligated to do so, and such market-making activities may be discontinued at any time. The Initial Purchasers may act as principal or agent in such transactions. There can be no assurance that an active market for the New Notes will develop. The Company has not entered into any arrangements or understandings with any person to distribute the New Notes to be received in the Exchange Offer. LEGAL MATTERS The validity of the New Notes offered hereby will be passed upon for the Company by Dow, Lohnes & Albertson, PLLC, Washington, D.C. EXPERTS The consolidated financial statements of the Company incorporated in this Prospectus by reference to the Company's Annual Report on Form 10-K for the year ended December 31, 1997 have been audited by Deloitte & Touche LLP, independent auditors, stated in their report thereon, which is incorporated in this Prospectus by reference, and have been so incorporated by reliance upon the report of such firm given upon their authority as experts in accounting and auditing. 67 76 The consolidated financial statements of NewCity Communications, Inc. incorporated in this Prospectus by reference to the Company's Current Report on Form 8-K dated April 14, 1997, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon incorporated by reference therein and incorporated herein by reference. Such financial statements are incorporated by reference herein in reliance upon the report of Ernst & Young LLP pertaining to such financial statements given upon the authority of such firm as experts in accounting and auditing. 68 77 (Cox Radio, Inc. Logo) 78 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS Reference is made to Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL"), which enables a corporation in its original certificate of incorporation or an amendment thereto to eliminate or limit the personal liability of a director for violations of the director's fiduciary duty, except (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividend) or (iv) for any transaction from which the director derived an improper personal benefit. The Company's Amended and Restated Certificate of Incorporation contains a provision which eliminates the liability of directors to the extent permitted by Section 102(b)(7) of the DGCL. Reference is made to Section 145 of the DGCL, which provides that a corporation may indemnify directors and officers as well as other employees and individuals against expenses (including attorneys' fees), judgments, fines and amounts paid in settlement in connection with specified actions, suits or proceedings, whether civil, criminal, administrative or investigative (other than an action by or in the right of the corporation (a "derivative action")), if they acted in good faith and in a manner they reasonably believed to be in or not opposed to the best interests of the corporation and, with respect to any criminal action or proceeding, had no reasonable cause to believe their conduct was unlawful. A similar standard is applicable in the case of derivative actions, except that indemnification only extends to expenses (including attorneys' fees) incurred in connection with the defense or settlement of such action, and the statute requires court approval before there can be any indemnification where the person seeking indemnification has been found liable to the corporation. The statute provides that it is not exclusive of other indemnification that may be granted by a corporation's charter, by-laws, disinterested director vote, stockholder vote, agreement or otherwise. The Amended and Restated Certificate of Incorporation of the Company provides that the Company shall indemnify its directors and officers to the fullest extent permitted by Delaware law. ITEM 21. EXHIBITS AND FINANCIAL DATA SCHEDULES 4.1 -- Indenture dated as of May 26, 1998 4.2 -- Registration Rights Agreement dated May 26, 1998* 5.1 -- Opinion of Dow, Lohnes & Albertson, PLLC regarding the validity of the New Notes* 23.1 -- Consent of Deloitte & Touche LLP 23.2 -- Consent of Ernst & Young LLP 23.3 -- Consent of Dow, Lohnes & Albertson, PLLC (included in Exhibit 5.1)* 25.1 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, of The Bank of New York, as Trustee for the 2003 Notes* 25.2 -- Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939, of The Bank of New York, as Trustee for the 2005 Notes* 99.1 -- Letter of Transmittal 99.2 -- Tender Instructions 99.3 -- Notice of Guaranteed Delivery
- --------------- * Previously filed with this Registration Statement ITEM 22. UNDERTAKINGS Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (the "Securities Act"), may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, II-1 79 therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. The Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement (i) To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; and (2) That, for the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-2 80 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, as amended, Cox Radio, Inc. has duly caused this Amendment No. 1 to Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, on November 12, 1998. COX RADIO, INC. By: /s/ ROBERT F. NEIL ------------------------------------ Robert F. Neil President and Chief Executive Officer Pursuant to the requirements of the Securities Act of 1933, as amended, this Amendment No. 1 to Registration Statement has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. Signatures appear on page II-4 A majority of the members of the Board of Directors of Cox Radio, Inc. has signed this Amendment No. 1 to Registration Statement in accordance with the requirements of the Securities Act of 1933, as amended. II-3 81
SIGNATURE TITLE DATE --------- ----- ---- * Chairman of the Board of November 12, 1998 - --------------------------------------------------- Directors Nicholas D. Trigony /s/ ROBERT F. NEIL President and Chief Executive November 12, 1998 - --------------------------------------------------- Officer, Director Robert F. Neil * Chief Financial Officer November 12, 1998 - --------------------------------------------------- (Principal Financial Officer Maritza C. Pichon and Principal Accounting Officer) * Director November 12, 1998 - --------------------------------------------------- David E. Easterly * Director November 12, 1998 - --------------------------------------------------- Paul M. Hughes * Director November 12, 1998 - --------------------------------------------------- Richard A. Ferguson
* POWER OF ATTORNEY Robert F. Neil, by signing his name hereto, does sign this document on behalf of each of the persons indicated above for whom he is attorney-in-fact pursuant to a power of attorney duly executed by such person and filed with the Securities and Exchange Commission. By: /s/ ROBERT F. NEIL ------------------------------------ Robert F. Neil Attorney-In-Fact II-4 EX-4.1 2 INDENTURE DATED AS OF MAY 26, 1998 1 ================================================================================ COX RADIO, INC., Issuer and THE GUARANTORS PARTY HERETO, Guarantors to THE BANK OF NEW YORK, Trustee --------------- INDENTURE --------------- Dated as of May 26, 1998 Debt Securities ================================================================================ 2 TABLE OF CONTENTS
Page ARTICLE I Definitions and Other Provisions of General Application.................................................1 Section 1.1. Definitions........................................................................................1 Act................................................................................................2 Additional Amounts.................................................................................2 Affiliate..........................................................................................2 Asset Acquisition..................................................................................2 Asset Disposition..................................................................................3 Authenticating Agent...............................................................................3 Authorized Newspaper...............................................................................3 Authorized Officer.................................................................................3 Bearer Security....................................................................................3 Board of Directors.................................................................................3 Board Resolution...................................................................................3 Business Day.......................................................................................3 Capitalized Lease..................................................................................3 Capital Stock......................................................................................4 Closing Date.......................................................................................4 Commission.........................................................................................4 Company............................................................................................4 Company Request and Company Order..................................................................4 Conversion Event...................................................................................4 Corporate Trust Office.............................................................................4 Corporation........................................................................................4 Coupon.............................................................................................5 Credit.............................................................................................5 Currency...........................................................................................5 Currency Agreement.................................................................................5 CUSIP number.......................................................................................5 Default............................................................................................5 Defaulted Interest.................................................................................5 Dollars or $.......................................................................................5 ECU................................................................................................5 European Monetary System...........................................................................5 European Union.....................................................................................5 Event of Default...................................................................................5 Foreign Currency...................................................................................5 GAAP...............................................................................................6 Government Obligations.............................................................................6 Guarantee or Guarantees............................................................................6 Guarantor or Guarantors............................................................................6 Guarantor's Board of Directors.....................................................................6 Guarantor's Board Resolution.......................................................................6 Guarantor's Officers' Certificate..................................................................6 Guarantor Request..................................................................................7 Holder.............................................................................................7 Indebtedness.......................................................................................7
i 3 Indenture..........................................................................................7 Independent Public Accountants.....................................................................8 Indexed Security...................................................................................8 Initial Guarantor or Initial Guarantors............................................................8 Interest...........................................................................................8 Interest Payment Date..............................................................................8 Interest Rate Agreement............................................................................8 Judgment Currency..................................................................................8 Leverage Ratio.....................................................................................8 Lien...............................................................................................9 Maturity...........................................................................................9 New York Banking Day...............................................................................9 Office or Agency...................................................................................9 Officers' Certificate..............................................................................9 Opinion of Counsel................................................................................10 Original Issue Discount Security..................................................................10 Outstanding.......................................................................................10 Paying Agent......................................................................................11 Permitted Liens...................................................................................11 Person............................................................................................13 Place of Payment..................................................................................13 Predecessor Security..............................................................................13 Principal Property................................................................................13 Redemption Date...................................................................................13 Redemption Price..................................................................................13 Registered Security...............................................................................13 Regular Record Date...............................................................................13 Required Currency.................................................................................14 Responsible Officer...............................................................................14 Restricted Group..................................................................................14 Restricted Property...............................................................................14 Restricted Subsidiary.............................................................................14 Security or Securities............................................................................14 Security Register.................................................................................14 Special Record Date...............................................................................14 Stated Maturity...................................................................................14 Subsequent Guarantor..............................................................................14 Subsidiary........................................................................................14 Trustee...........................................................................................15 United States.....................................................................................15 United States Alien...............................................................................15 Unrestricted Subsidiary...........................................................................15 U.S. Depository or Depository.....................................................................15 Vice President....................................................................................15 Section 1.2. Compliance Certificates and Opinions..............................................................16 Section 1.3. Form of Documents Delivered to Trustee............................................................16 Section 1.4. Acts of Holders...................................................................................17 Section 1.5. Notices, etc., to Trustee, the Company and the Guarantors.........................................19 Section 1.6. Notice to Holders of Securities; Waiver...........................................................19 Section 1.7. Language of Notices...............................................................................20 Section 1.8. Effect of Headings and Table of Contents..........................................................20 Section 1.9. Successors and Assigns............................................................................21 Section 1.10. Separability Clause...............................................................................21
ii 4 Section 1.11. Benefits of Indenture.............................................................................21 Section 1.12. Governing Law.....................................................................................21 Section 1.13. Legal Holidays....................................................................................21 Section 1.14. Counterparts......................................................................................22 Section 1.15. Judgment Currency.................................................................................22 Section 1.16. No Security Interest Created......................................................................22 Section 1.17. Limitation on Individual Liability................................................................22 ARTICLE II Security Forms........................................................................................23 Section 2.1. Forms Generally...................................................................................23 Section 2.2. Form of Trustee's Certificate of Authentication...................................................23 Section 2.3. Securities in Global Form.........................................................................24 ARTICLE III The Securities.......................................................................................25 Section 3.1. Amount Unlimited; Issuable in Series..............................................................25 Section 3.2. Currency; Denominations...........................................................................29 Section 3.3. Execution, Authentication, Delivery and Dating....................................................29 Section 3.4. Temporary Securities..............................................................................31 Section 3.5. Registration, Transfer and Exchange...............................................................32 Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities..................................................35 Section 3.7. Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional Amounts Preserved.................................................................................36 Section 3.8. Persons Deemed Owners.............................................................................38 Section 3.9. Cancellation......................................................................................39 Section 3.10. Computation of Interest...........................................................................39 Section 3.11. Exempt Offerings..................................................................................39 Section 3.12. CUSIP Numbers.....................................................................................41 ARTICLE IV Satisfaction and Discharge............................................................................42 Section 4.1. Satisfaction and Discharge of Indenture...........................................................42 Section 4.2. Defeasance and Covenant Defeasance................................................................43 Section 4.3. Application of Trust Money........................................................................47 ARTICLE V Remedies...............................................................................................48 Section 5.1. Events of Default.................................................................................48 Section 5.2. Acceleration of Maturity; Rescission and Annulment................................................50 Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee...................................51 Section 5.4. Trustee May File Proofs of Claim..................................................................52 Section 5.5. Trustee May Enforce Claims without Possession of Securities or Coupons............................53 Section 5.6. Application of Money Collected....................................................................53 Section 5.7. Limitations on Suits..............................................................................54 Section 5.8. Unconditional Right of Holders to Receive Principal and any Premium, Interest and Additional Amounts...........................................................................................54 Section 5.9. Restoration of Rights and Remedies................................................................55 Section 5.10. Rights and Remedies Cumulative....................................................................55 Section 5.11. Delay or Omission Not Waiver......................................................................55 Section 5.12. Control by Holders of Securities..................................................................55 Section 5.13. Waiver of Past Defaults...........................................................................56 Section 5.14. Waiver of Usury, Stay or Extension Laws...........................................................56 Section 5.15. Undertaking for Costs.............................................................................56 ARTICLE VI The Trustee...........................................................................................57
iii 5 Section 6.1. Certain Duties and Responsibilities...............................................................57 Section 6.2. Notice of Defaults................................................................................59 Section 6.3. Not Responsible for Recitals or Issuance of Securities............................................59 Section 6.4. May Hold Securities...............................................................................60 Section 6.5. Money Held in Trust...............................................................................60 Section 6.6. Compensation and Reimbursement....................................................................60 Section 6.7. Corporate Trustee Required; Eligibility...........................................................61 Section 6.8. Disqualification; Conflicting Interests...........................................................61 Section 6.9. Resignation and Removal; Appointment of Successor.................................................61 Section 6.10. Acceptance of Appointment by Successor............................................................63 Section 6.11. Merger, Conversion, Consolidation or Succession to Business.......................................65 Section 6.12. Preferential Collection of Claims against the Company.............................................65 Section 6.13. Appointment of Authenticating Agent...............................................................65 ARTICLE VII Holders' Lists and Reports by Trustee, the Guarantors and Company....................................68 Section 7.1. Company and the Guarantors to Furnish Trustee Names and Addresses of Holders......................68 Section 7.2. Preservation of Information; Communications to Holders............................................68 Section 7.3. Reports by Trustee................................................................................68 Section 7.4. Reports by Company and the Guarantors.............................................................69 ARTICLE VIII Consolidation, Merger, Conveyance, Transfer or Lease................................................70 Section 8.1. Company May Consolidate, Etc., Only on Certain Terms..............................................70 Section 8.2. Successor Person Substituted for Company..........................................................71 Section 8.3. Guarantors May Consolidate, Etc., Only on Certain Terms...........................................71 Section 8.4. Successor Person Substituted for A Guarantor......................................................72 ARTICLE IX Supplemental Indentures...............................................................................72 Section 9.1. Supplemental Indentures Without Consent of Holders................................................72 Section 9.2. Supplemental Indentures with Consent of Holders...................................................73 Section 9.3. Execution of Supplemental Indentures..............................................................75 Section 9.4. Effect of Supplemental Indentures.................................................................75 Section 9.5. Reference in Securities to Supplemental Indentures................................................75 Section 9.6. Notice of Supplemental Indenture..................................................................76 ARTICLE X Covenants..............................................................................................76 Section 10.1. Payment of Principal, any Premium, Interest and Additional Amounts................................76 Section 10.2. Maintenance of Office or Agency...................................................................76 Section 10.3. Money for Securities Payments to Be Held in Trust.................................................78 Section 10.4. Additional Amounts................................................................................79 Section 10.5. Limitation on Liens...............................................................................80 Section 10.6. Limitation on Indebtedness of Restricted Subsidiaries.............................................81 Section 10.7. Designation of Subsidiaries.......................................................................81 Section 10.8. Corporate Existence...............................................................................81 Section 10.9. Waiver of Certain Covenants.......................................................................81 Section 10.10. Company Statement as to Compliance; Notice of Certain Defaults....................................82 Section 10.11. Guarantor's Statement as to Compliance; Notice of Certain Defaults................................82 Section 10.12. Subsequent Guarantor..............................................................................83 Section 10.13. Calculation of Original Issue Discount............................................................83 ARTICLE XI Redemption of Securities..............................................................................84 Section 11.1. Applicability of Article..........................................................................84 Section 11.2. Election to Redeem; Notice to Trustee.............................................................84
iv 6 Section 11.3. Selection by Trustee of Securities to be Redeemed.................................................84 Section 11.4. Notice of Redemption..............................................................................85 Section 11.5. Deposit of Redemption Price.......................................................................86 Section 11.6. Securities Payable on Redemption Date.............................................................86 Section 11.7. Securities Redeemed in Part.......................................................................87 ARTICLE XII Sinking Funds........................................................................................88 Section 12.1. Applicability of Article..........................................................................88 Section 12.2. Satisfaction of Sinking Fund Payments with Securities.............................................88 Section 12.3. Redemption of Securities for Sinking Fund.........................................................89 ARTICLE XIII Repayment at the Option of Holders..................................................................89 Section 13.1. Applicability of Article..........................................................................89 ARTICLE XIV Securities in Foreign Currencies.....................................................................90 Section 14.1. Applicability of Article..........................................................................90 ARTICLE XV Meetings of Holders of Securities.....................................................................90 Section 15.1. Purposes for Which Meetings May Be Called.........................................................90 Section 15.2. Call, Notice and Place of Meetings................................................................90 Section 15.3. Persons Entitled to Vote at Meetings..............................................................91 Section 15.4. Quorum; Action....................................................................................91 Section 15.5. Determination of Voting Rights; Conduct and Adjournment of Meetings...............................92 Section 15.6. Counting Votes and Recording Action of Meetings...................................................93 ARTICLE XVI Guarantee............................................................................................93 Section 16.1. Unconditional Guarantee...........................................................................93 Section 16.2. Operation of Guarantees...........................................................................95 Section 16.3. Termination of Guarantees.........................................................................95
v 7 INDENTURE, dated as of May 26, 1998 (the "Indenture"), between COX RADIO, INC., a corporation duly organized and existing under the laws of the State of Delaware (hereinafter called the "Company"), having its principal executive office located at 1400 Lake Hearn Drive, NE, Atlanta, Georgia 30319, THE BANK OF NEW YORK, a New York banking corporation, as trustee (hereinafter called the "Trustee"), having its Corporate Trust Office located at 101 Barclay Street, New York, New York 10286 and WSB, INC. and WHIO, INC., each a corporation duly organized and existing under the laws of the State of Delaware, as guarantors (each, an "Initial Guarantor", and collectively, the "Initial Guarantors"). RECITALS OF THE COMPANY The Company has duly authorized the execution and delivery of this Indenture to provide for the issuance from time to time of its senior unsecured debentures, notes or other evidences of indebtedness (hereinafter called the "Securities"), unlimited as to principal amount, to bear interest at fixed or floating rates, to mature or be subject to earlier redemption or repayment at such time or times, to be issued in one or more series and to have such other provisions as shall be fixed as hereinafter provided. The Company has duly authorized the execution and delivery of this Indenture. All things necessary to make this Indenture a valid agreement of the Company, in accordance with its terms, have been done. In addition, each Initial Guarantor has duly authorized, and each Subsequent Guarantor will duly authorize, the execution and delivery of this Indenture insofar as it relates to the Guarantees provided for herein. All things necessary to make this Indenture a valid agreement of such Guarantor, in accordance with its terms, have been done. NOW, THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities or of any series thereof and any Coupons, as follows: ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION Section 1.1. Definitions. For all purposes of this Indenture, except as otherwise expressly provided in or pursuant to this Indenture or unless the context otherwise requires: (1) the terms defined in this Article have the meanings assigned to them in this Article and include the plural as well as the singular; 8 (2) all other terms used herein which are defined in the Trust Indenture Act, either directly or by reference therein, have the meanings assigned to them therein; (3) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with generally accepted accounting principles in the United States of America and, except as otherwise herein expressly provided, the terms "generally accepted accounting principles" or "GAAP" with respect to any computation required or permitted hereunder shall mean such accounting principles as are generally accepted in the United States of America at the date or time of such computation; (4) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision; and (5) the word "or" is always used inclusively (for example, the phrase "A or B" means "A or B or both", not "either A or B but not both"). Certain terms used principally in certain Articles hereof are defined in those Articles. "Act", when used with respect to any Holders, has the meaning specified in Section 1.4. "Additional Amounts" means any additional amounts which are required hereby or by any Security, under circumstances specified herein or therein, to be paid by the Company in respect of certain taxes, assessments or other governmental charges imposed on Holders specified therein and which are owing to such Holders. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For the purposes of this definition, "control", when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have the meanings correlative to the foregoing. "Asset Acquisition" means (i) an investment by the Company or any of its Restricted Subsidiaries in any other Person where such Person shall become a Restricted Subsidiary or shall be merged into or consolidated with the Company or any of its Restricted Subsidiaries or (ii) an acquisition by the Company or any of its Restricted Subsidiaries of the property and assets of any Person other than the Company or any of its Restricted Subsidiaries that constitute substantially all of a division or line of business of such Person. 2 9 "Asset Disposition" means the sale or other disposition by the Company or any of its Restricted Subsidiaries (other than to the Company or another Restricted Subsidiary) of (i) all or substantially all of the Capital Stock of any Restricted Subsidiary or (ii) all or substantially all of the assets that constitute a division or line of business of the Company or any of its Restricted Subsidiaries. "Authenticating Agent" means any Person authorized by the Trustee pursuant to Section 6.13 to act on behalf of the Trustee to authenticate Securities of one or more series. "Authorized Newspaper" means a newspaper, in an official language of the place of publication or in the English language, customarily published on each day that is a Business Day in the place of publication, whether or not published on Saturdays, Sundays or holidays in the place of publication, and of general circulation in each place in connection with which the term is used or in the financial community of each such place. Where successive publications are required to be made in Authorized Newspapers, the successive publications may be made in the same or in different newspapers in the same city meeting the foregoing requirements and in each case on any day that is a Business Day in the place of publication. "Authorized Officer" means, when used with respect to a Corporation, the Chairman of the Board of Directors, a Vice Chairman, the President, any Vice President, the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of such Corporation. "Bearer Security" means any Security in the form established pursuant to Section 2.1 which is payable to bearer. "Board of Directors" means either the Board of Directors of the Company or any duly authorized committee of that Board. "Board Resolution" means a copy of one or more resolutions, certified by the Secretary or an Assistant Secretary of the Company to have been duly adopted by the Board of Directors, and to be in full force and effect on the date such certification is delivered to the Trustee. "Business Day", with respect to any Place of Payment or other location, means, unless otherwise specified with respect to any Securities pursuant to Section 3.1, any day other than a Saturday, Sunday or other day on which banking institutions in such Place of Payment or other location are authorized or obligated by law, regulation or executive order to close. "Capitalized Lease" means, as applied to any Person, any lease of any property (whether real, personal or mixed) of which the discounted present value of the rental 3 10 obligations of such Person as lessee, in conformity with GAAP, is required to be capitalized on the balance sheet of such Person. "Capital Stock" means, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated, whether voting or non-voting) in equity of such Person, whether outstanding on the Closing Date or issued thereafter. "Closing Date" means the date on which the first series of Securities is originally issued under the Indenture. "Commission" means the Securities and Exchange Commission, as from time to time constituted, created under the Securities Exchange Act of 1934, as amended, or, if at any time after the execution of this Indenture such Commission is not existing and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties at such time. "Company" means the Person named as the "Company" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Company" shall mean such successor Person, and any other obligor upon the Securities. "Company Request" and "Company Order" mean, respectively, a written request or order, as the case may be, signed in the name of the Company by the Chairman of the Board, a Vice Chairman, the President, or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of the Company, and delivered to the Trustee. "Conversion Event" means the cessation of use of (i) a Foreign Currency both by the government of the country or the confederation which issued such Foreign Currency and for the settlement of transactions by a central bank or other public institutions of or within the international banking community, (ii) the ECU both within the European Monetary System and for the settlement of transactions by public institutions of or within the European Union or (iii) any currency unit or composite currency other than the ECU for the purposes for which it was established, and, unless otherwise specified with respect to any Securities pursuant to Section 3.1, all payments of principal of and premium, if any, and interest on any Debt Security that are payable in a Foreign Currency that ceases to be used by the government or confederation of issuance shall be made in U.S. dollars. "Corporate Trust Office" means the principal corporate trust office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which office as of the date hereof is located at 101 Barclay Street, New York, New York 10286. "Corporation" includes corporations and limited liability companies and, except for purposes of Article VIII, associations, companies and business trusts. 4 11 "Coupon" means any interest coupon appertaining to a Bearer Security. "Credit Agreement" or "Credit Agreements" means (i) the $300 million, five-year, senior, unsecured revolving credit facility, dated as of March 7, 1997, with certain guarantors and banks, including Chase Bank of Texas, N.A. (formerly Texas Commerce Bank National Association), as Administrative Agent, NationsBank of Texas, N.A., as Syndication Agent and Citibank, N.A., as Documentation Agent or (ii) any future senior unsecured credit facility between the Company and one or more third party lenders. "Currency", with respect to any payment, deposit or other transfer in respect of the principal of or any premium or interest on or any Additional Amounts with respect to any Security, means Dollars or the Foreign Currency, as the case may be, in which such payment, deposit or other transfer is required to be made by or pursuant to the terms hereof or such Security and, with respect to any other payment, deposit or transfer pursuant to or contemplated by the terms hereof or such Security, means Dollars. "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement. "CUSIP number" means the alphanumeric designation assigned to a Security by Standard & Poor's Corporation, CUSIP Service Bureau. "Default" means any event which is, or after notice or passage of time or both would be, an Event of Default. "Defaulted Interest" has the meaning specified in Section 3.7. "Dollars" or "$" means a dollar or other equivalent unit of legal tender for payment of public or private debts in the United States of America. "ECU" means the European Currency Units as defined and revised from time to time by the Council of the European Community. "European Monetary System" means the European Monetary System established by the Resolution of December 5, 1978 of the Council of the European Community. "European Union" means the European Community, the European Coal and Steel Community and the European Atomic Energy Community. "Event of Default" has the meaning specified in Section 5.1. "Foreign Currency" means any currency, currency unit or composite currency, including, without limitation, the ECU, issued by the government of one or more countries other than the United States of America or by any recognized confederation or association of such governments. 5 12 "GAAP" means such accounting principles as are generally accepted in the United States of America as of the date or time of any computation required hereunder. "Government Obligations" means securities which are (i) direct obligations of the United States of America or the other government or governments in the confederation which issued the Foreign Currency in which the principal of or any premium or interest on such Security or any Additional Amounts in respect thereof shall be payable, in each case where the payment or payments thereunder are supported by the full faith and credit of such government or governments or (ii) obligations of a Person controlled or supervised by and acting as an agency or instrumentality of the United States of America or such other government or governments, in each case where the timely payment or payments thereunder are unconditionally guaranteed as a full faith and credit obligation by the United States of America or such other government or governments, and which, in the case of (i) or (ii), are not callable or redeemable at the option of the issuer or issuers thereof, and shall also include a depository receipt issued by a bank or trust company as custodian with respect to any such Government Obligation or a specific payment of interest on or principal of or other amount with respect to any such Government Obligation held by such custodian for the account of the holder of a depository receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depository receipt from any amount received by the custodian in respect of the Government Obligation or the specific payment of interest on or principal of or other amount with respect to the Government Obligation evidenced by such depository receipt. "Guarantee" or "Guarantees" means each full and unconditional guarantee of the payment of the principal of or any premium or interest on or any Additional Amounts with respect to the Securities by a Guarantor, as more fully set forth in Article XVI. "Guarantor" or "Guarantors" means the Initial Guarantor and any and all Subsequent Guarantors. "Guarantor's Board of Directors" means the Board of Directors of a Guarantor or any committee of that Board duly authorized to act generally or in any particular respect for such Guarantor hereunder. "Guarantor's Board Resolution" means a copy of one or more resolutions, certified by the Secretary or an Assistant Secretary of a Guarantor to have been duly adopted by such Guarantor's Board of Directors and to be in full force and effect on the date such certification is delivered to the Trustee. "Guarantor's Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman, the President, the Chief Financial Officer or a Vice President and by the Treasurer, an Assistant Treasurer, the Comptroller, the Assistant Comptroller, the Secretary or an Assistant Secretary, of a Guarantor, and is delivered to the Trustee. One of the officers signing a Guarantor's Officers' Certificate given 6 13 pursuant to Section 10.11 shall be the principal executive, financial or accounting officer of such Guarantor. "Guarantor Request" and "Guarantor Order" mean, respectively, a written request or order, as the case may be, signed in the name of a Guarantor by the Chairman of the Board, a Vice Chairman, the President or a Vice President, and by the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of such Guarantor, and delivered to the Trustee. "Holder", in the case of any Registered Security, means the Person in whose name such Security is registered in the Security Register and, in the case of any Bearer Security, means the bearer thereof and, in the case of any Coupon, means the bearer thereof. "Indebtedness" means, without duplication, with respect to any Person: (i) any indebtedness of such Person (A) for borrowed money or (B) evidenced by a note, debenture or similar instrument (including a purchase money obligation) given in connection with the acquisition of any property or assets, including securities; (ii) any guarantee by such Person of any indebtedness of others described in the preceding clause (i); and (iii) any amendment, extension, renewal or refunding of any such indebtedness or guarantee. The term "Indebtedness" excludes (i) any indebtedness of the Company or any Restricted Subsidiary to the Company or another Restricted Subsidiary, (ii) any guarantee by the Company or any Restricted Subsidiary of indebtedness of the Company or another Restricted Subsidiary, (iii) trade accounts payable, (iv) money borrowed and set aside at the time of the incurrence of any Indebtedness in order to prefund the payment of the interest on such Indebtedness so long as such money is held to secure the payment of such interest, (v) liabilities for federal, state, local or other taxes and (vi) letters of credit, performance bonds and similar obligations issued in favor of governmental authorities as a term of any governmental franchise, license, permit or authorization held by such Person or any of its Subsidiaries. The amount of Indebtedness of any Person at any date shall be the outstanding balance at such date of all unconditional obligations as described above and, with respect to contingent obligations, the maximum liability upon the occurrence of the contingency giving rise to the obligation. The amount of Indebtedness issued with original issue discount is the face amount of such Indebtedness less the remaining unamortized portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP. "Indenture" means this instrument as it may from time to time be supplemented or amended by one or more indentures supplemental hereto entered into pursuant to the applicable provisions hereof and, with respect to any Security, by the terms and provisions of such Security and any Coupon appertaining thereto established pursuant to Section 3.1 (as such terms and provisions may be amended pursuant to the applicable provisions hereof). 7 14 "Independent Public Accountants" means accountants or a firm of accountants that, with respect to the Company and the Guarantors and any other obligor under the Securities, the Coupons or the Guarantees, are independent public accountants within the meaning of the Securities Act of 1933, as amended, and the rules and regulations promulgated by the Commission thereunder, who may be the independent public accountants regularly retained by the Company or who may be other independent public accountants. Such accountants or firm shall be entitled to rely upon any Opinion of Counsel as to the interpretation of any legal matters relating to this Indenture or certificates required to be provided hereunder. "Indexed Security" means a Security the terms of which provide that the principal amount thereof payable at Stated Maturity may be more or less than the principal face amount thereof at original issuance. "Initial Guarantor" or "Initial Guarantors" means each Person named as an "Initial Guarantor" in the first paragraph of this instrument until a successor Person shall have become such pursuant to the applicable provisions of this Indenture, and thereafter "Initial Guarantor" and "Initial Guarantors" shall mean such successor Person. "Interest", with respect to any Original Issue Discount Security which by its terms bears interest only after Maturity, means interest payable after Maturity and, when used with respect to a Security which provides for the payment of Additional Amounts pursuant to Section 10.4 or other amounts pursuant to the terms of such Security, includes such Additional Amounts or other amounts. "Interest Payment Date", with respect to any Security, means the Stated Maturity of an installment of interest on such Security. "Interest Rate Agreement" means any interest rate protection agreement, interest rate future agreement, interest rate option agreement, interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate hedge agreement, option or future contract or other similar agreement or arrangement. "Judgment Currency" has the meaning specified in Section 1.15. "Leverage Ratio" with respect to the Restricted Group means, as of the date of and after giving effect to any designation of an Unrestricted Subsidiary as a Restricted Subsidiary or any designation of a Restricted Subsidiary as an Unrestricted Subsidiary, in each case in accordance with Section 10.7, the ratio of (i) the aggregate outstanding principal amount of all Indebtedness of the Restricted Group as of such date to (ii) the product of four times the Restricted Group Cash Flow for the most recent full fiscal quarter for which financial information is available on such date; provided that, in making the foregoing calculation, (A) pro forma effect shall be given to any Indebtedness to be incurred or repaid on the date of incurrence of any Indebtedness (the "Transaction Date"); (B) pro forma effect shall be given to Asset Dispositions and Asset Acquisitions 8 15 (including giving pro forma effect to the application of proceeds of any Asset Disposition) that occur from the beginning of the fiscal quarter through the Transaction Date (the "Reference Period"), as if they had occurred and such proceeds had been applied on the first day of such Reference Period and, in the case of any Asset Acquisition, giving pro forma effect to any cost reductions the Company anticipates if the Company delivers to the Trustee an officer's certificate executed by the Chief Financial Officer of the Company certifying to and describing and quantifying with reasonable specificity the cost reductions expected to be attained within the first year after such Asset Acquisition; and (C) pro forma effect shall be given to asset dispositions and asset acquisitions (including giving pro forma effect to the application of proceeds of any asset disposition) that have been made by any Person that has become a Restricted Subsidiary or has been merged with or into the Company or any Restricted Subsidiary during such Reference Period and that would have constituted Asset Dispositions or Asset Acquisitions had such transactions occurred when such Person was a Restricted Subsidiary as if such asset dispositions or asset acquisitions were Asset Dispositions or Asset Acquisitions that occurred on the first day of such Reference Period; provided that to the extent that clause (B) or (C) of this sentence requires that pro forma effect be given to an Asset Acquisition or Asset Disposition, such pro forma calculation shall be based upon the fiscal quarter immediately preceding the Transaction Date of the Person, or division or line of business of the Person, that is acquired or disposed of for which financial information is available. "Lien" means any mortgage, pledge, security interest, encumbrance, lien or charge of any kind (including any conditional sale or other title retention agreement or lease in the nature thereof). "Maturity", with respect to any Security, means the date on which the principal of such Security or an installment of principal becomes due and payable as therein or herein provided, whether at the Stated Maturity or by declaration of acceleration, notice of redemption or repurchase, notice of option to elect repayment or otherwise, and includes the Redemption Date. "New York Banking Day" has the meaning specified in Section 1.15. "Office" or "Agency", with respect to any Securities, means an office or agency of the Company or a Guarantor maintained or designated in a Place of Payment for such Securities pursuant to Section 10.2 or any other office or agency of the Company or a Guarantor maintained or designated for such Securities pursuant to Section 10.2 or, to the extent designated or required by Section 10.2 in lieu of such office or agency, the Corporate Trust Office of the Trustee. "Officers' Certificate" means a certificate signed by the Chairman of the Board, a Vice Chairman, the President, the Chief Financial Officer or a Vice President, and by the Treasurer, an Assistant Treasurer, the Controller, an Assistant Controller, the Secretary or 9 16 an Assistant Secretary, of the Company, and delivered to the Trustee. One of the officers signing an Officers' Certificate given pursuant to Section 10.10 shall be the principal executive, financial or accounting officer of the Company. "Opinion of Counsel" means a written opinion of counsel, who may be an employee of or counsel for the Company or a Guarantor or other counsel who shall be reasonably acceptable to the Trustee. "Original Issue Discount Security" means a Security issued pursuant to this Indenture which provides for declaration of an amount less than the principal face amount thereof to be due and payable upon acceleration pursuant to Section 5.2. "Outstanding", when used with respect to any Securities, means, as of the date of determination, all such Securities theretofore authenticated and delivered under this Indenture, except: (i) any such Security theretofore cancelled by the Trustee or the Security Registrar or delivered to the Trustee or the Security Registrar for cancellation; (ii) any such Security for whose payment at the Maturity thereof money in the necessary amount has been theretofore deposited pursuant hereto (other than pursuant to Section 4.2) with the Trustee or any Paying Agent (other than the Company or a Guarantor) in trust or set aside and segregated in trust by the Company or a Guarantor (if the Company shall act as its own, or authorize a Guarantor to act as, Paying Agent) for the Holders of such Securities and any Coupons appertaining thereto; provided that, if such Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor satisfactory to the Trustee has been made; (iii) any such Security with respect to which the Company has effected defeasance pursuant to the terms hereof, except to the extent provided in Section 4.2; (iv) any such Security which has been paid pursuant to Section 3.6 or in exchange for or in lieu of which other Securities have been authenticated and delivered pursuant to this Indenture, unless there shall have been presented to the Trustee proof satisfactory to it that such Security is held by a bona fide purchaser in whose hands such Security is a valid obligation of the Company; and (v) any such Security converted or exchanged as contemplated by this Indenture into other securities, if the terms of such Security provide for such conversion or exchange pursuant to Section 3.1; 10 17 provided, however, that in determining whether the Holders of the requisite principal amount of Outstanding Securities have given any request, demand, authorization, direction, notice, consent or waiver hereunder or are present at a meeting of Holders of Securities for quorum purposes, (i) the principal amount of an Original Issue Discount Security that may be counted in making such determination and that shall be deemed to be Outstanding for such purposes shall be equal to the amount of the principal thereof that pursuant to the terms of such Original Issue Discount Security would be declared (or shall have been declared to be) due and payable upon a declaration of acceleration thereof pursuant to Section 5.2 at the time of such determination, and (ii) the principal amount of any Indexed Security that may be counted in making such determination and that shall be deemed Outstanding for such purposes shall be equal to the principal face amount of such Indexed Security at original issuance, unless otherwise provided in or pursuant to this Indenture, and (iii) the principal amount of a Security denominated in a Foreign Currency shall be the Dollar equivalent, determined on the date of original issuance of such Security, of the principal amount (or, in the case of an Original Issue Discount Security, the Dollar equivalent on the date of original issuance of such Security of the amount determined as provided in (i) above) of such Security, and (iv) Securities owned by the Company or a Guarantor or any other obligor upon the Securities or any Affiliate of the Company or a Guarantor or such other obligor, shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Trustee shall be protected in making any such determination or relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Securities which a Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so owned which shall have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Trustee (A) the pledgee's right so to act with respect to such Securities and (B) that the pledgee is not the Company or a Guarantor or any other obligor upon the Securities or any Coupons appertaining thereto or an Affiliate of the Company or a Guarantor or such other obligor. "Paying Agent" means any Person authorized by the Company to pay the principal of, or any premium or interest on, or any Additional Amounts with respect to, any Security or any Coupon on behalf of the Company. "Permitted Liens" means: (i) Liens for taxes, assessments, governmental charges or claims that are not yet delinquent or are being contested in good faith by appropriate legal proceedings promptly instituted and diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (ii) statutory and common law Liens of landlords and carriers, warehousemen, mechanics, suppliers, materialmen, repairmen or other similar Liens arising the ordinary course of business and with respect to amounts not yet delinquent or being contested in good faith by appropriate legal proceedings promptly instituted and 11 18 diligently conducted and for which a reserve or other appropriate provision, if any, as shall be required in conformity with GAAP shall have been made; (iii) Liens incurred or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security; (iv) Liens incurred or deposits made to secure the performance of tenders, bids, leases, statutory or regulatory obligations (including obligations under franchise agreements), bankers' acceptances, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of a similar nature incurred in the ordinary course of business (exclusive of obligations for the payment of borrowed money); (v) easements, rights-of-way, municipal and zoning ordinances and similar charges, encumbrances, title defects or other irregularities that do not materially interfere with the ordinary course of business of the Company or any of its Restricted Subsidiaries; (vi) Liens upon real or personal property acquired after the Closing Date; provided that (a) such Lien is created solely for the purpose of securing Indebtedness incurred, in accordance with Section 10.6 to finance the cost (including the cost of design, development, acquisition, installation, integration, improvement or construction) of the item of property or assets subject thereto and such Lien is created prior to, at the time of or within six months after the later of the acquisition, the completion of construction or the commencement of full operation of such property, (b) the principal amount of the Indebtedness secured by such Lien does not exceed 100% of such cost and (c) any such Lien shall not extend to or cover any property or assets other than such item of property or assets and any improvements on such item; (vii) Liens arising from filing Uniform Commercial Code financing statements regarding leases; (viii) Liens on property of, or on shares of Capital Stock or Indebtedness of, any Person existing at the time such Person becomes, or becomes a part of, any Restricted Subsidiary; provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the property or assets acquired; (ix) Liens in favor of the Company or any Restricted Subsidiary; (x) Liens arising from the rendering of a final judgment or order against the Company or any Restricted Subsidiary that does not give rise to an Event of Default; (xi) Liens securing reimbursement obligations with respect to letters of credit that encumber documents and other property relating to such letters of credit and the products and proceeds thereof; (xii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods; (xiii) Liens encumbering customary initial deposits and margin deposits, and other Liens that are within the general parameters customary in the industry and incurred in the ordinary course of business, in each case, securing Indebtedness under Interest Rate Agreements and Currency Agreements and forward contracts, options, future contracts, futures options or similar agreements or arrangements designed solely to protect the Company or any of its Restricted Subsidiaries from fluctuations in interest rates, currencies or the price of commodities; (xiv) Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business in accordance with industry practice; (xv) Liens resulting from deposits made in connection with any proposed Asset Acquisition; provided that such deposit does not exceed 10% of the 12 19 estimated purchase price for such Asset Acquisition; and (xvi) Liens on or sales of receivables, including related intangible assets and proceeds thereof where, in the good faith determination of the Board of Directors of the Company, the Company has received the fair market value of such receivables. "Person" means any individual, Corporation, partnership, joint venture, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof. "Place of Payment", with respect to any Security, means the place or places where the principal of, or any premium or interest on, or any Additional Amounts with respect to, such Security are payable as provided in or pursuant to this Indenture or such Security. "Predecessor Security" of any particular Security means every previous Security evidencing all or a portion of the same Indebtedness as that evidenced by such particular Security; and, for the purposes of this definition, any Security authenticated and delivered under Section 3.6 in exchange for or in lieu of a mutilated, destroyed, lost or stolen Security or any Security to which a mutilated, destroyed, lost or stolen Coupon appertains shall be deemed to evidence the same Indebtedness as the mutilated, destroyed, lost or stolen Security or the Security to which a mutilated, destroyed, lost or stolen Coupon appertains. "Principal Property" means, as of any date of determination, any property or assets owned by any Restricted Subsidiary other than (i) any such property which, in the good faith opinion of the Board of Directors of the Company, is not of material importance to the business conducted by the Company and its Restricted Subsidiaries taken as a whole and (ii) any shares of any class of stock or any other security of any Unrestricted Subsidiary. "Redemption Date", with respect to any Security or portion thereof to be redeemed, means the date fixed for such redemption by or pursuant to this Indenture or such Security. "Redemption Price", with respect to any Security or portion thereof to be redeemed, means the price at which it is to be redeemed as determined by or pursuant to this Indenture or such Security. "Registered Security" means any Security established pursuant to Section 2.1 which is registered in a Security Register. "Regular Record Date" for the interest payable on any Registered Security on any Interest Payment Date therefor means the date, if any, specified in or pursuant to this Indenture or such Security as the "Regular Record Date". 13 20 "Required Currency" has the meaning specified in Section 1.15. "Responsible Officer" means any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, or any trust officer or any other authorized officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his or her knowledge of and familiarity with the particular subject. "Restricted Group" means, as of any date of determination, the Company and the Restricted Subsidiaries as of such date. "Restricted Property" means, as of any date of determination, any Principal Property and any shares of stock of a Restricted Subsidiary owned by the Company or a Restricted Subsidiary. "Restricted Subsidiary" means each Subsidiary of the Company other than the Unrestricted Subsidiaries. "Security" or "Securities" means any note or notes, bond or bonds, debenture or debentures, or any other evidences of Indebtedness, as the case may be, authenticated and delivered under this Indenture; provided, however, that, if at any time there is more than one Person acting as Trustee under this Indenture, "Securities", with respect to any such Person, shall mean Securities authenticated and delivered under this Indenture, exclusive, however, of Securities of any series as to which such Person is not Trustee. "Security Register" and "Security Registrar" have the respective meanings specified in Section 3.5. "Special Record Date" for the payment of any Defaulted Interest on any Registered Security means a date fixed by the Trustee pursuant to Section 3.7. "Stated Maturity", with respect to any Security or any installment of principal thereof or interest thereon or any Additional Amounts with respect thereto, means the date established by or pursuant to this Indenture or such Security as the fixed date on which the principal of such Security or such installment of principal or interest is, or such Additional Amounts are, due and payable. "Subsequent Guarantor" means any Subsidiary that after the date hereof guarantees indebtedness of the Company under a Credit Agreement. "Subsidiary" means, in respect of any Person, any corporation, association, partnership or other business entity of which more than 50% of the total voting power of shares of capital stock or other interests (including partnership interests) entitled (without regard to the occurrence of any contingency) to vote in the election of directors, 14 21 managers or trustees thereof is at the time owned or controlled, directly or indirectly, by (i) such Person, (ii) such Person and one or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such Person. "Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument until a successor Trustee shall have become such with respect to one or more series of Securities pursuant to the applicable provisions of this Indenture, and thereafter "Trustee" shall mean each Person who is then a Trustee hereunder; provided, however, that if at any time there is more than one such Person, "Trustee" shall mean each such Person and as used with respect to the Securities of any series shall mean the Trustee with respect to the Securities of such series. "United States", except as otherwise provided in or pursuant to this Indenture or any Security, means the United States of America (including the states thereof and the District of Columbia), its territories and possessions and other areas subject to its jurisdiction. "United States Alien", except as otherwise provided in or pursuant to this Indenture or any Security, means any Person who, for United States Federal income tax purposes, is a foreign corporation, a non-resident alien individual, a non-resident alien fiduciary of a foreign estate or trust, or a foreign partnership one or more of the members of which is, for United States Federal income tax purposes, a foreign corporation, a non-resident alien individual or a non-resident alien fiduciary of a foreign estate or trust. "Unrestricted Subsidiary" means (i) any Subsidiary of the Company that has been designated as an Unrestricted Subsidiary as permitted by Section 10.7 and not thereafter redesignated as a Restricted Subsidiary as permitted thereby and (ii) each Subsidiary of any Unrestricted Subsidiary. "U.S. Depository" or "Depository" means, with respect to any Security issuable or issued in the form of one or more global Securities, the Person designated as U.S. Depository or Depository by the Company in or pursuant to this Indenture, which Person must be, to the extent required by applicable law or regulation, a clearing agency registered under the Securities Exchange Act of 1934, as amended, and, if so provided with respect to any Security, any successor to such Person. If at any time there is more than one such Person, "U.S. Depository" or "Depository" shall mean, with respect to any Securities, the qualifying entity which has been appointed with respect to such Securities. "Vice President", when used with respect to the Company, a Guarantor or the Trustee, means any vice president (but shall not include any assistant vice president), whether or not designated by a number or a word or words added before or after the title "Vice President". 15 22 Section 1.2. Compliance Certificates and Opinions. Except as otherwise expressly provided in this Indenture, upon any application or request by the Company or a Guarantor to the Trustee to take any action under any provision of this Indenture, the Company or such Guarantor, as the case may be, shall furnish to the Trustee an Officers' Certificate or a Guarantor's Officers' Certificate, as the case may be, stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents or any of them is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. Each such certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include: (1) a statement that each individual signing such certificate or opinion has read such condition or covenant and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (3) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such condition or covenant has been complied with; and (4) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. Section 1.3. Form of Documents Delivered to Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. Any certificate or opinion of an officer of the Company or a Guarantor may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any such certificate or opinion of counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Company or such Guarantor, as the case may be, stating that the information with 16 23 respect to such factual matters is in the possession of the Company or such Guarantor, as the case may be, unless such counsel knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect to such matters are erroneous. Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture or any Security, they may, but need not, be consolidated and form one instrument. Section 1.4. Acts of Holders. Any request, demand, authorization, direction, notice, consent, waiver or other action provided by or pursuant to this Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing. If, but only if, Securities of a series are issuable as Bearer Securities, any request, demand, authorization, direction, notice, consent, waiver or other action provided in or pursuant to this Indenture to be given or taken by Holders of Securities of such series may, alternatively, be embodied in and evidenced by the record of Holders of Securities of such series voting in favor thereof, either in person or by proxies duly appointed in writing, at any meeting of Holders of Securities of such series duly called and held in accordance with the provisions of Article XV, or a combination of such instruments and any such record. Except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments or record or both are delivered to the Trustee and, where it is hereby expressly required, to the Company and the Guarantors. Such instrument or instruments and any such record (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the "Act" of the Holders signing such instrument or instruments or so voting at any such meeting. Proof of execution of any such instrument or of a writing appointing any such agent, or of the holding by any Person of a Security, shall be sufficient for any purpose of this Indenture and (subject to the provisions of Article VI) conclusive in favor of the Trustee, the Company and a Guarantor and any agent of the Trustee, the Company or such Guarantor, if made in the manner provided in this Section. The record of any meeting of Holders of Securities shall be proved in the manner provided in Section 15.6. Without limiting the generality of this Section 1.4, unless otherwise provided in or pursuant to this Indenture, a Holder, including a U.S. Depository that is a Holder of a global Security, may make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or other Act provided in or pursuant to this Indenture to be made, given or taken by Holders, and a U.S. Depository that is a Holder of a global Security may provide its proxy or proxies to the beneficial owners of interests in any such global Security through such U.S. Depository's standing instructions and customary practices. The Company shall fix a record date for the purpose of determining the Persons who are beneficial owners of interest in any permanent global Security held by a U.S. Depository entitled under the procedures of such U.S. Depository to make, give or take, by a proxy or proxies duly appointed in writing, any request, demand, authorization, direction, notice, consent, waiver or 17 24 other Act provided in or pursuant to this Indenture to be made, given or taken by Holders. If such a record date is fixed, the Holders on such record date or their duly appointed proxy or proxies, and only such Persons, shall be entitled to make, give or take such request, demand, authorization, direction, notice, consent, waiver or other Act, whether or not such Holders remain Holders after such record date. No such request, demand, authorization, direction, notice, consent, waiver or other Act shall be valid or effective if made, given or taken more than 90 days after such record date. The fact and date of the execution by any Person of any such instrument or writing referred to in this Section 1.4 may be proved in any reasonable manner; and the Trustee may in any instance require further proof with respect to any of the matters referred to in this Section. The ownership, principal amount and serial numbers of Registered Securities held by any Person, and the date of the commencement and the date of the termination of holding the same, shall be proved by the Security Register. The ownership, principal amount and serial numbers of Bearer Securities held by any Person, and the date of the commencement and the date of the termination of holding the same, may be proved by the production of such Bearer Securities or by a certificate executed, as depositary, by any trust company, bank, banker or other depositary reasonably acceptable to the Company, wherever situated, if such certificate shall be deemed by the Company and the Trustee to be satisfactory, showing that at the date therein mentioned such Person had on deposit with such depositary, or exhibited to it, the Bearer Securities therein described; or such facts may be proved by the certificate or affidavit of the Person holding such Bearer Securities, if such certificate or affidavit is deemed by the Trustee to be satisfactory. The Trustee, the Company and the Guarantors may assume that such ownership of any Bearer Security continues until (i) another certificate or affidavit bearing a later date issued in respect of the same Bearer Security is produced, or (ii) such Bearer Security is produced to the Trustee by some other Person, or (iii) such Bearer Security is surrendered in exchange for a Registered Security, or (iv) such Bearer Security is no longer Outstanding. The ownership, principal amount and serial numbers of Bearer Securities held by the Person so executing such instrument or writing and the date of the commencement and the date of the termination of holding the same may also be proved in any other manner which the Company and the Trustee deem sufficient. If the Company or a Guarantor shall solicit from the Holders of any Registered Securities any request, demand, authorization, direction, notice, consent, waiver or other Act, the Company or such Guarantor, as the case may be, may at its option (but is not obligated to), by Board Resolution or Guarantor's Board Resolution, as the case may be, fix in advance a record date for the determination of Holders of Registered Securities entitled to give such request, demand, authorization, direction, notice, consent, waiver or other Act. If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver or other Act may be given before or after such record date, but only the Holders of Registered Securities of record at the close of business on such record date shall be deemed to be Holders for the purpose of determining whether Holders of the requisite proportion of Outstanding Securities have 18 25 authorized or agreed or consented to such request, demand, authorization, direction, notice, consent, waiver or other Act, and for that purpose the Outstanding Securities shall be computed as of such record date; provided that no such authorization, agreement or consent by the Holders of Registered Securities shall be deemed effective unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the record date. Any request, demand, authorization, direction, notice, consent, waiver or other Act by the Holder of any Security shall bind every future Holder of the same Security and the Holder of every Security issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof in respect of anything done or suffered to be done by the Trustee, any Security Registrar, any Paying Agent, the Company or a Guarantor in reliance thereon, whether or not notation of such Act is made upon such Security. Section 1.5. Notices, etc., to Trustee, the Company and the Guarantors. Any request, demand, authorization, direction, notice, consent, waiver or other Act of Holders or other document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with, (1) the Trustee by any Holder, a Guarantor or by the Company shall be sufficient for every purpose hereunder if made, given, furnished or filed in writing to or with the Trustee at its Corporate Trust Office, or (2) the Company or a Guarantor by the Trustee or by any Holder shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, to the Company or such Guarantor, as the case may be, addressed to it at the address of its principal office specified in the first paragraph of this instrument or at any other address previously furnished in writing to the Trustee by the Company or such Guarantor, as the case may be. Section 1.6. Notice to Holders of Securities; Waiver. Except as otherwise expressly provided in or pursuant to this Indenture, where this Indenture provides for notice to Holders of Securities of any event, (1) such notice shall be sufficiently given to Holders of Registered Securities if in writing and mailed, first-class postage prepaid, to each Holder of a Registered Security affected by such event, at his address as it appears in the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice; and (2) such notice shall be sufficiently given to Holders of Bearer Securities, if any, if published in an Authorized Newspaper in The City of New York and, if such Securities are then listed on any stock exchange outside the United States, in an Authorized Newspaper in such city as the Company shall advise the Trustee that such stock exchange 19 26 so requires, on a Business Day at least twice, the first such publication to be not earlier than the earliest date and the second such publication not later than the latest date prescribed for the giving of such notice. In any case where notice to Holders of Registered Securities is given by mail, neither the failure to mail such notice, nor any defect in any notice so mailed, to any particular Holder of a Registered Security shall affect the sufficiency of such notice with respect to other Holders of Registered Securities or the sufficiency of any notice to Holders of Bearer Securities given as provided herein. Any notice which is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. In the case by reason of the suspension of regular mail service or by reason of any other cause it shall be impracticable to give such notice by mail, then such notification as shall be made with the approval of the Trustee shall constitute a sufficient notification for every purpose hereunder. In case by reason of the suspension of publication of any Authorized Newspaper or Authorized Newspapers or by reason of any other cause it shall be impracticable to publish any notice to Holders of Bearers Securities as provided above, then such notification to Holders of Bearer Securities as shall be given with the approval of the Trustee shall constitute sufficient notice to such Holders for every purpose hereunder. Neither failure to give notice by publication to Holders of Bearer Securities as provided above, nor any defect in any notice so published, shall affect the sufficiency of any notice mailed to Holders of Registered Securities as provided above. Where this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Holders of Securities shall be filed with the Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. Section 1.7. Language of Notices. Any request, demand, authorization, direction, notice, consent, election or waiver required or permitted under this Indenture shall be in the English language, except that, if the Company or a Guarantor, as the case may be, so elects, any published notice may be in an official language of the country of publication. Section 1.8. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 20 27 Section 1.9. Successors and Assigns. All covenants and agreements in this Indenture by the Company shall bind its successors and assigns, whether so expressed or not. All covenants and agreements in this Indenture by the Guarantors shall bind their respective successors and assigns, whether so expressed or not. Section 1.10. Separability Clause. In case any provision in this Indenture, any Security or any Coupon shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 1.11. Benefits of Indenture. Nothing in this Indenture, any Security or any Coupon, express or implied, shall give to any Person, other than the parties hereto, any Security Registrar, any Paying Agent, any Authenticating Agent and their successors hereunder, and the Holders of Securities or Coupons, any benefit or any legal or equitable right, remedy or claim under this Indenture. Section 1.12. Governing Law. THIS INDENTURE, THE SECURITIES, THE GUARANTEES AND ANY COUPONS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE OR INSTRUMENTS ENTERED INTO AND, IN EACH CASE, PERFORMED IN SAID STATE. Section 1.13. Legal Holidays. Unless otherwise specified in or pursuant to this Indenture or any Securities, in any case where any Interest Payment Date, Stated Maturity or Maturity of any Security, or the last date on which a Holder has the right to convert or exchange Securities of a series that are convertible or exchangeable, shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of this Indenture, any Security or any Coupon other than a provision in any Security or Coupon that specifically states that such provision shall apply in lieu hereof) payment need not be made at such Place of Payment on such date, and such Securities need not be converted or exchanged on such date but such payment may be made, and such Securities may be converted or exchanged, on the next succeeding day that is a Business Day at such Place of Payment with the same force and effect as if made on the Interest Payment Date or at the Stated Maturity or Maturity or on such last day for conversion or exchange, and no interest shall accrue on the amount payable on such date or at such time for the period from and after such Interest Payment Date, Stated Maturity, Maturity or last day for conversion or exchange, as the case may be, to such next succeeding Business Day. 21 28 Section 1.14. Counterparts. This Indenture may be executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. Section 1.15. Judgment Currency. Each of the Company and the Guarantors agrees, to the fullest extent that it may effectively do so under applicable law, that (a) if for the purpose of obtaining judgment in any court it is necessary to convert the sum due in respect of the principal of, or premium or interest, if any, on, or Additional Amounts with respect to, the Securities of any series or the Guarantees (the "Required Currency") into a currency in which a judgment will be rendered (the "Judgment Currency"), the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Trustee could purchase in The City of New York the requisite amount of the Required Currency with the Judgment Currency on the New York Banking Day preceding the day on which a final unappealable judgment is given and (b) its obligations under this Indenture to make payments in the Required Currency (i) shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment (whether or not entered in accordance with clause (a)), in any currency other than the Required Currency, except to the extent that such tender or recovery shall result in the actual receipt, by the payee, of the full amount of the Required Currency expressed to be payable in respect of such payments, (ii) shall be enforceable as an alternative or additional cause of action for the purpose of recovering in the Required Currency the amount, if any, by which such actual receipt shall fall short of the full amount of the Required Currency so expressed to be payable and (iii) shall not be affected by judgment being obtained for any other sum due under this Indenture. For purposes of the foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a legal holiday in The City of New York or a day on which banking institutions in The City of New York are authorized or obligated by law, regulation or executive order to be closed. Section 1.16. No Security Interest Created. Subject to the provisions of Section 10.5, nothing in this Indenture or in any Securities, express or implied, shall be construed to constitute a security interest under the Uniform Commercial Code or similar legislation, as now or hereafter enacted and in effect in any jurisdiction where property of the Company or its Subsidiaries is or may be located. Section 1.17. Limitation on Individual Liability. No recourse under or upon any obligation, covenant or agreement contained in this Indenture or in any Security or Guarantee, or for any claim based thereon or otherwise in respect thereof, shall be had against any incorporator, shareholder, officer or director, as such, past, present or future, of the Company or any Guarantor, either directly or through the Company or a Guarantor, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly understood that this Indenture and the obligations issued hereunder are solely corporate obligations, and that no such personal liability 22 29 whatever shall attach to, or is or shall be incurred by, the incorporators, shareholders, officers or directors, as such, of the Company or any Guarantor , or any of them, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any Security or Guarantee or implied therefrom; and that any and all such personal liability of every name and nature, either at common law or in equity or by constitution or statute, of, and any and all such rights and claims against, every such incorporator, shareholder, officer or director, as such, because of the creation of the indebtedness hereby authorized, or under or by reason of the obligations, covenants or agreements contained in this Indenture or in any Security or Guarantee or implied therefrom, are hereby expressly waived and released as a condition of, and as a consideration for, the execution of this Indenture and the issuance of such Security or Guarantee. ARTICLE II SECURITY FORMS Section 2.1. Forms Generally. Each Registered Security, Bearer Security, Coupon and temporary or permanent global Security issued pursuant to this Indenture shall be in the form established by or pursuant to a Board Resolution or in one or more indentures supplemental hereto, shall have such appropriate insertions, omissions, substitutions and other variations as are required or permitted by or pursuant to this Indenture or any indenture supplemental hereto and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Security or Coupon as evidenced by their execution of such Security or Coupon. Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall be issuable in registered form without Coupons and shall not be issuable upon the exercise of warrants. Definitive Securities and definitive Coupons shall be printed, lithographed or engraved or produced by any combination of these methods on a steel engraved border or steel engraved borders or may be produced in any other manner, all as determined by the officers of the Company executing such Securities or Coupons, as evidenced by their execution of such Securities or Coupons. Section 2.2. Form of Trustee's Certificate of Authentication. Subject to Section 6.13, the Trustee's certificate of authentication shall be in substantially the following form: 23 30 This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, as Trustee By --------------------------------- Authorized Signatory Section 2.3. Securities in Global Form. Unless otherwise provided in or pursuant to this Indenture or any Securities, the Securities shall not be issuable in temporary or permanent global form. If Securities of a series shall be issuable in global form, any such Security may provide that it or any number of such Securities shall represent the aggregate amount of all Outstanding Securities of such series (or such lesser amount as is permitted by the terms thereof) from time to time endorsed thereon and may also provide that the aggregate amount of Outstanding Securities represented thereby may from time to time be increased or reduced to reflect exchanges. Any endorsement of any Security in global form to reflect the amount, or any increase or decrease in the amount, or changes in the rights of Holders, of Outstanding Securities represented thereby shall be made in such manner and by such Person or Persons as shall be specified therein or in the Company Order to be delivered pursuant to Section 3.3 or 3.4 with respect thereto. Subject to the provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall make available for delivery and redelivery, in each case at the Company's expense, any Security in permanent global form in the manner and upon instructions given by the Person or Persons specified therein or in the applicable Company Order. If a Company Order pursuant to Section 3.3 or 3.4 has been, or simultaneously is, delivered, any instructions by the Company with respect to a Security in global form shall be in writing but need not be accompanied by or contained in an Officers' Certificate and need not be accompanied by an Opinion of Counsel. Notwithstanding the provisions of Section 3.7, unless otherwise specified in or pursuant to this Indenture or any Securities, payment of principal of, any premium and interest on, and any Additional Amounts with respect to, any Security in temporary or permanent global form shall be made to the Person or Persons specified therein. Notwithstanding the provisions of Section 3.8 and except as provided in the preceding paragraph, the Company, the Trustee and any agent of the Company or the Trustee shall treat as the Holder of such principal amount of Outstanding Securities represented by a global Security (i) in the case of a global Security in registered form, the Holder of such global Security in registered form, or (ii) in the case of a global Security in bearer form, the Person or Persons specified pursuant to Section 3.1. 24 31 ARTICLE III THE SECURITIES Section 3.1. Amount Unlimited; Issuable in Series. The aggregate principal amount of Securities which may be authenticated and made available for delivery under this Indenture is unlimited. The Securities may be issued in one or more series. With respect to Securities to be authenticated and delivered hereunder, there shall be established in or pursuant to a Board Resolution and set forth in an Officers' Certificate, or established in one or more indentures supplemental hereto: (1) the title of such Securities and the series in which such Securities shall be included; (2) any limit upon the aggregate principal amount of the Securities of the series which may be authenticated and made available for delivery under this Indenture (except for Securities authenticated and made available for delivery upon registration of transfer of, or in exchange for, or in lieu of, other Securities of such series pursuant to Section 3.4, 3.5, 3.6, 9.5 or 11.7, upon repayment in part of any Registered Security of such series pursuant to Article XIII, upon surrender in part of any Registered Security for conversion into or exchange for other securities pursuant to its terms, or pursuant to or as contemplated by the terms of such Securities); (3) if such Securities are to be issuable as Registered Securities, as Bearer Securities or alternatively as Bearer Securities and Registered Securities, and whether the Bearer Securities are to be issuable with Coupons, without Coupons or both, and any restrictions applicable to the offer, sale or delivery of the Bearer Securities and the terms, if any, upon which Bearer Securities may be exchanged for Registered Securities and vice versa; (4) if any of such Securities are to be issuable in global form, when any of such Securities are to be issuable in global form and (i) whether such Securities are to be issued in temporary or permanent global form or both, (ii) whether beneficial owners of interests in any such global Security may exchange such interests for Securities of the same series and of like tenor and of any authorized form and denomination, and the circumstances under which any such exchanges may occur, if other than in the manner specified in Section 3.5, and (iii) the name of the Depository or the U.S. Depository, as the case may be, with respect to any such global Security; (5) if any of such Securities are to be issuable as Bearer Securities or in global form, the date as of which any such Bearer Security or global Security shall be dated (if other than the date of original issuance of the first of such Securities to be issued); 25 32 (6) if any of such Securities are to be issuable as Bearer Securities, whether interest in respect of any portion of a temporary Bearer Security in global form payable in respect of an Interest Payment Date therefor prior to the exchange, if any, of such temporary Bearer Security for definitive Securities shall be paid to any clearing organization with respect to the portion of such temporary Bearer Security held for its account and, in such event, the terms and conditions (including any certification requirements) upon which any such interest payment received by a clearing organization will be credited to the Persons entitled to interest payable on such Interest Payment Date; (7) the date or dates, or the method or methods, if any, by which such date or dates shall be determined, on which the principal of such Securities is payable; (8) the rate or rates at which such Securities shall bear interest, if any, or the method or methods, if any, by which such rate or rates are to be determined, the date or dates, if any, from which such interest shall accrue or the method or methods, if any, by which such date or dates are to be determined, the Interest Payment Dates, if any, on which such interest shall be payable and the Regular Record Date, if any, for the interest payable on Registered Securities on any Interest Payment Date, whether and under what circumstances Additional Amounts with respect to such Securities or any of them shall be payable, the notice, if any, to Holders regarding the determination of interest on a floating rate Security and the manner of giving such notice, and the basis upon which interest shall be calculated if other than that of a 360-day year of twelve 30-day months; (9) if in addition to or other than the Borough of Manhattan, The City of New York, the place or places where the principal of, any premium and interest on or any Additional Amounts with respect to such Securities shall be payable, any of such Securities that are Registered Securities may be surrendered for registration of transfer or exchange, any of such Securities may be surrendered for conversion or exchange and notices or demands to or upon the Company or any Guarantor in respect of such Securities, the Guarantee and this Indenture may be served, the extent to which, or the manner in which, any interest payment or Additional Amounts with respect to a global Security on an Interest Payment Date will be paid and the manner in which any principal of or premium, if any, on any global Security will be paid; (10) whether any of such Securities are to be redeemable at the option of the Company and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities may be redeemed, in whole or in part, at the option of the Company; (11) whether the Company is obligated to redeem or purchase any of such Securities pursuant to any sinking fund or analogous provision or at the option of any Holder thereof and, if so, the date or dates on which, the period or periods within which, the price or prices at which and the other terms and conditions upon which such Securities shall be redeemed, purchased or repaid, in whole or in part, pursuant to such 26 33 obligation, and any provisions for the remarketing of such Securities so redeemed or purchased; (12) the denominations in which any of such Securities that are Registered Securities shall be issuable if other than denominations of $1,000 and any integral multiple thereof, and the denominations in which any of such Securities that are Bearer Securities shall be issuable if other than the denomination of $5,000; (13) whether the Securities of the series will be convertible into and/or exchangeable for other securities, and if so, the terms and conditions upon which such Securities will be so convertible or exchangeable, and any deletions from or modifications or additions to this Indenture to permit or to facilitate the issuance of such convertible or exchangeable Securities or the administration thereof; (14) if other than the principal amount thereof, the portion of the principal amount of any of such Securities that shall be payable upon declaration of acceleration of the Maturity thereof pursuant to Section 5.2 or the method by which such portion is to be determined; (15) if other than Dollars, the Foreign Currency in which payment of the principal of, any premium or interest on or any Additional Amounts with respect to any of such Securities shall be payable; (16) if the principal of, any premium or interest on or any Additional Amounts with respect to any of such Securities are to be payable, at the election of the Company or a Holder thereof or otherwise, in Dollars or in a Foreign Currency other than that in which such Securities are stated to be payable, the date or dates on which, the period or periods within which, and the other terms and conditions upon which, such election may be made, and the time and manner of determining the exchange rate between the Currency in which such Securities are stated to be payable and the Currency in which such Securities or any of them are to be paid pursuant to such election, and any deletions from or modifications of or additions to the terms of this Indenture to provide for or to facilitate the issuance of Securities denominated or payable, at the election of the Company or a Holder thereof or otherwise, in a Foreign Currency; (17) whether the amount of payments of principal of, any premium or interest on or any Additional Amounts with respect to such Securities may be determined with reference to an index, formula or other method or methods (which index, formula or method or methods may be based, without limitation, on one or more Currencies, commodities, equity securities, equity indices or other indices), and, if so, the terms and conditions upon which and the manner in which such amounts shall be determined and paid or payable; (18) any deletions from, modifications of or additions to the Events of Default or covenants of the Company or the Guarantors with respect to any of such Securities or 27 34 Guarantees, whether or not such Events of Default or covenants are consistent with the Events of Default or covenants set forth herein; (19) whether either or both of Section 4.2(2) relating to defeasance or Section 4.2(3) relating to covenant defeasance shall not be applicable to the Securities of such series, or any covenants in addition to those specified in Section 4.2(3) relating to the Securities of such series which shall be subject to covenant of defeasance, and any deletions from, or modifications or additions to, the provisions of Article IV in respect of the Securities of such series; (20) whether any of such Securities are to be issuable upon the exercise of warrants, and the time, manner and place for such Securities to be authenticated and made available for delivery; (21) if any of such Securities are to be issuable in global form and are to be issuable in definitive form (whether upon original issue or upon exchange of a temporary Security) only upon receipt of certain certificates or other documents or satisfaction of other conditions, then the form and terms of such certificates, documents or conditions; (22) if there is more than one Trustee, the identity of the Trustee and, if not the Trustee, the identity of each Security Registrar, Paying Agent or Authenticating Agent with respect to such Securities; (23) whether the provisions of Section 3.11 are applicable to such Securities; and (24) any other terms of such Securities and any other deletions from or modifications or additions to this Indenture in respect of such Securities. All Securities of any one series and all Coupons, if any, appertaining to Bearer Securities of such series shall be substantially identical except as to Currency of payments due thereunder, denomination and the rate of interest thereon, or method of determining the rate of interest, if any, Maturity, and the date from which interest, if any, shall accrue and except as may otherwise be provided by the Company in or pursuant to the Board Resolution and set forth in the Officers' Certificate or in any indenture or indentures supplemental hereto pertaining to such series of Securities. The terms of the Securities of any series may provide, without limitation, that the Securities shall be authenticated and made available for delivery by the Trustee on original issue from time to time upon written order of persons designated in the Officers' Certificate or supplemental indenture and that such persons are authorized to determine, consistent with such Officers' Certificate or any applicable supplemental indenture, such terms and conditions of the Securities of such series as are specified in such Officers' Certificate or supplemental indenture. All Securities of any one series need not be issued at the same time and, unless otherwise so provided, a series may be reopened for issuances of additional Securities of such series or to establish additional terms of such series of Securities. 28 35 If any of the terms of the Securities of any series shall be established by action taken by or pursuant to a Board Resolution, the Board Resolution shall be delivered to the Trustee at or prior to the delivery of the Officers' Certificate setting forth the terms of such series. Section 3.2. Currency; Denominations. Unless otherwise provided in or pursuant to this Indenture, the principal of, any premium and interest on and any Additional Amounts with respect to the Securities shall be payable in Dollars. Unless otherwise provided in or pursuant to this Indenture, Registered Securities denominated in Dollars shall be issuable in registered form without Coupons in denominations of $1,000 and any integral multiple thereof, and Bearer Securities denominated in Dollars shall be issuable in the denomination of $5,000. Securities not denominated in Dollars shall be issuable in such denominations as are established with respect to such Securities in or pursuant to this Indenture. Section 3.3. Execution, Authentication, Delivery and Dating. Securities shall be executed on behalf of the Company by its Vice President or a Treasurer under its corporate seal reproduced thereon and attested by its Secretary or one of its Assistant Secretaries. Coupons shall be executed on behalf of the Company by the Treasurer or any Assistant Treasurer of the Company. The signature of any of these officers on the Securities or any Coupons appertaining thereto may be manual or facsimile. Securities and any Coupons appertaining thereto bearing the manual or facsimile signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities and Coupons or did not hold such offices at the date of original issuance of such Securities or Coupons. At any time and from time to time after the execution and delivery of this Indenture, the Company may deliver Securities, together with any Coupons appertaining thereto, executed by the Company, to the Trustee for authentication and, provided that the Board Resolution and Officers' Certificate or supplemental indenture or indentures with respect to such Securities referred to in Section 3.1 and a Company Order for the authentication and delivery of such Securities have been delivered to the Trustee, the Trustee in accordance with the Company Order and subject to the provisions hereof and of such Securities shall authenticate and make available for delivery such Securities. In authenticating such Securities, and accepting the additional responsibilities under this Indenture in relation to such Securities and any Coupons appertaining thereto, the Trustee shall be entitled to receive, and (subject to the provisions of Article VI) shall be fully protected in relying upon, (1) an Opinion of Counsel to the effect that: (a) the form or forms and terms of such Securities and Coupons, if any, have been established in conformity with the provisions of this Indenture; 29 36 (b) all conditions precedent to the authentication and delivery of such Securities and Coupons, if any, appertaining thereto have been complied with and that such Securities and Coupons, when completed by appropriate insertions, executed under the Company's corporate seal and attested by duly authorized officers of the Company, delivered by duly authorized officers of the Company to the Trustee for authentication pursuant to this Indenture, and authenticated and made available for delivery by the Trustee and issued by the Company in the manner and subject to any conditions specified in such Opinion of Counsel, will constitute legally valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as enforcement thereof may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, arrangement, fraudulent conveyance, fraudulent transfer or other similar laws relating to or affecting creditors' rights generally, and subject to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and will entitle the Holders thereof to the benefits of this Indenture, including the Guarantees; such Opinion of Counsel need express no opinion as to the availability of equitable remedies; and (c) all laws and requirements in respect of the execution and delivery by the Company of such Securities and Coupons, if any, have been complied with; and (2) an Officers' Certificate and a Guarantor's Officers' Certificate stating that all conditions precedent to the execution, authentication and delivery of such Securities and Coupons, if any, appertaining thereto have been complied with and that, to the best knowledge of the Persons executing such certificate, no event which is, or after notice or lapse of time would become, an Event of Default with respect to any of the Securities shall have occurred and be continuing. If all the Securities of any series are not to be issued at one time, it shall not be necessary to deliver an Opinion of Counsel and an Officers' Certificate at the time of issuance of each Security, but such opinion and certificate, with appropriate modifications, shall be delivered at or before the time of issuance of the first Security of such series. After any such first delivery, any separate written request by an Authorized Officer of the Company that the Trustee authenticate and make available for delivery Securities of such series for original issue will be deemed to be a certification by the Company that all conditions precedent provided for in this Indenture relating to authentication and delivery of such Securities continue to have been complied with. The Trustee shall not be required to authenticate or to cause an Authenticating Agent to authenticate any Securities if the issue of such Securities pursuant to this Indenture will affect the Trustee's own rights, duties or immunities under the Securities and this Indenture or otherwise in a manner which is not reasonably acceptable to the Trustee or if the Trustee, being advised by counsel, determines that such action may not lawfully be taken. 30 37 Each Registered Security shall be dated the date of its authentication. Each Bearer Security and any Bearer Security in global form shall be dated as of the date specified in or pursuant to this Indenture. No Security or Coupon appertaining thereto shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a certificate of authentication substantially in the form provided for in Section 2.2 or 6.13 executed by or on behalf of the Trustee or by the Authenticating Agent by the manual signature of one of its authorized officers. Such certificate upon any Security shall be conclusive evidence, and the only evidence, that such Security has been duly authenticated and made available for delivery hereunder. Except as permitted by Section 3.6 or 3.7, the Trustee shall not authenticate and make available for delivery any Bearer Security unless all Coupons appertaining thereto then matured have been detached and cancelled. Section 3.4. Temporary Securities. Pending the preparation of definitive Securities, the Company may execute and deliver to the Trustee and, upon Company Order, the Trustee shall authenticate and make available for delivery, in the manner provided in Section 3.3, temporary Securities in lieu thereof which are printed, lithographed, typewritten, mimeographed or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive Securities in lieu of which they are issued, in registered form or, if authorized in or pursuant to this Indenture, in bearer form with one or more Coupons or without Coupons and with such appropriate insertions, omissions, substitutions and other variations as the officers of the Company executing such Securities may determine, as conclusively evidenced by their execution of such Securities. Such temporary Securities may be in global form. Except in the case of temporary Securities in global form, which shall be exchanged in accordance with the provisions thereof, if temporary Securities are issued, the Company shall cause definitive Securities to be prepared without unreasonable delay. After the preparation of definitive Securities of the same series and containing terms and provisions that are identical to those of any temporary Securities, such temporary Securities shall be exchangeable for such definitive Securities upon surrender of such temporary Securities at an Office or Agency for such Securities, without charge to any Holder thereof. Upon surrender for cancellation of any one or more temporary Securities (accompanied by any unmatured Coupons appertaining thereto), the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a like principal amount of definitive Securities of authorized denominations of the same series and containing identical terms and provisions; provided, however, that no definitive Bearer Security, except as provided in or pursuant to this Indenture, shall be delivered in exchange for a temporary Registered Security; and provided, further, that a definitive Bearer Security shall be delivered in exchange for a temporary Bearer Security only in compliance with the conditions set forth in or pursuant to this Indenture. Unless otherwise provided in or pursuant to this Indenture with respect to a temporary global Security, until so exchanged the 31 38 temporary Securities of any series shall in all respects be entitled to the same benefits under this Indenture as definitive Securities of such series. Section 3.5. Registration, Transfer and Exchange. With respect to the Registered Securities of each series, if any, the Company shall cause to be kept a register (each such register being herein sometimes referred to as the "Security Register") at an Office or Agency for such series in which, subject to such reasonable regulations as it may prescribe, the Company shall provide for the registration of the Registered Securities of such series and of transfers of the Registered Securities of such series. Such Office or Agency shall be the "Security Registrar" for that series of Securities. Unless otherwise specified in or pursuant to this Indenture or the Securities, the Trustee shall be the initial Security Registrar for each series of Securities. The Company shall have the right to remove and replace from time to time the Security Registrar for any series of Securities; provided that no such removal or replacement shall be effective until a successor Security Registrar with respect to such series of Securities shall have been appointed by the Company and shall have accepted such appointment by the Company. In the event that the Trustee shall not be or shall cease to be Security Registrar with respect to a series of Securities, it shall have the right to examine the Security Register for such series at all reasonable times. There shall be only one Security Register for each series of Securities. Upon surrender for registration of transfer of any Registered Security of any series at any Office or Agency for such series, the Company shall execute, and the Trustee shall authenticate and make available for delivery, in the name of the designated transferee or transferees, one or more new Registered Securities of the same series denominated as authorized in or pursuant to this Indenture, of a like aggregate principal amount bearing a number not contemporaneously outstanding and containing identical terms and provisions. At the option of the Holder, Registered Securities of any series may be exchanged for other Registered Securities of the same series containing identical terms and provisions, in any authorized denominations, and of a like aggregate principal amount, upon surrender of the Securities to be exchanged at any Office or Agency for such series. Whenever any Registered Securities are so surrendered for exchange, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Registered Securities which the Holder making the exchange is entitled to receive. If provided in or pursuant to this Indenture, with respect to Securities of any series, at the option of the Holder, Bearer Securities of such series may be exchanged for Registered Securities of such series containing identical terms, denominated as authorized in or pursuant to this Indenture and in the same aggregate principal amount, upon surrender of the Bearer Securities to be exchanged at any Office or Agency for such series, with all unmatured Coupons and all matured Coupons in default thereto appertaining. If the Holder of a Bearer Security is unable to produce any such unmatured Coupon or Coupons or matured Coupon or Coupons in default, such exchange may be effected if the Bearer Securities are accompanied by payment in 32 39 funds acceptable to the Company and the Trustee in an amount equal to the face amount of such missing Coupon or Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee if there is furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Bearer Security shall surrender to any Paying Agent any such missing Coupon in respect of which such a payment shall have been made, such Holder shall be entitled to receive the amount of such payment; provided, however, that, except as otherwise provided in Section 10.2, interest represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an Office or Agency for such series located outside the United States. Notwithstanding the foregoing, in case a Bearer Security of any series is surrendered at any such Office or Agency for such series in exchange for a Registered Security of such series and like tenor after the close of business at such Office or Agency on (i) any Regular Record Date and before the opening of business at such Office or Agency on the next succeeding Interest Payment Date, or (ii) any Special Record Date and before the opening of business at such Office or Agency on the related date for payment of Defaulted Interest, such Bearer Security shall be surrendered without the Coupon relating to such Interest Payment Date or proposed date of payment, as the case may be (or, if such Coupon is so surrendered with such Bearer Security, such Coupon shall be returned to the Person so surrendering the Bearer Security), and interest or Defaulted Interest, as the case may be, shall not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of the Registered Security issued in exchange for such Bearer Security, but shall be payable only to the Holder of such Coupon when due in accordance with the provisions of this Indenture. If provided in or pursuant to this Indenture with respect to Securities of any series, at the option of the Holder, Registered Securities of such series may be exchanged for Bearer Securities upon such terms and conditions as may be provided in or pursuant to this Indenture with respect to such series. Whenever any Securities are surrendered for exchange as contemplated by the immediately preceding two paragraphs, the Company shall execute, and the Trustee shall authenticate and make available for delivery, the Securities which the Holder making the exchange is entitled to receive. Notwithstanding the foregoing, except as otherwise provided in or pursuant to this Indenture, any global Security shall be exchangeable for definitive Securities only if (i) the Depository is at any time unwilling, unable or ineligible to continue as depository and a successor depository is not appointed by the Company within 90 days of the date the Company is so informed in writing, (ii) the Company executes and delivers to the Trustee a Company Order to the effect that such global Security shall be so exchangeable, or (iii) an Event of Default has occurred and is continuing with respect to the related Securities. If the beneficial owners of interests in a global Security are entitled to exchange such interests for definitive Securities as the result of an event described in clause (i), (ii) or (iii) of the preceding sentence, then without unnecessary delay but in any event not later than the earliest date on which such interests may be so exchanged, the Company shall deliver to the Trustee definitive Securities in such form and 33 40 denominations as are required by or pursuant to this Indenture, and of the same series, containing identical terms and in aggregate principal amount equal to the principal amount of such global Security, executed by the Company. On or after the earliest date on which such interests may be so exchanged, such global Security shall be surrendered from time to time by the U.S. Depository or such other Depository as shall be specified in the Company Order with respect thereto, and in accordance with instructions given to the Trustee and the U.S. Depository or such other Depository, as the case may be (which instructions shall be in writing but need not be contained in or accompanied by an Officers' Certificate or be accompanied by an Opinion of Counsel), as shall be specified in the Company Order with respect thereto to the Trustee, as the Company's agent for such purpose, to be exchanged, in whole or in part, for definitive Securities as described above without charge. The Trustee shall authenticate and make available for delivery, in exchange for each portion of such surrendered global Security, a like aggregate principal amount of definitive Securities of the same series of authorized denominations and of like tenor as the portion of such global Security to be exchanged, which (unless such Securities are not issuable both as Bearer Securities and as Registered Securities, in which case the definitive Securities exchanged for the global Security shall be issuable only in the form in which the Securities are issuable, as provided in or pursuant to this Indenture) shall be in the form of Bearer Securities or Registered Securities, or any combination thereof, as shall be specified by the beneficial owner thereof, but subject to the satisfaction of any certification or other requirements to the issuance of Bearer Securities; provided, however, that no such exchanges may occur during a period beginning at the opening of business 15 days before any selection of Securities of the same series to be redeemed and ending on the relevant Redemption Date; and provided, further, that (unless otherwise provided in or pursuant to this Indenture) no Bearer Security delivered in exchange for a portion of a global Security shall be mailed or otherwise delivered to any location in the United States. Promptly following any such exchange in part, such global Security shall be returned by the Trustee to such Depository or the U.S. Depository, as the case may be, or such other Depository or U.S. Depository referred to above in accordance with the instructions of the Company referred to above. If a Registered Security is issued in exchange for any portion of a global Security after the close of business at the Office or Agency for such Security where such exchange occurs on or after (i) any Regular Record Date for such Security and before the opening of business at such Office or Agency on the next succeeding Interest Payment Date, or (ii) any Special Record Date for such Security and before the opening of business at such Office or Agency on the related proposed date for payment of interest or Defaulted Interest, as the case may be, interest shall not be payable on such Interest Payment Date or proposed date for payment, as the case may be, in respect of such Registered Security, but shall be payable on such Interest Payment Date or proposed date for payment, as the case may be, only to the Person to whom interest in respect of such portion of such global Security shall be payable in accordance with the provisions of this Indenture. All Securities issued upon any registration of transfer or exchange of Securities shall be the valid obligations of the Company evidencing the same debt and entitling the Holders thereof to the same benefits under this Indenture and the Guarantees as the Securities surrendered upon such registration of transfer or exchange. 34 41 Every Registered Security presented or surrendered for registration of transfer or for exchange or redemption shall (if so required by the Company or the Security Registrar for such Security) be duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar for such Security duly executed by the Holder thereof or his attorney duly authorized in writing. No service charge shall be made for any registration of transfer or exchange, or redemption of Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge and any other expenses (including fees and expenses of the Trustee) that may be imposed in connection with any registration of transfer or exchange of Securities, other than exchanges pursuant to Section 3.4, 9.5 or 11.7 not involving any transfer. Except as otherwise provided in or pursuant to this Indenture, the Company shall not be required (i) to issue, register the transfer of or exchange any Securities during a period beginning at the opening of business 15 days before the day of the selection for redemption of Securities of like tenor and the same series under Section 11.3 and ending at the close of business on the day of such selection, or (ii) to register the transfer of or exchange any Registered Security so selected for redemption in whole or in part, except in the case of any Security to be redeemed in part, the portion thereof not to be redeemed, or (iii) to exchange any Bearer Security so selected for redemption except, to the extent provided with respect to such Bearer Security, that such Bearer Security may be exchanged for a Registered Security of like tenor and the same series, provided that such Registered Security shall be immediately surrendered for redemption with written instruction for payment consistent with the provisions of this Indenture or (iv) to issue, register the transfer of or exchange any Security which, in accordance with its terms, has been surrendered for repayment at the option of the Holder, except the portion, if any, of such Security not to be so repaid. Section 3.6. Mutilated, Destroyed, Lost and Stolen Securities. If any mutilated Security or a Security with a mutilated Coupon appertaining to it is surrendered to the Trustee, subject to the provisions of this Section 3.6, the Company shall execute and the Trustee shall authenticate and make available for delivery in exchange therefor a new Security of the same series containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding, with Coupons appertaining thereto corresponding to the Coupons, if any, appertaining to the surrendered Security. If there be delivered to the Company and to the Trustee (i) evidence to their satisfaction of the destruction, loss or theft of any Security or Coupon, and (ii) such security or indemnity as may be required by them to save each of them and any agent of either of them harmless, then, in the absence of notice to the Company or the Trustee that such Security or Coupon has been acquired by a bona fide purchaser, the Company shall execute and, upon the Company's request the Trustee shall authenticate and make available for delivery, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Security or in exchange for the Security to which a destroyed, lost or stolen Coupon appertains with all appurtenant Coupons not destroyed, lost or 35 42 stolen, a new Security of the same series containing identical terms and of like principal amount and bearing a number not contemporaneously outstanding, with Coupons appertaining thereto corresponding to the Coupons, if any, appertaining to such destroyed, lost or stolen Security or to the Security to which such destroyed, lost or stolen Coupon appertains. Notwithstanding the foregoing provisions of this Section 3.6, in case any mutilated, destroyed, lost or stolen Security or Coupon has become or is about to become due and payable, the Company in its discretion may, instead of issuing a new Security, pay such Security or Coupon; provided, however, that payment of principal of, any premium or interest on or any Additional Amounts with respect to any Bearer Securities shall, except as otherwise provided in Section 10.2, be payable only at an Office or Agency for such Securities located outside the United States and, unless otherwise provided in or pursuant to this Indenture, any interest on Bearer Securities and any Additional Amounts with respect to such interest shall be payable only upon presentation and surrender of the Coupons appertaining thereto. Upon the issuance of any new Security under this Section 3.6, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Trustee) connected therewith. Every new Security, with any Coupons appertaining thereto issued pursuant to this Section 3.6 in lieu of any destroyed, lost or stolen Security, or in exchange for a Security to which a destroyed, lost or stolen Coupon appertains shall constitute a separate obligation of the Company, whether or not the destroyed, lost or stolen Security and Coupons appertaining thereto or the destroyed, lost or stolen Coupon shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture and the Guarantees equally and proportionately with any and all other Securities of such series and any Coupons, if any, duly issued hereunder. The provisions of this Section 3.6, as amended or supplemented pursuant to this Indenture with respect to particular Securities or generally, shall be exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons. Section 3.7. Payment of Interest and Certain Additional Amounts; Rights to Interest and Certain Additional Amounts Preserved. Unless otherwise provided in or pursuant to this Indenture, any interest on and any Additional Amounts with respect to any Registered Security which shall be payable, and are punctually paid or duly provided for, on any Interest Payment Date shall be paid to the Person in whose name such Security (or one or more Predecessor Securities) is registered as of the close of business on the Regular Record Date for such interest. Unless otherwise provided in or pursuant to this Indenture, any interest on and any Additional Amounts with respect to any Registered Security which shall be payable, but shall not be punctually paid or duly provided for, on any Interest Payment Date for such Registered 36 43 Security (herein called "Defaulted Interest") shall forthwith cease to be payable to the Holder thereof on the relevant Regular Record Date by virtue of having been such Holder; and such Defaulted Interest may be paid by the Company, at its election in each case, as provided in Clause (1) or (2) below: (1) The Company may elect to make payment of any Defaulted Interest to the Person in whose name such Registered Security (or a Predecessor Security thereof) shall be registered at the close of business on a Special Record Date for the payment of such Defaulted Interest, which shall be fixed by the Company in the following manner. The Company shall notify the Trustee in writing of the amount of Defaulted Interest proposed to be paid on such Registered Security, the Special Record Date therefor and the date of the proposed payment, and at the same time the Company shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such deposit on or prior to the date of the proposed payment, such money when so deposited to be held in trust for the benefit of the Person entitled to such Defaulted Interest as in this Clause provided. The Special Record Date for the payment of such Defaulted Interest shall be not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less than 10 days after notification to the Trustee of the proposed payment. The Trustee shall, in the name and at the expense of the Company, cause notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor to be mailed, first-class postage prepaid, to the Holder of such Registered Security (or a Predecessor Security thereof) at his address as it appears in the Security Register not less than 10 days prior to such Special Record Date. The Trustee may, if so directed by the Company, in the name and at the expense of the Company, cause a similar notice to be published at least once in an Authorized Newspaper of general circulation in the Borough of Manhattan, The City of New York, but such publication shall not be a condition precedent to the establishment of such Special Record Date. Notice of the proposed payment of such Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the Person in whose name such Registered Security (or a Predecessor Security thereof) shall be registered at the close of business on such Special Record Date and shall no longer be payable pursuant to the following clause (2). (2) The Company may make payment of any Defaulted Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which such Security may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment pursuant to this Clause, such payment shall be deemed practicable by the Trustee. Unless otherwise provided in or pursuant to this Indenture or the Securities of any particular series pursuant to the provisions of this Indenture, at the option of the Company, interest on Registered Securities that bear interest may be paid by mailing a check to the address 37 44 of the Person entitled thereto as such address shall appear in the Security Register or by transfer to an account maintained by the payee with a bank located in the United States. Subject to the foregoing provisions of this Section and Section 3.5, each Security delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to interest accrued and unpaid, and to accrue, which were carried by such other Security. In the case of any Registered Security of any series that is convertible into or exchangeable for other securities, which Registered Security is converted or exchanged after any Regular Record Date and on or prior to the next succeeding Interest Payment Date (other than any Registered Security with respect to which the Stated Maturity is prior to such Interest Payment Date), interest with respect to which the Stated Maturity is on such Interest Payment Date shall be payable on such Interest Payment Date notwithstanding such conversion or exchange, and such interest (whether or not punctually paid or duly provided for) shall be paid to the Person in whose name that Registered Security (or one or more predecessor Registered Securities) is registered at the close of business on such Regular Record Date. Except as otherwise expressly provided in the immediately preceding sentence, in the case of any Registered Security which is converted or exchanged, interest with respect to which the Stated Maturity is after the date of conversion or exchange of such Registered Security shall not be payable. Section 3.8. Persons Deemed Owners. Prior to due presentment of a Registered Security for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, a Guarantor or the Trustee may treat the Person in whose name such Registered Security is registered in the Security Register as the owner of such Registered Security for the purpose of receiving payment of principal of, any premium and (subject to Sections 3.5 and 3.7) interest on and any Additional Amounts with respect to such Registered Security and for all other purposes whatsoever, whether or not any payment with respect to such Registered Security shall be overdue, and none of the Company, the Guarantors, the Trustee or any agent of the Company, a Guarantor or the Trustee shall be affected by notice to the contrary. The Company, the Guarantors, the Trustee and any agent of the Company, a Guarantor or the Trustee may treat the bearer of any Bearer Security or the bearer of any Coupon as the absolute owner of such Security or Coupon for the purpose of receiving payment thereof or on account thereof and for all other purposes whatsoever, whether or not any payment with respect to such Security or Coupon shall be overdue, and none of the Company, the Guarantors, the Trustee or any agent of the Company, a Guarantor or the Trustee shall be affected by notice to the contrary. No Holder of any beneficial interest in any global Security held on its behalf by a Depository shall have any rights under this Indenture with respect to such global Security, and such Depository may be treated by the Company, the Guarantors or the Trustee, and any agent of 38 45 the Company, a Guarantor or the Trustee as the owner of such global Security for all purposes whatsoever. None of the Company, the Guarantors, the Trustee, any Paying Agent or the Security Registrar will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests of a global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests. Section 3.9. Cancellation. All Securities and Coupons surrendered for payment, redemption, registration of transfer, exchange or conversion or for credit against any sinking fund payment shall, if surrendered to any Person other than the Trustee, be delivered to the Trustee, and any such Securities and Coupons, as well as Securities and Coupons surrendered directly to the Trustee for any such purpose, shall be cancelled promptly by the Trustee. The Company may at any time deliver to the Trustee for cancellation any Securities previously authenticated and delivered hereunder which the Company may have acquired in any manner whatsoever, and all Securities so delivered shall be cancelled promptly by the Trustee. No Securities shall be authenticated in lieu of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by or pursuant to this Indenture. All cancelled Securities and Coupons held by the Trustee shall be returned to the Company pursuant to a Company Order. Section 3.10. Computation of Interest. Except as otherwise provided in or pursuant to this Indenture or in any Security, interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months. Section 3.11. Exempt Offerings. (a) If specified pursuant to Section 3.01, the provisions set forth in this Section 3.11 shall apply with respect to the related Securities until two years after the later of the date of original issuance of the particular Security and the last date on which the Company, any Guarantor or any Affiliate of the Company or any Guarantor was the owner of such Security (or any predecessor Security) (the "Resale Restriction Termination Date"). (b) Neither the Company nor any Guarantor shall, nor shall the Company or any Guarantor permit any of its Affiliates that are Subsidiaries to, purchase or agree to purchase or otherwise acquire any such Securities, whether as beneficial owner or otherwise (except as agent on behalf of and for the account of customers in the ordinary course of business as a securities broker in unsolicited broker's transactions) unless, immediately upon any such purchase, such Securities are submitted to the Trustee for cancellation. (c) Until the Resale Restriction Termination Date, each such Security shall bear substantially the following legend (the "Legend): THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE 39 46 SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY, ANY GUARANTOR OR ANY AFFILIATE OF THE COMPANY OR ANY GUARANTOR WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY) ONLY (A) TO THE COMPANY OR ANY GUARANTOR, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT OR (E) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUSTEE, THE COMPANY AND THE GUARANTORS PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT TO CLAUSE (D) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE TRUSTEE A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF APPENDIX A HERETO. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. PRIOR TO REGISTRATION, THIS SECURITY WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN MINIMUM DENOMINATIONS OF $100,000 AND INTEGRAL MULTIPLES OF $1,000 IN EXCESS THEREOF. ANY ATTEMPTED 40 47 TRANSFER OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT WHATSOEVER, ANY SUCH PURPORTED TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF PAYMENTS HEREON, AND SUCH PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER HEREIN. (d) Until the Resale Restriction Termination Date, the Trustee shall not register the resale or other transfer of a Security unless such resale or other transfer is made in accordance with the Legend set forth in clause (c) above. (e) If Securities are issued upon the transfer, exchange or replacement of Securities bearing the Legend or if a request is made to remove the Legend on a Security, the Securities so issued shall bear the Legend or the Legend shall not be removed, as the case may be, unless there is delivered to the Company and the Trustee such satisfactory evidence that neither the Legend nor the resale and other transfer restrictions set forth therein are required to ensure that transfers thereof comply with the relevant provisions of the Securities Act of 1933, as amended (the "Securities Act") or that such Securities are not "restricted securities" within the meaning of Rule 144 under the Securities Act. (f) Securities and related documentation (including this Indenture) may be amended or supplemented from time to time by the Company, without the consent of but upon notice to the Holders of the Securities, to modify the restrictions on and procedures for resale and other transfers of the Securities and interests therein to reflect any change in applicable law or regulation (or the interpretation thereof) or in practices relating to the resale or other transfer of securities generally if the Trustee shall have received an Opinion of Counsel to the effect that such amendment or supplement is necessary or appropriate. Section 3.12. CUSIP Numbers. The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any such notice may state that no representation is made as to the correctness of such numbers either as printed on the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in or omission of such numbers. The Company will promptly notify the Trustee of any change in the "CUSIP" numbers. 41 48 ARTICLE IV SATISFACTION AND DISCHARGE Section 4.1. Satisfaction and Discharge of Indenture. Upon the direction of the Company by a Company Order, this Indenture shall cease to be of further effect with respect to any series of Securities specified in such Company Order and any Coupons appertaining thereto, and the Trustee, on receipt of a Company Order, at the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture as to such series, when (1) either (a) all Securities of such series theretofore authenticated and made available for delivery and all Coupons appertaining thereto (other than (i) Coupons appertaining to Bearer Securities of such series surrendered in exchange for Registered Securities of such series and maturing after such exchange whose surrender is not required or has been waived as provided in Section 3.5, (ii) Securities and Coupons of such series which have been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.6, (iii) Coupons appertaining to Securities of such series called for redemption and maturing after the relevant Redemption Date whose surrender has been waived as provided in Section 11.7, and (iv) Securities and Coupons of such series for whose payment money has theretofore been deposited in trust or segregated and held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in Section 10.3) have been delivered to the Trustee for cancellation; or (b) all Securities of such series and, in the case of (i) or (ii) below, any Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation (i) have become due and payable, or (ii) will become due and payable at their Stated Maturity within one year, or (iii) if redeemable at the option of the Company, are to be called for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of redemption by the Trustee in the name, and at the expense, of the Company, and the Company, in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited with the Trustee as trust funds in trust for such purpose, money in the Currency in which such Securities are payable in an amount sufficient to pay and discharge the entire indebtedness on such Securities and any Coupons appertaining thereto not theretofore delivered to the Trustee for cancellation, 42 49 including the principal of, any premium and interest on, and any Additional Amounts with respect to such Securities and any Coupons appertaining thereto, to the date of such deposit (in the case of Securities which have become due and payable) or to the Maturity thereof, as the case may be; (2) the Company or the Guarantors have paid or caused to be paid all other sums payable hereunder by the Company and the Guarantors with respect to the Outstanding Securities of such series and any Coupons appertaining thereto; and (3) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel and each Guarantor has delivered to the Trustee a Guarantor's Officers' Certificate, each stating that all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture as to such series have been complied with. Upon the direction of the Company by a Company Order, this Indenture shall cease to be of any further effect if no series of Securities or any Coupons appertaining thereto are currently outstanding, and the Trustee, on receipt of a Company Order, at the expenses of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this Indenture. In the event there are Securities of two or more series hereunder, the Trustee shall be required to execute an instrument acknowledging satisfaction and discharge of this Indenture only if requested to do so with respect to Securities of such series as to which it is Trustee and if the other conditions thereto are met. Notwithstanding the satisfaction and discharge of this Indenture with respect to any series of Securities, the obligations of the Company to the Trustee under Section 6.6 and, if money shall have been deposited with the Trustee pursuant to subclause (b) of clause (1) of this Section, the obligations of the Company, the Guarantors and the Trustee with respect to the Securities of such series under Sections 3.5, 3.6, 4.3, 10.2 and 10.3, with respect to the payment of Additional Amounts, if any, with respect to such Securities as contemplated by Section 10.4 (but only to the extent that the Additional Amounts payable with respect to such Securities exceed the amount deposited in respect of such Additional Amounts pursuant to Section 4.1(1)(b)), and with respect to any rights to convert or exchange such Securities into other securities shall survive. Section 4.2. Defeasance and Covenant Defeasance. (1) Unless pursuant to Section 3.1, either or both of (i) defeasance of the Securities of or within a series under clause (2) of this Section 4.2 shall not be applicable with respect to the Securities of such series or (ii) covenant defeasance of the Securities of or within a series under clause (3) of this Section 4.2 shall not be applicable with respect to the Securities of such series, then such provisions, together with the other provisions of this Section 4.2 (with such modifications thereto as may be specified pursuant to Section 3.1 with respect to any Securities), shall be applicable to such Securities and any Coupons appertaining thereto, and the Company may at its option by 43 50 Board Resolution, at any time, with respect to such Securities and any Coupons appertaining thereto, elect to have Section 4.2(2) or Section 4.2(3) be applied to such Outstanding Securities and any Coupons appertaining thereto upon compliance with the conditions set forth below in this Section 4.2. (2) Upon the Company's exercise of the above option applicable to this Section 4.2(2) with respect to any Securities of or within a series, the Company shall be deemed to have been discharged from its obligations with respect to such Outstanding Securities and any Coupons appertaining thereto on the date the conditions set forth in clause (4) of this Section 4.2 are satisfied (hereinafter, "defeasance"). For this purpose, such defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by such Outstanding Securities and any Coupons appertaining thereto, which shall thereafter be deemed to be "Outstanding" only for the purposes of clause (5) of this Section 4.2 and the other Sections of this Indenture referred to in clauses (i) and (ii) below, and to have satisfied all of its other obligations under such Securities and any Coupons appertaining thereto and this Indenture insofar as such Securities and any Coupons appertaining thereto are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder: (i) the rights of Holders of such Outstanding Securities and any Coupons appertaining thereto to receive, solely from the trust fund described in clause (4) of this Section 4.2 and as more fully set forth in such clause, payments in respect of the principal of (and premium, if any) and interest, if any, on, and Additional Amounts, if any, with respect to, such Securities and any Coupons appertaining thereto when such payments are due, and any rights of such Holder to convert such Securities into Common Stock or exchange such Securities for other securities, (ii) the obligations of the Company, the Guarantor and the Trustee with respect to such Securities under Sections 3.5, 3.6, 10.2 and 10.3 and with respect to the payment of Additional Amounts, if any, on such Securities as contemplated by Section 10.4 (but only to the extent that the Additional Amounts payable with respect to such Securities exceed the amount deposited in respect of such Additional Amounts pursuant to Section 4.2(4)(a) below), and with respect to any rights to convert such Securities into or exchange for other securities, (iii) the rights, powers, trusts, duties and immunities of the Trustee hereunder and (iv) this Section 4.2. The Company may exercise its option under this Section 4.2(2) notwithstanding the prior exercise of its option under clause (3) of this Section 4.2 with respect to such Securities and any Coupons appertaining thereto. (3) Upon the Company's exercise of the option to have this Section 4.2(3) apply with respect to any Securities of or within a series, the Company shall be released from its obligations under Sections 10.5 and 10.6, and, to the extent specified pursuant to Section 3.1(19), any other covenant applicable to such Securities, with respect to such Outstanding Securities and any Coupons appertaining thereto, on and after the date the conditions set forth in clause (4) of this Section 4.2 are satisfied (hereinafter, "covenant defeasance"), and such Securities and any Coupons appertaining thereto shall thereafter 44 51 be deemed to be not "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of Holders (and the consequences of any thereof) in connection with any such covenant, but shall continue to be deemed "Outstanding" for all other purposes hereunder. For this purpose, such covenant defeasance means that, with respect to such Outstanding Securities and any Coupons appertaining thereto, the Company may omit to comply with, and shall have no liability in respect of, any term, condition or limitation set forth in any such Section or such other covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such Section or such other covenant or by reason of reference in any such Section or such other covenant to any other provision herein or in any other document and such omission to comply shall not constitute a default or an Event of Default under Section 5.1(4) or 5.1(8) or otherwise, as the case may be, but, except as specified above, the remainder of this Indenture and such Securities and Coupons appertaining thereto shall be unaffected thereby. (4) The following shall be the conditions to application of clause (2) or (3) of this Section 4.2 to any Outstanding Securities of or within a series and any Coupons appertaining thereto: (a) The Company shall irrevocably have deposited or caused to be deposited with the Trustee (or another trustee satisfying the requirements of Section 6.7 who shall agree to comply with the provisions of this Section 4.2 applicable to it) as trust funds in trust for the purpose of making the following payments, specifically pledged as security for, and dedicated solely to, the benefit of the Holders of such Securities and any Coupons appertaining thereto, (1) an amount in Dollars or in such Foreign Currency in which such Securities and any Coupons appertaining thereto are then specified as payable at Stated Maturity, or (2) Government Obligations applicable to such Securities and Coupons appertaining thereto (determined on the basis of the Currency in which such Securities and Coupons appertaining thereto are then specified as payable at Stated Maturity) which through the scheduled payment of principal and interest in respect thereof in accordance with their terms will provide, not later than one day before the due date of any payment of principal of (and premium, if any) and interest, if any, on such Securities and any Coupons appertaining thereto, money in an amount, or (3) a combination thereof, in any case, in an amount, sufficient, without consideration of any reinvestment of such principal and interest, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, to pay and discharge, and which shall be applied by the Trustee (or other qualifying trustee) to pay and discharge, (y) the principal of (and premium, if any) and interest, if any, on such Outstanding Securities and any Coupons appertaining thereto at the Stated Maturity of such principal or installment of principal or premium or interest and (z) any mandatory sinking fund payments or analogous payments applicable to such Outstanding Securities and any Coupons appertaining thereto on the days on which such payments are due and payable in accordance with the terms of this Indenture and of such Securities and any Coupons appertaining thereto. 45 52 (b) Such defeasance or covenant defeasance shall not result in a breach or violation of, or constitute a default under, this Indenture or any other material agreement or instrument to which the Company is a party or by which it is bound. (c) No Event of Default or event which with notice or lapse of time or both would become an Event of Default with respect to such Securities and any Coupons appertaining thereto shall have occurred and be continuing on the date of such deposit and, with respect to defeasance only, at any time during the period ending on the 123rd day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period). (d) In the case of an election under clause (2) of this Section 4.2, the Company shall have delivered to the Trustee an Opinion of Counsel stating that (i) the Company has received from the Internal Revenue Service a letter ruling, or there has been published by the Internal Revenue Service a Revenue Ruling, or (ii) since the date of execution of this Indenture, there has been a change in the applicable Federal income tax law, in either case to the effect that, and based thereon such opinion shall confirm that, the Holders of such Outstanding Securities and any Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred. (e) In the case of an election under clause (3) of this Section 4.2, the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that the Holders of such Outstanding Securities and any Coupons appertaining thereto will not recognize income, gain or loss for Federal income tax purposes as a result of such covenant defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such covenant defeasance had not occurred. (f) The Company shall have delivered to the Trustee an Opinion of Counsel to the effect that, after the 123rd day after the date of deposit, all money and Government Obligations (or other property as may be provided pursuant to Section 3.1) (including the proceeds thereof) deposited or caused to be deposited with the Trustee (or other qualifying trustee) pursuant to this clause (4) to be held in trust will not be subject to any case or proceeding (whether voluntary or involuntary) in respect of the Company under any Federal or State bankruptcy, insolvency, reorganization or other similar law, or any decree or order for relief in respect of the Company issued in connection therewith. (g) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent to the defeasance or covenant defeasance under clause (2) or (3) of this Section 4.2 (as the case may be) have been complied with. 46 53 (h) Notwithstanding any other provisions of this Section 4.2(4), such defeasance or covenant defeasance shall be effected in compliance with any additional or substitute terms, conditions or limitations which may be imposed on the Company in connection therewith pursuant to Section 3.1. (5) Unless otherwise specified in or pursuant to this Indenture or any Security, if, after a deposit referred to in Section 4.2(4)(a) has been made, (a) the Holder of a Security in respect of which such deposit was made is entitled to, and does, elect pursuant to Section 3.1 or the terms of such Security to receive payment in a Currency other than that in which the deposit pursuant to Section 4.2(4)(a) has been made in respect of such Security, or (b) a Conversion Event occurs in respect of the Foreign Currency in which the deposit pursuant to Section 4.2(4)(a) has been made, the indebtedness represented by such Security and any Coupons appertaining thereto shall be deemed to have been, and will be, fully discharged and satisfied through the payment of the principal of (and premium, if any), and interest, if any, on, and Additional Amounts, if any, with respect to, such Security as the same becomes due out of the proceeds yielded by converting (from time to time as specified below in the case of any such election) the amount or other property deposited in respect of such Security into the Currency in which such Security becomes payable as a result of such election or Conversion Event based on (x) in the case of payments made pursuant to clause (a) above, the applicable market exchange rate for such Currency in effect on the second Business Day prior to each payment date, or (y) with respect to a Conversion Event, the applicable market exchange rate for such Foreign Currency in effect (as nearly as feasible) at the time of the Conversion Event. The Company shall pay and indemnify the Trustee (or other qualifying trustee, collectively for purposes of this Section 4.2(5) and Section 4.3, the "Trustee") against any tax, fee or other charge, imposed on or assessed against the Government Obligations deposited pursuant to this Section 4.2 or the principal or interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of such Outstanding Securities and any Coupons appertaining thereto. Anything in this Section 4.2 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Request any money or Government Obligations (or other property and any proceeds therefrom) held by it as provided in clause (4) of this Section 4.2 which, in the opinion of a nationally recognized firm of Independent Public Accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect a defeasance or covenant defeasance, as applicable, in accordance with this Section 4.2. Section 4.3. Application of Trust Money. Subject to the provisions of the last paragraph of Section 10.3, all money and Government Obligations (or other property as may be provided pursuant to Section 3.1) 47 54 (including the proceeds thereof) deposited with the Trustee pursuant to Section 4.1 or 4.2 in respect of any Outstanding Securities of any series and any Coupons appertaining thereto shall be held in trust and applied by the Trustee, in accordance with the provisions of such Securities and any Coupons appertaining thereto and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such Securities and any Coupons appertaining thereto of all sums due and to become due thereon in respect of principal (and premium, if any) and interest and Additional Amounts, if any; but such money and Government Obligations need not be segregated from other funds except to the extent required by law. ARTICLE V REMEDIES Section 5.1. Events of Default. "Event of Default", wherever used herein with respect to Securities of any series, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body), unless such event is specifically deleted or modified in or pursuant to the supplemental indenture, Board Resolution or Officers' Certificate establishing the terms of such Series pursuant to this Indenture: (1) default in the payment of any interest on any Security of such series, or any Additional Amounts payable with respect thereto, when such interest becomes or such Additional Amounts become due and payable, and continuance of such default for a period of 30 days; or (2) default in the payment of the principal of or any premium on any Security of such series, or any Additional Amounts payable with respect thereto, when such principal or premium becomes or such Additional Amounts become due and payable at their Maturity; or (3) default in the deposit of any sinking fund payment (if applicable) when and as due by the terms of a Security of such series; or (4) default in the performance, or breach, of any covenant or warranty of the Company or any Guarantor in this Indenture or the Securities (other than a covenant or warranty a default in the performance or the breach of which is elsewhere in this Section specifically dealt with or which has been expressly included in this Indenture solely for the benefit of a series of Securities other than such series), and continuance of such default or breach for a period of 60 days after there has been given, by registered or certified mail, to the Company or such Guarantor, as the case may be, by the Trustee or to the Company or such Guarantor, as the case may be, and the Trustee by the Holders of at 48 55 least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a "Notice of Default" hereunder; or (5) if any of default (as defined in any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any Indebtedness of the Company or any Restricted Subsidiary, whether such Indebtedness now exists or shall hereafter be created) shall happen and shall result in such Indebtedness in principal amount in excess of the greater of $25,000,000 or 30% of the outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries becoming due and payable or being declared due and payable prior to the date on which it would otherwise become due and payable, and such default shall not be cured within a period of 30 days after there shall have been given, by registered or certified mail, to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Securities of such series, a written notice specifying such default and requiring the Company to cause such default to be cured or to cause such Indebtedness to be discharged and stating that such notice is a "Notice of Default" hereunder; or (6) the Company or any Restricted Subsidiary shall fail within 60 days to pay, bond or otherwise discharge any uninsured judgment or court order for the payment of money in excess of $25,000,000, which is not stayed on appeal or is not otherwise being appropriately contested in good faith; or (7) the entry by a court having competent jurisdiction of: (a) a decree or order for relief in respect of the Company, any Guarantor or any Restricted Subsidiary in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (b) a decree or order adjudging the Company, any Guarantor or any Restricted Subsidiary to be insolvent, or approving a petition seeking reorganization, arrangement, adjustment or composition of the Company, any Guarantor or any Restricted Subsidiary and such decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or (c) a final and non-appealable order appointing a custodian, receiver, liquidator, assignee, trustee or other similar official of the Company, any Guarantor or any Restricted Subsidiary or of any substantial part of the property of the Company, any Guarantor or any Restricted Subsidiary, or ordering the winding up or liquidation of the affairs of the Company, any Guarantor or any Restricted Subsidiary; or (8) the commencement by the Company, any Guarantor or any Restricted Subsidiary of a voluntary proceeding under any applicable bankruptcy, insolvency, 49 56 reorganization or other similar law or of a voluntary proceeding seeking to be adjudicated insolvent or the consent by the Company, any Guarantor or any Restricted Subsidiary to the entry of a decree or order for relief in an involuntary proceeding under any applicable bankruptcy, insolvency, reorganization or other similar law or to the commencement of any insolvency proceedings against it, or the filing by the Company, any Guarantor or any Restricted Subsidiary of a petition or answer or consent seeking reorganization, arrangement, adjustment or composition of the Company, any Guarantor or any Restricted Subsidiary or relief under any applicable law, or the consent by the Company, any Guarantor or any Restricted Subsidiary to the filing of such petition or to the appointment of or taking possession by a custodian, receiver, liquidator, assignee, trustee or similar official of the Company, any Guarantor or any Restricted Subsidiary or any substantial part of the property of the Company, any Guarantor or any Restricted Subsidiary or the making by the Company, any Guarantor or any Restricted Subsidiary of an assignment for the benefit of creditors, or the taking of corporate action by the Company, any Guarantor or any Restricted Subsidiary in furtherance of any such action; or (9) any other Event of Default provided in or pursuant to this Indenture with respect to Securities of such series. Section 5.2. Acceleration of Maturity; Rescission and Annulment. If an Event of Default with respect to Securities of any series at the time Outstanding (other than an Event of Default specified in clause (7) or (8) of Section 5.1) occurs and is continuing, then the Trustee or the Holders of not less than 25% in principal amount of the Outstanding Securities of such series may declare the principal of all the Securities of such series, or such lesser amount as may be provided for in the Securities of such series, to be due and payable immediately, by a notice in writing to the Company (and to the Trustee if given by the Holders), and upon any such declaration such principal or such lesser amount shall become immediately due and payable. If an Event of Default specified in clause (7) or (8) of Section 5.1 occurs, all unpaid principal of and accrued interest on the Outstanding Securities of that series (or such lesser amount as may be provided for in the Securities of such series) shall ipso facto become and be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of any Security of that series. At any time after a declaration of acceleration with respect to the Securities of any series has been made and before a judgment or decree for payment of the money due has been obtained by the Trustee as hereinafter in this Article provided, the Holders of not less than a majority in principal amount of the Outstanding Securities of such series, by written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (1) the Company or any Guarantor has paid or deposited with the Trustee a sum of money sufficient to pay 50 57 (a) all overdue installments of any interest on and Additional Amounts with respect to all Securities of such series and any Coupon appertaining thereto, (b) the principal of and any premium on any Securities of such series which have become due otherwise than by such declaration of acceleration and interest thereon and any Additional Amounts with respect thereto at the rate or rates borne by or provided for in such Securities, (c) to the extent that payment of such interest or Additional Amounts is lawful, interest upon overdue installments of any interest and Additional Amounts at the rate or rates borne by or provided for in such Securities, and (d) all sums paid or advanced by the Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due the Trustee under Section 6.6; and (2) all Events of Default with respect to Securities of such series, other than the non-payment of the principal of, any premium and interest on, and any Additional Amounts with respect to Securities of such series which shall have become due solely by such declaration of acceleration, shall have been cured or waived as provided in Section 5.13. No such rescission shall affect any subsequent default or impair any right consequent thereon. Section 5.3. Collection of Indebtedness and Suits for Enforcement by Trustee. The Company covenants that if (1) default is made in the payment of any installment of interest on or any Additional Amounts with respect to any Security or any Coupon appertaining thereto when such interest or Additional Amounts shall have become due and payable and such default continues for a period of 30 days, or (2) default is made in the payment of the principal of or any premium on any Security or any Additional Amounts with respect thereto at their Maturity, the Company shall, upon demand of the Trustee, pay to the Trustee, for the benefit of the Holders of such Securities and any Coupons appertaining thereto, the whole amount of money then due and payable with respect to such Securities and any Coupons appertaining thereto, with interest upon the overdue principal, any premium and, to the extent that payment of such interest shall be legally enforceable, upon any overdue installments of interest and Additional Amounts at the rate or rates borne by or provided for in such Securities, and, in addition thereto, such further amount of money as shall be sufficient to cover the costs and expenses of collection, 51 58 including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and all other amounts due to the Trustee under Section 6.6. If the Company fails to pay the money it is required to pay the Trustee pursuant to the preceding paragraph forthwith upon the demand of the Trustee, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for the collection of the money so due and unpaid, and may prosecute such proceeding to judgment or final decree, and may enforce the same against the Company or any Guarantor or any other obligor upon such Securities and any Coupons appertaining thereto and collect the monies adjudged or decreed to be payable in the manner provided by law out of the property of the Company or any Guarantor or any other obligor upon such Securities and any Coupons appertaining thereto, wherever situated. If an Event of Default with respect to Securities of any series occurs and is continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of the Holders of Securities of such series and any Coupons appertaining thereto by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or such Securities or in aid of the exercise of any power granted herein or therein, or to enforce any other proper remedy. Section 5.4. Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to the Company, any Guarantor or any Restricted Subsidiary or any other obligor upon the Securities of any series or the property of the Company, any Guarantor or any Restricted Subsidiary or such other obligor or their creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any demand on the Company or any Guarantor for the payment of any overdue principal, premium, interest or Additional Amounts) shall be entitled and empowered, by intervention in such proceeding or otherwise, (1) to file and prove a claim for the whole amount, or such lesser amount as may be provided for in the Securities of any applicable series, of the principal and any premium, interest and Additional Amounts owing and unpaid in respect of the Securities and any Coupons appertaining thereto and to file such other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents or counsel) and of the Holders of Securities or any Coupons appertaining thereto allowed in such judicial proceeding, and (2) to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same; 52 59 and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Holder of Securities or any Coupons to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders of Securities or any Coupons, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel and any other amounts due the Trustee under Section 6.6. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder of a Security or any Coupon any plan of reorganization, arrangement, adjustment or composition affecting the Securities or Coupons or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of any Holder of a Security or any Coupon in any such proceeding. Section 5.5. Trustee May Enforce Claims without Possession of Securities or Coupons. All rights of action and claims under this Indenture or any of the Securities or Coupons may be prosecuted and enforced by the Trustee without the possession of any of the Securities or Coupons or the production thereof in any proceeding relating thereto, and any such proceeding instituted by the Trustee shall be brought in its own name as trustee of an express trust, and any recovery or judgment, after provision for the payment of the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, shall be for the ratable benefit of each and every Holder of the Securities or Coupons in respect of which such judgment has been recovered. Section 5.6. Application of Money Collected. Any money collected by the Trustee pursuant to this Article shall be applied in the following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on account of principal, or any premium, interest or Additional Amounts, upon presentation of the Securities or Coupons, or both, as the case may be, and the notation thereon of the payment if only partially paid and upon surrender thereof if fully paid: FIRST: To the payment of all amounts due the Trustee and any predecessor Trustee under Section 6.6; SECOND: To the payment of the amounts then due and unpaid upon the Securities and any Coupons for principal and any premium, interest and Additional Amounts in respect of which or for the benefit of which such money has been collected, ratably, without preference or priority of any kind, according to the aggregate amounts due and payable on such Securities and Coupons for principal and any premium, interest and Additional Amounts, respectively; THIRD: The balance, if any, to the Person or Persons entitled thereto. 53 60 Section 5.7. Limitations on Suits. No Holder of any Security of any series or any Coupons appertaining thereto shall have any right to institute any proceeding, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless (1) such Holder has previously given written notice to the Trustee of a continuing Event of Default with respect to the Securities of such series; (2) the Holders of not less than 25% in principal amount of the Outstanding Securities of such series shall have made written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as Trustee hereunder; (3) such Holder or Holders have offered to the Trustee such indemnity as is reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; (4) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to institute any such proceeding; and (5) no direction inconsistent with such written request has been given to the Trustee during such 60-day period by the Holders of a majority in principal amount of the Outstanding Securities of such series; it being understood and intended that no one or more of such Holders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture or any Security to affect, disturb or prejudice the rights of any other such Holders or Holders of Securities of any other series, or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all such Holders. Section 5.8. Unconditional Right of Holders to Receive Principal and any Premium, Interest and Additional Amounts. Notwithstanding any other provision in this Indenture, the Holder of any Security or Coupon shall have the right, which is absolute and unconditional, to receive payment of the principal of, any premium and (subject to Sections 3.5 and 3.7) interest on, and any Additional Amounts with respect to such Security or payment of such Coupon, as the case may be, on the respective Stated Maturity or Maturities therefor specified in such Security or Coupon (or, in the case of redemption, on the Redemption Date or, in the case of repayment at the option of such Holder if provided in or pursuant to this Indenture, on the date such repayment is due) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. 54 61 Section 5.9. Restoration of Rights and Remedies. If the Trustee or any Holder of a Security or a Coupon has instituted any proceeding to enforce any right or remedy under this Indenture and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, the Trustee and each such Holder shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the Trustee and each such Holder shall continue as though no such proceeding had been instituted. Section 5.10. Rights and Remedies Cumulative. Except as otherwise provided with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities or Coupons in the last paragraph of Section 3.6, no right or remedy herein conferred upon or reserved to the Trustee or to each and every Holder of a Security or a Coupon is intended to be exclusive of any other right or remedy, and every right and remedy, to the extent permitted by law, shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not, to the extent permitted by law, prevent the concurrent assertion or employment of any other appropriate right or remedy. Section 5.11. Delay or Omission Not Waiver. No delay or omission of the Trustee or of any Holder of any Security or Coupon to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or to any Holder of a Security or a Coupon may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by such Holder, as the case may be. Section 5.12. Control by Holders of Securities. The Holders of a majority in principal amount of the Outstanding Securities of any series shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee with respect to the Securities of such series and any Coupons appertaining thereto, provided that (1) such direction shall not be in conflict with any rule of law or with this Indenture or with the Securities of such series, (2) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such direction, and 55 62 (3) such direction is not unduly prejudicial to the rights of the other Holders of Securities of such series not joining in such action. Section 5.13. Waiver of Past Defaults. The Holders of not less than a majority in principal amount of the Outstanding Securities of any series on behalf of the Holders of all the Securities of such series and any Coupons appertaining thereto may waive any past default hereunder with respect to such series and its consequences, except a default (1) in the payment of the principal of, any premium or interest on, or any Additional Amounts with respect to, any Security of such series or any Coupons appertaining thereto, or (2) in respect of a covenant or provision hereof which under Article IX cannot be modified or amended without the consent of the Holder of each Outstanding Security of such series affected. Upon any such waiver, such default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other default or impair any right consequent thereon. Section 5.14. Waiver of Usury, Stay or Extension Laws. Each of the Company and the Guarantors covenants that (to the extent that it may lawfully do so) it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any usury, stay or extension law wherever enacted, now or at any time hereafter in force, which may affect the covenants or the performance of this Indenture; and each of the Company and the Guarantors expressly waives (to the extent that it may lawfully do so) all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. Section 5.15. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Trustee for any action taken or omitted by it as Trustee, the filing by any party litigant in such suit of any undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees, against any party litigant in such suit having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Trustee, to any suit instituted by 56 63 any Holder, or group of Holders, holding in the aggregate more than 10% in principal amount of Outstanding Securities of any series, or to any suit instituted by any Holder for the enforcement of the payment of the principal of (or premium, if any) or interest, if any, on or Additional Amounts, if any, with respect to any Security on or after the respective Stated Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date, and, in the case of repayment, on or after the date for repayment) or for the enforcement of the right, if any, to convert or exchange any Security into or other securities in accordance with its terms. ARTICLE VI THE TRUSTEE Section 6.1. Certain Duties and Responsibilities. Subject to the provisions hereof: (1) the Trustee may conclusively rely and shall be fully protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, note, coupon or other paper or document reasonably believed by it to be genuine and to have been signed or presented by the proper party or parties; (2) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company Request or a Company Order or of the Guarantor mentioned herein shall be sufficiently evidenced by a Guarantor Request or Guarantor Order (in each case, other than delivery of any Security, together with any Coupons appertaining thereto, to the Trustee for authentication and delivery pursuant to Section 3.3 which shall be sufficiently evidenced as provided therein) and any resolution of the Board of Directors may be sufficiently evidenced by a Board Resolution or by the Guarantor's Board of Directors may be sufficiently evidenced by a Guarantor's Board Resolution; (3) whenever in the administration of this Indenture the Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or omitting any action hereunder, the Trustee (unless other evidence shall be herein specifically prescribed) may, in the absence of bad faith on its part, rely upon an Officers' Certificate or, if such matter pertains to the Guarantor, a Guarantor's Officers' Certificate; (4) the Trustee may consult with counsel of its selection and the advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon; (5) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by or pursuant to this 57 64 Indenture at the request or direction of any of the Holders of Securities of any series or any Coupons appertaining thereto pursuant to this Indenture, unless such Holders shall have offered to the Trustee such security or indemnity as is reasonably satisfactory to it against the costs, expenses and liabilities which might be incurred by it in compliance with such request or direction; (6) the Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order, bond, debenture, coupon or other paper or document, but the Trustee, in its discretion, may but shall not be obligated to make such further inquiry or investigation into such facts or matters as it may see fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled to examine, during business hours and upon reasonable notice, the books, records and premises of the Company and the Guarantors, personally or by agent or attorney; (7) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder. (8) in the event that an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs; (9) the Trustee shall not be liable for any action taken or error of judgment made in good faith by a Responsible Officer or Responsible Officers of the Trustee, unless it shall be proved that the Trustee was negligent, acted in bad faith or engaged in willful misconduct; (10) the Trustee undertakes to perform such duties and only such duties as are specifically set forth in or pursuant to this Indenture, and no implied covenants or obligations shall be read into this Indenture against the Trustee; (11) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture; but in the case of any such certificates or opinions which by any provision hereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture (but need not confirm or investigate the mathematical calculations or other facts stated therein); and (12) the Trustee shall not be liable with respect to any action taken, suffered or omitted to be taken by it in good faith in accordance with an Act of the Holders hereunder, and, to the extent not so provided herein, with respect to any act requiring the Trustee to exercise its own discretion, relating to the time, method and place of 58 65 conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee, under this Indenture or any Securities, unless it shall be proved that, in connection with any such action taken, suffered or omitted or any such act, the Trustee was negligent, acted in bad faith or engaged in willful misconduct. (13) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it. (14) whether or not herein expressly so provided, every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Trustee shall be subject to the provisions of this Section. Section 6.2. Notice of Defaults. Within 90 days after the occurrence of any default hereunder with respect to the Securities of any series, the Trustee shall transmit by mail to all Holders of Securities of such series entitled to receive reports pursuant to Section 7.3(3), notice of such default hereunder actually known to a Responsible Officer of the Trustee, unless such default shall have been cured or waived; provided, however, that, except in the case of a default in the payment of the principal of (or premium, if any), or interest, if any, on, or Additional Amounts or any sinking fund or purchase fund installment with respect to, any Security of such series, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee or a trust committee of directors and/or Responsible Officers of the Trustee in good faith determine that the withholding of such notice is in the best interest of the Holders of Securities and Coupons of such series; and provided, further, that in the case of any default of the character specified in Section 5.1(5) with respect to Securities of such series, no such notice to Holders shall be given until at least 30 days after the occurrence thereof. For the purpose of this Section, the term "default" means any event which is, or after notice or lapse of time or both would become, an Event of Default with respect to Securities of such series. The Trustee shall not be deemed to have knowledge or notice of any Default or Event of Default unless a Responsible Officer of the Trustee has actual knowledge thereof or, in the performance of its duties hereunder, should have actual knowledge thereof, or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture. Section 6.3. Not Responsible for Recitals or Issuance of Securities. The recitals contained herein and in the Securities, except the Trustee's certificate of authentication, and in any Coupons shall be taken as the statements of the Company and neither the Trustee nor any Authenticating Agent assumes any responsibility for their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of the 59 66 Securities or the Coupons, except that the Trustee represents that it is duly authorized to execute and deliver this Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it in a Statement of Eligibility on Form T-1 supplied to the Company are true and accurate, subject to the qualifications set forth therein. Neither the Trustee nor any Authenticating Agent shall be accountable for the use or application by the Company of the Securities or the proceeds thereof. Section 6.4. May Hold Securities. The Trustee, any Authenticating Agent, any Paying Agent, any Security Registrar or any other Person that may be an agent of the Trustee, the Company or any Guarantor, in its individual or any other capacity, may become the owner or pledgee of Securities or Coupons and, subject to Sections 6.8 and 6.12, may otherwise deal with the Company or any Guarantor with the same rights it would have if it were not the Trustee, Authenticating Agent, Paying Agent, Security Registrar or such other Person. Section 6.5. Money Held in Trust. Except as provided in Section 4.3 and Section 10.3, money held by the Trustee in trust hereunder need not be segregated from other funds except to the extent required by law and shall be held uninvested. The Trustee shall be under no liability for interest on any money received by it hereunder except as otherwise agreed to in writing with the Company or any Guarantor. Section 6.6. Compensation and Reimbursement. The Company agrees: (1) to pay to the Trustee such compensation as the Company and the Trustee shall from time to time agree in writing for all services rendered by the Trustee hereunder (which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust); (2) except as otherwise expressly provided herein, to reimburse the Trustee upon its request for all reasonable expenses, disbursements and advances incurred or made by the Trustee in accordance with any provision of this Indenture or arising out of or in connection with the acceptance or administration of the trust or trusts hereunder (including the reasonable compensation and the expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to the Trustee's negligence or bad faith; and (3) to indemnify the Trustee and any predecessor Trustee and their agents, officers, directors and employees for, and to hold them harmless against, any loss, liability or expense including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) incurred without negligence or bad faith on their part, arising out of or in connection with the acceptance or administration of the 60 67 trust or trusts hereunder, including the costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties hereunder, except to the extent that any such loss, liability or expense was due to the Trustee's negligence or bad faith. As security for the performance of the obligations of the Company under this Section, the Trustee shall have a lien prior to the Securities of any series upon all property and funds held or collected by the Trustee as such, except funds held in trust for the payment of principal of, and premium or interest on or any Additional Amounts with respect to Securities or any Coupons appertaining thereto. To the extent permitted by law, any compensation or expense incurred by the Trustee after a default specified in or pursuant to Section 5.1 is intended to constitute an expense of administration under any then applicable bankruptcy or insolvency law. "Trustee" for purposes of this Section 6.6 shall include any predecessor Trustee but the negligence or bad faith of any Trustee shall not affect the rights of any other Trustee under this Section 6.6. The provisions of this Section 6.6 shall survive the satisfaction and discharge of this Indenture or the earlier resignation or removal of the Trustee and shall apply with equal force and effect to the Trustee in its capacity as Authenticating Agent, Paying Agent or Security Registrar. Section 6.7. Corporate Trustee Required; Eligibility. There shall at all times be a Trustee hereunder that is a Corporation organized and doing business under the laws of the United States of America, any state thereof or the District of Columbia, that is eligible under Section 310(a)(1) of the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act and that has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000, and that is subject to supervision or examination by Federal or state authority. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect hereinafter specified in this Article. Section 6.8. Disqualification; Conflicting Interests. If the Trustee has or shall acquire a conflicting interest within the meaning of the Trust Indenture Act, the Trustee shall either eliminate such interest or resign, to the extent and in the manner provided by, and subject to the provisions of, the Trust Indenture Act and this Indenture. Section 6.9. Resignation and Removal; Appointment of Successor. (1) No resignation or removal of the Trustee and no appointment of a successor Trustee pursuant to this Article shall become effective until the acceptance of appointment by the successor Trustee pursuant to Section 6.10. 61 68 (2) Subject to Section 6.9(1) above, the Trustee may resign at any time with respect to the Securities of one or more series by giving written notice thereof to the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 days after the giving of such notice of resignation, the resigning Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such series. (3) The Trustee may be removed at any time with respect to the Securities of any series by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series, delivered to the Trustee and the Company. If the instrument of acceptance by a successor Trustee required by Section 6.10 shall not have been delivered to the Trustee within 30 days after the giving of such notice of removal, the removed Trustee may petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to such series. (4) If at any time: (a) the Trustee shall fail to comply with the obligations imposed upon an indenture trustee under Section 310(b) of the Trust Indenture Act with respect to Securities of any series after written request therefor by the Company or any Holder of a Security of such series who has been a bona fide Holder of a Security of such series for at least six months, or (b) the Trustee shall cease to be eligible under Section 6.7 and shall fail to resign after written request therefor by the Company or any such Holder, or (c) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent or a receiver of the Trustee or of its property shall be appointed or any public officer shall take charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then, in any such case, (i) the Company, by or pursuant to a Board Resolution, may remove the Trustee with respect to all Securities or the Securities of such series, or (ii) subject to Section 315(e) of the Trust Indenture Act, any Holder of a Security who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Trustee with respect to all Securities of such series and the appointment of a successor Trustee or Trustees. (5) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in the office of Trustee for any cause, with respect to the Securities of one or more series, the Company, by or pursuant to a Board Resolution, shall promptly appoint a successor Trustee or Trustees with respect to the Securities of such series (it being understood that any such successor Trustee may be appointed with respect to the Securities of one or more or all of such series and that at any time there shall be only one Trustee with respect to the Securities of any particular series) and shall comply with the 62 69 applicable requirements of Section 6.10. If, within one year after such resignation, removal or incapacity, or the occurrence of such vacancy, a successor Trustee with respect to the Securities of any series shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding Securities of such series delivered to the Company and the retiring Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance of such appointment in accordance with the applicable requirements of Section 6.10, become the successor Trustee with respect to the Securities of such series and to that extent supersede the successor Trustee appointed by the Company. If no successor Trustee with respect to the Securities of any series shall have been so appointed by the Company or the Holders of Securities and accepted appointment in the manner required by Section 6.10, any Holder of a Security who has been a bona fide Holder of a Security of such series for at least six months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the appointment of a successor Trustee with respect to the Securities of such series. (6) The Company shall give notice of each resignation and each removal of the Trustee with respect to the Securities of any series and each appointment of a successor Trustee with respect to the Securities of any series by mailing written notice of such event by first-class mail, postage prepaid, to the Holders of Registered Securities, if any, of such series as their names and addresses appear in the Security Register and, if Securities of such series are issued as Bearer Securities, by publishing notice of such event once in an Authorized Newspaper in each Place of Payment located outside the United States. Each notice shall include the name of the successor Trustee with respect to the Securities of such series and the address of its Corporate Trust Office. (7) In no event shall any retiring Trustee be liable for the acts or omissions of any successor Trustee hereunder. Section 6.10. Acceptance of Appointment by Successor. (1) Upon the appointment hereunder of any successor Trustee with respect to all Securities, such successor Trustee so appointed shall execute, acknowledge and deliver to the Company and the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Trustee shall become effective and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties hereunder of the retiring Trustee; but, on the request of the Company or such successor Trustee, such retiring Trustee, upon payment of its charges, shall execute and deliver an instrument transferring to such successor Trustee all the rights, powers and trusts of the retiring Trustee and, subject to Section 10.3, shall duly assign, transfer and deliver to such successor Trustee all property and money held by such retiring Trustee hereunder, subject nevertheless to its claim, if any, provided for in Section 6.6. 63 70 (2) Upon the appointment hereunder of any successor Trustee with respect to the Securities of one or more (but not all) series, the Company, the retiring Trustee and such successor Trustee shall execute and deliver an indenture supplemental hereto wherein each successor Trustee shall accept such appointment and which (a) shall contain such provisions as shall be necessary or desirable to transfer and confirm to, and to vest in, such successor Trustee all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, (b) if the retiring Trustee is not retiring with respect to all Securities, shall contain such provisions as shall be deemed necessary or desirable to confirm that all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series as to which the retiring Trustee is not retiring shall continue to be vested in the retiring Trustee, and (c) shall add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, it being understood that nothing herein or in such supplemental indenture shall constitute such Trustees co-trustees of the same trust, that each such Trustee shall be trustee of a trust or trusts hereunder separate and apart from any trust or trusts hereunder administered by any other such Trustee and that no Trustee shall be responsible for any notice given to, or received by, or any act or failure to act on the part of any other Trustee hereunder, and, upon the execution and delivery of such supplemental indenture, the resignation or removal of the retiring Trustee shall become effective to the extent provided therein, such retiring Trustee shall have no further responsibility for the exercise of rights and powers or for the performance of the duties and obligations vested in the Trustee under this Indenture with respect to the Securities of that or those series to which the appointment of such successor Trustee relates other than as hereinafter expressly set forth, and such successor Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Trustee with respect to the Securities of that or those series to which the appointment of such successor Trustee relates; but, on request of the Company or such successor Trustee, such retiring Trustee, upon payment of its charges with respect to the Securities of that or those series to which the appointment of such successor Trustee relates and subject to Section 10.3 shall duly assign, transfer and deliver to such successor Trustee, to the extent contemplated by such supplemental indenture, the property and money held by such retiring Trustee hereunder with respect to the Securities of that or those series to which the appointment of such successor Trustee relates, subject to its claim, if any, provided for in Section 6.6. (3) Upon request of any Person appointed hereunder as a successor Trustee, the Company and the Guarantors shall execute any and all instruments for more fully and certainly vesting in and confirming to such successor Trustee all such rights, powers and trusts referred to in paragraph (1) or (2) of this Section, as the case may be. (4) No Person shall accept its appointment hereunder as a successor Trustee unless at the time of such acceptance such successor Person shall be qualified and eligible under this Article. 64 71 Section 6.11. Merger, Conversion, Consolidation or Succession to Business. Any Corporation into which the Trustee may be merged or converted or with which it may be consolidated, or any Corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party, or any Corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall be the successor of the Trustee hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Securities shall have been authenticated but not delivered by the Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Trustee may adopt such authentication and deliver the Securities so authenticated with the same effect as if such successor Trustee had itself authenticated such Securities. Section 6.12. Preferential Collection of Claims against the Company. If and when the Trustee shall be or become a creditor, directly or indirectly, secured or unsecured, of the Company or any Guarantor (or any other obligor upon the Securities of any series or the Coupons, if any, appertaining thereto), the Trustee shall be subject to the provisions of Section 311 of the Trust Indenture Act regarding the collection of claims against the Company or such Guarantor (or any such other obligor). Section 6.13. Appointment of Authenticating Agent. The Trustee may appoint one or more Authenticating Agents acceptable to the Company with respect to one or more series of Securities which shall be authorized to act on behalf of the Trustee to authenticate Securities of that or those series issued upon original issue, exchange, registration of transfer, partial redemption or partial repayment or pursuant to Section 3.6, and Securities so authenticated shall be entitled to the benefits of this Indenture and shall be valid and obligatory for all purposes as if authenticated by the Trustee hereunder. Wherever reference is made in this Indenture to the authentication and delivery of Securities by the Trustee or the Trustee's certificate of authentication, such reference shall be deemed to include authentication and delivery on behalf of the Trustee by an Authenticating Agent and a certificate of authentication executed on behalf of the Trustee by an Authenticating Agent. Each Authenticating Agent must be acceptable to the Company and, except as provided in or pursuant to this Indenture, shall at all times be a corporation that would be permitted by the Trust Indenture Act to act as trustee under an indenture qualified under the Trust Indenture Act, is authorized under applicable law and by its charter to act as an Authenticating Agent and has a combined capital and surplus (computed in accordance with Section 310(a)(2) of the Trust Indenture Act) of at least $50,000,000. If at any time an Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, it shall resign immediately in the manner and with the effect specified in this Section. Any Corporation into which an Authenticating Agent may be merged or converted or with which it may be consolidated, or any Corporation resulting from any merger, conversion or consolidation to which such Authenticating Agent shall be a party, or any Corporation 65 72 succeeding to all or substantially all of the corporate agency or corporate trust business of an Authenticating Agent, shall be the successor of such Authenticating Agent hereunder, provided such Corporation shall be otherwise eligible under this Section, without the execution or filing of any paper or any further act on the part of the Trustee or the Authenticating Agent. An Authenticating Agent may resign at any time by giving written notice thereof to the Trustee and the Company. The Trustee may at any time terminate the agency of an Authenticating Agent by giving written notice thereof to such Authenticating Agent and the Company. Upon receiving such a notice of resignation or upon such a termination, or in case at any time such Authenticating Agent shall cease to be eligible in accordance with the provisions of this Section, the Trustee may appoint a successor Authenticating Agent which shall be acceptable to the Company and shall (i) mail written notice of such appointment by first-class mail, postage prepaid, to all Holders of Registered Securities, if any, of the series with respect to which such Authenticating Agent shall serve, as their names and addresses appear in the Security Register, and (ii) if Securities of the series are issued as Bearer Securities, publish notice of such appointment at least once in an Authorized Newspaper in the place where such successor Authenticating Agent has its principal office if such office is located outside the United States. Any successor Authenticating Agent, upon acceptance of its appointment hereunder, shall become vested with all the rights, powers and duties of its predecessor hereunder, with like effect as if originally named as an Authenticating Agent. No successor Authenticating Agent shall be appointed unless eligible under the provisions of this Section. The Company agrees to pay each Authenticating Agent from time to time reasonable compensation for its services under this Section. If the Trustee makes such payments, it shall be entitled to be reimbursed for such payments, subject to the provisions of Section 6.6. The provisions of Sections 3.8, 6.3 and 6.4 shall be applicable to each Authenticating Agent. If an Authenticating Agent is appointed with respect to one or more series of Securities pursuant to this Section, the Securities of such series may have endorsed thereon, in addition to or in lieu of the Trustee's certificate of authentication, an alternate certificate of authentication in substantially the following form: 66 73 This is one of the Securities of the series designated herein referred to in the within-mentioned Indenture. Dated: THE BANK OF NEW YORK, as Trustee By ----------------------- as Authenticating Agent By ----------------------- Authorized Signatory If all of the Securities of any series may not be originally issued at one time, and if the Trustee does not have an office capable of authenticating Securities upon original issuance located in a Place of Payment where the Company wishes to have Securities of such series authenticated upon original issuance, the Trustee, if so requested in writing (which writing need not be accompanied by or contained in an Officers' Certificate by the Company), shall appoint in accordance with this Section an Authenticating Agent having an office in a Place of Payment designated by the Company with respect to such series of Securities. 67 74 ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE, THE GUARANTORS AND COMPANY Section 7.1. Company and the Guarantors to Furnish Trustee Names and Addresses of Holders. The Company and the Guarantors shall furnish or cause to be furnished to the Trustee: (1) semi-annually with respect to Securities of each series not later than January 15 and July 15 of the year, commencing January 15, 1999, or upon such other dates as are set forth in or pursuant to the Board Resolution or indenture supplemental hereto authorizing such series, a list, in each case in such form as the Trustee may reasonably require, of the names and addresses of Holders as of the applicable date, and (a) at such other times as the Trustee may request in writing, within 30 days after the receipt by the Company or a Guarantor of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such list is furnished, provided, however, that so long as the Trustee is the Security Registrar no such list shall be requested to be furnished. Section 7.2. Preservation of Information; Communications to Holders. (1) The Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of Holders contained in the most recent list furnished to the Trustee as provided in Section 7.1 and the names and addresses of Holders received by the Trustee in its capacity as Security Registrar. The Trustee may destroy any list furnished to it as provided in Section 7.1 upon receipt of a new list so furnished. (2) The rights of the Holders to communicate with other Holders with respect to their rights under this Indenture or under the Securities, and the corresponding rights and privileges of the Trustee, shall be as provided by the Trust Indenture Act. (3) Every Holder of Securities, by receiving and holding the same, agrees with the Company, the Guarantors and the Trustee that neither the Company, any Guarantor nor the Trustee nor any agent of either of them shall be held accountable by reason of any disclosure of information as to names and addresses of Holders made pursuant to the Trust Indenture Act. Section 7.3. Reports by Trustee. (1) Within 60 days after September 15 of each year commencing with the first September 15 following the first issuance of Securities pursuant to Section 3.1, if 68 75 required by Section 313(a) of the Trust Indenture Act, the Trustee shall transmit, pursuant to Section 313(c) of the Trust Indenture Act, a brief report dated as of such September 15 with respect to any of the events specified in said Section 313(a) which may have occurred since the later of the immediately preceding September 15 and the date of this Indenture. (2) The Trustee shall transmit the reports required by Section 313(a) of the Trust Indenture Act at the times specified therein. (3) Reports pursuant to this Section shall be transmitted in the manner and to the Persons required by Sections 313(c) and 313(d) of the Trust Indenture Act. Section 7.4. Reports by Company and the Guarantors. The Company and the Guarantors, pursuant to Section 314(a) of the Trust Indenture Act, shall: (1) file with the Trustee, within 15 days after the Company or any Guarantor, as the case may be, is required to file the same with the Commission, copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations prescribe) which the Company or such Guarantor, as the case may be, may be required to file with the Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934, as amended; or, if the Company or any Guarantor, as the case may be, is not required to file information, documents or reports pursuant to either of said Sections, then it shall file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such of the supplementary and periodic information, documents and reports which may be required pursuant to Section 13 of the Securities Exchange Act of 1934, as amended, in respect of a security listed and registered on a national securities exchange as may be prescribed from time to time in such rules and regulations; (2) file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time by the Commission, such additional information, documents and reports with respect to compliance by the Company or any Guarantor, as the case may be, with the conditions and covenants of this Indenture as may be required from time to time by such rules and regulations; and (3) transmit within 30 days after the filing thereof with the Trustee, in the manner and to the extent provided in Section 313(c) of the Trust Indenture Act, such summaries of any information, documents and reports required to be filed by the Company or any Guarantor pursuant to paragraphs (1) and (2) of this Section as may be required by rules and regulations prescribed from time to time by the Commission. 69 76 Delivery of such reports, information and documents to the Trustee is for informational purposes only and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company's compliance with any of its covenants hereunder (as to which the Trustee is entitled to rely exclusively on Officers' Certificates). ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE Section 8.1. Company May Consolidate, Etc., Only on Certain Terms. The Company shall not consolidate with or merge into any other Person (whether or not affiliated with the Company), or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any other Person (whether or not affiliated with the Company), and the Company shall not permit any other Person (whether or not affiliated with the Company) to consolidate with or merge into the Company or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to the Company; unless: (1) in case the Company shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Company as an entirety or substantially as an entirety shall be a Corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there is more than one Trustee) supplemental hereto, executed by the successor Person and the Guarantors and delivered to the Trustee the due and punctual payment of the principal of, any premium and interest on and any Additional Amounts with respect to all the Securities and the performance of every obligation in this Indenture and the Outstanding Securities on the part of the Company to be performed or observed and shall provide for conversion or exchange rights in accordance with the provisions of the Securities of any series that are convertible or exchangeable into other securities; (2) immediately after giving effect to such transaction and treating any indebtedness which becomes an obligation of the Company, any Guarantor or a Subsidiary as a result of such transaction as having been incurred by the Company, such Guarantor or such Subsidiary at the time of such transaction, no Event of Default or event which, after notice or lapse of time, or both, would become an Event of Default, shall have occurred and be continuing; and (3) each of the Company and the successor Person has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and the required supplemental indenture comply 70 77 with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 8.2. Successor Person Substituted for Company. Upon any consolidation by the Company with or merger of the Company into any other Person or any conveyance, transfer or lease of the properties and assets of the Company substantially as an entirety to any Person in accordance with Section 8.1, the successor Person formed by such consolidation or into which the Company is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; and thereafter, except in the case of a lease, the predecessor Person shall be released from all obligations and covenants under this Indenture, the Securities and the Coupons. Section 8.3. Guarantor May Consolidate, Etc., Only on Certain Terms. A Guarantor shall not consolidate with or merge into any other Person (whether or not affiliated with such Guarantor), or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any other Person (whether or not affiliated with such Guarantor), and a Guarantor shall not permit any other Person (whether or not affiliated with such Guarantor) to consolidate with or merge into such Guarantor or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to such Guarantor; unless: (1) in case the Guarantor shall consolidate with or merge into another Person or convey, transfer or lease its properties and assets as an entirety or substantially as an entirety to any Person, the Person formed by such consolidation or into which such Guarantor is merged or the Person which acquires by conveyance or transfer, or which leases, the properties and assets of the Guarantor as an entirety or substantially as an entirety shall be a Corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia and shall expressly assume, by an indenture (or indentures, if at such time there is more than one Trustee) supplemental hereto, executed by the Company and the successor Person and delivered to the Trustee, in form satisfactory to the Trustee, all the obligations of such Guarantor under its Guarantee and the performance of every other covenant of this Indenture on the part of such Guarantor to be performed or observed; (2) immediately after giving effect to such transaction, no Event of Default and no event which, after notice or lapse of time or both, would become an Event of Default, shall have occurred and be continuing; and (3) each of the Guarantor and the successor Person has delivered to the Trustee a Guarantor's Officers' Certificate and an Opinion of Counsel, each stating that such consolidation, merger, conveyance, transfer or lease and the required supplemental 71 78 indenture comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with. Section 8.4. Successor Person Substituted for Guarantor. Upon any consolidation or merger or any conveyance, transfer or lease of the properties and assets of a Guarantor as an entirety or substantially as an entirety to any Person in accordance with Section 8.03, the successor Person formed by such consolidation or into which the Guarantor is merged or to which such conveyance, transfer or lease is made shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under this Indenture with the same effect as if such successor Person had been named as a Guarantor herein, and thereafter, except in the case of a lease to another Person, the predecessor Person shall be released from all obligations and covenants under this Indenture. ARTICLE IX SUPPLEMENTAL INDENTURES Section 9.1. Supplemental Indentures Without Consent of Holders. Without the consent of any Holders of Securities or Coupons, the Company (when authorized by or pursuant to a Board Resolution), a Guarantor (when authorized by such Guarantor's Board Resolution) and the Trustee, at any time and from time to time, may enter into one or more indentures supplemental hereto, for any of the following purposes: (1) to evidence the succession of another Person to the Company or a Guarantor, and the assumption by any such successor of the covenants of the Company or such Guarantor, as the case may be, contained herein and in the Securities; or (2) to add to the covenants of the Company or a Guarantor for the benefit of the Holders of all or any series of Securities (as shall be specified in such supplemental indenture or indentures) or to surrender any right or power herein conferred upon the Company or a Guarantor; or (3) to add to or change any of the provisions of this Indenture to provide that Bearer Securities may be registrable as to principal, to change or eliminate any restrictions on the payment of principal of, any premium or interest on or any Additional Amounts with respect to Securities, to permit Bearer Securities to be issued in exchange for Registered Securities, to permit Bearer Securities to be exchanged for Bearer Securities of other authorized denominations or to permit or facilitate the issuance of Securities in uncertificated form, provided any such action shall not adversely affect the interests of the Holders of Outstanding Securities of any series or any Coupons appertaining thereto in any material respect; or 72 79 (4) to establish the form or terms of Securities of any series and any Coupons appertaining thereto as permitted by Sections 2.1 and 3.1; or (5) to evidence and provide for the acceptance of appointment hereunder by a successor Trustee with respect to the Securities of one or more series and to add to or change any of the provisions of this Indenture as shall be necessary to provide for or facilitate the administration of the trusts hereunder by more than one Trustee, pursuant to the requirements of Section 6.10; or (6) to cure any ambiguity or to correct or supplement any provision herein which may be defective or inconsistent with any other provision herein, or to make any other provisions with respect to matters or questions arising under this Indenture which shall not adversely affect the interests of the Holders of Securities of any series then Outstanding or any Coupons appertaining thereto in any material respect; or (7) to add to, delete from or revise the conditions, limitations and restrictions on the authorized amount, terms or purposes of issue, authentication and delivery of Securities, as herein set forth; or (8) to add any additional Events of Default with respect to all or any series of Securities (as shall be specified in such supplemental indenture); or (9) to supplement any of the provisions of this Indenture to such extent as shall be necessary to permit or facilitate the defeasance and discharge of any series of Securities pursuant to Article IV, provided that any such action shall not adversely affect the interests of any Holder of an Outstanding Security of such series and any Coupons appertaining thereto or any other Outstanding Security or Coupon in any material respect; or (10) to secure the Securities pursuant to Section 10.5 or otherwise; or (11) to make provisions with respect to conversion or exchange rights of Holders of Securities of any series; or (12) to amend or supplement any provision contained herein or in any supplemental indenture, provided that no such amendment or supplement shall adversely affect the interests of the Holders of any Securities then Outstanding. Section 9.2. Supplemental Indentures with Consent of Holders. With the consent of the Holders of not less than a majority in principal amount of the Outstanding Securities of each series affected by such supplemental indenture, by Act of said Holders delivered to the Company, the Guarantors and the Trustee, the Company (when authorized by or pursuant to a Company's Board Resolution), each Guarantor (when authorized by or pursuant to a Guarantor's Board Resolutions), and the Trustee may enter into an indenture 73 80 or indentures supplemental hereto for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders of Securities of such series under this Indenture or of the Securities of such series; provided, however, that no such supplemental indenture, without the consent of the Holder of each Outstanding Security affected thereby, shall (1) change the Stated Maturity of the principal of, or any premium or installment of interest on or any Additional Amounts or other amounts payable with respect to, any Security, or reduce the principal amount thereof or the rate (or modify the calculation of such rate) of interest thereon or any Additional Amounts or other amounts payable with respect thereto, or any premium payable upon the redemption thereof or otherwise, or change the obligation of the Company to pay Additional Amounts pursuant to Section 10.4 (except as contemplated by Section 8.1(1) and permitted by Section 9.1(1)), or reduce the amount of the principal of an Original Issue Discount Security that would be due and payable upon a declaration of acceleration of the Maturity thereof pursuant to Section 5.2 or the amount thereof provable in bankruptcy pursuant to Section 5.4, change the redemption provisions or adversely affect the right of repayment at the option of any Holder as contemplated by Article XIII, or change the Place of Payment, Currency in which the principal of, any premium or interest on, or any Additional Amounts or other amounts payable with respect to any Security is payable, or impair the right to institute suit for the enforcement of any such payment on or after the Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date or, in the case of repayment at the option of the Holder, on or after the date for repayment), or (2) reduce the percentage in principal amount of the Outstanding Securities of any series, the consent of whose Holders is required for any such supplemental indenture, or the consent of whose Holders is required for any waiver (of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences) provided for in this Indenture, or reduce the requirements of Section 15.4 for quorum or voting, or (3) modify or effect in any manner adverse to the Holders the terms and conditions of the obligations of the Guarantors in respect of the due and punctual payments of principal of, or any premium or interest on or any sinking fund requirements or Additional Amounts or other amounts payable with respect to, the Securities, or (4) modify any of the provisions of this Section, Section 5.13 or Section 10.9, except to increase any such percentage or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Security affected thereby, or (5) make any change that adversely affects the right to convert or exchange any Security into or for other securities in accordance with its terms. 74 81 A supplemental indenture which changes or eliminates any covenant or other provision of this Indenture which shall have been included expressly and solely for the benefit of one or more particular series of Securities, or which modifies the rights of the Holders of Securities of such series with respect to such covenant or other provision, shall be deemed not to affect the rights under this Indenture of the Holders of Securities of any other series. The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Persons entitled to consent to any indenture supplemental hereto. If a record date is fixed, the Holders on such record date, or their duly designated proxies, and only such Persons, shall be entitled to consent to such supplemental indenture, whether or not such Holders remain Holders after such record date; provided, that unless such consent shall have become effective by virtue of the requisite percentage having been obtained prior to the date which is 90 days after such record date, any such consent previously given shall automatically and without further action by any Holder be cancelled and of no further effect. It shall not be necessary for any Act of Holders of Securities under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof. Section 9.3. Execution of Supplemental Indentures. As a condition to executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article or the modifications thereby of the trust created by this Indenture, the Trustee shall be entitled to receive, and (subject to Section 315 of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and an Officers' Certificate and Guarantor's Officer Certificates stating that all conditions precedent to the execution of such supplemental indenture have been fulfilled. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture which affects the Trustee's own rights, duties or immunities under this Indenture or otherwise. Section 9.4. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of a Security theretofore or thereafter authenticated and delivered hereunder and of any Coupon appertaining thereto shall be bound thereby. Section 9.5. Reference in Securities to Supplemental Indentures. Securities of any series authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any matter provided for in such supplemental indenture. If the Company shall so determine, new Securities of any series so modified as to conform, in the opinion of the Trustee and the Company, to any such supplemental indenture 75 82 may be prepared and executed by the Company and authenticated and delivered by the Trustee in exchange for Outstanding Securities of such series. Section 9.6. Notice of Supplemental Indenture. Promptly after the execution by the Company, the Guarantors and the Trustee of any supplemental indenture pursuant to Section 9.2, the Company shall transmit to the Holders of Outstanding Securities of any series affected thereby a notice setting forth the substance of such supplemental indenture. ARTICLE X COVENANTS Section 10.1. Payment of Principal, any Premium, Interest and Additional Amounts. The Company covenants and agrees for the benefit of the Holders of the Securities of each series that it will duly and punctually pay the principal of, any premium and interest on and any Additional Amounts and other amounts payable with respect to the Securities of such series in accordance with the terms thereof, any Coupons appertaining thereto and this Indenture. An installment of principal, premium, if any, or interest shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company and the Guarantors) holds on that date money designated for and sufficient to pay such installment. Any interest due on any Bearer Security on or before the Maturity thereof, and any Additional Amounts payable with respect to such interest, shall be payable only upon presentation and surrender of the Coupons appertaining thereto for such interest as they severally mature. Section 10.2. Maintenance of Office or Agency. The Company or a Guarantor shall maintain in each Place of Payment for any series of Securities an Office or Agency where Securities of such series (but not Bearer Securities, except as otherwise provided below, unless such Place of Payment is located outside the United States) may be presented or surrendered for payment, where Securities of such series may be surrendered for registration of transfer or exchange, where Securities of such series that are convertible or exchangeable may be surrendered for conversion or exchange, and where notices and demands to or upon the Company or a Guarantor in respect of the Securities of such series relating thereto and this Indenture may be served. If Securities of a series are issuable as Bearer Securities, the Company or a Guarantor shall maintain, subject to any laws or regulations applicable thereto, an Office or Agency in a Place of Payment for such series which is located outside the United States where Securities of such series and any Coupons appertaining thereto may be presented and surrendered for payment; provided, however, that if the Securities of such series are listed on The Stock Exchange of the United Kingdom and the Republic of Ireland or the Luxembourg Stock Exchange or any other stock exchange located outside the United States and such stock exchange shall so require, the Company or a Guarantor shall maintain a Paying Agent in London, Luxembourg or any other required city located outside the United States, as 76 83 the case may be, so long as the Securities of such series are listed on such exchange. The Company or a Guarantor will give prompt written notice to the Trustee of the location, and any change in the location, of such Office or Agency. If at any time the Company or the Guarantors shall fail to maintain any such required Office or Agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee, except that Bearer Securities of such series and any Coupons appertaining thereto may be presented and surrendered for payment at the place specified for the purpose with respect to such Securities as provided in or pursuant to this Indenture, and the Company and the Guarantors each hereby appoints the Trustee as its agent to receive all such presentations, surrenders, notices and demands. Except as otherwise provided in or pursuant to this Indenture, no payment of principal, premium, interest or Additional Amounts with respect to Bearer Securities shall be made at any Office or Agency in the United States or by check mailed to any address in the United States or by transfer to an account maintained with a bank located in the United States; provided, however, if amounts owing with respect to any Bearer Securities shall be payable in Dollars, payment of principal of, any premium or interest on and any Additional Amounts with respect to any such Security may be made at the Corporate Trust Office of the Trustee or any Office or Agency designated by the Company in the Borough of Manhattan, The City of New York, if (but only if) payment of the full amount of such principal, premium, interest or Additional Amounts at all offices outside the United States maintained for such purpose by the Company in accordance with this Indenture is illegal or effectively precluded by exchange controls or other similar restrictions. The Company or a Guarantor may also from time to time designate one or more other Offices or Agencies where the Securities of one or more series may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company or the Guarantors of its obligation to maintain an Office or Agency in each Place of Payment for Securities of any series for such purposes. The Company or a Guarantor shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other Office or Agency. Unless otherwise provided in or pursuant to this Indenture, the Company and the Guarantors each hereby designates as the Place of Payment for each series of Securities the Borough of Manhattan, The City of New York, and initially appoints the Corporate Trust Office of the Trustee as the Office or Agency of the Company and the Guarantors, as the case may be, in the Borough of Manhattan, The City of New York for such purpose. The Company or a Guarantor, as the case may be, may subsequently appoint a different Office or Agency in the Borough of Manhattan, The City of New York for the Securities of any series. Unless otherwise specified with respect to any Securities pursuant to Section 3.1, if and so long as the Securities of any series (i) are denominated in a Foreign Currency or (ii) may be payable in a Foreign Currency, or so long as it is required under any other provision of this 77 84 Indenture, then the Company will maintain with respect to each such series of Securities, or as so required, at least one exchange rate agent. Section 10.3. Money for Securities Payments to Be Held in Trust. If the Company shall at any time act as its own Paying Agent with respect to any series of Securities, it shall, on or before each due date of the principal of, any premium or interest on or Additional Amounts or other amounts payable with respect to any of the Securities of such series, segregate and hold in trust for the benefit of the Persons entitled thereto a sum in the currency or currencies, currency unit or units or composite currency or currencies in which the Securities of such series are payable (except as otherwise specified pursuant to Section 3.1 for the Securities of such series) sufficient to pay the principal or any premium, interest or Additional Amounts or other amounts so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and shall promptly notify the Trustee of its action or failure so to act. Whenever the Company shall have one or more Paying Agents for any series of Securities, it shall, on or prior to each due date of the principal of, any premium or interest on or any Additional Amounts or other amounts payable with respect to any Securities of such series, deposit with any Paying Agent a sum (in the currency or currencies, currency unit or units or composite currency or currencies described in the preceding paragraph) sufficient to pay the principal or any premium, interest or Additional Amounts or other amounts so becoming due, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless such Paying Agent is the Trustee) the Company will promptly notify the Trustee of its action or failure so to act. The Company shall cause each Paying Agent for any series of Securities other than the Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the Trustee, subject to the provisions of this Section, that such Paying Agent shall: (1) hold all sums held by it for the payment of the principal of, any premium or interest on or any Additional Amounts or other amounts payable with respect to Securities of such series in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as provided in or pursuant to this Indenture; (2) give the Trustee notice of any default by the Company (or any other obligor upon the Securities of such series) in the making of any payment of principal, any premium or interest on or any Additional Amounts or other amounts payable with respect to the Securities of such series; and (3) at any time during the continuance of any such default, upon the written request of the Trustee, forthwith pay to the Trustee all sums so held in trust by such Paying Agent. 78 85 The Company or the Guarantor may at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or for any other purpose, pay, or by Company Order or the Guarantor Order direct any Paying Agent to pay, to the Trustee all sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same terms as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such sums. Except as otherwise provided herein or pursuant hereto, any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, any premium or interest on or any Additional Amounts or other amounts payable with respect to any Security of any series or any Coupon appertaining thereto and remaining unclaimed for two years after such principal or any such premium or interest or any such Additional Amounts shall have become due and payable shall be paid to the Company on Company Request (or if deposited by a Guarantor, paid to such Guarantor on Guarantor Request), or (if then held by the Company or a Guarantor) shall be discharged from such trust; and the Holder of such Security or any Coupon appertaining thereto shall thereafter, as an unsecured general creditor, look only to the Company and the Guarantors for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in an Authorized Newspaper in each Place of Payment for such series or to be mailed to Holders of Registered Securities of such series, or both, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such publication or mailing nor shall it be later than two years after such principal and any premium or interest or Additional Amounts shall have become due and payable, any unclaimed balance of such money then remaining will be repaid to the Company or the Guarantor, as the case may be. Section 10.4. Additional Amounts. If any Securities of a series provide for the payment of Additional Amounts, the Company and the Guarantor agrees to pay to the Holder of any such Security or any Coupon appertaining thereto Additional Amounts as provided in or pursuant to this Indenture or such Securities. Whenever in this Indenture there is mentioned, in any context, the payment of the principal of or any premium or interest on, or in respect of, any Security of any series or any Coupon or the net proceeds received on the sale or exchange of any Security of any series, such mention shall be deemed to include mention of the payment of Additional Amounts provided by the terms of such series established hereby or pursuant hereto to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to such terms, and express mention of the payment of Additional Amounts (if applicable) in any provision hereof shall not be construed as excluding the payment of Additional Amounts in those provisions hereof where such express mention is not made. 79 86 Except as otherwise provided in or pursuant to this Indenture or the Securities of the applicable series, if the Securities of a series provide for the payment of Additional Amounts, at least 10 days prior to the first Interest Payment Date with respect to such series of Securities (or if the Securities of such series shall not bear interest prior to Maturity, the first day on which a payment of principal is made), and at least 10 days prior to each date of payment of principal or interest if there has been any change with respect to the matters set forth in the below-mentioned Officers' Certificate, the Company or the Guarantor, as the case may be, shall furnish to the Trustee and the principal Paying Agent or Paying Agents, if other than the Trustee, an Officers' Certificate instructing the Trustee and such Paying Agent or Paying Agents whether such payment of principal of and premium, if any, or interest on the Securities of such series shall be made to Holders of Securities of such series or the Coupons appertaining thereto who are United States Aliens without withholding for or on account of any tax, assessment or other governmental charge described in the Securities of such series. If any such withholding shall be required, then such Officers' Certificate shall specify by country the amount, if any, required to be withheld on such payments to such Holders of Securities or Coupons, and the Company and the Guarantor agree to pay to the Trustee or such Paying Agent the Additional Amounts required by the terms of such Securities. The Company and the Guarantor covenants to indemnify the Trustee and any Paying Agent for, and to hold them harmless against, any loss, liability or expense reasonably incurred without negligence or bad faith on their part arising out of or in connection with actions taken or omitted by any of them in reliance on any Officers' Certificate furnished pursuant to this Section. Section 10.5. Limitation on Liens. The Company will not, and will not permit any Restricted Subsidiary to, create, incur or assume any Lien (other than Permitted Liens) on Restricted Property to secure the payment of Indebtedness of the Company or any Restricted Subsidiary if, immediately after the creation, incurrence or assumption of such Lien, the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries that is secured by Liens (other than Permitted Liens) on Restricted Property would exceed the greater of (i) $30 million or (ii) 15% of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries (whether or not so secured), unless effective provision is made whereby the Securities (together with, if the Company shall so determine, any other Indebtedness ranking equally with the Securities, whether then existing or thereafter created) are secured equally and ratably with (or prior to) such Indebtedness (but only for so long as such Indebtedness is so secured). The foregoing limitation does not apply to (i) Liens existing on the Closing Date; (ii) Liens granted after the Closing Date on any assets or Capital Stock of the Company or its Restricted Subsidiaries created in favor of the Holders; (iii) Liens with respect to the assets of a Restricted Subsidiary granted by such Restricted Subsidiary to the Company or another Restricted Subsidiary to secure Indebtedness owing to the Company or such other Restricted Subsidiary; (iv) Liens securing Indebtedness which is incurred to refinance secured Indebtedness which is permitted to be incurred under Section 10.6; provided that such Liens do not extend to or cover any property or assets of the Company or any Restricted Subsidiary other than the 80 87 property or assets securing the Indebtedness being refinanced; (v) Liens securing Indebtedness permitted under Section 10.6; or (vii) Permitted Liens. Section 10.6. Limitation on Indebtedness of Restricted Subsidiaries. The Company will not permit any Restricted Subsidiary to incur any Indebtedness if, immediately after the incurrence or assumption of such Indebtedness, the aggregate outstanding principal amount of all Indebtedness of the Restricted Subsidiaries would exceed the greater of (i) $30 million or (ii) 15% of the aggregate outstanding principal amount of all Indebtedness of the Company and the Restricted Subsidiaries; provided that, in any event, a Restricted Subsidiary may incur Indebtedness to extend, renew or replace Indebtedness of such Restricted Subsidiary to the extent that the principal amount of the Indebtedness so incurred does not exceed the principal amount of the Indebtedness extended, renewed or replaced thereby immediately prior to such extension, renewal or replacement plus any premium, accrued and unpaid interest or capitalized interest payable thereon. Section 10.7. Designation of Subsidiaries. The Company may designate a Restricted Subsidiary as an Unrestricted Subsidiary or designate an Unrestricted Subsidiary as a Restricted Subsidiary at any time, provided that (i) immediately after giving effect to such designation, the Leverage Ratio of the Restricted Group is not greater than 7:1 and the Company and the Restricted Subsidiaries are in compliance with Sections 10.5 and 10.6, and (ii) an Officers' Certificate with respect to such designation is delivered to the Trustee within 75 days after the end of the fiscal quarter of the Company in which such designation is made (or, in the case of a designation made during the last fiscal quarter of the Company's fiscal year, within 120 days after the end of such fiscal year), which Officers' Certificate shall state the effective date of such designation. Section 10.8. Corporate Existence. Subject to Article VIII, the Company and the Guarantor shall do or cause to be done all things necessary to preserve and keep in full force and effect their respective corporate existences and that of each Restricted Subsidiary and their respective rights (charter and statutory) and franchises; provided, however, that the foregoing shall not obligate the Company, any Guarantor or any Restricted Subsidiary to preserve any such right or franchise if the Company or such Guarantor, as the case may be, or any Restricted Subsidiary shall determine that the preservation thereof is no longer desirable in the conduct of its business or the business of such Subsidiary and that the loss thereof is not disadvantageous in any material respect to any Holder. Section 10.9. Waiver of Certain Covenants. The Company or the Guarantors, as the case may be, may omit in any particular instance to comply with any term, provision or condition set forth in Sections 10.5 or 10.6 with respect to the Securities of any series if before the time for such compliance the Holders of at least a 81 88 majority in principal amount of the Outstanding Securities of such series, by Act of such Holders, either shall waive such compliance in such instance or generally shall have waived compliance with such term, provision or condition, but no such waiver shall extend to or affect such term, provision or condition except to the extent so expressly waived, and, until such waiver shall become effective, the obligations of the Company and the Guarantors and the duties of the Trustee in respect of any such term, provision or condition shall remain in full force and effect. Section 10.10. Company Statement as to Compliance; Notice of Certain Defaults. (1) The Company shall deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement (which need not be contained in or accompanied by an Officers' Certificate) signed by the principal executive officer, the principal financial officer or the principal accounting officer of the Company, stating that: (a) a review of the activities of the Company during such year and of its performance under this Indenture has been made under his or her supervision, and (b) to the best of his or her knowledge, based on such review, (i) the Company has complied with all the conditions and covenants imposed on it under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such condition or covenant, specifying each such default known to him or her and the nature and status thereof, and (ii) no event has occurred and is continuing which is, or after notice or lapse of time or both would become, an Event of Default, or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. (2) The Company shall deliver to the Trustee, within five days after the occurrence thereof, written notice of any Event of Default or any event which after notice or lapse of time or both would become an Event of Default pursuant to clause (4) of Section 5.1. (3) The Trustee shall have no duty to monitor the Company's compliance with the covenants contained in this Article X other than as specifically set forth in this Section 10.8. Section 10.11. Guarantor's Statement as to Compliance; Notice of Certain Defaults. (1) Each Guarantor shall deliver to the Trustee, within 120 days after the end of each fiscal year, a written statement (which need not be contained in or accompanied by a Guarantor's Officers' Certificate) signed by the principal executive officer, the principal financial officer or the principal accounting officer of such Guarantor, stating that (a) a review of the activities of such Guarantor during such year and of performance under this Indenture has been made under his or her supervision, and 82 89 (b) to the best of his or her knowledge, based on such review, (i) such Guarantor has complied with conditions and covenants imposed on it under this Indenture throughout such year, or, if there has been a default in the fulfillment of any such condition or covenant, specifying each such default known to him or her and the nature and status thereof, and (ii) no event has occurred and is continuing which constitutes, or which after notice or lapse of time or both would become, and Event of Default, or, if such an event has occurred and is continuing, specifying each such event known to him and the nature and status thereof. (2) Each Guarantor shall deliver to the Trustee, within five days after the occurrence thereof, written notice of any event which after notice or lapse of time or both would become an Event of Default pursuant to clause (4) of Section 5.1. Section 10.12. Subsequent Guarantor. The Company shall cause each Subsidiary that guarantees amounts payable under a Credit Agreement to, for so long as such Subsidiary is obligated to guarantee the Company's indebtedness pursuant to such Credit Agreement, fully and unconditionally guarantee the due and punctual payment of the principal of, interest on and any other amounts payable under the Securities, when and if the same shall become due and payable, whether at the Stated Maturity, by declaration of acceleration, upon redemption, repurchase or repayment or otherwise, by execution of an indenture supplemental hereto that adds such Subsidiary as a Subsequent Guarantor. Section 10.13. Calculation of Original Issue Discount. The Company shall file with the Trustee promptly at the end of each calendar year (i) a written notice specifying the amount, if any, of original issue discount (including daily rates and accrual periods) accrued on Outstanding Securities as of the end of such year and (ii) such other specific information relating to such original issue discount as may then be relevant under the Internal Revenue Code of 1986, as amended from time to time. 83 90 ARTICLE XI REDEMPTION OF SECURITIES Section 11.1. Applicability of Article. Redemption of Securities of any series at the option of the Company as permitted or required by the terms of such Securities shall be made in accordance with the terms of such Securities and (except as otherwise provided herein or pursuant hereto) this Article. Section 11.2. Election to Redeem; Notice to Trustee. The election of the Company to redeem any Securities shall be evidenced by or pursuant to a Board Resolution. In case of any redemption at the election of the Company of (1) less than all of the Securities of any series or (2) all of the Securities of any series, with the same issue date, interest rate or formula, Stated Maturity and other terms, the Company shall, at least 60 days prior to the Redemption Date fixed by the Company (unless a shorter notice shall be satisfactory to the Trustee), notify the Trustee of such Redemption Date and of the principal amount of Securities of such series to be redeemed. Section 11.3. Selection by Trustee of Securities to be Redeemed. If less than all of the Securities of any series with the same issue date, interest rate or formula, Stated Maturity and other terms are to be redeemed, the particular Securities to be redeemed shall be selected not more than 60 days prior to the Redemption Date by the Trustee from the Outstanding Securities of such series not previously called for redemption, by such method as the Trustee shall deem fair and appropriate and which may provide for the selection for redemption of portions of the principal amount of Registered Securities of such series; provided, however, that no such partial redemption shall reduce the portion of the principal amount of a Registered Security of such series not redeemed to less than the minimum denomination for a Security of such series established herein or pursuant hereto. The Trustee shall promptly notify the Company and the Security Registrar (if other than itself) in writing of the Securities selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount thereof to be redeemed. For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to the redemption of Securities shall relate, in the case of any Securities redeemed or to be redeemed only in part, to the portion of the principal of such Securities which has been or is to be redeemed. Unless otherwise specified in or pursuant to this Indenture or the Securities of any series, if any Security selected for partial redemption is converted into Common Stock or exchanged for other securities in part before termination of the conversion or exchange right with respect to the portion of the Security so selected, the converted portion of such Security shall be deemed (so far 84 91 as may be) to be the portion selected for redemption. Securities which have been converted or exchanged during a selection of Securities to be redeemed shall be treated by the Trustee as Outstanding for the purpose of such selection. Section 11.4. Notice of Redemption. Notice of redemption shall be given in the manner provided in Section 1.6, not less than 30 nor more than 60 days prior to the Redemption Date, unless a shorter period is specified in the Securities to be redeemed, to the Holders of Securities to be redeemed. Failure to give notice by mailing in the manner herein provided to the Holder of any Registered Securities designated for redemption as a whole or in part, or any defect in the notice to any such Holder, shall not affect the validity of the proceedings for the redemption of any other Securities or portion thereof. Any notice that is mailed to the Holder of any Registered Securities in the manner herein provided shall be conclusively presumed to have been duly given, whether or not such Holder receives the notice. All notices of redemption shall state: (1) the Redemption Date, (2) the Redemption Price, (3) if less than all Outstanding Securities of any series are to be redeemed, the identification (and, in the case of partial redemption, the principal amount) of the particular Security or Securities to be redeemed, (4) in case any Security is to be redeemed in part only, the notice which relates to such Security shall state that on and after the Redemption Date, upon surrender of such Security, the Holder of such Security will receive, without charge, a new Security or Securities of authorized denominations for the principal amount thereof remaining unredeemed, (5) that, on the Redemption Date, the Redemption Price shall become due and payable upon each such Security or portion thereof to be redeemed, and, if applicable, that interest thereon shall cease to accrue on and after said date, (6) the place or places where such Securities, together (in the case of Bearer Securities) with all Coupons appertaining thereto, if any, maturing after the Redemption Date, are to be surrendered for payment of the Redemption Price and any accrued interest and Additional Amounts pertaining thereto, (7) that the redemption is for a sinking fund, if such is the case, 85 92 (8) that, unless otherwise specified in such notice, Bearer Securities of any series, if any, surrendered for redemption must be accompanied by all Coupons maturing subsequent to the date fixed for redemption or the amount of any such missing Coupon or Coupons will be deducted from the Redemption Price, unless security or indemnity satisfactory to the Company, the Trustee and any Paying Agent is furnished, (9) if Bearer Securities of any series are to be redeemed and no Registered Securities of such series are to be redeemed, and if such Bearer Securities may be exchanged for Registered Securities not subject to redemption on the Redemption Date pursuant to Section 3.5 or otherwise, the last date, as determined by the Company, on which such exchanges may be made, (10) in the case of Securities of any series that are convertible into Common Stock or exchangeable for other securities, the conversion or exchange price or rate, the date or dates on which the right to convert or exchange the principal of the Securities of such series to be redeemed will commence or terminate and the place or places where such Securities may be surrendered for conversion or exchange, and (11) the CUSIP number or the Euroclear or the Cedel reference numbers of such Securities, if any (or any other numbers used by a Depository to identify such Securities). A notice of redemption published as contemplated by Section 1.6 need not identify particular Registered Securities to be redeemed. Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the Company or, at the Company's request, by the Trustee in the name and at the expense of the Company. Section 11.5. Deposit of Redemption Price. On or prior to any Redemption Date, the Company shall deposit, with respect to the Securities of any series called for redemption pursuant to Section 11.4, with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount of money in the applicable Currency sufficient to pay the Redemption Price of, and (except if the Redemption Date shall be an Interest Payment Date, unless otherwise specified pursuant to Section 3.1 or in the Securities of such series) any accrued interest on and Additional Amounts with respect thereto, all such Securities or portions thereof which are to be redeemed on that date. Section 11.6. Securities Payable on Redemption Date. Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the Redemption Date, become due and payable at the Redemption Price therein specified, and from and after such date (unless the Company shall default in the payment of the 86 93 Redemption Price and accrued interest) such Securities shall cease to bear interest and the Coupons for such interest appertaining to any Bearer Securities so to be redeemed, except to the extent provided below, shall be void. Upon surrender of any such Security for redemption in accordance with said notice, together with all Coupons, if any, appertaining thereto maturing after the Redemption Date, such Security shall be paid by the Company at the Redemption Price, together with any accrued interest and Additional Amounts to the Redemption Date; provided, however, that, except as otherwise provided in or pursuant to this Indenture or the Bearer Securities of such series, installments of interest on Bearer Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable only upon presentation and surrender of Coupons for such interest (at an Office or Agency located outside the United States except as otherwise provided in Section 10.2), and provided, further, that, except as otherwise specified in or pursuant to this Indenture or the Registered Securities of such series, installments of interest on Registered Securities whose Stated Maturity is on or prior to the Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such at the close of business on the Regular Record Dates therefor according to their terms and the provisions of Section 3.7. If any Bearer Security surrendered for redemption shall not be accompanied by all appurtenant Coupons maturing after the Redemption Date, such Security may be paid after deducting from the Redemption Price an amount equal to the face amount of all such missing Coupons, or the surrender of such missing Coupon or Coupons may be waived by the Company and the Trustee if there be furnished to them such security or indemnity as they may require to save each of them and any Paying Agent harmless. If thereafter the Holder of such Security shall surrender to the Trustee or any Paying Agent any such missing Coupon in respect of which a deduction shall have been made from the Redemption Price, such Holder shall be entitled to receive the amount so deducted; provided, however, that any interest or Additional Amounts represented by Coupons shall be payable only upon presentation and surrender of those Coupons at an Office or Agency for such Security located outside of the United States except as otherwise provided in Section 10.2. If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the principal and any premium, until paid, shall bear interest from the Redemption Date at the rate prescribed therefor in the Security. Section 11.7. Securities Redeemed in Part. Any Registered Security which is to be redeemed only in part shall be surrendered at any Office or Agency for such Security (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or his attorney duly authorized in writing) and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such Security without service charge, a new Registered Security or Securities of the same series, containing identical terms and provisions, of any authorized denomination as requested by such Holder in aggregate principal amount equal to and in exchange for the unredeemed portion of the 87 94 principal of the Security so surrendered. If a Security in global form is so surrendered, the Company shall execute, and the Trustee shall authenticate and deliver to the U.S. Depository or other Depository for such Security in global form as shall be specified in the Company Order with respect thereto to the Trustee, without service charge, a new Security in global form in a denomination equal to and in exchange for the unredeemed portion of the principal of the Security in global form so surrendered. ARTICLE XII SINKING FUNDS Section 12.1. Applicability of Article. The provisions of this Article shall be applicable to any sinking fund for the retirement of Securities of a series, except as otherwise permitted or required in or pursuant to this Indenture or any Security of such series issued pursuant to this Indenture. The minimum amount of any sinking fund payment provided for by the terms of Securities of any series is herein referred to as a "mandatory sinking fund payment", and any payment in excess of such minimum amount provided for by the terms of Securities of such series is herein referred to as an "optional sinking fund payment". If provided for by the terms of Securities of any series, the cash amount of any sinking fund payment may be subject to reduction as provided in Section 12.2. Each sinking fund payment shall be applied to the redemption of Securities of any series as provided for by the terms of Securities of such series and this Indenture. Section 12.2. Satisfaction of Sinking Fund Payments with Securities. The Company may, in satisfaction of all or any part of any sinking fund payment with respect to the Securities of any series to be made pursuant to the terms of such Securities (1) deliver Outstanding Securities of such series (other than any of such Securities previously called for redemption or any of such Securities in respect of which cash shall have been released to the Company), together in the case of any Bearer Securities of such series with all unmatured Coupons appertaining thereto, and (2) apply as a credit Securities of such series which have been redeemed either at the election of the Company pursuant to the terms of such series of Securities or through the application of permitted optional sinking fund payments pursuant to the terms of such Securities, provided that such series of Securities have not been previously so credited. Such Securities shall be received and credited for such purpose by the Trustee at the Redemption Price specified in such Securities for redemption through operation of the sinking fund and the amount of such sinking fund payment shall be reduced accordingly. If, as a result of the delivery or credit of Securities of any series in lieu of cash payments pursuant to this Section 12.2, the principal amount of Securities of such series to be redeemed in order to satisfy the remaining sinking fund payment shall be less than $100,000, the Trustee need not call Securities of such series for redemption, except upon Company Request, and such cash payment shall be held by the Trustee or a Paying Agent and applied to the next succeeding sinking fund payment, 88 95 provided, however, that the Trustee or such Paying Agent shall at the request of the Company from time to time pay over and deliver to the Company any cash payment so being held by the Trustee or such Paying Agent upon delivery by the Company to the Trustee of Securities of that series purchased by the Company having an unpaid principal amount equal to the cash payment requested to be released to the Company. Section 12.3. Redemption of Securities for Sinking Fund. Not less than 75 days prior to each sinking fund payment date for any series of Securities, the Company shall deliver to the Trustee an Officers' Certificate specifying the amount of the next ensuing mandatory sinking fund payment for that series pursuant to the terms of that series, the portion thereof, if any, which is to be satisfied by payment of cash and the portion thereof, if any, which is to be satisfied by delivering and crediting of Securities of that series pursuant to Section 12.2, and the optional amount, if any, to be added in cash to the next ensuing mandatory sinking fund payment, and will also deliver to the Trustee any Securities to be so credited and not theretofore delivered. If such Officers' Certificate shall specify an optional amount to be added in cash to the next ensuing mandatory sinking fund payment, the Company shall thereupon be obligated to pay the amount therein specified. Not less than 60 days before each such sinking fund payment date the Trustee shall select the Securities to be redeemed upon such sinking fund payment date in the manner specified in Section 11.3 and cause notice of the redemption thereof to be given in the name of and at the expense of the Company in the manner provided in Section 11.4. Such notice having been duly given, the redemption of such Securities shall be made upon the terms and in the manner stated in Sections 11.6 and 11.7. ARTICLE XIII REPAYMENT AT THE OPTION OF HOLDERS Section 13.1. Applicability of Article. Securities of any series which are repayable at the option of the Holders thereof before their Stated Maturity shall be repaid in accordance with the terms of the Securities of such series. The repayment of any principal amount of Securities pursuant to such option of the Holder to require repayment of Securities before their Stated Maturity, for purposes of Section 3.9, shall not operate as a payment, redemption or satisfaction of the Indebtedness represented by such Securities unless and until the Company, at its option, shall deliver or surrender the same to the Trustee with a directive that such Securities be cancelled. Notwithstanding anything to the contrary contained in this Section 13.1, in connection with any repayment of Securities, the Company may arrange for the purchase of any Securities by an agreement with one or more investment bankers or other purchasers to purchase such Securities by paying to the Holders of such Securities on or before the close of business on the repayment date an amount not less than the repayment price payable by the Company on repayment of such Securities, and the obligation of the Company to pay the repayment price of such Securities shall be satisfied and discharged to the extent such payment is so paid by such purchasers. 89 96 ARTICLE XIV SECURITIES IN FOREIGN CURRENCIES Section 14.1. Applicability of Article. Whenever this Indenture provides for (i) any action by, or the determination of any of the rights of, Holders of Securities of any series in which not all of such Securities are denominated in the same Currency, or (ii) any distribution to Holders of Securities, in the absence of any provision to the contrary in the form of Security of any particular series or pursuant to this Indenture or the Securities, any amount in respect of any Security denominated in a Currency other than Dollars shall be treated for any such action or distribution as that amount of Dollars that could be obtained for such amount on such reasonable basis of exchange and as of the record date with respect to Registered Securities of such series (if any) for such action, determination of rights or distribution (or, if there shall be no applicable record date, such other date reasonably proximate to the date of such action, determination of rights or distribution) as the Company or a Guarantor may specify in a written notice to the Trustee. ARTICLE XV MEETINGS OF HOLDERS OF SECURITIES Section 15.1. Purposes for Which Meetings May Be Called. A meeting of Holders of Securities of any series may be called at any time and from time to time pursuant to this Article to make, give or take any request, demand, authorization, direction, notice, consent, waiver or other Act provided by this Indenture to be made, given or taken by Holders of Securities of such series. Section 15.2. Call, Notice and Place of Meetings. (1) The Trustee may at any time call a meeting of Holders of Securities of any series for any purpose specified in Section 15.1, to be held at such time and at such place in the Borough of Manhattan, The City of New York, or, if Securities of such series have been issued in whole or in part as Bearer Securities, in London or in such place outside the United States as the Trustee shall determine. Notice of every meeting of Holders of Securities of any series, setting forth the time and the place of such meeting and in general terms the action proposed to be taken at such meeting, shall be given, in the manner provided in Section 1.6, not less than 21 nor more than 180 days prior to the date fixed for the meeting. (2) In case at any time the Company (by or pursuant to a Board Resolution), a Guarantor (by or pursuant to a Guarantor's Board Resolution) or the Holders of at least 10% in principal amount of the Outstanding Securities of any series shall have requested the Trustee to call a meeting of the Holders of Securities of such series for any purpose 90 97 specified in Section 15.1, by written request setting forth in reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have mailed notice of or made the first publication of the notice of such meeting within 21 days after receipt of such request (whichever shall be required pursuant to Section 1.6) or shall not thereafter proceed to cause the meeting to be held as provided herein, then the Company, a Guarantor or the Holders of Securities of such series in the amount above specified, as the case may be, may determine the time and the place in the Borough of Manhattan, The City of New York, or, if Securities of such series are to be issued as Bearer Securities, in London for such meeting and may call such meeting for such purposes by giving notice thereof as provided in clause (1) of this Section. Section 15.3. Persons Entitled to Vote at Meetings. To be entitled to vote at any meeting of Holders of Securities of any series, a Person shall be (1) a Holder of one or more Outstanding Securities of such series, or (2) a Person appointed by an instrument in writing as proxy for a Holder or Holders of one or more Outstanding Securities of such series by such Holder or Holders. The only Persons who shall be entitled to be present or to speak at any meeting of Holders of Securities of any series shall be the Persons entitled to vote at such meeting and their counsel, any representatives of the Trustee and its counsel, any representatives of a Guarantor and its counsel and any representatives of the Company and its counsel. Section 15.4. Quorum; Action. The Persons entitled to vote a majority in principal amount of the Outstanding Securities of a series shall constitute a quorum for any meeting of Holders of Securities of such series. In the absence of a quorum within 30 minutes after the time appointed for any such meeting, the meeting shall, if convened at the request of Holders of Securities of such series, be dissolved. In any other case the meeting may be adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such meeting. In the absence of a quorum at any reconvened meeting, such reconvened meeting may be further adjourned for a period of not less than 10 days as determined by the chairman of the meeting prior to the adjournment of such reconvened meeting. Notice of the reconvening of any adjourned meeting shall be given as provided in Section 15.2(1), except that such notice need be given only once not less than five days prior to the date on which the meeting is scheduled to be reconvened. Notice of the reconvening of an adjourned meeting shall state expressly the percentage, as provided above, of the principal amount of the Outstanding Securities of such series which shall constitute a quorum. Except as limited by the proviso to Section 9.2, any resolution presented to a meeting or adjourned meeting duly reconvened at which a quorum is present as aforesaid may be adopted only by the affirmative vote of the Holders of a majority in principal amount of the Outstanding Securities of that series; provided, however, that, except as limited by the proviso to Section 9.2, any resolution with respect to any request, demand, authorization, direction, notice, consent, 91 98 waiver or other Act which this Indenture expressly provides may be made, given or taken by the Holders of a specified percentage, which is less than a majority, in principal amount of the Outstanding Securities of a series may be adopted at a meeting or an adjourned meeting duly reconvened and at which a quorum is present as aforesaid by the affirmative vote of the Holders of such specified percentage in principal amount of the Outstanding Securities of such series. Any resolution passed or decision taken at any meeting of Holders of Securities of any series duly held in accordance with this Section shall be binding on all the Holders of Securities of such series and the Coupons appertaining thereto, whether or not such Holders were present or represented at the meeting. Section 15.5. Determination of Voting Rights; Conduct and Adjournment of Meetings. (1) Notwithstanding any other provisions of this Indenture, the Trustee may make such reasonable regulations as it may deem advisable for any meeting of Holders of Securities of such series in regard to proof of the holding of Securities of such series and of the appointment of proxies and in regard to the appointment and duties of inspectors of votes, the submission and examination of proxies, certificates and other evidence of the right to vote, and such other matters concerning the conduct of the meeting as it shall deem appropriate. Except as otherwise permitted or required by any such regulations, the holding of Securities shall be proved in the manner specified in Section 1.4 and the appointment of any proxy shall be proved in the manner specified in Section 1.4 or by having the signature of the person executing the proxy witnessed or guaranteed by any trust company, bank or banker authorized by Section 1.4 to certify to the holding of Bearer Securities. Such regulations may provide that written instruments appointing proxies, regular on their face, may be presumed valid and genuine without the proof specified in Section 1.4 or other proof. (2) The Trustee shall, by an instrument in writing, appoint a temporary chairman of the meeting, unless the meeting shall have been called by the Company or by Holders of Securities as provided in Section 15.2(2), in which case the Company, the Guarantor or the Holders of Securities of the series calling the meeting, as the case may be, shall in like manner appoint a temporary chairman. A permanent chairman and a permanent secretary of the meeting shall be elected by vote of the Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting. (3) At any meeting, each Holder of a Security of such series or proxy shall be entitled to one vote for each $1,000 principal amount of Securities of such series held or represented by him; provided, however, that no vote shall be cast or counted at any meeting in respect of any Security challenged as not Outstanding and ruled by the chairman of the meeting to be not Outstanding. The chairman of the meeting shall have no right to vote, except as a Holder of a Security of such series or proxy. 92 99 (4) Any meeting of Holders of Securities of any series duly called pursuant to Section 15.2 at which a quorum is present may be adjourned from time to time by Persons entitled to vote a majority in principal amount of the Outstanding Securities of such series represented at the meeting; and the meeting may be held as so adjourned without further notice. Section 15.6. Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of Holders of Securities of any series shall be by written ballots on which shall be subscribed the signatures of the Holders of Securities of such series or of their representatives by proxy and the principal amounts and serial numbers of the Outstanding Securities of such series held or represented by them. The permanent chairman of the meeting shall appoint two inspectors of votes who shall count all votes cast at the meeting for or against any resolution and who shall make and file with the secretary of the meeting their verified written reports in triplicate of all votes cast at the meeting. A record, at least in triplicate, of the proceedings of each meeting of Holders of Securities of any series shall be prepared by the secretary of the meeting and there shall be attached to said record the original reports of the inspectors of votes on any vote by ballot taken thereat and affidavits by one or more persons having knowledge of the facts setting forth a copy of the notice of the meeting and showing that said notice was given as provided in Section 15.2 and, if applicable, Section 15.4. Each copy shall be signed and verified by the affidavits of the permanent chairman and secretary of the meeting and one such copy shall be delivered to the Company and the Guarantors, and another to the Trustee to be preserved by the Trustee, the latter to have attached thereto the ballots voted at the meeting. Any record so signed and verified shall be conclusive evidence of the matters therein stated. ARTICLE XVI GUARANTEES Section 16.1. Unconditional Guarantee. Subject to the provisions of this Article XVI, each of the Initial Guarantors hereby fully, unconditionally and irrevocably guarantees, and each Subsidiary required to execute a supplemental indenture as a Subsequent Guarantor pursuant to Section 10.12 will be deemed to fully, unconditionally and irrevocably guarantee, to each Holder and to the Trustee on behalf of the Holders, the due and punctual payment of the principal of, and premium, if any, and interest on, and Additional Amounts and other amounts payable with respect to, each Security, the due and punctual payment of interest on the overdue principal of, and premium, if any, and interest on, and Additional Amounts and other amounts payable with respect to, the Securities, to the extent lawful, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee, all in accordance with the terms of such Securities and this Indenture, when and as the same shall become due and payable, whether at Stated Maturity, by declaration of acceleration, upon redemption, repurchase or repayment or otherwise. In case of the failure of 93 100 the Company punctually to pay any such principal, premium, interest, Additional Amounts or other payment, each Guarantor hereby agrees to cause any such payment to be made punctually when and as the same shall become due and payable, whether at Stated Maturity, by declaration of acceleration, upon redemption, repurchase or repayment or otherwise, and as if such payment were made by the Company. Each Guarantor hereby agrees that its obligations hereunder shall be as principal and not merely as surety, and shall be absolute, irrevocable and unconditional, irrespective of, and shall be unaffected by, any invalidity, irregularity or unenforceability of any Security or this Indenture, any failure to enforce the provisions of any Security or this Indenture, or any waiver, modification, consent or indulgence granted with respect thereto by the Holder of such Security or the Trustee, the recovery of any judgment against the Company or any action to enforce the same, or any other circumstances which may otherwise constitute a legal or equitable discharge of a surety or guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of merger, insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, the benefit of discussion, protest or notice with respect to any such Security or the debt evidenced thereby and all demands whatsoever, and covenants that no Guarantee will be discharged as to any such Security except by payment in full of all amounts due in respect of such Security and by the complete performance of all other obligations contained in such Security and this Indenture. The maturity of the obligations guaranteed hereby may be accelerated as provided in Article V for the purposes of this Article XVI. In the event of any declaration of acceleration of such obligations as provided in Article V, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Article XVI. In addition, without limiting the foregoing provisions, upon the effectiveness of an acceleration under Article V, the Trustee shall promptly make a demand for payment on the Securities under each Guarantee provided for in this Article XVI. If the Trustee or the Holder of any Security is required by any court or otherwise to return to the Company or any Guarantor, or any custodian, receiver, liquidator, trustee, sequestrator or other similar official acting in relation to the Company or any Guarantor, any amount paid to the Trustee or such Holder in respect of a Security, any Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees, to the fullest extent that it may lawfully do so, that, as between it, on the one hand, and the Holders and the Trustee, on the other hand, the maturity of the obligations guaranteed hereby may be accelerated as provided in Article V hereof for the purposes of each Guarantee, notwithstanding any stay, injunction or other prohibition issued or imposed under any applicable bankruptcy law preventing such acceleration in respect of the obligations guaranteed hereby. A Guarantor shall be subrogated to all rights of the Holder of any Security against the Company in respect of any amounts paid to the Trustee or such Holder by such Guarantor pursuant to the provisions of its Guarantee; provided, however, that no Guarantor shall be entitled to enforce, or to receive any payments arising out of or based upon, such right of 94 101 subrogation until the principal of, and premium, if any, and interest on, and any Additional Amounts and other amounts payable with respect to, all Securities shall have been paid in full and all other obligations contained in the Securities and this Indenture shall have been performed. If any amount shall be paid to any Guarantor in violation of the preceding sentence and all amounts payable in respect of the Securities shall not have been paid in full, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders, and shall forthwith be paid to the Trustee for the benefit of the Holders to be credited and applied upon such amounts. Each Guarantor acknowledges that it will receive direct and indirect benefits from the issuance of the Securities pursuant to this Indenture. Anything to the contrary in this Indenture notwithstanding, each Guarantee shall be, and hereby is, limited to the maximum amount that can be guaranteed by the applicable Guarantor without rendering such Guarantee, as it relates to such Guarantor, voidable under any applicable law relating to fraudulent conveyance, fraudulent transfer or similar laws affecting the rights of creditors generally. Each Guarantee set forth in this Section 16.1 shall be valid and obligatory for any purpose with respect to a Security until the certificate of authentication of such Security shall have been signed by or on behalf of the Trustee. Section 16.2. Operation of Guarantees. By execution of this Agreement (in the case of the Initial Guarantors) or a supplemental indenture (in the case of any Subsequent Guarantors), the Guarantee of each Guarantor in respect of the Securities shall be set forth in Section 16.1 and shall be effective for all purposes upon authentication of a particular Security by or on behalf of the Trustee, regardless of whether such authentication occurs prior to a Subsequent Guarantor's execution of the required supplemental indenture, and shall not require any Guarantor's endorsement on the Securities. Section 16.3 Termination of Guarantees. The Guarantee of any Guarantor (including the Initial Guarantors), and the provisions of any supplemental indenture with respect to a Guarantee by such Guarantor and this Indenture with respect to such Guarantor, shall be released, terminated and of no further force and effect, without further action by any party, immediately upon the release or termination of such Guarantor's guarantee of indebtedness under all Credit Agreements to which it is a party. * * * * * 95 102 IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, and their respective corporate seals to be hereunto affixed and attested, all as of the day and year first above written. COX Radio, INC., As Company By /s/ Richard J. Jacobson --------------------------- Name: Richard J. Jacobson Title: Treasurer WSB, INC., As Initial Guarantor By /s/ Andrew A. Merdek --------------------------- Name: Andrew A. Merdek Title: Secretary WHIO INC., As Initial Guarantor By /s/ Andrew A. Merdek --------------------------- Name: Andrew A. Merdek Title: Secretary THE BANK OF NEW YORK, As Trustee By /s/ Robert A. Massimillo --------------------------- Name: Robert A. Massimillo Title: Assistant Vice President 96 EX-23.1 3 CONSENT OF DELOITTE & TOUCHE LLP 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the incorporation by reference in this Amendment No. 1 Registration Statement No. 333-61179 of Cox Radio, Inc. on Form S-4 of our report dated February 6, 1998 (March 17, 1998 as to the KONO-FM/AM Acquisition described in Note 4) appearing in the Annual Report on Form 10-K of Cox Radio, Inc. for the year ended December 31, 1997 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. /s/ DELOITTE & TOUCHE LLP Atlanta, Georgia November 10, 1998 EX-23.2 4 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in Amendment No. 1 to Registration Statement No. 333-61179 on Form S-4 dated November 12, 1998 for the registration of 6.25% and 6.375% Senior Notes due 2003 and 2005, respectively and to the incorporation by reference therein of our report dated March 7, 1997, with respect to the financial statements of NewCity Communications, Inc. for the three years in the period ended December 31, 1996 included in Cox Radio, Inc.'s Current Report on Form 8-K dated April 14, 1997 also incorporated herein by reference. /s/ Ernst & Young LLP Stamford, Connecticut November 10, 1998 EX-99.1 5 LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 =============================================================================== PURSUANT TO THE PROSPECTUS DATED NOVEMBER 12, 1998: THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON DECEMBER 14, 1998, UNLESS EXTENDED (THE "EXPIRATION DATE"). =============================================================================== LETTER OF TRANSMITTAL COX RADIO, INC. OFFER TO EXCHANGE 6.250% NOTES DUE 2003 FOR ALL OUTSTANDING 6.250% NOTES DUE 2003 6.375% NOTES DUE 2005 FOR ALL OUTSTANDING 6.250% NOTES DUE 2005 To: The Bank of New York, the Exchange Agent By Registered or Certified Mail: By Overnight Courier: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7 East Ground Level New York, New York 10286 Corporate Trust Services Window Attn: Reorganization Section New York, New York 10286 Attn: Reorganization Section By Hand: By Facsimile (For Eligible Institutions Only): The Bank of New York (212) 815-6339 101 Barclay Street Ground Level Confirm by telephone: Corporate Trust Services Window Christopher Davis New York, New York 10286 (212) 815-4997 Attn: Reorganization Section DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS INSTRUMENT VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges receipt of the Prospectus, dated November 12, 1998 (the "Prospectus"), of Cox Radio, Inc. (the "Obligor") and this Letter of Transmittal (the "Letter of Transmittal"), which together describe the offer by the Obligor (the "Exchange Offer") to exchange (i) $1,000 principal amount of the 6.250% Notes due 2003 (the "New 2003 Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement, for each $1,000 principal amount of its outstanding 6.250% Notes due 2003 (the "Old 2003 Notes"); and (ii) $1,000 principal amount of the 6.375% Notes due 2005 (the "New 2005 Notes" and, together with the 2003 New Notes, the "New Notes"), which have been registered under the Securities Act, pursuant to a Registration Statement, for each $1,000 principal amount of its outstanding 6.375% Notes due 2005 (the "Old 2005 Notes" and, together with the 2 2003 Old Notes, the "Old Notes") of which $200,000,000 aggregate principal amount is outstanding. The term "Expiration Date" shall mean 5:00 p.m., New York City time, on December 14, 1998, unless the Obligor, in its sole discretion, extends the Exchange Offer, in which case the term shall mean the latest date and time to which the Exchange Offer is extended. The term "Holder" with respect to the Exchange Offer means any person: (i) in whose name Old Notes are registered on the books of the Obligor or any other person who has obtained a properly completed bond power from the registered Holder or (ii) whose Old Notes are held of record by The Depository Trust Company ("DTC") and who desires to deliver such Old Notes by book entry transfer at DTC. Capitalized terms used herein, but not defined herein, shall have the respective meanings set forth in the Prospectus. 2 3 This Letter of Transmittal is to be used by Holders if: (i) certificates representing Old Notes are to be physically delivered to the Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by book-entry transfer to the Exchange Agent's account at DTC pursuant to the procedures set forth in the Prospectus under "The Exchange Offer--Procedures for Tendering" by any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Notes (such participants, acting on behalf of Holders, are referred to herein as "Acting Holders"); or (iii) tender of Old Notes is to be made according to the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2 below. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety. 1. [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY DTC TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ---------------------------------------- DTC Book-Entry Account No.: ------------------------------------------- Transaction Code No.: ------------------------------------------------- 2. [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 2): Name of Registered or Acting Holder(s): ------------------------------- Window Ticket No. (if any): ------------------------------------------- Date of Execution of Notice of Guaranteed Delivery: ------------------- Name of Eligible Institution that Guaranteed Delivery: --------------------------------------------- If Delivered by Book-Entry Transfer, DTC Book-Entry Account No.: ------------------------------------------- Transaction Code Number: ---------------------------------------------- 3. [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. PLEASE NOTE: THE OBLIGOR HAS AGREED THAT, FOR A PERIOD OF 180 DAYS AFTER THE EXPIRATION DATE, IT WILL MAKE COPIES OF THE PROSPECTUS AVAILABLE TO ANY PARTICIPATING BROKER-DEALER FOR USE IN CONNECTION WITH RESALES OF THE NEW NOTES (PROVIDED THAT THE OBLIGOR RECEIVES NOTICE FROM ANY PARTICIPATING BROKER-DEALER OF ITS STATUS AS A BROKER-DEALER). Name: ------------------------------------------------------------- Address: ----------------------------------------------------------- -------------------------------------------------------------------- Attention: --------------------------------------------------------- 3 4 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount of Old Notes should be listed on a separate signed schedule affixed hereto.
================================================================================ DESCRIPTION OF OLD NOTES ================================================================================ Box 1 ================================================================================ NAME(S) AND AGGREGATE ADDRESS(ES)OF PRINCIPAL AMOUNT PRINCIPAL REGISTERED HOLDER(S) SERIES OF NOTES CERTIFICATE REPRESENTED BY AMOUNT (PLEASE FILL IN, IF 2003/2005 NUMBER(S)* CERTIFICATE(S) TENDERED** BLANK) Total: ================================================================================ * Need not be completed by Holders tendering by book-entry transfer. ** Must be in integral multiple of $1,000. Need not be completed by Holders who wish to tender with respect to all Old Notes listed. See Instruction 4. If the space provided above is inadequate, list the certificate numbers and principal amounts on a separate signed schedule and affix the list to this Letter of Transmittal. ================================================================================
4 5 ====================================== ====================================== Box 2 Box 3 SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6) To be completed ONLY if certificates To be completed ONLY if certificates for Old Notes in a principal amount for Old Notes in a principal amount not tendered, or New Notes issued in not tendered, or New Notes issued in exchange for Old Notes accepted for exchange for Old Notes accepted for exchange, are to be issued in a name exchange, are to be sent to an other than the name appearing in Box 1 address other than the address above. appearing in Box 1 above, or if Box 2 is filled in, to an address other than the address appearing in Box 2. ISSUE CERTIFICATE(S) TO: DELIVER CERTIFICATE(S) TO: Name _________________________________ Name_________________________________ (Please Print) (Please Print) Address ______________________________ Address______________________________ ______________________________________ _____________________________________ (Include Zip Code) (Include Zip Code) ______________________________________ _____________________________________ (Tax Identification or Social (Tax Identification or Social Security Number) Security Number) ====================================== ======================================
Box 4 ================================================================================ BROKER-DEALER STATUS [_] Check this box if the beneficial owner of the Old Notes is a Participating Broker-Dealer and such Participating Broker-Dealer acquired the Old Notes for its own account as a result of market-making activities or other trading activities. ================================================================================ NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to Cox Radio, Inc. (the "Obligor") the principal amount of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Obligor all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Obligor) with respect to the tendered Old Notes with the full power of substitution to (i) present such Old Notes and all evidences of transfer and authenticity to, or transfer ownership of, such Old Notes on the account books maintained by DTC to, or upon, the order of, the Obligor, (ii) deliver certificates for such Old Notes to the Obligor and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Obligor and (iii) 5 6 present such Old Notes for transfer on the books of the Obligor and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Obligor will acquire good, valid and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims, when the same are acquired by the Obligor. The undersigned hereby further represents that (i) the New Notes are to be acquired by the Holder or the person receiving such New Notes, whether or not such person is the Holder, in the ordinary course of business, (ii) the Holder or any such other person is not engaging and does not intend to engage in the distribution of the New Notes, (iii) the Holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the New Notes and (iv) neither the Holder nor any such other person is an "affiliate" of the Obligor within the meaning of Rule 405 under the Securities Act. As indicated above, each Participating Broker-Dealer that receives a New Note for its own account in exchange for Old Notes must acknowledge that it (i) acquired the Old Notes for its own account as a result of market-making activities or other trading activities, (ii) has not entered into any arrangement or understanding with the Obligor or any "affiliate" of the Obligor (within the meaning of Rule 405 under the Securities Act) to distribute the New Notes to be received in the Exchange Offer and (iii) will deliver a Prospectus in connection with any resale of such New Notes; however, by so acknowledging and by delivering a Prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. If applicable, the undersigned shall use its reasonable best efforts to notify the Obligor when it is no longer subject to such Prospectus delivery requirements. Unless otherwise notified in accordance with the instructions set forth herein in Box 4 under "Broker-Dealer Status," the Obligor will assume that the undersigned is not a Participating Broker-Dealer. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in, and does not intend to engage in, a distribution of New Notes. For purposes of the Exchange Offer, the Obligor shall be deemed to have accepted validly tendered Old Notes when, as and if the Obligor has given oral or written notice thereof to the Exchange Agent. If any Old Notes tendered herewith are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Notes will be returned (except as noted below with respect to tenders through DTC), without expense, to the undersigned at the address shown below or to a different address as may be indicated herein in Box 3 under "Special Delivery Instructions" as promptly as practicable after the Expiration Date. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that tenders of Old Notes pursuant to the procedures described under the caption "The Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned and the Obligor upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." 6 7 Unless otherwise indicated in Box 2 under "Special Registration Instructions," please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged, in the name(s) of the registered Holder of the Old Notes appearing in Box 1 above (or in such event in the case of Old Notes tendered by DTC, by credit to the account of DTC). Similarly, unless otherwise indicated in Box 3 under "Special Delivery Instructions," please send the certificates, if any, representing the New Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below in the undersigned's signature(s), unless tender is being made through DTC. In the event that the box entitled "Special Registration Instructions" and the box entitled "Special Delivery Instructions" both are completed, please issue the certificates representing the New Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any certificates for Old Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned understands that the Obligor has no obligation pursuant to the "Special Registration Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered Holder(s) thereof if the Obligor does not accept for exchange any of the Old Notes so tendered. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver the Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date, may tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2. 7 8 The lines below must be signed by the registered Holder(s) exactly as its name(s) appear(s) on the Old Notes or, if tendered by a participant in DTC, exactly as such participant's name appears on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered Holder(s) by a properly completed bond power from the registered Holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Old Notes to which this Letter of Transmittal relates are held of record by two or more joint Holders, then all such Holders must sign this Letter of Transmittal. PLEASE SIGN HERE WHETHER OR NOT OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY x - ---------------------------------------------------- ------------------- Date x - ---------------------------------------------------- ------------------- Signature(s) of Registered Holder(s) Date or Authorized Signatory Area Code and Telephone Number: --------------------------- If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) submit evidence satisfactory to the Obligor of such person's authority so to act. See Instruction 5. Name(s): ---------------------------------------------------------------------- (Please Print) Capacity: --------------------------------------------------------------------- Address: ---------------------------------------------------------------------- (Include Zip Code) MEDALLION SIGNATURE GUARANTEE (If required by Instruction 5) Certain Signatures must be Guaranteed by an Eligible Institution Signature(s) Guaranteed by an Eligible Institution: - ------------------------------------------------------------------------------- (Authorized Signature) - ------------------------------------------------------------------------------- (Title) - ------------------------------------------------------------------------------- (Name of Firm) - ------------------------------------------------------------------------------- (Address, Include Zip Code) - ------------------------------------------------------------------------------- (Area Code and Telephone Number) Dated: , 1998 ------------ 8 EX-99.2 6 TENDER INSTRUCTIONS 1 EXHIBIT 99.2 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES OR BOOK-ENTRY CONFIRMATIONS. Certificates representing the tendered Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC), as well as a properly completed and duly executed copy of this Letter of Transmittal (or facsimile thereof) (or, in the case of a book-entry transfer, an Agent's Message), a Substitute Form W-9 (or facsimile thereof) and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. The method of delivery of certificates for Old Notes and all other required documents is at the election and sole risk of the tendering Holder and delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the Holder may wish to use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. Neither the Obligor nor the Exchange Agent is under an obligation to notify any tendering Holder of the acceptance of tendered Old Notes prior to the completion of the Exchange Offer. 2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old Notes but whose Old Notes are not immediately available and who cannot deliver their certificates for Old Notes (or comply with the procedures for book-entry transfer prior to the Expiration Date), the Letter of Transmittal and any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth below. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Exchange Act (an "Eligible Institution"); (ii) prior to the Expiration Date, the Exchange Agent must have received from the Holder and the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail or hand delivery) setting forth the name and address of the Holder, the certificate number or numbers of the tendered Old Notes and the principal amount of tendered Old Notes and stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) (or, in the case of a book-entry transfer, an Agent's Message), together with the tendered Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC) and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) the certificates representing the tendered Old Notes in proper form for transfer (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC), together with the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and all other documents required by the Letter of Transmittal must be received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. 2 Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a Holder who attempted to use the guaranteed delivery procedure. 3. TENDER BY HOLDER. Only a Holder or Acting Holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial owner of Old Notes who is not the registered Holder and who wishes to tender should arrange with such Holder to execute and deliver this Letter of Transmittal on such owner's behalf or must, prior to completing and executing this Letter of Transmittal and delivering such Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such owner's name or obtain a properly completed bond power from the registered Holder. 4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral multiples of $1,000 principal amount. If less than the entire principal amount of Old Notes is tendered, the tendering Holder should fill in the principal amount tendered in the column labeled "Principal Amount Tendered" of the box entitled "Description of Old Notes" (Box 1) above. The entire principal amount of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of Old Notes is not tendered, Old Notes for the principal amount of Old Notes not tendered and New Notes exchanged for any Old Notes tendered will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal or unless tender is made through DTC, as soon as practicable following the Expiration Date. 5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURE. If this Letter of Transmittal is signed by the registered Holder(s) of the Old Notes tendered herewith, the signatures must correspond with the name(s) as written on the face of the tendered Old Notes without alteration, enlargement or any change whatsoever. If any of the tendered Old Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Old Notes are held in different names on several Old Notes, it will be necessary to complete, sign and submit as many separate copies of the Letter of Transmittal documents as there are names in which tendered Old Notes are held. If this Letter of Transmittal is signed by the registered Holder, and New Notes are to be issued and any untendered or unaccepted principal amount of Old Notes are to be reissued or returned to the registered Holder, then the registered Holder need not and should not endorse any tendered Old Notes nor provide a separate bond power. In any other case, the registered Holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal (executed exactly as the name(s) of the registered Holder(s) appear(s) on such Old Notes), with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution unless such certificates or bond powers are signed by an Eligible Institution. If this Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and evidence satisfactory to the Obligor of their authority to so act must be submitted with this Letter of Transmittal. No medallion signature guarantee is required if (i) this Letter of Transmittal is signed by the registered Holder(s) of the Old Notes tendered herewith and the issuance of New Notes (and any Old Notes not tendered or not accepted) are to be issued directly 2 3 to such registered Holder(s) and neither the "Special Registration Instructions" (Box 2) nor the "Special Delivery Instructions" (Box 3) has been completed. In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. 6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable box, the name and address in which the New Notes and/or substitute Old Notes for principal amounts not tendered or not accepted for exchange are to be sent, if different from the name and address or account of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification number or social security number of the person named must also be indicated and the indicated and the tendering Holders should complete the applicable box. If no such instructions are given, the New Notes (and any Old Notes not tendered or not accepted) will be issued in the name of and sent to the registered Holder of the Old Notes. 7. TRANSFER TAXES. The Obligor will pay all transfer taxes, if any, applicable to the sale and transfer of Old Notes to the Obligor or its order pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the transfer and sale of Old Notes to the Obligor or its order pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or on any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption from such taxes is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal. 8. TAX IDENTIFICATION NUMBER. Under the federal income tax laws, payments that may be made by the Obligor on account of New Notes issued pursuant to the Exchange Offer may be subject to backup withholding at the rate of 31%. In order to avoid such backup withholding, each tendering Holder should complete and sign the Substitute Form W-9 included in this Letter of Transmittal and either (a) provide the correct taxpayer identification number ("TIN") and certify, under penalties of perjury, that the TIN provided is correct and that (i) the Holder has not been notified by the Internal Revenue Service (the "IRS") that the Holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the IRS has notified the Holder that the Holder is no longer subject to backup withholding; or (b) provide an adequate basis for exemption. If the tendering Holder has not been issued a TIN and has applied for one, or intends to apply for one in the near future, such holder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I, the Obligor (or the Exchange Agent with respect to the New Notes or a broker or custodian) may still withhold 31% of the amount of any payments made on account of the New Notes until the Holder furnishes the Obligor or the Exchange Agent with respect to the New Notes, broker or custodian with its TIN. In general, if a Holder is an individual, the taxpayer identification number is the Social Security number of such individual. If the Exchange Agent or the Obligor are not provided with the correct TIN, the Holder may be subject to a $50 penalty imposed by the IRS. Certain Holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such Holder must submit a statement (generally, IRS Form W-8), 3 4 signed under penalties of perjury, attesting to that individual's exempt status. Failure to complete the Substitute Form W-9 will not, by itself, cause Old Notes to be deemed invalidly tendered, but may require the Obligor or the Exchange Agent with respect to the New Notes, broker or custodian to withhold 31% of the amount of any payments made on account of the New Notes. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. 9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility (including time of receipt) and acceptance of tendered Old Notes will be determined by the Obligor, in its sole discretion, which determination will be final and binding. The Obligor reserves the right to reject any and all Old Notes not validly tendered or any Old Notes, the acceptance of which would, in the opinion of the Obligor or its counsel, be unlawful. The Obligor also reserves the right to waive any conditions of the Exchange Offer or defects or irregularities in tenders of Notes as to any ineligibility of any Holder who seeks to tender Old Notes in the Exchange Offer. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Obligor shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Obligor shall determine. The Obligor will use reasonable efforts to give notification of defects or irregularities with respect to tenders of Old Notes, but shall not incur any liability for failure to give such notification. 10. WAIVER OF CONDITIONS. The Obligor reserves the absolute right to amend, waive or modify specified conditions in the Exchange Offer in the case of any tendered Old Notes. 11. NO CONDITIONAL TENDER. No alternative, conditional, irregular or contingent tender of Old Notes will be accepted. 12. MUTILATED, LOST, STOLEN, OR DESTROYED OLD NOTES. Any tendering Holder whose Old Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address set forth on the first page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. 14. ACCEPTANCE OF TENDERED OLD NOTES AND ISSUANCE OF NEW NOTES; RETURN OF OLD NOTES. Subject to the terms and conditions of the Exchange Offer, the Obligor will accept for exchange all validly tendered Old Notes as soon as practicable after the Expiration Date and will issue New Notes therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Obligor shall be deemed to have accepted tendered Old Notes when, as and if the Obligor has given written and oral notice thereof to the Exchange Agent. If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Old Notes will be returned, without expense, to the undersigned at the address shown above or at a different address as may be indicated under "Special Delivery Instructions." 15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." 4 5 (DO NOT WRITE IN SPACE BELOW)
================================================================================ SERIES OF NOTES CERTIFICATE OLD NOTES OLD NOTES 2003/2005 SURRENDERED TENDERED ACCEPTED - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================
DELIVERY PREPARED BY: ___________ CHECKED BY: _______________ DATE: __________ 5 6 PAYOR'S NAME: COX RADIO, INC. =============================================================================================================== SUBSTITUTE Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See FORM W-9 instructions if your name has changed.) ------------------------------------------------------------------------------------------ Department of Address the Treasury ------------------------------------------------------------------------------------------ Internal City, State and ZIP Code Revenue Service ------------------------------------------------------------------------------------------ Part 1 - PLEASE PROVIDE YOUR TAXPAYER Social Security IDENTIFICATION NUMBER ("TIN") IN THE Number or TIN BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW ------------------------------------------------------------------------------------------ Part 2 - Check the box if you are NOT subject to backup withholding under the provisions of section 3408(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. [ ] ------------------------------------------------------------------------------------------ CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I Part 3 - CERTIFY THAT THE INFORMATION PROVIDED ON THIS AWAITING FORM IS TRUE, CORRECT AND COMPLETE. TIN [ ] Signature: _________________ Date: ___________ ===============================================================================================================
Note: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administrative Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of the exchange, 31% of all reportable payments made to me thereafter will be withheld until I provide a number. - --------------------------------------------- ----------------------------- Signature Date 6 EX-99.3 7 NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.3 NOTICE OF GUARANTEED DELIVERY FOR COX RADIO, INC. OFFER TO EXCHANGE 6.250% NOTES DUE 2003 FOR ALL OUTSTANDING 6.250% NOTES DUE 2003 6.375% NOTES DUE 2005 FOR ALL OUTSTANDING 6.250% NOTES DUE 2005 This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Cox Radio, Inc. (the "Obligor") made pursuant to the Prospectus dated November 12, 1998 (the "Prospectus") if Holders of certificates for the 6.250% Notes due 2003 or the 6.375% Notes due 2005 (collectively, the "Old Notes") who wish to tender their Old Notes but whose Old Notes are not immediately available and who cannot deliver their certificates for Old Notes (or comply with the procedures for book-entry transfer prior to the Expiration Date), the Letter of Transmittal and any other documents required by the Letter of Transmittal to the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date (as defined in the Prospectus). Such form may be delivered by hand or transmitted by facsimile transmission, overnight courier or mail to the Exchange Agent. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus. To: The Bank of New York, the Exchange Agent By Registered or Certified Mail: By Overnight Courier: The Bank of New York The Bank of New York 101 Barclay Street 101 Barclay Street Floor 7 East Corporate Trust Services Window New York, New York 10286 Ground Level Attn: Reorganization Section New York, New York 10286 Attn: Reorganization Section By Hand: By Facsimile (For Eligible Institutions Only): The Bank of New York (212) 815-6339 101 Barclay Street Corporate Trust Services Window Confirm by telephone: Ground Level Christopher Davis New York, New York 10286 (212) 815-4997 Attn: Reorganization Section DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE, OTHER THAN AS SET FORTH ABOVE, DOES NOT CONSTITUTE A VALID DELIVERY. This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal to be used to tender Old Notes is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal. 2 Ladies and Gentlemen: The undersigned hereby tenders to Cox Radio, Inc. (the "Obligor"), upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, ____________ (number of Old Notes) Old Notes pursuant to the guaranteed delivery procedures set forth in Instruction 2 of the Letter of Transmittal. 3 NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW. Certificate No(s). for Old Notes (if Name(s) of Record Holder(s) available) - ------------------------------------ ------------------------------------- - ------------------------------------ ------------------------------------- Please Print or Type Address ----------------------------- ------------------------------------- Telephone. No.( ) ----------------------- Signature(s) ------------------------------------- Dated: ------------------------------- GUARANTEE (Not to be used for signature guarantee) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), hereby (a) represents that the above named person(s) "own(s)" the Old Notes tendered hereby within the meaning of Rule 10b-4 under the Exchange Act, (b) represents that such tender of Old Notes complies with Rule 10b-4 under the Exchange Act and (c) guarantees that delivery to the Exchange Agent of certificates for the Old Notes tendered hereby, in proper form for transfer, with delivery of a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature and any other required documents, will be received by the Exchange Agent at one of its addresses set forth above within five business days after the Exchange Date. Name of Firm ----------------------------- ------------------------------ Authorized Signature Address Name ----------------------------------- ------------------------ Please Print or Type Title - ------------------------------------------ ------------------------ Zip Code Telephone. No.( ) Date: ---------------------------- ------------------------- Dated: , 1998 NOTE: DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN FIVE BUSINESS DAYS AFTER THE EXPIRATION DATE. -----END PRIVACY-ENHANCED MESSAGE-----