-----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, ISFcWosuoX6FnmHaZdsf+QYPerUMNo3ssRUig+dm747jtze7tPGn+zsx4bG1yNfH B409wT+m57tkDtCwHpkyOg== /in/edgar/work/0000950134-00-008708/0000950134-00-008708.txt : 20001020 0000950134-00-008708.hdr.sgml : 20001020 ACCESSION NUMBER: 0000950134-00-008708 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 20001019 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEAR CHANNEL COMMUNICATIONS INC CENTRAL INDEX KEY: 0000739708 STANDARD INDUSTRIAL CLASSIFICATION: [7310 ] IRS NUMBER: 741787536 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-48230 FILM NUMBER: 742672 BUSINESS ADDRESS: STREET 1: 200 E BASSE RD CITY: SAN ANTONIO STATE: TX ZIP: 78209 BUSINESS PHONE: 2108222828 MAIL ADDRESS: STREET 1: 200 EAST BASSE ROAD CITY: SAN ANTONIO STATE: TX ZIP: 78209 S-4 1 d80863s-4.txt FORM S-4 1 AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 19, 2000 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- CLEAR CHANNEL COMMUNICATIONS, INC. (Exact name of registrant as specified in its charter) TEXAS 74-1787539 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.)
200 EAST BASSE ROAD SAN ANTONIO, TEXAS 78209 (210) 822-2828 (Address, including zip code, and telephone number, Including area code, of registrant's principal executive offices) L. LOWRY MAYS CLEAR CHANNEL COMMUNICATIONS, INC. 200 EAST BASSE ROAD SAN ANTONIO, TEXAS 78209 (210) 822-2828 (Name, address, including zip code, and telephone number Including area code, of agent for service) --------------------- Copies to: STEPHEN C. MOUNT, ESQ. JOHN WHITE, ESQ. AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. CRAVATH, SWAINE & MOORE 1500 NATIONSBANK PLAZA WORLDWIDE PLAZA 300 CONVENT STREET 825 EIGHTH AVENUE SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10019 (210) 281-7000 (212) 474-1000 (210) 224-2035 (FAX) (212) 474-3700 (FAX)
--------------------- APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF SECURITIES TO THE PUBLIC: As promptly as practicable after expiration of the exchange offer described herein. --------------------- If the securities being registered on this Form are 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. [ ] - ------------------ --------------------- CALCULATION OF REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------------------- PROPOSED PROPOSED TITLE OF EACH CLASS OF AMOUNT TO BE MAXIMUM OFFERING MAXIMUM AGGREGATE AMOUNT OF SECURITIES TO BE REGISTERED REGISTERED PRICE PER NOTE OFFERING PRICE REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------------------- 6.50% Notes Due 2005........................ E650,000,000 99.75% E648,375,000 $143,630 ($544,051,463) - ---------------------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------------------
(1) Determined pursuant to Rule 457(f) under the Securities Act of 1933, solely for the purpose of calculating the registration fee, on the basis of the average of the bid and asked price for the securities on October 18, 2000, converted into U.S. dollars as of noon New York City time on October 18, 2000. --------------------- 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 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted. SUBJECT TO COMPLETION DATED OCTOBER 19, 2000 PROSPECTUS CLEAR CHANNEL LOGO CLEAR CHANNEL COMMUNICATIONS, INC. --------------------- E650,000,000 6.50% NOTES DUE 2005 --------------------- OFFER TO EXCHANGE UP TO E650,000,000 6.50% NOTES DUE 2005 FOR ANY AND ALL OUTSTANDING 6.50% NOTES DUE 2005 SUMMARY OF THE EXCHANGE OFFER This document and accompanying Letter of Transmittal relate to the proposed offer by Clear Channel Communications, Inc. ("Clear Channel") to exchange up to E650,000,000 aggregate principal amount of new 6.50% notes due 2005 for any and all of its outstanding 6.50% notes due 2005. The new notes, which are referred to as the "exchange notes," will be freely transferable. The outstanding notes, which are referred to as the "restricted notes," have certain transfer restrictions. The restricted notes are, and the exchange notes will be, unsecured and unsubordinated obligations of Clear Channel. - The exchange offer expires at 5:00 p.m. New York City time on , 2000, unless extended. - There should be no United States federal income tax consequences to holders of restricted notes who exchange restricted notes for exchange notes pursuant to the exchange offer. - Holders of restricted notes do not have any appraisal or dissenters' rights in connection with the exchange offer. - Restricted notes not exchanged in the exchange offer will remain outstanding and be entitled to the benefits of the indenture under which they were issued, but except under certain circumstances will not have further exchange or registration rights. - The exchange notes will be listed on the Luxembourg Stock Exchange. Each holder of restricted notes wishing to accept the exchange offer must deliver the restricted notes to be exchanged, together with the Letter of Transmittal that accompanies this document and any other required documentation, to the exchange agent identified in this document. Alternatively, you may effect a tender of restricted notes by book-entry transfer into the exchange agent's account at Morgan Guaranty Trust Company of New York, Brussels Office, as operator of the Euroclear System ("Euroclear"), Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") or the Depository Trust Company ("DTC"). All deliveries are at the risk of the holder. You can find detailed instructions concerning delivery in the "Exchange Offer" section of this document and in the accompanying Letter of Transmittal. --------------------- NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE EXCHANGE NOTES OR DETERMINED IF THIS DOCUMENT IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. YOU SHOULD READ THIS ENTIRE DOCUMENT AND THE ACCOMPANYING LETTER OF TRANSMITTAL AND RELATED DOCUMENTS AND ANY AMENDMENTS OR SUPPLEMENTS CAREFULLY BEFORE MAKING YOUR DECISION TO PARTICIPATE IN THE EXCHANGE OFFER. 3 YOU SHOULD RELY ONLY ON THE INFORMATION PROVIDED OR INCORPORATED BY REFERENCE IN THIS DOCUMENT. CLEAR CHANNEL HAS NOT AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF THIS DOCUMENT. NEITHER THE DELIVERY OF THIS DOCUMENT NOR THE ACCOMPANYING LETTER OF TRANSMITTAL, NOR ANY EXCHANGE MADE PURSUANT TO THIS DOCUMENT SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED IN THIS DOCUMENT IS CORRECT AS OF ANY SUBSEQUENT DATE. THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS OF RESTRICTED NOTES BE ACCEPTED FROM, HOLDERS OF RESTRICTED NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR ITS ACCEPTANCE IS UNLAWFUL. TABLE OF CONTENTS
PAGE ---- Where You Can Find More Information......................... 1 Cautionary Statement Regarding Forward-Looking Statements... 2 Summary..................................................... 3 The Exchange Offer.......................................... 3 Business.................................................... 5 Ratios of Earnings to Fixed Charges......................... 8 Holding Company Structure................................... 8 Risk Factors................................................ 9 Exchange Offer.............................................. 15 Description of the Notes.................................... 25 United States Taxation...................................... 40 Tax Consequences to U.S. Holders............................ 40 Tax Consequences to Non-U.S. Holders........................ 43 Currency Conversions and Foreign Exchange Risks Affecting the Notes................................................. 45 Plan of Distribution........................................ 46 Experts..................................................... 47 Legal Opinions.............................................. 47 Listing and General Information............................. 48
References herein to "$" and "dollars" are to the currency of the United States. References to "euro" and "E" are to the currency introduced in the member states of the European Communities which adopted such single currency at the start of the third stage of the European Economic Monetary Union, pursuant to the Treaty establishing the European Communities, as amended by the Treaty on European Union. The financial information presented herein has been prepared in accordance with generally accepted accounting principles of the United States. On October 18, 2000, the Noon Buying Rate for euros was E1.00 = U.S.$0.8391. i 4 WHERE YOU CAN FIND MORE INFORMATION Clear Channel files annual, quarterly and special reports, proxy statements and other information with the Securities and Exchange Commission. You may read and copy any reports, statements, or other information Clear Channel files with the SEC at its public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549, 7 World Trade Center, Suite 1300, New York, New York 10048; and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on the public reference rooms. Clear Channel's filings are also available to the public on the internet, through a database maintained by the SEC at http://www.sec.gov. In addition, you can inspect and copy Clear Channel's reports, proxy statements and other information at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005, on which the common stock is listed. We filed a registration statement on Form S-4 to register with the SEC the securities described in this prospectus. This prospectus is part of that registration statement. As permitted by SEC rules, this prospectus does not contain all the information contained in the registration statement or the exhibits to the registration statement. You may refer to the registration statement and accompanying exhibits for more information about us and our securities. The SEC allows us to "incorporate by reference" into this document the information Clear Channel filed with it. This means that we can disclose important business, financial and other information to you by referring you to other documents separately filed with the SEC. All information incorporated by reference is part of this document, unless and until that information is updated and superseded by the information contained in this document or any information incorporated later. We incorporate by reference the documents listed below: 1. Annual Report on Form 10-K for the fiscal year ended December 31, 1999. 2. Quarterly Report on Form 10-Q for the quarter ended March 31, 2000, as amended by Form 10-Q/A filed May 16, 2000. 3. Quarterly Report on Form 10-Q for the quarter ended June 30, 2000. 4. Current Report on Form 8-K filed September 6, 2000. 5. Current Report on Form 8-K filed August 4, 2000. 6. Current Report on Form 8-K filed June 14, 2000. 7. Current Report on Form 8-K filed May 11, 2000. 8. Current Report on Form 8-K filed February 29, 2000. 9. Portions of the Current Report on Form 8-K filed November 19, 1999 relating to the consolidated financial statements of Capstar Broadcasting Corporation and Subsidiaries and the report of PricewaterhouseCoopers LLP dated February 26, 1999, except as to Note 3, which is as of March 15, 1999 (pgs. 56-104 of said Form 8-K). 10. Current Report on Form 8-K filed May 7, 1999. 11. Current Report on Form 8-K filed December 10, 1998, as amended by Form 8-K/A filed February 23, 1999 and Form 8-K/A filed April 12, 1999. We also incorporate by reference all future filings we make with the SEC between the date of this document and the date upon which we sell all the securities we offer with this document. You may obtain copies of filings referred to above at no cost by contacting us at the following address: Corporate Secretary, Clear Channel Communications, Inc., 200 East Basse Road, San Antonio, Texas 78209, telephone: (210) 822-2828. 1 5 CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS This document contains forward-looking statements. We have based these forward-looking statements on our current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about us, including, among other things: - the impact of general economic conditions in the U.S. and in other countries in which we currently do business, such as the United Kingdom, Australia, New Zealand, Mexico and certain other European and Asian countries; - competition and general conditions in our broadcasting and outdoor advertising industries; - fluctuations in exchange rates and currency values; - capital expenditure requirements; - legislative or regulatory requirements, including the policies of the Federal Communications Commission, the U.S. Department of Justice and the Federal Trade Commission with respect to the conduct of our business, the consummation of future or pending acquisitions, including the pending mergers with AMFM and SFX, and the extent of the asset divestitures required to obtain regulatory approval for the AMFM merger; - interest rates; - taxes; - access to capital markets; - additional risks referenced in our filings with the Securities and Exchange Commission; - the integration of our business with those of our recently acquired companies; and - the effect of leverage on our financial position and earnings. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or other factors. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this document might not occur as currently contemplated. 2 6 SUMMARY The following summary contains basic information about this exchange offer. It may not contain all the information that is important to you in making your investment decision. More detailed information appears elsewhere in this prospectus and in our consolidated financial statements and accompanying notes that we incorporate by reference. "The Exchange Offer" and the "Description of the Notes "sections of this prospectus contain more detailed information regarding the terms and conditions of the exchange offer and the exchange notes. Certain capitalized terms used in this prospectus summary are defined elsewhere in this prospectus. THE EXCHANGE OFFER Exchange Notes............. E650,000,000 in principal amount of our 6.50% exchange notes due July 7, 2005. On October 18, 2000, the Noon Buying Rate for euros was E1.00 = U.S.$0.8391. For more details see "Terms of the Exchange Offer." The Exchange Offer......... We are offering to issue the exchange notes in exchange for a like principal amount of outstanding notes that we issued on July 7, 2000. We are offering to issue the exchange notes to satisfy our obligations contained in the registration rights agreement we entered into when we sold the outstanding notes in transactions pursuant to Rule 144A and Regulation S under the Securities Act. The outstanding notes were subject to transfer restrictions that will not apply to the exchange notes so long as you are acquiring the exchange notes in the ordinary course of your business, you are not participating in a distribution of the exchange notes and you are not an affiliate of ours. Maturity Date.............. Each exchange note will mature on July 7, 2005. Interest Payment Dates..... The exchange notes will pay interest on July 7 of each year commencing July 7, 2001. Ranking.................... The exchange notes are direct, unsecured and unsubordinated obligations Clear Channel and will rank equally with other unsecured and unsubordinated obligations of Clear Channel for money borrowed. The exchange notes will be effectively subordinated to all existing and future indebtedness and other liabilities of Clear Channel's subsidiaries. Certain Covenants.......... The Indenture governing the exchange notes contains covenants that, among other things, limit our ability to: - create liens; - engage in certain sale/leaseback transactions; - merge or consolidate with another company; or - transfer substantially all of our assets. For more details, see the section under the heading "Description of the -- Covenants" in the prospectus. Use of Proceeds............ We will not receive any proceeds from the issuance of the exchange notes. 3 7 Denominations and Issuance of exchange notes.......... The exchange notes will be issued only in registered form without coupons, in minimum denominations of E1,000 and multiples of E1,000. Tenders, Expiration Date, Withdrawal............... The exchange offer will expire at 5:00 p.m., New York City time, on , 2000, unless it is extended. To tender your outstanding notes you must follow the detailed procedures described under the heading "The Exchange Offer -- Procedures for Tendering" including special procedures for certain beneficial owners and broker-dealers. If you decide to exchange your outstanding notes for exchange notes, you must acknowledge that you do not intend to engage in and have no arrangement with any person to participate in a distribution of the exchange notes. If you decide to tender your outstanding notes pursuant to the exchange offer, you may withdraw them at any time prior to 5:00 p.m., New York City time, on the expiration date. Federal Income Tax Consequences............. Your exchange of outstanding notes for exchange notes pursuant to the exchange offer will not result in a gain or loss to you. Exchange Agent............. The Bank of New York is the exchange agent for the exchange offer. Failure to Exchange Your outstanding Rule 144A notes and Trading Market................... If you fail to exchange your outstanding Rule 144A notes for exchange notes in the exchange offer, your outstanding notes will continue to be subject to transfer restrictions and you will not have any further rights under the registration rights agreement, including any right to require us to register your outstanding notes or to pay any additional interest. To the extent that outstanding notes are tendered and accepted in the exchange offer, your ability to sell untendered, and tendered but unaccepted, outstanding notes could be adversely affected. There may be no trading market for the outstanding notes. There can be no assurance that an active public market for the exchange notes will develop or as to the liquidity of any market that may develop for the exchange notes, the ability of holders to sell the exchange notes, or the price at which holders would be able to sell the exchange notes. For more details, see the sections "Clearing of the Notes" and "Absence of a Public Market" under the heading "Exchange Offer". 4 8 BUSINESS We are a global leader in the out-of-home advertising industry reaching local, national and international consumers through a complementary portfolio of radio stations, radio broadcast networks, outdoor advertising displays, television stations, a media representation business and a growing presence on the Internet. We are comprised of three business segments: broadcasting, outdoor advertising and entertainment. Following the completion of our merger with AMFM Inc., as of August 31, 2000, we owned, programmed or sold airtime for approximately 930 domestic radio stations and two radio stations in Denmark. In addition, we owned or programmed 24 domestic television stations. We are one of the world's largest outdoor advertising companies based on our total domestic and international advertising display inventory. Through our recent acquisition of SFX Entertainment, Inc., we are also now one of the world's largest diversified promoters, producers and venue operators for live entertainment events. We were incorporated in Texas in 1974. Our principal executive offices are located at 200 East Basse Road, San Antonio, Texas 78209 (telephone: 210-822-2828). Our broadcasting segment includes both radio and television stations for which we are the licensee and radio and television stations which we program or for which we sell air time under local marketing agreements or joint sales agreements. Our broadcasting segment also operates radio networks and produces syndicated programming. Our outdoor advertising segment includes advertising display faces which we own or operate under lease management agreements. Our entertainment segment includes the promotion and production of live entertainment events and operation of live entertainment venues. Our entertainment segment also includes a sports marketing and management company. A brief description of each of our primary lines of business and the recently completed mergers with AMFM and SFX follows. BROADCASTING As of August 31, 2000, we owned, programmed, or sold airtime for approximately 930 domestic radio stations, two international radio stations, 20 domestic television stations and four satellite television stations. Our radio stations employ a wide variety of programming formats, such as News/Talk/Sports, Country, Adult Contemporary, Urban and Rock. We own two international radio stations located in Denmark that broadcast Adult Contemporary and Oldies formats to the Copenhagen market and one cable audio channel that reaches most of Denmark. We also provide programming to and sell airtime under exclusive sales agency agreements for three radio stations in Mexico. In addition, we also operate several radio networks and produce more than 50 syndicated programs and services for more than 4,000 radio stations. Our syndicated programs include Rush Limbaugh, The Dr. Laura Schlessinger Show, Dr. Dean Edell, American Top 40 with Casey Kasem and Rockline. In addition, we currently own the following interests in radio broadcasting or music distribution companies: - a 50% equity interest in the Australian Radio Network Pty., Ltd., which operates radio stations in Australia; - a 33% equity interest in New Zealand Radio Network, which operates radio stations in New Zealand; - a 26% non-voting equity interest in Hispanic Broadcasting Corporation, a leading domestic Spanish-language radio broadcaster; - a 22.9% equity interest in Muzak Holdings, LLC, a music distribution company; - a 40% equity interest in Grupo Acir Communicaciones, S.A. de C.V., one of the largest radio broadcasters in Mexico; - a 50% equity interest in Radio 1, which owns seven radio stations in Norway; - a 50% equity interest in Radio Bonton, a.s., which owns an FM radio station in the Czech Republic; and - a 32% equity interest in JAZZ FM plc, which owns two radio stations in England. 5 9 Our television stations are affiliated with various television networks, including FOX, UPN, ABC, NBC and CBS. The primary sources of programming for our ABC, NBC and CBS affiliated television stations are their respective networks, which produce and distribute programming in exchange for each station's commitment to air the programming at specified times and for commercial announcement time during the programming. We supply the majority of programming to our FOX and UPN affiliates by selecting and purchasing syndicated television programs. OUTDOOR ADVERTISING As of August 31, 2000, we owned approximately 750,000 advertising display faces, and operated approximately 5,900 display faces under license management agreements. We currently provide outdoor advertising services in over 50 domestic markets and over 35 international markets. Domestic display faces include billboards of various sizes and various small display faces on the interior and exterior of various public transportation vehicles and taxi cabs. International display faces include street furniture, transit displays and billboards of various sizes. Additionally, we currently own the following interests in outdoor advertising companies: - a 50% equity interest in Hainan White Horse Advertising Media Investment Co. Ltd., which operates street furniture displays in China; - a 50% equity interest in Sirocco International SA, which is developing a new 8 square meter format network and obtaining concessions for 2 square meter format panels in France; - a 50% equity interest in Adshel Street Furniture Pty., Limited, which operates street furniture displays in Australia and New Zealand; - a 30% equity interest in Capital City Posters Pty., Ltd, which operates street furniture and billboard displays in Singapore; - a 50% equity interest in Buspak, which operates bus and tram displays in Hong Kong; and - a 31.9% equity interest in Master & More Co., Ltd, which operates billboard displays in Thailand. ENTERTAINMENT As a result of our recent merger with SFX, we are one of the world's largest diversified promoters, producers and venue operators for live entertainment events. In addition, we are a leading fully integrated sports marketing and management company specializing in the representation of sports athletes and broadcasters, integrated event management, and television programming, production and marketing consulting services. We operate one of the largest network of venues used principally for music concerts and other live entertainment events in the United States, with 92 venues in 31 of the top 50 markets and nine venues principally used for theatrical presentations, primarily in the United Kingdom. Through our large number of venues and our presence in each of the markets that we serve, we are able to provide integrated promotion, production and venue operation and event management services for a broad variety of live entertainment events. AMFM MERGER On August 30, 2000, we closed our merger with AMFM Inc. Pursuant to the terms of the merger agreement, each share of AMFM common stock was exchanged for 0.94 shares of our common stock. Approximately 205.4 million shares of our common stock were issued in the AMFM merger. We also indirectly assumed or refinanced AMFM's outstanding debt. At June 30, 2000, AMFM had a total outstanding indebtedness of approximately $5.7 billion, a portion of which has since been repaid with the proceeds of radio station divestitures required to gain regulatory approval for the merger. Additionally, all options and warrants to purchase AMFM common stock outstanding at the effective time of the merger became exercisable, subject to applicable vesting, for approximately 25.5 million shares of our common stock. 6 10 At the time of the AMFM merger, AMFM owned, programmed or sold airtime for 414 radio stations. AMFM also owned Katz Media, a full-service media representation firm. In addition, AMFM owned an approximate 30% equity interest in Lamar Advertising Company. To obtain clearance from the United States Department of Justice, Clear Channel and AMFM agreed to sell 99 radio stations in 27 markets. Before consummating our merger with AMFM, Clear Channel and AMFM completed the sale of 85 of these stations. The remaining 14 stations, which are located in five markets, will be sold pursuant to a consent decree filed by the DOJ on August 29, 2000. Under the terms of the consent decree, we have 150 days from August 29th to complete the sales of these 14 stations. In addition to the requirement that we sell the remaining 14 stations, for the next ten years, the consent decree requires that we provide the DOJ with advance notice of certain transactions in the five markets and refrain from reacquiring any of the stations (24 in total) we sold in the five markets to obtain DOJ clearance. In addition, we agreed in the consent decree to sell AMFM's approximately 30% equity stake in Lamar by December 31, 2002. Furthermore, the consent decree requires that our investment must be passive while we continue to hold any part of this stake in Lamar. The consent decree requires, among other things, that we shall not (i) elect, nominate or appoint directors of Lamar, (ii) participate as a board member or otherwise in any Lamar board meeting or on any committees, (iii) exercise any veto rights with respect to the business of Lamar, or (iv) obtain non-public financial or business information with respect to Lamar. The consent decree also prohibits our acquiring additional shares of Lamar, except in a transaction that requires a filing under the federal antitrust laws. In connection with the AMFM merger agreement, we entered into a registration rights agreement with certain shareholders of AMFM. As a result of the registration rights agreement, we may be required to file registration statements with the SEC to register for resale our common stock received by such AMFM shareholders in the AMFM merger. SFX MERGER On August 1, 2000, we closed our merger with SFX Entertainment, Inc. Pursuant to the terms of the merger agreement, each share of SFX Class A common stock was exchanged for 0.6 shares of our common stock and each share of SFX Class B common stock was exchanged for one share of our common stock. Approximately 39.1 million shares of our common stock were issued in the SFX merger. We also indirectly assumed or refinanced SFX's outstanding debt. At June 30, 2000, SFX had total outstanding indebtedness of approximately $1.4 billion. Additionally, all options and warrants to purchase SFX common stock outstanding at the effective time of the merger became exercisable for approximately 6.5 million shares of our common stock. A number of lawsuits were filed by holders of SFX Class A common stock alleging, among other things, that the difference in consideration for the Class A and Class B shares constituted unfair consideration to the Class B holders and that the SFX board breached its fiduciary duties and that we aided and abetted the actions of the SFX board. On August 29, 2000, a settlement that resulted in a modification of the consideration payable to SFX shareholders in the merger was approved by the court. Under the settlement, the defendants will pay to the holders of the SFX Class A common stock an aggregate of $34.5 million, payable in either cash or our common stock, at the option of the defendants, less the amount of $5.175 million awarded to plaintiffs' counsel by the court. At the time of the SFX merger, SFX was one of the world's largest diversified promoters, producers and venue operators for live entertainment events. In addition, SFX was a leading fully integrated sports marketing and management company specializing in the representation of sports athletes and broadcasters, integrated event management, television programming and production and marketing consulting services. SFX also operated the largest network of venues used principally for music concerts and other live entertainment events in the United States, with 92 venues in 31 of the top 50 markets. These venues include 17 amphitheaters in the top 10 markets and nine venues principally used for theatrical 7 11 presentations. In addition, SFX owned or operated 28 international venues used primarily for theatrical presentations, principally in the United Kingdom. In connection with the SFX merger agreement, we entered into a registration rights agreement with Mr. Robert F. X. Sillerman, the Executive Chairman of the Board and a shareholder of SFX, granting Mr. Sillerman and his transferees certain piggyback registration rights with respect to any or all of the shares of our common stock issued to Mr. Sillerman in the SFX merger. RATIOS OF EARNINGS TO FIXED CHARGES The ratio of earnings to fixed charges has been computed by dividing earnings before income taxes (which excludes the cumulative and transition effects of accounting changes) and fixed charges by fixed charges. "Fixed charges" consist of interest on debt and that portion of rental expense deemed to be representative of interest.
SIX MONTHS ENDED YEAR ENDED DECEMBER 31, JUNE 30, --------------------------------- ------------ 1999 1998 1997 1996 1995 2000 1999 ---- ---- ---- ---- ---- ---- ---- Ratio of earnings to fixed charges.................. 2.04 1.83 2.32 3.63 3.32 1.25 3.06
HOLDING COMPANY STRUCTURE We are a holding company and our assets consist primarily of investments in our subsidiaries and majority-owned partnerships. Our rights and the rights of our creditors, including holders of debt securities or junior subordinated debt securities, to participate in the distribution of assets of any person in which we own an equity interest will be subject to prior claims of the person's creditors upon the person's liquidation or reorganization. However, we may ourself be a creditor with recognized claims against this person, but our claims would still be subject to the prior claims of any secured creditor of this person and of any holder of indebtedness of this person that is senior to that held by us. Accordingly, the holder of notes may be deemed to be effectively subordinated to those claims. 8 12 RISK FACTORS Investing in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described below and the other information in this prospectus supplement and the prospectus and in the documents incorporated by reference before deciding whether to purchase our securities. WE HAVE LOSSES AND PRO FORMA LOSSES On a pro forma basis, after giving effect to the acquisitions we completed in 1999, we had a loss of $0.15 per share for the year ended December 31, 1999. In addition, if the mergers with AMFM and SFX had been completed at the beginning of this period, the pro forma losses during the period would have been substantially greater at $1.09 per share. Because of the substantial amortization of goodwill related to the merger and prior acquisitions, we expect these losses to continue. See "Unaudited Pro Forma Combined Condensed Consolidated Financial Statements." WE MAY EXPERIENCE DIFFICULTIES IN COMBINING CLEAR CHANNEL, AMFM AND SFX Our mergers with AMFM and SFX combine companies that previously operated independently. We intend to integrate some AMFM and SFX operations into our own operations. However, we may not successfully combine their operations with our own operations. Any unexpected delays or costs of combining these companies could adversely affect us. In particular, SFX is engaged in a line of business that is new to us, and we may encounter difficulties or obstacles to integrating our businesses. Moreover, the outstanding debt of AMFM and SFX, to the extent it remains outstanding, contains restrictive covenants which may limit our ability to integrate the separate operations of AMFM or SFX, as the case may be. Additionally, the operations, management and personnel of these companies may not be compatible. Following either of these mergers, we may experience the loss of key personnel. WE HAVE INCREASED OUR DEBT DUE TO THE AMFM AND SFX MERGERS Following the AMFM and SFX mergers, our debt obligations significantly increased. At June 30, 2000, we had borrowings under our credit facilities and other long term debt outstanding of approximately $5.4 billion. At June 30, 2000, we had shareholder's equity of $10.1 billion. At June 30, 2000, AMFM had total outstanding indebtedness of approximately $5.7 billion, a portion of which has since been repaid with the proceeds of radio station divestitures required to gain regulatory approval for the merger. At June 30, 2000, SFX had total outstanding indebtedness of approximately $1.4 billion. At August 31, 2000, Clear Channel, including AMFM and SFX, had approximately $10.1 billion of combined total outstanding indebtedness. We expect to continue to borrow funds to finance acquisitions of broadcasting, outdoor advertising and entertainment properties, as well as for other purposes. Our debt obligations could increase substantially because of the debt levels of companies that we may acquire in the future. Effective upon the August 30, 2000 merger with AMFM, AMFM's $3.2 billion credit facility was repaid in its entirety and terminated. Concurrently, we repaid and replaced our $1.0 billion 364-day multi-currency facility with a $3.0 billion five-year multi-currency facility. Borrowings under our $3.0 billion credit facility are at a floating rate, which at August 31, 2000 was equal to dollar LIBOR or an appropriate offshore currency rate, plus a margin of 0.625%. Borrowings under our existing $2.0 billion domestic credit facility are at a floating rate, which at August 31, 2000 was equal to dollar LIBOR plus 0.40%. As of August 31, 2000 we had borrowed approximately $236.8 million, of which $186.8 million or L129.1 million was denominated in British pounds, under our $3.0 billion multi-currency credit facility and $2.0 billion under our $2.0 billion domestic credit facility. Such a large amount of indebtedness could have negative consequences for us, including without limitation the following: - limitations on our ability to obtain financing in the future; - much of our cash flow will be dedicated to interest obligations and unavailable for other purposes; 9 13 - the high level of indebtedness limits our flexibility to deal with changing economic, business and competitive conditions; and - the high level of indebtedness could make us more vulnerable to an increase in interest rates, a downturn in our operating performance or a decline in general economic conditions. The failure to comply with the covenants in the agreements governing the terms of us or SFX or AMFM could be an event of default and could accelerate the payment obligations and, in some cases, could affect other obligations with cross-default and cross-acceleration provisions. OUR OPERATIONS MAY BE RESTRICTED BY AMFM INDEBTEDNESS AND SFX INDEBTEDNESS If all or part of AMFM's or SFX's indebtedness remains outstanding because either the AMFM or SFX debtholders do not accept our mandatory offers to purchase such indebtedness or we do not otherwise purchase such indebtedness, the terms of such indebtedness may restrict the ability of AMFM and its subsidiaries or SFX and its subsidiaries to make funds available to us in the form of dividends, loans, advances or otherwise. Much of AMFM's and SFX's indebtedness is high-yield indebtedness and restricts them from incurring additional indebtedness, repaying other debt, repurchasing or redeeming capital stock, selling assets or stock, making certain investments or acquisitions, engaging in asset swaps, mergers or consolidations and entering into transactions with affiliates. The covenants for this type of indebtedness are more restrictive than those contained in our public indebtedness. Accordingly, the AMFM and SFX indebtedness which remains outstanding following the two mergers may continue to: - cause us to incur substantial consolidated interest expense and principal repayment obligations; - limit our ability to obtain additional debt financing; - make it more difficult for us to combine our operations with AMFM and SFX; and - place more restrictions on our ability to manage AMFM and SFX than we currently face in the management of the rest of its business. DEPENDENCE ON KEY PERSONNEL Our business is dependent upon the performance of key employees, including L. Lowry Mays, our chief executive officer, and other executive officers. We employ or independently contract with several on-air personalities and hosts of syndicated radio programs with significant loyal audiences in their respective markets. Although we have entered into long-term agreements with some of our executive officers, key on-air talent and program hosts to protect their interests in those relationships, we can give no assurance that all of these key employees will remain with us or will retain their audiences. EXTENSIVE GOVERNMENT REGULATION MAY LIMIT OUR OPERATIONS BROADCASTING. The federal government extensively regulates the domestic broadcasting industry, and any changes in the current regulatory scheme could significantly affect us. Our broadcasting business depends upon maintaining broadcasting licenses issued by the FCC for maximum terms of eight years. Renewals of broadcasting licenses can be attained only through the FCC's grant of appropriate applications. Although the FCC rarely denies a renewal application, the FCC could deny future renewal applications. Such a denial could adversely affect our operations. The federal communications laws limit the number of broadcasting properties we may own in a particular area. While the Telecommunications Act of 1996 relaxed the FCC's multiple ownership limits, any subsequent modifications that tighten those limits could adversely affect us by making it impossible for us to complete potential acquisitions or requiring us to divest stations we have already acquired. For instance, the FCC has recently adopted modified rules that in some cases permit a company to own fewer radio stations than allowed by the Telecommunications Act of 1996 in markets or geographical areas where the company also owns television stations. These modified rules could eventually require us to divest 10 14 radio stations we currently own in markets or areas where we also own television stations. Additionally, the FCC is considering adopting new or revised rules that may further limit the number of radio stations a company may own in local markets. Such rules, if adopted, could limit our ability to make future radio acquisitions. Moreover, changes in governmental regulations and policies may have a material impact upon us. For example, we currently provide programming to several television stations we do not own and receive programming from other parties for certain television stations we do own. These programming arrangements are made through contracts known as local marketing agreements. The FCC has recently revised its rules and policies regarding television local marketing agreements. These revisions will restrict our ability to enter into television local marketing agreements in the future, and may eventually require us to terminate our programming arrangements under existing local marketing agreements. Additionally, the FCC has recently adopted rules which under certain circumstances will subject previously nonattributable debt and equity interests in communications media to the FCC's multiple ownership restrictions. These new rules may limit our ability to expand our media holdings. ANTITRUST. Additional acquisitions by us of radio and television stations and outdoor advertising properties as well as live entertainment operations or entities may require review by foreign antitrust agencies under the antitrust laws of foreign jurisdictions and will require antitrust review by the federal antitrust agencies, and we can give no assurances that the DOJ or the Federal Trade Commission or foreign antitrust agencies will not seek to bar us from acquiring additional radio or television stations, outdoor advertising or entertainment properties in any market where we already have a significant position. Following the passage of the Telecommunications Act of 1996, the DOJ has become more aggressive in reviewing proposed acquisitions of radio stations, particularly in instances where the proposed acquirer already owns one or more radio station properties in a particular market and seeks to acquire another radio station in the same market. The DOJ has, in some cases, obtained consent decrees requiring radio station divestitures in a particular market based on allegations that acquisitions would lead to unacceptable concentration levels. The DOJ also actively reviews proposed acquisitions of outdoor advertising properties. In addition, the antitrust laws of foreign jurisdictions will apply if we acquire international broadcasting properties. ENVIRONMENTAL. As the owner or operator of various real properties and facilities, especially in our outdoor advertising operations and SFX's venue operations, we must comply with various federal, state and local environmental laws and regulations. Such laws and regulations impose operating requirements and potential property cleanup liabilities in connection with fuel storage for our outdoor advertising operations. In addition, zoning and noise level restrictions may affect, among other things, the hours of operations of SFX's venue operations. Our broadcasting operations, as well as those of AMFM, also are subject to operating requirements and potential personal injury and property damage claims relating to radio frequency emissions from our transmission towers. Although we have not incurred significant expenditures to comply with these laws and regulations, additional environmental laws or requirements which may come into effect in the future, or a violation of existing laws, could require the combined company to incur significant costs. OUR OPERATIONS ARE IMPACTED BY THE REGULATION OF OUTDOOR ADVERTISING Our outdoor advertising operations are significantly impacted by federal, state and local government regulation of the outdoor advertising business. The federal government conditions federal highway assistance on states imposing location restrictions on the placement of billboards on primary and interstate highways. Federal laws also impose size, spacing and other limitations on billboards. Some states have adopted standards more restrictive than the federal requirements. Local governments generally control billboards as part of their zoning regulations. Some local governments have enacted ordinances which require removal of billboards by a future date. Others prohibit the construction of new billboards and the reconstruction of significantly damaged billboards, or allow new construction only to replace existing structures. 11 15 Local laws which mandate removal of billboards at a future date often do not provide for payment to the owner for the loss of structures that are required to be removed. Some federal and state laws require payment of compensation in such circumstances. Local laws that require the removal of a billboard without compensation have been challenged in state and federal courts with conflicting results. Accordingly, we may not be successful in negotiating acceptable arrangements when our displays have been subject to removal under these types of local laws. Additional regulations may be imposed on outdoor advertising in the future. Legislation regulating the content of billboard advertisements has been introduced in Congress from time to time in the past. Additional regulations or changes in the current laws regulating and affecting outdoor advertising at the federal, state or local level may have a material adverse effect on our results of operations. CHANGES IN RESTRICTIONS ON OUTDOOR TOBACCO ADVERTISING AND ALCOHOL ADVERTISING MAY POSE RISKS Regulations, legislation and recent settlement agreements related to outdoor tobacco advertising could have a material adverse effect on us. The major U.S. tobacco companies that are defendants in numerous class action suits throughout the country recently reached an out-of-court settlement with 46 states that includes a ban on outdoor advertising of tobacco products. The settlement agreement was finalized on November 23, 1998, but must be ratified by the courts in each of the 46 states participating in the settlement. In addition to the mass settlement, the tobacco industry previously had come to terms with the remaining four states individually. The terms of such individual settlements also included bans on outdoor advertising of tobacco products. In addition to the settlement agreements, state and local governments are also regulating the outdoor advertising of alcohol and tobacco products. For example, several states and cities have laws restricting tobacco billboard advertising near schools and other locations frequented by children. Some cities have proposed even broader restrictions, including complete bans on outdoor tobacco advertising on billboards, kiosks, and private business window displays. In a few jurisdictions, restrictions on tobacco billboard advertising have prompted Constitutional challenges with mixed results in court. It is possible that state and local governments may propose or pass similar ordinances to limit outdoor advertising of alcohol, tobacco and other products or services in the future, and that there may be court challenges to such restrictions. Legislation regulating tobacco and alcohol advertising has also been introduced in a number of European countries in which we conduct business, and could have a similar impact. The elimination of billboard advertising by the tobacco industry will cause a reduction in our direct revenues from such advertisers and may simultaneously increase the available space on the existing inventory of billboards in the outdoor advertising industry. This industry-wide increase in space may in turn result in a lowering of outdoor advertising rates or limit the ability of industry participants to increase rates for some period of time. For the year ended December 31, 1999, approximately 1.5% of our revenues came from the outdoor advertising of tobacco products. OUR INTERNATIONAL OPERATIONS HAVE ADDED RISKS Doing business in foreign countries carries with it risks that are not found in doing business in the United States. We currently derive a portion of our revenues from international radio and outdoor operations in Europe, Asia, Mexico, Australia and New Zealand. Following the SFX merger, we have significantly expanded our international operations. The risks of doing business in foreign countries which could result in losses against which we are not insured include: - exposure to local economic conditions; - potential adverse changes in the diplomatic relations of foreign countries with the United States; - hostility from local populations; - the adverse effect of currency exchange controls; - restrictions on the withdrawal of foreign investment and earnings; 12 16 - government policies against businesses owned by foreigners; - expropriations of property; - the potential instability of foreign governments; - the risk of insurrections; - risks of renegotiation or modification of existing agreements with governmental authorities; - foreign exchange restrictions; - withholding and other taxes on remittance and other payments by subsidiaries; and - changes in taxation structure. EXCHANGE RATES MAY CAUSE FUTURE LOSSES IN OUR INTERNATIONAL OPERATIONS Because we own assets overseas and derive revenues from our international operations, we may incur currency translation losses due to changes in the values of foreign currencies and in the value of the U.S. dollar. We cannot predict the effect of exchange rate fluctuations upon future operating results. To reduce our exposure to the risk of international currency fluctuations, we maintain a natural hedge by incurring amounts of debt in each currency approximately equivalent to our net assets in each such currency. We review this hedge position monthly. We currently maintain no derivative instruments to reduce the exposure to translation and/or transaction risk but may adopt other hedging strategies in the future. OUR ACQUISITION STRATEGY COULD POSE RISKS OPERATIONAL RISKS. We intend to grow through the acquisition of broadcasting companies and assets, outdoor advertising companies, individual outdoor advertising display faces, live entertainment assets and other assets that we believe will assist our customers in marketing their products and services. Our acquisition strategy involves numerous risks, including: - certain of such acquisitions may prove unprofitable and fail to generate anticipated cash flows; - to successfully manage a rapidly expanding and significantly larger portfolio of broadcasting and outdoor advertising properties, as well as the live entertainment business, we may need to recruit additional senior management and expand corporate infrastructure; - entry into markets and geographic areas where we have limited or no experience; - we may encounter difficulties in the integration of operations and systems; - management's attention may be diverted from other business concerns; and - we may lose key employees of acquired companies or stations. We frequently evaluate strategic opportunities both within and outside our existing lines of business. We expect from time to time to pursue additional acquisitions and may decide to dispose of certain businesses. These acquisitions or dispositions could be material. CAPITAL REQUIREMENTS NECESSARY FOR ADDITIONAL ACQUISITIONS. We will face stiff competition from other broadcasting, outdoor advertising and live entertainment companies for acquisition opportunities. If the prices sought by sellers of these companies continue to rise, we may find fewer acceptable acquisition opportunities. In addition, the purchase price of possible acquisitions could require additional debt or equity financing on our part. We can give no assurance that we will obtain the needed financing or that we will obtain such financing on attractive terms. Additional indebtedness could increase our leverage and make us more vulnerable to economic downturns and may limit our ability to withstand competitive pressures. Additional equity financing could result in dilution to our shareholders. 13 17 WE FACE INTENSE COMPETITION IN OUR BROADCASTING, OUTDOOR ADVERTISING AND LIVE ENTERTAINMENT BUSINESSES Our three existing business segments are in highly competitive industries, and we may not be able to maintain or increase our current audience ratings and advertising revenues. Our radio and television stations and outdoor advertising properties compete for audiences and advertising revenues with other radio and television stations and outdoor advertising companies, as well as with other media, such as newspapers, magazines, cable television, direct mail and the Internet within their respective markets. Audience ratings and market shares are subject to change, which could have an adverse effect on our revenues in that market. Other variables that could affect our financial performance include: - economic conditions, both general and relative to the broadcasting industry; - shifts in population and other demographics; - the level of competition for advertising dollars; - fluctuations in operating costs; - technological changes and innovations; - changes in labor conditions; and - changes in governmental regulations and policies and actions of federal regulatory bodies. As a participant in the live entertainment industry, our ability to generate revenues will be highly sensitive to rapidly changing public tastes and will be dependent on the availability of popular performers and events. Since SFX relies on unrelated parties to create and perform live entertainment content, any lack of availability of popular musical artists, touring Broadway shows, specialized motor sports talent and other performers could limit the combined company's ability to generate revenues. In addition, SFX requires access to venues to generate revenues from live entertainment events. SFX operates a number of its live entertainment venues under leasing or booking agreements. Our long-term success will depend in part on our ability to renew these agreements when they expire or end. We may be unable to renew these agreements on acceptable terms or at all, and may be unable to obtain favorable agreements with new venues. NEW TECHNOLOGIES MAY AFFECT OUR BROADCASTING OPERATIONS The FCC has approved and is considering ways to introduce new technologies to the radio broadcast industry, including satellite and terrestrial delivery of digital audio broadcasting and the standardization of available technologies which significantly enhance the sound quality of radio broadcasts. We are unable to predict the effect that these technologies will have on our broadcasting operations, but the capital expenditures necessary to implement these technologies could be substantial. Additionally, the FCC has established a low power FM broadcast service. Low power FM stations may serve as additional competition to our radio operations in some or all of our markets, and could cause interference to the signals of one or more of our stations. In addition, Internet "streaming" of audio and video programming may serve as more competition to our broadcasting operations in some or all of our markets. We also face risks in implementing the conversion of our television stations to digital television, which the FCC has ordered and for which it has established a timetable. We will incur considerable expense in the conversion to digital television and are unable to predict the extent or timing of consumer demand for any such digital television services. Moreover, the FCC may impose additional public service obligations on television broadcasters in return for their use of digital television spectrum. This could add to our operational costs. The most contentious issue yet to be resolved is the extent to which cable systems will be required to carry broadcasters' new digital channels. Our television stations are highly dependent on their carriage by cable systems in the areas they serve. Thus, FCC rules that impose no or limited obligations on cable systems to carry the digital television signals of television broadcast stations in their local markets could adversely affect our television operations. 14 18 EXCHANGE OFFER REASON FOR THE EXCHANGE OFFER We initially sold the restricted notes on July 7, 2000 to ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited and Westdeutsche Landesbank Girozentrale, and collectively referred to as the "Managers," pursuant to a Subscription Agreement dated July 3, 2000 among Clear Channel and the Managers. The Managers subsequently resold or were permitted to resell the restricted notes: - outside the United States in accordance with the provisions of Regulation S under the Securities Act; and - to qualified institutional buyers in accordance with the provisions of Rule 144A under the Securities Act. In connection with the offering of the restricted notes, Clear Channel and the Managers entered into a Registration Rights Agreement dated July 7, 2000, in which we agreed, among other things: - to file with the SEC on or before December 4, 2000, a registration statement relating to an exchange offer for the restricted notes; - to use our reasonable best efforts to cause the exchange offer registration statement to be declared effective under the Securities Act on or before January 3, 2001; - upon the effectiveness of the exchange offer registration statement, to offer the holders of the restricted notes the opportunity to exchange their restricted notes in the exchange offer for a like principal amount of exchange notes; - to keep the exchange offer open for not less than 30 days, or longer, if required by applicable law, after notice of the exchange offer is mailed to holders of restricted notes; and - to use our reasonable best efforts to consummate the exchange offer on or before February 2, 2001. We also agreed, under certain circumstances: - to use our reasonable best efforts to file a shelf registration statement relating to the offer and sale of the restricted notes by the holders of the restricted notes; - to use our reasonable best efforts to cause such shelf registration statement to be declared effective; and - to use our reasonable best efforts to keep such shelf registration statement effective for two years after the shelf registration statement becomes effective or until the restricted notes covered by the shelf registration statement have been sold or cease to be outstanding. The exchange offer being made by this document is intended to satisfy our exchange and registration obligations under the Registration Rights Agreement. If we fail to fulfill such obligations, holders of outstanding restricted notes are entitled to receive additional interest at the rate of 0.25% per annum for each violation of the obligations. The rate will increase by an additional 0.25% each 90-day period during which the additional interest continues to accrue. The maximum aggregate increase to the interest rate under all circumstances is 0.5% per annum. After we have cured all defaults of our registration and exchange obligations, the accrual of additional interest on the restricted notes will cease, and the interest rate for each series of restricted notes will revert to its original rate. For a more complete understanding of your exchange and registration rights, please refer to the Registration Rights Agreement, which is included as Exhibit 4.11 to the registration statement relating to the exchange notes. 15 19 TRANSFERABILITY OF THE EXCHANGE NOTES Based on certain no-action letters issued by the staff of the SEC to others in unrelated transactions, we believe that a noteholder may offer for resale, resell or otherwise transfer any exchange notes without compliance with the registration and prospectus delivery requirements of the Securities Act, unless the noteholder is - acquiring the exchange notes other than in the ordinary course of business; - participating, intends to participate or has an arrangement or understanding with any person to participate, in a distribution of the exchange notes; - an "affiliate" of Clear Channel, as defined in Rule 405 under the Securities Act; or - a Manager who acquired restricted notes directly from Clear Channel in the initial offering to resell pursuant to Regulation S, Rule 144A or any other available exemption under the Securities Act. In any of the foregoing circumstances, a noteholder - will not be able to rely on the interpretations of the staff of the SEC, in connection with any offer for resale, resale or other transfer of exchange notes; and - must comply with the registration and prospectus delivery requirements of the Securities Act, or have an exemption available, in connection with any offer for resale, resale or other transfer of the exchange notes. We are not making this exchange offer to, nor will we accept surrenders of restricted notes from, holders of restricted notes in any state in which this exchange offer would not comply with the applicable securities laws or "blue sky" laws of such state. Each broker-dealer that receives exchange notes for its own account in exchange for restricted notes, where such restricted notes were acquired by such broker-dealer as a result of market-making activities or other trading activities, must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. See "Plan of Distribution" on page 47. CLEARING OF THE NOTES Upon consummation of the Exchange Offer, the exchange notes will have a different CUSIP number, a different Euroclear and Clearstream, Luxembourg Common Code and a different ISIN from those under which the Rule 144A notes have traded (and, to the extent not tendered, will continue to trade). Regulation S notes not tendered for exchange will continue to clear through Euroclear and Clearstream, Luxembourg under their original Common Code (11378668) and their ISIN will remain the same (XS0113786684). Regulation S notes (unless acquired by a Manager as part of their original distribution) may now be sold in the United States or to U.S. persons and, upon any such transfer, a beneficial interest in the Regulation S global note will be able to be exchanged for an interest in the exchange global note in accordance with procedures established by Euroclear or Clearstream, Luxembourg and DTC. Beneficial interests in the restricted Regulation S global note may be transferred to a person who takes delivery in the form of an interest in the Regulation S global note upon receipt by the trustee of a written certification from the transferor, in the form provided in the indenture, to the effect that the transfer is being made in accordance with Rule 903 or 904 of Regulation S. We cannot predict the extent to which beneficial owners of an interest in the Regulation S global note will participate in the exchange offer. Beneficial owners should consult their own financial advisors as to the benefits to be obtained from exchange. 16 20 USE OF PROCEEDS We will not receive any cash proceeds from the issuance of the exchange notes. As consideration for the exchange notes, we will receive in exchange an equivalent principal amount of outstanding restricted notes, the terms of which are substantially identical to the terms of the exchange notes, except that the exchange notes will be freely transferable and issued free of any covenants regarding exchange and registration rights. We will retire and cancel the restricted notes surrendered in exchange for the exchange notes. Accordingly, the issuance of the exchange notes under the exchange offer will not result in any change in our outstanding aggregate indebtedness. TERMS OF THE EXCHANGE OFFER The restricted notes were issued in a single series of 6.50% notes due 2005. As of the date of this document, E650,000,000 aggregate principal amount of the 6.50% notes are outstanding. The rates set forth below are provided solely for the convenience of the reader. No representation is made that euros could have been, or could be, converted in U.S. dollars at that rate or at any other rate. On October 18, 2000, the Noon Buying Rate for euros was (Euro)1.00=U.S. $0.8391. The table below sets forth for the periods indicated the Noon Buying Rates expressed in U.S. dollars per euro:
PERIOD RATE AT END OF PERIOD AVERAGE HIGH LOW - ------ --------------------- ------- ------ ------ Year Ended December 31, 1999.......................... 1.0070 1.0588 1.1812 1.0016 Period Ended September 30, 2000....................... 0.8837
Upon the terms and subject to the conditions set forth in this document and in the accompanying Letters of Transmittal, we will accept all restricted notes validly tendered and not withdrawn prior to 5:00 p.m. New York City time on , 2000, the date that the exchange offer expires. This date and time may be extended. See "Expiration Date; Extensions; Amendments" below. After authentication of the exchange notes by the trustee under the indenture governing the notes or an authenticating agent, we will issue and deliver E1,000 principal amount of exchange notes in exchange for each E1,000 principal amount of outstanding restricted notes accepted in the exchange offer. Holders may tender some or all of their restricted notes pursuant to the exchange offer in denominations of E1,000 and integral multiples thereof. The form and terms of the exchange notes are identical in all material respects to the form and terms of the outstanding restricted notes, except that: - the offering of the exchange notes has been registered under the Securities Act; - the exchange notes will not be subject to transfer restrictions; and - the exchange notes will be issued free of any covenants regarding exchange and registration rights. The exchange notes will be issued under and entitled to the benefits of the indenture that governs the restricted notes. In connection with the issuance of the restricted notes, we arranged for the restricted notes to be issued and transferable in book-entry form through the facilities of Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear"), Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") and The Depository Trust Company, acting as a depositary. The exchange notes will also be issuable and transferable in book-entry form through Euroclear, Clearstream, Luxembourg and DTC. 17 21 This document, together with the accompanying Letter of Transmittal, is initially being sent to all registered holders of restricted notes as of the close of business on , 2000. The exchange offer for restricted notes is not conditioned upon any minimum aggregate principal amount being tendered. However, the exchange offer is subject to certain customary conditions which we may waive, and to the terms and provisions of the Registration Rights Agreement. See "Conditions to the Exchange Offer" below. The exchange agent is The Bank of New York, which also serves as trustee under the indenture that governs the notes. We will be deemed to have accepted validly tendered restricted notes when, as and if we have given oral or written notice thereof to the exchange agent. The exchange agent will act as agent of the tendering holders for the purpose of receiving exchange notes from us and as our agent for the purpose of delivering exchange notes to such holders. See "Exchange Agent" below. If any tendered restricted notes are not accepted for exchange because of an invalid tender or the occurrence of certain other events set forth herein, certificates for any such unaccepted restricted notes will be returned (if in certificated form) or credited to an account maintained with Euroclear, Clearstream, Luxembourg or DTC, as the case may be, at our cost, to the tendering holder as promptly as practicable after the expiration of the exchange offer. Holders who tender restricted notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the Letters of Transmittal, transfer taxes with respect to the exchange of restricted notes pursuant to the exchange offer. We will pay all charges and expenses, other than certain applicable taxes, in connection with the exchange offer. See "Solicitation of Tenders, Fees and Expenses" below. EXPIRATION DATE; EXTENSIONS; AMENDMENTS The exchange offer will expire at 5:00 p.m. New York City time on , 2000 unless we, in our sole discretion, extend the exchange offer. We may extend the exchange offer at any time and from time to time by giving oral or written notice to the exchange agent and by timely public announcement. We reserve the right, in our sole discretion, to amend the terms of the exchange offer in any manner. If any of the conditions set forth below under "Conditions to the Exchange Offer" has occurred and has not been waived by Clear Channel, Clear Channel expressly reserves the right, in its sole discretion, by giving oral or written notice to the exchange agent, to: - delay acceptance of, or refuse to accept, any restricted notes not previously accepted; - extend the exchange offer; or - terminate the exchange offer. Any such delay in acceptance, extension, termination or amendment will be followed as promptly as practicable by oral or written notice thereof by Clear Channel to the registered holders of the restricted notes. If the exchange offer is amended in a manner determined by Clear Channel to constitute a material change, we will promptly disclose such amendment in a manner reasonably calculated to inform the holders of such amendment, and we will extend the exchange offer to the extent required by law. If the exchange offer is terminated, federal law requires we promptly either exchange or return all restricted notes that have been tendered. We will have no obligation to publish, advise, or otherwise communicate any delay in acceptance, extension, termination or amendment of the exchange offer other than by making a timely press release. We may also publicly communicate these matters in any other appropriate manner of our choosing. INTEREST ON THE EXCHANGE NOTES Interest on the exchange notes will accrue from July 7, 2000 (or, if interest has been paid on the restricted notes, then from the last interest payment date on which interest was paid on the restricted notes 18 22 surrendered in exchange therefor). The exchange notes will bear interest at a rate of 6.50% per annum. Interest on the exchange notes will be payable on July 7th of each year. Assuming that the exchange offer is consummated prior to July 7, 2001, as anticipated, interest on the exchange notes will first become payable beginning on July 7, 2001. PROCEDURES FOR TENDERING Only a Euroclear participant, Clearstream, Luxembourg participant or a DTC participant listed on a DTC securities position listing with respect to the restricted notes may tender its restricted notes in the exchange offer. To tender restricted notes in the exchange offer: - holders of restricted notes that are DTC participants may follow the procedures for book-entry transfer as provided for below under "Book-Entry Transfer" and in the Letter of Transmittal. - Euroclear participants and Clearstream, Luxembourg participants on behalf of the beneficial owners of notes are required to use book-entry transfer pursuant to the standard operating procedures of Euroclear or Clearstream, Luxembourg, as the case may be, which include transmission of a computer-generated message to Euroclear or Clearstream, Luxembourg, as the case may be, in lieu of a Letter of Transmittal. See the term "Agent's Message" under "Book-entry Transfer". To be effective, a tender must be made prior to the expiration of the exchange offer. Any beneficial owner whose restricted notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender restricted notes in the exchange offer should contact such registered holder promptly and instruct such registered holder to tender on such beneficial owner's behalf. Delivery of documents to Euroclear, Clearstream, Luxembourg or DTC in accordance with their respective procedures will NOT constitute delivery to the exchange agent. The tender by a holder of restricted notes will constitute an agreement between such holder, Clear Channel and the exchange agent in accordance with the terms and subject to the conditions set forth herein and in the Letter of Transmittal. If less than all the restricted notes held by a holder of restricted notes are tendered, a tendering holder should fill in the amount of restricted notes being tendered in the specified box on the Letter of Transmittal. The entire amount of restricted notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated. The Letter of Transmittal includes representations by the tendering holder to Clear Channel that, among other things: - any exchange notes received by the tendering holder will be acquired in the ordinary course of its business; - the tendering holder has no arrangement or understanding with any person to participate in the distribution of the exchange notes; and - the tendering holder is not an "affiliate," as defined in Rule 405 under the Securities Act, of Clear Channel, or, if it is an affiliate, that it will comply with the registration and prospectus delivery requirements of the Securities Act to the extent applicable. A Letter of Transmittal of a broker-dealer that receives exchange notes for its own account in exchange for restricted notes that were acquired by it as a result of market-making or other trading activities must also include an acknowledgment that the broker-dealer will deliver a copy of this document in connection with the resale of such exchange notes. By so acknowledging and by delivering a prospectus, such broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. See "Plan of Distribution." The method of delivery of restricted notes and Letters of Transmittal and all other required documents or transmittal of an Agent's Message, as described below under "Book-Entry Transfer," to the exchange agent is at the election and risk of the holders of restricted notes. Instead of delivery by mail, it 19 23 is recommended that holders of restricted notes use an overnight or hand delivery service. In all cases, sufficient time should be allowed to ensure delivery to the exchange agent prior to the expiration of the exchange offer. No Letters of Transmittal should be sent to Clear Channel. Signatures on a Letter of Transmittal or a notice of withdrawal described in "Withdrawal of Tenders" below must be guaranteed by a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., 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 (each, an "Eligible Institution"), unless the corresponding restricted notes are tendered - by a registered holder who has not completed the box entitled "Special Registration Instructions" or the box entitled "Special Delivery Instructions" in the Letter of Transmittal; or - for the account of an Eligible Institution. If a Letter of Transmittal is signed by a person other than the registered holder, the corresponding restricted notes must be endorsed or accompanied by appropriate bond powers which authorize such person to tender the restricted notes on behalf of the registered holder, in either case signed as the name of the registered holder or holders appears on the restricted notes. If a Letter of Transmittal or any restricted notes or bond powers are signed or endorsed by trustees, executors, administrators, guardians, attorneys-in-fact, officers or corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by Clear Channel, submit evidence satisfactory to Clear Channel of their authority to so act with such Letter of Transmittal. All questions as to the validity, form, eligibility, acceptance and withdrawal of the tendered restricted notes will be determined by Clear Channel in its sole discretion, which determination will be final and binding. Clear Channel reserves the absolute right to reject restricted notes not properly tendered or any restricted notes Clear Channel's acceptance of which would, in the opinion of counsel for Clear Channel, be unlawful. Clear Channel also reserves the absolute right to waive any irregularities or conditions of tender as to particular restricted notes. Clear Channel's interpretation of the terms and conditions of the Exchange Offer, including the instructions in the Letters of Transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of restricted notes must be cured within such time as Clear Channel shall determine. Although Clear Channel intends to notify tendering holders of defects or irregularities with respect to tenders of restricted notes, neither Clear Channel, the exchange agent nor any other person will be under any duty or obligation to do so, and no person will incur any liability for failure to give such notification. Restricted notes will not be validly tendered until such irregularities have been cured or waived. Any restricted notes received by the exchange agent that Clear Channel determines are not properly tendered or the tender of which is otherwise rejected by Clear Channel will be returned by the exchange agent to the tendering holder or other person specified in the appropriate Letter of Transmittal as soon as practicable following the expiration of the exchange offer. Clear Channel reserves the right in its sole discretion: - to purchase or make offers for any restricted notes that remain outstanding subsequent to the expiration of the exchange offer; - to terminate the exchange offer, as set forth in "Conditions to the Exchange Offer" below; and - to the extent permitted by applicable law, to purchase restricted notes during the pendency of the exchange offer in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers may differ from the terms of the exchange offer. 20 24 BOOK-ENTRY TRANSFER Clear Channel understands that the exchange agent will make a request promptly after the date of this document to establish accounts with respect to the restricted notes at Euroclear, Clearstream, Luxembourg and DTC for the purpose of facilitating the exchange offer. Any financial institution that is a participant in DTC's system may make book-entry delivery of restricted notes by causing DTC to transfer such restricted notes into the Exchange Agent's DTC account in accordance with DTC's Automated Tender Offer Program procedures for such transfer. Any participant in Euroclear or Clearstream, Luxembourg may make book-entry delivery of Regulation S restricted notes by causing Euroclear or Clearstream, Luxembourg to transfer such notes into the exchange agent's account in accordance with established Euroclear or Clearstream, Luxembourg procedures for transfer. The exchange for tendered restricted notes will only be made after a timely confirmation of a book-entry transfer of the restricted notes into the exchange agent's account, and timely receipt by the exchange agent of an Agent's Message. The term "Agent's Message" means a message, transmitted by Euroclear, Clearstream, Luxembourg or DTC, as the case may be, and received by the exchange agent and forming part of the confirmation of a book-entry transfer, which states that Euroclear, Clearstream, Luxembourg or DTC, as the case may be, has received an express acknowledgment from a participant tendering restricted notes and that such participant has received an appropriate Letter of Transmittal and agrees to be bound by the terms of the Letter of Transmittal, and Clear Channel may enforce such agreement against the participant. Delivery of an Agent's Message will also constitute an acknowledgment from the tendering Euroclear, Clearstream, Luxembourg or DTC participant, as the case may be, that the representations contained in the appropriate Letter of Transmittal and described on page 20 above are true and correct. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their restricted notes and: - whose restricted notes are not immediately available, - who cannot deliver their restricted notes, the Letter of Transmittal or any other required documents to the exchange agent prior to the expiration of the exchange offer, or - who cannot complete the procedure for book-entry transfer on a timely basis, may effect a tender if: 1. the tender is made through an Eligible Institution; 2. prior to the expiration of the exchange offer the exchange agent receives from such Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery by facsimile transmittal, mail or hand delivery; and 3. certificate(s) representing all tendered restricted notes in proper form for transfer, together with a properly completed and executed Letter of Transmittal, or a facsimile thereof and all other documents required by the Letter of Transmittal, or confirmation of a book-entry transfer into the exchange agent's account at Euroclear, Clearstream, Luxembourg or DTC, as the case may be, of restricted notes delivered electronically, are received by the exchange agent within three business days after the expiration of the exchange offer. A Notice of Guaranteed Delivery must state: - the name and address of the holder; - if the restricted notes will be tendered by their registered holder, the certificate number or numbers of such restricted notes; - the principal amount of such restricted notes tendered; - that the tender is being made thereby; and 21 25 - that the holder guarantees that, within three business days after the expiration of the exchange offer, a Letter of Transmittal or facsimile thereof, together with the certificate(s) representing the restricted notes to be tendered in proper form for transfer and any other documents required by the Letter of Transmittal, or confirmation of a book-entry transfer into the exchange agent's account at Euroclear, Clearstream, Luxembourg or DTC, as the case may be, of restricted notes delivered electronically, will be deposited by the Eligible Institution with the exchange agent. Forms of the Notice of Guaranteed Delivery will be available from the exchange agent upon request. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of restricted notes may be withdrawn at any time prior to the expiration of the exchange offer by delivery of a written or facsimile transmission notice of withdrawal to the exchange agent at its address set forth in this document. Any such notice of withdrawal must: - specify the name of the person having deposited the restricted notes to be withdrawn; - identify the restricted notes to be withdrawn, including the certificate number or number and principal amount of such restricted notes or, in the case of restricted notes transferred by book-entry transfer, the name and number of the account at Euroclear, Clearstream, Luxembourg or DTC, as the case may be, to be credited; - be signed by the depositor of the restricted notes in the same manner as the original signature on the Letter of Transmittal by which such restricted notes were tendered, including any required signature guarantee, or be accompanied by documents of transfer sufficient to permit the registrar to register the transfer of such restricted notes into the name of the party withdrawing the tender or, in the case of restricted notes transferred by book-entry transfer, be transmitted by Euroclear, Clearstream, Luxembourg or DTC, as the case may be, and received by the exchange agent in the same manner as the Agent's Message transferring the notes; and - specify the name in which any such restricted notes are to be registered, if different from that of the depositor of the restricted notes. All questions as to the validity, form and eligibility of such withdrawal notices will be determined by Clear Channel, whose determination shall be final and binding on all parties. Any restricted notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer, and no exchange notes will be issued with respect thereto unless the restricted notes so withdrawn are validly retendered. Any restricted notes that have been tendered but 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 restricted notes may be retendered by following one of the procedures described above under "Procedures for Tendering" at any time prior to the expiration of the exchange offer. CONDITIONS TO THE EXCHANGE OFFER Clear Channel will not be required to accept for exchange, or to exchange notes for, any restricted notes, and may terminate or amend the exchange offer before the acceptance of such restricted notes if, in Clear Channel's judgment, any of the following conditions has occurred: - the exchange offer, or the making of any exchange by a holder of restricted notes, violates applicable law or the applicable interpretations of the SEC staff; - any action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency or body with respect to the exchange offer; or 22 26 - there has been adopted or enacted any law, statute, rule or regulation that can reasonably be expected to impair the ability of Clear Channel to proceed with the exchange offer. See "Expiration Date; Extensions; Amendments" above for a discussion of possible Clear Channel actions if any of the foregoing conditions occur. The foregoing conditions are for the sole benefit of Clear Channel. They may be asserted by Clear Channel regardless of the circumstances giving rise to any such condition or may be waived by Clear Channel in whole or in part at any time and from time to time in its sole discretion. The failure by Clear Channel at any time to exercise any of the foregoing rights will not be deemed a waiver of any such right, and each such right will be deemed an ongoing right which may be asserted at any time and from time to time. EXCHANGE AGENT The Bank of New York has been appointed as exchange agent for the exchange offer. Requests for assistance and requests for additional copies of this document or of the Letter of Transmittal should be directed to the exchange agent addressed as follows: By Registered Mail or Overnight Carrier By Hand Delivery The Bank of New York The Bank of New York 101 Barclay Street, 7E 101 Barclay Street New York, New York 10286 Corporate Trust Services Window Attention: Ground Level New York, New York 10286 Attention:
Facsimile Transmission: (212) 815-6339 Information or Confirmation by Telephone: (212) 815-6331 SOLICITATION OF TENDERS; FEES AND EXPENSES The principal solicitation pursuant to the exchange offer is being made by Clear Channel by mail and through the facilities of DTC, Euroclear and Clearstream, Luxembourg. Additional solicitations may be made by officers and regular employees of Clear Channel and its affiliates in person or by telegraph, telephone, facsimile transmission, electronic communication or similar methods. Clear Channel has not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or other persons soliciting acceptances of the exchange offer. Clear Channel will, however, pay the exchange agent reasonable and customary fees for its services and will reimburse the exchange agent for its reasonable out-of-pocket costs and expenses incurred in connection with the exchange offer and will indemnify the exchange agent for all losses and claims incurred by it as a result of the exchange offer. Clear Channel may also pay brokerage houses and other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses incurred by them in forwarding copies of this document, the Letter of Transmittal and related documents to the beneficial owners of the restricted notes and in handling or forwarding tenders for exchange. Clear Channel will pay all expenses incurred in connection with the exchange offer, including fees and expenses of the trustee, accounting and legal fees, including the expense of one counsel for the holders of the restricted notes, and printing costs. Clear Channel will pay any transfer taxes applicable to the exchange of restricted notes pursuant to the exchange offer. If, however, a transfer tax is imposed for any reason other than the exchange of restricted notes pursuant to the exchange offer, then the amount of any such transfer taxes, whether imposed on the registered holder thereof or any other person, will be payable by the tendering holder. 23 27 ACCOUNTING TREATMENT The exchange notes will be recorded at the same carrying value as the restricted notes, as reflected in Clear Channel's accounting records on the date of the exchange. Accordingly, no gain or loss for accounting purposes will be recognized by Clear Channel as a result of the consummation of the exchange offer. The expense of the exchange offer will be amortized by Clear Channel over the term of the exchange notes. CONSEQUENCES OF A FAILURE TO EXCHANGE RESTRICTED NOTES Following consummation of the exchange offer, assuming Clear Channel has accepted for exchange all validly tendered restricted notes, Clear Channel will have fulfilled its exchange and registration obligations under the Registration Rights Agreement. All untendered restricted notes outstanding after consummation of the exchange offer will continue to be valid and enforceable debt obligations of Clear Channel subject to the restrictions on transfer set forth in the indenture governing the notes. Holders of Rule 144A restricted notes will only be able to offer for sale, sell or otherwise transfer untendered Rule 144A notes as follows: - to Clear Channel, although Clear Channel has no obligation to purchase untendered restricted notes except if they are called for redemption in accordance with the provisions of the indenture governing the notes; - pursuant to a registration statement that has been declared effective under the Securities Act, although Clear Channel will have no obligation, and does not intend, to file any such registration statement; - for so long as the restricted notes are eligible for resale pursuant to Rule 144A under the Securities Act, to a person reasonably believed to be a qualified institutional buyer, or QIB, within the meaning of Rule 144A, that purchases for its own account or for the account of a QIB to whom notice is given that the transfer is being made in reliance on the exemption from the registration requirements of the Securities Act provided by Rule 144A; - pursuant to offers and sales that occur outside the United States to non-U.S. persons in transactions complying with the provisions of Regulation S under the Securities Act; or - pursuant to any other available exemption from the registration requirements of the Securities Act. To the extent that restricted notes are tendered and accepted in the exchange offer, the liquidity of the trading market for untendered restricted notes could be adversely affected. See also "Clearing of the Notes". ABSENCE OF A PUBLIC MARKET Although holders of exchange notes who are not "affiliates" of Clear Channel within the meaning of the Securities Act may resell or otherwise transfer their exchange notes without compliance with the registration requirements of the Securities Act, there is no existing market for the exchange notes, and there can be no assurance as to the liquidity of any markets that may develop for the exchange notes, the ability of holders of exchange notes to sell their exchange notes or the prices at which holders would be able to sell their exchange notes. Future trading prices of the exchange notes will depend on many factors, including, among other things, prevailing interest rates, Clear Channel's operating results and the market for similar securities. 24 28 DESCRIPTION OF THE NOTES GENERAL The restricted notes were issued and the exchange notes will be issued as a separate series of securities under an indenture, dated as of October 1, 1997, as supplemented by supplemental indentures from time to time (collectively, the "Indenture"), between us and The Bank of New York, as debt trustee. The term "notes" refers to and includes the restricted and the exchange notes. The terms of the restricted notes and the exchange notes are identical, except that the exchange notes are not subject to restrictions on transfer. The Indenture is subject to, and governed by, the United States Trust Indenture Act of 1939. The Indenture contains: - provisions limiting our ability to consolidate with or merge into any other corporation or convey or transfer substantially all of our properties and assets; - limitations on Mortgages (defined below); and - limitations on sale and leaseback transactions. All capitalized terms used and not defined in this Description of the Notes have the meaning specified in the Indenture. In this description, references to "Clear Channel" mean only Clear Channel Communications, Inc. and not its subsidiaries. The following description is subject to the detailed provisions of the Indenture, a copy of which can be obtained upon request from us. The notes were issued in an aggregate principal amount of E650,000,000. The notes are direct, unsecured obligations and will have the same rank as all of our other unsecured and unsubordinated debt. Because we are a holding company, the notes will be effectively subordinated to all existing and future liabilities, including indebtedness, of our subsidiaries. See "Holding Company Structure." The notes bear interest from July 7, 2000, at the rate of interest stated on the cover page of this document. Interest on the notes is payable annually on July 7, commencing July 7, 2001 and, with respect to payments in U.S. dollars, to the person in whose name such notes are registered at the close of business on the June 23 preceding such payment date. Interest on the notes that is required to be calculated for a period of less than one year will be calculated on the basis of the actual number of days elapsed divided by the actual number of days in the period from and including the immediately preceding annual interest payment to but excluding the next annual interest payment date. Unless previously redeemed, repurchased or cancelled as provided below, the notes will mature at par on July 7, 2005. Payments in respect of the principal of, and premium, if any, and interest on a global note registered in the name of DTC or its nominee or in the name of the common depositary for Euroclear and Clearstream, Luxembourg are payable to the depositaries in their capacities as the registered holder under the Indenture. The Indenture requires Clear Channel to make payments in respect of notes (including principal, premium and interest) by wire transfer of immediately available funds to accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address. Except as described under "Covenants" below, the Indenture does not limit other indebtedness or securities which may be incurred or issued by us or any of our respective subsidiaries or contain financial or similar restrictions on us or any of our respective subsidiaries. The Indenture does not limit the aggregate principal amount of debt securities which may be issued thereunder. As of the date of this offering memorandum $3.2 billion of debt securities have been issued by us and are outstanding under the Indenture. Under New York's statute of limitations, any legal action upon the notes must be commenced within six years after the payment thereof is due. Thereafter, notes will become generally unenforceable. 25 29 The notes are not subject to redemption prior to maturity unless certain events occur involving United States taxation. If any of these special tax events do occur, the notes will be redeemed at a redemption price of 100% of their principal amount plus accrued and unpaid interest to the date of redemption. See "-- Redemption for Tax Reasons." The notes are issued in denominations of E1,000 and integral multiples of E1,000. We may, without the consent of the holders of notes, issue additional notes having the same ranking and the same interest rate, maturity and other terms as the applicable notes. No additional notes may be issued if an event of default has occurred with respect to the applicable series of notes. The debt trustee will act as paying agent, transfer agent, exchange agent and registrar for the notes. We have appointed Banque Internationale a Luxembourg S.A., as paying agent and transfer agent in Luxembourg with respect to the notes in definitive form. As long as the notes are listed on the Luxembourg Stock Exchange, we will maintain a paying and transfer agent in Luxembourg, and any change in the Luxembourg paying agent and transfer agent will be published in Luxembourg. See "-- Notices" below. Payments in respect of the principal of, and premium, if any, and interest on a global note registered in the name of DTC or its nominee or in the name of the common depositary for Euroclear and Clearstream, Luxembourg will be payable to the depositaries in their capacities as the registered holder under the Indenture. The currency of payment for the notes is the euro. A holder of notes through DTC (other than participants in Euroclear or Clearstream, Luxembourg) will receive all payments in U.S. dollars, unless that holder makes an election as described in "Currency Conversions and Foreign Exchange Risks Affecting the Notes." The amount payable in euro (the "euro conversion amount") shall be converted by the registrar into U.S. dollars and paid by wire transfer of same day funds to the registered holder of the restricted global note for payment through DTC's settlement system to the relevant DTC Participants (defined below). All costs of any such conversion shall be deducted from such payments. Any such conversion shall be based on the registrar's bid quotation, at or prior to 11:00 a.m. New York time, on the second New York Business Day (as used herein, New York Business Day refers to any day which is not a Saturday or Sunday or a day on which banking institutions are authorized or required by law or regulation to be closed in The City of New York) preceding the relevant payment date, for the purchase by the registrar of U.S. dollars with euro in an amount equal to the euro conversion amount for settlement on such payment date. If such bid quotation is not available, the registrar shall obtain a bid quotation from a leading foreign exchange bank in The City of New York selected by the registrar for such purpose after consultation with us. If no bid quotation from a leading foreign exchange bank is available, payment of the euro conversion amount will be in euro to the account or accounts specified by DTC to the registrar. Until such account or accounts are so specified, the funds still held by the registrar shall bear interest at the rate of interest quoted by the registrar for deposits with it on an overnight basis to the extent that the registrar is reasonably able to reinvest such funds. If an annual interest payment date or the maturity date is not a Business Day, the requisite payment shall be made on the next succeeding Business Day. No additional interest will accrue as a result of such delay. "Business Day" means any day other than a Saturday, a Sunday or a day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is not operating. CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER The Indenture prohibits Clear Channel's consolidation with or merger into any other corporation or the transfer of our properties and assets to any person, unless: - the successor corporation is organized and existing under the laws of the United States, any State thereof or the District of Columbia, and expressly assumes by a supplemental indenture the 26 30 punctual payment of the principal of, premium on and interest on, all the outstanding debt securities and the performance of every covenant in the applicable indenture to be performed or observed on its part; - immediately after giving effect to the transaction, no event of default has happened and is continuing; and - Clear Channel shall have delivered to the applicable debt trustee an officers' certificate and an opinion of counsel, each stating that the consolidation, merger, conveyance or transfer and the supplemental indenture comply with the foregoing provisions relating to the transaction. In case of any consolidation, merger, conveyance or transfer, the successor corporation will succeed to and be substituted for us as obligor on the debt securities, with the same effect as if we had been named in the Indenture. Unless otherwise specified, other than the restrictions on Mortgages described below, the Indenture and the notes do not contain any covenants or other provisions designed to protect holders of notes in the event of a highly leveraged transaction involving us or any Subsidiary (defined below). EVENTS OF DEFAULT; WAIVER AND NOTICE OF DEFAULT; DEBT SECURITIES IN FOREIGN CURRENCIES An event of default when used in the Indenture will mean any of the following as to the notes: - default for 30 days in payment of any interest; - default in payment of principal of or any premium at maturity; - default in payment of any sinking or purchase fund or similar obligation; - default by Clear Channel in the performance of any other covenant or warranty contained in the Indenture for the benefit of that series which has not been remedied for a period of 90 days after notice is given; or - events of bankruptcy, insolvency and reorganization of Clear Channel. A default under our other indebtedness will not be a default under the Indenture and a default under one series of debt securities will not necessarily be a default under another series. The Indenture provides that if an event of default described in the first four bullet points above (if the event of default under the fourth bullet point is with respect to less than all series of debt securities then outstanding) has occurred and is continuing with respect to any series, either the applicable debt trustee or the holders of not less than 25% in aggregate principal amount of the debt securities of the series then outstanding (each series acting as a separate class) may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all outstanding debt securities of the series and the accrued interest to be due and payable immediately. The Indenture further provides that if an event of default described in the fourth or fifth bullet points above, if the event of default under the fourth bullet point is with respect to all series of debt securities then outstanding, has occurred and is continuing, either the applicable debt trustee or the holders of at least 25% in aggregate principal amount of all debt securities then outstanding, treated as one class, may declare the principal or, in the case of original issue discount securities, the portion specified in the terms thereof, of all debt securities then outstanding and the accrued interest to be due and payable immediately. However, upon certain conditions the declarations may be annulled and past defaults, except for defaults in the payment of principal of, premium on, or interest on, the debt securities and in compliance with certain covenants, may be waived by the holders of a majority in aggregate principal amount of the debt securities of the series then outstanding. Under the Indenture the applicable debt trustee must give notice to the holders of the affected series of debt securities of all uncured defaults known to it with respect to that series within 90 days after a default occurs. The term "default" includes the events specified above without notice or grace periods. However, in the case of any default of the type described in the fourth bullet point above, no notice may be given until at least 90 days after the occurrence of the event. The debt trustee will be protected in 27 31 withholding notice if it in good faith determines that the withholding of notice is in the interests of the holders of the debt securities, except in the case of default in the payment of principal of, premium on, or interest on, any of the debt securities, or default in the payment of any sinking or purchase fund installment or analogous obligations. No holder of any debt securities of any series may institute any action under the Indenture unless: - the holder has given the debt trustee written notice of a continuing event of default with respect to that series; - the holders of not less than 25% in aggregate principal amount of the debt securities of the affected series then outstanding have requested the debt trustee to institute proceedings in respect of the event of default; - the holder or holders have offered the debt trustee reasonable indemnity as the debt trustee may require; - the debt trustee has failed to institute an action for 60 days; and - no inconsistent direction has been given to the debt trustee during the 60-day period by the holders of a majority in aggregate principal amount of debt securities of the affected series then outstanding. The holders of a majority in aggregate principal amount of the debt securities of any series affected and then outstanding will have the right, subject to limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the applicable debt trustee or exercising any trust or power conferred on the debt trustee with respect to a series of debt securities. The Indenture provides that if an event of default occurs and is continuing, the debt trustee will be required to use the degree of care of a prudent person in the conduct of that person's own affairs in exercising its rights and powers under the Indenture. The Indenture further provides that the debt trustee will not be required to expend or risk its own funds in the performance of any of its duties under the Indenture unless it has reasonable grounds for believing that repayment of the funds or adequate indemnity against the risk or liability is reasonably assured to it. We must furnish to the debt trustee within 120 days after the end of each fiscal year a statement signed by one of our officers to the effect that a review of our activities during the year and of our performance under the Indenture and the terms of the debt securities has been made, and, to the best of the knowledge of the signatories based on the review, we have complied with all conditions and covenants of the Indenture through the year or, if we are in default, specifying the default. To determine whether the holders of the requisite principal amount of debt securities have taken action as described above when the debt securities are denominated in a foreign currency, the principal amount of the debt securities will be deemed to be that amount of U.S. dollars that could be obtained for the principal amount based on the applicable spot rate of exchange as of the date the action is taken as evidenced to the debt trustee as provided in the Indenture. To determine whether the holders of the requisite principal amount of debt securities have taken action as described above when the debt securities are original issue discount securities, the principal amount of the debt securities will be deemed to be the portion of the principal amount that would be due and payable at the time the action is taken upon a declaration of acceleration of maturity. MODIFICATION OF THE INDENTURE The Indenture provides that we and the debt trustee may, without the consent of any holders of debt securities, enter into supplemental indentures for the purposes, among other things, of - adding to our covenants; - adding additional events of default; 28 32 - establishing the form or terms of any series of debt securities; or - curing ambiguities or inconsistencies in the Indenture or making other provisions. With specific exceptions, the Indenture or the rights of the holders of the debt securities may be modified by us and the debt trustee with the consent of the holders of a majority in aggregate principal amount of the debt securities of each series affected by the modification then outstanding, but no modification may be made without the consent of the holder of each outstanding debt security affected which would: - change the maturity of any payment of principal of, or any premium on, or any installment of interest on any debt security; - reduce the principal amount of or the interest or any premium on any debt security; - change the method of computing the amount of principal of or interest on any date; - change any place of payment where, or the currency in which, any debt security or any premium or interest is payable; - impair the right to sue for the enforcement of any payment on or after the maturity thereof, or, in the case of redemption or repayment, on or after the redemption date or the repayment date; - reduce the percentage in principal amount of the outstanding debt securities of any series where the consent of the holders is required for any modification, or the consent of the holders is required for any waiver of compliance with provisions of the Indenture or specific defaults and their consequences provided for in the Indenture; or - modify any of the provisions of specific sections of the Indenture, including the provisions summarized in this section, except to increase any percentage or to provide that other provisions of the Indenture cannot be modified or waived without the consent of the holder of each outstanding debt security affected thereby. COVENANTS The Indenture contains the covenants summarized below, which will be applicable, unless waived or amended, so long as any of the notes are outstanding. Limitation on Mortgages. Clear Channel will not, nor will we permit any Restricted Subsidiary (defined below) to create, assume or incur - any Mortgage on any stock or indebtedness of any Restricted Subsidiary to secure any of Clear Channel's Debt (defined below) or any Debt of any other person, other than the notes only issued under the Indenture; or - any Mortgage on any Principal Property (defined below) to secure any Debt of us or any other person, other than the notes only issued under the Indenture, without making provision for all the outstanding notes only issued under the Indenture to be secured equally with the Debt. Any Mortgage on stock or indebtedness of a corporation existing at the time a corporation becomes a Subsidiary or at the time stock or indebtedness of a Subsidiary is acquired, and, with specific exceptions, any extension, renewal or replacement of any Mortgage, will generally be excluded from this restriction. The following permitted mortgages will be excluded from the restriction referred to in the preceding paragraph: - any Mortgage on property owned or leased by a corporation existing at the time the corporation becomes a Restricted Subsidiary; 29 33 - any Mortgage on property existing at the time of its acquisition or to secure payment of any part of the purchase price thereof or any Debt incurred to finance the purchase thereof; - any Mortgage on property to secure any part of the cost of development, construction, alteration, repair or improvement of the property, or Debt incurred to finance the cost; - any Mortgage securing Debt of a Restricted Subsidiary owing to us or to another Restricted Subsidiary; - any Mortgage existing on the date of the Indenture; - any Mortgage on our property or property of a Restricted Subsidiary in favor of the United States of America or any State or political subdivision thereof, or in favor of any other country or any political subdivision thereof, to secure payment pursuant to any contract or statute or to secure any indebtedness incurred for the purpose of financing all or part of the purchase price or the cost of construction or improvement of the property subject to the Mortgage; - any Mortgage on any property subsequently acquired by Clear Channel or any Restricted Subsidiary, concurrently with the acquisition or within 120 days, to secure or provide for the payment of any part of the purchase price of the property, or any Mortgage assumed by Clear Channel or any Restricted Subsidiary on any property subsequently acquired by Clear Channel or any Restricted Subsidiary which was existing at the time of the acquisition, provided that the amount of any Indebtedness secured by any Mortgage created or assumed does not exceed the cost to Clear Channel or any Restricted Subsidiary of the property covered by the Mortgage; and - any extension, renewal or replacement of any Mortgage referred to in the previous seven bullet points, provided that the principal amount of Debt secured thereby may not exceed the principal amount of Debt so secured at the time of the extension, renewal or replacement, and provided that the Mortgage must be limited to all or part of the property which secured the Mortgage so extended, renewed or replaced. Notwithstanding the above, we may, and may permit any Restricted Subsidiary to, create, assume or incur any Mortgage on any Principal Property without equally securing the notes if the aggregate amount of all Debt then outstanding secured by the Mortgage and all similar Mortgages does not exceed 15% of our total consolidated shareholders' equity, including preferred stock, as shown on the audited consolidated balance sheet contained in our latest annual report to shareholders. However, Debt secured by permitted mortgages will not be included in the amount of the secured Debt. Sale and Leaseback Transactions. Clear Channel will not, nor will we permit any Restricted Subsidiary to, enter into any sale-leaseback transaction providing for the leasing by Clear Channel or a Restricted Subsidiary of any Principal Property, except for temporary leases for a term of not more than three years, which has been or is to be sold or transferred by us or the Restricted Subsidiary to such person, unless: - the sale-leaseback transaction occurs within the later of 120 days from the date of acquisition of the Principal Property or the date of the completion of construction or commencement of full operations on the Principal Property, or - within 120 days after the sale-leaseback transaction, Clear Channel applies or causes to be applied to the retirement of our Funded Debt or the Funded Debt of any Subsidiary, other than our Funded Debt which is subordinate in right of payment to the notes, an amount not less than the net proceeds of the sale of the Principal Property. Notwithstanding the above provisions, Clear Channel may, and may permit any Restricted Subsidiary to, effect any sale-leaseback transaction involving any Principal Property, provided that the net sale proceeds from the sale-leaseback transaction, together with all Debt secured by Mortgages other than permitted mortgages, does not exceed 15% of our total consolidated shareholders' equity as shown on the audited consolidated balance sheet contained in our latest annual report to shareholders. 30 34 Definitions For the purposes of the description of the notes: "Debt" means indebtedness for money borrowed. "Funded Debt" of any person means all indebtedness for borrowed money created, incurred, assumed or guaranteed in any manner by the person, and all indebtedness incurred or assumed by the person in connection with the acquisition of any business, property or asset, which in each case matures more than one year after, or which is renewable or extendible or payable out of the proceeds of similar indebtedness incurred pursuant to the terms of any revolving credit agreement or any similar agreement at the option of the person for a period ending more than one year after the date as of which Funded Debt is being determined. However, Funded Debt does not include: - any indebtedness for the payment, redemption or satisfaction of which money, or evidences of indebtedness, if permitted under the instrument creating or evidencing the indebtedness, in the necessary amount has been irrevocably deposited in trust with a trustee or proper depository either on or before the maturity or redemption date thereof; - any indebtedness of the person to any of its Subsidiaries or of any Subsidiary to the person or any other Subsidiary; or - any indebtedness incurred in connection with the financing of operating, construction or acquisition projects, provided that the recourse for the indebtedness is limited to the assets of the projects. "Mortgage" means any mortgage, pledge, lien, encumbrance, charge or security interest of any kind. "Principal Property" means any radio broadcasting, television broadcasting, outdoor advertising property or live entertainment property located in the United States owned or leased by us or any of our subsidiaries, unless, in the opinion of our Board of Directors, any of the properties are not in the aggregate of material importance to the total business conducted by us and our Subsidiaries as an entirety. "Restricted Subsidiary" means each Subsidiary as of the date of the Indenture and each Subsidiary created or acquired after the date of the Indenture, unless expressly excluded by resolution of our Board of Directors before, or within 120 days following, the creation or acquisition. "Subsidiary", when used with respect to Clear Channel, means any corporation of which a majority of the outstanding voting stock is owned, directly or indirectly, by Clear Channel or by one or more other Subsidiaries, or both. SATISFACTION AND DISCHARGE OF THE INDENTURE; DEFEASANCE The Indenture will generally cease to be of any further effect with respect to a series of debt securities if we deliver all debt securities of that series, with limited exceptions, for cancellation to the applicable debt trustee or all debt securities of that series not previously delivered for cancellation to the applicable debt trustee have become due and payable or will become due and payable or called for redemption within one year, and we have deposited with the applicable debt trustee as trust funds the entire amount sufficient to pay at maturity or upon redemption all the debt securities, no default with respect to the debt securities has occurred and is continuing on the date of the deposit, and the deposit does not result in a breach or violation of, or default under, the Indenture or any other agreement or instrument to which we are a party. Clear Channel has a "legal defeasance option" under which Clear Channel may terminate, with respect to the debt securities of a particular series, all of Clear Channel's obligations under the debt securities and the Indenture. In addition, Clear Channel has a "covenant defeasance option" under which Clear Channel may terminate, with respect to the debt securities of a particular series, Clear Channel's obligations with respect to the debt securities under specified covenants contained in the Indenture. If Clear Channel exercises its legal defeasance option with respect to a series of debt securities, payment of the debt securities may not be accelerated because of an event of default. If Clear Channel exercises its 31 35 covenant defeasance option with respect to a series of debt securities, payment of the debt securities may not be accelerated because of an event of default related to the specified covenants. Clear Channel may exercise its legal defeasance option or its covenant defeasance option with respect to the debt securities of a series only if: - Clear Channel deposits in trust with the debt trustee cash or debt obligations of the United States of America or our agencies or instrumentalities for the payment of principal, premium and interest with respect to the debt securities to maturity or redemption; - Clear Channel delivers to the debt trustee a certificate from a nationally recognized firm of independent public accountants expressing their opinion that the payments of principal and interest when due will provide cash sufficient to pay the principal, premium, and interest when due with respect to all the debt securities of that series to maturity or redemption; - 91 days pass after the deposit is made and during the 91-day period no default described in the fifth bullet point under "-- Events of Default, Waiver and Notice Of Default; Debt Securities in Foreign Currencies" above with respect to Clear Channel occurs that is continuing at the end of the period; - no default has occurred and is continuing on the date of the deposit; - the deposit does not constitute a default under any other agreement binding on us; - Clear Channel delivers to the debt trustee an opinion of counsel to the effect that the trust resulting from the deposit does not constitute a regulated investment company under the Investment Company Act of 1940; - Clear Channel has delivered to the debt trustee an opinion of counsel addressing specific federal income tax matters relating to the defeasance; and - Clear Channel delivers to the debt trustee an officers' certificate and an opinion of counsel stating that all conditions to the defeasance and discharge of the debt securities of that series have been complied with. The debt trustee will hold in trust cash or debt obligations of the United States of America or its agencies or instrumentalities deposited with it as described above and will apply the deposited cash and the proceeds from deposited debt obligations of the United States of America or its agencies or instrumentalities to the payment of principal, premium, and interest with respect to the debt securities of the defeased series. NOTICES Notices to holders of the notes will be sent by mail to the registered holders and will be published, whether the notes are in global or definitive form, and so long as the notes are listed on the Luxembourg Stock Exchange, in a daily newspaper of general circulation in Luxembourg. It is expected that publication will be made in Luxembourg in the LUXEMBURGER WORT. Any such notice shall be deemed to have been given on the date of such publication or, if published more than once, on the date of the first such publication. So long as the notes are listed on the Luxembourg Stock Exchange, any appointment of or change in the Luxembourg paying agent and transfer agent will be published in Luxembourg in the manner set forth above. REPLACEMENT NOTES In case of mutilation, destruction, loss or theft of any definitive note, application for replacement is to be made at the office of the debt trustee. Any such definitive note will be replaced by the debt trustee in compliance with such procedures, and on such terms as to evidence any indemnity, as Clear Channel and the debt trustee may require and subject to applicable laws and regulations of the Luxembourg Stock Exchange. All costs incurred in connection with the replacement of any definitive note will be borne by 32 36 the holder of the note. Mutilated or defaced definitive notes must be surrendered before new ones will be issued. FOREIGN CURRENCY JUDGMENTS; GOVERNING LAW The notes are governed by and construed in accordance with the internal laws of the State of New York. Courts in the United States customarily have not rendered judgments for money damages denominated in any currency other than the U.S. dollar. PAYMENTS OF ADDITIONAL AMOUNTS Clear Channel will, subject to the exceptions and limitations set forth below, pay as additional interest on the notes such additional amounts as are necessary in order that the net payment by Clear Channel or a paying agent of the principal of and interest on the notes to a holder who is not a United States person (as defined below), after deduction for any present or future tax, assessment or other governmental charge of the United States or a political subdivision or taxing authority of or in the United States, imposed by withholding with respect to the payment, will not be less than the amount provided in the notes to be then due and payable; provided, however, that the foregoing obligation to pay additional amounts shall not apply: (1) to any tax, assessment or other governmental charge that is imposed or withheld solely by reason of the holder, or a fiduciary, settlor, beneficiary, member or shareholder of the holder if the holder is an estate, trust, partnership or corporation, or a person holding a power over an estate or trust administered by a fiduciary holder, being considered as: (a) being or having been present or engaged in a trade or business in the United States or having had a permanent establishment in the United States; (b) having a current or former relationship with the United States, including a relationship as a citizen or resident of the United States; (c) being or having been a foreign or domestic personal holding company, a passive foreign investment company or a controlled foreign corporation with respect to the United States or a corporation that has accumulated earnings to avoid United States federal income tax; (d) being or having been a "10-percent shareholder" of us as defined in section 871(h)(3) of the United States Internal Revenue Code or any successor provision; or (e) being a bank receiving payments on an extension of credit made pursuant to a loan agreement entered into the ordinary course of its trade or business; (2) to any holder that is not the sole beneficial owner of the notes, or a portion of the notes, or that is a fiduciary or partnership, but only to the extent that a beneficiary or settlor with respect to the fiduciary, a beneficial owner or member of the partnership would not have been entitled to the payment of an additional amount had the beneficiary, settlor, beneficial owner or member received directly its beneficial or distributive share of the payment; (3) to any tax, assessment or other governmental charge that is imposed otherwise or withheld solely by reason of a failure of the holder or any other person to comply with certification, identification or information reporting requirements concerning the nationality, residence, identity or connection with the United States of the holder or beneficial owner of the notes, if compliance is required by statute, by regulation of the United States Treasury Department or by an applicable income tax treaty to which the United States is a party as a precondition to exemption from such tax, assessment or other governmental charge; (4) to any tax, assessment or other governmental charge that is imposed otherwise than by withholding by us or a paying agent from the payment; 33 37 (5) to any tax, assessment or other governmental charge that is imposed or withheld solely by reason of a change in law, regulation, or administrative or judicial interpretation that becomes effective more than 15 days after the payment becomes due or is duly provided for, whichever occurs later; (6) to any estate, inheritance, gift, sales, excise, transfer, wealth or personal property tax or similar tax, assessment or other governmental charge; (7) to any tax, assessment or other governmental charge required to be withheld by any paying agent from any payment of principal of or interest on any notes, if such payment can be made without such withholding by any other paying agent; or (8) in the case of any combination of items (1), (2), (3), (4), (5), (6) and (7). The notes are subject in all cases to any tax, fiscal or other law or regulation or administrative or judicial interpretation applicable to the notes. Except as specifically provided under this heading "-- Payments of Additional Amounts" and under the heading "-- Redemption for Tax Reasons," Clear Channel will not be required to make any payment with respect to any tax, assessment or other governmental charge imposed by any government or a political subdivision or taxing authority of or in any government or political subdivision. As used under this heading "-- Payments of Additional Amounts" and under the heading "-- Redemption for Tax Reasons", the term "United States" means the United States of America (including the states and the District of Columbia) and its territories, possessions and other areas subject to its jurisdiction, "United States person" means any individual who is a citizen or resident of the United States, a corporation, partnership or other entity created or organized in or under the laws of the United States, any state of the United States or the District of Columbia (other than a partnership that is not treated as a United States person under any applicable Treasury regulations), or any estate or trust the income of which is subject to United States federal income taxation regardless of its source. REDEMPTION FOR TAX REASONS If, as a result of any change in, or amendment to, the laws (or any regulations or rulings promulgated under the laws) of the United States (or any political subdivision or taxing authority of or in the United States), or any change in, or amendments to, an official position regarding the application or interpretation of such laws, regulations or rulings, which change or amendment is announced or becomes effective on or after the date of this offering memorandum, Clear Channel becomes or, based upon a written opinion of independent counsel selected by Clear Channel, will become obligated to pay additional amounts as described herein under the heading "-- Payments of Additional Amounts" with respect to the notes, then we may at our option redeem, in whole, but not in part, the notes on not less than 30 nor more than 60 days prior notice, at a redemption price equal to 100% of their principal amount, together with interest accrued but unpaid on those notes to the date fixed for redemption. BOOK-ENTRY, DELIVERY AND FORM The notes are issued in registered, global form in minimum denominations of E1,000 and integral multiples of E1,000. Rule 144A and Regulation S Notes Rule 144A notes will be initially represented by a global note, in definitive, fully registered form without interest coupons (the "restricted global note") and will be deposited with a custodian for, and registered in the name of, a nominee of DTC. The restricted global note (and any notes issued in exchange therefor), including beneficial interests in the restricted global note, will be subject to certain restrictions on transfer set forth therein and in the Indenture and will bear the legend regarding such restrictions set forth under "Notice to Investors" elsewhere herein. 34 38 Regulation S notes will be represented by a global note, in fully registered form without interest coupons (the "Regulation S global note") registered in the name of a nominee of Euroclear or Clearstream, Luxembourg or both and deposited with the common depositary, for credit to the securities accounts on the books of the depositories of Euroclear and Clearstream, Luxembourg. Until the 40th day after the latest of the commencement of the offering and the original issue date of the notes (such period, the "Restricted Period"), beneficial interests in the Regulation S global note may be held only through Euroclear or Clearstream, Luxembourg, unless delivery is made through the restricted global note in accordance with the certification requirements described below. Beneficial interests in the global notes may not be exchanged for notes in certificated form except in the limited circumstances described below. See "-- Exchanges of Book-Entry Notes for Certificated Notes". In addition, beneficial interests in the restricted global note may not be exchanged for beneficial interests in the Regulation S global note or vice versa except in accordance with the transfer and certification requirements described below under "-- Exchanges Between the Restricted Global Note and the Regulation S Global Note." Exchanges Between the Restricted Global Note and the Regulation S Global Note Beneficial interests in the restricted global note may be exchanged for beneficial interests in the Regulation S global note and vice versa only in connection with a transfer of such interest. Such transfers are subject to compliance with the certification requirements described below. Prior to the expiration of the Restricted Period, a beneficial interest in the Regulation S global note may be transferred to a person who takes delivery in the form of an interest in the restricted global note only upon receipt by the debt trustee of a written certification from the transferor, in the form provided in the Indenture, to the effect that the transfer is being made to a person who the transferor reasonably believes is purchasing for its own account or accounts as to which it exercises sole investment discretion and that such person and each such account is a qualified institutional buyer, in each case in a transaction meeting the requirements of Rule 144A and in accordance with any applicable securities laws of any state of the United States or any other jurisdiction. Beneficial interests in the restricted global note may be transferred to a person who takes delivery in the form of an interest in the Regulation S global note, only upon receipt by the trustee of a written certification from the transferor, in the form provided in the Indenture, to the effect that the transfer is being made in accordance with Rule 903 or 904 of Regulation S, or, if available, Rule 144, and that, if the transfer occurs prior to the expiration of the Restricted Period, the interest transferred will be held immediately thereafter through Euroclear or Clearstream, Luxembourg. Any beneficial interest in one of the global notes that is transferred to a person who takes delivery in the form of an interest in the other global note will, upon transfer, cease to be an interest in the original global note and will become an interest in the other global note and, accordingly, will thereafter be subject to all transfer restrictions and other procedures applicable to beneficial interests in the other global note for as long as it remains such an interest. In addition, transfers of beneficial interests in the global notes will be subject to the applicable rules and procedures of Euroclear, Clearstream, Luxembourg, and DTC which may change from time to time. Transfers of interests in the notes will be recorded in accordance with the book-entry system maintained by either the DTC, pursuant to customary procedures established by DTC and its participants, or Euroclear or Clearstream, Luxembourg and their participants. 35 39 Exchanges of Book-Entry Notes for Certificated Notes A beneficial interest in a global note may not be exchanged for a note in certificated form unless: - Euroclear, Clearstream, Luxembourg or DTC are unwilling or unable to continue as depositary for the global note and we fail to appoint a successor depositary, or Euroclear, Clearstream, Luxembourg, or DTC, as the case may be, -- is closed for business for a continuous period of 14 days (other than by reasons of statutory or other holidays) or -- announces an intention permanently to cease business or does in fact do so; - Clear Channel at its option, notifies the debt trustee in writing that Clear Channel elects to cause the issuance of the certificated notes; or - there shall have occurred and be continuing an event of default with respect to the notes. In addition, beneficial interests in the global notes may be exchanged for certificated notes upon request by or on behalf of Euroclear, Clearstream, Luxembourg or DTC in accordance with the Indenture but only upon prior written notice given to the debt trustee. In all cases, certificated notes delivered in exchange for the global notes or beneficial interests in the global notes will be registered in the names, and issued in any approved denominations, requested by or on behalf of Euroclear, Clearstream, Luxembourg or DTC (in accordance with their customary procedures) and will bear the applicable restricted legend, unless we determine otherwise in compliance with applicable law. Any such exchange will be effected through the facilities of DTC in the case of restricted global notes or Euroclear or Clearstream, Luxembourg in the case of Regulation S notes and an appropriate adjustment will be made in the records of the registrar to reflect a decrease in the principal amount of the relevant global note. The notes may not be issued in bearer form. If individual certificates are issued, an owner of a beneficial interest in the global notes will be entitled to physical delivery in definitive form of notes represented by the global notes equal in principal amount to its beneficial interest and to have those notes registered in its name. Notes issued in definitive form will be issued as registered notes in denominations of E1,000 and integral multiples of E1,000. You may transfer the definitive notes by presenting them for registration to the registrar at its New York office or to the Luxembourg paying and transfer agent, at its office. Notes presented for registration must be duly endorsed by you or your attorney duly authorized in writing, or accompanied by a written instrument or instruments of transfer in form satisfactory to Clear Channel or the debt trustee duly executed by you or your attorney duly authorized in writing. Clear Channel may require you to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any exchange or registration of transfer of definitive notes. In the case of a transfer of part of a holding of notes represented by one certificate, a new certificate shall be issued to the transferee in respect of the part transferred and a further new certificate in respect of the balance of the holding not transferred shall be issued to the transferor. Any new certificates shall be obtained at the specified office of the registrar or the Luxembourg paying and transfer agent within three business days of receipt by the registrar or Luxembourg paying and transfer agent. For the purposes of this paragraph, "business day" means a day, other than a Saturday or Sunday, on which banks are open for business in the place of the specified office of the registrar or the Luxembourg paying and transfer agent. If we issue definitive notes, we will do so at the office of The Bank of New York, the paying agent and registrar for the notes, including any successor paying agent and registrar for the notes, currently located at 101 Barclay Street, New York, New York 10286. We may pay interest on definitive notes, other than interest at maturity or upon redemption, by mailing a check to the address of the person entitled to the interest as it appears on the security register at the close of business on the record date corresponding to the relevant interest payment date. 36 40 Notwithstanding the foregoing, DTC, as holder of the notes, may require the paying agent to make payments of interest, other than interest due at maturity or upon redemption, by wire transfer of immediately available funds into an account maintained by DTC in the United States, by sending appropriate wire transfer instructions. The paying agent must receive these instructions not less than ten days prior to the applicable interest payment date. The paying agent or the Luxembourg paying and transfer agent, as the case may be, will pay the principal and interest payable at maturity or upon redemption by wire transfer of immediately available funds against presentation of a note at the office of the paying agent or the Luxembourg paying and transfer agent. Title to book-entry interests in the notes will pass by book-entry registration of the transfer within the records of Euroclear, Clearstream, Luxembourg or DTC, as the case may be, in accordance with their respective procedures. Book-entry interests in the notes may be transferred within Euroclear and within Clearstream, Luxembourg and between Euroclear and Clearstream, Luxembourg in accordance with procedures established for these purposes by Euroclear and Clearstream, Luxembourg. Book-entry interests in the notes may be transferred within DTC in accordance with procedures established for this purpose by DTC. Transfers of book-entry interests in the notes between Euroclear and Clearstream, Luxembourg and DTC may be effected in accordance with procedures established for this purpose by Euroclear, Clearstream, Luxembourg and DTC. Depositary Procedures The following description of the operations and procedures of Euroclear, Clearstream, Luxembourg and DTC is provided solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them from time to time. We take no responsibility for these operations and procedures and urge investors to contact the system or their participants directly to discuss these matters. Euroclear and Clearstream, Luxembourg Euroclear and Clearstream, Luxembourg each holds securities for their account holders and facilitates the clearance and settlement of securities transactions by electronic book entry transfer between the respective account holders, thereby eliminating the need for physical movements of certificates and any risk from lack of simultaneous transfers of securities. Euroclear and Clearstream, Luxembourg each provides various services including safekeeping, administration, clearance and settlement of internationally traded securities, and securities lending and borrowing. Euroclear and Clearstream, Luxembourg also deal with domestic securities markets in several countries through established depositary and custodial relationships. Euroclear and Clearstream, Luxembourg have established an electronic bridge between their two systems across which account holders may settle trades with each other. Account holders in Euroclear and Clearstream, Luxembourg are worldwide financial institutions including underwriters, securities brokers and dealers, banks, trust companies and clearing corporations. Indirect access to Euroclear and Clearstream, Luxembourg is available to other institutions that clear through or maintain a custodial relationship with an account holder of either system. Account holders' overall contractual relations with Euroclear and Clearstream, Luxembourg are governed by the rules and operating procedures of Euroclear and Clearstream, Luxembourg and any applicable laws. Euroclear and Clearstream, Luxembourg act under these rules and operating procedures only on behalf of their account holders, and have no record of or relationship with persons holding through their account holders. 37 41 DTC DTC has advised us that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Participants") and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a Participant, either directly or indirectly (collectively, the "Indirect Participants"). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through the Participants or the Indirect Participants. The ownership interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and Indirect Participants. DTC has also advised us that, pursuant to procedures established by it: - upon deposit of the restricted global note, DTC will credit the accounts of Participants designated by the Managers with portions of the principal amount of the restricted global note; and - ownership of such interest will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC, with respect to the Participants, or by the Participants and the Indirect Participants, with respect to other owners of beneficial interest in the restricted global note. Investors may hold their interests in the restricted global note directly through DTC, if they are Participants, or indirectly through organizations, including Euroclear and Clearstream, Luxembourg, which are Participants. General We understand that, under existing industry practices, if either we or the debt trustee requests any action of owners of book-entry interests or if an owner of a book-entry interest desires to give or take any action that a holder is entitled to give or take under the Indenture, the depositories would authorize their participants owning the relevant book-entry interests to give or take the action, and the participants would authorize indirect participants to give or take the action or would otherwise act upon the instructions of the indirect participants. Although Euroclear, Clearstream, Luxembourg and DTC have agreed to certain procedures to facilitate transfers of interests in the global notes among their account holders, they are under no obligation to perform or to continue to perform those procedures, and the procedures may be discontinued at any time. Neither we, nor the debt trustee, nor any agent of any of them will have any responsibility for the nonperformance or misperformance (as a result of insolvency, mistake, misconduct or otherwise) by Euroclear, Clearstream, Luxembourg or DTC or their respective account holders or intermediaries of their obligations under the rules and procedures governing their operations. Except as described in this offering memorandum and the Indenture, owners of interests in the global notes will not have notes registered in their names, will not receive physical delivery of notes in certificated form and will not be considered the registered owners or holders of the notes. So long as a nominee for DTC or Euroclear and Clearstream, Luxembourg or any of them is the registered holder of the global notes, such registered holder will be considered the sole owner or holder of the notes represented by such global notes for all purposes under the Indenture and the notes. Accordingly, each person owning a beneficial interest in the global notes must rely on the procedures of Euroclear, Clearstream, Luxembourg, or DTC, as the case may be, and their account holders to exercise any rights and remedies of a holder of notes under the Indenture. Payments of principal and interest on the global notes will be made to the 38 42 nominee of DTC or the common depositary on behalf of Euroclear or Clearstream, Luxembourg, as the case may be, as the registered owners of the global notes. The laws of some jurisdictions require that certain persons take physical delivery in definitive form of securities which they own. Accordingly, the ability to transfer beneficial interests in the global notes to those persons may be limited to that extent. Because DTC, Euroclear and Clearstream, Luxembourg can act only on behalf of their respective account holders, the ability of a person having beneficial interests in the global notes to pledge those interests to persons or entities that do not participate in the relevant clearing system, or otherwise take actions in respect of those interests, may be affected by the lack of a physical certificate evidencing those interests. PAYING AGENTS, TRANSFER AGENT, REGISTRAR AND EXCHANGE AGENT Clear Channel has initially appointed the debt trustee at its corporate trust office as a paying agent, transfer agent, registrar and exchange agent for the notes. In these capacities, the debt trustee will be responsible for, among other things, (1) maintaining a record of the aggregate holdings of notes represented by the Regulation S global note and the restricted global notes and accepting notes for exchange and registration of transfer, (2) ensuring that payments of principal and premium, if any, and interest in respect of the notes received by the debt trustee from Clear Channel are duly paid to DTC, Euroclear or Clearstream, Luxembourg or their nominees, and (3) transmitting to us any notices from the noteholders. The Company has also appointed Banque Internationale a Luxembourg S.A. to serve as a paying agent and transfer agent in Luxembourg. We will cause to be kept at the office of each transfer agent a register in which, subject to such reasonable regulations as we may prescribe, Clear Channel will provide for the registration of the notes and registration of transfers of the notes. Clear Channel may vary or terminate the appointment of any paying agent or transfer agent, or appoint additional or other such agents or approve any change in the office through which any such agent acts, provided that there shall at all times be a paying agent and a transfer agent in the Borough of Manhattan, The City of New York, New York and, as long as the notes are listed on the Luxembourg Stock Exchange, in Luxembourg. Clear Channel will provide notice of any resignation, termination or appointment of the debt trustee or the registrar or any paying agent or transfer agent, and of any change in the office through which any such agent will act. So long as the notes are listed on the Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange so require, notice of a change of paying agent or transfer agent or registrar will be published in a newspaper of general circulation in Luxembourg. 39 43 UNITED STATES TAXATION GENERAL This section summarizes the material U.S. tax consequences to holders of notes. It represents the views of our tax counsel, Akin, Gump, Strauss, Hauer & Feld L.L.P. However, the discussion is limited in the following ways: - The discussion only covers you if you buy your notes in the initial offering at the initial offering price to the public. - The discussion only covers you if your functional currency is the U.S. dollar and you hold your notes as a capital asset (that is, for investment purposes), and if you do not have a special tax status. - The discussion does not cover tax consequences that depend upon your particular tax situation in addition to your ownership of notes. We suggest that you consult your tax advisor about the consequences of holding notes in your particular situation. - The discussion is based on current law. Changes in the law may change the tax treatment of the notes. - The discussion does not cover state, local or foreign law. - The discussion does not apply to you if you are a Non-U.S. Holder of notes (as defined below) and if you (a) own 10% or more of the voting stock of Clear Channel, (b) are a "controlled foreign corporation" with respect to Clear Channel, or (c) are a bank making a loan in the ordinary course of its business. - We have not requested a ruling from the IRS on the tax consequences of owning the notes. As a result, the IRS could disagree with portions of this discussion. IF YOU ARE CONSIDERING BUYING NOTES, WE SUGGEST THAT YOU CONSULT YOUR TAX ADVISOR ABOUT THE TAX CONSEQUENCES OF HOLDING THE NOTES IN YOUR PARTICULAR SITUATION. THE EXCHANGE OFFER An exchange of restricted notes for exchange notes pursuant to the exchange offer will not be treated as an exchange or other taxable event for U.S. federal income tax purposes. Accordingly, there will be no U.S. federal income tax consequences to holders of restricted notes who exchange restricted notes for exchange notes pursuant to the exchange offer, and an exchanging holder will have the same adjusted tax basis and holding period in the exchange notes as it had in the restricted notes immediately before the exchange. TAX CONSEQUENCES TO U.S. HOLDERS This section applies to you if you are a "U.S. Holder". A "U.S. Holder" is: - an individual U.S. citizen or resident alien; - a corporation, or entity taxable as a corporation, that was created under U.S. law (federal or state); or - an estate or trust whose world-wide income is subject to U.S. federal income tax. If a partnership holds notes, the tax treatment of a partner will generally depend upon the status of the partner and upon the activities of the partnership. If you are a partner of a partnership holding notes, we suggest that you consult your tax advisor. 40 44 INTEREST - All holders of notes will be taxable on the U.S. dollar value of euros payable as interest on the notes, whether or not they elect to receive payments in euros. If you receive interest in the form of U.S. dollars, you will be considered to have received interest in the form of euros and to have sold those euros for U.S. dollars. For purposes of this discussion, "spot rate" generally means a currency exchange rate that reflects a market exchange rate available to the public for the euro. - If you are a cash method taxpayer (including most individual holders), you will be taxed on the value of the euro when it is received by you (if you receive euros) or when it is deemed received by you (if you receive U.S. dollars). The value of the euro will be determined using the "spot rate" in effect at such time. - If you are an accrual method taxpayer, you will be taxed on the value of the euro payable as interest as the interest accrues on the notes. In determining the value of the euro for this purpose, you may use the average foreign currency exchange rate during the relevant interest accrual period (or, if that period spans two taxable years, during the portion of the interest accrual period in the relevant taxable year). The average rate for an accrual period (or partial period) is the simple average of the spot rates for each business day of such period, or other average exchange rate for the period reasonably derived and consistently applied by you. When interest is actually paid, you will generally also recognize exchange gain or loss, taxable as ordinary income or loss, equal to the difference between (a) the value of the euro received as interest, as translated into U.S. dollars using the spot rate on the date of receipt, and (b) the U.S. dollar amount previously included in income with respect to such payment. If you receive interest in the form of U.S. dollars, clause (a) will be calculated on the basis of the value of the euro you would have received instead of U.S. dollars. If you do not wish to accrue interest income using the average exchange rate, certain alternative elections may be available. - Your tax basis in the euros you receive (or are considered to receive) as interest will be the aggregate amount reported by you as income with respect to the receipt of the euros. If you receive interest in the form of euros and subsequently sell those euros, or if you are considered to receive euros and those euros are considered to be sold for U.S. dollars on your behalf, additional tax consequences will apply as described in "Sale of Euros". ADDITIONAL INTEREST If you receive additional interest on your note as a result of a registration default: - We believe it should be treated in the same manner as regular interest on the note. - However, you might instead be required to report it as income when it accrues or becomes fixed, even if you are a cash method taxpayer. SALE OR RETIREMENT OF NOTES On the sale or retirement of your note: - If you receive the principal payment on your note in the form of U.S. dollars, you will be considered to have received the principal in the form of euros and to have sold those euros for U.S. dollars. - You will have taxable gain or loss equal to the difference between the amount received or deemed received by you and your tax basis in the note. If you receive (or are considered to receive) euros, those euros are valued for this purpose at the spot rate of the euro. Your tax basis in the note is the U.S. dollar value of the euro amount paid for the note, determined on the date of purchase. 41 45 - Any such gain or loss (except to the extent attributable to foreign currency gain or loss) will be capital gain or loss, and will be long term capital gain or loss if you held the note for more than one year. - You will realize foreign currency gain or loss to the extent the U.S. dollar value of the euro paid for the note, based on the spot rate at the time you dispose of the note, is greater or less than the U.S. dollar value of the euro paid for the note, based on the spot rate at the time you acquired the note. Any resulting foreign currency gain or loss will be ordinary income or loss. You will only recognize such foreign currency gain or loss to the extent you have gain or loss, respectively, on the overall sale or retirement of the note. - If you sell a note between interest payment dates, a portion of the amount you receive reflects interest that has accrued on the note but has not yet been paid by the sale date. That amount is treated as ordinary interest income and not as sale proceeds. - Your tax basis in the euros you receive (or are considered to receive) on sale or retirement of the note will be the value of euros reported by you as received on the sale or retirement of the note. If you receive euros on retirement of the note and subsequently sell those euros, or if you are considered to receive euros on retirement of the note and those euros are considered to be sold for U.S. dollars on your behalf, or if you sell the note for euros and subsequently sell those euros, additional tax consequences will apply as described in "Sale of Euros." - You will not have taxable gain or loss on the exchange of your note for an exchange note. SALE OF EURO - If you receive (or are considered to receive) euros as principal or interest on a note, and you later sell (or are considered to sell) those euros for U.S. dollars, you will have taxable gain or loss equal to the difference between the amount of U.S. dollars received and your tax basis in the euros. In addition, when you purchase a note in euros, you will have taxable gain or loss if your tax basis in the euros is different from the U.S. dollar value of the euros on the date of purchase. Any such gain or loss is foreign currency gain or loss taxable as ordinary income or loss. INFORMATION REPORTING AND BACKUP WITHHOLDING Under the tax rules concerning information reporting to the IRS: - Assuming you hold your notes through a broker or other securities intermediary, the intermediary must provide information to the IRS concerning interest and retirement proceeds on your notes, unless an exemption applies. - Similarly, unless an exemption applies, you must provide the intermediary with your Taxpayer Identification Number for its use in reporting information to the IRS. If you are an individual, this is your social security number. You are also required to comply with other IRS requirements concerning information reporting. - If you are subject to these requirements but do not comply, the intermediary must withhold 31% of all amounts payable to you on the notes (including principal payments). If the intermediary withholds payments, you may use the withheld amount as a credit against your federal income tax liability. - All individuals are subject to these requirements. Some holders, including all corporations, tax-exempt organizations and individual retirement accounts, are exempt from these requirements. 42 46 TAX CONSEQUENCES TO NON-U.S. HOLDERS This section applies to you if you are a "Non-U.S. Holder." A "Non-U.S. Holder" is: - an individual that is a nonresident alien; - a corporation organized or created under non-U.S. law; or - an estate or trust that is not taxable in the U.S. on its worldwide income. WITHHOLDING TAXES Generally, payments of principal and interest on the notes will not be subject to U.S. withholding taxes. However, for the exemption from withholding taxes to apply to you, you must meet one of the following requirements: - You provide your name, address, and a signed statement that you are the beneficial owner of the note and are not a U.S. Holder. This statement is generally made on Form W-8 or Form W-8BEN. - You or your agent claim an exemption from withholding tax under an applicable tax treaty. This claim is generally made on Form 1001 or Form W-8BEN. - You or your agent claim an exemption from withholding tax on the ground that the income is effectively connected with the conduct of a trade or business in the U.S. This claim is generally made on Form 4224 or Form W-8ECI. We suggest that you consult your tax advisor about the specific methods for satisfying these requirements. These procedures will change on January 1, 2001. In addition, a claim for exemption will not be valid if the person receiving the applicable form has actual knowledge that the statements on the form are false. SALE OR RETIREMENT OF NOTES If you sell a note or it is redeemed, you will not be subject to federal income tax on any gain unless one of the following applies: - The gain is connected with a trade or business that you conduct in the U.S. - You are an individual, you are present in the U.S. for at least 183 days during the year in which you dispose of the note, and certain other conditions are satisfied. - The gain represents accrued interest, in which case the rules for interest would apply. U.S. TRADE OR BUSINESS If you hold your note in connection with a trade or business that you are conducting in the U.S.: - Any interest on the note, and any gain from disposing of the note, generally will be subject to income tax as if you were a U.S. Holder. - If you are a corporation, you may be subject to an additional "branch profits tax" on your earnings that are connected with your U.S. trade or business, including earnings from the note. This tax is 30%, but may be reduced or eliminated by an applicable income tax treaty. ESTATE TAXES If you are an individual, your notes will not be subject to U.S. estate tax when you die. However, this rule only applies if, at your death, payments on the notes were not connected to a trade or business that you were conducting in the U.S. 43 47 INFORMATION REPORTING AND BACKUP WITHHOLDING U.S. rules concerning information reporting and backup withholding are described above. These rules apply to Non-U.S. Holders as follows: - Principal and interest payments you receive will be automatically exempt from the usual rules if you provide the tax certifications needed to avoid withholding tax on interest, as described above. The exemption does not apply if the recipient of the applicable form knows that the form is false. In addition, interest payments made to you will be reported to the IRS on Form 1042-S. - Sale proceeds you receive on a sale of your notes through a broker may be subject to information reporting and/or backup withholding if you are not eligible for an exemption. In particular, information reporting and backup reporting may apply if you use the U.S. office of a broker, and information reporting (but not generally backup withholding) may apply if you use the foreign office of a broker that has certain connections to the U.S. We suggest that you consult your tax advisor concerning information reporting and backup withholding on a sale. 44 48 CURRENCY CONVERSIONS AND FOREIGN EXCHANGE RISKS AFFECTING THE NOTES CURRENCY CONVERSIONS Initial investors are required to pay for the notes in euro. See "-- Foreign Exchange Risks." We are required to make payments of principal and interest and premium, if any, in respect of the notes in euro. However, holders of notes holding through DTC (but excluding Euroclear or Clearstream, Luxembourg and investors who hold beneficial interests in the notes, directly or indirectly, through Euroclear or Clearstream, Luxembourg), will be paid in U.S. dollars converted from such euro payments by the trustee unless the holder elects to receive payments in euro as described below. Payments of principal and interest and premium, if any, on notes held through DTC will be converted to U.S. dollars in accordance with procedures established from time to time by the debt trustee and DTC and paid to Cede & Co. for payment to owners of beneficial interests in the restricted global notes (except for holders through Euroclear or Clearstream, Luxembourg or holders electing to receive euros). All costs of such conversion will be borne by those owners receiving U.S. dollars by deduction from such payments. If the debt trustee is not able to exchange euro into U.S. dollars, payments of the aggregate amount due to all such owners on the payment date will be made in euro outside of DTC. An owner of a beneficial interest in the restricted global note may elect to receive payment in respect of the principal of or premium, if any, or interest on the notes in euro by notifying the Participant through which its global note is held at least fifteen days prior to the payment of (1) such owner's election to receive all or a portion of such payment in euro and (2) wire transfer instructions to an account denominated in euro with respect to any payment to be made in euro. Such Participant must notify DTC of such election and wire transfer instructions and on or prior to the twelfth day prior to the payment. DTC will notify the debt trustee of such election and wire transfer instructions on or prior to the tenth day prior to the payment. If complete instructions are received by the Participant and forwarded by the Participant to DTC and by DTC to the debt trustee, on or prior to such dates, the owner of the beneficial interest in the global note will receive payment in euro outside of DTC; otherwise, only U.S. dollar payments will be made through DTC. Holders of notes will be subject to foreign exchange risks as to payments of principal and interest and premium, if any, that may have important economic and tax consequences to them. For further information as to such consequences, see "-- Foreign Exchange Risks" and "United States Taxation." FOREIGN EXCHANGE RISKS An investment in notes which are denominated in, and the payment of such is to be made in, a currency other than the currency of the country in which the purchaser is resident or the currency in which the purchaser conducts its business or activities (the "home currency") entails significant risks that are not associated with a similar investment in a security denominated in the home currency. Such risks include, without limitation, the possibility of significant changes in rates of exchange between the home currency and the euro and the possibility of the imposition or modification of foreign exchange controls with respect to the euro. Such risks generally depend on economic and political events over which we have no control. In recent years, rates of exchange for certain currencies, including the euro, have been highly volatile and such volatility may be expected to continue in the future. Fluctuations in any particular exchange rate that have occurred in the past are not necessarily indicative however, of fluctuations in such rate that may occur during the term of the notes. Depreciation of the euro against the relevant home currency could result in a decrease in the effective yield of such note below its coupon rate and, in certain circumstances, could result in a loss to the investor on a home currency basis. This description of foreign currency risks does not describe all the risks of an investment in securities denominated in a currency other than the home currency. Prospective investors should consult with their own financial and legal advisors as to such risks entailed by an investment in the notes. 45 49 PLAN OF DISTRIBUTION Each broker-dealer that receives exchange 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 exchange notes. This document, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes or market-making activities or other trading activities. Clear Channel will not receive any proceeds from any sale of exchange notes by broker-dealers. Exchange notes received by broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transaction in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange 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 at 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 commissions or concessions from any such broker-dealer or the purchasers of any such exchange notes. Any broker-dealer that resells exchange 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 exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any such resale of exchange notes and any commission 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 broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period starting on the date of this prospectus and ending on the close of business on the earlier to occur of: - the date on which all exchange notes held by broker-dealers eligible to use the prospectus to satisfy their prospectus delivery obligations under the Securities Act have been sold and - the date 180 days after the consummation of the exchange offer, Clear Channel will make this document, as amended or supplemented, available to any broker-dealer in connection with any such resale and will send additional copies of this document and any amendment or supplement to this prospectus to any broker-dealer that requests such documents. Clear Channel has agreed to pay all expenses incident to the exchange offer, including the expense of one counsel for the holders of the restricted notes, other than commissions or concession of any broker-dealers and will indemnify the holders of the restricted notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. 46 50 EXPERTS The consolidated financial statements of Clear Channel at December 31, 1999 and 1998, and for each of the three years in the period ended December 31, 1999, and the financial statement schedule appearing in Clear Channel's Annual Report on Form 10-K for the year ended December 31, 1999, have been audited by Ernst & Young LLP, independent auditors, as set forth in their reports thereon included therein and incorporated herein by reference which are based in part on the reports of KPMG LLP, independent auditors, as to each of the three years in the period ended December 31, 1999. Such consolidated financial statements and schedule referred to above are incorporated herein by reference in reliance upon such reports given on the authority of such firms as experts in accounting and auditing. The consolidated financial statements of SFX at December 31, 1999 and 1998, and for each of the three years in the period ended December 31, 1999 and the related financial statement schedule appearing in SFX's Annual Report on Form 10-K/A for the year ended December 31, 1999, have been audited by Ernst & Young LLP, independent auditors, as set forth in their report thereon included therein and incorporated herein by reference. Such consolidated financial statements and schedule referred to above are incorporated herein by reference in reliance upon the report of such firm given on the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Jacor Communications, Inc. and its subsidiaries as of December 31, 1998 and 1997 and for each of the three years in the period ended December 31, 1998 incorporated into this document by reference to Clear Channel's Current Report on Form 8-K dated December 9, 1998, as amended by Form 8-K/A filed on February 23, 1999 and Form 8-K/A dated April 12, 1999, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing. The consolidated financial statements of Jacor Communications, Inc. and its subsidiaries as of December 31, 1997 and 1996 and for each of the three years in the period ended December 31, 1997 incorporated into this document by reference to Clear Channel's Current Report on Form 8-K dated December 9, 1998, as amended by Form 8-K/A filed on February 23, 1999 and Form 8-K/A dated April 12, 1999, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in accounting and auditing. The consolidated financial statements of AMFM Inc. and Subsidiaries (formerly Chancellor Media Corporation) as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999 incorporated into this document by reference to the Current Report on Form 8-K of Clear Channel Communications, Inc., dated June 14, 2000, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. The consolidated financial statements of Capstar Broadcasting Corporation and Subsidiaries as of December 31, 1998 and 1997 and for each of the three years in the period ended December 31, 1998 incorporated into this document by reference to the Current Report on Form 8-K of Clear Channel Communications, Inc., dated November 18, 1999, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting. LEGAL OPINIONS The validity of the exchange notes offered hereby will be passed upon for Clear Channel by our special counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P. (a partnership including professional corporations), San Antonio, Texas. Alan D. Feld, the sole shareholder of a professional corporation which is a partner of Akin, Gump, Strauss, Hauer & Feld, L.L.P., is a director of Clear Channel and as of September 30, 2000, owns approximately 139,500 shares of common stock (including presently exercisable nonqualified options to acquire approximately 123,500 shares). Vernon E. Jordan, Jr., of counsel to Akin, 47 51 Gump, Strauss, Hauer & Feld, L.L.P., is also a director of Clear Channel and as of September 30, 2000, holds options exercisable to acquire 89,300 shares of common stock. LISTING AND GENERAL INFORMATION In connection with the application to list the exchange notes on the Luxembourg Stock Exchange, a legal notice relating to the issue of the exchange notes and copies of the Articles of Incorporation of Clear Channel was deposited with the Chief Registrar of the District Court of Luxembourg ("Greffier en Chef du Tribunal d'Arrondissement de et a Luxembourg") where such documents may be examined and copies obtained. Copies of the indenture, the registration rights agreement, the documents listed above and the financial statements are available, and copies of Clear Channel's most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K may be obtained free of charge, at the specified office of the paying agent in Luxembourg, if and so long as the exchange notes are listed on the Luxembourg Stock Exchange. Clear Channel does not publish non-consolidated financial statements. The issue of the exchange notes was duly authorized by Clear Channel pursuant to an authorization of its Board of Directors on June 2, 2000. The most recently available financial statements of Clear Channel have been filed at the Company Registry in Luxembourg (Registre de Commerce et des Societes) at the District Court of Luxembourg and such documents are publicly available at such Registry and copies can be obtained at the Registry. The exchange notes have been accepted for clearance through DTC (CUSIP Number: ) and the Euroclear System and Clearstream Luxembourg (Common Code ). The ISIN for the exchange notes is . The Regulation S notes have been accepted for clearance through the Euroclear and Clearstream, Luxembourg systems (Common Code 11378668). The ISIN for the Regulation S notes is XS0113786684. 48 52 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Article 2.02-1 of the TBCA provides for indemnification of directors and officers in certain circumstances. In addition, the Texas Miscellaneous Corporation Law provides that a corporation may amend its articles of incorporation to provide that no director shall be liable to the corporation or its stockholders for monetary damages for an act or omission in the director's capacity as a director, provided that the liability of a director is not eliminated or limited (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or knowing violation of law, (iii) any transaction from which such director derived an improper personal benefit, or (iv) an act or omission for which the liability of a director is expressly provided by an applicable statute. Clear Channel has amended its Charter and added Article Eleven adopting such limitations on a director's liability. The Clear Channel Charter also provides in Article Nine for indemnification of directors or officers in connection with the defense or settlement of suits brought against them in their capacities as directors or officers of Clear Channel, except in respect of liabilities arising from gross negligence or willful misconduct in the performance of their duties. Article IX(8) of the Clear Channel Bylaws provides for indemnification of any person made a party to a proceeding by reason of such person's status as a director, officer, employee, partner or trustee of Clear Channel, except in respect of liabilities arising from negligence or misconduct in the performance of their duties. An insurance policy obtained by Clear Channel provides for indemnification of officers and directors of Clear Channel and certain other persons against liabilities and expenses incurred by any of them in certain stated proceedings and under certain stated conditions. ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
Exhibit No. Description of Exhibit - ----------- ---------------------- 1.1* Subscription Agreement, dated July 3, 2000, among the Company, ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, and Westdeutsche Landesbank Girozentrale. 4.1 Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays, B.J. McCombs, John M. Schaefer, and John W. Barger, dated May 31, 1977 (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-1 (Reg. No. 33-289161) dated April 19, 1984). 4.2 Fourth Amended and Restated Credit Agreement by and among Clear Channel Communications, Inc., Bank of America, N.A., as administrative agent, Fleet National Bank, as documentation agent, the Bank of Montreal and Toronto Dominion (Texas), Inc., as co-syndication agents, and certain other lenders dated June 15, 2000 (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.3 Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997). 4.4 First Supplemental Indenture dated March 30, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York,
II-1 53 as Trustee (incorporated by reference to the exhibits of Clear Channel's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 4.5 Second Supplemental Indenture dated June 16, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Current Report on Form 8-K dated August 27, 1998). 4.6 Third Supplemental Indenture dated June 16, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Current Report on Form 8-K dated August 27, 1998). 4.7 Fourth Supplemental Indenture dated November 24, 1999, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Annual Report on Form 10-K filed March 14, 2000). 4.8 Fifth Supplemental Indenture dated June 21, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.9 Sixth Supplemental Indenture dated June 21, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.10 Seventh Supplemental Indenture dated July 7, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.11* Registration Rights Agreement, dated as of July 7, 2000, among the Company, ABN AMRO Bank N.V., Deutsche Bank A.G. London, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, and Westdeutsche Landesbank Girozentrale. 4.12 Form of 6.50% Note due 2005 (included in Seventh Supplemental Indenture filed as Exhibit 4.10). 5* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. 12* Computation of Ratio of Earnings to Fixed Charges. 23.1* Consent of Ernst & Young LLP. 23.2* Consent of KPMG LLP. 23.3* Consent of Ernst & Young LLP. 23.4* Consent of PricewaterhouseCoopers LLP. 23.5* Consent of PricewaterhouseCoopers LLP. 23.6* Consent of PricewaterhouseCoopers LLP.
II-2 54 23.7 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in opinion filed as Exhibit 5). 24 Power of Attorney (included on signature page of this Registration Statement). 25 Statement on Form T-1 of the eligibility of The Bank of New York, as trustee under the Indenture (incorporated by reference to the exhibits to Clear Channel's Registration Statement on Form S-3 dated July 21, 2000). 99.1* Form of Letter of Transmittal
*Filed herewith. Clear Channel agrees to furnish supplementally a copy of any omitted schedules or exhibits to the SEC upon request. ITEM 22. UNDERTAKINGS. (a) The undersigned Registrant hereby undertakes: (1) To file, during any period 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. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective Registration Statement; (iii) To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the SEC by the Registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. II-3 55 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (b) The undersigned Registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. (c) Insofar as indemnification for liabilities arising under 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 SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. (d) The undersigned Registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 herein, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request. (e) The undersigned Registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective. II-4 56 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-4 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of San Antonio, State of Texas, on October 19, 2000. CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ L. LOWRY MAYS --------------------------------------- L. Lowry Mays Chief Executive Officer POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors and officers of Clear Channel Communications, Inc., hereby constitute and appoint L. Lowry Mays, Mark P. Mays, Randall T. Mays and Herbert W. Hill, Jr., and each of them, his true and lawful attorneys-in-fact and agents with full power of substitution and resubstitution, for him and his name place and stead, in any and all capacities, to execute any and all amendments (including post-effective amendments) to this registration statement, and to file the same with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents or any of them, or their or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated below.
NAME TITLE DATE ---- ----- ---- /s/ L. LOWRY MAYS Chief Executive October 19, 2000 - ------------------------------------ Officer and Director L. Lowry Mays /s/ THOMAS O. HICKS Vice Chairman and Director October 19, 2000 - ------------------------------------ Thomas O. Hicks /s/ RANDALL T. MAYS Executive Vice President/Chief October 19, 2000 - ------------------------------------ Financial Officer (Principal Financial Randall T. Mays Officer) and Director /s/ HERBERT W. HILL, JR. Senior Vice President/Chief Accounting October 19, 2000 - ------------------------------------ Officer (Principal Accounting Officer) Herbert W. Hill, Jr. /s/ MARK P. MAYS President, Chief Operating Officer and October 19, 2000 - ------------------------------------ Director Mark P. Mays /s/ B.J. McCOMBS Director October 19, 2000 - ------------------------------------ B.J. McCombs
II-5 57 Director - ------------------------------------ Alan D. Feld /s/ THEODORE H. STRAUSS Director October 19, 2000 - ------------------------------------ Theodore H. Strauss Director - ------------------------------------ John H. Williams /s/ KARL ELLER Director October 19, 2000 - ------------------------------------ Karl Eller /s/ ROBERT L. CRANDALL Director October 19, 2000 - ------------------------------------ Robert L. Crandall /s/ VERNON E. JORDAN, JR. Director October 19, 2000 - ------------------------------------ Vernon E. Jordan, Jr. /s/ MICHAEL J. LEVITT Director October 19, 2000 - ------------------------------------ Michael J. Levitt /s/ PERRY J. LEWIS Director October 19, 2000 - ------------------------------------ Perry J. Lewis
II-6 58 INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION - ------- ----------- 1.1* Subscription Agreement, dated July 3, 2000, among the Company, ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, and Westdeutsche Landesbank Girozentrale. 4.1 Buy-Sell Agreement by and between Clear Channel Communications, Inc., L. Lowry Mays, B.J. McCombs, John M. Schaefer, and John W. Barger, dated May 31, 1977 (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-1 (Reg. No. 33-289161) dated April 19, 1984). 4.2 Fourth Amended and Restated Credit Agreement by and among Clear Channel Communications, Inc., Bank of America, N.A., as administrative agent, Fleet National Bank, as documentation agent, the Bank of Montreal and Toronto Dominion (Texas), Inc., as co-syndication agents, and certain other lenders dated June 15, 2000 (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.3 Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Quarterly Report on Form 10-Q for the quarter ended September 30, 1997). 4.4 First Supplemental Indenture dated March 30, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Quarterly Report on Form 10-Q for the quarter ended March 31, 1998). 4.5 Second Supplemental Indenture dated June 16, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Current Report on Form 8-K dated August 27, 1998). 4.6 Third Supplemental Indenture dated June 16, 1998, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Current Report on Form 8-K dated August 27, 1998). 4.7 Fourth Supplemental Indenture dated November 24, 1999, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's Annual Report on Form 10-K filed March 14, 2000). 4.8 Fifth Supplemental Indenture dated June 21, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.9 Sixth Supplemental Indenture dated June 21, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000).
59 4.10 Seventh Supplemental Indenture dated July 7, 2000, to Senior Indenture dated October 1, 1997, by and between Clear Channel Communications, Inc. and The Bank of New York, as Trustee (incorporated by reference to the exhibits of Clear Channel's registration statement on Form S-3 (Reg. No. 333-42028) dated July 21, 2000). 4.11* Registration Rights Agreement, dated as of July 7, 2000, among the Company, ABN AMRO Bank N.V., Deutsche Bank AG London, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, and Westdeutsche Landesbank Girozentrale. 4.12 Form of 6.50% Note due 2005 (included in Seventh Supplemental Indenture filed as Exhibit 4.10). 5* Opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P. 12* Computation of Ratio of Earnings to Fixed Charges. 23.1* Consent of Ernst & Young LLP. 23.2* Consent of KPMG LLP. 23.3* Consent of Ernst & Young LLP. 23.4* Consent of PricewaterhouseCoopers LLP. 23.5* Consent of PricewaterhouseCoopers LLP. 23.6* Consent of PricewaterhouseCoopers LLP. 23.7 Consent of Akin, Gump, Strauss, Hauer & Feld, L.L.P. (included in opinion filed as Exhibit 5). 24 Power of Attorney (included on signature page of this Registration Statement). 25 Statement on Form T-1 of the eligibility of The Bank of New York, as trustee under the Indenture (incorporated by reference to the exhibits to Clear Channel's Registration Statement on Form S-3 dated July 21, 2000). 99.1* Form of Letter of Transmittal
*Filed herewith. EX-1.1 2 d80863ex1-1.txt SUBSCRIPTION AGREEMENT DATED 7/3/00 1 EXHIBIT 1.1 CLEAR CHANNEL COMMUNICATIONS, INC. Debt Securities Subscription Agreement July 3, 2000 ABN AMRO Bank N.V. Deutsche Bank AG London Barclays Bank PLC Credit Suisse First Boston (Europe) Limited Merrill Lynch International Salomon Brothers International Limited Westdeutsche Landesbank Girozentrale c/o ABN AMRO Bank N.V. 250 Bishopsgate London EC2M 4AA United Kingdom Ladies and Gentlemen: Clear Channel Communications, Inc., a Texas corporation (the "Company"), proposes to issue and sell to the managers named in Schedule II hereto (the "Managers" which term shall also include any manager substituted as herein provided), for whom you are acting as representatives (the "Representatives"), the principal amount of its debt securities identified in Schedule I hereto (the "Securities"), to be issued under the Indenture, dated as of October 1, 1997, as supplemented by the Seventh Supplemental Indenture to be dated on or about July 7, 2000 (as so supplemented, the "Indenture"), in each case, among the Company and The Bank of New York, as debt trustee (the "Trustee"). If the firm or firms listed in Schedule II hereto include only the firm or firms listed in Schedule I hereto, then the terms "Managers" and "Representatives," as used herein shall each be deemed to refer to such firm or firms. The Company understands that the Managers propose to make an offering of the Securities on the terms and in the manner set forth herein and agrees that the Managers may resell, subject to the conditions set forth herein, all or a portion of the 2 Securities to purchasers ("Subsequent Purchasers") at any time after the date of this Agreement. The Securities are to be offered and sold through the Managers without being registered under the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission (the "Commission") thereunder (collectively the "Securities Act"), in reliance upon exemptions therefrom. Pursuant to the terms of the Securities and the Indenture, investors that acquire Securities may only resell or otherwise transfer such Securities if such Securities are hereafter registered under the Securities Act or if an exemption from the registration requirements of the Securities Act is available (including the exemption afforded by Rule 144A ("Rule 144A") or Regulation S ("Regulation S") of the rules and regulations promulgated under the Securities Act by the Commission). The Company has prepared and will deliver to the Managers, on the date hereof, copies of a final offering memorandum dated July 3, 2000 (the "Offering Memorandum") used or to be used by the Managers in connection with their solicitation of purchases of, or offering of, the Securities. The Company has previously delivered to the Managers copies of a preliminary offering memorandum dated June 15, 2000 (the "Preliminary Offering Memorandum"). All references in this Agreement to financial statements and schedules and other information which is "contained," "included" or "stated" in the Offering Memorandum (or other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information which is incorporated by reference in the Offering Memorandum; and all references in this Agreement to amendments or supplements to the Offering Memorandum shall be deemed to mean and include the filing of any document under the Securities Exchange Act of 1934 as amended, and the rules and regulations of the Commission thereunder (the "Exchange Act") which is incorporated by reference in the Offering Memorandum. The holders of the Securities identified in Schedule I will be entitled to the benefits of the registration rights agreement (the "Registration Rights Agreement"), to be dated as of the Closing Date (as defined below) among the Company and the Managers, pursuant to which the Company will agree to file, as soon as practicable after the Closing Date but in any event within 150 days of the Closing Date, a registration statement with the Commission registering the Exchange Securities (as defined in the Registration Rights Agreement) under the Securities Act. The Company hereby agrees with the Managers as follows: 1. The Company agrees to issue and sell the Securities to the several Managers as hereinafter provided, and each Manager, on the basis of the representations and warranties herein contained, but subject to the conditions hereinafter stated, agrees to 2 3 purchase, severally and not jointly, from the Company the respective principal amount of Securities set forth opposite such Manager's name in Schedule II hereto at the purchase price of 99.077% of the principal amount thereof (which shall equal the issue price of each Security of 99.627%, less a selling concession of 0.30% and a combined management and underwriting commission of 0.25% of the principal amount of the Securities which may be divided among you in such proportions as you may determine which is to be payable to the Managers in connection with the offering and sale of the Securities) (the "Purchase Price"), plus accrued interest, if any, from the date specified in Schedule I hereto to the date of payment and delivery. 2. The Company understands that the several Managers intend (i) to make an offering of their respective portions of the Securities and (ii) initially to offer the Securities upon the terms set forth in the Offering Memorandum. In connection with the offering and sale of the Securities, ABN AMRO Bank N.V. or its affiliates may over-allot or effect transactions which stabilize or maintain the market price of the Securities at levels above those which might otherwise prevail in the open market. Such transactions may be effected in the over-the-counter markets or otherwise. Such stabilizing, if commenced, may be discontinued at any time. 3. Payment of the Purchase Price for the Securities shall be made by wire transfer in immediately available funds to the account or accounts specified by the Company to the Representatives (which account information shall be provided no later than noon on the Business Day prior to the Closing Date (as defined below)) at 9:00 A.M., London time, on July 7, 2000 at the offices of Cravath, Swaine & Moore, 33 King William Street, London EC4R 9DU (or at such other time and place on the same or such other date, not later than the fifth Business Day (as defined below) thereafter, as you and the Company may agree in writing). As used herein, the term "Business Day" means any day on which the Trans-European Automated Real-Time Gross Settlement Express Transfer (TARGET) System is open and such day is not a day on which banks or foreign exchange markets are permitted or required to be closed in London. The time and date of such payment and delivery with respect to the Securities are referred to herein as the "Closing Date". Payment of the Purchase Price for the Securities shall be made (against delivery in the case of (i)) to (i) the common depositary for Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear System ("Euroclear") and Clearstream Banking, societe anonyme, Luxembourg ("Clearstream, Luxembourg") and (ii) the nominee of The Depository Trust Company for the respective accounts of the several Managers of global notes (the "Global Notes") representing the Securities, with any transfer taxes payable in connection with the transfer to the Managers of the Securities duly paid by the Company. 3 4 4. The Company represents and warrants to each Manager that: (a) assuming the Managers offer the Securities in the manner described herein, the Company has not, directly or indirectly, solicited any offer to buy or offered to sell, and each will not, directly or indirectly, solicit any offer to buy or offer to sell, in the United States or to any United States citizen or resident, any security which is or would be integrated with the sale of the Securities in a manner that would require the Securities to be registered under the Securities Act; (b) the Preliminary Offering Memorandum as of its date did not contain, and the Offering Memorandum at the Closing Date will not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, that this representation, warranty and agreement shall not apply to statements in or omissions from the Preliminary Offering Memorandum and the Offering Memorandum made in reliance upon and in conformity with information furnished to the Company in writing by or on behalf of any Manager with respect to that Manager through ABN AMRO Bank N.V. or Deutsche Bank AG London expressly for use in the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be; (c) the documents incorporated by reference in the Preliminary Offering Memorandum and in the Offering Memorandum, or portions thereof, to the extent only a portion of a document is incorporated by reference in the Preliminary Offering Memorandum or in the Offering Memorandum, when they became effective or were filed with the Commission, as the case may be, conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Preliminary Offering Memorandum or in the Offering Memorandum, when such documents become effective or are filed with the Commission, as the case may be, will conform in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (d) the Company has been duly organized and is validly existing as a corporation in good standing under the laws of the State of Texas, with corporate power and authority to own its properties and conduct its business as described in 4 5 the Offering Memorandum; each of the subsidiaries of the Company as listed on Schedule III hereto (collectively, the "Subsidiaries") has been duly organized and is validly existing in good standing under the laws of the jurisdiction of its organization, with power and authority to own or lease its properties and conduct its business as described in the Offering Memorandum; the Company and each of the Subsidiaries are duly qualified to transact business in all jurisdictions in which the conduct of their business requires such qualification and a failure to qualify would have a materially adverse effect upon the business or financial condition of the Company and the Subsidiaries taken as a whole; except as set forth on Schedule III hereto, or as described in the Offering Memorandum, the outstanding shares of capital stock of each of the Subsidiaries owned by the Company or a subsidiary have been duly authorized and validly issued, are fully paid and nonassessable and are owned by the Company or another subsidiary free and clear of all liens, encumbrances and security interests and no options, warrants or other rights to purchase, agreements or other obligations to issue or other rights to convert any obligations into shares of capital stock or ownership interests in the Subsidiaries are outstanding; (e) the authorized shares of Common Stock of the Company have been duly authorized. The outstanding shares of Common Stock of the Company have been duly authorized and are validly issued, fully-paid and non-assessable; (f) this Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms; (g) the Registration Rights Agreement and the Indenture, upon due execution by or on behalf of the Company, will constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their respective terms; (h) the Securities, upon due execution by the Company, authentication by the Trustee in accordance with the provisions of the Indenture and delivery to and payment for by the Managers pursuant to this Agreement, will constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, and will constitute direct, unsecured obligations of the Company and will rank the same as all other unsecured and unsubordinated debt of the Company; (i) the information set forth under the caption "Capitalization" in the Offering Memorandum is true and correct. The Securities conform in all material respects with the statements concerning them in the Offering Memorandum; 5 6 (j) the Commission has not issued an order preventing or suspending the proposed offering of the Securities nor instituted proceedings for that purpose; (k) the consolidated financial statements of the Company and its subsidiaries, together with related notes and schedules incorporated by reference in the Offering Memorandum present fairly the financial position and the results of operations of the Company and its subsidiaries consolidated, at the indicated dates and for the indicated periods. Such financial statements have been prepared in accordance with generally accepted principles of accounting, consistently applied throughout the periods involved, and all adjustments necessary for a fair presentation of results for such periods have been made. The selected and summary financial and statistical data included in the Offering Memorandum present fairly the information shown therein and have been compiled on a basis consistent with the financial statements incorporated by reference therein and the books and records of the Company. The pro forma financial information included in the Offering Memorandum present fairly the information shown therein, have been properly compiled on the pro forma bases described therein, and, in the opinion of the Company, the assumptions used in the preparation thereof are reasonable and the adjustments used therein are appropriate to give effect to the transactions or circumstances referred to therein; (l) except for those license renewal applications of the Company or its subsidiaries currently pending before the Federal Communications Commission (the "FCC"), or as set forth in the Offering Memorandum or in Schedule III hereto, there is no action or proceeding pending or, to the knowledge of the Company, threatened against the Company or any of the Subsidiaries before any court or administrative agency which could reasonably be likely to result in any material adverse change in the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) of the Company and of the Subsidiaries (taken as a whole); (m) the Company and the Subsidiaries have good and marketable title to all of the properties and assets reflected in the financial statements herein above described (or as described in the Offering Memorandum) subject to no material lien, mortgage, pledge, charge or encumbrance of any kind, except those reflected in such financial statements or as described in the Offering Memorandum or set forth on Schedule III. The Company and the Subsidiaries occupy their leased properties under valid leases with such exceptions as are not material to the Company and its subsidiaries taken as a whole and do not materially interfere with the use made and proposed to be made of such properties by the Company and its Subsidiaries; 6 7 (n) the Company and the Subsidiaries have filed all Federal, State and foreign income tax returns which have been required to be filed and have paid all taxes indicated by said returns and all assessments received by them or any of them to the extent that such taxes have become due and are not being contested in good faith. Except as set forth in Schedule III, the Company has no knowledge of any material tax deficiency that has been or might be asserted against the Company; (o) since the last date as of which information is given in the Offering Memorandum, as it may be amended or supplemented, there has not been any material adverse change or any development involving a prospective material adverse change in or affecting the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) or business prospects of the Company and its subsidiaries (taken as a whole), whether or not occurring in the ordinary course of business, other than general economic and industry conditions, changes in the ordinary course of business and changes or transactions described or contemplated in the Offering Memorandum and there has not been any material definitive agreement entered into by the Company or the Subsidiaries, other than transactions in the ordinary course of business and changes and transactions contemplated by the Offering Memorandum, as it may be amended or supplemented. None of the Company or the Subsidiaries have any material contingent obligations which are not disclosed in the Offering Memorandum, as it may be amended or supplemented; (p) no event has occurred which is or would (with the passage of time, the giving of notice or the making of any determination) become an Event of Default (as described in the Offering Memorandum) under the Securities; (q) neither the Company nor any of the Subsidiaries is or with the giving of notice or lapse of time or both, will be in default under its certificate or articles of incorporation, by-laws or partnership agreement or any agreement, lease, contract, indenture or other instrument or obligation to which it is a party or by which it, or any of its properties, is bound and which default is of material significance in respect of the business or financial condition of the Company and its subsidiaries (taken as a whole). The execution and delivery of this Agreement and the consummation of the transactions herein contemplated and the fulfillment of the terms hereof will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust or other material agreement or instrument to which the Company or any Subsidiary is a party, or of the certificate or articles of incorporation, by-laws or partnership agreement of the Company or any order, rule or regulation applicable 7 8 to the Company or any Subsidiary, or of any court or of any regulatory body or administrative agency or other governmental body having jurisdiction, except in all cases a conflict, breach or default which would not have a materially adverse effect on the business or financial condition of the Company and the subsidiaries (taken as a whole); (r) all payments by the Company in respect of the Securities may be made without withholding or deduction for or on account of any taxes, duties, assessments or charges of whatever nature imposed or levied by or on behalf of the United States or any political subdivision thereof or any authority therein or thereof having power to tax, unless such withholding or deduction is required by law, in which event, the Company shall pay such additional amounts as will result in the receipt by the holders of the Securities of such amounts as would have been received by them if no such withholding or deduction had been required, as provided in the Indenture; (s) each approval, consent, order, authorization, designation, declaration or filing by or with any regulatory, administrative or other governmental body necessary in connection with the execution and delivery by the Company of this Agreement and the consummation of the transactions herein contemplated (except such additional steps as may be required by the National Association of Securities Dealers, Inc., the Luxembourg Stock Exchange or the New York Stock Exchange or may be necessary to qualify the Securities for a public offering by the Managers under State securities or Blue Sky laws) has been obtained or made and is in full force and effect; (t) the Company and each of the Subsidiaries hold all material licenses, certificates and permits from governmental authorities, including without limitation, the FCC, which are necessary to the conduct of their businesses; and neither the Company nor any of the Subsidiaries has received notice of any infringement of any material patents, patent rights, trade names, trademarks or copyrights, which infringement is material to the business of the Company and the Subsidiaries (taken as a whole); (u) Ernst & Young LLP and PricewaterhouseCoopers LLP, both of whom have certified certain of the financial statements incorporated by reference in the Offering Memorandum, are to the knowledge of the Company independent public accountants as required by the Securities Act; (v) to the Company's knowledge, there are no affiliations or associations between any member of the National Association of Securities Dealers and any of 8 9 the Company's officers, directors or 5% or greater security holders or set forth in Schedule III; (w) neither the Company nor any Subsidiary is an "investment company" within the meaning of such term under the Investment Company Act of 1940 and the rules and regulations of the Commission thereunder; (x) the Company maintains a system of internal accounting controls sufficient to provide reasonable assurances that (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences; (y) the Company and each of its Subsidiaries carry, or are covered by, insurance, including self insurance, in such amounts and covering such risks as is adequate for the conduct of their respective businesses and the value of their respective properties and as is customary for companies engaged in similar industries; and (z) except as set forth in Schedule III, the Company is in compliance in all material respects with all presently applicable provisions of the Employee Retirement Income Security Act of 1974, as amended, including the regulations and published interpretations thereunder ("ERISA"); no "reportable event" (as defined in ERISA) for which the Company would have any liability has occurred and is continuing; the Company has not incurred and does not expect to incur liability under (i) Title IV of ERISA with respect to termination of, or withdrawal from, any "pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended, including the regulations and published interpretations thereunder (the "Code"); and each "pension plan" for which the Company would have any liability that is intended to be qualified under Section 401(a) of the Code is so qualified in all material respects and nothing has occurred, whether by action or by failure to act, which would cause the loss of such qualification except in each case as set forth in Schedule III or where any such noncompliance, "reportable event, " liability or nonqualification, alone or in the aggregate, would not have a material adverse effect on the Company and its subsidiaries taken as a whole. 9 10 Any certificate signed by any officer of the Company delivered to the Managers or to counsel for the Managers in connection with the offering of the Securities shall be deemed solely to be a representation and warranty by the Company to each Manager as to the matters covered thereby. 5. Each of the Managers acknowledges that the Securities have not been and will not be registered under the Securities Act and may not be offered or sold within the United States or to, or for the account or benefit of, U.S. persons except in accordance with Regulation S or pursuant to an exemption from the registration requirements under the Securities Act. Terms used in this paragraph have the meanings given to them by Regulation S. Each Manager represents and warrants that it has not offered or sold, and will not offer or sell, any Securities except (i) to those persons it reasonably believes to be qualified institutional buyers (as defined in Rule 144A under the Act) and that, in connection with each such sale, it has taken or will take reasonable steps to ensure that the purchaser of such Securities is aware that such sale is being made in reliance on Rule 144A or (ii) in "offshore transactions" (as defined in Regulation S) in accordance with the restrictions set forth in the Offering Memorandum. Each Manager represents and warrants that it has offered and sold the Securities and agrees that it will offer and sell the Securities (i) as part of their distribution at any time and (ii) otherwise, until 40 days after the later of the commencement of the offering and the Closing Date, only in accordance with Rule 903 of Regulation S. Accordingly, neither it, its affiliates nor any persons acting on its or their behalf have engaged or will engage in any directed selling efforts with respect to the Securities, and it and they have complied and will comply with the offering restrictions requirement of Regulation S. Each Manager agrees that, at or prior to confirmation of the sale of Securities, it will have sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration that purchases Securities from it during the restricted period a confirmation or notice to substantially the following effect: "The Securities covered hereby have not been registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered and sold within the United States or to, or for the account or benefit of, U.S. persons (i) as part of their distribution at any time or (ii) otherwise until 40 days after the later of the commencement of the offering and the Closing Date, except in either case, in accordance with Regulation S under the Securities Act. Terms used above have the meanings given to them by Regulation S." 10 11 Any Manager, with the prior written consent of ABN AMRO Bank N.V. and Deutsche Bank AG London, may directly or through its agents or affiliates arrange for the resale of the Securities in the United States to qualified institutional buyers or to purchasers who such Manager reasonably believes is a qualified institutional buyer pursuant to Rule 144A. Each Manager further represents and warrants and agrees with the Company that: (i) it has not offered or sold and will not offer or sell any Securities to persons in the United Kingdom prior to the expiry of the period six months from the Closing Date except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purposes of their business or otherwise in circumstances which have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers of Securities Regulations 1995; (ii) it has complied and will comply with all applicable provisions of the Financial Services Act of 1986 with respect to anything done by it in relation to the Securities in, from or otherwise involving the United Kingdom; and (iii) it has only issued or passed on and will only issue or pass on in the United Kingdom any document received by it in connection with the issue of the Securities to a person who is of a kind described in Article 11(3) of the Financial Services Act of 1986(Investment Advertisements) (Exemption) Order 1996 (as amended) or is a person to whom such document may otherwise lawfully be issued or passed on. 6. The Company covenants and agrees with each of the several Managers as follows: (a) to furnish each of the Managers as many copies of the Offering Memorandum (including all amendments and supplements thereto) and documents incorporated by reference therein as you may reasonably request so long as delivery of an Offering Memorandum by a Manager or dealer may be required by law or prior to the completion of the distribution of the Securities; (b) from the date hereof and prior to the Closing Date, to furnish you a copy of any proposed amendment or supplement to the Offering Memorandum, for your review, and not to effect any such proposed amendment or supplement to which you reasonably and timely object; 11 12 (c) to file promptly, subject to the provisions of paragraph (b) above, all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act during the period mentioned in paragraph (d) below; (d) the Company will comply with the Securities Act and the Exchange Act so as to permit the completion of the distribution of the Securities contemplated in this Agreement and in the Offering Memorandum; (e) if, during such period after the first date of the offering of the Securities as in the opinion of counsel for the Managers an offering memorandum relating to the Securities is required by law to be delivered in connection with sales of the Securities by a Manager or dealer, or at any time prior to the completion of the distribution of the Securities (in the reasonable view of ABN AMRO Bank N.V. and Deutsche Bank AG London), any event shall occur as a result of which it is necessary to amend or supplement the Offering Memorandum in order to make the statements therein, in the light of the circumstances existing when the Offering Memorandum is delivered to a purchaser (or, in the case of certain jurisdictions where the Offering Memorandum is not required to be delivered to a purchaser, when the Securities are sold), not misleading, or if it is necessary to amend or supplement the Offering Memorandum to comply with law, forthwith to prepare and furnish, at the expense of the Company, to the Managers to which Securities may have been sold by you on behalf of the Managers, such amendments or supplements to the Offering Memorandum as may be necessary so that the statements in the Offering Memorandum as so amended or supplemented will not, in light of the circumstances existing when the Offering Memorandum is delivered to a purchaser (or, in the case of certain jurisdictions where the Offering Memorandum is not required to be delivered to a purchaser, when the Securities are sold), be misleading or so that the Offering Memorandum will comply with law; (f) to use the net proceeds received by the Company from the sale of the Securities pursuant to this Agreement in the manner specified in the Offering Memorandum under "Use of Proceeds"; (g) so long as the Securities are outstanding, to furnish to you upon request copies of all reports or other communications (financial or other) furnished to holders of Securities and copies of any reports and financial statements furnished to or filed with the Commission or any national securities exchange; (h) other than the offer and sale of the Securities hereunder, the Company agrees that they will not and will cause their respective affiliates not to make any 12 13 offer or sale of securities of the Company of any class if, as a result of the doctrine of "integration" referred to in Rule 502 of Regulation D under the Securities Act, such offer or sale could be deemed to render invalid (for the purpose of (i) the sale of the Securities by the Company to the Managers, (ii) the resale of the Securities by the Managers to Subsequent Purchasers or (iii) the resale of the Securities by such Subsequent Purchasers to others) the exemption from the registration requirements of the Securities Act provided by Section 4(2) thereof or by Rule 144A or by Regulation S thereunder or otherwise; (i) the Company agrees that, in order to render the Securities eligible for resale pursuant to Rule 144A, while any of the Securities remain outstanding, it will make available, upon request, to any holder of Securities or prospective purchasers of Securities the information specified in Rule 144A(d)(4) for so long as such information is required to be furnished by Rule 144A, unless the Company furnishes information to the Commission pursuant to Section 13 or 15(d) of the Exchange Act (such information, whether made available to holders or prospective purchasers or furnished to the Commission, is hereinafter referred to as "Additional Information"); (j) until the expiration of two years after the original issuance of the Securities, the Company will not, and will cause their respective "affiliates" (as such term is defined in Rule 144(a)(1) under the Securities Act) not to, resell any Securities which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the Securities Act) that have been reacquired by any of them and shall immediately upon any purchase of any such Securities submit such Securities to the Trustee for cancellation; (k) the Company shall take all reasonable action necessary to enable Standard & Poor's Corporation and Moody's Investors Service, Inc. to provide their respective credit ratings of the Securities; (l) the Company will use all reasonable efforts in cooperation with the Managers to permit the Securities to be eligible for clearance and settlement through Euroclear, Clearstream, Luxembourg and DTC; (m) each certificate for a Security to be sold under Rule 144A will bear the legend contained in "Notices to Investors" in the Offering Memorandum for the time period and upon the other terms stated in the Offering Memorandum; (n) during the period beginning on the date hereof and continuing to and including the Business Day following the Closing Date, not to offer, sell, contract to sell or otherwise dispose of any debt securities of or guaranteed by the 13 14 Company which are substantially similar to the Securities without prior written consent of the Representatives; (o) the Company shall use all reasonable efforts to procure the listing of the Securities on the Luxembourg Stock Exchange and to maintain such listing until none of the Securities are outstanding; provided, however, that, if it is impractical or unduly burdensome to maintain such listing, the Company shall use all reasonable efforts to procure and maintain as aforesaid a listing of or quotation of the Securities on such other securities or stock exchange or exchanges as it may (with the approval of ABN AMRO Bank N.V. and Deutsche Bank AG London) decide; and (p) whether or not the transactions contemplated in this Agreement are consummated or this Agreement is terminated, to pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limiting the generality of the foregoing, all costs and expenses (i) incident to the preparation, issuance, execution, authentication and delivery of the Securities, including any expenses of the Trustee, (ii) incident to the preparation, printing, filing and distribution of the Offering Memorandum (including all exhibits, amendments and supplements thereto), (iii) in connection with the listing of the Securities on any securities or stock exchange, (iv) in connection with the printing (including word processing and duplication costs) and delivery of this Agreement, the Indenture, the Registration Rights Agreement and the furnishing to the Managers and dealers of copies of the Offering Memorandum, including mailing and shipping, as herein provided and (v) payable to rating agencies in connection with the rating of the Securities, it being understood that the Company shall not be responsible for the fees and expenses of counsel to the Managers. 7. The several obligations of the Managers hereunder shall be subject to the following conditions: (a) the representations and warranties of the Company contained herein are true and correct on and as of the Closing Date as if made on and as of the Closing Date and the Company shall have complied with all agreements and all conditions on their part to be performed or satisfied hereunder at or prior to the Closing Date; (b) unless otherwise agreed by the Representatives, subsequent to the execution and delivery of this Agreement and prior to the Closing Date, other than as may have existed on the date hereof, there shall not have occurred any downgrading, nor shall any notice have been given of (i) any downgrading, (ii) any intended or potential downgrading or (iii) any review or possible change that does not indicate an improvement, in the rating accorded any securities of or 14 15 guaranteed by the Company by any "nationally recognized statistical rating organization", as such term is defined for purposes of Rule 436(g)(2) under the Securities Act; (c) since the respective dates as of which information is given in the Offering Memorandum there shall not have been any material change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any material adverse change in the earnings, business, management, properties, assets, rights, operations, condition (financial or otherwise) of the Company and of the Subsidiaries (taken as a whole) otherwise than as set forth or contemplated in the Offering Memorandum, the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering or the delivery of the Securities on the terms and in the manner contemplated in the Offering Memorandum; (d) the Representatives shall have received on and as of the Closing Date a certificate of a managing director or an executive officer of the Company with specific knowledge about the Company's financial matters, satisfactory to you to the effect set forth in subsections (a) and (c) of this Section; (e) the Company shall have furnished to you a written opinion of Akin, Gump, Strauss, Hauer & Feld, L.L.P., dated the Closing Date, in form and substance satisfactory to you; (f) on the date hereof and on the Closing Date, Ernst & Young LLP and PricewaterhouseCoopers LLP shall have furnished to you letters, dated such dates, in form and substance satisfactory to you, containing statements and information of the type customarily included in accountants "comfort letters" to the Managers with respect to the financial statements and certain financial information contained or incorporated by reference in the Offering Memorandum; (g) you shall have received on and as of the Closing Date an opinion of Cravath, Swaine & Moore, U.S. counsel to the Managers, with respect to the validity of this Agreement, the Indenture, the Securities, the Registration Rights Agreement, the Offering Memorandum and other related matters as the Representatives may reasonably request, and such counsel shall have received such papers and information as they may reasonably request to enable them to pass upon such matters; (h) on the Closing Date, the Securities shall have been approved for listing on the Luxembourg Stock Exchange, subject only to official notice of issuance; 15 16 (i) the Company shall have duly authorized, executed and delivered the Registration Rights Agreement and the Indenture to the Managers in a form and substance reasonably satisfactory to the Representatives and counsel to the Managers; and (j) on or prior to the Closing Date, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives shall reasonably request. 8. (a) The Company agrees to indemnify and hold harmless each Manager and each person, if any, who controls any Manager within the meaning of either Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against (i) any and all losses, claims, damages, liabilities and expenses (including, without limitation, the reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted) arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Preliminary Offering Memorandum or the Offering Memorandum (as amended or supplemented if the Company shall have furnished any amendments or supplements thereto), or arising out of or based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any and all losses, claims, damages, liabilities and expenses whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever arising out of or based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that any such settlement is effected with the written consent of the Company; and (iii) any and all expenses whatsoever, as incurred (including the fees and disbursements of counsel chosen by ABN AMRO Bank N.V. and Deutsche Bank AG London to the extent permitted by law), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever arising out of or based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under clauses (i) or (ii) above; except insofar as such losses, claims, damages, liabilities or expenses are arising out of or based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with information relating to any Manager furnished to the Company in writing by any Manager through ABN AMRO Bank N.V. and Deutsche Bank AG London expressly for use therein; provided, however, that with respect to any untrue statement or omission of material fact made in any Preliminary Offering Memorandum, the indemnity agreement contained in this Section 8(a) shall not inure to the benefit of any Manager from whom the person asserting any such loss, claim, damage or liability purchased the securities concerned, to the extent that any such loss, claim, 16 17 damage or liability of such Manager occurs under the circumstance where (w) the Company had previously furnished copies of the Final Offering Memorandum to the Representatives, (x) delivery of the Final Offering Memorandum was required to be made to such person, (y) the untrue statement or alleged untrue statement or omission or alleged omission of a material fact contained in the Preliminary Offering Memorandum was corrected in the Final Offering Memorandum and (z) there was not sent or given to such person, at or prior to the written confirmation of the sale of such securities to such person, a copy of the Final Offering Memorandum. This indemnity agreement will be in addition to any liability which the Company may otherwise have. (b) Each Manager agrees, severally and not jointly, to indemnify and hold harmless the Company and its directors and officers and each person who controls the Company within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act, to the same extent as the indemnity from the Company to each Manager set forth in clauses (i), (ii) and (iii) of paragraph (a) of this Section 8, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Preliminary Offering Memorandum or the Offering Memorandum in reliance upon and in conformity with written information furnished to the Company by any Manager relating to any Manager through ABN AMRO Bank N.V. and Deutsche Bank AG London expressly for use in the Preliminary Offering Memorandum or the Offering Memorandum, as the case may be. (c) Promptly after receipt by an indemnified party under this Section 8 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 8, notify the indemnifying party in writing of the commencement thereof; but the failure so to notify the indemnifying party (i) will not relieve it from liability under paragraph (a) or (b) above unless and to the extent it did not otherwise learn of such action and such failure results in the prejudice by the indemnifying party of substantial rights and defenses and (ii) will not, in any event, relieve the indemnifying party from any obligations to any indemnified party other than the indemnification obligation provided in paragraph (a) or (b) above. The indemnifying party shall be entitled to appoint counsel of the indemnifying party's choice at the indemnifying party's expense to represent the indemnified party in any action for which indemnification is sought (in which case the indemnifying party shall not thereafter be responsible for the fees and expenses of any separate counsel retained by the indemnified party or parties except as set forth below); provided, however, that such counsel shall be reasonably satisfactory to the indemnified party. Notwithstanding the indemnifying party's election to appoint counsel to represent the indemnified party in an action, the indemnified parties shall have the right to employ one separate counsel (and, if reasonably necessary, one additional local counsel), and the indemnifying party shall bear the reasonable fees, costs and expenses of such separate counsel if (i) the use of counsel chosen by the indemnifying party to represent the 17 18 indemnified party would present such counsel with a conflict of interest, (ii) the indemnifying party shall not have employed counsel satisfactory to the indemnified party to represent the indemnified party within a reasonable time after notice of the institution of such action or, (iii) the indemnifying party shall authorize the indemnified party to employ separate counsel at the expense of the indemnifying party. An indemnifying party will not, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened claim, action, suit or proceeding in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified parties are actual or potential parties to such claim or action) unless such settlement, compromise or consent includes an unconditional release of each indemnified party from all liability arising out of such claim, action, suit or proceeding. If the indemnification provided for in paragraphs (a) and (b) of this Section 8 is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages, liabilities or expenses referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Managers on the other hand from the offering of the Securities or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Managers on the other hand in connection with the statements or omissions that resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Managers on the other hand shall be deemed to be in the same respective proportions as the net proceeds from the offering of such Securities (net of underwriting discounts and commissions but before deducting expenses) received by the Company and the total underwriting discounts and the commissions received by the Managers bear to the aggregate offering price of the Securities. The relative fault of the Company on the one hand and the Managers on the other shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Managers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Managers agree that it would not be just and equitable if contribution pursuant to this Section 8 were determined by pro rata allocation (even if the Managers were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in the 18 19 immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses reasonably incurred by such Indemnified Person in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 8, in no event shall a Manager be required to contribute any amount in excess of the amount by which the total fees and commissions received by it in respect of the Securities purchased by it exceeds the amount of any damages that such Manager has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Managers' obligations to contribute pursuant to this Section 8 are several in proportion to the respective principal amount of the Securities set forth opposite their names in Schedule II hereto, and not joint. The remedies provided for in this Section 8 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any indemnified party at law or in equity. The indemnity and contribution agreements contained in this Section 8 and the representations and warranties of the Company set forth in this Agreement shall remain operative and in full force and effect regardless of (i) any termination of this Agreement, (ii) any investigation made by or on behalf of any Manager or any person controlling any Manager or by or on behalf of the Company or their respective officers or directors or any other person controlling the Company and (iii) acceptance of and payment for any of the Securities. 9. Notwithstanding anything herein contained, this Agreement may be terminated in the absolute discretion of the Representatives, by notice given to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date (i) trading generally shall have been suspended or materially limited on or by, as the case may be, the New York Stock Exchange (other than limitations on hours or the number of days trading) or (ii) trading of any securities of or guaranteed by the Company shall have been suspended on any exchange or in any over-the-counter market or (iii) a general moratorium on commercial banking activities in London shall have been declared by appropriate authorities or a general moratorium on commercial banking activities in New York shall have been declared by either Federal or New York State authorities or (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis that, in the judgment of ABN AMRO Bank N.V. and Deutsche Bank AG London, is material and adverse and which, in the judgment of ABN AMRO Bank N.V. and Deutsche Bank AG London, makes it impracticable to 19 20 offer and deliver the Securities or (v) there has been in the opinion of ABN AMRO Bank N.V. and Deutsche Bank AG London such a change in the national or international financial, political or economic conditions or currency exchange rates or exchange controls as would in their view be likely to materially and adversely affect the financial markets. If this Agreement is terminated, such termination shall be without liability of any party to any other party except as provided in Section 11 hereof, and provided further that Sections 4 and 8 shall survive such termination and remain in full force and effect. 10. If, on the Closing Date, any one or more of the Managers shall fail or refuse to purchase Securities which it or they have agreed to purchase under this Agreement, and the aggregate principal amount of Securities which such defaulting Manager or Managers agreed but failed or refused to purchase is not more than one-tenth of the aggregate principal amount of the Securities, the other Managers shall be obligated severally in the proportions that the principal amount of Securities set forth opposite their respective names in Schedule II hereto bears to the aggregate principal amount of Securities set forth opposite the names of all such non-defaulting Managers, or in such other proportions as the Representatives may specify, to purchase the Securities which such defaulting Manager or Managers agreed but failed or refused to purchase on such date; provided that in no event shall the principal amount of Securities that any Manager has agreed to purchase pursuant to Section 1 be increased pursuant to this Section 9 by an amount in excess of one-tenth of such principal amount of Securities without the written consent of such Manager. If, on the Closing Date, any Manager or Managers shall fail or refuse to purchase Securities and the aggregate principal amount of Securities with respect to which such default occurs is more than one-tenth of the aggregate principal amount of Securities to be purchased, and arrangements satisfactory to you and the Company for the purchase of such Securities are not made within 24 hours after such default, this Agreement shall terminate without liability on the part of any non-defaulting Manager or the Company. In any such case either you or the Company shall have the right to postpone the Closing Date, but in no event for longer than seven days, in order that the required changes, if any, in the Offering Memorandum or in any other documents or arrangements may be effected. Any action taken under this paragraph shall not relieve any defaulting Manager from liability in respect of any default of such Manager under this Agreement. 11. If this Agreement shall be terminated by the Managers, or any of them pursuant to Section 9 or because of any failure or refusal on the part of the Company to comply with the terms or to fulfill any of the conditions of this Agreement, or if for any reason the Company shall be unable to perform its obligations under this Agreement or any condition of the Managers' obligations cannot be fulfilled, the Company agrees to 20 21 reimburse the Managers or such Managers as have so terminated this Agreement with respect to themselves, severally, for all out-of-pocket expenses (including the fees and expenses of their counsel) reasonably incurred by such Managers in connection with this Agreement or the offering of the Securities, but the Company shall not be liable in any event to any of the Managers for damages on account of loss of anticipated profits from the sale of the Securities. 12. This Agreement shall inure to the benefit of and be binding upon the Company, the Managers and any Indemnified Persons referred to herein and their respective successors and assigns. Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any other person, firm or corporation any legal or equitable right, remedy or claim under or in respect of this Agreement or any provision herein contained. No purchaser of Securities from any Manager shall be deemed to be a successor or assign by reason merely of such purchase. 13. Any action by the Managers hereunder may be taken by you jointly or by ABN AMRO Bank N.V. and Deutsche Bank AG London alone on behalf of the Managers, and any such action taken by you jointly or by ABN AMRO Bank N.V. and Deutsche Bank AG London alone shall be binding upon the Managers. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted by any standard form of telecommunication. Notices to the Managers shall be given at the address set forth in Schedule I hereto. Notices to the Company shall be given to Clear Channel Communications, Inc., 200 East Basse Road, San Antonio, TX 78209, Attention Randall Mays. 14. The Company (i) agrees that any legal suit, action or proceeding brought by any party to enforce any rights under or with respect to this Agreement or any other document or the transactions contemplated hereby or thereby may be instituted in any state or federal court in The City of New York, State of New York, U.S.A., (ii) irrevocably waives to the fullest extent permitted by law any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, (iii) irrevocably waives to the fullest extent permitted by law any claim that and agrees not to claim or plead in any court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum and (iv) irrevocably submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding or for recognition and enforcement of any judgment in respect thereof. 15. If pursuant to a judgment or order being made or registered against the Company, any payment under or in connection with this Agreement to a Manager is made or satisfied in a currency (the "Judgment Currency") other than in euro then, to the extent that the payment (when converted into euro at the rate of exchange on the date of payment or, if it is not practicable for such Manager to purchase euro with the Judgment 21 22 Currency on the date of payment, at the rate of exchange as soon thereafter as it is practicable for it to do so) actually received by such Manager falls short of the amount due under the terms of this Agreement, the Company shall, to the extent permitted by law, as a separate and independent obligation, indemnify and hold harmless such Manager against the amount of such shortfall and such indemnity shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. For the purpose of this Section, "rate of exchange" means the rate at which the Manager is able on the relevant date to purchase euro with the Judgment Currency and shall take into account any premium and other costs of exchange. 16. This Agreement may be signed in counterparts, each of which shall be an original and all of which together shall constitute one and the same instrument. 22 23 This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to the conflicts of laws provisions thereof. Very truly yours, CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ JULIANA F. HILL --------------------------------- Juliana F. Hill Senior Vice President -- Finance Accepted: July 3, 2000 CONFIRMED AND ACCEPTED, ABN AMRO Bank N.V. Deutsche Bank AG London Barclays Bank PLC Credit Suisse First Boston (Europe) Limited Merrill Lynch International Salomon Brothers International Limited Westdeutsche Landesbank Girozentrale By: ABN AMRO Bank N.V. By ------------------------------- Authorized Signatory By: Deutsche Bank AG London By ------------------------------- Authorized Signatory By ------------------------------- Authorized Signatory For themselves and the other Managers named in Schedule II hereto. 23 EX-4.11 3 d80863ex4-11.txt REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 4.11 REGISTRATION RIGHTS AGREEMENT This Registration Rights Agreement (the "Agreement") is made and entered into this 7th day of July, 2000 among Clear Channel Communications, Inc., a Texas corporation (the "Company"), and ABN AMRO Bank N.V. ("ABN AMRO"), Deutsche Bank AG London ("Deutsche Bank"), Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, Westdeutsche Landesbank Girozentrale (collectively, the "Managers"). This Agreement is made pursuant to the Subscription Agreement, dated July 3, 2000, among the Company and the Managers (the "Subscription Agreement"), which provides for the sale by the Company to the Managers of an aggregate of euro 650,000,000 principal amount of 6.50% Notes due 2005 (the "Securities"). In order to induce the Managers to enter into the Subscription Agreement, the Company has agreed to provide to the Managers and their direct and indirect transferees the registration rights set forth in this Agreement. The execution of this Agreement is a condition to the closing under the Subscription Agreement. In consideration of the foregoing, the parties hereto agree as follows: 1. Definitions. As used in this Agreement, the following capitalized defined terms shall have the following meanings: "1933 Act" shall mean the United States Securities Act of 1933, as amended from time to time. "1934 Act" shall mean the United States Securities Exchange Act of l934, as amended from time to time. "Closing Date" shall mean the Closing Date as defined in the Subscription Agreement. "Company" shall have the meaning set forth in the preamble and shall also include the Company's successors. "Depositary" shall mean The Depository Trust Company, or any other depositary appointed by the Company, provided, however, that such depositary must have an address in the Borough of Manhattan, in the City of New York. 2 "Exchange Offer" shall mean the exchange offer by the Company of Exchange Securities for Registrable Securities pursuant to Section 2.1 hereof. "Exchange Offer Registration" shall mean a registration under the 1933 Act effected pursuant to Section 2.1 hereof. "Exchange Offer Registration Statement" shall mean an exchange offer registration statement on Form S-4 (or, if applicable, on another appropriate form or any successor form used for substantially the same transaction), and all amendments and supplements to such registration statement, including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Exchange Period" shall have the meaning set forth in Section 2.1 hereof. "Exchange Securities" shall mean collectively, the 6.50% Notes due 2005, issued by the Company, to be offered to Holders of Securities in exchange for Registrable Securities pursuant to the Exchange Offer. "Holder" shall mean a Manager, for so long as it owns any Registrable Securities, and each of its successors, assigns and direct and indirect transferees who become registered owners of Registrable Securities under the Indenture and each Participating Broker-Dealer that holds Exchange Securities for so long as such Participating Broker-Dealer is required to deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities. "Indenture" shall mean the Indenture relating to the Securities and the Exchange Securities, dated as of October 1, 1997, as supplemented by the Seventh Supplemental Indenture, among the Company and The Bank of New York, as trustee, as the same may be amended, supplemented, waived or otherwise modified from time to time in accordance with the terms thereof. "Majority Holders" shall mean the Holders of a majority of the aggregate principal amount of Outstanding (as defined in the Indenture) Registrable Securities or each series of Registrable Securities as the case may be; provided that whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company and other obligors on the Securities or any Affiliate (as defined in the Indenture) of the Company shall be disregarded in determining whether such consent or approval was given by the Holders of such required percentage amount; provided further that, when used in connection with the Shelf 2 3 Registration Statement, the term Majority Holders shall mean the Holders of a majority of the aggregate principal amount of all series of Registrable Securities participating therein or whose securities are being sold thereunder in the particular case, as applicable. "Manager" or "Managers" shall have the meaning set forth in the preamble. "Participating Broker-Dealer" shall mean any of ABN AMRO, Deutsche Bank, Barclays Bank PLC, Credit Suisse First Boston (Europe) Limited, Merrill Lynch International, Salomon Brothers International Limited, Westdeutsche Landesbank Girozentrale and any other broker-dealer which makes a market in the Securities or exchanges Registrable Securities in the Exchange Offer for Exchange Securities. "Person" shall mean an individual, partnership (general or limited), corporation, limited liability company, trust or unincorporated organization, or a government or agency or political subdivision thereof. "Prospectus" shall mean the prospectus included in a Registration Statement, including any preliminary prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such prospectus supplement with respect to the terms of the offering of any portion of the Registrable Securities covered by a Shelf Registration Statement, and by all other amendments and supplements to a prospectus, including post-effective amendments, and in each case including all material incorporated by reference therein. "Subscription Agreement" shall have the meaning set forth in the preamble. "Registrable Securities" shall mean the Securities; provided, however, that Securities shall cease to be Registrable Securities when (i) a Registration Statement with respect to such Securities shall have been declared effective under the 1933 Act and such Securities shall have been disposed of pursuant to such Registration Statement, (ii) such Securities have been sold to the public pursuant to Rule l44 (or any similar provision then in force, but not Rule 144A) under the 1933 Act, (iii) such Securities shall have ceased to be outstanding or (iv) the Exchange Offer is consummated (except in the case of Securities purchased from the Company and continued to be held by the Managers or Securities which may not be exchanged in the Exchange Offer). 3 4 "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all SEC, stock exchange or National Association of Securities Dealers, Inc. (the "NASD") registration and filing fees, including, if applicable, the fees and expenses of any "qualified independent underwriter" (and the reasonable fees and expenses of its counsel) that is required to be retained by any holder of Registrable Securities in accordance with the rules and regulations of the NASD, (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws and compliance with the rules of the NASD (including reasonable fees and disbursements of counsel for any underwriters or Holders in connection with blue sky qualification of any of the Exchange Securities or Registrable Securities and any filings with the NASD), (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any Registration Statement, any Prospectus, any amendments or supplements thereto, any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement, (iv) all fees and expenses incurred in connection with the listing, if any, of any of the Registrable Securities on any securities exchange or exchanges, (v) all rating agency fees, (vi) the fees and disbursements of counsel for the Company and of the independent public accountants of the Company, including the expenses of any special audits or "cold comfort" letters required by or incident to such performance and compliance, (vii) the fees and expenses of the Trustee, and any escrow agent or custodian, (viii) the reasonable fees and expenses of the Managers in connection with the Exchange Offer, including the reasonable fees and expenses of one counsel to the Managers in connection therewith, (ix) the reasonable fees and disbursements of one special counsel representing the Holders of Registrable Securities in connection with the Shelf Registration Statement and (x) any fees and disbursements of the underwriters customarily required to be paid by issuers or sellers of securities and the fees and expenses of any special experts retained by the Company in connection with any Registration Statement, but excluding underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of Registrable Securities by a Holder. "Registration Statement" shall mean any registration statement of the Company which covers any of the Exchange Securities or Registrable Securities pursuant to the provisions of this Agreement, and all amendments and supplements to any such Registration Statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by reference therein. 4 5 "SEC" shall mean the United States Securities and Exchange Commission or any successor agency or government body performing the functions currently performed by the United States Securities and Exchange Commission. "Shelf Registration" shall mean a registration effected pursuant to Section 2.2 hereof. "Shelf Registration Statement" shall mean a "shelf" registration statement of the Company filed pursuant to the provisions of Section 2.2 of this Agreement which covers all of the Registrable Securities on an appropriate form under Rule 415 under the 1933 Act, or any successor or similar rule that may be adopted by the SEC, and all amendments and supplements to such registration statement, including post-effective amendments, in each case including the Prospectus contained therein, all exhibits thereto and all documents incorporated by reference therein. "Trustee" shall mean the trustee with respect to the Securities under the Indenture. 2. Registration Under the 1933 Act. 2.1 Exchange Offer. The Company shall, for the benefit of the Holders, at the Company's cost, use their reasonable best efforts to (A) prepare and file with the SEC an Exchange Offer Registration Statement on an appropriate form under the 1933 Act with respect to a proposed Exchange Offer and the issuance and delivery to the Holders, in exchange for the Registrable Securities, of a like principal amount of Exchange Securities within 150 days following the Closing Date, (B) to cause the Exchange Offer Registration Statement to be declared effective under the 1933 Act within 180 days of the Closing Date, (C) keep the Exchange Offer Registration Statement effective until the closing of the Exchange Offer and (D) cause the Exchange Offer to be consummated not later than 210 days following the Closing Date. The Exchange Securities will be issued under the Indenture. Upon the effectiveness of the Exchange Offer Registration Statement, the Company shall promptly commence the Exchange Offer, it being the objective of such Exchange Offer to enable each Holder eligible and electing to exchange Registrable Securities for Exchange Securities to transfer such Exchange Securities from and after their receipt without any limitations or restrictions under the 1933 Act and under state securities or blue sky laws. The Company shall not make the Exchange Offer to, nor will it accept surrendered Registrable Securities from, Holders in any state or other jurisdiction in which the Exchange Offer would not comply with the applicable securities laws or "blue sky" laws of such such state or other jurisdiction. 5 6 Each Holder participating in the Exchange Offer shall be required, as a condition to such participation, to represent in writing to the Company that, at the time of the consummation of the Exchange Offer, such Holder (a) is not an affiliate of the Company within the meaning of Rule 405 under the 1933 Act, (b) is not a broker-dealer tendering Registrable Securities acquired directly from the Company for its own account, (c) acquired or will acquire the Exchange Securities in the ordinary course of such Holder's business and (d) has no arrangements or understandings with any Person to participate in the Exchange Offer for the purpose of distributing the Exchange Securities. In connection with the Exchange Offer, the Company shall: (a) mail as promptly as practicable to each Holder a copy of the Prospectus forming part of the Exchange Offer Registration Statement, together with an appropriate letter of transmittal and related documents; (b) keep the Exchange Offer open for acceptance for a period of not less than 30 calendar days after the date notice thereof is mailed to the Holders (or longer if required by applicable law) (such period referred to herein as the "Exchange Period"); (c) utilize the services of the Depositary for the Exchange Offer; (d) permit Holders to withdraw tendered Registrable Securities at any time prior to 5:00 p.m. (Eastern Standard Time), on the last business day of the Exchange Period, by sending to the institution specified in the notice, a telegram, telex, facsimile transmission or letter setting forth the name of such Holder, the principal amount of Registrable Securities delivered for exchange, and a statement that such Holder is withdrawing such Holder's election to have such Securities exchanged; (e) notify each Holder that any Registrable Security not tendered will remain outstanding and continue to accrue interest, but will not retain any rights under this Agreement (except in the case of the Managers and Participating Broker-Dealers as provided herein); and (f) otherwise comply in all respects with all applicable laws relating to the Exchange Offer. The Exchange Securities shall be issued under (i) the Indenture or (ii) an indenture identical in all material respects to the Indenture and which, in either case, has been qualified under the Trust Indenture Act of 1939, as amended (the "TIA"), or is exempt from such qualification and shall provide that the Exchange Securities shall not be subject to the transfer restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Securities and the Securities having the same 6 7 interest rate and maturity shall vote and consent together on all matters as one class and that none of the Exchange Securities or the Securities having the same interest rate and maturity will have the right to vote or consent as a separate class on any matter. As soon as practicable after the close of the Exchange Offer the Company shall: (i) accept for exchange all Registrable Securities duly tendered and not validly withdrawn pursuant to the Exchange Offer in accordance with the terms of the Exchange Offer Registration Statement and the letter of transmittal which shall be an exhibit thereto; (ii) deliver, or cause to be delivered to the Trustee for cancellation all Registrable Securities so accepted for exchange; and (iii) cause the Trustee promptly to authenticate and deliver Exchange Securities to each Holder of Registrable Securities so accepted for exchange in a principal amount equal to the principal amount of the Registrable Securities of such Holder so accepted for exchange. Interest on each Exchange Security will accrue from the last date on which interest was paid on the Registrable Securities surrendered in exchange therefor or, if no interest has been paid on the Registrable Securities, from the date of original issuance. The Exchange Offer shall not be subject to any conditions, other than (i) that the Exchange Offer or the making of any exchange by a Holder, does not violate applicable law or any applicable interpretation of the staff of the SEC, (ii) the due tendering of Registrable Securities in accordance with the Exchange Offer, (iii) that each Holder of Registrable Securities exchanged in the Exchange Offer shall have made the representations set forth above in this Section 2.1 and shall have made such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to render the use of Form S-4 or other appropriate form under the 1933 Act available and (iv) that no action or proceeding shall have been instituted or threatened in any court or by or before any governmental agency with respect to the Exchange Offer which, in the Company's judgment, would reasonably be expected to impair the ability of the Company to proceed with the Exchange Offer. The Company shall inform the Managers of the names and addresses of the Holders to whom the Exchange Offer is made, and the Managers shall have the right to contact such Holders and otherwise facilitate the tender of Registrable Securities in the Exchange Offer. 2.2 Shelf Registration. (i) If, because of any changes in law, SEC rules or regulations or applicable interpretations thereof by the staff of the SEC, the Company is not permitted to effect the Exchange Offer as contemplated by Section 2.1 hereof, (ii) if 7 8 for any other reason the Exchange Offer Registration Statement is not declared effective within 180 days following the original issue of the Registrable Securities or the Exchange Offer is not consummated within 210 days after the original issue of the Registrable Securities, (iii) upon the request of any of the Managers with respect to Registrable Securities that are not eligible to be exchanged for Exchange Notes in the Exchange Offer or the Managers do not receive freely tradeable Exchange Securities in the Exchange Offer or (iv) if a Holder known or identified in writing to the Company (other than a Manager) is not permitted by applicable law to participate in the Exchange Offer or elects to participate in the Exchange Offer but does not receive fully tradeable Exchange Securities pursuant to the Exchange Offer, then in case of each of clauses (i) through (iv) the Company shall, at its cost: (a) As promptly as practicable, file with the SEC, and thereafter shall use their reasonable best efforts to cause to be declared effective within 210 days after the original issue of the Registrable Securities, a Shelf Registration Statement relating to the offer and sale of the Registrable Securities by the Holders from time to time in accordance with the methods of distribution elected by the Majority Holders participating in the Shelf Registration and set forth in such Shelf Registration Statement; provided, however, that no Holder shall be entitled to have Registrable Securities held by it included in the Shelf Registration Statement unless such Holder agrees in writing to be bound by all of the provisions of this Agreement applicable to such Holder and furnishes to the Company in writing such information as the Company may reasonably request for inclusion in the Shelf Registration Statement or any Prospectus included therein. (b) Use their reasonable best efforts to keep the Shelf Registration Statement effective in order to permit the Prospectus forming part thereof to be usable by Holders for a period of two years from the date the Shelf Registration Statement is declared effective by the SEC, or for such shorter period that will terminate when all Registrable Securities covered by the Shelf Registration Statement have been sold pursuant to the Shelf Registration Statement or cease to be outstanding or otherwise to be Registrable Securities (the "Effectiveness Period"); provided, however, that the Effectiveness Period in respect of the Shelf Registration Statement shall be extended to the extent required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the 1933 Act and as otherwise provided herein. (c) Notwithstanding any other provisions hereof, use their reasonable best efforts to ensure that (i) any Shelf Registration Statement and any amendment thereto and any Prospectus forming part thereof and any supplement thereto complies in all material respects with the 1933 Act and the rules and regulations thereunder, (ii) any Shelf Registration Statement and any amendment thereto does 8 9 not, when it becomes effective, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading and (iii) any Prospectus forming part of any Shelf Registration Statement, and any supplement to such Prospectus (as amended or supplemented from time to time), does not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements, in light of the circumstances under which they were made, not misleading. The Company shall not permit any securities other than Registrable Securities to be included in the Shelf Registration Statement. The Company further agrees, if necessary, to supplement or amend the Shelf Registration Statement, as required by Section 3(b) below, and to furnish to the Holders of Registrable Securities copies of any such supplement or amendment promptly after its being used or filed with the SEC. 2.3 Expenses. The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2.1 or 2.2. Each Holder shall pay all underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Shelf Registration Statement. 2.4. Effectiveness. (a) The Company will be deemed not to have used its reasonable best efforts to cause the Exchange Offer Registration Statement or the Shelf Registration Statement, as the case may be, to become, or to remain, effective during the requisite period if the Company voluntarily takes any action that would, or omits to take any action which omission would, result in any such Registration Statement not being declared or remaining effective or in the Holders of Registrable Securities covered thereby not being able to exchange or offer and sell such Registrable Securities during that period as and to the extent contemplated hereby, unless such action is required by applicable law. (b) An Exchange Offer Registration Statement pursuant to Section 2.1 hereof or a Shelf Registration Statement pursuant to Section 2.2 hereof will not be deemed to have become effective unless it has been declared effective by the SEC; provided, however, that if, after it has been declared effective, the offering of Registrable Securities pursuant to an Exchange Offer Registration Statement or a Shelf Registration Statement is interfered with by any stop order, injunction or other order or requirement of the SEC or any other governmental agency or court of competent jurisdiction, such Registration Statement will be deemed not to have become effective during the period of such interference, until the offering of Registrable Securities pursuant to such Registration Statement may legally resume. 9 10 2.5 Interest. The Indenture executed in connection with the Securities will provide that in the event that either (a) the Exchange Offer Registration Statement is not filed with the Commission on or prior to the 150th calendar day following the date of original issue of the Securities, (b) the Exchange Offer Registration Statement has not been declared effective on or prior to the 180th calendar day following the date of original issue of the Securities or (c) the Exchange Offer is not consummated or a Shelf Registration Statement is not declared effective, in either case, on or prior to the 210th calendar day following the date of original issue of the Securities (each such event referred to in clauses (a) through (d) above, a "Registration Default"), the interest rate borne by the Securities shall be increased ("Additional Interest") by one-quarter of one percent (0.25%) per annum upon the occurrence of each Registration Default, which rate will increase by one-quarter of one percent (0.25%) each 90-day period that such Additional Interest continues to accrue under any such circumstance, provided that the maximum aggregate increase in the interest rate will in no event exceed one-half of one percent (0.5%) per annum; provided, however, that no Additional Interest shall be payable if the Exchange Offer Registration Statement is not filed or declared effective or the Exchange Offer is not consummated on account of the reasons set forth in clause (i) of the first paragraph of Section 2.2 (it being understood, however, that in any such case the Company shall be obligated to file a Shelf Registration Statement and Additional Interest shall be payable if the Shelf Registration Statement is not declared effective in accordance with clause (c)), that no Additional Interest shall be payable if the Shelf Registration Statement is not declared effective as set forth above because the request under clause (iii) of Section 2.2 or notice under clause (iv) of such paragraph was not made on a timely basis; and provided, further, that Additional Interest shall only be payable in case the Shelf Registration Statement is not declared effective as aforesaid with respect to Securities that have the right to be included, and whose inclusion has been requested, in the Shelf Registration Statement. Following the cure of all Registration Defaults the accrual of Additional Interest will cease and the interest rate will revert to the original rate. If the Shelf Registration Statement is declared effective but shall thereafter become unusable by the Holders for any reason (whether pursuant to the last paragraph of Section 3 or otherwise), and the aggregate number of days in any consecutive twelve-month period for which the Shelf Registration Statement shall not be usable exceeds 30 days in the aggregate, then the interest rate borne by the Securities included in the Registration Statement will be increased by one-quarter of one percent (0.25%) per annum of the principal amount of the Securities for the first 90-day period (or portion thereof) beginning on the 31st such date that such Shelf Registration Statement ceases to be usable, which rate shall be increased by an additional one-quarter of one percent (0.25%) per annum of the principal amount of the Securities at the beginning of each subsequent 90-day period, provided that the maximum aggregate increase in the interest rate will in no event exceed one-half of one percent (0.5%) per annum. Any amounts 10 11 payable under this paragraph shall also be deemed "Additional Interest" for purposes of this Agreement. Upon the Shelf Registration Statement once again becoming usable, the interest rate borne by such Securities will be reduced to the original interest rate if the Company is otherwise in compliance with this Agreement at such time. Additional Interest shall be computed based on the actual number of days elapsed in each 90-day period in which the Shelf Registration Statement is unusable. The Company shall notify the Trustee within five business days after each and every date on which an event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Additional Interest shall be paid by depositing with the Trustee, in trust, for the benefit of the Holders of the Securities entitled to receive the interest payment, on or before the applicable annual interest payment date, immediately available funds in sums sufficient to pay the Additional Interest then due. The Additional Interest due shall be payable on each interest payment date to the record Holder of Securities entitled to receive the interest payment to be paid on such date as set forth in the Indenture. Each obligation to pay Additional Interest shall be deemed to accrue from and including the day following the applicable Event Date. 3. Registration Procedures. In connection with the obligations of the Company with respect to Registration Statements pursuant to Sections 2.1 and 2.2 hereof, the Company shall: (a) prepare and file with the SEC a Registration Statement, within the relevant time period specified in Section 2, on the appropriate form under the 1933 Act, which form (i) shall be selected by the Company, (ii) shall, in the case of a Shelf Registration, be available for the sale of the Registrable Securities by the selling Holders thereof, (iii) shall comply as to form in all material respects with the requirements of the applicable form and include or incorporate by reference all financial statements required by the SEC to be filed therewith or incorporated by reference therein, and (iv) shall comply in all respects with the requirements of Regulation S-T under the 1933 Act, and use their reasonable best efforts to cause such Registration Statement to become effective and remain effective in accordance with Section 2 hereof; (b) prepare and file with the SEC such amendments and post-effective amendments to each Registration Statement as may be necessary under applicable law to keep such Registration Statement effective for the applicable period; and cause each Prospectus to be supplemented by any required prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 (or any similar provision then in force) under the 1933 Act and comply with the provisions of the 1933 Act, the 1934 Act and the rules and regulations thereunder applicable to them with respect to the disposition of all securities covered by each Registration Statement during the applicable period in 11 12 accordance (in the case of a Shelf Registration) with the intended method or methods of distribution by the selling Holders thereof (including sales by any Participating Broker-Dealer); (c) in the case of a Shelf Registration, (i) notify each Holder of Registrable Securities, at least five business days prior to filing, that a Shelf Registration Statement with respect to the Registrable Securities is being filed and advising such Holders that the distribution of Registrable Securities will be made in accordance with the method selected by the Majority Holders participating in the Shelf Registration; (ii) furnish to each Holder of Registrable Securities and to each underwriter of an underwritten offering of Registrable Securities, if any, without charge, as many copies of each Prospectus, including each preliminary Prospectus, and any amendment or supplement thereto and such other documents as such Holder or underwriter may reasonably request, including financial statements and schedules and, if the Holder so requests, all exhibits, in order to facilitate the public sale or other disposition of the Registrable Securities; and (iii) hereby consent to the use of the Prospectus or any amendment or supplement thereto by each of the selling Holders of Registrable Securities in connection with the offering and sale of the Registrable Securities covered by the Prospectus or any amendment or supplement thereto; (d) use their reasonable best efforts to register or qualify the Registrable Securities under all applicable state securities or "blue sky" laws of such jurisdictions as any Holder of Registrable Securities covered by a Registration Statement and each underwriter of an underwritten offering of Registrable Securities shall reasonably request by the time the applicable Registration Statement is declared effective by the SEC; provided, however, that the Company shall not be required to (i) qualify as a foreign corporation or as a dealer in securities in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(d) or (ii) take any action which would subject it to general service of process or taxation in any such jurisdiction where it is not then so subject; (e) notify promptly each Holder of Registrable Securities included under a Shelf Registration or any Participating Broker-Dealer who has notified the Company that it is utilizing the Exchange Offer Registration Statement as provided in paragraph (f) below and, if requested by such Holder or Participating Broker-Dealer, confirm such advice in writing promptly (i) when a Registration Statement has become effective and when any post-effective amendments and supplements thereto become effective, (ii) of any request by the SEC or any state securities authority for post-effective amendments and supplements to a Registration Statement and Prospectus or for additional information after the Registration Statement has become effective, (iii) of the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a Registration Statement or the initiation of any proceedings for that purpose, (iv) in the 12 13 case of a Shelf Registration, if, between the effective date of such Registration Statement and the closing of any sale of Registrable Securities covered thereby, the representations and warranties of the Company contained in any underwriting agreement, securities sales agreement or other similar agreement, if any, relating to the offering cease to be true and correct in all material respects, (v) of the happening of any event or the discovery of any facts during the period a Shelf Registration Statement is effective which makes any statement made in such Registration Statement or the related Prospectus untrue in any material respect or which requires the making of any changes in such Registration Statement or Prospectus in order to make the statements therein not misleading, (vi) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities or the Exchange Securities, as the case may be, for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose and (vii) of any determination by the Company that a post-effective amendment to such Registration Statement would be appropriate; (f) in the case of the Exchange Offer Registration Statement (i) include in the Exchange Offer Registration Statement a section entitled "Plan of Distribution" which section shall be reasonably acceptable to ABN AMRO and Deutsche Bank on behalf of the Participating Broker-Dealers, and which shall contain a summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential "underwriter" status of any broker-dealer that holds Registrable Securities acquired for its own account as a result of market-making activities or other trading activities and that will be the beneficial owner (as defined in Rule 13d-3 promulgated under the 1934 Act) of Exchange Securities to be received by such broker-dealer in the Exchange Offer, whether such positions or policies have been publicly disseminated by the staff of the SEC or such positions or policies, in the reasonable judgment of ABN AMRO and Deutsche Bank on behalf of the Participating Broker-Dealers and its counsel, represent the prevailing views of the staff of the SEC, including a statement that any such broker-dealer who receives Exchange Securities for Registrable Securities pursuant to the Exchange Offer may be deemed a statutory underwriter and must deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of such Exchange Securities, (ii) furnish to each Participating Broker-Dealer who has delivered to the Company the notice referred to in Section 3(e), without charge, as many copies of each Prospectus included in the Exchange Offer Registration Statement, including any preliminary prospectus, and any amendment or supplement thereto, as such Participating Broker-Dealer may reasonably request, (iii) hereby consent to the use of the Prospectus forming part of the Exchange Offer Registration Statement or any amendment or supplement thereto, by any Person subject to the prospectus delivery requirements of the SEC, including all Participating Broker-Dealers, in connection with the sale or transfer of the Exchange Securities covered by the Prospectus or any amendment or supplement thereto, provided any such Person has provided the Company in writing with any information required by Item 507 or Item 508 of Regulation S-K under the 1933 Act (or 13 14 any similar provision then in force) for inclusion in the Prospectus contained in the Exchange Offer Registration Statement, and (iv) include in the transmittal letter or similar documentation to be executed by an exchange offeree in order to participate in the Exchange Offer (x) the following provision (or any other provision requested by ABN AMRO and Deutsche Bank on behalf of the Participating Broker-Dealers with respect to similar matters): "If the exchange offeree is a broker-dealer holding Registrable Securities acquired for its own account as a result of market-making activities or other trading activities, it will deliver a prospectus meeting the requirements of the 1933 Act in connection with any resale of Exchange Securities received in respect of such Registrable Securities pursuant to the Exchange Offer;" and (y) a statement to the effect that by a broker-dealer making the acknowledgment described in clause (x) and by delivering a Prospectus in connection with the exchange of Registrable Securities, the broker-dealer will not be deemed to admit that it is an underwriter within the meaning of the 1933 Act; (g) (i) in the case of an Exchange Offer, furnish counsel for the Managers and (ii) in the case of a Shelf Registration, furnish counsel for the Holders of Registrable Securities copies of any comment letters received from the SEC or any other request by the SEC or any state securities authority for amendments or supplements to a Registration Statement and Prospectus or for additional information; (h) make every reasonable effort to obtain the withdrawal of any order suspending the effectiveness of a Registration Statement at the earliest possible moment; (i) in the case of a Shelf Registration, furnish to each Holder of Registrable Securities, and each underwriter, if any, without charge, at least one conformed copy of each Registration Statement and any post-effective amendment thereto, including financial statements and schedules (without documents incorporated therein by reference and all exhibits thereto, unless requested in writing); (j) in the case of a Shelf Registration, cooperate with the selling Holders of Registrable Securities to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold and not bearing any restrictive legends; and enable such Registrable Securities to be in such denominations (consistent with the provisions of the Indenture) and registered in such names as the selling Holders or the underwriters, if any, may reasonably request at least three business days prior to the closing of any sale of Registrable Securities; 14 15 (k) in the case of a Shelf Registration, upon the occurrence of any event or the discovery of any facts, each as contemplated by Sections 3(e)(v) and 3(e)(vi) hereof, as promptly as practicable after the occurrence of such an event, use their best efforts to prepare a supplement or post-effective amendment to the Registration Statement or the related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of the Registrable Securities or Participating Broker-Dealers, such Prospectus will not contain at the time of such delivery any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading or will remain so qualified. At such time as such public disclosure is otherwise made or the Company determines that such disclosure is not necessary, in each case to correct any misstatement of a material fact or to include any omitted material fact, the Company agrees promptly to notify each Holder of such determination and to furnish each Holder such number of copies of the Prospectus as amended or supplemented, as such Holder may reasonably request; (l) in the case of a Shelf Registration, within a reasonable time prior to the filing of any Registration Statement, any Prospectus, any amendment to a Registration Statement or amendment or supplement to a Prospectus or any document which is to be incorporated by reference into a Registration Statement or a Prospectus after initial filing of a Registration Statement, provide copies of such document to the Managers on behalf of such Holders; and make representatives of the Company as shall be reasonably requested by the Holders of Registrable Securities, or the Managers on behalf of such Holders, available for discussion of such document; (m) use their reasonable best efforts to obtain a CUSIP number for all Exchange Securities or Registrable Securities, as the case may be, not later than the effective date of a Registration Statement, and provide the Trustee with printed certificates for the Exchange Securities or the Registrable Securities, as the case may be, in a form eligible for deposit with the Depositary; (n) (i) cause the Indenture to be qualified under the TIA in connection with the registration of the Exchange Securities or Registrable Securities, as the case may be, (ii) cooperate with the Trustee to effect such changes to the Indenture as may be required for the Indenture to be so qualified in accordance with the terms of the TIA, to the extent that such changes may be made without the consent of the Holders or the holders of any other securities issued under the Indenture and (iii) execute, and use their reasonable best efforts to cause the Trustee to execute, all documents as may be required to effect such changes, and all other forms and documents required to be filed with the SEC to enable the Indenture to be so qualified in a timely manner; 15 16 (o) in the case of a Shelf Registration, enter into agreements (including underwriting agreements) and take all other customary and appropriate actions in order to expedite or facilitate the disposition of such Registrable Securities and in such connection whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration: (i) make such representations and warranties to the Holders of such Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made by issuers to underwriters in similar underwritten offerings as may be reasonably requested by them; (ii) obtain opinions of counsel to the Company and updates thereof (which counsel and opinions (in form, scope and substance) shall be reasonably satisfactory to the managing underwriters, if any, or, if there are no underwriters, the Majority Holders) addressed to the underwriters, if any, or, if there are no underwriters, the selling Holders of Registrable Securities covering the matters customarily covered in opinions requested in sales of securities or underwritten offerings and such other matters as may be reasonably requested by such Holders and underwriters; (iii) obtain "cold comfort" letters and updates thereof from the Company's independent certified public accountants (and, if necessary, any other independent certified public accountants of any subsidiary of the Company or of any business acquired by the Company for which financial statements are, or are required to be, included in the Registration Statement) addressed to the underwriters, if any, and if there are no underwriters, use reasonable efforts to have such letter addressed to the selling Holders of Registrable Securities (to the extent consistent with Statement on Auditing Standards No. 72 of the American Institute of Certified Public Accounts), such letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters to underwriters in connection with similar underwritten offerings; (iv) if so requested by the Majority Holders, enter into a securities sales agreement with the Holders and an agent of the Holders providing for, among other things, the appointment of such agent for the selling Holders for the purpose of soliciting purchases of Registrable Securities, which agreement shall be in form, substance and scope customary for similar offerings; (v) if an underwriting agreement is entered into, cause the same to set forth indemnification provisions and procedures substantially equivalent to the indemnification provisions and procedures set forth in Section 4 hereof with respect to the underwriters and all other parties to be indemnified pursuant to said 16 17 Section or, at the request of any underwriters, in the form customarily provided to such underwriters in similar types of transactions; provided such underwriting agreement shall contain customary provisions regarding indemnification of the Company with the respect to information provided by the underwriters; and (vi) deliver such documents and certificates as may be reasonably requested by the managing underwriter or, if there are no underwriters, the Majority Holders and as are customarily delivered in similar offerings, if any. The above shall be done at (i) the effectiveness of such Registration Statement (and, if requested by the Majority Holders, each post-effective amendment thereto) and (ii) each closing under any underwriting or similar agreement as and to the extent required thereunder. In the case of any underwritten offering, the Company shall provide written notice to the Holders of all Registrable Securities whose Securities are included in the Shelf Registration Statement of such underwritten offering at least 15 days prior to the filing of a prospectus supplement for such underwritten offering. Such notice shall (x) offer each such Holder the right to participate in such underwritten offering, (y) specify a date, which shall be no earlier than 10 days following the date of such notice, by which such Holder must inform the Company of its intent to participate in such underwritten offering and (z) include the instructions such Holder must follow in order to participate in such underwritten offering; (p) in the case of a Shelf Registration or if a Prospectus is required to be delivered by any Participating Broker-Dealer in the case of an Exchange Offer, make available for inspection by representatives of the Majority Holders of the Registrable Securities, any underwriters participating in any disposition pursuant to a Shelf Registration Statement, any Participating Broker-Dealer and any counsel or accountant retained by any of the foregoing, all financial and other records, pertinent corporate documents and properties of the Company reasonably requested by any such persons, and cause the respective officers, directors, employees, and any other agents of the Company to supply all information reasonably requested by any such representative, underwriter, special counsel or accountant in connection with a Registration Statement, and make such representatives of the Company available for discussion of such documents as shall be reasonably requested by the Managers, in each case as shall be customary and reasonably necessary to enable such Persons to exercise applicable due diligence responsibilities; provided that any information that is designated by the Company in good faith, in writing, as confidential at the time of delivery of such information shall be kept confidential by such Persons, unless such information becomes available to the public generally not as a result of a breach of this Agreement, and unless disclosure is required in connection with a court proceeding or required by law, in which case prior to such disclosure the Company shall be given such notice as shall be reasonably practicable in 17 18 the circumstances to enable the Company to take action to prevent disclosure of such information; (q) (i) in the case of an Exchange Offer Registration Statement, within a reasonable time prior to the filing of any Exchange Offer Registration Statement, any Prospectus forming a part thereof, any amendment to an Exchange Offer Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Managers and their counsel and make such changes in any such document prior to the filing thereof as the Managers or their counsel may reasonably request and, except as otherwise required by applicable law, not file any such document in a form to which the Managers or their counsel shall not have previously been advised and furnished a copy of or to which the Managers shall reasonably object, and make the representatives of the Company available for discussion of such documents as shall be reasonably requested by the Managers; and (ii) in the case of a Shelf Registration, within a reasonable time prior to filing any Shelf Registration Statement, any Prospectus forming a part thereof, any amendment to such Shelf Registration Statement or amendment or supplement to such Prospectus, provide copies of such document to the Holders of Registrable Securities participating therein, to the Managers, to counsel for the Holders of Registrable Securities participating therein selected by the Majority Holders (all references to counsel for the Holders of Registrable Securities in this paragraph being references to such counsel) and to the underwriter or underwriters of an underwritten offering of Registrable Securities, if any, make such changes in any such document prior to the filing thereof as the Managers, the counsel to the Holders of Registrable Securities participating therein or the underwriter or underwriters reasonably request and not file any such document in a form to which the Managers, counsel for the Holders of Registrable Securities or any underwriter shall not have previously been advised and furnished a copy of or to which the Managers, counsel to the Holders of Registrable Securities or any underwriter shall reasonably object, and make the representatives of the Company available for discussion of such document as shall be reasonably requested by the Managers, counsel for the Holders of Registrable Securities or any underwriter; (r) in the case of a Shelf Registration, use their reasonable best efforts to cause all Registrable Securities to be listed on any securities exchange on which similar debt securities issued by the Company are then listed if requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any; (s) in the case of a Shelf Registration, use their reasonable best efforts to cause the Registrable Securities to be rated by the appropriate rating agencies, if so 18 19 requested by the Majority Holders, or if requested by the underwriter or underwriters of an underwritten offering of Registrable Securities, if any; (t) otherwise comply with all applicable rules and regulations of the SEC and make available to its security holders, as soon as reasonably practicable, an earnings statement covering at least 12 months which shall satisfy the provisions of Section 11(a) of the 1933 Act and Rule 158 promulgated thereunder; (u) cooperate and assist in any filings required to be made with the NASD and, in the case of a Shelf Registration, in the performance of any due diligence investigation by any underwriter and its counsel (including any "qualified independent underwriter" that is required to be retained in accordance with the rules and regulations of the NASD); and (v) upon consummation of an Exchange Offer, obtain (i) a customary opinion of counsel to the Company addressed to the Trustee for the benefit of all Holders of Registrable Securities participating in the Exchange Offer, and which includes an opinion that (A) the Company has duly authorized, executed and delivered the Exchange Securities and the related indenture, and (B) each of the Exchange Securities and related indenture constitute legal, valid and binding obligations of each of the Company, enforceable against the Company in accordance with its respective terms (with customary exceptions) and (ii) an officers' certificate containing the certifications substantially similar to those set forth in Section 7(d) of the Subscription Agreement. In the case of a Shelf Registration Statement, each Holder agrees that, upon receipt of any notice from the Company of the happening of any event or the discovery of any facts, each of the kind described in Section 3(e)(v) and 3(e)(vi) hereof, such Holder will forthwith discontinue disposition of Registrable Securities pursuant to a Registration Statement until such Holder's receipt of the copies of the supplemented or amended Prospectus contemplated by Section 3(k) hereof, and, if so directed by the Company, such Holder will deliver to the Company (at its expense) all copies in such Holder's possession, other than permanent file copies then in such Holder's possession, of the Prospectus covering such Registrable Securities current at the time of receipt of such notice. If any of the Registrable Securities covered by any Shelf Registration Statement are to be sold in an underwritten offering, the underwriter or underwriters and manager or managers that will manage such offering will be selected by the Majority Holders of all such Registrable Securities included in such offering and shall be acceptable to the Company. No Holder of Registrable Securities may participate in any underwritten registration hereunder unless such Holder (a) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (b) completes and 19 20 executes all questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents required under the terms of such underwriting arrangements. The Company shall be entitled for a period of time not to exceed 30 consecutive days in any one instance or 60 days in the aggregate during any consecutive twelve-month period, to require that Holders refrain from effecting any distribution of their Registrable Securities pursuant to the Shelf Registration Statement if the Company in its reasonable good faith judgment determines that, in accordance with its understanding of the disclosure requirements of applicable securities law, such distribution would require disclosure of any financing (other than an underwritten secondary offering of any securities of the Company), acquisition, corporate reorganization or other transaction or development involving the Company or any of their subsidiaries that is or would be material to the Company and that, in the reasonable good faith business judgment of the Company, such disclosure would not at that time be in the best interests of the Company (a "Material Development Election") provided that any period during which the Company requires Holders to refrain from disposing of their Registrable Securities due to a Material Development Election (an "Election Period") shall be deemed to trigger the obligation of the Company to pay Additional Interest in accordance with the second paragraph of Section 2.5 to the extent that such Election Period, together with all other days that the Shelf Registration Statement has become unusable in any consecutive twelve-month period, exceeds 30 consecutive days. The Company shall, as promptly as practicable, give the Holders whose Securities are included in the Shelf Registration Statement written notice of any such Material Development Election. If such Holders have been required to refrain from disposing of their Registrable Securities as a result of a Material Development Election, the Company shall, as promptly as practicable following the determination that the Holders may recommence such sales, notify such Holders in writing of such determination but in any event no later than the end of such 30-day period in any one case or 60-day period in the aggregate. 4. Indemnification; Contribution. (a) The Company agrees to indemnify and hold harmless the Managers, each Holder, each Participating Broker-Dealer, each Person who participates as an underwriter (any such Person being an "Underwriter") and each Person, if any, who controls any Holder or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act as follows: (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in any Registration 20 21 Statement (or any amendment or supplement thereto) pursuant to which Exchange Securities or Registrable Securities were registered under the 1933 Act, including all documents incorporated therein by reference, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact contained in any Prospectus (or any amendment or supplement thereto) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 4(d) below) any such settlement is effected with the written consent of the Company; and (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel chosen by any indemnified party), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under subparagraph (i) or (ii) above; provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with written information furnished to the Company by the Holder, Participating Broker-Dealer or Underwriter expressly for use in a Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or supplement thereto); and provided further that this indemnity agreement shall not, with respect to a Shelf Registration Statement, if applicable, with respect to any preliminary prospectus, inure to the benefit of any Underwriter (or to the benefit of any Person controlling such Underwriter) from whom the Person asserting any such losses, liabilities, claims, damages or expenses purchased Registrable Securities if such untrue statement or omission or alleged untrue statement or omission made in a preliminary prospectus is eliminated or remedies in the Prospectus (as amended or supplemented if the Company shall have furnished amendments or supplements thereto) and, if required by law, a copy of the Prospectus (as so amended or supplemented) shall not have been furnished to such Person at or prior to the written confirmation of the sale of such Registrable Securities to such Person. 21 22 (b) Each Holder severally, but not jointly, agrees to indemnify and hold harmless the Company, the Managers, each Underwriter and the other selling Holders, and each of their respective directors and officers, and each Person, if any, who controls the Company, the Managers, any Underwriter or any other selling Holder within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act, against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 4(a) hereof, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Shelf Registration Statement (or any amendment thereto) or any Prospectus included therein (or any amendment or supplement thereto) in reliance upon and in conformity with written information with respect to such Holder furnished to the Company by such Holder expressly for use in the Shelf Registration Statement (or any amendment thereto) or such Prospectus (or any amendment or supplement thereto); provided, however, that no such Holder shall be liable for any claims hereunder in excess of the amount of net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Shelf Registration Statement. (c) Each indemnified party shall give notice as promptly as reasonably practicable to each indemnifying party of any action or proceeding commenced against it in respect of which indemnity may be sought hereunder, but failure so to notify an indemnifying party shall not relieve such indemnifying party from any liability hereunder to the extent it is not materially prejudiced as a result thereof and in any event shall not relieve it from any liability which it may have otherwise than on account of this indemnity agreement. The indemnifying party, upon request of the indemnified party, shall retain counsel reasonably satisfactory to the indemnified party to represent the indemnified party and any other the indemnifying party may designate in such action or proceeding and shall pay the fees and expenses of such counsel related to such proceeding. In any such proceeding, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the contrary, (ii) the indemnifying party has failed within a reasonable time to retain counsel reasonably satisfactory to the indemnified party or (iii) the named parties in any such proceeding (including impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. In no event shall the indemnifying party or parties be liable for the fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all indemnified parties in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. No indemnifying party shall, without the prior written consent of the indemnified parties, settle or compromise or consent to the entry of any 22 23 judgment with respect to any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever in respect of which indemnification or contribution could be sought under this Section 4 (whether or not the indemnified parties are actual or potential parties thereto), unless such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising out of such litigation, investigation, proceeding or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party. (d) If at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 4(a)(ii) effected without its written consent if (i) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (ii) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement unless the indemnifying party in good faith shall be contesting the reasonableness of such fees and expenses (but only to the extent so contested) or the entitlement of the indemnified party to indemnification under the terms of this Section. No indemnifying person shall, without the prior written consent of the indemnified person, effect any settlement of any pending or threatened proceeding in respect of which any indemnified person is or could have been a party and indemnity could have been sought hereunder by such indemnified person, unless such settlement includes an unconditional release of such indemnified person from all liability on claims that are the subject matter of such proceeding. (e) If the indemnification provided for in this Section 4 is for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and expenses incurred by such indemnified party, as incurred, in such proportion as is appropriate to reflect the relative fault of the Company on the one hand and the Managers, the Holders, the Participating Broker-Dealers and/or the Underwriters each on the other hand in connection with the statements or omissions which resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant equitable considerations. The relative fault of the Company on the one hand and the Managers, the Holders, the Participating Broker-Dealers and/or the Underwriters each on the other hand shall be determined by reference to, among other things, whether any such untrue or alleged untrue statement of a material fact or omission or alleged omission to state a 23 24 material fact relates to information supplied by the Company, the Holders, the Participating Broker-Dealers and/or the Underwriters or the Managers and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Managers, the Holders, the Participating Broker-Dealers and/or the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 4 were determined by pro rata allocation (even if the Managers, the Holders, the Participating Broker-Dealers and/or the Underwriters were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to above in this Section 4. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by an indemnified party and referred to above in this Section 4 shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 4, no Manager shall be required to contribute any amount in excess of the amount by which the total price at which the Securities sold by it were offered exceeds the amount of any damages which such Manager has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 4, each Person, if any, who controls a Manager, Holder, Participating Broker-Dealer or Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as such Manager or Holder, and each director of the Company, and each Person, if any, who controls the Company, within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to contribution as the Company. The Managers' respective obligations to contribute pursuant to this Section 4 are several in proportion to the principal amount of Securities set forth opposite their respective names in Schedule II to the Subscription Agreement and not joint. 24 25 5. Miscellaneous. 5.1 Rule 144 and Rule 144A. For so long as the the Company is subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the Company covenants that it will file the reports required to be filed by it under the 1933 Act and Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by the SEC thereunder. If the Company ceases to be so required to file such reports, the Company covenants that it will upon the request of any Holder of Registrable Securities (a) make publicly available such information as is necessary to permit sales pursuant to Rule 144 under the 1933 Act, (b) deliver such information to a prospective purchaser as is necessary to permit sales pursuant to Rule 144A under the 1933 Act to the extent required by the securities laws, and (c) take such further action that is reasonable in the circumstances, in each case, to the extent required from time to time to enable such Holder to sell its Registrable Securities without registration under the 1933 Act within the limitation of the exemptions provided by (i) Rule 144 under the 1933 Act, as such Rule may be amended from time to time, (ii) Rule 144A under the 1933 Act, as such Rule may be amended from time to time, or (iii) any similar rules or regulations hereafter adopted by the SEC. Upon the request of any Holder of Registrable Securities, the Company will deliver to such Holder a written statement as to whether they have complied with such requirements. 5.2 No Inconsistent Agreements. The Company has not entered into, and the Company will not after the date of this Agreement enter into, any agreement which is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements. 5.3 Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of Holders of at least a majority in aggregate principal amount of the outstanding Registrable Securities affected by such amendment, modification, supplement, waiver or departure. 5.4 Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand delivery, registered first-class mail, telex, telecopier, or any courier guaranteeing overnight delivery (a) if to a Holder, at the most current address given by such Holder to the Company by means of a notice given in accordance with the provisions of this Section 5.4, which address initially is the address set forth in the Subscription Agreement with respect to the Managers; and (b) if to the Company, initially at the Company's address set forth in the Subscription Agreement, and thereafter at such other address of which notice is given in accordance with the provisions of this Section 5.4. 25 26 All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt is acknowledged, if telecopied; and on the next business day if timely delivered to an air courier guaranteeing overnight delivery. Copies of all such notices, demands, or other communications shall be concurrently delivered by the person giving the same to the Trustee under the Indenture, at the address specified in such Indenture. 5.5 Successor and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors, assigns and transferees of each of the parties, including, without limitation and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities in violation of the terms of the Subscription Agreement or the Indenture. If any transferee of any Holder shall acquire Registrable Securities, in any manner, whether by operation of law or otherwise, such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Subscription Agreement, and such person shall be entitled to receive the benefits hereof. 5.6 Third Party Beneficiaries. The Managers (even if the Managers are not Holders of Registrable Securities) shall be third party beneficiaries to the agreements made hereunder between the Company on the one hand, and the Holders, on the other hand, and shall have the right to enforce such agreements directly to the extent they deem such enforcement necessary or advisable to protect their rights or the rights of Holders hereunder. Each Holder of Registrable Securities shall be a third party beneficiary to the agreements made under this Registration Rights Agreement between the Company on the one hand, and the Managers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights hereunder. 5.7. Specific Enforcement. Without limiting the remedies available to the Managers and the Holders, the Company acknowledges that any failure by the Company to comply with its obligations under Sections 2.1 through 2.4 hereof may result in material irreparable injury to the Managers or the Holders for which there is no adequate remedy at law, that it would not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Managers or any Holder may 26 27 obtain such relief as may be required to specifically enforce the Company's obligations under Sections 2.1 through 2.4 hereof. 5.8. Restriction on Resales. Until the expiration of two years after the original issuance of the Securities, the Company will not, and will cause its "affiliates" (as such term is defined in Rule 144(a)(1) under the 1933 Act) not to, resell any Securities which are "restricted securities" (as such term is defined under Rule 144(a)(3) under the 1933 Act) that have been reacquired by any of them and shall immediately upon any purchase of any such Securities submit such Securities to the Trustee for cancellation. 5.9 Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 5.10 Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 5.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF. 5.12 Severability. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby. 5.13 Jurisdictional Matters. The Company (i) agrees that any legal suit, action or proceeding brought by any party to enforce any rights under or with respect to this Agreement or any other document in respect thereof or the transactions contemplated hereby or thereby may be instituted in any state or federal court in The City of New York, State of New York, U.S.A., (ii) irrevocably waives to the fullest extent permitted by law any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding, (iii) irrevocably waives to the fullest extent permitted by law any claim that and agrees not to claim or plead in any court that any such action, suit or proceeding brought in such court has been brought in an inconvenient forum and (iv) irrevocably submits to the non-exclusive jurisdiction of any such court in any such suit, action or proceeding or for recognition and enforcement of any judgment in respect thereof. 27 28 5.14. Judgment Currency. If pursuant to a judgment or order being made or registered against the Company, any payment under or in connection with this Agreement to a Person is made or satisfied in a currency (the "Judgment Currency") other than in euro then, to the extent that the payment (when converted into euro at the rate of exchange on the date of payment or, if it is not practicable for such Person to purchase euro with the Judgment Currency on the date of payment, at the rate of exchange as soon thereafter as it is practicable for it to do so) actually received by such Person falls short of the amount due under the terms of this Agreement, the Company shall, to the extent permitted by law, as a separate and independent obligation, indemnify and hold harmless such Person against the amount of such short fall and such indemnity shall continue in full force and effect notwithstanding any such judgment or order as aforesaid. For the purpose of this Section, "rate of exchange" means the rate at which the Person is able on the relevant date to purchase euro with the Judgment Currency and shall take into account any premium and other costs of exchange. 28 29 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. CLEAR CHANNEL COMMUNICATIONS, INC. By: /s/ JULIANA F. HILL ----------------------------------------- Juliana F. Hill Senior Vice President -- Finance 30 Confirmed and accepted as of the date first above written: ABN AMRO BANK N.V. DEUTSCHE BANK AG LONDON BARCLAYS BANK PLC CREDIT SUISSE FIRST BOSTON (EUROPE) LIMITED MERRILL LYNCH INTERNATIONAL SALOMON BROTHERS INTERNATIONAL LIMITED WESTDEUTSCHE LANDESBANK GIROZENTRALE By: ABN AMRO BANK N.V. By: ----------------------------------------------- Authorized Signatory By: DEUTSCHE BANK AG LONDON By: ----------------------------------------------- Authorized Signatory By: ----------------------------------------------- Authorized Signatory For themselves and on behalf of the other Managers. EX-5 4 d80863ex5.txt OPINION/CONSENT-AKIN GUMP STRAUSS HAUER & FELD LLP 1 EXHIBIT 5 OPINION OF AKIN, GUMP, STRAUSS, HAUER & FELD L.L.P. AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. 1500 NATIONSBANK PLAZA 300 CONVENT STREET SAN ANTONIO, TEXAS 78205 (210) 281-7000 October 19, 2000 Clear Channel Communications, Inc. 200 East Basse Road San Antonio, Texas 78209 Gentlemen: We have acted as counsel to Clear Channel Communications, Inc. (the "Company") in connection with the preparation for filing with the Securities and Exchange Commission of a registration statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933, as amended. The Registration Statement relates to E650,000,000 aggregate principal amount of the Company's 6.50% Notes due 2005 (the "Notes"), to be issued upon consummation of the exchange offer referred to in the Registration Statement (the "Exchange Offer"). The Notes will be issued as a single series pursuant to an Indenture filed as Exhibit 4.3 to the Registration Statement (the "Indenture"), and as supplemented by the Seventh Supplemental Indenture filed as Exhibit 4.10 to the Registration Statement (the "Supplemental Indenture") among the Company and The Bank of New York (the "Trustee"). The law covered by the opinions expressed herein is limited solely to the Federal laws of the United States and the laws of the State of Texas. This firm is a registered limited liability partnership organized under the laws of the State of Texas. We have examined such corporate records, documents, instruments and certificates of the Company and have received such representations from the officers and directors of the Company and have reviewed such questions of law as we have deemed necessary, relevant or appropriate to enable us to render the opinion expressed herein. In such examination, we have assumed the genuineness of all signatures and the authenticity of all documents, instruments, records and certificates submitted to us as originals. When the Notes have been duly executed, authenticated, issued and delivered in accordance with the provisions of the Indenture and the Supplemental Indenture, and upon the terms of the Exchange Offer set forth in the Registration Statement, the Notes will be legally issued and will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms, except as such enforcement is subject to any applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or other law relating to or affecting creditors' rights and remedies generally and general principles of equity. 2 In connection with the opinions expressed above, we have assumed that, at or prior to the time of the delivery of the Notes, (i) the Board of Directors shall have duly established the terms of the Notes and duly authorized their issuance and such authorization shall not have been modified or rescinded, (ii) the Registration Statement shall have been declared effective and such effectiveness shall not have been terminated or rescinded, (iii) there shall not have occurred any change in law affecting the validity, legally binding character or enforceability of the Notes, and (iv) that the issuance and delivery of the Notes, all of the terms of the Notes and the performance by the Company of its obligations under the Notes will comply with all applicable law and with each requirement or restriction imposed by any court or governmental body having jurisdiction over the Company and will not result in a default under or a breach of any agreement or instrument then binding upon the Company. We have further assumed that (a) the Indenture as supplemented by the Supplemental Indenture, has been duly authorized, executed and delivered by the Trustee, (b) the Notes will conform to the specimens thereof examined by us, and (c) the Trustee's certificate of authentication of the Exchange Notes will be manually signed by one of the Trustee's authorized officers. We consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the statements made with respect to us under the caption "Legal Matters" in the prospectus included as part of the Registration Statement. Very truly yours, /s/ AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. AKIN, GUMP, STRAUSS, HAUER & FELD, L.L.P. EX-12 5 d80863ex12.txt COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES 1 EXHIBIT 12 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
June 30, Year Ended 2000 1999 1999 1998 1997 1996 1995 -------- -------- -------- -------- -------- -------- -------- Income before income taxes, equity in earnings of non- consolidated affiliates and extraordinary item 40,702 172,799 220,213 117,922 104,077 71,240 49,817 Dividends and other received from nonconsolidated affiliates 920 10,539 7,079 9,168 4,624 10,430 1,432 Total 41,622 183,338 227,292 127,090 108,701 81,670 51,249 Fixed Charges Interest expense 125,460 78,842 192,321 135,766 75,076 30,080 20,752 Amortization of loan fees 156 649 1,970 2,220 1,451 506 1,004 Interest portion of rentals 40,536 9,627 24,511 16,044 6,120 424 361 Total fixed charges 166,152 89,118 218,802 154,030 82,647 31,010 22,117 Preferred stock dividends Tax effect of preferred dividends -- -- -- -- -- -- -- After tax preferred dividends -- -- -- -- -- -- -- Total fixed charges and preferred dividends 166,152 89,118 218,802 154,030 82,647 31,010 22,117 Total earnings available for payment of fixed charges 207,774 272,456 446,094 281,120 191,348 112,680 73,366 Ratio of earnings to fixed Charges 1.25 3.06 2.04 1.83 2.32 3.63 3.32 Rental fees and charges 202,678 120,333 306,393 200,550 76,500 5,299 4,510 Interest rate 20% 8% 8% 8% 8% 8% 8%
EX-23.1 6 d80863ex23-1.txt CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement on Form S-4 and related Prospectus of Clear Channel Communications, Inc. for the registration of 6.50% Notes due 2005 filed on or about October 18, 2000 and to the incorporation by reference therein of our reports dated March 13, 2000, with respect to the consolidated financial statements and schedule of Clear Channel Communications, Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 1999, filed with the Securities and Exchange Commission. ERNST & YOUNG LLP San Antonio, Texas October 16, 2000 EX-23.2 7 d80863ex23-2.txt CONSENT OF KPMG LLP 1 EXHIBIT 23.2 INDEPENDENT AUDITORS' CONSENT The Board of Directors Clear Channel Communications, Inc.: We consent to the incorporation by reference in this registration statement on Form S-4 of our report on the consolidated financial statements of Hispanic Broadcasting Corporation (formerly Heftel Broadcasting Corporation) and subsidiaries as of December 31, 1999 and 1998, and for each of the years in the three-year period ended December 31, 1999, which report is included in the Annual Report on Form 10-K of Clear Channel Communications, Inc. for the year ended December 31, 1999, and to the reference to our firm under the heading "Experts" in the registration statement. KPMG LLP Dallas, Texas October 16, 2000 EX-23.3 8 d80863ex23-3.txt CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.3 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" and to the use of our report dated February 28, 2000, with respect to the consolidated financial statements of SFX Entertainment, Inc. as of December 31, 1999 and 1998 and for each of the three years in the period ended December 31, 1999 and the related financial statement schedule, incorporated by reference from Clear Channel Communications, Inc.'s Current Report on Form 8-K dated June 14, 2000, previously filed with the Securities and Exchange Commission, in this Registration Statement on Form S-4 and related Prospectus thereto of Clear Channel Communications, Inc. for the registration of 6.50% Notes due 2005. ERNST & YOUNG LLP New York, New York October 16, 2000 EX-23.4 9 d80863ex23-4.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23.4 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in this registration statement on Form S-4 of Clear Channel Communications, Inc. of (1) our report dated February 12, 1999 relating to the consolidated financial statements of Jacor Communications, Inc., appearing in the Clear Channel Communications, Inc. Form 8-K/A filed April 12, 1999 and (2) our report dated February 11, 1998 relating to the consolidated financial statements of Jacor Communications, Inc. appearing in the Clear Channel Communications, Inc., Form 8-K filed December 10, 1998. We also consent to the reference to us under the heading "Experts" in such registration statement. PRICEWATERHOUSECOOPERS LLP Cincinnati, Ohio October 17, 2000 EX-23.5 10 d80863ex23-5.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23.5 CONSENT OF INDEPENDENT ACCOUNTANTS The Board of Directors Clear Channel Communications, Inc.: We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Clear Channel Communications, Inc. of our report dated March 13, 2000 relating to the consolidated financial statements of AMFM Inc. (formerly Chancellor Media Corporation) and its subsidiaries, which appears in the Current Report on Form 8-K of Clear Channel Communications, Inc. dated June 14, 2000. We also consent to the reference to us under the heading "Experts" in such Registration Statement. PRICEWATERHOUSECOOPERS LLP Dallas, Texas October 17, 2000 EX-23.6 11 d80863ex23-6.txt CONSENT OF PRICEWATERHOUSECOOPERS LLP 1 EXHIBIT 23.6 CONSENT OF INDEPENDENT ACCOUNTANTS The Board of Directors Clear Channel Communications, Inc.: We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Clear Channel Communications, Inc. of our report dated February 26, 1999, except for Note 3 as to which the date is March 15, 1999 relating to the financial statements of Capstar Broadcasting Corporation and Subsidiaries, which appears in the Current Report on Form 8-K of Clear Channel Communications, Inc. dated November 18, 1999. We also consent to the reference to us under the heading "Experts" in such registration statement. PRICEWATERHOUSECOOPERS LLP Austin, Texas October 17, 2000 EX-99.1 12 d80863ex99-1.txt FORM OF LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 FORM OF LETTER OF TRANSMITTAL CLEAR CHANNEL COMMUNICATIONS, INC. OFFER TO EXCHANGE 6.50% NOTES DUE 2005 FOR 6.50% NOTES DUE 2005 PURSUANT TO THE PROSPECTUS DATED OCTOBER __, 2000 THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________, 2000, UNLESS THE EXCHANGE OFFER IS EXTENDED. The Exchange Agent for the Exchange Offer is: The Bank of New York
BY REGISTERED OR CERTIFIED MAIL: FACSIMILE TRANSACTIONS: BY HAND OR OVERNIGHT DELIVERY: The Bank of New York (Eligible Institutions Only) The Bank of New York 101 Barclay Street, 7E (212) 815-6339 101 Barclay Street New York, New York 10286 Corporate Trust Services Window Attn: TO CONFIRM BY TELEPHONE OR FOR Ground Level Reorganization Department INFORMATION CALL: New York, New York 10286 (212) 815-6331 Attn: Reorganization Department
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OR TRANSMISSION TO A FACSIMILE NUMBER OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID DELIVERY. THE METHOD OF DELIVERY OF ALL DOCUMENTS, INCLUDING CERTIFICATES, IS AT THE RISK OF THE HOLDER. IF DELIVERY IS BY MAIL, REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, IS RECOMMENDED. YOU SHOULD READ THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL CAREFULLY BEFORE YOU COMPLETE THIS LETTER OF TRANSMITTAL. The undersigned acknowledges that he or she has received the prospectus, dated __________, 2000 (the "Prospectus"), of Clear Channel Communications, Inc. ("Clear Channel"), and this Letter of Transmittal and the instructions hereto (the "Letter of Transmittal"), which together constitute Clear Channel's offer (the "Exchange Offer") to exchange E1,000 principal amount of its 6.50% Notes due 2005 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement of which the Prospectus is a part, for each E1,000 principal amount of its outstanding 6.50% Notes due 2005 (the "Restricted Notes"), of which E650,000,000 aggregate principal amount is outstanding, upon the terms and subject to the conditions set forth in the Prospectus. The term "Expiration Date" shall mean 5:00 p.m. New York City time on ___________, 2000, unless Clear Channel, 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 by Clear Channel. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus. 2 This Letter of Transmittal is to be used if (1) certificates representing Restricted Notes are to be physically delivered to the Exchange Agent by Holders (as defined below), (2) the Restricted Notes are to be tendered by book-entry transfer pursuant to the procedures set forth in the Prospectus under "The Exchange Offer--Book-Entry Transfer" or (3) if tender of the Restricted Notes is to be made by Holders according to the guaranteed delivery procedures set forth in the Prospectus under "Exchange Offer--Guaranteed Delivery Procedures." Delivery of this Letter of Transmittal and any other required documents must be made to the Exchange Agent. DELIVERY OF DOCUMENTS TO EUROCLEAR, CLEARSTREAM, LUXEMBOURG OR DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT. The term "Holder" as used herein means any person in whose name Restricted Notes are registered on the books of Clear Channel or any other person who has obtained a properly completed bond power from the registered holder. Any Holder of Restricted Notes who wishes to tender his, her or its Restricted Notes must, prior to the Expiration Date, either: (a) complete, sign and deliver this Letter of Transmittal, or a facsimile thereof, to the Exchange Agent, in person or to the address or facsimile number set forth above and tender (and not withdraw) his, her or its Restricted Notes or, (b) if a tender of Restricted Notes is to be made by book-entry transfer to the account maintained by the Exchange Agent at Euroclear, Clearstream, Luxembourg, or DTC, confirm such book-entry transfer, including the delivery of an Agent's Message (a "Book-Entry Confirmation"), in each case in accordance with the procedures for tendering described in the Instructions to this Letter of Transmittal. Holders of Restricted Notes whose certificates are not immediately available or who are unable to deliver their certificates or Book-Entry Confirmation and all other documents required by this Letter of Transmittal to be delivered to the Exchange Agent on or prior to the Expiration Date, must tender their Restricted Notes according to the guaranteed delivery procedures set forth under the caption "Exchange Offer--Guaranteed Delivery Procedures" in the Prospectus. (See Instruction 2.) Upon the terms and subject to the conditions of the Exchange Offer, the acceptance for exchange of the Restricted Notes validly tendered and not withdrawn and the issuance of the Exchange Notes will be made promptly following the Expiration Date. For the purposes of the Exchange Offer, Clear Channel shall be deemed to have accepted for exchange validly tendered Restricted Notes when, as and if Clear Channel has given written notice thereof 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. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL AND THE PROSPECTUS CAREFULLY BEFORE CHECKING ANY BOX BELOW. THE INSTRUCTIONS INCLUDED IN THIS LETTER OF TRANSMITTAL MUST BE FOLLOWED. QUESTIONS AND REQUESTS FOR ASSISTANCE OR FOR ADDITIONAL COPIES OF THE PROSPECTUS, THIS LETTER OF TRANSMITTAL AND THE NOTICE OF GUARANTEED DELIVERY MAY BE DIRECTED TO THE EXCHANGE AGENT. SEE INSTRUCTION 12. HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR RESTRICTED NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS ENTIRETY AND COMPLY WITH ALL OF ITS TERMS. 3 List below the Restricted Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the Certificate Numbers and Principal Amounts should be listed on a separate signed schedule, attached hereto. The minimum permitted tender is E1,000 in principal amount of the Restricted Notes. All other tenders must be in integral multiples of E1,000. DESCRIPTION OF RESTRICTED NOTES
1 2 3 ---------------------------- ---------------------------- ---------------------------- Name(s) and Address(es) of Principal Amount of Registered Holder(s): Aggregate Principal Amount Restricted Notes (Please Fill In, If Blank) Certificate Number(s) of Notes Tendered/1/* ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- ---------------------------- Total: ---------------------------- ----------------------------
* Need not be completed by Holders who wish to tender all Restricted Notes listed. PLEASE READ CAREFULLY THE ACCOMPANYING INSTRUCTIONS
SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 5 and 6) (See Instructions 4, 5 and 6) To be completed ONLY if Restricted Notes in a principal To be completed ONLY if Restricted Notes in a principal amount not tendered, or Exchange Notes issued in exchange amount not tendered, or Exchange Notes issued in exchange for Restricted Notes accepted for exchange, are to be issued for Restricted Notes accepted for exchange are to be in the name of someone other than the undersigned. delivered to someone other than the exchange, undersigned. Issue Exchange Note(s) to: Deliver Exchange Note(s) to: ------------------------------- ----------------------------- Name(s): Name(s): ------------------------------------------------- ------------------------------------------------- Address: Address: ------------------------------------------------- ------------------------------------------------- (Include Zip Code) (Include Zip Code) ------------------------------------------------- ------------------------------------------------- (Tax Identification or Social Security Number(s)) (Tax Identification or Social Security Number(s))
IMPORTANT: THIS LETTER OF TRANSMITTAL OR A FACSIMILE HEREOF (TOGETHER WITH THE CERTIFICATE(S) FOR RESTRICTED NOTES AND ALL OTHER REQUIRED DOCUMENTS) OR A CONFIRMATION OF BOOK-ENTRY TRANSFER AND AGENT'S MESSAGE OF SUCH RESTRICTED NOTES MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. IF GUARANTEED DELIVERY PROCEDURES ARE TO BE COMPLIED WITH, A NOTICE OF GUARANTEED DELIVERY MUST BE RECEIVED BY THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE. HOLDERS WHOSE RESTRICTED NOTES ARE NOT IMMEDIATELY AVAILABLE OR WHO CANNOT DELIVER THEIR RESTRICTED NOTES AND ALL OTHER DOCUMENTS REQUIRED HEREBY TO THE EXCHANGE AGENT ON OR PRIOR TO THE EXPIRATION DATE MAY TENDER THEIR RESTRICTED NOTES ACCORDING TO THE GUARANTEED DELIVERY PROCEDURES SET FORTH IN THE PROSPECTUS UNDER THE CAPTION "EXCHANGE OFFER - GUARANTEED DELIVERY PROCEDURES." (SEE INSTRUCTION 2.) 4 [ ] CHECK HERE IF RESTRICTED NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING: - --------------------------------------------------- NAME(S) OF TENDERING HOLDER(S) - --------------------------------------------------- DATE OF EXECUTION OF NOTICE OF GUARANTEED DELIVERY - --------------------------------------------------- NAME OF INSTITUTION WHICH GUARANTEES DELIVERY - --------------------------------------------------- TRANSACTION CODE NUMBER [ ] 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. NAME: --------------------------------------------- ADDRESS: ------------------------------------------ If the undersigned is not a broker-dealer, the undersigned represents that (1) it is acquiring the Exchange Notes in the ordinary course of its business, (2) it has no arrangements or understanding with any person, nor does it intend to engage in, a distribution (as that term is interpreted by the SEC) of Exchange Notes and (3) it is not an affiliate (as that term is interpreted by the SEC) of Clear Channel. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Restricted Notes that were acquired as a result of market-making activities or other trading activities, it acknowledges that it will deliver a prospectus in connection with any resale of such Exchange 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. 5 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 Tyco International Group S.A. (the "Company") the principal amount of Restricted Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount of Restricted Notes tendered hereby in accordance with the terms of the Exchange Offer described in the prospectus, this Letter of Transmittal and the accompanying Instructions, or upon the order of the Company, the undersigned sells, assigns and transfers to the Company all right, title and interest in and to the Restricted 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 Company and as Trustee and Registrar under the Indenture for the Restricted Notes and the Exchange Notes) with respect to the tendered Restricted Notes with full power of substitution (such power of attorney being deemed an irrevocable power coupled with an interest), subject only to the right of withdrawal described in the Prospectus, to (1) deliver certificates for such Restricted Notes to the Company or transfer ownership of such Restricted Notes on the account books maintained by Euroclear, Clearstream, Luxembourg, or DTC, together, in either such case, with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company and (2) present such Restricted Notes for transfer on the books of the Company and receive all benefits and otherwise exercise all rights of beneficial ownership of such Restricted Notes, all in accordance with the terms of the Exchange Offer. The undersigned acknowledges that the Exchange Offer is being made in reliance upon interpretative advice given by the staff of the SEC to third parties in connection with transactions similar to the Exchange Offer, so that the Exchange Notes issued pursuant to the Exchange Offer in exchange for the Restricted Notes may be offered for resale, resold and otherwise transferred by holders thereof (other than a broker-dealer who purchased such Restricted Notes directly from the Company for resale pursuant to Rule 144A, Regulation S or any other available exemption under the Securities Act or a person 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 provisions of the Securities Act, provided that such Exchange Notes are acquired by non-affiliates of the Company in the ordinary course of such holders' business and such holders are not participating, do not intend to participate and have no arrangement or understanding with any person to participate, in the distribution of such Exchange Notes. The undersigned agrees that acceptance of any tendered Restricted Notes by the Company and the issuance of Exchange Notes in exchange therefor shall constitute performance in full by the Company of its obligations under the Exchange Offer and Registration Rights Agreement and that, upon the issuance of the Exchange Notes, the Company will have no further obligations or liabilities thereunder (except in certain limited circumstances). The undersigned represents and warrants that (1) the Exchange Notes acquired pursuant to the Exchange Offer are being acquired in the ordinary course of business of the person receiving Exchange Notes (which shall be the undersigned unless otherwise indicated in the box entitled "Special Delivery Instructions" above) (the "Recipient"), (2) neither the undersigned nor the Recipient (if different) is engaged in, intends to engage in or has any arrangement or understanding with any person to participate in the distribution (as that term is interpreted by the SEC) of such Exchange Notes, and (3) neither the undersigned nor the Recipient (if different) is an "affiliate" of the Company as defined in Rule 405 under the Securities Act. 6 If the undersigned is a broker-dealer, the undersigned further (1) represents that it acquired Restricted Notes for the undersigned's own account as a result of market-making activities or other trading activities, (2) represents that it 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 Exchange Notes to be received in the Exchange Offer and (3) acknowledges that it will deliver a prospectus meeting the requirements of the Securities Act (for which purposes, the delivery of the Prospectus, as the same may be hereafter supplemented or amended, shall be sufficient) in connection with any resale of Exchange Notes received in the Exchange Offer. Such a broker-dealer will not be deemed, solely by reason of such acknowledgment and prospectus delivery, to admit that it is an "underwriter" within the meaning of the Securities Act. The undersigned understands and agrees that the Company reserves the right not to accept tendered Restricted Notes from any tendering holder if the Company determines, in its sole and absolute discretion, that such acceptance could result in a violation of applicable securities laws. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, assign and transfer the Restricted Notes tendered hereby and to acquire Exchange Notes issuable upon the exchange of such tendered Restricted Notes, and that, when the same are accepted for exchange, the Company will acquire good and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claim. The undersigned also warrants that it will, upon request, execute and deliver any additional documents deemed to be necessary or desirable by the Exchange Agent or the Company in order to complete the exchange, assignment and transfer of tendered Restricted Notes or transfer of ownership of such Restricted Notes on the account books maintained by a book- entry transfer facility. The undersigned understands and acknowledges that the Company reserves the right in its sole discretion to purchase or make offers for any Restricted Notes that remain outstanding subsequent to the Expiration Date or, as set forth in the Prospectus under the caption "Exchange Offer--Procedures for Tendering," to terminate the Exchange Offer and, to the extent permitted by applicable law, purchase Restricted Notes in the open market, in privately negotiated transactions or otherwise. The terms of any such purchases or offers could differ from the terms of the Exchange Offer. The undersigned understands that the Company may accept the undersigned's tender by delivering written notice of acceptance to the Exchange Agent, at which time the undersigned's right to withdraw such tender will terminate. For purposes of the Exchange Offer, the Company shall be deemed to have accepted validly tendered Restricted Notes when, as and if the Company has given oral (which shall be confirmed in writing) or written notice thereof to the Exchange Agent. The undersigned understands that the first interest payment following the Expiration Date will include unpaid interest on the Restricted Notes accrued through the date of issuance of the Exchange Notes. The undersigned understands that tenders of Restricted Notes pursuant to the procedures described under the caption "Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the undersigned, the Company and the Exchange Agent in accordance with the terms and subject to the conditions of the Exchange Offer. If any tendered Restricted Notes are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Restricted Notes will be returned, at the Company's cost and expense, to the undersigned at the address shown below or at a different address as may be 7 indicated herein 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 on the undersigned's heirs, personal representatives, successors and assigns. This tender may be withdrawn only in accordance with the procedures set forth in the prospectus and in this Letter of Transmittal. By acceptance of the Exchange Offer, each broker-dealer that receives Exchange Notes pursuant to the Exchange Offer hereby acknowledges and agrees that upon the receipt of notice by the Company of the happening of any event that makes any statement in the Prospectus untrue in any material respect or that requires the making of any changes in the Prospectus in order to make the statements therein not misleading (which notice the Company agrees to deliver promptly to such broker-dealer), such broker-dealer will suspend use of the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented prospectus to such broker-dealer. Unless otherwise indicated under "Special Registration Instructions," please issue the certificates representing the Exchange Notes issued in exchange for the Restricted Notes accepted for exchange and return any certificates for Restricted Notes not tendered or not exchanged, in the name(s) of the undersigned. Similarly, unless otherwise indicated under "Special Delivery Instructions," please send the certificates representing the Exchange Notes issued in exchange for the Restricted Notes accepted for exchange and any certificates for Restricted Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below the undersigned's signature(s). In the event that both "Special Registration Instructions" and "Special Delivery Instructions" are completed, please issue the certificates representing the Exchange Notes issued in exchange for the Restricted Notes accepted for exchange in the name(s) of, and return any certificates for Restricted Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned understands that the Company has no obligations pursuant to the "Special Registration Instructions" or "Special Delivery Instructions" to transfer any Restricted Notes from the name of the registered Holder(s) thereof if the Company does not accept for exchange any of the Restricted Notes so tendered. Holders who wish to tender the Restricted Notes and (1) whose Restricted Notes are not immediately available or (2) who cannot deliver their Restricted Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date, may tender their Restricted Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." (See Instruction 2.) ---------- 8 PLEASE SIGN HERE WHETHER OR NOT TENDER IS TO BE MADE PURSUANT TO THE GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal must be signed by the registered holder(s) as its (their) name(s) appear on the Restricted 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 the Restricted Notes to which this Letter of Transmittal relate are held of record by two or more joint holders, then all such holders must sign this Letter of Transmittal. 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 (1) set forth his or her full title below and (2) unless waived by the Company, submit evidence satisfactory to the Company of such person's authority so to act. (See Instruction 4.) - ---------------------------------------- (SIGNATURE(S) OF HOLDER(S)) Date: _________ , 2000 Name(s): -------------------------------- (PLEASE PRINT) Capacity (full title): -------------------------------------------------------- Address: ---------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ---------------------------------------------- - -------------------------------------------------------------------------------- (TAX IDENTIFICATION OR SOCIAL SECURITY NUMBER(S)) GUARANTEE OF SIGNATURE(S) (SEE INSTRUCTION 1) Authorized Signature: --------------------------------------------------------- Date: _________ , 2000 Name of Firm: ---------------------------------------------------------------- Capacity (full title): -------------------------------------------------------- Address: --------------------------------------------------------------------- (INCLUDE ZIP CODE) Area Code and Telephone Number: ----------------------------------------------- 9 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. GUARANTEE OF SIGNATURES. Signatures on this Letter of Transmittal need not be guaranteed if (a) this Letter of Transmittal is signed by the registered holder(s) of the Restricted Notes tendered herewith and such holder(s) have not completed the box set forth herein entitled "Special Registration Instructions" or the box entitled "Special Delivery Instructions" or (b) such Restricted Notes are tendered for the account of 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 (each, an "Eligible Institution"). (See Instruction 6.) Otherwise, all signatures on this Letter of Transmittal or a notice of withdrawal, as the case may be, must be guaranteed by an Eligible Institution. All signatures on bond powers and endorsements on certificates must also be guaranteed by an Eligible Institution. 2. DELIVERY OF THIS LETTER OF TRANSMITTAL AND RESTRICTED NOTES. Certificates for all physically delivered Restricted Notes or confirmation of any book-entry transfer to the Exchange Agent at Euroclear, Clearstream, Luxembourg, or DTC, of Restricted Notes tendered by book-entry transfer, as well as, in the case of physical delivery of Restricted Notes, a properly completed and duly executed copy of this Letter of Transmittal or facsimile hereof 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 5:00 p.m. New York City time on the Expiration Date. The method of delivery of the tendered Restricted Notes, this Letter of Transmittal and all other required documents, or book-entry transfer and transmission of an Agent's Message by a Euroclear, Clearstream, Luxembourg, or DTC participant, to the Exchange Agent is at the election and risk of the Holder and the delivery will be deemed made only when actually received by the Exchange Agent. If Restricted Notes are sent by mail, registered mail with return receipt requested, properly insured, is recommended. In all cases, sufficient time should be allowed to ensure timely delivery. No Letter of Transmittal or Restricted Notes should be sent to the Company, Euroclear, Clearstream, Luxembourg, or DTC. The Exchange Agent will make a request to establish an account with respect to the Restricted Notes at Euroclear, at Clearstream, Luxembourg, or at DTC for purposes of the Exchange Offer promptly after receipt of this Prospectus, and any financial institution that is a participant in Euroclear Clearstream, Luxembourg, or DTC may make book-entry delivery of Restricted Notes by causing Euroclear, Clearstream, Luxembourg, or DTC, as the case may be, to transfer such Restricted Notes into the Exchange Agent's account at Euroclear or Clearstream, Luxembourg, or DTC, as the case may be, in accordance with the relevant entity's procedures for transfer. However, although delivery of Restricted Notes may be effected through book-entry transfer at Euroclear, Clearstream, Luxembourg, or DTC, an Agent's Message (as defined in the next paragraph) in connection with a book-entry transfer and any other required documents, must, in any case, be transmitted to and received by the Exchange Agent at the address specified on the cover page of the Letter of Transmittal on or prior to the Expiration Date or the guaranteed delivery procedures described below must be complied with. A Holder may tender Restricted Notes that are held through DTC by transmitting its acceptance through DTC's Automatic Tender Offer Program, for which the transaction will be eligible, and DTC will then edit and verify the acceptance and send an Agent's Message to the Exchange Agent for its acceptance. The term "Agent's Message" means a message transmitted by DTC to, and received by, the Exchange Agent and forming part of the Book-Entry Confirmation, which states that DTC has received an express acknowledgment from each participant in DTC tendering the Restricted Notes and that such participant has received the Letter of Transmittal and agrees to be bound by the terms of the Letter of Transmittal and the Company may enforce such agreement against such participant. Delivery of an 10 Agent's Message will also constitute an acknowledgment from the tendering DTC participant that the representations and warranties set forth on page 4 of this Letter of Transmittal are true and correct. Holders of Restricted Notes held through Euroclear or Clearstream, Luxembourg, are required to use book-entry transfer pursuant to the standard operating procedures of Euroclear or Clearstream, Luxembourg, as the case may be, to accept the Exchange Offer and to tender their Restricted Notes. A computer-generated message must be transmitted to Euroclear or Clearstream, Luxembourg, as the case may be, in lieu of a Letter of Transmittal, in order to tender the Restricted Notes in the Exchange Offer. Holders who wish to tender their Restricted Notes and (1) whose Restricted Notes are not immediately available, or (2) who cannot deliver their Restricted Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date or comply with book-entry transfer procedures on a timely basis must tender their Restricted Notes according to the guaranteed delivery procedures set forth in the Prospectus. See "Exchange Offer--Guaranteed Delivery Procedures." Pursuant to such procedure: (1) such tender must be made by or through an Eligible Institution; (2) prior to the Expiration Date, the Exchange Agent must have received from the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, overnight courier, mail or hand delivery) setting forth the name and address of the Holder of the Restricted Notes, the certificate number or numbers of such Restricted Notes and the principal amount of Restricted Notes tendered, stating that the tender is being made thereby and guaranteeing that, within three New York Stock Exchange trading days after the Expiration Date, this Letter of Transmittal (or facsimile hereof) or any Agent's Message together with the certificate(s) representing the Restricted Notes or book-entry transfer, as the case may be, and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (3) such properly completed and executed Letter of Transmittal (or facsimile hereof), as well as all other documents required by this Letter of Transmittal and the certificate(s) representing all tendered Restricted Notes in proper form for transfer (or a confirmation of book-entry transfer of such Restricted Notes into the Exchange Agent's account at Euroclear, Clearstream, Luxembourg, or DTC), must be received by the Exchange Agent within three New York Stock Exchange trading days after the Expiration Date, all in the manner provided in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery Procedures." Any Holder who wishes to tender his, her or its Restricted Notes pursuant to the guaranteed delivery procedures described above must ensure that the Exchange Agent receives the Notice of Guaranteed Delivery prior to the Expiration Date. Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be sent to Holders who wish to tender their Restricted Notes according to the guaranteed delivery procedures set forth above. All questions as to the validity, form, eligibility (including time of receipt), acceptance of tendered Restricted Notes, and withdrawal of tendered Restricted Notes will be determined by the Company in its sole discretion, which determination will be final and binding. All tendering holders, by execution of this Letter of Transmittal (or facsimile thereof), shall waive any right to receive notice of the acceptance of the Restricted Notes for exchange. The Company reserves the absolute right to reject any and all Restricted Notes not properly tendered or any Restricted Notes the Company's acceptance of which would, in the opinion of counsel for the Company, be unlawful. The Company also reserves the right to waive any irregularities or conditions of tender as to particular Restricted Notes. The Company's interpretation of the terms and conditions of the Exchange Offer (including the instructions in this Letter of Transmittal) shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Restricted Notes must be cured within such time as the Company shall determine. Neither the Company, the Exchange Agent nor any other person shall be under any duty to give notification of defects or irregularities with respect to tenders of Restricted Notes, nor shall any of them incur any liability for failure to give such notification. Tenders of Restricted Notes will not be deemed to have been made until such defects or irregularities have been cured to the Company's satisfaction or waived. Any Restricted Notes received by the Exchange Agent that are not properly 11 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 pursuant to the Company's determination, unless otherwise provided in this Letter of Transmittal as soon as practicable following the Expiration Date. 3. INADEQUATE SPACE. If the space provided is inadequate, the certificate numbers and/or the number of Restricted Notes should be listed on a separate signed schedule attached hereto. 4. TENDER BY HOLDER. Only a registered Holder of Restricted Notes or a Euroclear, Clearstream, Luxembourg, or DTC participant listed on a securities position listing furnished by Euroclear, Clearstream, Luxembourg, or DTC with respect to the Restricted Notes may tender its Restricted Notes in the Exchange Offer. Any beneficial owner of Restricted Notes who is not the registered Holder and is not a Euroclear, Clearstream, Luxembourg, or DTC participant and who wishes to tender should arrange with such registered holder to execute and deliver this Letter of Transmittal on such beneficial owner's behalf or must, prior to completing and executing this Letter of Transmittal and delivering his, her or its Restricted Notes, either make appropriate arrangements to register ownership of the Restricted Notes in such beneficial owner's name or obtain a properly completed bond power from the registered holder or properly endorsed certificates representing such Restricted Notes. 5. PARTIAL TENDERS; WITHDRAWALS. Tenders of Restricted Notes will be accepted only in integral multiples of (Euro)1,000. If less than the entire principal amount of any Restricted Notes is tendered, the tendering Holder should fill in the principal amount tendered in the third column of the box entitled "Description of Restricted Notes" above. The entire principal amount of any Restricted Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount of all Restricted Notes is not tendered, then Restricted Notes for the principal amount of Restricted Notes not tendered and a certificate or certification representing Exchange Notes issued in exchange for any Restricted Notes accepted will be sent to the Holder at his, her or its registered address, unless a different address is provided in the "Special Delivery Instructions" box above on this Letter of Transmittal or unless tender is made through Euroclear, Clearstream, Luxembourg, or DTC promptly after the Restricted Notes are accepted for exchange. Except as otherwise provided herein, tenders of Restricted Notes may be withdrawn at any time prior to the Expiration Date. To withdraw a tender of Restricted Notes in the Exchange Offer, a written or facsimile transmission notice of withdrawal must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. Any such notice of withdrawal must (1) specify the name of the person having deposited the Restricted Notes to be withdrawn (the "Depositor"), (2) identify the Restricted Notes to be withdrawn (including the certificate number or numbers and principal amount of such Restricted Notes, or, in the case of Restricted Notes transferred by book-entry transfer the name and number of the account at Euroclear, Clearstream, Luxembourg, or DTC to be credited), (3) be signed by the Depositor in the same manner as the original signature on the Letter of Transmittal by which such Restricted Notes were tendered (including any required signature guarantees) or be accompanied by documents of transfer sufficient to have the Registrar with respect to the Restricted Notes register the transfer of such Restricted Notes into the name of the person withdrawing the tender and (4) specify the name in which any such Restricted 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 Restricted Notes so withdrawn will be deemed not to have been validly tendered for purposes of the Exchange Offer and no Exchange Notes will be issued with respect thereto unless the Restricted Notes so withdrawn are validly retendered. Any Restricted Notes which have been tendered but which are not accepted for exchange by the Company 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 12 withdrawn Restricted Notes may be retendered by following one of the procedures described in the Prospectus under "Exchange Offer--Procedures for Tendering" at any time prior to the Expiration Date. 6. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder(s) of the Restricted Notes tendered hereby, the signature must correspond with the name(s) as written on the face of the Restricted Note without alteration, enlargement or any change whatsoever. If any of the Restricted Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If a number of Restricted Notes registered in different names are tendered, it will be necessary to complete, sign and submit as many copies of this Letter of Transmittal as there are different registrations of Restricted Notes. If this Letter of Transmittal (or facsimile hereof) is signed by the registered Holder or Holders (which term, for the purposes described herein, shall include a book-entry transfer facility whose name appears on a security listing as the owner of the Restricted Notes) of Restricted Notes tendered and the certificate or certificates for Exchange Notes issued in exchange therefor is to be issued (or any untendered principal amount of Restricted Notes to be reissued) to the registered Holder, then such Holder need not and should not endorse any tendered Restricted Notes, nor provide a separate bond power. In any other case, such Holder must either properly endorse the Restricted Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal with the signatures on the endorsement or bond power guaranteed by an Eligible Institution. If this Letter of Transmittal (or facsimile hereof) is signed by a person other than the registered Holder or Holders of any Restricted Notes listed, such Restricted Notes must be endorsed or accompanied by appropriate bond powers in each case signed as the name of the registered Holder or Holders appears on the Restricted Notes. If this Letter of Transmittal (or facsimile hereof) or any Restricted Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, or officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing, and unless waived by the Company, evidence satisfactory to the Company of their authority so to act must be submitted with this Letter of Transmittal. Endorsements on Restricted Notes or signatures on bond powers required by this Instruction 6 must be guaranteed by an Eligible Institution. 7. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable box or boxes, the name and address to which Exchange Notes or substitute Restricted Notes for principal amounts not tendered or not accepted for exchange are to be issued or sent, if different from the name and address of the person signing this Letter of Transmittal. In the case of issuance in a different name, the taxpayer identification or social security number of the person named must also be indicated. 8. TRANSFER TAXES. The Company will pay all transfer taxes, if any, applicable to the exchange of Restricted Notes pursuant to the Exchange Offer. If, however, certificates representing Exchange Notes or Restricted Notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be registered in the name of, any person other than the registered Holder of the Restricted Notes tendered hereby, or if tendered Restricted Notes are registered in the name of a person other than the person signing this Letter of Transmittal, or if a transfer tax is imposed for any reason other than the 13 exchange of Restricted Notes pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or on any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. See the Prospectus under "Exchange Offer--Solicitation of Tenders; Fees and Expenses." Except as provided in this Instruction 8, it will not be necessary for transfer tax stamps to be affixed to the Restricted Notes listed in this Letter of Transmittal. 9. WAIVER OF CONDITIONS. The Company reserves the right, in its sole discretion, to amend, waive or modify specified conditions in the Exchange Offer in the case of any Restricted Notes tendered. 10. MUTILATED, LOST, STOLEN OR DESTROYED RESTRICTED NOTES. Any tendering Holder whose Restricted Notes have been mutilated, lost, stolen or destroyed should contact the Exchange Agent at the address indicated herein for further instructions. 11. REQUESTS FOR ASSISTANCE, COPIES. Requests for assistance and requests for additional copies of the Prospectus or this Letter of Transmittal may be directed to the Exchange Agent at the address specified in the Prospectus. Holders may also contact their broker, dealer, commercial bank, trust company or other nominee for assistance concerning the Exchange Offer. (DO NOT WRITE IN SPACE BELOW)
CERTIFICATE TENDERED RESTRICTED NOTES ACCEPTED RESTRICTED NOTES SURRENDERED ------------------------ ---------------------------- -------------------------------- ------------------------ ---------------------------- -------------------------------- ------------------------ ---------------------------- -------------------------------- ------------------------ ---------------------------- --------------------------------
Received Accepted by Checked by ---------- ------- -------- Delivery Prepared by -------------- Checked by Date ------- -------- -----END PRIVACY-ENHANCED MESSAGE-----