-----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, JEffBOl91srP5nyuHBbU2hnAoaEvcQnkRN8e3fOkexwn4LKdzO6h45EXCgv9/50J lgqgftwuy9AH9g1U+NPSHw== 0000950137-99-000268.txt : 19990316 0000950137-99-000268.hdr.sgml : 19990316 ACCESSION NUMBER: 0000950137-99-000268 CONFORMED SUBMISSION TYPE: S-4 PUBLIC DOCUMENT COUNT: 12 FILED AS OF DATE: 19990315 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS COMMUNICATIONS CORP CENTRAL INDEX KEY: 0000783005 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351542018 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377 FILM NUMBER: 99564540 BUSINESS ADDRESS: STREET 1: ONE EMMIS PLAZA STREET 2: 40 MONUMENT CIRCLE SUITE 700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 317-266-0100 MAIL ADDRESS: STREET 1: ONE EMMIS PLZ STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIAPOLIS STATE: IN ZIP: 46204 FORMER COMPANY: FORMER CONFORMED NAME: EMMIS BROADCASTING CORPORATION DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM BROADCASTING CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081428 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351704900 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-01 FILM NUMBER: 99564541 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM BROADCASTING CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081429 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351705341 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-02 FILM NUMBER: 99564542 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE #700 CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KPWR INC CENTRAL INDEX KEY: 0001081430 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351705334 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-03 FILM NUMBER: 99564543 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS BROADCASTING CORP OF NEW YORK CENTRAL INDEX KEY: 0001081431 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351705332 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-04 FILM NUMBER: 99564544 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM BROADCASTING CORP OF CHICAGO CENTRAL INDEX KEY: 0001081432 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351397437 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-05 FILM NUMBER: 99564545 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS MEADOWLANDS CORP CENTRAL INDEX KEY: 0001081433 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351756647 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-06 FILM NUMBER: 99564546 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS PUBLISHING CORP CENTRAL INDEX KEY: 0001081434 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351748335 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-07 FILM NUMBER: 99564547 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS AM RADIO CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081435 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351922651 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-08 FILM NUMBER: 99564548 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM RADIO CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081436 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351922632 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-09 FILM NUMBER: 99564549 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 104 1 FM RADIO CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081438 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352005992 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-10 FILM NUMBER: 99564550 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 106 5 FM BROADCASTING CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081456 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352005991 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-11 FILM NUMBER: 99564551 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 1310 AM RADIO CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081457 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352030857 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-12 FILM NUMBER: 99564552 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 105 7 FM RADIO CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081458 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352030858 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-13 FILM NUMBER: 99564553 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIATEX COMMUNICATIONS CORP CENTRAL INDEX KEY: 0001081459 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 741723301 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-14 FILM NUMBER: 99564554 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MEDIATEX DEVELOPMENT CORP CENTRAL INDEX KEY: 0001081460 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 742120662 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-15 FILM NUMBER: 99564555 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TEXAS MONTHLY INC CENTRAL INDEX KEY: 0001081461 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 742236977 STATE OF INCORPORATION: TX FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-16 FILM NUMBER: 99564556 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS DAR INC CENTRAL INDEX KEY: 0001081462 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 351740703 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-17 FILM NUMBER: 99564557 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS INTERNATIONAL CORP CENTRAL INDEX KEY: 0001081464 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352027309 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-18 FILM NUMBER: 99564558 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 1380 AM RADIO CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081467 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352005995 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-19 FILM NUMBER: 99564559 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM HOLDING CORP OF NEW YORK CENTRAL INDEX KEY: 0001081469 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 391623479 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-20 FILM NUMBER: 99564560 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 101 9 FM RADIO CORP OF NEW YORK CENTRAL INDEX KEY: 0001081470 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 382270683 STATE OF INCORPORATION: MI FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-21 FILM NUMBER: 99564561 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS RADIO CORP OF NEW YORK CENTRAL INDEX KEY: 0001081472 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 581825801 STATE OF INCORPORATION: DE FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-22 FILM NUMBER: 99564562 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS INDIANA BROADCASTING LP CENTRAL INDEX KEY: 0001081473 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352039701 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-23 FILM NUMBER: 99564563 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION BROADCASTING LP CENTRAL INDEX KEY: 0001081474 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051031 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-24 FILM NUMBER: 99564564 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS PUBLISHING LP CENTRAL INDEX KEY: 0001081475 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352039702 STATE OF INCORPORATION: IN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-25 FILM NUMBER: 99564565 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIANAPOLIS STATE: IN ZIP: 46204 BUSINESS PHONE: 3176846548 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 40 MONUMENT CIRCLE , 7TH FL CITY: INDIAPOLIS STATE: IN ZIP: 46204 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM LICENSE CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081477 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662828 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-26 FILM NUMBER: 99564566 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM LICENSE CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081478 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662829 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-27 FILM NUMBER: 99564567 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KPWR LICENSE INC CENTRAL INDEX KEY: 0001081490 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954663002 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-28 FILM NUMBER: 99564568 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS LICENSE CORP OF NEW YORK CENTRAL INDEX KEY: 0001081492 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662857 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-29 FILM NUMBER: 99564569 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS LICENSE CORP OF CHICAGO CENTRAL INDEX KEY: 0001081493 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662827 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-30 FILM NUMBER: 99564570 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS AM RADIO LICENSE CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081495 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662831 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-31 FILM NUMBER: 99564571 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS FM RADIO LICENSE CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081497 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662856 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-32 FILM NUMBER: 99564572 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS RADIO LICENSE CORP OF NEW YORK CENTRAL INDEX KEY: 0001081500 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662859 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-33 FILM NUMBER: 99564573 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 104 1 FM RADIO LICENSE CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081502 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662863 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-34 FILM NUMBER: 99564574 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 106 5 FM LICENSE CORP OF ST LOUIS CENTRAL INDEX KEY: 0001081504 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954663001 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-35 FILM NUMBER: 99564575 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 1310 AM RADIO LICENSE CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081507 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954663000 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-36 FILM NUMBER: 99564576 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS LICENSE CORP CENTRAL INDEX KEY: 0001081509 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954662830 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-37 FILM NUMBER: 99564577 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS INTERNATIONAL BROADCASTING CORP CENTRAL INDEX KEY: 0001081510 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 311573818 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-38 FILM NUMBER: 99564578 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF HONOLULU CENTRAL INDEX KEY: 0001081511 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051237 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-39 FILM NUMBER: 99564579 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF MOBILE CENTRAL INDEX KEY: 0001081512 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051244 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-40 FILM NUMBER: 99564580 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF CAPE CORAL CENTRAL INDEX KEY: 0001081515 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051644 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-41 FILM NUMBER: 99564581 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF GREEN BAY CENTRAL INDEX KEY: 0001081517 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051241 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-42 FILM NUMBER: 99564582 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 1480 AM RADIO LICENSE CORP OF TERRE HAUTE CENTRAL INDEX KEY: 0001081520 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051646 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-43 FILM NUMBER: 99564583 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF TERRE HAUTE CENTRAL INDEX KEY: 0001081522 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051642 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-44 FILM NUMBER: 99564584 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 99 9 FM RADIO LICENSE CORP OF TERRE HAUTE CENTRAL INDEX KEY: 0001081524 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051618 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-45 FILM NUMBER: 99564585 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 105 7 FM RADIO LICENSE CORP OF INDIANAPOLIS CENTRAL INDEX KEY: 0001081526 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 954663004 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-46 FILM NUMBER: 99564586 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS TELEVISION LICENSE CORP OF NEW ORLEANS CENTRAL INDEX KEY: 0001081528 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051239 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-47 FILM NUMBER: 99564587 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 FILER: COMPANY DATA: COMPANY CONFORMED NAME: EMMIS 105 5 FM RADIO LICENSE CORP OF TERRE HAUTE CENTRAL INDEX KEY: 0001081531 STANDARD INDUSTRIAL CLASSIFICATION: RADIO BROADCASTING STATIONS [4832] IRS NUMBER: 352051649 STATE OF INCORPORATION: CA FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: S-4 SEC ACT: SEC FILE NUMBER: 333-74377-48 FILM NUMBER: 99564588 BUSINESS ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 BUSINESS PHONE: 8188178522 MAIL ADDRESS: STREET 1: C/O EMMIS COMMUNICATIONS CORP STREET 2: 15821 VENTURA BLVD #685 CITY: ENCINO STATE: CA ZIP: 91436 S-4 1 FORM S-4 1 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------------------ FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ------------------------------------ EMMIS COMMUNICATIONS CORPORATION (Exact name of registrant as specified in its charter) INDIANA 4832 35-1542018 (State or other jurisdiction of (Primary standard industrial (I.R.S. Employer Identification incorporation or organization) classification code number) No.)
40 MONUMENT CIRCLE, 7TH FLOOR, INDIANAPOLIS, INDIANA 46204, (317) 266-0100 (Address, including zip code and telephone number, including area code, of principal executive offices) SEE "TABLE OF ADDITIONAL REGISTRANTS" ON THE FOLLOWING PAGE FOR INFORMATION RELATING TO ADDITIONAL GUARANTORS OF CERTAIN SECURITIES REGISTERED HEREBY WHO ARE ADDITIONAL REGISTRANTS J. SCOTT ENRIGHT, ESQ. VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL EMMIS COMMUNICATIONS CORPORATION 40 MONUMENT CIRCLE, 7TH FLOOR INDIANAPOLIS, INDIANA 46204 (317) 266-0100 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------------ Copy to: ALAN W. BECKER, ESQ. BOSE MCKINNEY & EVANS 135 NORTH PENNSYLVANIA STREET, SUITE 2700 INDIANAPOLIS, INDIANA 46204 (317) 684-5000 ------------------------------------ APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: As soon as practicable after this Registration Statement becomes effective. If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. [ ] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------------- TITLE OF SECURITIES PROPOSED MAXIMUM AMOUNT OF TO BE REGISTERED AGGREGATE OFFERING PRICE REGISTRATION FEE - ---------------------------------------------------------------------------------------------------------------- 8.125% Senior Subordinated Notes due 2009................... $300,000,000 $83,400 - ---------------------------------------------------------------------------------------------------------------- Guarantees of Subsidiary Guarantors......................... (1) (1) - ---------------------------------------------------------------------------------------------------------------- Total....................................................... $300,000,000 $83,400 - ----------------------------------------------------------------------------------------------------------------
(1) Also registered are Guarantees of certain subsidiaries of Emmis Communications Corporation of the 8.125% Senior Subordinated Notes due 2009 for which no additional consideration will be received. Accordingly, pursuant to Rule 457(n) under the Securities Act, no additional fee is included for the registration of such Guarantees. THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF ADDITIONAL REGISTRANTS TO FORM S-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Emmis FM Broadcasting Indiana 4832 35-1704900 Corporation of Indianapolis Emmis FM Broadcasting Indiana 4832 35-1705341 Corporation of St. Louis KPWR, Inc. Indiana 4832 35-1705334 Emmis Broadcasting Corporation Indiana 4832 35-1705332 of New York Emmis FM Broadcasting Indiana 4832 31-1397437 Corporation of Chicago Emmis Meadowlands Corporation Indiana 4832 35-1756647 Emmis Publishing Corporation Indiana 2721 35-1748335 Emmis AM Radio Corporation of Indiana 4832 35-1922651 Indianapolis Emmis FM Radio Corporation of Indiana 4832 35-1922632 Indianapolis Emmis 104.1 FM Radio Indiana 4832 35-2005992 Corporation of St. Louis Emmis 106.5 FM Broadcasting Indiana 4832 35-2005991 Corporation of St. Louis Emmis 1310 AM Radio Corporation Indiana 4832 35-2030857 of Indianapolis Emmis 105.7 FM Radio Indiana 4832 35-2030858 Corporation of Indianapolis Mediatex Communications Texas 2721 74-1723301 Corporation Mediatex Development Texas 2721 74-2120662 Corporation Texas Monthly, Inc. Texas 2721 74-2236977 Emmis DAR, Inc. Indiana 4800 35-1740703 Emmis International Corporation Indiana 4832 35-2027309 Emmis 1380 AM Radio Corporation Indiana 4832 35-2005995 of St. Louis Emmis FM Holding Corporation of Delaware 4832 39-1623479 New York Emmis 101.9 FM Radio Michigan 4832 38-2270683 Corporation of New York Emmis Radio Corporation of New Delaware 4832 58-1825801 York Emmis Indiana Broadcasting, Indiana 4832 35-2039701 L.P. Emmis Television Broadcasting, Indiana 4833 35-2051031 L.P. Emmis Publishing, L.P. Indiana 2721 35-2039702 (Exact name of Registrant as (State or other (Primary standard (I.R.S. Employer specified in its charter) jurisdiction of industrial Identification No.) incorporation or classification code organization) number)
3 40 MONUMENT CIRCLE 7TH FLOOR INDIANAPOLIS, INDIANA 46204 (317) 266-0100 (Address, including zip code and telephone number, including area code, of principal executive offices) J. SCOTT ENRIGHT, ESQ. VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL EMMIS COMMUNICATIONS CORPORATION 40 MONUMENT CIRCLE, 7TH FLOOR INDIANAPOLIS, INDIANA 46204 (317) 266-0100 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ Copy to: ALAN W. BECKER, ESQ. BOSE MCKINNEY & EVANS 135 NORTH PENNSYLVANIA STREET, SUITE 2700 INDIANAPOLIS, INDIANA 46204 (317) 684-5000 ------------------------------ Emmis FM License Corporation of California 4832 95-4662828 Indianapolis Emmis FM License Corporation of St. California 4832 95-4662829 Louis KPWR License, Inc. California 4832 95-4663002 Emmis License Corporation of New York California 4832 95-4662857 Emmis FM License Corporation of Chicago California 4832 95-4662827 Emmis AM Radio License Corporation of California 4832 95-4662831 Indianapolis Emmis FM Radio License Corporation of California 4832 95-4662856 Indianapolis Emmis Radio License Corporation of New California 4832 95-4662859 York Emmis 104.1 FM Radio License California 4832 95-4662863 Corporation of St. Louis Emmis 106.5 FM License Corporation of California 4832 95-4663001 St. Louis Emmis 1310 AM Radio License Corporation California 4832 95-4663000 of Indianapolis Emmis License Corporation California 4832 95-4662830 Emmis International Broadcasting California 4832 31-1573818 Corporation Emmis Television License Corporation of California 4833 35-2051237 Honolulu Emmis Television License Corporation of California 4833 35-2051244 Mobile Emmis Television License Corporation of California 4833 35-2051644 Cape Coral Emmis Television License Corporation of California 4833 35-2051241 Green Bay
4 Emmis 1480 AM Radio License Corporation California 4832 35-2051646 of Terre Haute Emmis Television License Corporation of California 4832 35-2051642 Terre Haute Emmis 99.9 FM Radio License Corporation California 4832 35-2051618 of Terre Haute Emmis 105.7 FM Radio License California 4832 95-4663004 Corporation of Indianapolis Emmis Television License Corporation of California 4833 35-2051239 New Orleans Emmis 105.5 FM Radio License California 4832 35-2051649 Corporation of Terre Haute (Exact name of Registrant as specified (State or other (Primary standard (I.R.S. in its charter) jurisdiction of industrial Employer incorporation or classification code Identification organization) number) No.)
15821 VENTURA BLVD. SUITE 685 ENCINO, CALIFORNIA 91436 (818) 817-8522 (Address, including zip code and telephone number, including area code, of principal executive offices) J. SCOTT ENRIGHT, ESQ. VICE PRESIDENT AND ASSOCIATE GENERAL COUNSEL EMMIS COMMUNICATIONS CORPORATION 40 MONUMENT CIRCLE, 7TH FLOOR INDIANAPOLIS, INDIANA 46204 (317) 266-0100 (Name, address, including zip code, and telephone number, including area code, of agent for service) ------------------------------ Copy to: ALAN W. BECKER, ESQ. BOSE MCKINNEY & EVANS 135 NORTH PENNSYLVANIA STREET, SUITE 2700 INDIANAPOLIS, INDIANA 46204 (317) 684-5000 ------------------------------ 5 This information in this prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. SUBJECT TO COMPLETION, DATED MARCH 12, 1999 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- PROSPECTUS 6 EMMIS COMMUNICATIONS CORPORATION LOGO EMMIS COMMUNICATIONS CORPORATION $300,000,000 OFFER TO EXCHANGE SERIES B 8 1/8% SENIOR SUBORDINATED NOTES DUE 2009 FOR ANY AND ALL OUTSTANDING 8 1/8% SENIOR SUBORDINATED NOTES DUE 2009 - -------------------------------------------------------------------------------- TERMS OF EXCHANGE OFFER - - Expires 5:00 p.m., New York City time, , 1999, unless extended - - All outstanding notes that are validly tendered and not withdrawn will be exchanged - - Tenders of outstanding notes may be withdrawn any time prior to the expiration of the exchange offer - - The exchange of notes will not be a taxable exchange for U.S. Federal income tax purposes - - We will not receive any proceeds from the exchange offer - - The terms of the registered notes we will issue in the exchange offer are substantially identical to the outstanding notes, except that certain transfer restrictions and registration rights relating to the outstanding notes will not apply to the registered notes The notes are eligible for trading in The Portal(SM) Market, a subsidiary of The Nasdaq Market, Inc. The notes also may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. WE ARE NOT MAKING AN OFFER TO EXCHANGE NOTES IN ANY JURISDICTION WHERE THE OFFER IS NOT PERMITTED. FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD CONSIDER BEFORE PARTICIPATING IN THIS EXCHANGE OFFER, SEE "RISK FACTORS" COMMENCING ON PAGE 14. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES TO BE DISTRIBUTED IN THE EXCHANGE OFFER, NOR HAVE ANY OF THESE ORGANIZATIONS DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. , 1999 7 TABLE OF CONTENTS
Page Prospectus Summary................. 1 Risk Factors....................... 14 Use of Proceeds.................... 23 Capitalization..................... 24 Selected Consolidated Financial and Other Data....................... 25 Unaudited Pro Forma Condensed Consolidated Financial Data...... 28 Management's Discussion and Analysis of Financial Condition and Results of Operations........ 36 Business........................... 43
Page Management......................... 51 Principal Shareholders............. 53 Description of Notes............... 55 Description of Certain Indebtedness..................... 98 Certain Federal Income Tax Considerations................... 101 The Exchange Offer................. 108 Plan of Distribution............... 120 Legal Matters...................... 121 Experts............................ 121 Where You Can Find More Information...................... 122
8 PROSPECTUS SUMMARY The following summary is qualified in its entirety by the more detailed information, including the financial statements and related notes, appearing elsewhere in this prospectus or incorporated into this prospectus by reference. All references to "we," "our" or "Emmis" in this prospectus mean Emmis Communications Corporation and its subsidiaries collectively, except where it is clear we mean only the parent company. THE EXCHANGE OFFER On February 12, 1999, we completed the private offering of $300,000,000 aggregate original principal amount at maturity of 8 1/8% Senior Subordinated Notes Due 2009. Emmis entered into a registration rights agreement with the initial purchasers of the notes in the private offering in which we agreed, among other things, to deliver to you this prospectus and to complete the exchange offer on or prior to , 1999. This exchange offer allows you to exchange your notes for registered notes with substantially identical terms. If the exchange offer is not completed on or prior to , 1999, we will be required to pay liquidated damages at an initial rate of $0.05 per week per $1,000 principal amount of the notes until, among other things, the completion of the exchange offer. You should read the discussions under the heading "-- Summary of Terms of the Registered Notes" and "Description of Notes" for further information regarding the registered notes. We believe that you may resell the notes issued in the exchange offer without compliance with the registration and prospectus delivery provisions of the Securities Act of 1933, subject to certain conditions. You should read the discussion under the headings "-- Summary of the Exchange Offer" and "The Exchange Offer" for further information regarding the exchange offer and resale of the registered notes. THE COMPANY We are a diversified media company with radio broadcasting, television broadcasting and magazine publishing operations. We are the eighth largest radio broadcaster in the United States based on total revenues. The thirteen FM radio stations and three AM radio stations we own in the United States serve the nation's three largest radio markets of New York City, Los Angeles and Chicago, as well as St. Louis, Indianapolis and Terre Haute, Indiana. Our six television stations, which we acquired in 1998, are located in New Orleans, Louisiana, Mobile, Alabama, Green Bay, Wisconsin, Honolulu, Hawaii, Fort Myers, Florida and Terre Haute, Indiana. On a pro forma basis after considering recent acquisitions, we had revenues and EBITDA of $219.5 million and $83.2 million, respectively, for the twelve months ended November 30, 1998. Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by developing those properties to increase their cash flow. We find such underdeveloped properties attractive because they offer greater potential for revenue and cash flow growth than mature properties. We have been successful in acquiring these types of radio stations and improving their ratings, revenues and cash flow with our marketing focus and innovative programming expertise. We have created top-performing radio stations which rank, in terms of primary demographic target audience share, among the top ten stations in the New 1 9 York City, Los Angeles and Chicago radio markets according to the Fall 1998 Arbitron survey. We believe that our strong large-market radio presence and diversity of station formats makes us attractive to a diverse base of radio advertisers and reduces our dependence on any one economic sector or specific advertiser. More recently, we have begun to apply our advertising sales and programming expertise to our television stations. We view our entry into television as a logical outgrowth of our radio business and as a platform for diversification. Like the radio stations we previously acquired, our television stations are underdeveloped properties located in desirable markets, which can benefit from innovative, research-based programming and our experienced management team. We believe we can improve the ratings, revenues and broadcast cash flow of our television stations with a more market-focused, research-based programming approach and other related strategies, which have proven successful with our radio properties. In addition to our domestic broadcasting properties, we operate news and agricultural information radio networks in Indiana, publish the Indianapolis Monthly, Atlanta, Cincinnati and Texas Monthly magazines, and have a 54% interest in a national radio station in Hungary. We also engage in various businesses ancillary to our broadcasting business, such as consulting and broadcast tower leasing. BUSINESS STRATEGY We are committed to maintaining our leadership positions in broadcasting, enhancing the performance of our broadcast properties, and distinguishing ourselves through the quality of our operations. Our strategy has the following principal components: CREATE CASH FLOW GROWTH BY ENHANCING STATION PERFORMANCE. Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by developing those properties to increase their cash flow. We believe that our station portfolio provides significant potential for revenue and cash flow growth through enhanced operating performance. We believe that our growth is less dependent on overall advertising market growth than it would be if we owned only mature properties. We expect to continue to create value, particularly in our recently-acquired television stations, through maximizing operating efficiencies, development of innovative programming and focused sales and marketing efforts. DEVELOP INNOVATIVE PROGRAMMING. We believe that knowledge of local markets and innovative programming developed to target specific demographic groups are the most important determinants of individual radio and television station success. We conduct extensive market research to identify underserved segments of our markets or to insure that we are meeting the needs and tastes of our target audiences. Utilizing the research results, we concentrate on providing focused programming formats carefully tailored to the demographics of our markets and our advertisers' preferences. Such programming strategies might include, for example, the development or acquisition of on-air talent or development of a sports coverage or news franchise. Local market knowledge is particularly important in developing programming for our Fox television stations, as the higher degree of programming flexibility afforded by our Fox affiliation provides us greater opportunity to tailor our programming to meet the specific demands of our local markets. Greg Nathanson, 2 10 who heads our television division and directs programming, has over 30 years of television broadcasting experience and has had extensive independent programming experience as President of Programming and Development for Twentieth Television and President of Fox Television Stations. EMPHASIZE FOCUSED SALES AND MARKETING STRATEGY. Emmis designs its local and national sales efforts based on advertiser demand and competition within each market. We provide our sales force with extensive training and technology for sophisticated inventory management techniques, which allows us to make frequent price adjustments based on regional and local market conditions. We seek to maximize sources of non-traditional, non-spot revenue and have led the industry in developing "vendor co-op" advertising revenue. Although this source of advertising revenue is common in the newspaper and magazine industry, we were among the first broadcasters to recognize and take advantage of the potential of vendor co-op advertising. ENCOURAGE ENTREPRENEURIAL MANAGEMENT APPROACH. We believe that broadcasting is primarily a local business and that much of our success is the result of the efforts of regional and local management and staff. We have attracted and retained an experienced team of broadcast professionals who understand the musical tastes, demographics and competitive opportunities of their particular market. Our decentralized approach to station management gives local management oversight of station spending, long-range planning and resource allocation at their individual stations and rewards local management based on those stations' performance. In addition, we encourage our managers and employees to own a stake in Emmis, and over 90% of all full-time employees have an equity ownership position in the company. We believe that this entrepreneurial management approach has given us a distinctive corporate culture, making Emmis a highly desirable employer in the broadcasting industry and significantly enhancing our ability to attract and retain experienced and highly motivated employees and management. SELECTIVELY PURSUE STRATEGIC ACQUISITIONS. Our acquisition strategy is to selectively acquire underdeveloped media properties at reasonable purchase prices where our experienced management team can enhance value. We believe that continued consolidation in the radio broadcasting industry will create attractive acquisition opportunities as the number of potential buyers for radio assets declines as a result of in-market ownership limitations, and we will continue to evaluate acquisitions of individual radio stations or groups of radio stations in both our current and new markets. We also believe that attractive acquisition opportunities are becoming increasingly available in the television broadcasting industry. In many cases, television stations have suffered ratings and revenue declines due to management inattention, improper programming strategies or inadequate sales and marketing efforts. We also expect to evaluate acquisitions of international broadcasting stations and magazine publishing properties which present attractive purchase prices and significant opportunities to capitalize on our management expertise to enhance cash flow. We intend to seek strong local minority-interest partners in evaluating and completing any international broadcasting acquisitions. 3 11 The following tables set forth certain information regarding our radio and television stations and their broadcast markets. RADIO STATIONS
RANKING IN MARKET MARKET PRIMARY PRIMARY STATION AND RANK BY DEMOGRAPHIC DEMOGRAPHIC AUDIENCE STATION REVENUE(1) FORMAT TARGET AGES TARGET(2) SHARE(2) ------- ---------- ------ ----------- ----------- -------- Los Angeles 1 KPWR-FM Dance/Contemporary Hit 12-24 1 4.1 New York 2 WQHT-FM Dance/Contemporary Hit 12-24 1 5.3 WRKS-FM Classic Soul/Smooth R&B 25-54 4 3.8 WQCD-FM Contemporary Jazz 25-54 7 3.1 Chicago 3 WKQX-FM New Rock 18-34 2 3.9 St. Louis 18 KSHE-FM Album Oriented Rock 18-34 12 3.6 WKKX-FM Country 18-34 6t 3.8 WXTM-FM Extreme Rock 18-34 4 2.9 Indianapolis 30 WENS-FM Adult Contemporary 25-54 4 4.9 WIBC-AM News/Talk 35-64 4 7.8 WNAP-FM Classic Rock 18-34 8 3.3 WTLC-FM Urban Contemporary 25-54 6 6.0 WTLC-AM Solid Gold Soul, Gospel and 35-64 19 0.7 Talk Terre Haute 172 WTHI-FM Country 25-54 1t 19.2 WTHI-AM News/Talk 35-54 9t 1.7 WWVR-FM Classic Rock 25-49 1 12.1
- ------------------------------ (1) "Market Rank by Revenue" is the ranking of the market revenue size of the principal radio market served by the station among all radio markets in the United States. Market revenue ranking figures are from Duncan's Radio Market Guide (1998 ed.). We own a 40% equity interest in the publisher of Duncan's Radio Market Guide. (2) "Ranking in Primary Demographic Target" is the ranking of the station among all radio stations in its market based on the Fall 1998 Arbitron survey. A "t" indicates the station tied with another station for the stated ranking. "Station Audience Share" represents a percentage generally computed by dividing the average number of persons over age 12 listening to a particular station during specified time periods by the average number of such persons for all stations in the market area as determined by Arbitron. 4 12 TELEVISION STATIONS
NUMBER OF STATION TELEVISION METROPOLITAN DMA AFFILIATION/ STATIONS STATION AUDIENCE STATION AREA SERVED RANK(1) CHANNEL IN MARKET(2) RANK(3) SHARE(4) ---------- ------------ ------- ------------ ------------ ------- -------- WVUE-TV New Orleans, LA 41 Fox/8 6 3t 9 WALA-TV Mobile, AL-Pensacola, 62 Fox/10 6 3 11 FL WLUK-TV (5) Green Bay, WI 70 Fox/11 5 3 14 KHON-TV (5) Honolulu, HI 71 Fox/2 6 1 17 WFTX-TV Fort Myers, FL 83 Fox/36 5 4 8 WTHI-TV Terre Haute, IN 140 CBS/10 3 1 24
- ------------------------------ (1) Estimated by the A. C. Nielsen Company ("Nielsen") as of January 1998. Rankings are based on the relative size of a station's market among the 212 generally recognized Designated Market Areas ("DMAs"), as defined by Nielsen. (2) Represents the number of television stations ("Reportable Stations") designated by Nielsen as "local" to the DMA, excluding public television stations and stations which do not meet minimum Nielsen reporting standards (i.e., a weekly cumulative audience of less than 2.5%) for reporting in the 9:00 a.m. to midnight, Sunday through Saturday time period. (3) Reflects the station's rank relative to other Reportable Stations based upon the DMA rating as reported by Nielsen from 9:00 a.m. to midnight, Sunday through Saturday during November 1998. (4) Reflects an estimate of the share of DMA households viewing television received by a local commercial station in comparison to other local commercial stations in the market as measured from 9:00 a.m. to midnight, Sunday through Saturday. (5) Emmis also owns KAII-TV and KHAW-TV, which operate as satellite stations of KHON-TV and primarily re-broadcast the signal of KHON-TV. The stations are considered one station for FCC multiple ownership purposes. Low power television translators W40AN and K55D2 retransmit stations WLUK-TV and KHON-TV, respectively. 5 13 SUMMARY OF THE EXCHANGE OFFER Registration Rights Agreement................ You have the right to exchange your notes for registered notes with substantially identical terms. This exchange offer is intended to satisfy these rights. After the exchange offer is complete, you will no longer be entitled to any exchange or registration rights with respect to your notes. The Exchange Offer......... We are offering to exchange $1,000 principal amount of Emmis' 8 1/8% Senior Subordinated Notes due 2009 which have been registered under the Securities Act for each $1,000 principal amount at maturity of Emmis' outstanding 8 1/8% Senior Subordinated Notes due 2009 which were issued in February 1999 in a private offering. In order to be exchanged, an outstanding note must be properly tendered and accepted. We will exchange all notes validly tendered and not validly withdrawn. As of this date there is $300,000,000 aggregate principal amount of notes outstanding. We will issue registered notes on or promptly after the expiration of the exchange offer. Resales.................... We believe that the registered notes may be offered for resale, resold and otherwise transferred by you without compliance with the registration and prospectus delivery provisions of the Securities Act provided that: - you acquire the registered notes issued in the exchange offer in the ordinary course of your business; - you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in the distribution of the registered notes issued to you in the exchange offer; and - you are not an "affiliate," as defined under Rule 405 of the Securities Act, of Emmis. If our belief is inaccurate and you transfer any registered note issued to you in the exchange offer without delivering a prospectus meeting the requirements of the Securities Act or without an exemption of your registered notes from such requirements, you may incur liability under the Securities Act. We do not assume or indemnify you against such liability. Each broker-dealer that issued registered notes for its own account in exchange for outstanding notes which were acquired by such broker-dealer as a result of market-making or other trading activities must acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the registered notes. A broker-dealer may use 6 14 this prospectus for an offer to resell, resale or other retransfer of the registered notes issued to it in the exchange offer. Record Date................ We mailed this prospectus and the related exchange offer documents to registered holders of outstanding notes on , 1999. Expiration Date............ The exchange offer will expire at 5:00 p.m., New York City time, , 1999, unless we decide to extend the expiration date. Conditions to the Exchange Offer.................... We may terminate or amend the exchange offer if: - any legal proceeding, government action or other adverse development materially impairs our ability to complete the exchange offer; - any SEC rule, regulation or interpretation materially impairs the exchange offer; or - we have not obtained any necessary governmental approvals with respect to the exchange offer. We may waive any or all of these conditions. At this time, there are no adverse proceedings, actions or developments pending or, to our knowledge, threatened and no governmental approvals are necessary to complete the exchange offer. Procedures for Tendering Outstanding Notes........ Each holder of outstanding notes wishing to accept the exchange offer must: - complete, sign and date the accompanying letter of transmittal, or a facsimile thereof; or - arrange for DTC to transmit certain required information to the exchange agent in connection with a book-entry transfer. You must mail or otherwise deliver such documentation and your outstanding notes to IBJ Whitehall Bank and Trust Company, as exchange agent, at the address set forth under "The Exchange Offer -- Exchange Agent." By tendering your outstanding notes in this manner, you will be representing, among other things, that: - you are acquiring the registered notes pursuant to the exchange offer in the ordinary course of your business; - you are not participating, do not intend to participate, and have no arrangement or understanding with any person to 7 15 participate, in the distribution of the registered notes issued to you in the exchange offer; and - you are not an affiliate of Emmis. Untendered Outstanding Notes.................... If you are eligible to participate in the exchange offer and you do not tender your outstanding notes, you will not have any further registration or exchange rights and your outstanding notes will continue to be subject to certain restrictions on transfer. Accordingly, the liquidity of the market for such outstanding notes could be adversely affected. Special Procedures for Beneficial Owners........ If you beneficially own outstanding notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee and you wish to tender your outstanding notes in the exchange offer, you should contact such registered holder promptly and instruct it to tender on your behalf. If you wish to tender on your own behalf, you must, prior to completing and executing the letter of transmittal for the exchange offer and delivering your outstanding notes, either arrange to have your outstanding notes registered in your name or obtain a properly completed bond power from the registered holder. The transfer of registered ownership may take considerable time. Guaranteed Delivery Procedures............... If you wish to tender your outstanding notes and time will not permit your required documents to reach the exchange agent by the expiration date of the exchange offer, or you cannot complete the procedure for book-entry transfer on time or you cannot deliver certificates for your outstanding notes on time, you may tender your outstanding notes pursuant to the procedures described in this prospectus under the heading "The Exchange Offer -- Guaranteed Delivery Procedures." Withdrawal Rights.......... You may withdraw the tender of your outstanding notes at any time prior to 5:00 p.m., New York City time, on , 1999. Certain U.S. Federal Tax Considerations........... The exchange of notes will not be a taxable event for United States federal income tax purposes. Use of Proceeds............ We will not receive any proceeds from the issuance of registered notes pursuant to the exchange offer. We will pay all our expenses incident to the exchange offer. Exchange Agent............. IBJ Whitehall Bank and Trust Company is serving as the exchange agent in connection with the exchange offer. 8 16 SUMMARY OF TERMS OF THE REGISTERED NOTES The form and terms of the registered notes are the same as the form and terms of the outstanding notes except that the registered notes will be registered under the Securities Act and, therefore, will not bear legends restricting their transfer and will not be entitled to registration under the Securities Act. In this regard, we use the term "notes" when describing provisions that govern or otherwise pertain to both the outstanding notes and the registered notes. The registered notes will evidence the same debt as the outstanding notes, and the same indenture will govern both the registered notes and the outstanding notes. Issuer..................... Emmis Communications Corporation Securities Offered......... $300 million aggregate principal amount of 8 1/8% Senior Subordinated Notes due 2009. Maturity Date.............. March 15, 2009. Interest Payment Dates..... Interest on the notes will accrue at the rate of 8 1/8% per year, payable semi-annually in cash in arrears on March 15 and September 15 of each year, commencing September 15, 1999. Optional Redemption........ Emmis can redeem the notes, in whole or in part, on or after March 15, 2004, at the redemption prices set forth in this prospectus, plus accrued and unpaid interest. In addition, before March 15, 2002, Emmis can redeem up to 35% of the notes at 108.125% of the principal amount thereof, plus accrued and unpaid interest, with the net cash proceeds from certain common stock offerings. Guarantees................. The notes will be unconditionally guaranteed by our existing wholly-owned subsidiaries and certain future subsidiaries. These guarantees will be subordinate in right of payment to all existing and future senior indebtedness of our subsidiary guarantors. These subsidiary guarantees will rank equal to other existing and future senior subordinated indebtedness of the subsidiary guarantors and senior in right of payment to all of the existing and future obligations of the subsidiary guarantors that are expressly subordinated in right of payment to the subsidiary guarantees. Change of Control.......... Upon the occurrence of certain change of control events, you may require Emmis to repurchase all or a portion of your notes at 101% of the principal amount thereof, plus accrued and unpaid interest. 9 17 Ranking.................... The notes: - are general unsecured obligations of Emmis; - rank equally with all of our other existing and future senior subordinated indebtedness; - are senior in right of payment to existing and future obligations expressly subordinated in right of payment to the notes; and - rank junior to all existing and future senior debt, as defined in the indenture governing the notes. Anti-Layering.............. Emmis will not incur any indebtedness that is subordinate in right of payment to any of our senior debt and senior in any respect in right of payment to the notes. No subsidiary guarantor will incur any indebtedness that is subordinate in right of payment to any senior debt of such subsidiary guarantor and senior in any respect in right of payment to its subsidiary guarantee. Certain Covenants.......... The indenture governing the notes contains covenants that, among other things, limit our ability and the ability of our subsidiaries to: - pay or permit payment of certain dividends on, redeem or repurchase its capital stock; - make certain investments; - incur additional indebtedness; - allow the imposition of dividend restrictions on certain subsidiaries; - sell assets; - guarantee indebtedness; - issue capital stock; - create certain liens; - engage in certain transactions with affiliates; and - consolidate or merge or sell all or substantially all our assets and the assets of our subsidiaries. All of these limitations are subject to important exceptions and qualifications. 10 18 SUMMARY UNAUDITED PRO FORMA FINANCIAL DATA The following sets forth summary unaudited pro forma financial data derived from the unaudited pro forma condensed consolidated financial data included elsewhere in this prospectus. The unaudited pro forma condensed consolidated statement of operations data for the year ended February 28, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the acquisitions of three radio stations in St. Louis, two radio stations in Indianapolis and Texas Monthly and the disposition of the St. Louis AM radio station (the "Fiscal 1998 Transactions"), all of which occurred during the year ended February 28, 1998, - the acquisition of WQCD-FM in New York City (the "WQCD Acquisition"), - our equity offering in June 1998 (the "Equity Offering") and the amendment and restatement of our Credit Facility in July 1998 (the "Credit Facility Restatement"), - the acquisition of four television stations in New Orleans, Louisiana, Mobile, Alabama, Green Bay, Wisconsin and Honolulu, Hawaii (the "SF Acquisition"), - the acquisition of two television stations in Fort Myers, Florida and Terre Haute, Indiana and three radio stations in Terre Haute (the "Wabash Valley Acquisition") and - the offering of the outstanding notes and a concurrent amendment to the Credit Facility (the "Credit Facility Amendment") as if such transactions had occurred at the beginning of the year presented. The unaudited pro forma condensed consolidated statement of operations data for the nine months ended November 30, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the WQCD Acquisition, - the Equity Offering and the Credit Facility Restatement, - the SF Acquisition, - the Wabash Valley Acquisition and - the offering of the outstanding notes and the Credit Facility Amendment, as if such transactions had occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations data for the twelve months ended November 30, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the acquisition of Texas Monthly, - the WQCD Acquisition, - the Equity Offering and the Credit Facility Restatement, - the SF Acquisition, - the Wabash Valley Acquisition and - the offering of the outstanding notes and the Credit Facility Amendment, as if such transactions had occurred at the beginning of the period presented. 11 19 The summary unaudited pro forma financial data do not purport to present the actual results of operations of Emmis had the transactions and events assumed therein in fact occurred on the dates specified, nor are they necessarily indicative of the results of operations that may be achieved in the future. The summary unaudited pro forma financial data are based on certain assumptions and adjustments described in the notes to the unaudited pro forma condensed consolidated financial data and should be read in conjunction with those notes. The pro forma data presented below should also be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements for the year ended February 28, 1998 and our unaudited condensed consolidated financial statements for the nine months ended November 30, 1998 and related notes and "Management's Discussion and Analysis of Financial Condition and Results of Operations" which are incorporated in this prospectus by reference.
UNAUDITED PRO FORMA ------------------------------------------------------------- FISCAL YEAR ENDED NINE MONTHS ENDED TWELVE MONTHS ENDED FEBRUARY 28, 1998 NOVEMBER 30, 1998 NOVEMBER 30, 1998 ----------------- ----------------- ------------------- (DOLLARS IN THOUSANDS) STATEMENT OF OPERATIONS DATA: Net broadcasting revenues.......... $ 204,675 $ 176,564 $ 219,536 Broadcasting operating expenses.... 118,618 96,622 124,599 Amortization of television program rights..................... 5,754 4,662 6,071 Publication and other revenue, net of operating expenses.......... 3,776 4,527 5,169 International business development expenses........................... 999 974 1,041 Corporate expenses................. 9,286 7,488 9,763 Depreciation and amortization...... 31,656 26,361 34,220 Noncash compensation............... 4,882 (1,022) 328 ----------- ----------- ----------- Operating income................... 37,256 46,006 48,683 Interest expense................... 48,919 37,337 49,450 Other income (expense) net......... (173) 4,013 (1,195) ----------- ----------- ----------- Income (loss) before income taxes.............................. (11,836) 12,682 (1,962) Provision (benefit) for income taxes.............................. (2,900) 7,100 900 ----------- ----------- ----------- Net income (loss).................. $ (8,936) $ 5,582 $ (2,862) =========== =========== =========== Basic net income (loss) per share.............................. $ (.58) $ .36 $ (.18) =========== =========== =========== Diluted net income (loss) per Share................... $ (.58) $ .35 $ (.18) =========== =========== =========== Weighted average common shares outstanding: Basic............................ 15,503,333 15,635,719 15,635,719 Diluted.......................... 15,503,333(10) 16,036,855 15,635,719(10) OTHER FINANCIAL DATA: Broadcast cash flow(1)............. $ 80,303 $ 75,280 $ 88,866 Broadcast cash flow margin(2)...... 39.2% 42.6% 40.5% EBITDA(3).......................... $ 73,794 $ 71,345 $ 83,231 Capital expenditures(4)...................................................... 40,179 EMMIS AND ITS RESTRICTED SUBSIDIARIES(5): Consolidated EBITDA(6)....................................................... $ 84,503 Cash interest expense........................................................ 46,318 Total indebtedness........................................................... 575,152 Interest coverage ratio(7)................................................... 1.8x Leverage ratio(8)............................................................ 6.8
12 20
UNAUDITED PRO FORMA AS OF NOVEMBER 30, 1998 ------------------------ (IN THOUSANDS) BALANCE SHEET DATA(9): Working capital........................................... $ 5,746 Intangible assets......................................... 811,214 Total assets.............................................. 1,019,701 Total debt................................................ 591,958 Total shareholders' equity................................ 238,655
- --------------- (1) Management believes that broadcast cash flow is useful because it provides a meaningful comparison of broadcast operating performance between companies in the industry and serves as an indicator of the market value of a group of stations. Broadcast cash flow is generally recognized by the broadcasting industry as a measure of performance and is used by analysts who report on the performance of broadcasting companies. Broadcast cash flow does not take into account Emmis' debt service requirements and other commitments and, accordingly, broadcast cash flow is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses. It is not a measure of liquidity or of performance in accordance with generally accepted accounting principles, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of generally accepted accounting principles. Emmis defines broadcast cash flow as advertising revenues net of agency commissions, less broadcasting operating expenses and amortization of television program rights. (2) Broadcast cash flow margin is defined as broadcast cash flow divided by net broadcasting revenues. (3) EBITDA is defined as operating income plus depreciation and amortization and noncash compensation expenses. (4) Capital expenditures for the twelve months ended November 30, 1998 include progress payments totaling $26,818 in connection with the construction of our new Indianapolis office and studio facility. (5) This information represents Emmis and its Restricted Subsidiaries (as defined under the Indenture) and, therefore, excludes the results of its Unrestricted Subsidiary, Radio Hungaria Co. Ltd. (6) Consolidated EBITDA as defined under the Indenture for the Notes. See "Description of Notes -- Certain Definitions." (7) Represents the ratio of Consolidated EBITDA to cash interest expense. (8) Represents the ratio of consolidated indebtedness to Consolidated EBITDA. (9) Unaudited pro forma balance sheet data are calculated based on the unaudited historical balance sheet at November 30, 1998 plus the effects of the offering of the outstanding notes and the Credit Facility Amendment. (10) Due to net loss, weighted average common shares outstanding for diluted net income (loss) per share is the same as weighted average common shares outstanding for basic net income (loss) per share. 13 21 RISK FACTORS In connection with this exchange offer, you should consider carefully all of the information in this prospectus and, in particular, the following factors. Some of the statements contained in this prospectus are forward-looking. All statements regarding our expected financial position, business and financing plans are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as "may," "will," "should," "expect," "anticipate," "estimate" or "continue." Although we believe that our expectations in such forward-looking statements are reasonable, we cannot promise that our expectations will turn out to be correct. Actual results could be materially different from and worse than our expectations for various reasons, including those discussed in this section. SUBSTANTIAL LEVERAGE -- OUR SUBSTANTIAL INDEBTEDNESS COULD ADVERSELY AFFECT OUR FINANCIAL HEALTH AND PREVENT US FROM FULFILLING OUR OBLIGATIONS UNDER THE NOTES. We have now and, after the offering, will continue to have a significant amount of indebtedness. At November 30, 1998, on a pro forma basis assuming we had completed the offering of the outstanding notes as of that date and applied the proceeds as intended, our total indebtedness would have been approximately $592.0 million and our stockholders' equity would have been approximately $238.7 million. Our substantial indebtedness could have important consequences to you. For example, it could: - make it more difficult for us to satisfy our obligations with respect to these notes; - increase our vulnerability to general adverse economic and industry conditions; - limit our ability to finance future acquisitions and to fund working capital, capital expenditures and other general corporate requirements; - require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures and other general corporate purposes; - limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; - place us at a competitive disadvantage compared to our competitors that have less debt; and - limit, along with the financial and other restrictive covenants in our credit facility and the indenture governing the notes, among other things, our ability to borrow additional funds. Failing to comply with those covenants could result in an event of default which, if not cured or waived, could have a material adverse effect on us. ADDITIONAL BORROWINGS AVAILABLE -- DESPITE CURRENT INDEBTEDNESS LEVELS, WE AND OUR SUBSIDIARIES MAY STILL BE ABLE TO INCUR SUBSTANTIALLY MORE DEBT. THIS COULD FURTHER EXACERBATE THE RISKS DESCRIBED ABOVE. 14 22 We and our subsidiaries may be able to incur substantial additional indebtedness in the future. The terms of the indenture governing the notes, do not fully prohibit us or our subsidiaries from doing so. Our credit facility would permit additional borrowings of up to $475.1 million, and all of those borrowings would be senior to the notes and the subsidiary guarantees. If new debt is added to our and our subsidiaries' current debt levels, the related risks that we and they now face could intensify. ABILITY TO SERVICE DEBT -- TO SERVICE OUR INDEBTEDNESS, WE WILL REQUIRE A SIGNIFICANT AMOUNT OF CASH. OUR ABILITY TO GENERATE CASH DEPENDS ON MANY FACTORS BEYOND OUR CONTROL. Our ability to make payments on and to refinance our indebtedness, including the notes, and to fund planned capital expenditures will depend on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors that are beyond our control. Based on our current level of operations and operating improvements, we believe our cash flow from operations, available cash and available borrowings under our credit facility will be adequate to meet our future liquidity needs for at least the next few years. We cannot assure you, however, that our business will generate sufficient cash flow from operations, that currently anticipated operating improvements will be realized on schedule or that future borrowings will be available to us under our credit facility in an amount sufficient to enable us to pay our indebtedness, including the notes, or to fund our other liquidity needs. We may need to refinance all or a portion of our indebtedness, including the notes, on or before maturity. We cannot assure you that we will be able to refinance any of our indebtedness, including our credit facility and the notes, on commercially reasonable terms or at all. SUBORDINATION -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES IS JUNIOR TO OUR EXISTING INDEBTEDNESS AND POSSIBLY ALL OF OUR FUTURE BORROWINGS. FURTHER, THE SUBSIDIARY GUARANTEES OF THE NOTES ARE JUNIOR TO ALL OUR SUBSIDIARY GUARANTORS' EXISTING INDEBTEDNESS AND POSSIBLY TO ALL THEIR FUTURE BORROWINGS. The notes and the subsidiary guarantees rank behind all of our and the subsidiary guarantors' existing indebtedness and all of our and their future borrowings, except any future indebtedness that expressly provides that it ranks equal with, or is subordinated in right of payment to, the notes and the subsidiary guarantees. As a result, upon any distribution to our creditors or the creditors of the subsidiary guarantors in a bankruptcy, liquidation or reorganization or similar proceeding relating to us or the subsidiary guarantors or our or their property, the holders of senior debt of Emmis and the subsidiary guarantors will be entitled to be paid in full in cash before any payment may be made with respect to the notes or the subsidiary guarantees. In addition, all payments on the notes and the subsidiary guarantees will be blocked in the event of a payment default on senior debt and may be blocked for up to 179 of 360 consecutive days in the event of certain non-payment defaults on senior debt. In the event of a bankruptcy, liquidation or reorganization or similar proceeding relating to Emmis or the subsidiary guarantors, holders of the notes will participate with trade creditors and all other holders of subordinated indebtedness of Emmis and the subsidiary guarantors in the 15 23 assets remaining after Emmis and the subsidiary guarantors have paid all of the senior debt. However, because the indenture governing the notes requires that amounts otherwise payable to holders of the notes in a bankruptcy or similar proceeding be paid to holders of senior debt instead, holders of the notes may receive less, ratably, than holders of trade payables in any such proceeding. In any of these cases, Emmis and the subsidiary guarantors may not have sufficient funds to pay all of our creditors and holders of notes may receive less, ratably, than the holders of senior debt. Assuming we had completed the offering of the outstanding notes on November 30, 1998, the notes and the subsidiary guarantees would have been subordinated to $274.9 million of senior debt, and approximately $475.1 million would have been available for borrowing as additional senior debt under our credit facility. We will be permitted to borrow substantial additional indebtedness, including senior debt, in the future under the terms of the indenture governing the notes. NOT ALL SUBSIDIARIES ARE GUARANTORS -- YOUR RIGHT TO RECEIVE PAYMENTS ON THE NOTES COULD BE ADVERSELY AFFECTED IF ANY OF OUR NON-GUARANTOR SUBSIDIARIES DECLARES BANKRUPTCY, LIQUIDATES OR REORGANIZES. Most but not all of our subsidiaries will guarantee the notes. In the event of a bankruptcy, liquidation or reorganization of any of the non-guarantor subsidiaries, holders of their indebtedness and their trade creditors will generally be entitled to payment of their claims from the assets of those subsidiaries before any assets are made available for distribution to us. Assuming we had completed the offering of the outstanding notes on November 30, 1998, the notes would have been effectively junior to $27.8 million of indebtedness and other liabilities (including trade payables) of these non-guarantor subsidiaries. The non-guarantor subsidiaries generated 1.1% of our consolidated revenues in the nine-month period ended November 30, 1998 and held 2.1% of our consolidated assets as of November 30, 1998. FRAUDULENT CONVEYANCE MATTERS -- FEDERAL AND STATE STATUTES ALLOW COURTS, UNDER SPECIFIC CIRCUMSTANCES, TO VOID GUARANTEES AND REQUIRE NOTEHOLDERS TO RETURN PAYMENTS RECEIVED FROM GUARANTORS. Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or claims in respect of a guarantee could be subordinated to all other debts of that guarantor if, among other things, the guarantor, at the time it incurred the indebtedness evidenced by its guarantee: - received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee; and - was insolvent or rendered insolvent by reason of such incurrence; or - was engaged in a business or transaction for which the guarantor's remaining assets constituted unreasonably small capital; or - intended to incur, or believed that it would incur, debts beyond its ability to pay such debts as they mature. 16 24 In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor, or to a fund for the benefit of the creditors of the guarantor. The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent if: - the sum of its debts, including contingent liabilities, were greater than the fair saleable value of all of its assets, or - if the present fair saleable value of its assets were less than the amount that would be required to pay its probable liability on its existing debts, including contingent liabilities, as they become absolute and mature, or - it could not pay its debts as they become due. On the basis of historical financial information, recent operating history and other factors, we believe that each subsidiary guarantor, after giving effect to its guarantee of the notes, will not be insolvent, will not have unreasonably small capital for the business in which it is engaged and will not have incurred debts beyond its ability to pay such debts as they mature. There can be no assurance, however, as to what standard a court would apply in making such determinations or that a court would agree with our conclusions in this regard. NEW LINE OF BUSINESS -- WE ACQUIRED OUR FIRST TELEVISION PROPERTIES IN JULY 1998, AND OUR ABILITY TO SUCCESSFULLY INTEGRATE AND OPERATE OUR TELEVISION STATIONS IS UNPROVEN. Until recently, we had concentrated our business operations in radio broadcasting and magazine publishing and had not operated television stations. In 1998, we acquired six television stations. Although we have hired a manager with substantial television experience to manage our television stations, we have no established operating history in the television industry, and we must make the operations of these television stations a part of our operations. We cannot be sure that our management can successfully integrate our newly-acquired television stations into our business. If we experience any delays or unexpected costs in that process, it could have an adverse effect on our business, operating results or financial condition. DEPENDENCE UPON ADVERTISING -- OUR REVENUES ARE SUBSTANTIALLY DEPENDENT UPON THE DEMAND FOR ADVERTISING WHICH FLUCTUATES WITH GENERAL ECONOMIC CONDITIONS THAT WE CANNOT CONTROL. We derive substantially all of our revenues from the sale of advertising on our radio and television stations. Because advertisers generally reduce their spending during economic downturns, we could be adversely affected by a future national recession. In addition, because a substantial portion of our revenues are derived from local advertisers, our ability to generate advertising revenues in specific markets could be adversely affected by local or regional economic downturns. This is particularly true in New York, where our three radio stations accounted for approximately 46.9% of our total pro forma broadcast cash flow for the twelve months ended November 30, 1998. 17 25 RELIANCE ON PROGRAMMING -- CASH FLOW AT OUR TELEVISION STATIONS DEPENDS TO A LARGE EXTENT ON OUR ABILITY TO SECURE POPULAR PROGRAMMING AT A REASONABLE COST. A significant operating expense for our television stations is syndicated programming. If the cost of syndicated programming increases in the future, it may cause us to have lower net income. It is difficult to predict accurately how a program will perform because television stations often must purchase program rights two or three years in advance. In some instances, we may need to replace programs early and write off a portion of their costs, which will increase our operating expenses. In addition, because television stations need to purchase syndicated programming and develop original programming substantially in advance of the date it is first broadcast, the audience ratings and broadcast cash flow of our television stations will probably not improve for some time. If we cannot obtain or develop certain types of programming at an acceptable cost, or at all, any improvements in audience ratings or broadcast cash flow could take even longer or not be as large. LIMITATIONS ON ACQUISITION STRATEGY -- OUR STRATEGY TO GROW THROUGH ACQUISITIONS MAY BE LIMITED BY COMPETITION FOR SUITABLE PROPERTIES AND OTHER FACTORS WE CANNOT CONTROL. We intend to selectively pursue acquisitions of television stations, radio stations and publishing properties as our management believes appropriate. In order for us to be successful with this strategy, we must be effective at quickly evaluating markets, obtaining loans to buy stations and publishing properties on satisfactory terms and obtaining the necessary governmental authorizations. We must also do these tasks at reasonable costs. We compete with many other buyers for television and radio stations. Many of those competitors have much more money and other resources than we do. We cannot predict whether we will be successful in buying stations or whether we will be successful with any station we buy. Also, our strategy is to buy underperforming broadcast properties and use our experience to improve their performance. Thus, we will likely benefit over time from any station we buy, rather than immediately, and we may need to pay large initial costs for these improvements. COMPETITIVE NATURE OF BROADCASTING -- WE COMPETE WITH OTHER RADIO AND TELEVISION BROADCASTERS AS WELL AS OTHER COMPETING TECHNOLOGIES FOR AUDIENCE AND ADVERTISERS. The broadcasting industry is very competitive. The success of each of our stations is dependent upon its audience ratings and share of the overall advertising revenues within its market. Our stations compete for audiences and advertising revenues directly with other radio and television stations, and some of the owners of those competing stations have much more money than we do. Our stations also compete with other media such as cable television, newspapers, magazines, direct mail, compact discs, music videos, the Internet and outdoor advertising. Although we believe that each of our stations can compete effectively in its broadcast area, we cannot be sure that any of our stations can keep or increase its current audience ratings or market share. In addition, other stations may change their format or programming to compete directly with our stations for audience and advertisers, or engage in aggressive promotional campaigns. If this happens, the ratings and advertising revenues of our stations could decrease, the promotion and other expenses of our stations could increase, and our stations would have lower broadcast cash flow. 18 26 New media technologies are also being introduced to compete with the broadcasting industry. Some of these new technologies are as follows: - Direct broadcast satellite systems, which provide video and audio programming on a subscription basis to people with a satellite signal receiving dish and decoder equipment. These systems claim to provide high picture and sound quality. They do not usually provide the signals of traditional over-the-air broadcast stations, and thus are generally restricted to providing cable-oriented and premium services. - Digital audio broadcasting and satellite digital audio radio service, which provide for the delivery of multiple new, high quality audio programming formats to local and national audiences. We cannot predict at this time the effect, if any, that any of these new technologies may have on the radio or television broadcasting industry in general or our stations in particular. KEY EMPLOYEES -- THE LOSS OF ONE OR MORE KEY EXECUTIVES OR ON-AIR TALENT COULD SERIOUSLY IMPAIR OUR ABILITY TO IMPLEMENT OUR STRATEGY. Our business depends upon certain key employees, including Jeffrey H. Smulyan, our Chief Executive Officer and President. We had an employment agreement with Mr. Smulyan which expired in February 1999. We currently are negotiating a new agreement for Mr. Smulyan. We are also in the process of finalizing new employment agreements with certain other key employees. In each of these cases, although we expect to enter into long-term agreements, we cannot predict when or if such agreements will be completed and signed. In addition, we employ several on-air personalities with significant loyal audiences. We generally enter into long-term employment agreements with our key on-air talent, but we cannot be sure that any of these on-air personalities will remain with our company. CONTROL OF OUR COMPANY -- ONE SHAREHOLDER CONTROLS A SUBSTANTIAL MAJORITY OF THE COMMON STOCK VOTING POWER, AND HIS INTERESTS MAY CONFLICT WITH YOURS. Jeffrey H. Smulyan holds shares representing approximately 68% of the outstanding combined voting power of all classes of our common stock. As a result of his voting power, Mr. Smulyan can control the outcome of most matters submitted to a vote of our shareholders, including the election of a majority of the directors. We cannot assure you that Mr. Smulyan's interest will align with those of the holders of notes. FUTURE CAPITAL COST OF DIGITAL CONVERSION -- WE EXPECT THAT THE COST OF EQUIPPING OUR TELEVISION STATIONS WITH DIGITAL TELEVISION CAPABILITIES WILL BE SIGNIFICANT. Under current rules of the Federal Communications Commission, our television stations will be required to broadcast a digital signal by May 2002 and then cease analog operations at the end of a digital television transition period. Digital television will provide additional channels to television broadcasters which can be used for multiple standard definition program channels, data transfer and other services as well as digital video programming. However, our costs to convert our television stations to digital television will be significant, and we cannot predict whether or when there will be any consumer demand for digital television services. 19 27 UNITED STATES BROADCASTING INDUSTRY SUBJECT TO FEDERAL REGULATION -- WE MUST COMPLY WITH COMPREHENSIVE, COMPLEX AND SOMETIMES UNPREDICTABLE FEDERAL REGULATIONS. The broadcasting industry in the United States is subject to extensive and changing regulation by the Federal Communications Commission. Among other things, the FCC is responsible for the following: - Assigning frequency bands for broadcasting - Determining the particular frequencies, locations and operating power of stations - Issuing, renewing, revoking and modifying station licenses - Determining whether to approve changes in ownership or control of station licenses - Regulating equipment used by stations - Adopting and implementing regulations and policies that directly affect the ownership, operation and employment practices of stations. The FCC has the power to impose penalties for violation of its rules or the applicable statutes. In particular, our business will be dependent upon continuing to hold broadcasting licenses from the FCC that are issued for terms of up to eight years. While in the vast majority of cases these licenses are renewed by the FCC, we cannot be sure that any of our United States stations' licenses will be renewed at their expiration date. If our licenses are renewed, we cannot be sure that the FCC will not impose conditions or qualifications that could cause problems in our business. Although a recent amendment to the law loosened or eliminated many restrictions on ownership of radio and television stations in the United States, we are still restricted from owning more than a certain number of stations in any United States market. This restriction, as well as rules which could "attribute" ownership of broadcast properties by other persons to us because those persons are associated with us, may limit our ability to purchase stations we would otherwise wish to buy. The law also limits the ability of non-U.S. persons to own our voting capital stock and to participate in our affairs. Our articles of incorporation contain provisions which place restrictions on the ownership, voting and transfer of our capital stock in accordance with the law. INTANGIBLE ASSETS -- WE HAVE A SUBSTANTIAL AMOUNT OF INTANGIBLE ASSETS WHOSE LIQUIDATION VALUE MIGHT NOT BE SUFFICIENT FOR US TO REPAY ALL OUR SENIOR DEBT AND THE NOTES. At November 30, 1998, approximately 79% of our total assets consisted of intangible assets, such as broadcast licenses, excess of cost over fair value of net assets of purchased businesses, subscription lists and similar assets, the value of which depends significantly upon the continued operation of our business. As a consequence, in the event of a default or any other event which would result in a liquidation of our assets to pay our indebtedness, we cannot assure you that the proceeds would be sufficient to repay our outstanding indebtedness, including the notes. 20 28 INTERNATIONAL BUSINESS RISKS -- OUR CURRENT AND ANY FUTURE INTERNATIONAL OPERATIONS ARE SUBJECT TO CERTAIN RISKS THAT ARE UNIQUE TO OPERATING IN A FOREIGN COUNTRY. We currently own a 54% interest in a national radio station in Hungary, and we intend to pursue opportunities to buy broadcasting properties in other foreign countries. The risks of doing business in foreign countries include the following: - Changing regulatory or taxation policies - Currency exchange risks - Changes in diplomatic relations or hostility from local populations - The risk that our property could be taken by the government, or that our ability to transfer our property or earnings out of the foreign country will be restricted - Potential instability of foreign governments, which might result in losses against which we are not insured. Although we will try to evaluate the risks before we purchase a station in a foreign country, we cannot be sure whether any of these risks will have an effect on our business in the future. FINANCING CHANGE OF CONTROL OFFER -- WE MAY NOT HAVE THE ABILITY TO RAISE THE FUNDS NECESSARY TO FINANCE A CHANGE OF CONTROL OFFER REQUIRED BY THE INDENTURE GOVERNING THE NOTES. Upon the occurrence of certain specific kinds of change of control events, we will be required to offer to repurchase all notes then outstanding. However, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes or that restrictions in our credit facility will not allow such repurchases. In addition, certain important corporate events, such as leveraged recapitalizations that would increase the level of our indebtedness, would not constitute a "change of control" under the indenture governing the notes. NO PRIOR MARKET FOR THE NOTES -- YOU CANNOT BE SURE THAT AN ACTIVE TRADING MARKET WILL DEVELOP FOR THE NOTES. The outstanding notes were not registered under the Securities Act or under the securities laws of any state and may not be resold unless they are subsequently registered or an exemption from the registration requirements of the Securities Act and applicable state securities laws is available. The registered notes will be registered under the Securities Act, but will constitute a new issue of securities with no established trading market, and there can be no assurance as to: - the liquidity of any such market that may develop; - the ability of registered note holders to sell their notes; or - the price at which the registered note holders would be able to sell their notes. If such a market were to exist, the registered notes may trade at higher or lower prices than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar debentures and the financial performance of Emmis. The notes are designated for trading among qualified institutional buyers in The Portal(SM) Market. We understand that Credit Suisse First Boston Corporation, Lehman Brothers Inc. and 21 29 CIBC Oppenheimer Corp. presently intend to make a market in the notes. However, they are not obligated to do so, and any market-making activity with respect to the notes may be discontinued at any time without notice. In addition, such market-making activity will be subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934, and may be limited during the exchange offer or the pendency of an applicable shelf registration statement. There can be no assurance that an active trading market will exist for the notes or that such trading market will be liquid. Notes that are not tendered or are tendered but not accepted will, following the consummation of the exchange offer, continue to be subject to the existing restrictions upon transfer, and, upon consummation of the exchange offer, certain registration rights with respect to the outstanding notes will terminate. In addition, any outstanding note holder who tenders in the exchange offer for the purpose of participating in a distribution of the registered notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. To the extent that outstanding notes are tendered and accepted in the exchange offer, the trading market for untendered and tendered but unaccepted outstanding notes could be adversely affected. WE ARE NOT OBLIGATED TO NOTIFY YOU OF UNTIMELY OR DEFECTIVE TENDERS OF OUTSTANDING NOTES. We will issue registered notes pursuant to this exchange offer only after a timely receipt of your outstanding notes, a properly completed and duly executed letter of transmittal and all other required documents. Therefore, if you want to tender your outstanding notes, please allow sufficient time to ensure timely delivery. We are under no duty to give notification of defects or irregularities with respect to the tenders of outstanding notes for exchange. 22 30 USE OF PROCEEDS Emmis will not receive any cash proceeds from the issuance of the registered notes in exchange for the outstanding notes. In consideration for issuing the registered notes, Emmis will receive outstanding notes in like original principal amount at maturity. Outstanding notes received in the exchange offer will be cancelled. The net proceeds to Emmis from the original issuance of the outstanding notes, after deducting discount and estimated expenses, were approximately $291.3 million. We used approximately $26.1 million of the net proceeds to retire our $25 million promissory note, including accrued interest, representing a portion of the purchase price of the four television stations we acquired in the SF Acquisition (the "SF Note"), and used the remainder of the net proceeds to reduce the outstanding balance on our credit facility. For more information regarding the SF Note and our credit facility, see "Description of Certain Indebtedness." As of February 12, 1999, we had aggregate amounts outstanding under our credit facility of $552.0 million prior to application of net proceeds from the sale of the outstanding notes. All amounts outstanding under our credit facility bear interest at a rate that fluctuates with an applicable margin based on our leverage ratio plus a bank base rate or a Eurodollar base rate as applicable. At February 12, 1999, the weighted average interest rate on our credit facility was approximately 7.3%. Outstanding indebtedness under our credit facility has been incurred primarily to pay for acquisitions. The SF Note accrued interest at 8.0% per annum and was scheduled to mature in July 1999. Our credit facility, as amended and restated as of July 16, 1998, provided availability of $750 million in loans, which could be increased to $1.0 billion with the consent of the lenders. Concurrently with the offering of the outstanding notes, our lenders amended the credit facility to permit Emmis to complete the offering and use the proceeds of the offering as described above. As so amended, the credit facility provides for the following: - A $400 million senior secured revolving credit facility with a final maturity date of August 31, 2006; - A $250 million senior secured amortizing term loan with a final maturity date of February 28, 2007; and - A $100 million senior secured acquisition revolving credit/term loan facility with a final maturity date of August 31, 2006, which will terminate if not utilized prior to July 1999. See "Description of Certain Indebtedness -- Amendment to Credit Facility." 23 31 CAPITALIZATION The following table sets forth the capitalization of Emmis as of November 30, 1998 and as adjusted to reflect the application of the net proceeds from the offering of the outstanding notes in the manner described in "Use of Proceeds" and the amendment of our credit facility, as described in "Description of Certain Indebtedness -- Amendment to Credit Facility." Read the following information in conjunction with our consolidated financial statements and related notes, which are incorporated by reference in this prospectus.
AS OF NOVEMBER 30, 1998 ----------------------- PRO FORMA ACTUAL AS ADJUSTED (IN THOUSANDS) Long-term debt, including current maturities: Credit facility......................................... $539,000 $274,946 SF Note................................................. 25,000 -- Capital leases.......................................... 206 206 Hungarian radio debt(1)................................. 16,806 16,806 8 1/8% Senior Subordinated Notes due 2009............... -- 300,000 -------- -------- Total long-term debt................................. 581,012 591,958 Total shareholders' equity................................ 238,655 238,655 -------- -------- Total capitalization.............................. $819,667 $830,613 ======== ========
- ------------------------------ (1) Hungarian radio debt represents obligations of our 54% owned Hungarian subsidiary which are consolidated in our financial statements due to our majority ownership interest. However, Emmis is not a guarantor of or required to fund these obligations. See "Description of Certain Indebtedness -- Hungarian Radio Debt." 24 32 SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA The selected consolidated financial and other data have been derived, except as otherwise noted, from the consolidated financial statements of Emmis for the years ended February (29) 28, 1994, 1995, 1996, 1997 and 1998 which have been audited by Arthur Andersen LLP and from the unaudited condensed consolidated financial statements of Emmis for the nine months ended November 30, 1997 and 1998. The selected consolidated financial and other data presented below should be read in conjunction with, and are qualified in their entirety by reference to, our consolidated financial statements for the years ended February (29) 28, 1996, 1997, and 1998 and to our unaudited condensed consolidated financial statements for the nine months ended November 30, 1997 and 1998 and related notes, both of which are incorporated by reference in this prospectus, and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained elsewhere in this prospectus.
NINE MONTHS ENDED YEAR ENDED FEBRUARY (29) 28, NOVEMBER 30, ----------------------------------------------------------- ----------------------- 1994 1995 1996 1997 1998 1997 1998 ------- ---------- ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS) (UNAUDITED) OPERATING DATA: Net broadcasting revenues..... $50,311 $ 66,815 $ 99,830 $ 103,292 $ 125,855 $ 98,696 $ 145,277 Broadcasting operating expenses.................... 29,368 38,794 53,948 52,839 67,646 50,739 76,182 Amortization of television program rights.............. -- -- -- -- -- -- 2,011 Publication and other revenue, net of operating expenses... 657 593 896 834 1,204 1,047 4,527 International business development expenses........ -- 313 1,264 1,164 999 932 974 Corporate expenses............ 2,766 3,700 4,419 5,929 6,846 5,338 6,379 Depreciation and amortization................ 2,812 3,827 5,677 5,481 7,536 5,407 18,595 Noncash compensation.......... 1,724 600 3,667 3,465 4,882 3,532 (1,022) Time brokerage fee............ -- -- -- -- 5,667 3,542 2,220 ------- ---------- ---------- ---------- ---------- ---------- ---------- Operating income.............. 14,298 20,174 31,751 35,248 33,483 30,253 44,465 Interest expense(1)........... (13,588) (7,849) (13,540) (9,633) (13,772) (10,356) (24,942) Minority interest............. -- -- -- -- -- -- 1,875 Loss on donation of radio station..................... -- -- -- -- (4,833) -- -- Other income (expense), net... (367) (170) (303) 325 6 322 2,313 ------- ---------- ---------- ---------- ---------- ---------- ---------- Income before income taxes and extraordinary item.......... 343 12,155 17,908 25,940 14,884 20,219 23,711 Provision for income taxes.... 1,300 4,528 7,600 10,500 5,900 8,100 12,650 ------- ---------- ---------- ---------- ---------- ---------- ---------- Income (loss) before extraordinary item.......... (957) 7,627 10,308 15,440 8,984 12,119 11,061 ------- ---------- ---------- ---------- ---------- ---------- ---------- Net income (loss)............. $(4,365) $ 7,627 $ 10,308 $ 15,440 $ 8,984 $ 12,119 $ 9,464 Basic net income (loss) per share....................... (2) $ .72 $ .96 $ 1.41 $ .82 $ 1.10 $ .67 Diluted net income (loss) per share....................... (2) $ .70 $ .93 $ 1.37 $ .79 $ 1.06 $ .66 Weighted average common shares outstanding: Basic....................... 10,557,328 10,690,677 10,942,996 10,903,333 11,034,856 14,046,628 Diluted..................... 10,831,695 11,083,504 11,291,225 11,377,765 11,450,283 14,447,764
(footnotes on following page) 25 33
AS OF FEBRUARY (29) 28, AS OF ---------------------------------------------------- NOVEMBER 30, 1994 1995 1996 1997 1998 1998 -------- -------- -------- -------- -------- ------------ (DOLLARS IN THOUSANDS) (UNAUDITED) BALANCE SHEET DATA: Cash and cash equivalents............. $ 1,607 $ 3,205 $ 1,218 $ 1,191 $ 5,785 $ 5,320 Working capital........... 6,210 10,088 14,761 15,463 21,083 (20,337) Net intangible assets(7)............... 30,751 139,729 135,830 131,743 234,558 801,351 Total assets.............. 57,849 183,441 176,566 189,716 333,388 1,009,838 Total debt................ 92,345 152,322 124,257 115,172 231,422 581,012 Redeemable preferred stock................... 11,250 -- -- -- -- -- Shareholders' equity (deficit)............... (54,229) (2,661) 13,884 34,422 45,210 238,655
NINE MONTHS ENDED YEAR ENDED FEBRUARY (29) 28, NOVEMBER 30, ----------------------------------------------------------- ----------------------- 1994 1995 1996 1997 1998 1997 1998 ------- ---------- ---------- ---------- ---------- ---------- ---------- (DOLLARS IN THOUSANDS) (UNAUDITED) OTHER DATA: Broadcast cash flow(3)......... $20,943 $ 28,021 $ 45,882 $ 50,453 $ 58,209 $ 47,957 $ 67,084 Broadcast cash flow margin(4).................... 41.6% 41.9% 46.0% 48.8% 46.3% 48.6% 46.2% EBITDA(5)...................... $18,834 $ 24,601 $ 41,095 $ 44,194 $ 51,568 $ 42,734 $ 64,258 Cash flows from: Operating activities.......... (4,177) 15,480 23,221 21,362 22,487 13,534 30,365 Investing activities.......... 10,368 (102,682) 222 (13,919) (116,693) (61,480) (530,264) Financing activities.......... (7,726) 88,800 (25,430) (7,470) 98,800 59,048 500,087 Capital expenditures(6)........ 659 1,081 1,396 7,559 16,991 6,492 26,224 Ratio of earnings to fixed charges...................... 1.0x 2.4x 2.4x 3.4x 2.0x 2.8x 1.8x
- ------------------------------ (1) Includes debt issuance cost and interest rate cap amortization of $3,263, $660, $1,742, $1,071 and $2,183 for the years ended February (29) 28, 1994 through 1998, respectively, and $1,920 and $910 for the periods ended November 30, 1997 and 1998, respectively. (2) On March 1, 1994, Emmis closed on its initial public offering of its Class A Common Stock. Accordingly, basic and diluted net income per share information is not applicable for the year ended February 28, 1994. (3) Management believes that broadcast cash flow is useful because it provides a meaningful comparison of broadcast operating performance between companies in the industry and serves as an indicator of the market value of a group of stations. Broadcast cash flow is generally recognized by the broadcasting industry as a measure of performance and is used by analysts who report on the performance of broadcasting companies. Broadcast cash flow does not take into account Emmis' debt service requirements and other commitments and, accordingly, broadcast cash flow is not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses. It is not a measure of liquidity or of performance in accordance with generally accepted accounting principles, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of generally accepted accounting principles. Emmis defines broadcast cash flow as advertising revenues net of agency commissions, less broadcasting operating expenses and amortization of television program rights. (4) Broadcast cash flow margin is defined as broadcast cash flow divided by net broadcasting revenues. (5) EBITDA is defined as operating income plus depreciation and amortization and noncash compensation expenses. 26 (6) Capital expenditures for the year ended February 28, 1998 and nine months ended November 30, 1997 and 1998 include progress payments totaling $11,775, $4,342 and $19,385, respectively, in connection with the construction of our new Indianapolis office and studio facility. (7) Net intangible assets consist primarily of FCC licenses and excess of cost over fair value of net assets of purchased businesses, net of accumulated amortization. 27 34 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL DATA The following unaudited pro forma condensed consolidated financial data reflect the unaudited pro forma condensed consolidated results of operations data of Emmis for the year ended February 28, 1998, the nine months ended November 30, 1998 and the twelve months ended November 30, 1998. The unaudited pro forma condensed consolidated statement of operations data for the year ended February 28, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the Fiscal 1998 Transactions, all of which occurred during the year ended February 28, 1998, - the WQCD Acquisition, - the Equity Offering and the Credit Facility Restatement, - the SF Acquisition, - the Wabash Valley Acquisition, and - the offering of the outstanding notes and the Credit Facility Amendment, as if such transactions had occurred at the beginning of the year presented. The unaudited pro forma condensed consolidated statement of operations data for the nine months ended November 30, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the WQCD Acquisition, - the Equity Offering and the Credit Facility Restatement, - the SF Acquisition, - the Wabash Valley Acquisition, and - the offering of the outstanding notes and the Credit Facility Amendment, as if such transactions had occurred at the beginning of the period presented. The unaudited pro forma condensed consolidated statement of operations data for the twelve months ended November 30, 1998 reflect adjustments to our condensed consolidated historical operating data to give effect to: - the acquisition of Texas Monthly, - the WQCD Acquisition, - the Equity Offering and the Credit Facility Restatement, - the SF Acquisition, - the Wabash Valley Acquisition, and - the offering of the outstanding notes and the Credit Facility Amendment, as if such transactions had occurred at the beginning of the period presented. 28 35 Except as otherwise noted, the unaudited pro forma condensed consolidated financial data are based on historical consolidated financial statements of Emmis and the entities from which assets were acquired in connection with certain of the transactions referred to above, and should be read in conjunction with our consolidated financial statements for the year ended February 28, 1998, our unaudited condensed consolidated financial statements for the nine months ended November 30, 1998, the financial statements for Tribune New York Radio, Inc. (WQCD-FM) for the year ended December 28, 1997, and the combined financial statements of SF Broadcasting of Wisconsin, Inc. and SF Multistations, Inc. and subsidiaries for the year ended December 28, 1997, incorporated in this prospectus by reference. In the opinion of management, all adjustments necessary to fairly present pro forma data have been made. The unaudited pro forma data are presented for illustrative purposes only and are not indicative of the operating results or financial position that would have occurred if the transactions referred to above had been consummated on the dates indicated. 29 36 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE FISCAL YEAR ENDED FEBRUARY 28, 1998
EQUITY OFFERING WABASH FISCAL 1998 WQCD AND CREDIT SF VALLEY HISTORICAL TRANSACTIONS ACQUISITION FACILITY ACQUISITION ACQUISITION SUBTOTAL ---------- ------------ ----------- ---------- ----------- ----------- -------- (IN THOUSANDS) Net broadcasting revenues................ $ 125,855 $ 1,975(3) $ 6,773(5) -- $ 52,934(8) $17,138(8) $204,675 Broadcasting operating expenses................ 67,646 1,430(3) 3,570(5) -- 35,247(8) 10,725(8) 118,618 Amortization of television program rights.......... -- -- -- -- 3,528(4) 2,226(4) 5,754 Publication and other revenue, net of operating expenses...... 1,204 2,572(3) -- -- -- -- 3,776 International business development expenses.... 999 -- -- -- -- -- 999 Corporate expenses....... 6,846 -- -- -- 1,940(8) 500(8) 9,286 Depreciation and amortization............ 7,536 3,540(4) 5,240(4) -- 11,968(4) 3,372(4) 31,656 Noncash compensation..... 4,882 -- -- -- -- -- 4,882 Time brokerage fee....... 5,667 -- (5,667)(5) -- -- -- -- ---------- ------- -------- --------- -------- ------- -------- Operating income (loss).................. 33,483 (423) 3,630 -- 251 315 37,256 ---------- ------- -------- --------- -------- ------- -------- Other income (expense): Interest expense(1)..... (13,772) (3,840)(3) (10,215)(6) 12,871(7) (24,506)(9) (7,095)(11) (46,557) Other income (expense), net................... (234)(10) (234) (4,827) 4,833(3) -- -- 55(8) -- 61 ---------- ------- -------- --------- -------- ------- -------- Total other income (expense)........... (18,599) 993 (10,215) 12,871 (24,685) (7,095) (46,730) ---------- ------- -------- --------- -------- ------- -------- Income (loss) before income taxes............ 14,884 570 (6,585) 12,871 (24,434) (6,780) (9,474) Provision (benefit) for income taxes(2)......... 5,900 188 (2,169) 4,239 (8,047) (2,233) (2,122) ---------- ------- -------- --------- -------- ------- -------- Net income (loss)........ $ 8,984 $ 382 $ (4,416) $ 8,632 $(16,387) $(4,547) $(7,352) ========== ======= ======== ========= ======== ======= ======== Basic net income (loss) per share............... $ .82 ========== Diluted net income (loss) per share............... $ .79 ========== Weighted average common shares outstanding: Basic................... 10,903,333 -- -- 4,600,000(13) -- -- -- Diluted................. 11,377,765 -- -- 4,600,000(13) -- -- -- NOTES OFFERING AND CREDIT FACILITY AMENDMENT PRO FORMA --------------- ---------- (IN THOUSANDS) Net broadcasting revenues................ -- $ 204,675 Broadcasting operating expenses................ -- 118,618 Amortization of television program rights.......... -- 5,754 Publication and other revenue, net of operating expenses...... -- 3,776 International business development expenses.... -- 999 Corporate expenses....... -- 9,286 Depreciation and amortization............ -- 31,656 Noncash compensation..... -- 4,882 Time brokerage fee....... -- -- ------- ---------- Operating income (loss).................. -- 37,256 ------- ---------- Other income (expense): Interest expense(1)..... (2,362)(12) (48,919) Other income (expense), net................... -- (234) -- 61 ------- ---------- Total other income (expense)........... (2,362) (49,092) ------- ---------- Income (loss) before income taxes............ (2,362) (11,836) Provision (benefit) for income taxes(2)......... (778) (2,900) ------- ---------- Net income (loss)........ $(1,584) $ (8,936) ======= ========== Basic net income (loss) per share............... $ (.58) ========== Diluted net income (loss) per share............... $ (.58) ========== Weighted average common shares outstanding: Basic................... -- 15,503,333 Diluted................. -- 15,503,333(14)
- ------------------------------ (1) Reflects pro forma interest expense for the twelve months ended February 28, 1998 resulting from borrowings under our credit facility, assuming the Fiscal 1998 Transactions, WQCD Acquisition, the Equity Offering and the Credit Facility Restatement, the SF Acquisition and the Wabash Valley Acquisition had occurred as of March 1, 1997 and assuming a weighted average interest rate of 7.981%. (2) Calculated using a statutory tax rate of 38% of taxable income. (3) Includes the Fiscal 1998 Transactions, assuming the transactions had occurred as of March 1, 1997. (4) Reflects pro forma depreciation of property and equipment and amortization of intangibles and television program rights resulting from the allocation of the purchase price of the acquisitions from March 1, 1997 through the respective date of each acquisition. 30 37 (5) Reflects the historical results of WQCD-FM in New York City for the period from March 1, 1997 to June 30, 1997. Actual operating results for the period from July 1, 1997 to February 28, 1998 are reflected in historical operations because Emmis began operating the station on July 1, 1997 under a time brokerage agreement. The time brokerage fees have been eliminated for pro forma purposes. (6) Reflects pro forma interest expense on the cash purchase price of the radio station of $141,000 less $13,000 for adjustments relating to taxes. The net purchase price was funded by borrowings under our credit facility. (7) Reflects the net effect of (i) the elimination of interest expense and amortization of debt issuance costs and interest rate caps resulting from repayment of the outstanding balance under the prior credit facility by application of $173,900 of the net proceeds of the Equity Offering and the Credit Facility Restatement, and (ii) interest expense under our credit facility and the amortization of debt issuance costs and interest rate caps related to the Credit Facility Restatement. (8) Represents the historical operating results of the acquired stations for the year ended December 28, 1997, exclusive of depreciation and amortization, and amortization of television program rights. (9) Reflects pro forma interest expense on the borrowings, totaling $307,000, associated with the purchase of the stations. The borrowings consist of the SF Note accruing interest at 8.0% and $282,000 in borrowings under our credit facility. (10) Reflects reduced interest income due to cash paid for acquisition related costs. (11) Reflects pro forma interest expense on the adjusted cash purchase price of the stations of $88,905. The purchase price was funded by $9,000 held in escrow and $79,905 in borrowings under our credit facility. (12) Represents an adjustment to interest expense to reflect (i) the repayment of the SF Note and accrued interest of $26,083, (ii) the repayment of borrowings under our credit facility of $264,054, (iii) the interest on the notes at a rate of 8.125% and (iv) the amortization of debt issuance costs relating to the offering of the outstanding notes and the Credit Facility Amendment. (13) Reflects issuance of 4.6 million shares of Class A Common Stock at $42.00 per share resulting from the Equity Offering. (14) Due to net loss, weighted average common shares outstanding for diluted net income (loss) per share is the same as weighted average common shares outstanding for basic net income (loss) per share. 31 38 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED NOVEMBER 30, 1998
EQUITY NOTES OFFERING WABASH OFFERING AND WQCD AND CREDIT SF VALLEY CREDIT FACILITY HISTORICAL ACQUISITION FACILITY ACQUISITION ACQUISITION SUBTOTAL AMENDMENT ---------- ----------- ---------- ----------- ----------- -------- ---------------- (IN THOUSANDS) Net broadcasting revenues............... $ 145,277 $ -- $ -- $19,896(8) $11,391(11) $176,564 -- Broadcasting operating expenses............... 76,182 -- -- 13,622(8) 6,818(11) 96,622 -- Amortization of television program rights................. 2,011 -- -- 1,323(3) 1,328(3) 4,662 -- Publication and other revenue, net of operating expenses..... 4,527 -- -- -- -- 4,527 -- International business development expenses... 974 -- -- -- -- 974 -- Corporate expenses....... 6,379 -- -- 817(8) 292(11) 7,488 -- Depreciation and amortization........... 18,595 1,310(3) -- 4,489(3) 1,967(3) 26,361 -- Noncash compensation..... (1,022) -- -- -- -- (1,022) -- Time brokerage fee....... 2,220 (2,220)(4) -- -- -- -- -- ---------- ------- --------- ------- ------- -------- ------- Operating income (loss)................. 44,465 910 -- (355) 986 46,006 -- ---------- ------- --------- ------- ------- -------- ------- Other income (expense): Interest expense(1).... (24,942) (2,554)(5) 5,256(6) (9,189)(9) (4,137)(12) (35,566) (1,771)(13) Other income (expense), net.................. 4,188 -- -- (175)(10) -- 4,013 -- ---------- ------- --------- ------- ------- -------- ------- Total other income (expense).......... (20,754) (2,554) 5,256 (9,364) (4,137) (31,553) (1,771) ---------- ------- --------- ------- ------- -------- ------- Income (loss) before income taxes........... 23,711 (1,644) 5,256 (9,719) (3,151) 14,453 (1,771) Provision (benefit) for income taxes(2)........ 12,650 (827) 2,645 (4,891) (1,586) 7,991 (891) ---------- ------- --------- ------- ------- -------- ------- Net income (loss) before extraordinary item..... 11,061 (817) 2,611 (4,828) (1,565) 6,462 (880) Extraordinary item, net of tax................. 1,597 -- (1,597)(7) -- -- -- -- ---------- ------- --------- ------- ------- -------- ------- Net income (loss)........ $ 9,464 $ (817) $ 4,208 $(4,828) $(1,565) $ 6,462 $ (880) ========== ======= ========= ======= ======= ======== ======= Basic net income (loss) per share.............. $ .67 ========== Diluted net income (loss) per share.............. $ .66 ========== Weighted average common shares outstanding: Basic.................. 14,046,628 -- 1,589,091(14) -- -- -- -- Diluted................ 14,447,764 -- 1,589,091(14) -- -- -- -- PRO FORMA ---------- Net broadcasting revenues............... $ 176,564 Broadcasting operating expenses............... 96,622 Amortization of television program rights................. 4,662 Publication and other revenue, net of operating expenses..... 4,527 International business development expenses... 974 Corporate expenses....... 7,488 Depreciation and amortization........... 26,361 Noncash compensation..... (1,022) Time brokerage fee....... -- ---------- Operating income (loss)................. 46,006 ---------- Other income (expense): Interest expense(1).... (37,337) Other income (expense), net.................. 4,013 ---------- Total other income (expense).......... (33,324) ---------- Income (loss) before income taxes........... 12,682 Provision (benefit) for income taxes(2)........ 7,100 ---------- Net income (loss) before extraordinary item..... 5,582 Extraordinary item, net of tax................. -- ---------- Net income (loss)........ 5,582 ========== Basic net income (loss) per share.............. $ .36 ========== Diluted net income (loss) per share.............. $ .35 ========== Weighted average common shares outstanding: Basic.................. 15,635,719 Diluted................ 16,036,855
- ------------------------------ (1) Reflects pro forma interest expense for the nine months ended November 30, 1998 resulting from borrowings under our credit facility, assuming the WQCD Acquisition, the Equity Offering and the Credit Facility Restatement, the SF Acquisition and the Wabash Valley Acquisition had occurred as of March 1, 1998 and assuming a weighted average interest rate of 7.981%. (2) Calculated using a statutory tax rate of 37% of taxable income. 32 39 (3) Reflects pro forma depreciation of property and equipment and amortization of intangibles and television program rights resulting from the allocation of the purchase price of the acquisitions from March 1, 1998 through the respective date of each acquisition. (4) Actual operating results for the period from March 1, 1998 to November 30, 1998 for WQCD-FM in New York City are reflected in historical operations because Emmis began operating the station on July 1, 1997 under a time brokerage agreement. The time brokerage fees have been eliminated for pro forma purposes. (5) Reflects pro forma interest expense on the cash purchase price of the radio station of $141,000 less $13,000 for adjustments relating to taxes. The net purchase price was funded by borrowings under our credit facility. (6) Reflects the net effect of (i) the elimination of interest expense and amortization of debt issuance costs and interest rate caps resulting from repayment of the outstanding balance under the prior credit facility by application of $173,900 of the net proceeds of the equity offering and by borrowings under our credit facility, and (ii) interest expense under our credit facility and the amortization of debt issuance costs and interest rate caps related to the Credit Facility Restatement. (7) Represents the elimination of the write-off of deferred debt issuance costs, net of tax resulting from the Credit Facility Restatement, which were recorded as an extraordinary item in the historical statement of operations for the nine months ended November 30, 1998. (8) Represents the historical operating results of the acquired stations for the period from March 1, 1998 to July 14, 1998, exclusive of depreciation and amortization and amortization of program rights. (9) Reflects pro forma interest expense on the borrowings, totaling $307,000, associated with the purchase of the stations. The borrowings consist of the SF Note accruing interest at 8.0% and $282,000 in borrowings under our credit facility. (10) Reflects reduced interest income due to cash paid for acquisition related costs. (11) Represents the historical operating results of the stations acquired in the Wabash Valley Acquisition for the period from March 1, 1998 to September 30, 1998, exclusive of depreciation and amortization and amortization of program rights. (12) Reflects pro forma interest expense on the adjusted cash purchase price of the stations of $88,905. The purchase price was funded by $9,000 held in escrow and $79,905 in borrowings under our credit facility. (13) Represents an adjustment to interest expense to reflect (i) the repayment of the SF Note and accrued interest of $26,083, (ii) the repayment of borrowings under our credit facility of $264,054, (iii) the interest on the notes at a rate of 8.125% and (iv) the amortization of debt issuance costs relating to the offering of the outstanding notes and the Credit Facility Amendment. (14) Represents shares not included in historical related to the issuance of 4.6 million shares of Class A Common Stock at $42.00 per share resulting from the Equity Offering. 33 40 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED NOVEMBER 30, 1998
EQUITY TEXAS OFFERING WABASH MONTHLY WQCD AND CREDIT SF VALLEY HISTORICAL ACQUISITION ACQUISITION FACILITY ACQUISITION ACQUISITION SUBTOTAL ---------- ----------- ----------- ---------- ----------- ----------- -------- (IN THOUSANDS) Net broadcasting revenues............ $ 172,435 $ -- $ -- -- $31,742(9) $15,359(12) $219,536 Broadcasting operating expenses............ 93,089 -- -- -- 22,033(9) 9,477(12) 124,599 Amortization of television program rights.............. 2,011 -- -- -- 2,205(4) 1,855(4) 6,071 Publication and other revenue, net of operating expenses............ 4,684 485(3) -- -- -- -- 5,169 International business development expenses............ 1,041 -- -- -- -- -- 1,041 Corporate expenses... 7,887 -- -- -- 1,459(9) 417(12) 9,763 Depreciation and amortization........ 20,724 586(4) 2,620(4) -- 7,480(4) 2,810(4) 34,220 Noncash compensation........ 328 -- -- -- -- -- 328 Time brokerage fee... 4,345 -- (4,345)(5) -- -- -- -- ---------- ----- ------- --------- ------- ------- -------- Operating income (loss).............. 47,694 (101) 1,725 -- (1,435) 800 48,683 ---------- ----- ------- --------- ------- ------- -------- Other income (expense): Interest expense(1)........ (28,358) (498) (5,106)(6) 8,099(7) (15,315)(10) (5,910)(13) (47,088) Other income (expense), net...... (961) -- -- -- (234)(11) -- (1,195) ---------- ----- ------- --------- ------- ------- -------- Total other income (expense)....... (29,319) (498) (5,106) 8,099 (15,549) (5,910) (48,283) ---------- ----- ------- --------- ------- ------- -------- Income (loss) before income taxes........ 18,375 (599) (3,381) 8,099 (16,984) (5,110) 400 Provision (benefit) for income taxes(2)............ 10,450 (281) (1,588) 3,803 (7,975) (2,400) 2,009 ---------- ----- ------- --------- ------- ------- -------- Net income (loss) before extraordinary items............... 7,925 (318) (1,793) 4,296 (9,009) (2,710) (1,609) Extraordinary items............... 1,597 -- -- (1,597)(8) -- -- -- ---------- ----- ------- --------- ------- ------- -------- Net income (loss).... $ 6,328 $(318) $(1,793) $ 5,893 $(9,009) $(2,710) $ (1,609) ========== ===== ======= ========= ======= ======= ======== Basic net income (loss) per share.... $ .45 ========== Diluted net income (loss) per share.... $ .44 ========== Weighted average common shares outstanding: Basic............... 14,046,628 -- -- 1,589,091(15) -- -- -- Diluted............. 14,447,764 -- -- 1,589,091(15) -- -- -- NOTES OFFERING AND CREDIT FACILITY AMENDMENT PRO FORMA --------------- ---------- Net broadcasting revenues............ -- $ 219,536 Broadcasting operating expenses............ -- 124,599 Amortization of television program rights.............. -- 6,071 Publication and other revenue, net of operating expenses............ -- 5,169 International business development expenses............ -- 1,041 Corporate expenses... -- 9,763 Depreciation and amortization........ -- 34,220 Noncash compensation........ -- 328 Time brokerage fee... -- -- ------- ---------- Operating income (loss).............. -- 48,683 ------- ---------- Other income (expense): Interest expense(1)........ (2,362)(14) (49,450) Other income (expense), net...... -- (1,195) ------- ---------- Total other income (expense)....... (2,362) (50,645) ------- ---------- Income (loss) before income taxes........ (2,362) (1,962) Provision (benefit) for income taxes(2)............ (1,109) 900 ------- ---------- Net income (loss) before extraordinary items............... (1,253) (2,862) Extraordinary items............... -- -- ------- ---------- Net income (loss).... $(1,253) $ (2,862) ======= ========== Basic net income (loss) per share.... $ (.18) ========== Diluted net income (loss) per share.... $ (.18) ========== Weighted average common shares outstanding: Basic............... -- 15,635,719 Diluted............. -- 15,635,719(16)
- ------------------------------ (1) Reflects pro forma interest expense for the twelve months ended November 30, 1998 resulting from borrowings under our credit facility, assuming the Texas Monthly acquisition, the WQCD Acquisition, the Equity Offering and the Credit Facility Restatement, the SF Acquisition and the Wabash Valley Acquisition had occurred as of December 1, 1997 and assuming a weighted average interest rate of 7.981%. (2) Calculated using a statutory tax rate of 37% of taxable income. 34 41 (3) Represents the historical operating results of Texas Monthly for the period from December 1, 1997 to January 31, 1998, exclusive of depreciation and amortization. (4) Reflects pro forma depreciation of property and equipment and amortization of intangibles and television program rights resulting from the allocation of the purchase price of the acquisitions from December 1, 1997 through the respective date of each acquisition. (5) Actual operating results for the period from December 1, 1997 to November 30, 1998 for WQCD-FM in New York City are reflected in historical operations because Emmis began operating the station on July 1, 1997 under a time brokerage agreement. The time brokerage fees have been eliminated for pro forma purposes. (6) Reflects pro forma interest expense on the cash purchase price of the radio station of $141,000 less $13,000 for adjustments relating to taxes. The net purchase price was funded by borrowings under our credit facility. (7) Reflects the net effect of (i) the elimination of interest expense and amortization of debt issuance costs and interest rate caps resulting from repayment of the outstanding balance under the prior credit facility by application of $173,900 of the net proceeds of the Equity Offering and by the Credit Facility Restatement, and (ii) interest expense under our credit facility and the amortization of debt issuance costs and interest rate caps related to the Credit Facility Restatement. (8) Represents the elimination of the write-off of deferred debt issuance costs, net of tax resulting from the Credit Facility Restatement, which were recorded as an extraordinary item in the historical statement of operations for the twelve months ended November 30, 1998. (9) Represents the historical operating results of the acquired stations for the period from December 1, 1997 to July 14, 1998, exclusive of depreciation and amortization and amortization of program rights. (10) Reflects pro forma interest expense on the borrowings, totaling $307,000, associated with the purchase of the stations. The borrowings consist of the SF Note accruing interest at 8.0% and $282,000 in borrowings under our credit facility. (11) Reflects reduced interest income due to cash paid for acquisition related costs. (12) Represents the historical operating results of the stations acquired in the Wabash Valley Acquisition for the period from December 1, 1997 to September 30, 1998, exclusive of depreciation and amortization and amortization of program rights. (13) Reflects pro forma interest expense on the adjusted cash purchase price of the stations of $88,905. The purchase price was funded by $9,000 held in escrow and $79,905 in borrowings under our credit facility. (14) Represents an adjustment to interest expense to reflect (i) the repayment of the SF Note and accrued interest of $26,083, (ii) the repayment of borrowings under our credit facility of $264,054, (iii) the interest on the notes at a rate of 8.125% and (iv) the amortization of debt issuance costs relating to the offering of the outstanding notes and the Credit Facility Amendment. (15) Represents shares not included in historical related to the issuance of 4.6 million shares of Class A Common Stock at $42.00 per share resulting from the Equity Offering. (16) Due to net loss, weighted average common shares outstanding for diluted net income (loss) per share is the same as weighted average common shares outstanding for basic net income (loss) per share. 35 42 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with our selected historical and pro forma financial statements and the related notes presented elsewhere in this offering memorandum, as well as our historical financial statements and the financial statements of acquired businesses which are incorporated by reference in this offering memorandum. GENERAL We own and operate sixteen radio stations, six television stations and four magazine publishing operations. Our radio stations consist of thirteen FM and three AM stations serving New York City, Los Angeles, Chicago, St. Louis, Indianapolis and Terre Haute, Indiana. Our television stations consist of five Fox affiliated stations serving New Orleans, Louisiana, Mobile, Alabama, Green Bay, Wisconsin, Honolulu, Hawaii and Fort Myers, Florida and one CBS affiliated station serving Terre Haute, Indiana. Our publishing operations consist primarily of four city or regional monthly magazines including Indianapolis Monthly, Atlanta, Cincinnati and Texas Monthly. The principal source of our broadcasting revenues is the sale of broadcasting time on our radio and television stations for advertising. The sale of advertising time is primarily affected by the demand for advertising time by local and national advertisers and the advertising rates charged by our radio and television stations. We derive a small portion of our broadcasting revenues from fees paid by the networks and program syndicators for the broadcast of programming. Our broadcast revenues are generally highest in our second and third fiscal quarters. Radio station advertising rates are based in part on a station's ability to attract audiences in the demographic groups which advertisers wish to reach and the number of stations competing in the market area, as well as local, regional and national economic conditions. A station's audience is reflected in rating service surveys of the size of the audience tuned to the station and the time spent listening or viewing. Television station advertising is sold for placement in proximity to specific local or network programming and is priced primarily on the basis of a program's popularity with the audience advertisers wish to reach, as measured principally by quarterly audience surveys. In addition, advertising rates are affected by the number of advertisers competing for the available time, the size and demographic makeup of the market areas served, and local, regional and national economic conditions. In the broadcasting industry, stations often utilize trade (or barter) agreements to exchange advertising time for goods or services (such as other media advertising, travel or lodging), in lieu of cash. In order to preserve most of our on-air inventory for cash advertising, we generally enter into trade agreements only if the goods or services bartered to us will be used in our business. We have minimized our use of trade agreements and in fiscal 1996, 1997 and 1998 sold approximately 95% of our advertising time for cash. The principal source of our publishing revenues is the sale of local, regional and national advertising pages in our magazines. Advertising sales and the rates that we charge are 36 43 determined in part by a publication's ability to attract audiences in the geographic and demographic groups which advertisers wish to reach and the number of magazines competing in the market area, as well as local, regional and national economic conditions. Our publications also derive revenues from the sale of subscriptions to our magazines and the sales of our magazines at retail locations such as newsstands, bookstores and shops. The primary operating expenses involved in owning and operating radio stations are employee salaries and commissions, programming, advertising and promotion. The primary operating expenses involved in owning and operating television stations are syndicated program rights fees, employee salaries and commissions, news gathering, programming, advertising and promotion. The principal operating expenses involved in owning and operating magazines are printing, employee salaries and commissions, advertising and promotion. Our net earnings are also impacted by depreciation, amortization and interest expenses associated with our acquisition of broadcasting and publishing operations. The performance of a broadcasting group, such as Emmis, is customarily measured by the ability of its stations to generate broadcast cash flow and operating cash flow. We define broadcast cash flow as advertising revenues net of agency commissions, less broadcast operating expenses and amortization of TV program rights. We define operating cash flow as operating income before depreciation and amortization, time brokerage fees and non-cash compensation expenses. Broadcast cash flow and operating cash flow are not measures of liquidity or of performance calculated in accordance with generally accepted accounting principles, and should be viewed as a supplement to and not a substitute for our results of operations presented on the basis of generally accepted accounting principles. Broadcast and operating cash flow do not take into account Emmis' debt service requirements and other commitments and, accordingly, they are not necessarily indicative of amounts that may be available for dividends, reinvestment in Emmis' business or other discretionary uses. We believe that broadcast cash flow and operating cash flow are useful because they are generally recognized by the broadcasting industry as measures of performance and are used by analysts who report on the performance of broadcast companies. Additionally, broadcast cash flow provides a meaningful comparison of broadcast operating performance between companies in the industry and serves as an indicator of the market value of a group of stations. Operating cash flow is used by analysts to measure a company's ability to service debt and is used in calculating the amount of additional indebtedness that a company may incur. RESULTS OF OPERATIONS The pro forma comparisons discussed in this section are based on the pro forma data in Note 2 to our consolidated financial statements for the nine months ended November 30, 1998 and in Note 6 to our consolidated financial statements for the fiscal year ended February 28, 1998. NINE MONTHS ENDED NOVEMBER 30, 1998 COMPARED TO NINE MONTHS ENDED NOVEMBER 30, 1997 Net broadcasting revenues for the nine months ended November 30, 1998 were $145.3 million compared to $98.7 million for the same period of the prior year, an increase of 37 44 $46.6 million or 47.2%. This increase is principally due to the operation of WQCD under a time brokerage agreement and the subsequent acquisition thereof, the acquisition of WTLC FM and AM, the commencement of operations of our Hungarian national radio subsidiary (known as Slager Radio), the SF Acquisition and the Wabash Valley Acquisition, as well as improved performance at our properties in New York and Chicago. On a pro forma basis, net broadcasting revenues increased $15.2 million or 9.4% for the nine-month period. This pro forma increase is principally due to improved performance at our radio stations in New York and Chicago. Broadcasting operating expenses for the nine months ended November 30, 1998 were $76.2 million compared to $50.7 million for the same period of the prior year, an increase of $25.5 million or 50.1%. This increase is primarily attributable to the operation of WQCD under a time brokerage agreement and the subsequent acquisition thereof, the acquisition of WTLC FM and AM, the commencement of operations of Slager Radio, the SF Acquisition and the Wabash Valley Acquisition. On a pro forma basis, broadcasting operating expenses increased $6.1 million or 6.8% for the nine-month period. This pro forma increase is principally due to expenses associated with higher revenues. Broadcast cash flow for the nine-months ended November 30, 1998 was $67.1 million compared to $48.0 million for the same period of the prior year, an increase of $19.1 million or 39.9%. This increase is principally due to increased net broadcasting revenues offset by increased broadcasting operating expenses as discussed above. On a pro forma basis, broadcast cash flow increased $8.3 million or 12.4% for the nine-month period. This pro forma increase is principally due to improved operations at our properties in New York and Chicago. Corporate expenses for the nine-month period ended November 30, 1998 were $6.4 million compared to $5.3 million for same period of the prior year, an increase of $1.1 million or 19.5%. This increase is primarily due to the establishment of corporate divisions for publishing and television. International business development expenses for the nine-month period ended November 30, 1998 were $1.0 million compared to $0.9 million for the same period of the prior year. These expenses reflect costs associated with Emmis International Corporation. The purpose of this wholly owned subsidiary is to identify, investigate and develop international broadcast investments or other international business opportunities. Expenses consist primarily of salaries, travel and various administrative costs. Operating cash flow for the nine months ended November 30, 1998 was $64.3 million compared to $42.7 million for the same period of the prior year, an increase of $21.6 million or 50.4%. This increase is principally due to increased net broadcasting revenues offset by increased broadcasting operating expenses, as discussed above, and an increase in publication and other revenue net of operating expenses resulting from the acquisition of Texas Monthly. On a pro forma basis, operating cash flow increased $8.8 million or 13.8% for the nine-month period. Interest expense was $24.9 million for the nine months ended November 30, 1998 compared to $10.4 million for the same period of the prior year, an increase of $14.5 million or 140.9%. This increase reflects higher outstanding debt due to the WTLC FM and AM acquisitions, the acquisition of Texas Monthly, the acquisition of Slager Radio, the WQCD Acquisition, the SF 38 45 Acquisition and the Wabash Valley Acquisition. On a pro forma basis, interest expense increased $0.3 million or 0.9% for the nine-month period. YEAR ENDED FEBRUARY 28, 1998 COMPARED TO YEAR ENDED FEBRUARY 28, 1997 Net broadcasting revenues for the year ended February 28, 1998 were $125.9 million compared to $103.3 million for the same period of the prior year, an increase of $22.6 million or 21.8%. This increase was principally due to the acquisition of radio stations in St. Louis, the operation of WQCD-FM under a time brokerage agreement, and the ability to realize higher advertising rates at our broadcasting properties, resulting from higher ratings at certain broadcasting properties, as well as increases in general radio spending in the markets in which Emmis operates. On a pro forma basis, net broadcasting revenues would have increased $8.5 million or 6.7% for the year. For these purposes, pro forma information assumes the acquisition of Texas Monthly, the acquisition of radio stations in Indianapolis and St. Louis and the operation of WQCD-FM under a time brokerage agreement were effective on the first day of the year ended February 28, 1997. Broadcasting operating expenses for the year ended February 28, 1998 were $67.6 million compared to $52.8 million for the same period of the prior year, an increase of $14.8 million or 28.0%. This increase was principally attributable to the acquisition of radio stations in St. Louis and the operation of WQCD-FM under a time brokerage agreement and increased promotional spending at our broadcasting properties. On a pro forma basis, broadcasting operating expenses would have increased $4.9 million or 7.2% for the year. Broadcast cash flow for the year ended February 28, 1998 was $58.2 million compared to $50.4 million for the same period of the prior year, an increase of $7.8 million or 15.4%. This increase was due to increased net broadcasting revenues partially offset by increased broadcasting operating expenses as discussed above. On a pro forma basis, broadcast cash flow would have increased $3.6 million or 6.2% for the year. Corporate expenses for the year ended February 28, 1998 were $6.8 million compared to $5.9 million for the same period of the prior year, an increase of $0.9 million or 15.5%. This increase was primarily due to increased travel expenses and other expenses related to potential acquisitions that were not finalized and increased professional fees. Operating cash flow consists of operating income, excluding the time brokerage fee, noncash compensation and depreciation and amortization. Operating cash flow for the year ended February 28, 1998 was $51.6 million compared to $44.2 million for the same period of the prior year, an increase of $7.4 million or 16.7%. This increase was principally due to the increase in broadcast cash flow partially offset by an increase in corporate expenses. On a pro forma basis, operating cash flow would have increased $4.0 million or 7.5% for the year. Interest expense was $13.8 million for the year ended February 28, 1998 compared to $9.6 million for the same period of the prior year, an increase of $4.2 million or 43.0%. This increase reflected higher outstanding debt due to the acquisition of radio stations in St. Louis and the write-off of deferred financing costs associated with refinancing of our bank debt, offset by voluntary repayments made under the bank debt and a rate decrease associated with the 39 46 refinancing. On a pro forma basis, interest expense would have increased $0.8 million or 4.6% for the year. Publication and other revenues net of operating expenses for the year ended February 28, 1998 were $1.2 million compared to $0.8 million for same period of the prior year, an increase of $0.4 million or 44.4%. This increase was due to the acquisition of Texas Monthly and increased tower rental revenue offset by an increase in operating expenses at Atlanta magazine. On a pro forma basis, publication and other revenues would have increased $1.1 million or 43.2%. Depreciation and amortization expense for the year ended February 28, 1998 was $7.5 million compared to $5.5 million for the same period of the prior year, an increase of $2.0 million or 37.5%. This increase was primarily due to the acquisition of Texas Monthly and radio stations in Indianapolis and St. Louis. On a pro forma basis, depreciation and amortization expense would have increased $0.1 million or 0.9%. Noncash compensation expense for year ended February 28, 1998 was $4.9 million compared to $3.5 million for the same period of the prior year, an increase of $1.4 million or 40.9%. Noncash compensation includes compensation expense associated with stock options granted, restricted common stock issued under employment agreements and common stock contributed to our profit sharing plan. This increase was due primarily to the increase in stock price from the prior year. Accounts receivable at February 28, 1998 were $32.1 million compared to $20.8 million at February 28, 1997, an increase of $11.3 million or 54.2%. This increase in accounts receivable was due primarily to the acquisition of Texas Monthly and Cincinnati magazines, radio stations in Indianapolis and St. Louis and two radio networks and the operation of WQCD-FM under a time brokerage agreement. LIQUIDITY AND CAPITAL RESOURCES The increase in accounts receivable from February 28, 1998 to November 30, 1998 is due to the increase of net broadcasting revenues in the quarter ended November 30, 1998 compared to the quarter ended February 28, 1998. In August 1996, Emmis announced its plan to build an office building in downtown Indianapolis for its corporate office and its Indianapolis operations. The project is substantially complete. In the nine-month period ended November 30, 1998, Emmis had capital expenditures of $26.2 million, of which $19.4 million relate to payments in connection with the Indianapolis building project. In June 1998, Emmis completed the sale of 4.6 million shares of its Class A Common Stock at $42.00 per share, resulting in net proceeds of $182.6 million. Net proceeds from the offering were used to repay outstanding obligations under our prior credit facility. In July 1998, Emmis entered into an amended and restated credit facility. See Note 6 to our financial statements for the nine months ended November 30, 1998, incorporated by reference in this prospectus. Concurrently with the offering of the outstanding notes, our lenders amended the credit facility. See "Description of Certain Indebtedness -- Amendment to Credit Facility." 40 47 We have entered into an agreement to acquire a new publication for a purchase price of approximately $21.0 million. This acquisition is subject to a number of conditions. There can be no assurances that we will be able to consummate this particular acquisition. We expect that cash flow from operating activities will be sufficient to fund all debt service obligations, working capital and capital expenditure requirements for the next fiscal year. As part of its business strategy, Emmis frequently evaluates potential acquisitions of radio and television stations. In connection with future acquisition opportunities, we may incur additional debt or issue additional equity or debt securities depending on market conditions and other factors. INFORMATION REGARDING OPERATING GROUPS On a pro forma basis, for the nine-month period ended November 30, 1998, Emmis would have derived approximately 59.4% of its net revenue from radio operations and approximately 27.0% of its net revenue from television operations, and approximately 13.6% of its net revenue from publishing and other operations. On a pro forma basis, for the twelve-month period ended November 30, 1998, Emmis would have derived approximately 58.1% of its net revenue from radio operations and approximately 27.5% of its net revenue from television operations, and approximately 14.4% of its net revenue from publishing and other operations. The following table sets forth selected pro forma information regarding our operating groups for the fiscal year ended February 28, 1998 and for the nine-month and twelve-month periods ended November 30, 1998 assuming the acquisition of WQCD-FM and our television stations had occurred as of the beginning of the periods:
UNAUDITED PRO FORMA ----------------------------------------------------------- NINE MONTHS TWELVE MONTHS YEAR ENDED ENDED ENDED FEBRUARY 28, NOVEMBER 30, NOVEMBER 30, 1998 1998 1998 (IN THOUSANDS) RADIO: Net revenue....................... $136,279 $121,386 $148,916 Broadcast cash flow............... 61,593 58,009 68,098 TELEVISION: Net revenue....................... 68,396 55,178 70,620 Broadcast cash flow............... 18,710 17,271 20,768 PUBLISHING AND OTHER: Net revenue....................... 36,904 27,941 36,961 Publishing and other cash flow(1)........................ 3,776 4,527 5,169 Total group net revenue............. 241,579 204,505 256,497 Total group broadcast, publishing and other cash flow............... 84,079 79,807 94,035 Corporate and international business development expenses.............. 10,285 8,462 10,804 -------- -------- -------- EBITDA.............................. $ 73,794 $ 71,345 $ 83,231 ======== ======== ========
- ------------------------------ 41 48 (1) Publishing and other cash flow for our Publishing and Other operating group represents publishing, tower leasing and consulting revenues, net of operating expenses. YEAR 2000 COMPLIANCE Emmis has completed its assessment phase of year 2000 compliance for information technology for all of its radio broadcasting properties except those included in the Wabash Valley Acquisition, its publishing entities and its corporate operations. It has also completed its assessment of other equipment, including broadcast equipment, at some radio properties. Assessment of year 2000 compliance at newly acquired radio and television stations is partially complete. It has been determined that certain information technology and other equipment is represented by its vendors to be year 2000 compliant. Emmis is in the process of testing this technology and equipment. Testing should be completed by August 31, 1999. Technology and equipment that is currently not represented as year 2000 compliant will be upgraded or replaced, and tested prior to August 31, 1999. In connection with the move of our corporate and Indianapolis operations to an office building in downtown Indianapolis, substantially all information technology and other equipment in the building will be year 2000 compliant. Emmis intends to upgrade broadcast equipment at radio properties that are not currently utilizing digital equipment. Currently, Emmis estimates that this upgrade to digital will cost approximately $1.0 million. Emmis believes that this upgrade will make the radio broadcast equipment year 2000 compliant. Emmis has completed its assessment of information technology, and other equipment at some of its television stations and estimates that costs to make such equipment year 2000 compliant will be approximately $1.0 million. Emmis intends to fund all expenditures relating to year 2000 remediation from current operations. Emmis has not separately tracked costs incurred to date relating to year 2000 compliance; however, management believes that these costs have been insignificant. If certain broadcast equipment and information technology is not year 2000 compliant prior to January 1, 2000, a station using that equipment and information technology might not be able to broadcast and process transactions. If this were to occur, temporary solutions or processes not involving the malfunctioning equipment could be implemented. Emmis intends to develop a contingency plan which would be used to implement such temporary solutions. 42 49 BUSINESS We are a diversified media company with radio broadcasting, television broadcasting and magazine publishing operations. We are the eighth largest radio broadcaster in the United States based on total revenues. The thirteen FM radio stations and three AM radio stations we own in the United States serve the nation's three largest radio markets of New York City, Los Angeles and Chicago, as well as St. Louis, Indianapolis and Terre Haute, Indiana. Our six television stations, which we acquired in 1998, are located in New Orleans, Louisiana, Mobile, Alabama, Green Bay, Wisconsin, Honolulu, Hawaii, Fort Myers, Florida and Terre Haute, Indiana. On a pro forma basis after considering recent acquisitions, we had revenues and EBITDA of $219.5 million and $83.2 million, respectively, for the twelve months ended November 30, 1998. Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by developing those properties to increase their cash flow. We find such underdeveloped properties attractive because they offer greater potential for revenue and cash flow growth than mature properties. We have been successful in acquiring these types of radio stations and improving their ratings, revenues and cash flow with our marketing focus and innovative programming expertise. We have created top-performing radio stations which rank, in terms of primary demographic target audience share, among the top ten stations in the New York City, Los Angeles and Chicago radio markets according to the Fall 1998 Arbitron survey. We believe that our strong large-market radio presence and diversity of station formats makes us attractive to a diverse base of radio advertisers and reduces our dependence on any one economic sector or specific advertiser. More recently, we have begun to apply our advertising sales and programming expertise to our television stations. We view our entry into television as a logical outgrowth of our radio business and as a platform for diversification. Like the radio stations we previously acquired, our television stations are underdeveloped properties located in desirable markets, which can benefit from innovative, research-based programming and our experienced management team. We believe we can improve the ratings, revenues and broadcast cash flow of our television stations with a more market-focused, research-based programming approach and other related strategies, which have proven successful with our radio properties. In addition to our domestic broadcasting properties, we operate news and agricultural information radio networks in Indiana, publish the Indianapolis Monthly, Atlanta, Cincinnati and Texas Monthly magazines, and have a 54% interest in a national radio station in Hungary. We also engage in various businesses ancillary to our broadcasting business, such as consulting and broadcast tower leasing. BUSINESS STRATEGY We are committed to maintaining our leadership positions in broadcasting, enhancing the performance of our broadcast properties, and distinguishing ourselves through the quality of our operations. Our strategy has the following principal components: CREATE CASH FLOW GROWTH BY ENHANCING STATION PERFORMANCE. Our strategy is to selectively acquire underdeveloped media properties in desirable markets and then to create value by developing those properties to increase their cash flow. We believe that our station portfolio 43 50 provides significant potential for revenue and cash flow growth through enhanced operating performance. We believe that our growth is less dependent on overall advertising market growth than it would be if we owned only mature properties. We expect to continue to create value, particularly in our recently-acquired television stations, through maximizing operating efficiencies, development of innovative programming and focused sales and marketing efforts. DEVELOP INNOVATIVE PROGRAMMING. We believe that knowledge of local markets and innovative programming developed to target specific demographic groups are the most important determinants of individual radio and television station success. We conduct extensive market research to identify underserved segments of our markets or to insure that we are meeting the needs and tastes of our target audiences. Utilizing the research results, we concentrate on providing focused programming formats carefully tailored to the demographics of our markets and our advertisers' preferences. Such programming strategies might include, for example, the development or acquisition of on-air talent or development of a sports coverage or news franchise. Local market knowledge is particularly important in developing programming for our Fox television stations, as the higher degree of programming flexibility afforded by our Fox affiliation provides us greater opportunity to tailor our programming to meet the specific demands of our local markets. Greg Nathanson, who heads our television division and directs programming, has over 30 years of television broadcasting experience and has had extensive independent programming experience as President of Programming and Development for Twentieth Television and President of Fox Television Stations. EMPHASIZE FOCUSED SALES AND MARKETING STRATEGY. Emmis designs its local and national sales efforts based on advertiser demand and competition within each market. We provide our sales force with extensive training and technology for sophisticated inventory management techniques, which allows us to make frequent price adjustments based on regional and local market conditions. We seek to maximize sources of non-traditional, non-spot revenue and have led the industry in developing "vendor co-op" advertising revenue. Although this source of advertising revenue is common in the newspaper and magazine industry, we were among the first broadcasters to recognize and take advantage of the potential of vendor co-op advertising. ENCOURAGE ENTREPRENEURIAL MANAGEMENT APPROACH. We believe that broadcasting is primarily a local business and that much of our success is the result of the efforts of regional and local management and staff. We have attracted and retained an experienced team of broadcast professionals who understand the musical tastes, demographics and competitive opportunities of their particular market. Our decentralized approach to station management gives local management oversight of station spending, long-range planning and resource allocation at their individual stations and rewards local management based on those stations' performance. In addition, we encourage our managers and employees to own a stake in Emmis, and over 90% of all full-time employees have an equity ownership position in the company. We believe that this entrepreneurial management approach has given us a distinctive corporate culture, making Emmis a highly desirable employer in the broadcasting industry and significantly enhancing our ability to attract and retain experienced and highly motivated employees and management. 44 51 SELECTIVELY PURSUE STRATEGIC ACQUISITIONS. Our acquisition strategy is to selectively acquire underdeveloped media properties at reasonable purchase prices where our experienced management team can enhance value. We believe that continued consolidation in the radio broadcasting industry will create attractive acquisition opportunities as the number of potential buyers for radio assets declines as a result of in-market ownership limitations, and we will continue to evaluate acquisitions of individual radio stations or groups of radio stations in both our current and new markets. We also believe that attractive acquisition opportunities are becoming increasingly available in the television broadcasting industry. In many cases, television stations have suffered ratings and revenue declines due to management inattention, improper programming strategies or inadequate sales and marketing efforts. We also expect to evaluate acquisitions of international broadcasting stations and magazine publishing properties which present attractive purchase prices and significant opportunities to capitalize on our management expertise to enhance cash flow. We intend to seek strong local minority-interest partners in evaluating and completing any international broadcasting acquisition opportunities. 45 52 RADIO AND TELEVISION STATIONS The following tables set forth certain information regarding our radio and television stations and their broadcast markets: RADIO STATIONS
RANKING IN MARKET MARKET PRIMARY PRIMARY STATION AND RANK BY DEMOGRAPHIC DEMOGRAPHIC AUDIENCE STATION REVENUE(1) FORMAT TARGET AGES TARGET(2) SHARE(2) ------- ---------- ------ ----------- ----------- -------- Los Angeles 1 KPWR-FM Dance/Contemporary Hit 12-24 1 4.1 New York 2 WQHT-FM Dance/Contemporary Hit 12-24 1 5.3 WRKS-FM Classic Soul/Smooth R&B 25-54 4 3.8 WQCD-FM Contemporary Jazz 25-54 7 3.1 Chicago 3 WKQX-FM New Rock 18-34 2 3.9 St. Louis 18 KSHE-FM Album Oriented Rock 18-34 12 3.6 WKKX-FM Country 18-34 6t 3.8 WXTM-FM Extreme Rock 18-34 4 2.9 Indianapolis 30 WENS-FM Adult Contemporary 25-54 4 4.9 WIBC-AM News/Talk 35-64 4 7.8 WNAP-FM Classic Rock 18-34 8 3.3 WTLC-FM Urban Contemporary 25-54 6 6.0 WTLC-AM Solid Gold Soul, Gospel and 35-64 19 0.7 Talk Terre Haute 172 WTHI-FM Country 25-54 1t 19.2 WTHI-AM News/Talk 35-54 9t 1.7 WWVR-FM Classic Rock 25-49 1 12.1
- ------------------------------ (1) "Market Rank by Revenue" is the ranking of the market revenue size of the principal radio market served by the station among all radio markets in the United States. Market revenue ranking figures are from Duncan's Radio Market Guide (1998 ed.). We own a 40% equity interest in the publisher of Duncan's Radio Market Guide. (2) "Ranking in Primary Demographic Target" is the ranking of the station among all radio stations in its market based on the Fall 1998 Arbitron survey. A "t" indicates the station tied with another station for the stated ranking. "Station Audience Share" represents a percentage generally computed by dividing the average number of persons over age 12 listening to a particular station during specified time periods by the average number of such persons for all stations in the market area as determined by Arbitron. 46 53 TELEVISION STATIONS
NUMBER OF STATION TELEVISION METROPOLITAN DMA AFFILIATION/ STATIONS STATION AUDIENCE STATION AREA SERVED RANK(1) CHANNEL IN MARKET(2) RANK(3) SHARE(4) ---------- ------------ ------- ------------ ------------ ------- -------- WVUE-TV New Orleans, LA 41 Fox/8 6 3t 9 WALA-TV Mobile, AL-Pensacola, FL 62 Fox/10 6 3 11 WLUK-TV(5) Green Bay, WI 70 Fox/11 5 3 14 KHON-TV(5) Honolulu, HI 71 Fox/2 6 1 17 WFTX-TV Fort Myers, FL 83 Fox/36 5 4 8 WTHI-TV Terre Haute, IN 140 CBS/10 3 1 24
- ------------------------------ (1) Estimated by Nielsen as of January 1998. Rankings are based on the relative size of a station's market among the 212 generally recognized DMAs, as defined by Nielsen. (2) Represents the number of Reportable Stations designated by Nielsen as "local" to the DMA, excluding public television stations and stations which do not meet minimum Nielsen reporting standards (i.e., a weekly cumulative audience of less than 2.5%) for reporting in the 9:00 a.m. to midnight, Sunday through Saturday time period. (3) Reflects the station's rank relative to other Reportable Stations based upon the DMA rating as reported by Nielsen from 9:00 a.m. to midnight, Sunday through Saturday during November 1998. (4) Reflects an estimate of the share of DMA households viewing television received by a local commercial station in comparison to other local commercial stations in the market as measured from 9:00 a.m. to midnight, Sunday through Saturday. (5) Emmis also owns KAII-TV and KHAW-TV, which operate as satellite stations of KHON-TV and primarily re-broadcast the signal of KHON-TV. The stations are considered one station for FCC multiple ownership purposes. Low power television translators W40AN and K55D2 retransmit stations WLUK-TV and KHON-TV, respectively. RADIO NETWORKS In addition to our other radio broadcasting operations, we own and operate two radio networks. Network Indiana provides news and other programming to nearly 70 affiliated radio stations in Indiana. AgriAmerica Network provides farm news, weather information and market analysis to radio stations across Indiana. PUBLISHING OPERATIONS We publish four magazines through our publishing division, as follows. Indianapolis Monthly. We have published Indianapolis Monthly magazine since September 1988. Indianapolis Monthly covers local personalities, homes and lifestyles and currently has a paid monthly circulation of approximately 45,000. With a large advertising base and a popular editorial focus, Indianapolis Monthly is the market's leading general interest magazine focusing on the Indianapolis area. Atlanta. We acquired and began publishing Atlanta magazine in August 1993. Atlanta covers area personalities, issues and style and currently has a paid monthly circulation of approximately 65,000. The magazine was unprofitable for several years before we acquired it for a nominal investment. Certain initiatives, including downsizing staff, increasing sales efforts and repositioning the editorial focus, have contributed to improving profitability. 47 54 Cincinnati. We acquired Cincinnati magazine in October 1997. Cincinnati magazine was founded by the Greater Cincinnati Chamber of Commerce in 1967 and, under its prior owners, the magazine grew to a paid monthly circulation of approximately 22,000. We repositioned the editorial product to an up-to-date city/regional magazine covering people and entertainment in Cincinnati, doubled the existing sales staff and marketed the newly designed magazine to the Cincinnati area. The magazine currently has a paid monthly circulation of approximately 31,000. Texas Monthly. We acquired Texas Monthly magazine in February 1998. The critically acclaimed magazine, which has received eight National Magazine Awards, has a paid monthly circulation of approximately 300,000, and we believe it is read by more than two million people. It marked its 25th anniversary with the publication of the February 1998 issue, which set a single issue advertising record. Since acquiring the magazine, we have worked to increase Texas Monthly's operating efficiencies while leaving the highly regarded editorial product intact. COMMUNITY INVOLVEMENT We believe that to be successful, we must be integrally involved in the communities we serve. To that end, each of our stations participates in many community programs, fundraisers and activities that benefit a wide variety of organizations. Charitable organizations that have been the beneficiaries of our marathons, walkathons, dance-a-thons, concerts, fairs and festivals include, among others, The March of Dimes, American Cancer Society, Riley Children's Hospital and research foundations seeking cures for cystic fibrosis, leukemia and AIDS and helping to fight drug abuse. In addition to our planned activities, our stations take leadership roles in community responses to natural disasters. INDUSTRY INVOLVEMENT We have an active leadership role in a wide range of industry organizations. Our senior managers have served in various capacities with industry associations, including as directors of the National Association of Broadcasters, the Radio Advertising Bureau, the Radio Futures Committee and the Arbitron Advisory Council and as founding members of the Radio Operators Caucus. In addition, our managers have been voted Radio President of the Year and General Manager of the Year, and at various times we have been voted Most Respected Broadcaster in polls of radio industry chief executive officers and managers. CERTAIN REGULATORY DEVELOPMENTS In August 1998, the FCC adopted new rules and procedures that establish the use of competitive bidding (auctions) to resolve competing applications for all new broadcast stations and mutually exclusive applications for major changes to existing broadcast stations. The rules apply to full power commercial radio and analog television stations as well as all secondary commercial broadcast services (e.g., low power television, FM translator and television translator services). With respect to equal employment opportunity regulation, the FCC recently initiated a rulemaking proceeding that may lead to reinstatement (in revised form) of the equal employment opportunity rules and reporting requirements which were overturned last year by the 48 55 U.S. Court of Appeals for the D.C. Circuit. The FCC suspended its EEO rules and reporting requirements following the court's denial of the FCC's request for rehearing en banc. In July 1998, the FCC initiated a rulemaking proceeding to determine the nature and extent of the mandatory carriage obligations of cable operators during the digital television transition. The rulemaking proceeding also seeks comment on related issues, including how to resolve technical compatibility problems, whether the FCC should modify its signal quality requirement during the transition, how to regulate channel placement of digital television signals and whether such signals must be carried on the basic cable tier. The FCC also adopted new rules in November 1998 requiring the payment of fees by commercial broadcasters in connection with any revenues they receive from their use of digital television spectrum for services other than free, over-the-air advertiser supported television. The fee is set at 5% of gross revenues from covered services. The FCC has also initiated a rulemaking proceeding to determine whether to give greater flexibility to direct broadcast satellite operators seeking to provide distant broadcast network signals to their subscribers. Additionally, as part of the ongoing examination of its broadcast ownership rules, the FCC is considering whether to permit a single entity to own television stations covering more than 35% of the national television homes. The FCC is also considering whether to eliminate or modify the 50% discount credited to UHF television stations in calculating compliance with the national ownership cap. We cannot predict the outcome of any of these rulemaking proceedings or the effect of a particular outcome on the ownership and operation of our station properties. ADVERTISING SALES Our stations derive their advertising revenue from local and regional advertising in the marketplaces in which they operate, as well as from the sale of national advertising. Local and most regional sales are made by a station's sales staff. National sales are made by firms specializing in such sales which are compensated on a commission-only basis. We believe that the volume of national advertising revenue tends to adjust to shifts in a station's audience share position more rapidly than does the volume of local and regional advertising revenue. We have led the industry in developing "vendor co-op" advertising revenue (i.e., revenue from a manufacturer or distributor which is used to promote its particular goods together with local retail outlets for those goods). Although this source of advertising revenue is common in the newspaper and magazine industry, we were among the first radio broadcasters to recognize, and take advantage of, the potential of vendor co-op advertising. Our Revenue Development Systems division has established a network of radio stations which share information about sources of vendor co-op revenue. In addition, each of our stations has a salesperson devoted exclusively to the development of cooperative advertising. We also use this approach at our television stations. COMPETITION Radio and television broadcasting stations compete with the other broadcasting stations in their respective market areas, as well as with other advertising media such as newspapers, magazines, outdoor advertising, transit advertising, the Internet and direct mail marketing. 49 56 Competition within the broadcasting industry occurs primarily in individual market areas, so that a station in one market does not generally compete with stations in other market areas. In each of our markets, our stations face competition from other stations with substantial financial resources, including stations targeting the same demographic groups. In addition to management experience, factors which are material to competitive position include the station's rank in its market, authorized power, assigned frequency, audience characteristics, local program acceptance and the number and characteristics of other stations in the market area. We attempt to improve our competitive position with programming and promotional campaigns aimed at the demographic groups targeted by our stations, and through sales efforts designed to attract advertisers that have done little or no broadcast advertising by emphasizing the effectiveness of radio and television advertising in increasing the advertisers' revenues. Recent changes in the policies and rules of the FCC permit increased joint ownership and joint operation of local stations. Those stations taking advantage of these joint arrangements may in certain circumstances have lower operating costs and may be able to offer advertisers more attractive rates and services. Although we believe that each of our stations can compete effectively in its market, there can be no assurance that any of our stations will be able to maintain or increase its current audience ratings or advertising revenue market share. Although the broadcasting industry is highly competitive, some barriers to entry exist. The operation of a broadcasting station in the United States requires a license from the FCC, and the number of stations that can operate in a given market is limited by the availability of the frequencies that the FCC will license in that market, as well as by the FCC's multiple ownership rules regulating the number of stations that may be owned and controlled by a single entity. The FCC's multiple ownership rules have changed significantly as a result of the Telecommunications Act of 1996. The broadcasting industry historically has grown in terms of total revenues despite the introduction of new technology for the delivery of entertainment and information, such as cable television, audio tapes and compact discs. We believe that radio's portability in particular makes it less vulnerable than other media to competition from new methods of distribution or other technological advances. There can be no assurance, however, that the development or introduction in the future of any new media technology will not have an adverse effect on the radio or television broadcasting industry. EMPLOYEES As of November 30, 1998, Emmis had approximately 1,242 full-time employees and approximately 332 part-time employees. We have approximately 246 employees at various radio and television stations represented by unions. We consider relations with our employees to be excellent. LITIGATION Emmis currently and from time to time is involved in litigation incidental to the conduct of its business. However, we are not a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on us. 50 57 MANAGEMENT The following table sets forth information about our executive officers and directors as of March 1, 1999:
NAME AGE POSITION Jeffrey H. Smulyan................... 51 Chairman, President and Chief Executive Officer Doyle L. Rose........................ 50 Radio Division President and Director Greg Nathanson....................... 51 Television Division President and Director Richard F. Cummings.................. 47 Executive Vice President --Programming Walter Z. Berger..................... Executive Vice President, Treasurer and Chief Financial Officer Norman H. Gurwitz.................... 51 Executive Vice President -- Human Resources and Secretary Gary L. Kaseff....................... 50 General Counsel, Executive Vice President and Director Susan B. Bayh........................ 39 Director Richard A. Leventhal................. 51 Director Frank V. Sica........................ 47 Director Lawrence B. Sorrel................... 40 Director
Jeffrey H. Smulyan founded Emmis in 1981 and is our Chairman of the Board of Directors, President and Chief Executive Officer. Mr. Smulyan began working in radio in 1973, and has owned one or more radio stations since then. Formerly, he was also the owner and chief executive officer of the Seattle Mariners major league baseball team. He is a Director of the Radio Advertising Bureau and The Finish Line, a sports apparel manufacturer, and serves as a Trustee of Ball State University. Mr. Smulyan has been chosen Radio Executive of the Year by a radio industry group and was voted one of the Ten Most Influential Radio Executives in the Past 20 Years in a poll in Radio and Records magazine. Doyle L. Rose has been Radio Division President of Emmis since 1989, and General Manager of KPWR-FM in Los Angeles from 1991 through 1995. Previously, he was our Executive Vice President-Operations. Mr. Rose has been a general manager of one or more radio stations for approximately twenty years. Greg Nathanson joined Emmis in 1998 as Television Division President. Mr. Nathanson has over 30 years of television broadcasting experience, most recently as President of Programming and Development for Twentieth Television from 1996 to 1998, as General Manager of KTLA-TV in Los Angeles, California from 1992 to 1996 and as President of Fox Television Stations from 1990 to 1992. Richard F. Cummings was the Program Director of WENS from 1981 to March 1984, when he became the National Program Director and a Vice President of Emmis. He became our Executive Vice President -- Programming in 1988. 51 58 Walter Z. Berger became Executive Vice President and Chief Financial Officer of Emmis on March 1, 1999. Most recently, Mr. Berger served as Group President of the Energy Marketing Division of LG&E Energy Corporation. Prior to that appointment, he served as Executive Vice President and Chief Financial Officer of LG&E Energy Corporation. From 1992 to 1996, he held several senior financial and operating management positions at Enron Corporation and its affiliates. Mr. Berger also spent seven years in various financial management roles at Baker Hughes Incorporated. Norman H. Gurwitz currently serves as Executive Vice President -- Human Resources, a position he assumed in 1998. Previously he served as Corporate Counsel for Emmis from 1987 to 1998 and as a Vice President from 1988 to 1995. He became Secretary of Emmis in 1989 and became an Executive Vice President in 1995. Prior to 1987, he was a partner in the Indianapolis law firm of Scott & Gurwitz. Gary L. Kaseff is employed as Executive Vice President and General Counsel to Emmis, a post he has held since 1998. Mr. Kaseff also has been a solo practitioner attorney in Southern California since 1992. Previously, he was President of the Seattle Mariners major league baseball team and partner with the law firm of Epport & Kaseff. Susan B. Bayh is the Commissioner of the International Joint Commission of the United States and Canada, and also serves as a Distinguished Visiting Professor at Butler University, positions she has held since 1994. Previously, she was an attorney with Eli Lilly & Company. Richard A. Leventhal has owned and operated a wholesale fabric and textile company in Carmel, Indiana, for 24 years. Mr. Leventhal is the brother-in-law of Norman H. Gurwitz. Frank V. Sica is a Managing Director of Soros Fund Management LLC and head of Soros Fund Management's Private Equity Operations. He is director of CSG Systems International, Inc., a computer software company, and Kohl's Corporation, a retail company. Prior to joining Soros in 1998, Mr. Sica had been a Managing Director at Morgan Stanley Dean Witter & Co. Lawrence B. Sorrel is a general partner of Welsh, Carson, Anderson & Stowe, a private investment firm. Prior to May 1998, he was a Managing Director of Morgan Stanley & Co. Incorporated, where he had been employed since 1986. 52 59 PRINCIPAL SHAREHOLDERS The following table sets forth certain information known to Emmis with respect to beneficial ownership of our common stock as of March 1, 1999 by (i) each person known to us to be the beneficial owner of more than five percent of each class of our issued and outstanding common stock, (ii) each director and executive officer and (iii) all officers and directors as a group.
CLASS A CLASS B COMMON STOCK COMMON STOCK --------------------- -------------------- AMOUNT AND AMOUNT AND PERCENT FIVE PERCENT SHAREHOLDERS, NATURE OF PERCENT NATURE OF PERCENT OF TOTAL DIRECTORS AND BENEFICIAL OF BENEFICIAL OF VOTING EXECUTIVE OFFICERS OWNERSHIP CLASS OWNERSHIP CLASS POWER(1) Jeffrey H. Smulyan.............................. 239,595(2) 1.7% 2,935,610(15) 100.0% 67.9% Susan B. Bayh................................... 10,100(3) * -- -- * Richard F. Cummings............................. 37,957(4) * -- -- * Norman H. Gurwitz............................... 83,906(5) * -- -- * Gary L. Kaseff.................................. 24,424(6) * -- -- * Richard A. Leventhal............................ 30,600(7) * -- -- * Doyle L. Rose................................... 32,935(8) * -- -- * Walter Z. Berger................................ -- * -- -- * Greg Nathanson.................................. 122,000(9) * -- -- * Lawrence B. Sorrel.............................. 4,000 * -- -- * Frank V. Sica................................... -- -- -- -- -- Mellon Bank Corporation......................... 1,415,741(10) 10.0 -- -- 3.5 Westport Asset Management, Inc.................. 507,200(11) 3.6 -- -- 1.3 Denver Investment Advisors LLC.................. 504,500(12) 3.5 -- -- 1.3 Safeco Corp..................................... 1,740,600(13) 12.2 -- -- 4.3 All executive officers and directors as a group (11 persons).................................. 629,637(14) 4.4 2,935,610 100.0 68.8
- ------------------------------ * Less than 1% (1) The Class A Common Stock generally entitles holders to one vote per share, and the Class B Common Stock generally entitles the holder to ten votes per share. (2) Includes 159,595 shares held by Mr. Smulyan as trustee for the Emmis Communications Corporation Profit Sharing Trust (the "Profit Sharing Trust"), as to which Mr. Smulyan disclaims beneficial ownership. (3) Consists of 100 shares owned individually and 10,000 shares represented by stock options exercisable within 60 days of March 1, 1999. (4) Consists of 24,316 shares owned individually, 2,468 shares held for the benefit of Mr. Cummings' children, 1,573 shares held in the Profit Sharing Trust and 9,600 shares represented by stock options exercisable within 60 days of March 1, 1999. (5) Consists of 11,865 shares owned individually or jointly with his spouse, 275 owned by Mr. Gurwitz's spouse, 979 shares held in the Profit Sharing Trust, 10,100 shares owned by a corporation of which Mr. Gurwitz's spouse is a 50% owner 2,308 shares owned for the benefit of Mr. Gurwitz's children and 58,379 shares represented by stock options exercisable within 60 days of March 1, 1999. (6) Consists of 3,059 shares owned individually by Mr. Kaseff, 1,154 shares owned by Mr. Kaseff's spouse, 211 shares held in the Profit Sharing Trust and 20,000 shares represented by stock options exercisable within 60 days of March 1, 1999. 53 60 (7) Consists of 4,000 shares owned individually, 1,500 shares owned by Mr. Leventhal's spouse, 10,100 shares owned by a corporation of which Mr. Leventhal is a 50% owner and 15,000 shares represented by stock options exercisable within 60 days of March 1, 1999. (8) Consists of 21,762 shares owned individually, 1,573 shares held in the Profit Sharing Trust and 9,600 shares represented by stock options exercisable within 60 days of March 1, 1999. (9) Consists of 100,000 shares owned individually or jointly with his spouse and 22,000 shares owned by a trust for the benefit of Mr. Nathanson's children. (10) Information concerning these shares was obtained from an Amendment to Schedule 13G filed in November 1998 by Mellon Bank Corporation on behalf of itself, Boston Group Holdings, Inc. and The Boston Company, Inc., each of which has a mailing address c/o Mellon Bank Corporation, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258. (11) Information concerning these shares was obtained from a Schedule 13G filed in February 1998 by Westport Asset Management, Inc., which has an address of 235 Riverside Avenue, Westport, Connecticut 06880. (12) Information concerning these shares was obtained from a Schedule 13G filed in February 1998 by Denver Investment Advisors LLC, which has an address of 1225 17th Street, 26th Floor, Denver, Colorado 80202. (13) Information concerning these shares was obtained from a Schedule 13G filed in June 1998 by Safeco Corporation on behalf of itself, Safeco Common Stock Trust and Safeco Asset Management Company. Each such entity has an address of Safeco Plaza, Seattle, Washington 98101. (14) Includes 183,412 shares represented by stock options exercisable within 60 days of March 1, 1999 and 159,595 shares held in the Profit Sharing Trust. (15) Consists of 2,589,610 shares owned individually and 346,000 shares represented by stock options exercisable within 60 days of March 1, 1999. 54 61 DESCRIPTION OF NOTES You can find the definitions of certain terms used in this description under the subheading "Certain Definitions." Certain other capitalized terms are defined in the indenture governing the notes (the "Indenture"). In this description, the word "Emmis" refers only to Emmis Communications Corporation and not to any of its subsidiaries. The registered notes have the same form and terms as the outstanding notes, which they replace, with two exceptions. First, because the issuance of the registered notes has been registered under the Securities Act, the registered notes will not bear legends restricting their transfer. Second, the holders of registered notes will not be entitled to rights under the registration rights agreement, since the primary provision of that agreement will terminate when the exchange offer is consummated. A copy of the Indenture, dated February 12, 1999, among Emmis, the subsidiary guarantors and IBJ Whitehall Bank and Trust Company, as trustee, has been filed as an exhibit to the exchange offer registration statement of which this prospectus forms a part. The terms of the notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939. The following description is a summary of the material provisions of the Indenture. It does not restate the Indenture in its entirety. We urge you to read the Indenture because it, and not this description, defines your rights as holders of these notes. BRIEF DESCRIPTION OF THE NOTES AND THE GUARANTEES THE NOTES These notes: - are general unsecured obligations of Emmis; - are subordinated in right of payment to all existing and future Senior Debt of Emmis, including borrowings under the Credit Agreement; - are pari passu in right of payment to any additional senior subordinated debt incurred by Emmis in the future; - are senior in right of payment to any future subordinated Indebtedness of Emmis that expressly provides by its terms that it is subordinated to the notes; - are effectively junior to (i) all liabilities of Emmis' Subsidiaries that are Unrestricted Subsidiaries (and thus not subsidiary guarantors), (ii) all liabilities of any subsidiary guarantor if such subsidiary guarantor's guarantee is subordinated or avoided by a court of competent jurisdiction (see "Risk Factors -- Fraudulent Conveyance Matters") and (iii) all secured obligations, to the extent of the collateral securing such obligations, including any borrowings under any future secured credit facilities of Emmis; and - are unconditionally guaranteed by the Guarantors. 55 62 THE GUARANTEES These notes are unconditionally guaranteed, jointly and severally, by the following Subsidiaries of Emmis, which include all of Emmis' direct and indirect Domestic Restricted Subsidiaries (the "Subsidiary Guarantors"): Emmis FM Broadcasting Corporation of Indianapolis Emmis FM Broadcasting Corporation of St. Louis KPWR, Inc. Emmis Broadcasting Corporation of New York Emmis FM Broadcasting Corporation of Chicago Emmis FM License Corporation of Indianapolis Emmis FM License Corporation of St. Louis KPWR License, Inc. Emmis License Corporation of New York Emmis FM License Corporation of Chicago Emmis Meadowlands Corporation Emmis Publishing Corporation Emmis AM Radio Corporation of Indianapolis Emmis FM Radio Corporation of Indianapolis Emmis AM Radio License Corporation of Indianapolis Emmis FM Radio License Corporation of Indianapolis Emmis Radio License Corporation of New York Emmis 104.1 FM Radio Corporation of St. Louis Emmis 104.1 FM Radio License Corporation of St. Louis Emmis 106.5 FM Broadcasting Corporation of St. Louis Emmis 106.5 FM License Corporation of St. Louis Emmis 1310 AM Radio Corporation of Indianapolis Emmis 1310 AM Radio License Corporation of Indianapolis Emmis 105.7 FM Radio Corporation of Indianapolis Mediatex Communications Corporation Mediatex Development Corporation Texas Monthly, Inc. Emmis License Corporation Emmis International Broadcasting Corporation Emmis DAR, Inc. Emmis Publishing, L.P. Emmis International Corporation Emmis 1380 AM Radio Corporation of St. Louis Emmis Television License Corporation of Honolulu Emmis Television License Corporation of Mobile Emmis Television License Corporation of Cape Coral Emmis Television License Corporation of Green Bay Emmis FM Holding Corporation of New York Emmis 101.9 FM Radio Corporation of New York Emmis Radio Corporation of New York 56 63 Emmis 1480 AM Radio License Corporation of Terre Haute Emmis Television License Corporation of Terre Haute Emmis 99.9 FM Radio License Corporation of Terre Haute Emmis 105.7 FM Radio License Corporation of Indianapolis Emmis Television License Corporation of New Orleans Emmis 105.5 FM Radio License Corporation of Terre Haute Emmis Indiana Broadcasting, L.P. Emmis Television Broadcasting, L.P. The Guarantees of these notes: - are general unsecured obligations of each Guarantor; - are subordinated in right of payment to all existing and future Senior Debt of each Guarantor, including Guarantees of each Guarantor of Senior Debt of Emmis; - are pari passu in right of payment to all existing and any future senior subordinated debt of each Guarantor, including Guarantees of any future senior subordinated debt of Emmis; and - are senior in right of payment to any future subordinated Indebtedness of each Guarantor that expressly provides by its terms that it is subordinated to the Guarantee of such Guarantor. Assuming we had completed the offering of these notes and applied the net proceeds as intended, as of November 30, 1998, Emmis and the Subsidiary Guarantors would have had total Senior Debt of approximately $274.9 million, with an additional $475.1 million available under the Credit Agreement. As indicated above and as discussed in detail below under the subheading "Subordination," payments on the Notes and under the Guarantees will be subordinated to the payment of Senior Debt. The Indenture will permit Emmis and the Guarantors to incur additional Senior Debt. As of the date of the Indenture, all of Emmis' Subsidiaries, except for Radio Hungaria Co. Ltd., will be "Restricted Subsidiaries." However, under the circumstances described below under the subheading "Certain Covenants -- Designation of Restricted and Unrestricted Subsidiaries," we will be permitted to designate certain of our Subsidiaries as "Unrestricted Subsidiaries." Unrestricted Subsidiaries will not be subject to many of the restrictive covenants in the Indenture. Unrestricted Subsidiaries will not guarantee these notes. In addition, if Emmis acquires or creates a new Restricted Subsidiary that is not a Domestic Restricted Subsidiary, Emmis will not be required to make such newly acquired or created Restricted Subsidiary a Guarantor. See "Certain Covenants -- Additional Subsidiary Guarantees." In the event of a bankruptcy, liquidation or reorganization of any of these non-guarantor Subsidiaries, these non-guarantor Subsidiaries will pay the holders of their debt and their trade creditors before they will be able to distribute any of their assets to us. The non-guarantor Subsidiaries generated 1.1% of our consolidated revenues in the nine-month period ended November 30, 1998 and held 2.1% of our consolidated assets as of November 30, 1998. 57 64 PRINCIPAL, MATURITY AND INTEREST The Indenture will be limited to a maximum aggregate principal amount of notes equal to $400 million, of which $300 million was issued in the offering of the outstanding notes. The notes are in denominations of $1,000 and integral multiples of $1,000. The notes will mature on March 15, 2009. Interest on these notes will accrue at the rate of 8 1/8% per annum and will be payable semiannually in arrears on March 15 and September 15, commencing on September 15, 1999. Emmis will make each interest payment to the holders of record of these notes on the immediately preceding March 1 and September 1. Interest on these notes will accrue from the date of original issuance or, if interest has already been paid, from the date it was most recently paid. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months. SUBSIDIARY GUARANTEES The Guarantors will jointly and severally guarantee Emmis' obligations under these notes. Each Subsidiary Guarantee will be subordinated to the prior payment in full in cash of all Senior Debt of that Guarantor and Emmis on the same basis and to the same extent as the notes are junior subordinated to the prior payment in full in cash of the Senior Debt of Emmis. The obligations of each Guarantor under its Subsidiary Guarantee will be limited as necessary to prevent that Subsidiary Guarantee from constituting a fraudulent conveyance under applicable law. See "Risk Factors -- Fraudulent Conveyance Matters." A Guarantor may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with or into (whether or not such Guarantor is the surviving entity), another entity unless: (1) immediately after giving effect to that transaction, no Default or Event of Default exists and either (a) such Guarantor is the surviving corporation; or (b) the entity formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia or the jurisdiction in which such Guarantor is organized and under the laws of which it is existing; (2) the entity formed by or surviving any such consolidation or merger (if other than such Guarantor) or the entity to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of such Guarantor under the Guarantees and the Indenture, as applicable, pursuant to agreements reasonably satisfactory to the trustee; (3) immediately after such transaction no Default or Event of Default exists; (4) such Guarantor or the entity formed by or surviving any such consolidation or merger (if other than such Guarantor) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction; and 58 65 (5) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture. The Subsidiary Guarantee of a Guarantor will be released: (1) in connection with any sale or other disposition of all or substantially all of the assets of that Guarantor (including by way of merger or consolidation), if Emmis applies the Net Proceeds of that sale or other disposition, in accordance with the applicable provisions of the Indenture; or (2) in connection with any sale of all of the capital stock of a Guarantor, if Emmis applies the Net Proceeds of that sale in accordance with the applicable provisions of the Indenture; or (3) if Emmis designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary. See "Repurchase at the Option of Holders -- Asset Sales." SUBORDINATION The payment of principal, premium and liquidated damages, if any, and interest on these notes will be subordinated to the prior payment in full in cash of all Senior Debt of Emmis. The holders of Senior Debt will be entitled to receive payment in full in cash of all Obligations due in respect of Senior Debt (including interest after the commencement of any such proceeding described below at the rate specified in the applicable Senior Debt) before the holders of notes will be entitled to receive any payment with respect to the notes (except that holders of notes may receive and retain Permitted Junior Securities and payments made from the trust as described under "-- Legal Defeasance and Covenant Defeasance"), in the event of any distribution to creditors of Emmis: (1) in a liquidation or dissolution of Emmis or any of its Subsidiaries; (2) in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to Emmis, any of its Subsidiaries or any of their respective property; (3) in an assignment for the benefit of creditors of Emmis or any of its Subsidiaries; or (4) in any marshalling of Emmis' or any of its Subsidiaries' assets and liabilities. Emmis also may not make any payment in respect of the notes (except in Permitted Junior Securities or from the trust as described under " -- Legal Defeasance and Covenant Defeasance") if: (1) a payment default with respect to any principal, interest, premium or fees due on Designated Senior Debt occurs and is continuing; or (2) any other default occurs and is continuing on Designated Senior Debt that currently, or with the passage of time or the giving of notice, permits holders of the Designated Senior Debt to accelerate its maturity and the trustee receives a notice of such default (a "Payment Blockage Notice") from Emmis or the holders of any Designated Senior Debt. 59 66 Payments on the notes may and shall be resumed: (1) in the case of a payment default, upon the date on which such default is cured or waived in writing by the representatives of the holders of Designated Senior Debt; and (2) in case of a nonpayment default, upon the earlier of the date on which such nonpayment default is cured or waived in writing by the representatives of the holders of Designated Senior Debt or 179 days after the date on which the applicable Payment Blockage Notice is received by the trustee, unless the maturity of any Designated Senior Debt has been accelerated. No new Payment Blockage Notice may be delivered unless and until 360 days have elapsed since the commencement of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been cured or waived for a period of not less than 120 days. Emmis must promptly notify holders of Senior Debt if payment of the notes is accelerated because of an Event of Default. As a result of the subordination provisions described above, in the event of a bankruptcy, liquidation or reorganization of Emmis, holders of these notes may recover less ratably than creditors of Emmis who are holders of Senior Debt. See "Risk Factors -- Subordination." OPTIONAL REDEMPTION At any time prior to March 15, 2002, Emmis may on any one or more occasions redeem up to 35% of the aggregate principal amount of notes originally issued under the Indenture at a redemption price of 108.125% of the principal amount thereof, plus accrued and unpaid interest and liquidated damages thereon, if any, to the redemption date, with the net cash proceeds of one or more Public Equity Offerings; provided that (1) at least 65% of the aggregate principal amount of notes originally issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding notes held by Emmis and its Subsidiaries); and (2) the redemption must occur within 45 days of the date of the closing of such Public Equity Offering. Except pursuant to the preceding paragraph, the notes will not be redeemable at Emmis' option prior to March 15, 2004. After March 15, 2004, Emmis may redeem all or a part of these notes upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and liquidated damages thereon, if any, 60 67 to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below:
YEAR PERCENTAGE - ---- ---------- 2004............................................ 104.063% 2005............................................ 102.708% 2006............................................ 101.354% 2007 and thereafter............................. 100.000%
REPURCHASE AT THE OPTION OF HOLDERS CHANGE OF CONTROL If a Change of Control occurs, each holder of notes will have the right to require Emmis to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that holder's notes pursuant to the Change of Control Offer. In the Change of Control Offer, Emmis will offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of notes repurchased plus accrued and unpaid interest and liquidated damages thereon, if any, to the date of purchase. Within ten days following any Change of Control, Emmis will mail a notice to each holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase notes on the Change of Control Payment Date specified in such notice, pursuant to the procedures required by the Indenture and described in such notice. Emmis will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control. On the Change of Control Payment Date, Emmis will, to the extent lawful: (1) accept for payment all notes or portions thereof properly tendered pursuant to the Change of Control Offer; (2) deposit with Emmis' paying agent an amount equal to the Change of Control Payment in respect of all notes or portions thereof so tendered; and (3) deliver or cause to be delivered to the trustee the notes so accepted together with an officers' certificate stating the aggregate principal amount of notes or portions thereof being purchased by Emmis. The paying agent will promptly mail to each holder of notes so tendered the Change of Control Payment for such notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new note equal in principal amount to any unpurchased portion of the notes surrendered, if any; provided that each such new note will be in a principal amount of $1,000 or an integral multiple thereof. Prior to complying with any of the provisions of this "Change of Control" covenant, but in any event within 90 days following a Change of Control, Emmis will either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of notes required by this covenant. Emmis will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. 61 68 The provisions described above that require Emmis to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable. Except as described above with respect to a Change of Control, the Indenture does not contain provisions that permit the holders of the notes to require that Emmis repurchase or redeem the notes in the event of a takeover, recapitalization or similar transaction. Emmis' outstanding Senior Debt currently prohibits Emmis from purchasing any notes, and also provides that certain change of control events with respect to Emmis would constitute a default under the agreements governing the Senior Debt. Any future credit agreements or other agreements relating to Senior Debt to which Emmis becomes a party may contain similar restrictions and provisions. In the event a Change of Control occurs at a time when Emmis is prohibited from purchasing notes, Emmis could seek the consent of its senior lenders to the purchase of notes or could attempt to refinance the borrowings that contain such prohibition. If Emmis does not obtain such a consent or repay such borrowings, Emmis will remain prohibited from purchasing notes. In such case, Emmis' failure to purchase tendered notes would constitute an Event of Default under the Indenture which would, in turn, constitute a default under such Senior Debt. In such circumstances, the subordination provisions in the Indenture would likely restrict payments to the holders of notes. Emmis will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in the Indenture applicable to a Change of Control Offer made by Emmis and purchases all notes validly tendered and not withdrawn under such Change of Control Offer. The definition of Change of Control includes a phrase relating to the sale, lease, transfer, conveyance or other disposition of "all or substantially all" of the assets of Emmis and its Subsidiaries taken as a whole. Although there is a limited body of case law interpreting the phrase "substantially all," there is no precise established definition of the phrase under applicable law. Accordingly, the ability of a holder of notes to require Emmis to repurchase such notes as a result of a sale, lease, transfer, conveyance or other disposition of less than all of the assets of Emmis and its Subsidiaries taken as a whole to another person or group may be uncertain. ASSET SALES Emmis will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: (1) Emmis (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; (2) such fair market value is determined by Emmis' Board of Directors and evidenced by a resolution of the board of directors set forth in an officers' certificate delivered to the trustee; and 62 69 (3) at least 80% of the consideration therefor received by Emmis or such Restricted Subsidiary is in the form of cash. For purposes of this provision, each of the following shall be deemed to be cash: (a) any liabilities (as shown on Emmis' or such Restricted Subsidiary's most recent balance sheet), of Emmis or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases Emmis or such Restricted Subsidiary from further liability; and (b) any securities, notes or other obligations received by Emmis or any such Restricted Subsidiary from such transferee that are contemporaneously (subject to ordinary settlement periods) converted by Emmis or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion). Within 360 days after the receipt of any Net Proceeds from an Asset Sale, Emmis may apply such Net Proceeds at its option: (1) to repay Senior Debt; (2) to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, another Permitted Business that is owned by Emmis or a Guarantor; (3) to make a capital expenditure; or (4) to acquire other long-term assets that are used or useful in a Permitted Business that is owned by Emmis or a Guarantor. Pending the final application of any such Net Proceeds, Emmis may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the Indenture. Notwithstanding the two immediately preceding paragraphs, Emmis and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraphs to the extent (i) at least 80% of the consideration for such Asset Sale constitutes Productive Assets, cash, Cash Equivalents and/or Marketable Securities and (ii) such Asset Sale is for fair market value (as determined in good faith by the board of directors and certified to in an officer's certificate); provided that any consideration not constituting Productive Assets received by Emmis or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall be subject to the provisions of the preceding paragraph. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $5.0 million, Emmis will make an Asset Sale Offer to all holders of notes and all holders of other Indebtedness that is pari passu with the notes containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset 63 70 Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and liquidated damages thereon, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, Emmis may use such Excess Proceeds for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the trustee shall select the notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. SELECTION AND NOTICE If less than all of the notes are to be redeemed at any time, the trustee will select notes for redemption as follows: (1) if the notes are listed, in compliance with the requirements of the principal national securities exchange on which the notes are listed; or (2) if the notes are not so listed, on a pro rata basis, by lot or by such method as the trustee shall deem fair and appropriate. No notes of $1,000 or less shall be redeemed in part. Notices of redemption shall be mailed by first class mail at least 30 but not more than 60 days before the redemption date to each holder of notes to be redeemed at its registered address. Notices of redemption may not be conditional. If any note is to be redeemed in part only, the notice of redemption that relates to that note shall state the portion of the principal amount thereof to be redeemed. A new note in principal amount equal to the unredeemed portion of the original note will be issued in the name of the holder thereof upon cancellation of the original note. Notes called for redemption become due on the date fixed for redemption. On and after the redemption date, interest ceases to accrue on notes or portions of them called for redemption. CERTAIN COVENANTS RESTRICTED PAYMENTS Emmis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make any other payment or distribution on account of Emmis' or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving Emmis or any of its Restricted Subsidiaries) or to the direct or indirect holders of Emmis' or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of Emmis or to Emmis or a Restricted Subsidiary of Emmis); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving Emmis) any Equity Interests of Emmis or any direct or indirect parent of Emmis or any Restricted Subsidiary of 64 71 Emmis (other than any such Equity Interests owned by Emmis or any Restricted Subsidiary of Emmis); (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the notes or the Subsidiary Guarantees (other than the notes or the Subsidiary Guarantees), except a payment of interest or principal at the Stated Maturity thereof; or (4) make any Restricted Investment (all such payments and other actions set forth in the foregoing clauses (1) through (4) being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (2) Emmis would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described below under the caption " -- Incurrence of Indebtedness and Issuance of Preferred Stock"; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by Emmis and its Restricted Subsidiaries after the date of the Indenture (excluding Restricted Payments permitted by clauses (2) and (3) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) (i) the aggregate Consolidated EBITDA of Emmis for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of the Indenture to the end of Emmis' most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the event aggregate Consolidated EBITDA for such period is a deficit, then minus such deficit) less (ii) 1.4 times the aggregate Fixed Charges of Emmis for the same period; plus (b) the aggregate net cash proceeds received by Emmis since the date of the Indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of Emmis (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of Emmis that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of Emmis); plus (c) to the extent that any Restricted Investment is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment; plus 65 72 (d) if any Unrestricted Subsidiary (i) is redesignated as a Restricted Subsidiary, the fair market value of such redesignated Subsidiary (as determined in good faith by the board of directors) as of the date of its redesignation or (ii) pays any cash dividends or cash distributions to Emmis or any of its Restricted Subsidiaries, 100% of any such cash dividends or cash distributions made after the date of the Indenture; plus (e) $10.0 million. So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions will not prohibit: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of Emmis or any Guarantor or of any Equity Interests of Emmis or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of Emmis) of, Equity Interests of Emmis (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of Emmis or any Guarantor with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (4) the payment of any dividend by a Restricted Subsidiary of Emmis to the holders of its common Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Emmis or any Restricted Subsidiary of Emmis held by any former member of Emmis' (or any of its Subsidiaries') management pursuant to any management equity subscription agreement or stock option agreement in effect as of the date of the Indenture; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1.0 million in any twelve-month period; and (6) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of Emmis (other than those described in clause (5) above) in an amount not to exceed $25 million in the aggregate. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by Emmis or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the board of directors whose resolution with respect thereto shall be delivered to the trustee. The board of directors' determination must be based upon an 66 73 opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $5.0 million. Not later than the date of making any Restricted Payment, Emmis shall deliver to the trustee an officers' certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Restricted Payments" covenant were computed, together with a copy of any fairness opinion or appraisal required by the Indenture. INCURRENCE OF INDEBTEDNESS AND ISSUANCE OF PREFERRED STOCK Emmis will not, and will not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and Emmis will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that Emmis and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), and may issue Disqualified Stock, if the Leverage Ratio of Emmis for the Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would not have been greater than 7.0 to 1, determined on a pro forma basis (after giving pro forma effect to such incurrence or issuance and to the application of the net proceeds therefrom) and in accordance with the definition of Leverage Ratio. So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this covenant will not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (1) the incurrence by Emmis and any Restricted Subsidiary of Indebtedness under the Credit Agreement; provided that the aggregate principal amount of all Indebtedness of Emmis and the Restricted Subsidiaries outstanding under the Credit Agreement after giving effect to such incurrence does not exceed an amount equal to $750.0 million less the aggregate amount of all Net Proceeds of Asset Sales required to be applied by Emmis or any of its Restricted Subsidiaries since the date of the Indenture to repay Indebtedness under the Credit Facilities pursuant to the covenant described above under the caption "-- Asset Sales;" (2) the incurrence by Emmis and its Restricted Subsidiaries of Existing Indebtedness; (3) the incurrence by Emmis and the Guarantors of Indebtedness represented by the outstanding notes or the registered notes and the Subsidiary Guarantees; (4) the incurrence by Emmis or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of Emmis or such Restricted Subsidiary, in an aggregate principal amount not to exceed $5.0 million at any time outstanding; (5) the incurrence by Emmis or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was 67 74 permitted by the Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (8) or (9) of this paragraph; (6) the incurrence by Emmis or any of its Restricted Subsidiaries of intercompany Indebtedness between or among Emmis and any Guarantor; provided, however, that: (a) if Emmis or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the notes, in the case of Emmis, or the Subsidiary Guarantee of such Guarantor, in the case of a Guarantor; and (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a person other than Emmis or a Guarantor and (ii) any sale or other transfer of any such Indebtedness to a person that is not either Emmis or a Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by Emmis or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); (7) the incurrence by Emmis or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of the Indenture to be outstanding; (8) the guarantee by Emmis or any of the Restricted Subsidiaries of Indebtedness of Emmis or a Restricted Subsidiary of Emmis that is also a Guarantor that was permitted to be incurred by another provision of this covenant; (9) the incurrence by Emmis or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed $25 million; (10) the incurrence by Emmis' Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of Emmis that was not permitted by this clause (10); (11) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms (provided, in each such case, that the amount thereof is included in Fixed Charges of Emmis as accrued), and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock; and (12) the incurrence by Emmis and any Restricted Subsidiary of up to an aggregate principal amount of $250.0 million of Indebtedness under the Credit Facilities for the purpose of acquiring Permitted Businesses. 68 75 For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (12) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, Emmis will be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. NO SENIOR SUBORDINATED DEBT Emmis will not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of Emmis and senior in any respect in right of payment to the notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor's Subsidiary Guarantee. LIENS Emmis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or trade payables on any asset now owned or hereafter acquired, except Permitted Liens. DIVIDEND AND OTHER PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES Emmis will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distributions on its Capital Stock to Emmis or any of Emmis' Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to Emmis or any of Emmis' Restricted Subsidiaries; (2) make loans or advances to Emmis or any of Emmis' Restricted Subsidiaries; or (3) transfer any of its properties or assets to Emmis or any of Emmis' Restricted Subsidiaries. However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of: (1) Existing Indebtedness as in effect on the date of the Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such Existing Indebtedness, as in effect on the date of the Indenture; 69 76 (2) the Indenture and the notes; (3) applicable law; (4) any instrument governing Indebtedness or Capital Stock of a person acquired by Emmis or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person, or the property or assets of the person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred; (5) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices; (6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph; (7) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending its sale or other disposition; (8) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; (9) Liens securing Indebtedness otherwise permitted to be incurred pursuant to the provisions of the covenant described above under the caption "-- Liens" that limit the right of Emmis or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien; (10) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; and (11) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. MERGER, CONSOLIDATION OR SALE OF ASSETS Emmis may not, directly or indirectly: (1) consolidate or merge with or into another person (whether or not Emmis is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another person; unless: (1) either: (a) Emmis is the surviving corporation; or (b) the person formed by or surviving any such consolidation or merger (if other than Emmis) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; 70 77 (2) the person formed by or surviving any such consolidation or merger (if other than Emmis) or the person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of Emmis under the notes and the Indenture pursuant to agreements reasonably satisfactory to the trustee; (3) immediately after such transaction no Default or Event of Default exists; and (4) Emmis or the person formed by or surviving any such consolidation or merger (if other than Emmis): (a) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of Emmis immediately preceding the transaction; and (b) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of the covenant described above under the caption "-- Incurrence of Indebtedness and Issuance of Preferred Stock." In addition, Emmis may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other person. This "Merger, Consolidation, or Sale of Assets" covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among Emmis and any of its Wholly Owned Subsidiaries. TRANSACTIONS WITH AFFILIATES Emmis will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any affiliate, unless: (1) such affiliate transaction is on terms that are no less favorable to Emmis or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by Emmis or such Restricted Subsidiary with an unrelated person; and (2) Emmis delivers to the trustee: (a) with respect to any affiliate transaction or series of related affiliate transactions involving aggregate consideration in excess of $1.0 million, a resolution of the board of directors set forth in an officers' certificate certifying that such affiliate transaction complies with this covenant and that such affiliate transaction has been approved by a majority of the disinterested members of the board of directors; and (b) with respect to any affiliate transaction or series of related affiliate transactions involving aggregate consideration in excess of $5.0 million, an opinion as to the fairness to the holders of the notes of such affiliate transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. 71 78 The following items shall not be deemed to be affiliate transactions and, therefore, will not be subject to the provisions of the prior paragraph: (1) any employment agreement entered into by Emmis or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of Emmis or such Restricted Subsidiary; (2) transactions between or among Emmis and/or its Restricted Subsidiaries; (3) payment of reasonable directors fees to persons who are not otherwise affiliates of Emmis; and (4) Restricted Payments that are permitted by the provisions of the Indenture described above under the caption "-- Restricted Payments." ADDITIONAL SUBSIDIARY GUARANTEES If Emmis or any of its Restricted Subsidiaries acquires or creates another Subsidiary after the date of the Indenture, then, unless such Subsidiary either (1) is designated as an "Unrestricted Subsidiary" in accordance with the covenant described below under the caption "-- Designation of Restricted and Unrestricted Subsidiaries" or (2) is not a Domestic Restricted Subsidiary, that newly acquired or created Restricted Subsidiary must become a Guarantor and execute a supplemental indenture satisfactory to the trustee and deliver an opinion of counsel to the trustee within 10 business days of the date on which it was acquired or created. DESIGNATION OF RESTRICTED AND UNRESTRICTED SUBSIDIARIES The board of directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all outstanding Investments owned by Emmis and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an Investment made as of the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of the covenant described above under the caption "-- Restricted Payments" or Permitted Investments, as applicable. All such outstanding Investments will be valued at their fair market value at the time of such designation. In addition, such designation will only be permitted if such Restricted Payment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The board of directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default. SALE AND LEASEBACK TRANSACTIONS Emmis will not, and will not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that Emmis or any Guarantor may enter into a sale and leaseback transaction if: (1) Emmis or that Guarantor, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Leverage Ratio test in the first paragraph of the covenant described above under the caption "-- Incurrence of Additional Indebtedness and Issuance of Preferred 72 79 Stock" and (b) incurred a Lien to secure such Indebtedness pursuant to the covenant described above under the caption "-- Liens;" (2) the gross cash proceeds of that sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the board of directors and set forth in an officers' certificate delivered to the trustee, of the property that is the subject of such sale and leaseback transaction; and (3) the transfer of assets in that sale and leaseback transaction is permitted by, and Emmis applies the proceeds of such transaction in compliance with, the covenant described above under the caption "-- Asset Sales." LIMITATION ON ISSUANCES AND SALES OF EQUITY INTERESTS IN WHOLLY OWNED SUBSIDIARIES Emmis will not, and will not permit any of its Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of Emmis to any person (other than Emmis or a Wholly Owned Restricted Subsidiary of Emmis), unless: (1) such transfer, conveyance, sale, lease or other disposition is of all the Equity Interests in such Wholly Owned Restricted Subsidiary; and (2) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with the covenant described above under the caption "-- Asset Sales." In addition, Emmis will not permit any Wholly Owned Restricted Subsidiary of Emmis to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors' qualifying shares) to any person other than to Emmis or a Wholly Owned Restricted Subsidiary of Emmis. LIMITATIONS ON ISSUANCES OF GUARANTEES OF INDEBTEDNESS Emmis will not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of Emmis unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge to secure such other Indebtedness, unless such other Indebtedness is Senior Debt, in which case the Guarantee of the notes may be subordinated to the Guarantee of such Senior Debt to the same extent as the notes are subordinated to such Senior Debt. Notwithstanding the preceding paragraph, any Subsidiary Guarantee of the notes will provide by its terms that it will be automatically and unconditionally released and discharged under the circumstances described above under the caption "-- Subsidiary Guarantees." The form of the Subsidiary Guarantee will be attached as an exhibit to the Indenture. 73 80 PAYMENTS FOR CONSENT Emmis will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any holder of notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the notes unless such consideration is offered to be paid and is paid to all holders of the notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. REPORTS Whether or not required by the SEC, so long as any notes are outstanding, Emmis will furnish to the holders of notes, within the time periods specified in the SEC's rules and regulations: (1) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if Emmis were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by Emmis' certified independent accountants; and (2) all current reports that would be required to be filed with the SEC on Form 8-K if Emmis were required to file such reports. If Emmis has designated any of its Subsidiaries as Unrestricted Subsidiaries or if any Restricted Subsidiaries of Emmis are not Guarantors, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in Management's Discussion and Analysis of Financial Condition and Results of Operations, of the financial condition and results of operations of Emmis and its Restricted Subsidiaries separate from the financial condition and results of operations of the non-Guarantor Subsidiaries of Emmis. In addition, whether or not required by the SEC, Emmis will file a copy of all of the information and reports referred to in clauses (1) and (2) above with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. EVENTS OF DEFAULT AND REMEDIES Each of the following is an Event of Default: (1) default for 30 days in the payment when due of interest on, or liquidated damages with respect to, the notes, whether or not prohibited by the subordination provisions of the Indenture; (2) default in payment when due of the principal of or premium, if any, on the notes, whether or not prohibited by the subordination provisions of the Indenture; (3) failure by Emmis or any of its Subsidiaries to comply with the provisions described under the captions "-- Change of Control," "-- Asset Sales," "-- Restricted 74 81 Payments" or "-- Incurrence of Indebtedness and Issuance of Preferred Stock" or "-- Merger, Consolidation or Sale of Assets;" (4) failure by Emmis or any of its Restricted Subsidiaries to comply with any of the other agreements in the Indenture for 60 days after notice to Emmis by the trustee or the holders of at least 25% in aggregate principal amount of the notes then outstanding; (5) default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by Emmis or any of its Restricted Subsidiaries (or the payment of which is guaranteed by Emmis or any of its Restricted Subsidiaries) whether such Indebtedness or guarantee now exists, or is created after the date of the Indenture, if that default: (a) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"); and (b) results in the acceleration of such Indebtedness prior to its express maturity, and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; (6) failure by Emmis or any of its Restricted Subsidiaries to pay final judgments aggregating in excess of $5.0 million, which judgments are not paid, discharged or stayed for a period of 60 days; (7) except as permitted by the Indenture, any Subsidiary Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Subsidiary Guarantee; and (8) certain events of bankruptcy or insolvency with respect to Emmis or its Restricted Subsidiaries. In the case of an Event of Default arising from certain events of bankruptcy or insolvency, with respect to Emmis, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary, all notes then outstanding will become due and payable immediately without further action or notice. If any other Event of Default occurs and is continuing, the trustee or the holders of at least 25% in principal amount of the notes then outstanding may declare all the notes to be due and payable immediately. Holders of the notes may not enforce the Indenture or the notes except as provided in the Indenture. Subject to certain limitations, holders of a majority in principal amount of the notes then outstanding may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. 75 82 The holders of a majority in aggregate principal amount of the notes then outstanding by notice to the trustee may on behalf of the holders of all of the notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the notes. In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of Emmis with the intention of avoiding payment of the premium that Emmis would have had to pay if Emmis then had elected to redeem the notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the notes. If an Event of Default occurs prior to March 15, 2004, by reason of any willful action (or inaction) taken (or not taken) by or on behalf of Emmis with the intention of avoiding the prohibition on redemption of the notes prior to March 15, 2004, then the premium specified in the Indenture shall also become immediately due and payable to the extent permitted by law upon the acceleration of the notes. Emmis is required to deliver to the trustee annually a statement regarding compliance with the Indenture. Upon becoming aware of any Default or Event of Default, Emmis is required to deliver to the trustee a statement specifying such Default or Event of Default. NO PERSONAL LIABILITY OF DIRECTORS, OFFICERS, EMPLOYEES AND STOCKHOLDERS No director, officer, employee, incorporator or stockholder of Emmis or any Guarantor, as such, shall have any liability for any obligations of Emmis or the Guarantors under the notes, the Indenture or the Subsidiary Guarantees or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of notes by accepting a note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the notes. The waiver may not be effective to waive liabilities under the federal securities laws. LEGAL DEFEASANCE AND COVENANT DEFEASANCE Emmis may, at its option and at any time, elect to have all of its obligations discharged with respect to notes then outstanding and all obligations of the Guarantors discharged with respect to their Subsidiary Guarantees ("Legal Defeasance") except for: (1) the rights of holders of notes then outstanding to receive payments in respect of the principal of, premium and liquidated damages, if any, and interest on such notes when such payments are due from the trust referred to below; (2) Emmis' obligations with respect to the notes concerning issuing temporary notes, registration of notes, mutilated, destroyed, lost or stolen notes and the maintenance of an office or agency for payment and money for security payments held in trust; (3) the rights, powers, trusts, duties and immunities of the trustee, and Emmis' obligations in connection therewith; and (4) the Legal Defeasance provisions of the Indenture. In addition, Emmis may, at its option and at any time, elect to have the obligations of Emmis and the Guarantors released with respect to certain covenants that are described in the 76 83 Indenture ("Covenant Defeasance") and thereafter any omission to comply with those covenants shall not constitute a Default or Event of Default with respect to the notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy, receivership, rehabilitation and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the notes. In order to exercise either Legal Defeasance or Covenant Defeasance: (1) Emmis must irrevocably deposit with the trustee, in trust, for the benefit of the holders of the notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest on the notes then outstanding on the stated maturity or on the applicable redemption date, as the case may be, and Emmis must specify whether the notes are being defeased to maturity or to a particular redemption date; (2) in the case of Legal Defeasance, Emmis shall have delivered to the trustee an opinion of counsel reasonably acceptable to the trustee confirming that (a) Emmis has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the date of the Indenture, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such opinion of counsel shall confirm that, the holders of the notes then outstanding will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (3) in the case of Covenant Defeasance, Emmis shall have delivered to the trustee an opinion of counsel reasonably acceptable to the Trustee confirming that the holders of the notes then outstanding will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (4) no Default or Event of Default shall have occurred and be continuing either: (a) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit); or (b) or insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 91st day after the date of deposit; (5) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument (other than the Indenture) to which Emmis or any of its Restricted Subsidiaries is a party or by which Emmis or any of its Restricted Subsidiaries is bound, including without limitation the Credit Facilities; (6) Emmis must have delivered to the trustee an opinion of counsel to the effect that after the 91st day following the deposit, the trust funds will not be subject to the effect of 77 84 any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (7) Emmis must deliver to the trustee an officers' certificate stating that the deposit was not made by Emmis with the intent of preferring the holders of notes over the other creditors of Emmis with the intent of defeating, hindering, delaying or defrauding creditors of Emmis or others; and (8) Emmis must deliver to the trustee an officers' certificate and an opinion of counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. TRANSFER AND EXCHANGE A holder may transfer or exchange notes in accordance with the Indenture. The Registrar and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents and Emmis may require a holder to pay any taxes and fees required by law or permitted by the Indenture. Emmis is not required to transfer or exchange any note selected for redemption. Also, Emmis is not required to transfer or exchange any note for a period of 15 days before a selection of notes to be redeemed. The registered holder of a note will be treated as the owner of it for all purposes. AMENDMENT, SUPPLEMENT AND WAIVER Except as provided in the next and the third succeeding paragraphs, the Indenture or the notes may be amended or supplemented with the consent of the holders of at least a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes), and any existing default or compliance with any provision of the Indenture or the notes may be waived with the consent of the holders of a majority in principal amount of the notes then outstanding (including, without limitation, consents obtained in connection with a purchase of, or tender offer or exchange offer for, notes). Without the consent of each holder affected, an amendment or waiver may not (with respect to any notes held by a non-consenting holder): (1) reduce the principal amount of notes whose holders must consent to an amendment, supplement or waiver; (2) reduce the principal of or change the fixed maturity of any note or alter the provisions with respect to the redemption of the notes (other than provisions relating to the covenants described above under the caption "-- Repurchase at the Option of Holders"); (3) reduce the rate of or change the time for payment of interest on any note; (4) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the notes (except a rescission of acceleration of the notes by the holders of at least a majority in aggregate principal amount of the notes and a waiver of the payment default that resulted from such acceleration); 78 85 (5) make any note payable in money other than that stated in the notes; (6) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of holders of notes to receive payments of principal of or premium, if any, or interest on the notes; (7) waive a redemption payment with respect to any note (other than a payment required by one of the covenants described above under the caption "-- Repurchase at the Option of Holders"); or (8) make any change in the preceding amendment and waiver provisions. In addition, any amendment to, or waiver of, the provisions of the Indenture relating to subordination that adversely affects the rights of the holders of the notes will require the consent of the holders of at least 75% in aggregate principal amount of notes then outstanding. Also, any amendment to such provisions will require the consent of the representatives of the holders of Designated Senior Debt. Notwithstanding the preceding, without the consent of any holder of notes, Emmis and the trustee may amend or supplement the Indenture or the notes: (1) to cure any ambiguity, defect or inconsistency; (2) to provide for uncertificated notes in addition to or in place of certificated notes; (3) to provide for the assumption of Emmis' obligations to holders of notes in the case of a merger or consolidation or sale of all or substantially all of Emmis' assets; (4) to make any change that would provide any additional rights or benefits to the holders of notes or that does not adversely affect the legal rights under the Indenture of any such holder; or (5) to comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act. CONCERNING THE TRUSTEE If the trustee becomes a creditor of Emmis or any Guarantor, the Indenture limits its right to obtain payment of claims in certain cases, or to realize property received in respect of any such claim as security or otherwise. The trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue or resign. The holders of a majority in principal amount of the notes then outstanding will have the right to direct the time, method and place of conducting any proceeding for exercising any, remedy available to the trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of his or her own affairs. Subject to such provisions, the trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of notes, unless such holder shall have offered to the trustee security and indemnity satisfactory to it against any loss, liability or expense. 79 86 METHODS OF RECEIVING PAYMENTS ON THE NOTES If a holder has given wire transfer instructions to Emmis, Emmis will make all principal, premium, liquidated damages and interest payments on those notes in accordance with those instructions. All other payments on these notes will be made at the office or agency of the paying agent and registrar within the City and State of New York unless Emmis elects to make interest payments by check mailed to the holders at their address set forth in the register of holders. PAYING AGENT AND REGISTRAR FOR THE NOTES The trustee will initially act as paying agent and registrar. Emmis may change the paying agent or registrar without prior notice to the holders of the notes, and Emmis or any of its Subsidiaries may act as paying agent or registrar. BOOK-ENTRY; DELIVERY; FORM AND TRANSFER The notes initially will be in the form of one or more registered global notes without interest coupons (collectively, the "Global Notes"). Upon issuance, the Global Notes will be deposited with the trustee, as custodian for the Depository Trust Company ("DTC" or the "Depositary"), in New York and registered in the name of DTC or its nominee for credit to the accounts of DTC's Direct Participants and Indirect Participants (each as defined). Transfer of beneficial interests in Global Notes will be subject to the applicable rules and procedures of DTC and its Direct Participants or Indirect Participants (including, if applicable, those of Euroclear and CEDEL), which may change from time to time. The Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor DTC or its nominee in certain limited circumstances. Beneficial interests in the Global Notes may be exchanged for notes in certificated form in certain limited circumstances. See "-- Transfer of Interests in Global Notes for Certificated Notes." The notes may be presented for registration of transfer and exchanged at the offices of the registrar. DEPOSITARY PROCEDURES DTC has advised Emmis that DTC is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the "Direct Participants") and to facilitate the clearance and settlement of transactions in those securities between Direct Participants through electronic book-entry changes in accounts of Participants. The Direct Participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations, including Euroclear and CEDEL. Access to DTC's system is also available to other entities that clear through or maintain a direct or indirect, custodial relationship with a Direct Participant (collectively, the "Indirect Participants"). DTC may hold securities beneficially owned by other persons only through the Direct Participants or Indirect Participants and such other person's ownership interest and transfer of ownership interest will be recorded only on the records of the Direct Participant and/or Indirect Participant and not on the records maintained by DTC. 80 87 DTC has also advised Emmis that, pursuant to DTC's procedures, (i) upon deposit of the Global Notes, DTC will credit the accounts of Direct Participants with portions of the principal amount of the Global Notes, and (ii) DTC will maintain records of the ownership interests of such Direct Participants in the Global Notes and the transfer of ownership interests by and between Direct Participants. DTC will not maintain records of the ownership interests of, or the transfer of ownership interests by and between, Indirect Participants or other owners of beneficial interests in the Global Notes. Direct Participants and Indirect Participants must maintain their own records of the ownership interests of, and the transfer of ownership interests by and between, Indirect Participants and other owners of beneficial interests in the Global Notes. Investors in the Global Notes may hold their interests therein directly through DTC if they are Direct Participants in DTC or indirectly through organizations that are Direct Participants in DTC. The laws of some states in the United States require that certain persons take physical delivery in definitive, certificated form, of securities that they own. This may limit or curtail the ability to transfer beneficial interests in a Global Note to such persons. Because DTC can act only on behalf of Direct Participants, which in turn act on behalf of Indirect Participants and others, the ability of a person having a beneficial interest in a Global Note to pledge such interest to persons or entities that are not Direct Participants in DTC, or to otherwise take actions in respect of such interests, may be affected by the lack of physical certificates evidencing such interests. For certain other restrictions on the transferability of the Notes see "-- Transfers of Interests in Global Notes for Certificated Notes." EXCEPT AS DESCRIBED IN "-- TRANSFERS OF INTEREST IN GLOBAL NOTES FOR CERTIFICATED NOTES," OWNERS OF BENEFICIAL 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 THEREOF UNDER THE INDENTURE FOR ANY PURPOSE. Under the terms of the Indenture, Emmis, the Guarantors and the Trustee will treat the persons in whose names the notes are registered (including notes represented by Global Notes) as the owners thereof for the purpose of receiving payments and for any and all other purposes whatsoever. Payments in respect of the principal, premium, liquidated damages, if any, and interest on Global Notes registered in the name of DTC or its nominee will be payable by the trustee to DTC or its nominee as the registered holder under the Indenture. Consequently, none of Emmis, the Guarantors, the trustee or any agent of Emmis, the Guarantors or the trustee has or will have any responsibility or liability for (i) any aspect of DTC's records or any Direct Participant's or Indirect Participant's records relating to or payments made on account of beneficial ownership interests in the Global Note or for maintaining, supervising or reviewing any of DTC's records or any Direct Participant's or Indirect Participant's records relating to the beneficial ownership interests in any Global Note or (ii) any other matter relating to the actions and practices of DTC or any of its Direct Participants or Indirect Participants. DTC has advised Emmis that its current payment practice (for payments of principal, interest and the like) with respect to securities such as the notes is to credit the accounts of the relevant Direct Participants with such payment on the payment date in amounts proportionate to such Direct Participant's respective ownership interests in the Global Notes as shown on DTC's records. Payments by Direct Participants and Indirect Participants to the beneficial owners of the notes will be governed by standing instructions and customary practices between them and will 81 88 not be the responsibility of DTC, the trustee, Emmis or the Guarantors. None of Emmis, the Guarantors or the trustee will be liable for any delay by DTC or its Direct Participants or Indirect Participants in identifying the beneficial owners of the notes, and Emmis and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the notes for all purposes. The Global Notes will trade in DTC's Same-Day Funds Settlement System and, therefore, transfers between Direct Participants in DTC will be effected in accordance with DTC's procedures, and will be settled in immediately available funds. Transfers between Indirect Participants (other than Indirect Participants who hold an interest in the notes through Euroclear or CEDEL) who hold an interest through a Direct Participant will be effected in accordance with the procedures of such Direct Participant but generally will settle in immediately available funds. Transfers between and among Indirect Participants who hold interests in the notes through Euroclear and CEDEL will be effected in the ordinary way in accordance with their respective rules and operating procedures. Subject to compliance with the transfer restrictions applicable to the notes described herein, cross-market transfers between Direct Participants in DTC, on the one hand, and Indirect Participants who hold interests in the notes through Euroclear or CEDEL, on the other hand, will be effected by Euroclear's or CEDEL's respective nominee through DTC in accordance with DTC's rules on behalf of Euroclear or CEDEL; however, delivery of instructions relating to crossmarket transactions must be made directly to Euroclear or CEDEL, as the case may be, by the counterparty in accordance with the rules and procedures of Euroclear or CEDEL and within their established deadlines (Brussels time for Euroclear and U.K. time for CEDEL). Indirect Participants who hold interest in the notes through Euroclear and CEDEL may not deliver instructions directly to Euroclear's or CEDEL's nominee. Euroclear or CEDEL will, if the transaction meets its settlement requirements, deliver instructions to its respective nominee to deliver or receive interests on Euroclear's or CEDEL's behalf in the relevant Global Note in DTC, and make or receive payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Because of time zone differences, the securities of accounts of an Indirect Participant who holds an interest in the notes through Euroclear or CEDEL purchasing an interest in a Global Note from a Direct Participant in DTC will be credited, and any such crediting will be reported, to Euroclear or CEDEL during the European business day immediately following the settlement date of DTC in New York. DTC has advised Emmis that it will take any action permitted to be taken by a holder of notes only at the direction of one or more Direct Participants to whose account interest in the Global Notes is credited and only in respect of such portion of the aggregate principal amount of the notes to which such Direct Participant or Direct Participants has or have given direction. However, if there is an Event of Default under the notes, DTC reserves the right to exchange Global Notes (without the direction of one or more of its Direct Participants) for notes in certificated form, and to distribute such certificated forms of notes to its Direct Participants. See "-- Transfers of Interest in Global Notes for Certificated Notes." Although DTC, Euroclear and CEDEL have agreed to the foregoing procedures to facilitate transfers of interest in the Global Notes among Direct Participants, including Euroclear and 82 89 CEDEL, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. None of Emmis, the Guarantors or the trustee shall have any responsibility for the performance by DTC, Euroclear or CEDEL or their respective Direct Participants and Indirect Participants of their respective obligations under the rules and procedures governing any of their operations. The information in this section concerning DTC, Euroclear and CEDEL and their book-entry systems has been obtained from sources that Emmis believes to be reliable, but Emmis takes no responsibility for the accuracy thereof. TRANSFERS OF INTERESTS IN GLOBAL NOTES FOR CERTIFICATED NOTES An entire Global Note may be exchanged for definitive notes in registered, certificated form with interest coupons ("Certificated Notes") if (i) DTC (x) notifies Emmis that it is unwilling or unable to continue as depositary for the Global Notes and Emmis thereupon fails to appoint a successor depositary within 90 days or (y) has ceased to be a clearing agency registered under the Exchange Act, (ii) Emmis, at its option, notifies that Trustee in writing that it elects to cause the issuance of Certificated Notes or (iii) there shall have occurred and be continuing a Default or an Event of Default with respect to the notes. In any such case, Emmis will notify the trustee in writing that, upon surrender by the Direct Participants and Indirect Participants of their interest in such Global Note, Certificated Notes will be issued to each person that such Direct Participants and Indirect Participants and the DTC identify as being the beneficial owner of the related notes. Beneficial interests in Global Notes held by any Direct Participant or Indirect Participant may be exchanged for Certificated Notes upon request to DTC, by such Direct Participant (for itself or on behalf of an Indirect Participant) or to the trustee in accordance with customary DTC procedures. Certificated Notes delivered in exchange for any beneficial interests in any Global Note will be registered in the names, and issued in any approved denominations, requested by DTC on behalf of such Direct Participants or Indirect Participants (in accordance with DTC's customary procedures). None of Emmis, the Guarantors or the trustee will be liable for any delay by the holder of any Global Note or DTC in identifying the beneficial owners of notes, and Emmis and the trustee may conclusively rely on, and will be protected in relying on, instructions from the holder of the Global Note or DTC for all purposes. SAME DAY SETTLEMENT AND PAYMENT The Indenture requires that payments in respect of the notes represented by the Global Notes (including principal, premium, if any, interest and liquidated damages, if any) be made by wire transfer of immediately available same day funds to the accounts specified by the holder of interests in such Global Note. With respect to Certificated Notes, Emmis will make all payments of principal, premium, if any, interest and liquidated damages, if any by wire transfer of immediately available same day funds to the accounts specified by the holders thereof or, if no such account is specified, by mailing a check to each such holder's registered address. Emmis expects the secondary trading in the Certificated Notes will also be settled in immediately available funds. 83 90 CERTAIN DEFINITIONS Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided. "Acquired Debt" means, with respect to any specified person: (1) Indebtedness of any other person existing at the time such other person is merged with or into or became a Subsidiary of such specified person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other person merging with or into, or becoming a Subsidiary of, such specified person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified person. "Asset Sale" means: (1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of business consistent with past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of Emmis and its Restricted Subsidiaries taken as a whole will be governed by the provisions of the Indenture described above under the caption "-- Change of Control" and/or the provisions described above under the caption "-- Merger, Consolidation or Sale of Assets" and not by the provisions of the Asset Sale covenant; and (2) the issuance of Equity Interests by any of Emmis' Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries, Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales: (1) any single transaction or series of related transactions that: (a) involves assets having a fair market value of less than $1.0 million; or (b) results in net proceeds to Emmis and its Restricted Subsidiaries of less than $1.0 million; (2) a transfer of assets between or among Emmis and any of its Guarantors; (3) an issuance of Equity Interests by a Guarantor to Emmis or to a Guarantor; (4) a transfer by Emmis of assets in a transaction that qualifies as a charitable contribution or donation and which does not exceed $2.0 million in the aggregate; and (5) a Restricted Payment that is permitted by the covenant described above under the caption "-- Restricted Payments." "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with generally accepted accounting principles. 84 91 "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with generally accepted accounting principles. "Capital Stock" means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing person. "Cash Equivalents" means: (1) United States dollars; (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition; (3) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in excess of $500 million and a Thompson Bank Watch Rating of "B" or better; (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper having the highest rating obtainable from Moody's Investors Service, Inc. or Standard & Poor's Corporation and in each case maturing within six months after the date of acquisition; and (6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. "Change of Control" means the occurrence of any of the following: (1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of Emmis and its Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than Jeffrey H. Smulyan or a Related Party of Jeffrey H. Smulyan; (2) the adoption of a plan relating to the liquidation or dissolution of Emmis; 85 92 (3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than Jeffrey H. Smulyan and his Related Parties, becomes the beneficial owner, directly or indirectly, of more than 35% of the voting stock of Emmis, measured by voting power rather than number of shares; (4) the first day on which a majority of the members of the board of directors of Emmis are not Continuing Directors; or (5) Emmis consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, Emmis, in any such event pursuant to a transaction in which any of the outstanding voting stock of Emmis is converted into or exchanged for cash, securities or other property, other than any such transaction where the voting stock of Emmis outstanding immediately prior to such transaction is converted into or exchanged for voting stock (other than Disqualified Stock) of the surviving or transferee person constituting a majority of the outstanding shares of such voting stock of such surviving or transferee person immediately after giving effect to such issuance. "Consolidated EBITDA" means, with respect to any person for any period, the Consolidated Net Income of such person for such period plus: (1) an amount equal to any extraordinary loss on an after tax basis plus any loss realized in connection with an Asset Sale or any refinancing of a Credit Facility on an after tax basis, to the extent such losses were deducted in computing such Consolidated Net Income; plus (2) provision for taxes based on income or profits of such person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (3) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus (4) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus 86 93 (5) all one-time cash compensation payments in connection with employment agreements as in effect on the date of the Indenture; minus (6) non-cash items increasing such Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with generally accepted accounting principles. Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of Emmis shall be added to Consolidated Net Income to compute Consolidated EBITDA of Emmis only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to Emmis by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Net Income" means, with respect to any specified person for any period, the aggregate of the Net Income of such person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with generally accepted accounting principles; provided that: (1) the Net Income or loss of any person that is not a Restricted Subsidiary or Unrestricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded; provided, however, that such Net Income shall be included to the extent of the amount of dividends or distributions paid in cash to the specified person or a Restricted Subsidiary thereof; (2) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; (3) the Net Income of any person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded; (4) the Net Income or loss of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the specified person or one of its Subsidiaries; and (5) the cumulative effect of a change in accounting principles shall be excluded. "Consolidated Net Worth" means, with respect to any person as of any date, the sum of: (1) the consolidated equity of the common stockholders of such person and its consolidated Subsidiaries as of such date; plus (2) the respective amounts reported on such person's balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its 87 94 terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such person upon issuance of such preferred stock. "Continuing Directors" means, as of any date of determination, any member of the board of directors of Emmis who: (1) was a member of such board of directors on the date of the Indenture; or (2) was nominated for election or elected to such board of directors with the approval of a majority of the Continuing Directors who were members of such board at the time of such nomination or election. "Credit Agreement" means the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 16, 1998, as amended, among Emmis, the lenders named therein, Toronto Dominion (Texas), Inc., as Administrative Agent, BankBoston, N.A., as Documentation Agent and First Union National Bank, as Syndication Agent, as further amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Credit Facilities" means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) and/or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. "Designated Senior Debt" means (i) any and all Indebtedness (including all principal, premium, interest, fees, expenses and other obligations and liabilities) outstanding under the Credit Agreement and all Hedging Obligations with respect thereto and (ii) any Senior Debt permitted under the Indenture the principal amount of which is $25.0 million or more and that has been designated by Emmis as "Designated Senior Debt"; provided, however, that so long as the Credit Agreement remains in effect, lenders holding a majority of the loan commitments or outstanding loans thereunder shall have consented in writing to such designation by Emmis of additional Indebtedness as Designated Senior Debt. "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require Emmis to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that Emmis may not 88 95 repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the covenant described above under the caption "-- Certain Covenants -- Restricted Payments." "Domestic Restricted Subsidiary" means any Restricted Subsidiary organized under or incorporated in any State of the United States or the District of Columbia and has its principal place of business in the United States. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Existing Indebtedness" means up to $0.5 million in aggregate principal amount of Indebtedness of Emmis and its Restricted Subsidiaries in existence on the date of the Indenture, until such amounts are repaid. "Fixed Charges" means, with respect to any person for any period, the sum, without duplication, of: (1) the consolidated interest expense of such person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations; plus (2) the consolidated interest of such person and its Restricted Subsidiaries that was capitalized during such period; plus (3) any interest expense on Indebtedness of another person that is Guaranteed by such person or one of its Restricted Subsidiaries or secured by a Lien on assets of such person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon and limited to the amount of such Guarantee or the fair market value of the property secured by such Lien, as the case may be. "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness. "Guarantors" means each of: (1) the Subsidiary Guarantors and (2) any other Subsidiary of Emmis that executes a Subsidiary Guarantee in accordance with the provisions of the Indenture; and their respective successors and assigns. 89 96 "Hedging Obligations" means, with respect to any person, the obligations of such person under: (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "Indebtedness" means, without duplication, with respect to any specified person, any indebtedness of such person, whether or not contingent, in respect of: (1) borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); (3) banker's acceptances; (4) representing Capital Lease Obligations; (5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified person prepared in accordance with generally accepted accounting principles. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified person (whether or not such Indebtedness is assumed by the specified person) (limited to the fair market value of the property securing such Lien) and, to the extent not otherwise included, the Guarantee by such person of any indebtedness of any other person. The amount of any Indebtedness outstanding as of any date shall be: (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Investments" means, with respect to any person, all investments by such person in other persons (including affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with generally accepted accounting principles. If Emmis or any Restricted Subsidiary of Emmis sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of Emmis such that, after giving effect to any such sale or disposition, such person is no longer a Restricted Subsidiary of Emmis, Emmis shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market 90 97 value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of the covenant described above under the caption "Certain Covenants -- Restricted Payments." "Leverage Ratio" means, with respect to any specified person on any date of determination (the "Calculation Date"), the ratio, on a pro forma basis, of (1) the sum of the aggregate outstanding amount of Indebtedness and Disqualified Stock of such person and its Restricted Subsidiaries as of the Calculation Date determined on a consolidated basis in accordance with generally accepted accounting principles to (2) the Consolidated EBITDA of such person and its Restricted Subsidiaries attributable to continuing operations and businesses (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Reference Period. For purposes of calculating the Leverage Ratio: (1) acquisitions that have been made by the specified person or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the Reference Period or subsequent to such Reference Period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the Reference Period and Consolidated EBITDA for such Reference Period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income; and (2) transactions giving rise to the need to calculate the Leverage Ratio shall be assumed to have occurred on the first day of the Reference Period. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. "Marketable Securities" means publicly traded debt or equity securities that are listed for trading on a national securities exchange and that were issued by a corporation with debt securities are rated at least "AAA-" from Standard & Poor's Corporation or "Aaa3" from Moody's Investors Service, Inc. "Net Income" means, with respect to any person, the net income (loss) of such person and its Restricted Subsidiaries, determined in accordance with generally accepted accounting principles and before any reduction in respect of preferred stock dividends, excluding, however: (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such person or any of its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by Emmis or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash 91 98 received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof, in each case after taking into account any available tax credits or deductions and any tax sharing arrangements and amounts required to be applied to the repayment of Indebtedness, other than Senior Debt, secured by a Lien on the asset or assets that were the subject of such Asset Sale. "Non-Recourse Debt" means Indebtedness: (1) as to which neither Emmis nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; (2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the notes) of Emmis or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of Emmis or any of its Restricted Subsidiaries. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness, including, without limitation, post-petition interest whether or not allowed as a claim in any bankruptcy, reorganization, insolvency, receivership or similar proceeding with respect to such Indebtedness. "Permitted Business" means any business in which Emmis and its Restricted Subsidiaries are engaged on the date of the Indenture or any business reasonably related, incidental, complementary or ancillary thereto. "Permitted Investments" means: (1) any Investment in Emmis or in a Restricted Subsidiary of Emmis; (2) any Investment in Cash Equivalents; (3) any Investment by Emmis or any Restricted Subsidiary of Emmis in a person, if as a result of such Investment: (a) such person becomes a Restricted Subsidiary of Emmis or (b) such person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, Emmis or a Restricted Subsidiary of Emmis; (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption "-- Repurchase at the Option of Holders -- Asset Sales"; 92 99 (5) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of Emmis; (6) other Investments in any person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (6) since the date of the Indenture, not to exceed $15 million in the aggregate; (7) Investments in Permitted Joint Ventures, provided that, at the time of and immediately after giving pro forma effect to such Investment (and any related transaction or series of transactions), the Leverage Ratio would be less than or equal to the Leverage Ratio immediately prior to such Investment; and (8) any Investment in the form of loans or advances to employees of Emmis not to exceed $3.0 million in aggregate principal amount at any one time outstanding. "Permitted Joint Ventures" means a corporation, partnership or other entity (other than a Subsidiary) engaged in one or more Permitted Businesses in respect of which Emmis or a Restricted Subsidiary (a) beneficially owns at least 20% of the Capital Stock of such entity and (b) either is a party to an agreement empowering one or more parties to such agreement (which may or may not be Emmis or a Subsidiary), or is a member of a group that, pursuant to the constituent documents of the applicable corporation, partnership or other entity, has the power, to direct the policies, management and affairs of such entity. "Permitted Junior Securities" means: (1) Equity Interests in Emmis or any Guarantor; or (2) debt securities of Emmis or any Guarantor that are unsecured and subordinated to all Senior Debt (and any debt securities issued in exchange for Senior Debt), to substantially the same extent as, or to a greater extent than, the notes and the Subsidiary Guarantees are subordinated to Senior Debt pursuant to the Indenture. Without limiting the foregoing, such Permitted Junior Securities shall have no required principal payments or equity redemption requirements until after the final maturity of the Senior Debt. "Permitted Liens" means: (1) Liens on the assets of Emmis and any Guarantor securing Senior Debt and Indebtedness and other Obligations under Credit Facilities to the extent such Indebtedness was permitted by the terms of the Indenture to be incurred; (2) Liens in favor of Emmis or the Guarantors; (3) Liens on property of a person existing at the time such person is merged with or into or consolidated with Emmis or any Restricted Subsidiary of Emmis; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the person merged into or consolidated with Emmis or the Restricted Subsidiary; (4) Liens on property existing at the time of acquisition thereof by Emmis or any Restricted Subsidiary of Emmis, provided that such Liens were in existence prior to the contemplation of such acquisition; 93 100 (5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant entitled "Incurrence of Indebtedness and Issuance of Preferred Stock" covering only the assets acquired with such Indebtedness; (7) Liens existing on the date of the Indenture; (8) Liens on Assets of Guarantors to secure Senior Debt of such Guarantor to the extent that such Lien was permitted by the Indenture to be incurred; (9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with generally accepted accounting principles shall have been made therefor; and (10) Liens incurred in the ordinary course of business of Emmis or any Restricted Subsidiary of Emmis with respect to obligations that do not exceed $5.0 million at any one time outstanding. "Permitted Refinancing Indebtedness" means any Indebtedness of Emmis or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of Emmis or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that: (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the notes on terms at least as favorable to the holders of notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (4) such Indebtedness is incurred either by Emmis or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. 94 101 "Productive Assets" means assets (including Capital Stock) that are used or usable by Emmis and its Restricted Subsidiaries in Permitted Businesses; provided that for any Capital Stock to qualify as Productive Assets, it must, after giving pro forma effect to the transaction in which it was acquired, be Capital Stock of a Restricted Subsidiary. "Public Equity Offering" means any underwritten public offering of common stock of Emmis in which the net proceeds to Emmis are at least $25.0 million. "Reference Period" means, with regard to any person, the four full fiscal quarters (or such lesser period during which such person has been in existence) ended immediately preceding any date upon which any determination or calculation is to be made pursuant to the terms of the Indenture. "Related Party" with respect to Jeffrey H. Smulyan means: (1) any 80% or more owned Subsidiary, or spouse or immediate family member of Jeffrey H. Smulyan; or (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or persons beneficially holding an 80% or more controlling interest of which consist of Jeffrey H. Smulyan and/or such other persons referred to in the immediately preceding clause (1). "Restricted Investment" means an Investment other than a Permitted Investment. "Restricted Subsidiary" of a person means any Subsidiary of the referent person that is not an Unrestricted Subsidiary. "Senior Debt" means: (1) all principal, premium, interest, fees, expenses and other obligations and liabilities of any kind outstanding under the Credit Facilities and any Guarantees thereof, together with available undrawn amounts under letters of credit issued thereunder and any other Indebtedness outstanding under the Credit Facilities (including, without limitation, post-petition interest whether or not allowed as a claim in any bankruptcy, reorganization, insolvency, receivership or similar proceeding with respect to Indebtedness outstanding under the Credit Facilities) and all Hedging Obligations with respect thereto; (2) any other Indebtedness permitted to be incurred by Emmis under the terms of the Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the notes; and (3) all Obligations with respect to the items listed in the preceding clauses (1) and (2). Notwithstanding anything to the contrary in the preceding, Senior Debt will not include: (1) any liability for federal, state, local or other taxes owed or owing by Emmis; (2) any Indebtedness of Emmis to any of its Subsidiaries or other affiliates; (3) any trade payables; or (4) any Indebtedness that is incurred in violation of the Indenture. 95 102 "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Act, as such Regulation is in effect on the date hereof. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary" means, with respect to any person: (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such person or one or more of the other Subsidiaries of that person (or a combination thereof); and (2) any partnership (a) the sole general partner or the managing general partner of which is such person or a Subsidiary of such person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof). "Unrestricted Subsidiary" means Radio Hungaria Co. Ltd. and any other Subsidiary of Emmis that is designated by the board of directors of Emmis as an Unrestricted Subsidiary pursuant to a board resolution, but only to the extent that such Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; (2) is not party to any agreement, contract, arrangement or understanding with Emmis or any Restricted Subsidiary of Emmis unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to Emmis or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not affiliates of Emmis; (3) is a person with respect to which neither Emmis nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such person's financial condition or to cause such person to achieve any specified levels of operating results; (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of Emmis or any of its Restricted Subsidiaries; and (5) has at least one director on its board of directors that is not a director or executive officer of Emmis or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of Emmis or any of its Restricted Subsidiaries. Any designation of a Subsidiary of Emmis as an Unrestricted Subsidiary shall be evidenced to the trustee by filing with the trustee a certified copy of the board resolution giving effect to such designation and an officers' certificate certifying that such designation complied with the preceding conditions and was permitted by the covenant described above under the caption 96 103 "Certain Covenants -- Restricted Payments." If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of the Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of Emmis as of such date and, if such Indebtedness is not permitted to be incurred as of such date under the covenant described under the caption "Incurrence of Indebtedness and Issuance of Preferred Stock," Emmis shall be in default of such covenant. The board of directors of Emmis may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of Emmis of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (1) such Indebtedness is permitted under the covenant described under the caption "Certain Covenants -- Incurrence of Indebtedness and Issuance of Preferred Stock," calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (2) the then outstanding principal amount of such Indebtedness. "Wholly Owned Restricted Subsidiary" of any person means a Restricted Subsidiary of such person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such person and/or by one or more Wholly Owned Restricted Subsidiaries of such person. 97 104 DESCRIPTION OF CERTAIN INDEBTEDNESS The following summary description of certain indebtedness of Emmis does not purport to be complete and is qualified in its entirety by reference to the provisions of the various related agreements, certain of which are on file with the Securities and Exchange Commission and to which reference is hereby made. CREDIT FACILITY Emmis amended and restated its senior credit facility with a syndicate of banks and other financial institutions on July 16, 1998. Prior to the offering of the outstanding notes, the Credit Facility provided availability of $750 million in loans, which could be increased to $1.0 billion with the consent of the lenders. The Credit Facility provided for four lending facilities, as follows: - A $150 million senior secured revolving credit facility with a final maturity date of August 31, 2006; - A $250 million senior secured amortizing term loan with a final maturity date of August 31, 2006; - A $250 million senior secured amortizing term loan with a final maturity date of February 28, 2007; and - A $100 million senior secured acquisition revolving credit/term loan facility with a final maturity date of August 31, 2006 which will terminate if not utilized prior to July 1999. The Credit Facility provides for letters of credit to be made available to Emmis not to exceed $50 million. The aggregate amount of outstanding letters of credit and amounts borrowed under the revolving credit facility cannot exceed the revolving credit facility commitment. All outstanding amounts under the Credit Facility bear interest, at the option of Emmis, at a rate equal to the Eurodollar Rate or an alternative base rate (as such terms are defined in the Credit Facility) plus a margin. The margin over the Eurodollar Rate or the alternative base rate varies from time to time, depending on our ratio of debt to earnings before interest, taxes, depreciation and amortization (EBITDA), as defined in the Credit Facility. Interest is due on a calendar quarter basis under the alternative base rate and at least every three months under the Eurodollar Rate. The Credit Facility requires Emmis to maintain interest rate protection agreements through July 2001. The notional amount required varies based upon our ratio of adjusted debt to EBITDA, as defined in the Credit Facility. The notional amount of the agreements outstanding as of January 18, 1999 was $274 million. The agreements, which expire at various dates ranging from April 2000 to February 2001, establish ceilings of 6.5% to 8.0% on the London Interbank Offered Rate ("LIBOR") interest rate. The aggregate amount of the revolving credit facility under the Credit Facility reduces quarterly beginning August 31, 2001. Amortization of the outstanding principal amount under the term notes and revolving credit facility/term loan facility is payable in quarterly installments beginning August 31, 2001. 98 105 Commencing with the fiscal year ending February 28, 2002, in addition to the scheduled amortization/reduction under the Credit Facility, within 60 days after the end of each fiscal year, the amount available for borrowing under the Credit Facility is permanently reduced by 50% of our excess cash flow if the ratio of adjusted debt (as defined in the Credit Facility) to EBITDA exceeds 4.5 to 1. Excess cash flow is generally defined as EBITDA reduced by the sum of net cash tax payments, capital expenditures, required debt service, increases in working capital (net of cash or cash equivalents) and $5 million. The net proceeds of any sale of certain assets must also be used to permanently reduce borrowings under the Credit Facility. If the ratio of adjusted debt to EBITDA is less than 5.5 to 1 and certain other conditions are met, Emmis will be permitted in certain circumstances to reborrow the amount of the net proceeds within nine months solely for the purpose of funding an acquisition. The Credit Facility contains various financial and operating covenants and other restrictions with which Emmis must comply, including, among others, restrictions on additional indebtedness, engaging in businesses other than broadcasting and publishing, paying cash dividends, redeeming or repurchasing our capital stock and use of borrowings, as well as requirements to maintain certain financial ratios. The Credit Facility also prohibits Emmis, under certain circumstances, from making acquisitions and disposing of certain assets without the prior consent of the lenders, and provides that an event of default will occur if Jeffrey H. Smulyan ceases to maintain (i) a significant equity investment in Emmis (as specified in the Credit Facility), (ii) the ability to elect a majority of our directors or (iii) control of a majority of shareholder voting power. Substantially all of our assets, including the stock of our subsidiaries, are pledged to secure the Credit Facility. AMENDMENT TO CREDIT FACILITY Concurrently with the offering of the outstanding notes, our lenders amended the Credit Facility as follows: - The $250 million senior secured amortizing term loan with a final maturity date of August 31, 2006 was changed into a revolving credit facility and the prepayment provisions were modified to permit Emmis to reduce the outstanding balance on that facility with a portion of the proceeds of the offering of the outstanding notes and then reborrow these amounts as needed for acquisitions or other business needs; - The limitation on subordinated indebtedness was increased to permit the offering of the outstanding notes; - The restrictions on payment of the SF Note were modified to permit Emmis to retire the SF Note with a portion of the proceeds from the offering of the outstanding notes; and - Various financial covenants and acquisition restrictions were modified. SF NOTE In connection with our acquisition in 1998 of four television stations representing substantially all of the assets of SF Broadcasting of Wisconsin, Inc. and SF Multistations, Inc. and its subsidiaries, Emmis issued the $25 million SF Note for a portion of the purchase price. 99 106 The SF Note was due July 15, 1999 and accrued interest at 8% per annum. The SF Note was secured by a pledge of approximately $27 million of our Class A Common Stock. At the option of Emmis, the SF Note could be paid in cash or an equivalent amount of our Class A Common Stock. We paid this obligation in cash with a portion of the net proceeds from the offering of the outstanding notes. HUNGARIAN RADIO DEBT Our 54% owned Hungarian subsidiary, Radio Hungaria Co. Ltd. (doing business as Slager Radio), has certain obligations which are consolidated in our financial statements due to our majority ownership interest. However, Emmis is not a guarantor of or required to fund these obligations. In particular, Slager Radio must pay, in Hungarian forints, an obligation for a radio broadcast license to the Hungarian government in four equal annual installments commencing November 2000. At November 30, 1998, this obligation (in U.S. dollars) was approximately $13.1 million, which was net of an unamortized discount of approximately $1.4 million. The obligation is subject to a monthly Hungarian cost of living adjustment (which was 14.3% for the year ended December 31, 1998) payable in Hungarian forints concurrently with the principal payments. At the commencement of the obligation, Slager Radio recorded the obligation at its present value giving consideration for the difference between the estimated current annual cost of living adjustment and the estimated average cost of borrowing. The amortization of this discount is reflected in interest expense and will be paid in Hungarian forints concurrently with the principal payments. In addition, Slager Radio is obligated to pay certain notes and bonds to its shareholders. At November 30, 1998, bonds payable to the minority shareholders were (in U.S. dollars) approximately $2.9 million. The bonds are due at maturity in November 2004 and bear interest at the Hungarian State Bill rate plus 3% (20.2% at November 30, 1998). Interest payments on the bonds are semiannual. At November 30, 1998, notes payable to the minority shareholders were (in U.S. dollars) approximately $0.8 million. The notes bear interest at the Citibank prime rate plus 2% (9.75% at November 30, 1998). The notes and accrued interest are due at maturity in September 1999. 100 107 CERTAIN FEDERAL INCOME TAX CONSIDERATIONS The following summary describes certain material United States federal income tax consequences of the purchase, disposition and ownership of the notes as of the date hereof, but is not purported to be a complete analysis of all potential tax effects. Except where noted, it deals only with notes held as capital assets and does not deal with special situations, such as those of dealers in securities or currencies, tax exempt organizations, individual retirement accounts and other tax deferred accounts, financial institutions, life insurance companies, persons holding notes as a part of a hedging or conversion transaction or a straddle, persons subject to the alternative minimum tax or holders of notes whose "functional currency" is not the U.S. dollar. Furthermore, the discussion below is based upon the provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings and judicial decisions thereunder as of the date hereof, and such authorities may be repealed, revoked or modified, either retroactively or prospectively, so as to result in federal income tax consequences different from those discussed below. In addition, except as otherwise indicated, the following does not consider the effect of any applicable foreign, state, local or other tax laws or estate or gift tax considerations. Persons considering the purchase, ownership or disposition of notes should consult their own tax advisors concerning the federal income tax consequences in light of their particular situations, as well as any consequences arising under the laws of any other taxing jurisdiction. EFFECT OF EXCHANGE OF OUTSTANDING NOTES FOR REGISTERED NOTES Emmis believes that the exchange of outstanding notes for registered notes pursuant to the registered exchange offer will not be treated as an "exchange" for federal income tax purposes because the registered notes will not be considered to differ materially in kind or extent from the outstanding notes. Rather, the registered notes received by a holder will be treated as a continuation of the outstanding notes in the hands of such holder. As a result, holders will not recognize any taxable gain or loss or any interest income as a result of exchanging outstanding notes for registered notes pursuant to the exchange offer, the holding period of the registered notes will include the holding period of the outstanding notes, and the basis of the registered notes will equal the basis of the outstanding notes immediately before the exchange. STATED INTEREST ON NOTES Except as set forth below, interest on a note will generally be taxable to a United States Holder as ordinary interest income from domestic sources at the time it is accrued or received (in accordance with the United States Holder's method of accounting for tax purposes). As used herein, a "United States Holder" of a note means a holder that is a citizen or individual resident (as defined in Section 7701(b) of the Code) of the United States; a corporation or partnership (including any entity treated as a corporation or partnership for United States federal income tax purposes) created or organized under the laws of the United States, any state thereof or the District of Columbia unless, in the case of a partnership, otherwise provided by regulation; an estate the income of which is subject to United States federal income taxation regardless of its source; or a trust if (i) a U.S. court is able to exercise primary supervision over the administration of the trust, and (ii) one or more U.S. trustees or fiduciaries have the authority to control all substantial decisions of the trust. A "Non-United States Holder" is a holder that is not a United States Holder. 101 108 Failure of Emmis to consummate this exchange offer or to file or cause to be declared effective the shelf registration statement as described under "The Exchange Offer -- Purpose and Effect of the Exchange Offer" will cause liquidated damages to accrue on the outstanding notes in the manner described therein and in the same manner as additional interest. According to Treasury regulations, the possibility of a change in the interest rate will not affect the amount of interest income recognized by a United States Holder (or the timing of such recognition) if the likelihood of the change, as of the date the notes are issued, is remote. Emmis believes that the likelihood of a change in the interest rate on the notes is remote and does not intend to treat the possibility of a change in the interest rate as affecting the yield to maturity of any note. In the unlikely event that the interest rate on the notes is increased, then such increased interest may be treated as original issue discount, includible by a United States Holder in income as such interest accrues, in advance of receipt of any cash payment thereof. Because the issue price of the notes was equal to their stated principal amount, and because the likelihood of a change in the interest rate is remote, the notes were not issued with original issue discount. MARKET DISCOUNT If a United States Holder purchases a note subsequent to its original issuance for an amount that is less than its stated redemption price at maturity, the amount of the difference will be treated as "market discount" for U.S. federal income tax purposes, unless such difference is less than a specified de minimis amount. Under the market discount rules, a United States Holder will be required to treat any partial principal payment on, or any gain on the sale, exchange, redemption, retirement or other disposition of a note as ordinary income to the extent of the market discount which has not previously been included in income, and such income is treated as having accrued on such note at the time of such payment or disposition. In addition, the United States Holder may be required to defer, until the maturity of the note or its earlier disposition in a taxable transaction, the deduction of all or a portion of the interest expense on any indebtedness incurred or continued to purchase or carry such note. Any market discount will be considered to accrue on a straight-line basis during the period from the date of acquisition to the maturity date of the note, unless the United States Holder elects to accrue on a constant interest method. A United States Holder of a Note may elect to include market discount in income currently as it accrues (on either a straight-line or constant interest method). If the United States Holder of a note makes such an election, the foregoing rules with respect to the recognition of ordinary income on sales and other dispositions of such instruments, and with respect to the deferral of interest deductions on debt incurred or maintained to purchase or carry such debt instruments, would not apply. This election to include market discount in income currently once made applies to all market discount obligations acquired on or after the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service. AMORTIZABLE BOND PREMIUM A United States Holder that purchases a note for an amount in excess of the principal amount will be considered to have purchased the note at a "premium." A United States Holder generally may elect to amortize the premium over the remaining term of the note on a constant yield method (or, if a smaller amortization allowance would result, by computing such allowance 102 109 with reference to the amount payable on an earlier call date and amortizing such allowance over the shorter period to such call date). The amount amortized in any year will be treated as a reduction of the United States Holder's interest income from the note. Bond premium on a note held by a United States Holder that does not make such an election will decrease the gain or increase the loss otherwise recognized on disposition of the note. The election to amortize premium on a constant yield method, once made, applies to all debt obligations held or subsequently acquired by the electing United States Holder on or after the first day of the first taxable year to which the election applies and may not be revoked without the consent of the Internal Revenue Service. SALE, EXCHANGE AND REDEMPTION OF NOTES Upon the sale, exchange, redemption, retirement or other disposition of a note, a United States Holder generally will recognize gain or loss equal to the difference between the amount realized upon the sale, exchange, redemption, retirement or other disposition and such holder's adjusted tax basis in the note. A United States Holder's adjusted tax basis in a note will, in general, be the United States Holder's cost therefor, increased by market discount previously included in income by the United States Holder and reduced by any amortized premium previously deducted from income by the United States Holder. Except as described above with respect to market discount or except to the extent the gain or loss is attributable to accrued but unpaid stated interest, such gain or loss will be capital gain or loss and will be long-term capital gain or loss if, at the time of sale, exchange, redemption, retirement or other disposition, the note has been held for more than one year. United States Holders that are corporations will generally be taxed on net capital gains at a maximum rate of 35%. In contrast, United States Holders that are individuals will generally be taxed on net capital gains at a maximum rate of (i) 39.6% for property held for 12 months or less, and (ii) 20% for property held for more than 12 months. Special rules (and generally lower maximum rates) apply for individuals in lower tax brackets. Any capital losses realized by a United States Holder that is a corporation generally may be used only to offset capital gains. Any capital losses realized by a United States Holder that is an individual generally may be used only to offset capital gains plus $3,000 of other income per year. NON-UNITED STATES HOLDERS Under present United States federal income tax law, and, subject to the discussion below concerning backup withholding, no United States federal withholding tax will be imposed with respect to the payment by Emmis or a paying agent of principal or interest on a note owned by a Non-United States Holder (the "Portfolio Interest Exception"), provided (i) that such Non-United States Holder does not actually or constructively own 10% or more of the total combined voting power of all classes of stock of Emmis entitled to vote within the meaning of Section 871(h)(3) of the Code and the regulations thereunder, (ii) such Non-United States Holder is not a controlled foreign corporation that is related, directly or indirectly, to Emmis through stock ownership, (iii) such Non-United States Holder is not a bank whose receipt of interest on a note is described in Section 881(c)(3)(A) of the Code, and (iv) such Non-United States Holder satisfies the statement requirement (described generally below) set forth in Section 871(h) and Section 881(c) of the Code and the regulations thereunder. 103 110 To satisfy the requirement referred to in clause (iv) above, the beneficial owner of such note, or a financial institution holding the note on behalf of such owner, must provide, in accordance with specified procedures, Emmis or its paying agent with a statement to the effect that the beneficial owner is not a United States Holder. Pursuant to current temporary Treasury regulations, these requirements will be met if (i) the beneficial owner provides his name and address, and certifies, under penalties of perjury, that he is not a United States Holder (which certification may be made on an Internal Revenue Service Form W-8 (or successor form)), or (ii) a financial institution, holding the note in the ordinary course of its trade or business on behalf of the beneficial owner, certifies under penalties of perjury that such statement has been received by it or by a financial institution between it and the beneficial owner and furnishes Emmis or its agent with a copy thereof. Such certification is effective with respect to payments of interest made after the issuance of the certificate in the calendar year of its issuance and the two immediately succeeding calendar years. On October 6, 1997, final regulations were adopted by the issuance of T.D. 8734 (the "1997 Final Regulations") that affect the United States federal income taxation of Non-United States Holders. The 1997 Final Regulations are effective for payments after December 31, 1999, regardless of the issue date of the instrument with respect to which such payments are made, subject to certain transition rules discussed below. The discussion under this heading and under "Information Reporting and Backup Withholding" below is not intended to be a complete discussion of the provisions of the 1997 Final Regulations. Holders of the notes are urged to consult their tax advisors concerning the tax consequences of their investment in light of the 1997 Final Regulations. The 1997 Final Regulations provide documentation procedures designed to simplify compliance by withholding agents. The 1997 Final Regulations generally do not affect the documentation rules described above, but add other certification options. Under one such option, a withholding agent will be allowed to rely on an intermediary withholding certificate furnished by a "qualified intermediary" (as defined below) on behalf of one or more beneficial owners (or other intermediaries) without having to obtain the beneficial owner certificate described above. Qualified intermediaries include persons that are parties to a withholding agreement with the Internal Revenue Service where such persons are: (i) foreign financial institutions or foreign clearing organizations (other than a United States branch or United States office of such institution or organization), (ii) foreign branches or offices of United States financial institutions or foreign branches or offices of United States clearing organizations, (iii) foreign corporations for purposes of presenting claims of benefits under income tax treaties on behalf of their shareholders or (iv) any other persons acceptable to the Internal Revenue Service. In addition to certain other requirements, qualified intermediaries must obtain withholding certificates, such as revised Internal Revenue Service Form W-8 (discussed below), from each beneficial owner. Under another option, an authorized foreign agent of a United States withholding agent will be permitted to act on behalf of the United States withholding agent (including the receipt of withholding certificates, the payment of amounts of income subject to withholding and the deposit of tax withheld), provided that certain conditions are met. For purposes of the certification requirements, the 1997 Final Regulations generally treat as the beneficial owners of payments on a note those persons that, under United States federal 104 111 income tax principles, are the taxpayers with respect to such payments, rather than persons such as nominees or agents legally entitled to such payments. In the case of payments to an entity classified as a foreign partnership under United States tax principles, the partners, rather than the partnership, generally must provide the required certifications to qualify for the withholding tax exemption described above (unless the partnership has entered into a special agreement with the Internal Revenue Service). A payment to a United States partnership, however, is treated for these purposes as payment to a United States payee, even if the partnership has one or more foreign partners. The 1997 Final Regulations provide certain presumptions with respect to withholding for holders not furnishing the required certifications to qualify for the withholding tax exemption described above. In addition, the 1997 Final Regulations will replace a number of current tax certification forms (including Internal Revenue Service Form W-8) with a series of revised Internal Revenue Service Forms W-8 (which, in certain circumstances, require information in addition to that previously required). Under the 1997 Final Regulations, these revised Forms W-8 will remain valid until the last day of the third calendar year following the year in which the certificate is signed. The 1997 Final Regulations provide transition rules concerning existing certificates, such as Internal Revenue Service Form W-8. Valid withholding certificates that are held on December 31, 1999 will generally remain valid until the earlier of December 31, 2000 or the date of their expiration. Existing certificates that expire in 1999 will not be effective after their expiration. Certificates dated prior to January 1, 1998 will generally remain valid until the end of 1998, irrespective of the fact that their validity expires during 1998. If a Non-United States Holder cannot satisfy the requirements of the Portfolio Interest Exception described above in "-- Non-United States Holders -- Interest," payments on a note made to such Non-United States Holder will be subject to a 30% withholding tax unless the beneficial owner of the note provides Emmis or its paying agent with a properly executed (i) Internal Revenue Service Form 1001 (or successor form) claiming an exemption from withholding under the benefit of a tax treaty, or (ii) Internal Revenue Service Form 4224 (or successor form) stating that interest paid on the note is not subject to withholding tax because it is effectively connected with the beneficial owner's conduct of a trade or business in the United States. If a Non-United States Holder is engaged in a trade or business in the United States and interest paid on a note is effectively connected with the conduct of such trade or business, the Non-United States Holder, although exempt from United States federal withholding tax as discussed above, will be subject to United States federal income tax on such payment on a net income basis (that is, after allowance for applicable deductions) at the graduated rates that are applicable to United States Holders in essentially the same manner as if the notes were held by a United States Holder, as discussed above. In addition, if such Non-United States Holder is a corporation, it may be subject to a United States federal branch profits tax (which is generally imposed on a foreign corporation upon the deemed repatriation from the United States of effectively connected earnings and profits) at a 30% rate, unless the rate is reduced or eliminated by an applicable income tax treaty and the Non-United States Holder is a qualified resident of the treaty country. For this purpose, such payment on a note will be included in such foreign corporation's earnings and profits. 105 112 GAIN ON SALE OR OTHER DISPOSITION Subject to special rules applicable to individuals as described below, a Non-United States Holder will generally not be subject to regular United States federal income or withholding tax on gain recognized on a sale or other disposition of the notes, unless the gain is effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder or of a partnership, trust or estate in which such Non-United States Holder is a partner or beneficiary. Gains realized by a Non-United States Holder that are effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder will generally be taxed on a net income basis (that is, after allowance for applicable deductions) at the graduated rates that are applicable to United States Holders, as described above, unless exempt by an applicable income tax treaty. In the case of a Non-United States Holder that is a corporation, such income may also be subject to the United States federal branch profits tax (which is generally imposed on a foreign corporation upon the deemed repatriation from the United States of effectively connected earnings and profits) at a 30% rate, unless the rate is reduced or eliminated by an applicable income tax treaty and the Non-United States Holder is a qualified resident of the treaty country. In addition to being subject to the rules described above, an individual Non-United States Holder who holds the notes as a capital asset will generally be subject to tax at a 30% rate on any gain recognized on the sale or other disposition of such notes if (i) such gain is not effectively connected with the conduct of a trade or business within the United States of the Non-United States Holder, and (ii) such individual is present in the United States for 183 days or more in the taxable year of the sale or other disposition and either (A) has a "tax home" in the United States (as specially defined for purposes of the United States federal income tax), or (B) maintains an office or other fixed place of business in the United States and the gain from the sale or other disposition of the Notes is attributable to such office or other fixed place of business. Individual Non-United States Holders may also be subject to tax pursuant to provisions of United States federal income tax law applicable to certain United States expatriates (including certain former long-term residents of the United States). Under the 1997 Final Regulations, withholding of United States federal income tax may apply to payments on a taxable sale or other disposition of the notes by a Non-United States Holder who does not provide appropriate certification to the withholding agent with respect to such transaction. INFORMATION REPORTING AND BACKUP WITHHOLDING In general, information reporting requirements will apply to payments on a note and to the proceeds of the sale or other disposition of a note before maturity if the sale is to United States Holders other than certain exempt recipients (such as corporations). In addition, a 31% backup withholding tax applies if a non-corporate person (i) fails to furnish such person's Taxpayer Identification Number (which, for an individual, is his or her Social Security Number) to the payor in the manner required, (ii) furnishes an incorrect Taxpayer Identification Number and the payor is so notified by the Internal Revenue Service, (iii) is notified by the Internal Revenue Service that such person has failed properly to report payments of interest and dividends, or 106 113 (iv) in certain circumstances, fails to certify, under penalties of perjury, that such person has not been notified by the Internal Revenue Service that such person is subject to backup withholding for failure properly to report interest and dividend payments. Backup withholding does not apply to payments made to certain exempt recipients, such as corporations and tax-exempt organizations. No information reporting or backup withholding will be required with respect to payments made by Emmis or its paying agent to Non-United States Holders if either (i) a statement described in clause (iv) under "--Non-United States Holders -- Interest" has been received and the payor does not have actual knowledge that the beneficial owner is a United States person, or (ii) an exemption has otherwise been established. In addition, backup withholding and information reporting will not apply if interest payments on a note are collected by a foreign office of a custodian, nominee or other foreign agent on behalf of the beneficial owner of such note, or if a foreign office of a broker (as defined in applicable Treasury regulations) pays the proceeds of the sale or other disposition of a note to the owner thereof. If, however, such nominee, custodian, agent or broker is, for United States federal income tax purposes, a United States person, a controlled foreign corporation or a foreign person 50% or more of whose gross income is effectively connected with the conduct of a trade or business in the United States for a specified three year period, such payments will be subject to information reporting (but not backup withholding), unless (i) such custodian, nominee, agent or broker has documentary evidence in its records that the beneficial owner is not a United States person and certain other conditions are met, or (ii) the beneficial owner otherwise establishes an exemption. The 1997 Final Regulations modify certain of the certification requirements for backup withholding and expand the group of U.S. Related Persons. It is possible that Emmis or its paying agent may request new withholding exemption forms from holders of notes in order to qualify for continued exemption from backup withholding when the 1997 Final Regulations become effective. Payments on a note paid to the beneficial owner of a note by a United States office of a custodian, nominee or agent, or the payment by the United States office of a broker of the proceeds of sale of a note, will be subject to both backup withholding and information reporting unless (a) the beneficial owner provides the statement described in clause (iv) under "--Non-United States Holders -- Interest" and the payor does not have actual knowledge that the beneficial owner is a United States person, or (b) the beneficial owner otherwise establishes an exemption. Backup withholding is not an additional tax. Any amount withheld under the backup withholding rules will be allowed as a refund or a credit against such holder's United States federal income tax liability provided the required information is furnished to the Internal Revenue Service. 107 114 THE EXCHANGE OFFER PURPOSE AND EFFECT OF THE EXCHANGE OFFER Emmis originally sold the outstanding notes to Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston Robertson Stephens Inc., First Union Capital Markets Corp., Goldman. Sachs & Co. and TD Securities (USA) Inc. These initial purchasers subsequently placed the outstanding notes with: - qualified institutional buyers in reliance on Rule 144A under the Securities Act; and - qualified buyers outside the United States in reliance on Regulation S under the Securities Act. Emmis entered into a registration rights agreement with the initial purchasers, as a condition to their purchase of the outstanding notes, pursuant to which Emmis has agreed, for the benefit of the outstanding note holders, at its own expense, to file a registration statement for this exchange offer, of which this prospectus is a part, with the SEC on or before a date 30 days after the date of the registration rights agreement. When the exchange offer registration statement is declared effective, Emmis will offer the registered notes in exchange for tender of the outstanding notes. For each outstanding note tendered to Emmis pursuant to the exchange offer, the holder of such outstanding note will receive a registered note having an original principal amount at maturity equal to that of the tendered outstanding note. Based upon interpretations by the SEC staff set forth in certain no-action letters to third parties (including Exxon Capital Holdings Corp., SEC No-Action Letter (April 13, 1989); Morgan Stanley & Co. Inc., SEC No-Action Letter (June 5, 1991); and Shearman & Sterling, SEC No-Action Letter (July 2, 1993)), Emmis believes that the registered notes issued pursuant to this exchange offer in exchange for the outstanding notes, in general, will be freely tradeable after the exchange offer, without compliance with the registration and prospectus delivery requirements of the Securities Act. However, any purchaser of outstanding notes who is a Emmis "affiliate," within the meaning of Rule 405 under the Securities Act, who does not acquire the registered notes in the ordinary course of business, or who tenders in the exchange offer for the purpose of participating in a distribution of the registered notes, could not rely on the SEC staff position enunciated in such no-action letters and, in the absence of an applicable exemption, must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. A holder's failure to comply with those requirements in such an instance may result in that holder incurring liability under the Securities Act which we will not indemnify. As the above-mentioned no-action letters and the registration rights agreement contemplate, each holder accepting the exchange offer is required to represent to us, in a letter of transmittal, that: - the holder or the person receiving the registered notes, whether or not such person is the holder, will acquire those registered notes in the ordinary course of business; - the holder or any other acquiror is not engaging in a distribution of the registered notes; 108 115 - the holder or any other acquiror has no arrangement or understanding with any person to participate in a distribution of the registered notes; - neither the holder nor any other acquiror is an Emmis affiliate within the meaning of Rule 405 under the Securities Act; and - the holder or any other acquiror acknowledges that if that holder or other acquiror participates in the exchange offer for the purpose of distributing the registered notes, it must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any such resale and cannot rely on the above-mentioned no-action letters. As indicated above, each broker-dealer that receives for its own account a registered note in exchange for outstanding notes must acknowledge that it: - acquired the outstanding notes for its own account as a result of market-making activities or other trading activities; - has not entered into any arrangement or understanding with Emmis or any Emmis "affiliate" to distribute the registered notes; and - will deliver a prospectus meeting the requirements of the Securities Act in connection with any resale of the registered notes. For a description of the procedures for resales by participating broker-dealers, see "Plan of Distribution." In the event that changes in the law or the applicable interpretations of the SEC staff do not permit Emmis to effect this exchange offer, or if for any other reason the exchange offer is commenced and not consummated within 30 days after the exchange offer registration statement is declared effective, or in certain other events involving holders of the notes who are not permitted to participate in the exchange offer, Emmis will: - file a shelf registration statement covering resales of the outstanding notes; - use reasonable best efforts to cause the shelf registration statement to be declared effective under the Securities Act; and - use reasonable best efforts to keep effective the shelf registration statement until the earlier of two years after the outstanding notes' original issuance date, subject to extension under certain circumstances, or such time as all of the applicable outstanding notes have been sold. Emmis will, if and when it files the shelf registration statement, provide to each applicable holder of the outstanding notes copies of the prospectus which is a part of the shelf registration statement. A holder that sells the outstanding notes pursuant to the shelf registration statement generally: - must be named as a selling security holder in the related prospectus; - must deliver a prospectus to purchasers; 109 116 - will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales; and - will be bound by the provisions of the registration rights agreement which are applicable to that holder, including certain indemnification obligations. In addition, each of the outstanding note holders must deliver information to Emmis, to be used in connection with the shelf registration statement, in order to have his or her outstanding notes included in the shelf registration statement and to benefit from the provisions set forth in the foregoing paragraph. The registration rights agreement covering the outstanding notes provides that Emmis will file an exchange offer registration statement with the SEC on or before a date 30 days after the date of the registration rights agreement. In the event that: - by the 90(th) day after February 12, 1999 the exchange offer registration statement is not declared effective; or - by the 30th day after the exchange offer registration statement is declared effective the exchange offer is not consummated; or - if Emmis is obligated to file a shelf registration statement either Emmis does not file the shelf registration within 30 days after notice or the shelf registration statement is not declared effective within 60 days after filing; or - after either the exchange offer registration statement or shelf registration statement is declared effective, such registration statement thereafter ceases to be effective or usable, subject to certain exceptions, in connection with resales of the outstanding notes or registered notes in accordance with and during the periods specified in the registration rights agreement, then Emmis will be required to pay to the holders of the notes liquidated damages in amounts equal to $0.05 per week per $1,000 in principal amount of notes held by such holders for each week or part of a week that the registration default continues during the first 90-day period after the registration default occurs. The amount of liquidated damages will increase by an additional $0.05 per week per $1,000 in principal amount of notes at the beginning of and for each subsequent 90-day period until the registration defaults are cured, up to a maximum amount of liquidated damages of $0.50 per week per $1,000 in principal amount of the notes. Emmis will not be required to pay liquidated damages for more than one registration default at any given time. Liquidated damages will cease to accrue following the cure of all registration defaults. The sole remedy available to the outstanding note holders will be the collection of these liquidated damages. All liquidated damages payable because a registration default occurred will be payable to the outstanding notes holders in cash on each March 15 and September 15, commencing with the first such date occurring after any such liquidated damages begin to accrue, until the registration default is cured. Outstanding note holders must: - make certain representations to us in order to participate in the exchange offer; 110 117 - deliver information to be used in connection with the shelf registration statement, if required; and - provide comments on the shelf registration statement within the time periods set forth in the registration rights agreement, in order to have their outstanding notes included in the shelf registration statement and to benefit from the provisions regarding liquidated damages payable because a registration default occurred, as set forth above. The preceding summary of the material provisions of the registration rights agreement does not purport to be complete and is subject to, and is qualified in its entirety by, all the provisions of the registration rights agreement, a copy of which is filed as an exhibit to the exchange offer registration statement of which this prospectus is a part. TERMS OF THE EXCHANGE OFFER Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal for the exchange offer, we will accept any and all outstanding notes validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on the expiration date. See "-- Expiration Date; Extensions; Amendments." Emmis will issue $1,000 original principal amount at maturity of registered notes in exchange for each $1,000 original principal amount at maturity of outstanding notes accepted in the exchange offer. Holders may tender some or all of their outstanding notes pursuant to the exchange offer. However, outstanding notes may be tendered only in integral multiples of $1,000. The form and terms of the registered notes are the same as the form and terms of the outstanding notes except that: - the registered notes have been registered under the Securities Act and hence will not bear legends restricting their transfer; and - the registered note holders will not be entitled to certain rights under the registration rights agreement covering the outstanding notes, including the provisions providing for an increase in the interest rate on the outstanding notes in certain circumstances relating to the timing of the exchange offer, all of which rights will terminate when the exchange offer is terminated. The registered notes will evidence the same debt as the outstanding notes and will be entitled to the benefits of the indenture governing the outstanding notes. As of the date of this prospectus, $300,000,000 aggregate principal amount of notes were outstanding. We have fixed the close of business on , 1999 as the record date for the exchange offer for purposes of determining the persons to whom this prospectus and the letter of transmittal will be mailed initially. Outstanding note holders do not have any appraisal or dissenters' rights under the Indiana Business Corporation Law or the indenture in connection with the exchange offer. We intend to conduct the exchange offer in accordance with the applicable requirements of the Exchange Act and the rules and regulations of the SEC related to such offers. 111 118 Emmis shall be deemed to have accepted validly tendered outstanding notes when, as and if we give oral or written notice to IBJ Whitehall Bank and Trust Company, which is the exchange agent. The exchange agent will act as agent for the tendering holders for the purpose of receiving the registered notes from Emmis. If any tendered outstanding notes are not accepted for exchange either because of an invalid tender, the occurrence of certain other events set forth herein, or otherwise, the certificates for the unaccepted outstanding notes will be returned, without expense, to the tendering holder as promptly as practicable after the exchange offer's expiration date. Holders who tender outstanding notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of outstanding notes pursuant to the exchange offer. We will pay all charges and expenses, other than transfer taxes in certain circumstances, in connection with the exchange offer. See "-- Fees and Expenses." EXPIRATION DATE; EXTENSIONS; AMENDMENTS We shall keep the exchange offer open for at least 30 days, or longer if required by applicable law, including in connection with any material modification or waiver of the terms or conditions of the exchange offer that requires such extension, after the date that notice of the exchange offer is mailed to outstanding note holders. The expiration date shall be 5:00 p.m., New York City time, on , 1999, unless we, in our sole discretion, extend the exchange offer, in which case the expiration date shall be the latest date and time to which we extend the exchange offer. If we decide to extend the exchange offer, we will notify IBJ Whitehall Bank and Trust Company, which is the exchange agent, of the extension by oral or written notice, and will mail an announcement of the extension to the registered holders prior to 10:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. Emmis reserves the right, in its sole discretion: - to delay accepting any outstanding notes, to extend the exchange offer or to terminate the exchange offer if any of the conditions set forth below under "-- Conditions" shall not have been satisfied, by giving oral or written notice of such delay, extension or termination to the exchange agent; or - to amend the terms of the exchange offer in any manner. We will give oral or written notice of any delay in acceptance, extension, termination or amendment to the registered holders as promptly as practicable. PROCEDURES FOR TENDERING Only an outstanding note holder may tender such outstanding notes in the exchange offer. To tender in the exchange offer, a holder must complete, sign and date the letter of transmittal, or a facsimile thereof, have the signatures thereon guaranteed if the letter of transmittal so requires, or transmit an agent's message in connection with a book-entry transfer, and mail or otherwise deliver the letter of transmittal or facsimile, or agent's message, together with the 112 119 outstanding notes and any other required documents, to IBJ Whitehall Bank and Trust Company, which is the exchange agent, prior to 5:00 p.m., New York City time, on the expiration date. In addition, either: - the exchange agent must receive the letter of transmittal and certificates for the outstanding notes prior to the expiration date; - the exchange agent must receive a timely confirmation of a book-entry transfer of the outstanding notes into the exchange agent's account at The Depository Trust Company ("DTC") pursuant to the procedure for book-entry transfer described below, prior to the expiration date; or - the holder must comply with the guaranteed delivery procedures described below. For effective tender, the exchange agent must receive the outstanding notes or book-entry confirmation, as the case may be, the letter of transmittal, and other required documents, at the address set forth below under "-- Exchange Agent" prior to 5:00 p.m., New York City time, on the expiration date. Delivery of documents to the book entry transfer facility in accordance with its procedure does not constitute delivery to the exchange agent. DTC has authorized DTC participants that hold outstanding notes on behalf of the outstanding notes' beneficial owners to tender their outstanding notes as if they were holders. To effect a tender of outstanding notes, DTC participants should either: - complete and sign the letter of transmittal, or a manually signed facsimile thereof, have the signature guaranteed if required by the instructions, and mail or deliver the letter of transmittal, or the manually signed facsimile, to the exchange agent pursuant to the procedure set forth in "Procedures for Tendering;" or - transmit their acceptance to DTC through the DTC automated tender offer program for which the transaction will be eligible and follow the procedure for book-entry transfer set forth in "-- Book-Entry Transfer." By executing the letter of transmittal or an agent's message, each holder will make to Emmis the representations set forth above in the third paragraph under the heading "-- Purpose and Effect of the Exchange Offer." Each holder's tender, and Emmis' acceptance, will constitute agreement between such holder and Emmis in accordance with the terms, and subject to the conditions, set forth herein and in the letter of transmittal or agent's message. THE METHOD OF DELIVERY OF OUTSTANDING NOTES, THE LETTER OF TRANSMITTAL OR AGENT'S MESSAGE, AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE HOLDER'S ELECTION AND SOLE RISK. AS AN ALTERNATIVE TO MAIL DELIVERY, HOLDERS MAY WISH TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, HOLDERS SHOULD ALLOW SUFFICIENT TIME TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTER OF TRANSMITTAL OR OUTSTANDING NOTES SHOULD BE SENT TO EMMIS. HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR THEM. Any beneficial owner whose outstanding notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the 113 120 registered holder promptly and instruct the registered holder to tender on the beneficial owner's behalf. See "Instructions to Registered Holder and/or Book-Entry Transfer Facility Participant from Beneficial Owner" included with the letter of transmittal. A member of the Medallion System must guarantee signatures on a letter of transmittal or a notice of withdrawal, as the case may be, unless the outstanding notes tendered pursuant thereto are tendered: - by a registered holder who has not completed the box entitled "Special Registration Instructions" or "Special Delivery Instructions" on the letter of transmittal; or - for the account of a Medallion System member. In the event that signatures on a letter of transmittal or a notice of withdrawal, as the case may be, must be guaranteed, such guarantee must be by a Medallion System member. If a person other than the registered holder of any outstanding notes listed therein signs the accompanying letter of transmittal, the outstanding notes must be endorsed or accompanied by a properly completed bond power, signed by the registered holder as his or name appears on the outstanding notes, with the signature guaranteed by a Medallion System member. If trustees, executors, administrators, guardians, attorneys-in-fact, offices of corporations, or others acting in a fiduciary or representative capacity sign the letter of transmittal or any outstanding notes or bond powers, such persons should so indicate when signing, and they must submit evidence satisfactory to Emmis of their authority to so act, with the letter of transmittal. Emmis will determine, in its sole discretion, all questions as to the validity, form, eligibility, including time of receipt, and acceptance and withdrawal of tendered outstanding notes. This determination will be final and binding. We reserve the absolute right to reject any and all outstanding notes not properly tendered, or any outstanding notes, Emmis' acceptance of which would, in the opinion of Emmis' counsel, be unlawful. We also reserve the right, in our sole discretion, to waive any defects, irregularities or conditions of tender as to particular outstanding notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of outstanding notes must be cured within such time as we shall determine. Although we intend to notify holders of defects or irregularities with respect to tenders of outstanding notes, neither Emmis, the exchange agent nor any other person shall incur any liability for failure to give such notification. Tenders of outstanding notes will not be deemed to have been made until such defects or irregularities have been cured or waived. If the exchange agent receives any outstanding notes that are not properly tendered, and as to which the defects or irregularities have not been cured or waived, the exchange agent will return them to the tendering holders, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date. ACCEPTANCE OF OUTSTANDING NOTES FOR EXCHANGE; DELIVERY OF REGISTERED NOTES For each outstanding note Emmis accepts for exchange, the holder will receive a registered note having a principal amount at maturity equal to that of the surrendered outstanding note. For purposes of the exchange offer, Emmis shall be deemed to have accepted properly tendered 114 121 outstanding notes for exchange when, as and if Emmis has given oral or written notice thereof to IBJ Whitehall Bank and Trust Company, as exchange agent. In all cases, Emmis will issue registered notes for outstanding notes that are accepted for exchange pursuant to the exchange offer only after the exchange agent's timely receipt of certificates for such outstanding notes, or a timely book-entry confirmation of the outstanding notes into the exchange agent's account at the book-entry transfer facility, plus a properly completed and duly executed letter of transmittal or agent's message and all other required documents. If Emmis does not accept any tendered outstanding notes for any reason set forth in the terms and conditions of the exchange offer, we will return the unaccepted or non-exchanged outstanding notes without expense to the tendering holder, or, in the case of outstanding notes tendered by book-entry transfer into the exchange agent's account, the non-exchanged outstanding notes will be credited to an account maintained with the book-entry transfer facility, as promptly as practicable after the expiration date. BOOK-ENTRY TRANSFER IBJ Whitehall Bank and Trust Company, as exchange agent, will establish a new account or utilize an existing account at DTC for the outstanding notes promptly after the date of this prospectus, and any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of outstanding notes may make a book-entry tender of outstanding notes by causing DTC to transfer such outstanding notes into the exchange agent's account in accordance with DTC's procedures for such transfer. However, the exchange agent must receive, at its address set forth below under the caption "Exchange Agent," on or prior to the expiration date, or the holders must comply with the guaranteed delivery procedures described below to submit, the letter of transmittal, or a manually signed facsimile thereof, properly completed and validly executed, with any required signature guarantees, or an agent's message, and any other required documents. Document delivery to DTC in accordance with DTC's procedures does not constitute delivery to the exchange agent. The term "agent's message" means a message transmitted by DTC to, and received by, the exchange agent, forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the DTC participant tendering the outstanding notes, stating: - the aggregate principal amount of outstanding notes which have been tendered by such participant; - that such participant has received and agrees to be bound by the terms of the letter of transmittal; and - that Emmis may enforce that agreement against the participant. GUARANTEED DELIVERY PROCEDURES Holders who wish to tender their outstanding notes and: - whose outstanding notes are not immediately available; - who cannot deliver their outstanding notes, the letter of transmittal or any other required documents, to IBJ Whitehall Bank and Trust Company, which is the exchange agent; or 115 122 - who cannot complete the procedures for book-entry transfer, prior to the expiration date, may effect a tender if: (a) the tender is made through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States; (b) prior to the expiration date, the exchange agent receives from an institution listed in clause (a) above a properly completed and duly executed Notice of Guaranteed Delivery, by facsimile transmission, mail or hand delivery, setting forth the name and address of the holder, the certificate number(s) of the outstanding notes and the principal amount of outstanding notes tendered, stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the expiration date, the letter of transmittal, or facsimile thereof, or an agent's message, together with the certificate(s) representing the outstanding notes, or a confirmation of book-entry transfer of the notes into the exchange agent's account at the book-entry transfer facility, and any other documents required by the letter of transmittal, will be deposited by the institution with the exchange agent; and (c) the exchange agent receives, no later than five New York Stock Exchange trading days after the expiration date, the certificate(s) representing all tendered outstanding notes in proper form for transfer, or a confirmation of book-entry transfer of such outstanding notes into the exchange agent's account at the book-entry transfer facility, together with a letter of transmittal, or facsimile thereof, properly completed and duly executed, with any required signature guarantees, or an agent's message, and all other documents required by the letter of transmittal. Holders who wish to tender their outstanding notes according to the guaranteed delivery procedures set forth above may request that the exchange agent send them a Notice of Guaranteed Delivery. WITHDRAWAL OF TENDERS Except as otherwise provided herein, tenders of outstanding notes may be withdrawn at any time prior to 5:00 p.m., New York City time, on , 1999; otherwise such tenders are irrevocable. To withdraw a tender of outstanding notes in the exchange offer IBJ Whitehall Bank and Trust Company, which is the exchange agent, must receive a telegram, telex, letter or facsimile transmission notice of withdrawal at its address set forth herein prior to 5:00 p.m., New York City time, on the expiration date. Any such notice of withdrawal must: - specify the name of the person having deposited the outstanding notes to be withdrawn; - identify the outstanding notes to be withdrawn, including the certificate number(s) and principal amount of such outstanding notes, or, in the case of outstanding notes transferred by book-entry transfer, the name and number of the account at the book-entry transfer facility to be credited; 116 123 - be signed by the holder in the same manner as the original signature on the letter of transmittal by which the outstanding notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have the trustee with respect to the outstanding notes register the transfer of such outstanding notes into the name of the person withdrawing the tender; and - specify the name in which to register the outstanding notes, if different from that of the depositor. Emmis will determine all questions as to the validity, form and eligibility, including time of receipt, of the notices. This determination shall be final and binding on all parties. Any outstanding notes so withdrawn will be deemed not to have been validly tendered for purposes of the exchange offer and no registered notes will be issued with respect thereto unless the outstanding notes so withdrawn are validly retendered. Emmis will return to the holder any outstanding notes which have been tendered but which are not accepted for exchange without expense to the holder, as soon as practicable after withdrawal, rejection of tender, or termination of the exchange offer. Holders may retender properly withdrawn outstanding notes by following one of the procedures described above under "-- Procedures for Tendering" at any time prior to the expiration date. CONDITIONS Notwithstanding any other term of the exchange offer, we shall not be required to accept for exchange, or offer registered notes for, any outstanding notes, and may terminate or amend the exchange offer as provided herein before the acceptance of the outstanding notes, if: (a) any action or proceeding is instituted or threatened in any court or by or before any governmental agency with respect to the exchange offer which, in our judgment, might impair materially our ability to proceed with the exchange offer, or any material adverse development has occurred in any existing action or proceeding with respect to Emmis or any of its subsidiaries; or (b) any law, statute, rule, regulation or interpretation by the SEC staff is proposed, adopted or enacted, which, in our judgment, might impair materially our ability to proceed with the exchange offer, or impair materially our contemplated benefits from the exchange offer; or (c) any governmental approval has not been obtained, which approval we shall, in our discretion, deem necessary for the consummation of the exchange offer as contemplated hereby. If we determine in our discretion that any of the conditions are not satisfied, we may: - refuse to accept any outstanding notes and return all tendered outstanding notes to the tendering holders; - extend the exchange offer and retain all outstanding notes tendered prior to the expiration of the exchange offer, subject, however, to the holders' rights to withdraw the outstanding notes; or 117 124 - waive the unsatisfied conditions and accept all properly tendered outstanding notes which have not been withdrawn. We shall keep the exchange offer open for at least 30 days, or longer if applicable law so requires, including, in connection with any material modification or waiver of the terms or conditions of the exchange offer that requires such extension under applicable law, after the date we mail notice of the exchange offer to outstanding note holders. EXCHANGE AGENT IBJ Whitehall Bank and Trust Company has been appointed as the exchange agent for this exchange offer. Questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal, and requests for notice of guaranteed delivery should be directed to the exchange agent, addressed as follows: By Registered or Certified Mail: By Overnight Courier or by Hand: IBJ Whitehall Bank and Trust Company IBJ Whitehall Bank and Trust Company 1 State Street, 10th Floor 1 State Street, 10th Floor New York, New York 10004 New York, New York 10004 Attn: Corporate Trust Administration Attn: Corporate Trust Administration By Facsimile: (212) 858-2952
DELIVERY TO AN ADDRESS OTHER THAN THOSE SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. FEES AND EXPENSES Emmis will bear the expenses of soliciting tenders. The principal solicitation is being made by mail; however, additional solicitation may be made by telegraph, telecopy, telephone or in person by officers and regular employees of Emmis and its affiliates or its agents. Emmis has not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers, or others soliciting acceptances of the exchange offer. Emmis, however, will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of pocket expenses in connection with the exchange offer. Emmis will pay the cash expenses incurred in connection with the exchange offer. Such expenses include the exchange agent's and the trustee's fees and expenses, accounting and legal fees, and printing costs, among others. ACCOUNTING TREATMENT The registered notes will be recorded at the same carrying value as the outstanding notes, which is face value, as reflected in Emmis's accounting records on the date of exchange. 118 125 Accordingly, Emmis will not recognize any gain or loss for accounting purposes. The exchange offer expenses will be expensed over the term of the registered notes. CONSEQUENCES OF FAILURE TO EXCHANGE The outstanding notes that are not exchanged for registered notes pursuant to the exchange offer will remain restricted securities. Accordingly, such outstanding notes may be resold only: - to Emmis, upon redemption thereof or otherwise; - so long as the outstanding notes are eligible for resale pursuant to Rule 144A, to a person inside the United States whom the seller reasonably believes is a qualified institutional buyer within the meaning of Rule 144A under the Securities Act in a transaction meeting the requirements of Rule 144A, in accordance with Rule 144 under the Securities Act, or pursuant to another exemption from the registration requirements of the Securities Act, and based upon an opinion of counsel reasonably acceptable to us; - outside the United States to a foreign person in a transaction meeting the requirements of Regulation S under the Securities Act; or - pursuant to an effective registration statement under the Securities Act. Any resale of outstanding notes must comply with any applicable securities laws of any state of the United States. 119 126 PLAN OF DISTRIBUTION Each broker-dealer that receives registered notes for its own account pursuant to the exchange offer, where its outstanding 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 registered notes. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of registered notes received in exchange for outstanding notes where such outstanding notes were acquired as a result of market making or other trading activities. Until , 1999 (90 days after the commencement of the exchange offer), all dealers effecting transactions in the registered notes may be required to deliver a prospectus. Emmis will not receive any proceeds from any sales of the registered notes by participating broker-dealers. Registered notes received by participating broker-dealers for their own account pursuant to the exchange offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the registered notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or to or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such participating broker-dealer that resells the registered notes, and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The letter of transmittal for the exchange offer states that, by acknowledging that it will deliver, and by delivering, a prospectus, a participating broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. For a period of 180 days after the expiration date, or until all broker-dealers who exchange outstanding notes which were acquired as a result of market-making activities for registered notes have sold all registered notes held by them, we will promptly send additional copies of this prospectus and any amendment or supplement to this prospectus to any broker-dealer that requests such documents in the letter of transmittal. Emmis has agreed to pay all expenses incident to the exchange offer. Emmis will indemnify the holders of the registered notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act. The registered notes will not be listed on any stock exchange. The notes are designated for trading in The Portal Market. 120 127 LEGAL MATTERS Certain legal matters in connection with the registered notes will be passed upon for Emmis by Bose McKinney & Evans, Indianapolis, Indiana. Ronald E. Elberger, a partner in Bose McKinney & Evans, is an officer of Emmis Communications Corporation. EXPERTS The audited consolidated financial statements and schedule of Emmis Communications Corporation and Subsidiaries as of February 28, 1997 and 1998 and for each of the three years in the period ended February 28, 1998, incorporated by reference in this prospectus and elsewhere in the registration statement, have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto and included herein in reliance upon the authority of said firm as experts in giving said reports. The audited financial statements of Tribune New York Radio, Inc. as of December 28, 1997 and for each of the two years in the period ended December 28, 1997 incorporated by reference in this prospectus have been audited by Arthur Andersen LLP, independent public accountants, as indicated in their reports with respect thereto and included herein in reliance upon the authority of said firm as experts in giving said reports. The audited combined financial statements of SF Broadcasting of Wisconsin, Inc. and SF Multistations, Inc. and Subsidiaries as of December 29, 1996 and December 28, 1997 and for each of the three years in the period ended December 28, 1997, incorporated by reference in this prospectus, have been audited by Ernst & Young LLP, independent auditors, as indicated in their report with respect thereto incorporated by reference herein. With respect to the unaudited interim financial information of Emmis Communications Corporation and Subsidiaries for the quarters ended May 31, 1998 and 1997, August 31, 1998 and 1997, and November 30, 1998 and 1997, incorporated by reference or included elsewhere in this prospectus, Arthur Andersen LLP, has applied limited procedures in accordance with professional standards for a review of that information. However, their separate reports thereon state that they did not audit and they do not express an opinion on that interim financial information. Accordingly, the degree of reliance on their reports on that information should be restricted in light of the limited nature of the review procedures applied. In addition, the accountants are not subject to the liability provisions of Section 11 of the Securities Act of 1933 for their report on the unaudited interim financial information because that report is not a "report" or a "part" of the registration statement prepared or certified by the accountants within the meaning of Section 7 or 11 of the Act. 121 128 WHERE YOU CAN FIND MORE INFORMATION Emmis filed a registration statement on Form S-4 with the SEC covering the registered notes, and this prospectus is part of our registration statement. For further information on Emmis and the notes, you should refer to our registration statement and its exhibits. This prospectus summarizes material provisions of contracts and other documents that we refer you to. Since the prospectus may not contain all the information that you may find important, you should review the full text of these documents. We have included copies of these documents as exhibits to our registration statement. We file annual, quarterly and special reports, proxy statements and other information with the SEC. You may read and copy any document we file at the SEC's public reference rooms in Washington, D.C., New York and Chicago. Please call the SEC at 1-800-SEC-0330 for more information on the public reference rooms and their copy charges. Our SEC filings are also available to the public from the SEC's Web Site at http://www.sec.gov. This prospectus is part of a registration statement we filed with the SEC. The SEC allows us to "incorporate by reference" the information we file with them, which means that we can disclose important information to you by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus, and later information that we file with the SEC will automatically update and supersede this information. We incorporate by reference the documents listed below and any future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act until all the outstanding notes have been exchanged for registered notes or the exchange offer is otherwise terminated. - Our Annual Report on Form 10-K (file no. 0-23264) for the fiscal year ended February 28, 1998. - Our Quarterly Reports on Form 10-Q (file no. 0-23264) for the fiscal quarters ended May 31, 1998, August 31, 1998, and November 30, 1998. - Our Current Reports on Form 8-K (file no. 0-23264) filed May 7, 1998, June 22, 1998, and July 31, 1998, December 2, 1998, and March 15, 1999, and an amendment on Form 8-K/A (file no. 0-23264) filed September 29, 1998. - Our proxy statement dated May 28, 1998. You may request a copy of these filings, at no cost, by writing or telephoning us at the following address: Investor Relations Emmis Communications Corporation One Emmis Plaza, 7th Floor 40 Monument Circle Indianapolis, Indiana 46204 Telephone: (317) 266-0100 122 129 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- LOGO EMMIS COMMUNICATIONS CORPORATION $300,000,000 OFFER TO EXCHANGE 8 1/8% SENIOR SUBORDINATED NOTES DUE 2009 ------------------------------- PROSPECTUS ------------------------------- - -------------------------------------------------------------------------------- WE HAVE NOT AUTHORIZED ANY DEALER, SALESPERSON OR OTHER PERSON TO GIVE YOU WRITTEN INFORMATION OTHER THAN THIS PROSPECTUS OR TO MAKE REPRESENTATIONS AS TO MATTERS NOT STATED IN THIS PROSPECTUS. YOU MUST NOT RELY ON UNAUTHORIZED INFORMATION. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES OR OUR SOLICITATION OF YOUR OFFER TO BUY THE SECURITIES IN ANY JURISDICTION WHERE THAT WOULD NOT BE PERMITTED OR LEGAL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALES MADE HEREUNDER AFTER THE DATE OF THIS PROSPECTUS SHALL CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN OR THE AFFAIRS OF THE COMPANY HAVE NOT CHANGED SINCE THE DATE HEREOF. UNTIL , 1999 (90 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL BROKER-DEALERS THAT EFFECT TRANSACTIONS IN THE REGISTERED NOTES, WHETHER OR NOT PARTICIPATING IN THE EXCHANGE OFFER, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE BROKER-DEALERS' OBLIGATION TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO ANY UNSOLD ALLOTMENTS OR SUBSCRIPTIONS. - -------------------------------------------------------------------------------- ---------------, 1999 130 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Emmis Communications Corporation is an Indiana corporation. Chapter 37 of The Indiana Business Corporation Law (the "IBCL") requires a corporation, unless its articles of incorporation provide otherwise, to indemnify a director or an officer of the corporation who is wholly successful, on the merits or otherwise, in the defense of any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative and whether formal or informal, against reasonable expenses, including counsel fees, incurred in connection with the proceeding. Emmis' Articles of Incorporation do not contain any provision prohibiting such indemnification. Emmis' Amended and Restated Articles of Incorporation expressly require such indemnification. The IBCL also permits a corporation to indemnify a director, officer, employee or agent who is made a party to a proceeding because the person was a director, officer, employee or agent of the corporation or its subsidiary against liability incurred in the proceeding if (i) the individual's conduct was in good faith and (ii) the individual reasonably believed (A) in the case of conduct in the individual 's official capacity with the corporation that the conduct was in the corporation's best interests and (B) in all other cases that the individual's conduct was at least not opposed to the corporation's best interests and (iii) in the case of a criminal proceeding, the individual either (A) had reasonable cause to believe the individual's conduct was lawful or (B) had no reasonable cause to believe the individual's conduct was unlawful. The IBCL also permits a corporation to pay for or reimburse reasonable expenses incurred before the final disposition of the proceeding and permits a court of competent jurisdiction to order a corporation to indemnify a director or officer if the court determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not the person met the standards for indemnification otherwise provided in the IBCL. Emmis' Amended and Restated Articles of Incorporation generally provide that any director or officer of Emmis or any person who is serving at the request of Emmis as a director, officer, employee or agent of another entity shall be indemnified and held harmless by Emmis to the fullest extent authorized by the IBCL. The Amended and Restated Articles of Incorporation also provide such persons with certain rights to be paid by Emmis the expenses incurred in defending proceedings in advance of their final disposition and authorize Emmis to maintain insurance to protect itself and any director, officer, employee or agent of Emmis or any person who is or was serving at the request of Emmis as a director, officer, partner, trustee, employee or agent of another entity against expense, liability or loss, whether or not Emmis would have the power to indemnify such person against such expense, liability or loss under the Amended and Restated Articles of Incorporation. II-1 131 ITEM 21. EXHIBITS. The following exhibits are filed with this Registration Statement: 3.1 Amended and Restated Articles of Incorporation of Emmis Communications Corporation, as amended, incorporated by reference to Exhibit 2.3 to Emmis' Registration Statement on Form S-1, File No. 33-73218, as amended, and to Exhibit 3.1 to Emmis' Quarterly Report on Form 10-Q for the quarter ended August 31, 1998. 3.2 Amended and Restated Bylaws of Emmis Communications Corporation, as amended, incorporated by reference to Exhibit 2.4 to Emmis' Quarterly Report on Form 10-Q for the quarter ended May 31, 1995, and to Exhibit 3.2 to Emmis' Quarterly Report on Form 10-Q for the quarter ended August 31, 1998. 4.1 Indenture, including as an exhibit thereto the form of note. 4.2 Registration Rights Agreement dated as of February 12, 1999, by and among Emmis Communications Corporation and its Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston Robertson Stephens Inc., First Union Capital Markets Corp., Goldman, Sachs & Co. and TD Securities (USA) Inc. 5 Opinion and consent of Bose McKinney & Evans regarding the legality of the securities being registered. 12 Statements re computation of ratios. 15 Letter re unaudited interim financial information. 23.1 Consent of Arthur Andersen LLP. 23.2 Consent of Ernst & Young LLP. 24 Powers of Attorney. 25 Statement re eligibility of trustee. 99.1 Form of Letter of Transmittal 99.2 Form of Notice of Guaranteed Delivery
ITEM 22. UNDERTAKINGS. A. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933. (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. 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% change in II-2 132 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 by the registrant pursuant to section 13 or section 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. (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. (4) If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Rule 3-19 to Regulation S-X at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (A)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3. B. The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 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 Securities Exchange Act of 1934) 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 of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities II-3 133 (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 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 of this Form, 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. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Indianapolis, Indiana, on March 12, 1999. EMMIS COMMUNICATIONS CORPORATION /s/ J. SCOTT ENRIGHT By: -------------------------------------- J. Scott Enright Vice President and Associate General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on March 12, 1999, by the following persons in the capacities indicated. II-4 134
SIGNATURE TITLE --------- ----- JEFFREY H. SMULYAN* Director and Chairman of the Board - --------------------------------------------- (Principal Executive Officer) Jeffrey H. Smulyan DOYLE L. ROSE* Director and Radio Division President - --------------------------------------------- Doyle L. Rose Director - --------------------------------------------- Susan B. Bayh GARY L. KASEFF* Director - --------------------------------------------- Gary L. Kaseff RICHARD A. LEVENTHAL* Director - --------------------------------------------- Richard A. Leventhal GREG NATHANSON* Director - --------------------------------------------- Greg Nathanson FRANK V. SICA* Director - --------------------------------------------- Frank V. Sica Director - --------------------------------------------- Lawrence B. Sorrel WALTER Z. BERGER* Vice President, Chief Financial Officer - --------------------------------------------- and Treasurer Walter Z. Berger (Principal Financial Officer and Principal Accounting Officer) *By /s/ J. SCOTT ENRIGHT - --------------------------------------------- J. Scott Enright Attorney-in-Fact
II-5 135 Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Indianapolis, Indiana, on March 12, 1999. EMMIS FM BROADCASTING CORPORATION OF INDIANAPOLIS EMMIS FM RADIO CORPORATION OF INDIANAPOLIS EMMIS FM BROADCASTING CORPORATION OF ST. LOUIS KPWR, INC. EMMIS BROADCASTING CORPORATION OF NEW YORK EMMIS FM BROADCASTING CORPORATION OF CHICAGO EMMIS MEADOWLANDS CORPORATION EMMIS PUBLISHING CORPORATION EMMIS AM RADIO CORPORATION OF INDIANAPOLIS EMMIS 104.1 FM RADIO CORPORATION OF ST. LOUIS EMMIS 106.5 FM BROADCASTING CORPORATION OF ST. LOUIS EMMIS 1310 AM RADIO CORPORATION OF INDIANAPOLIS EMMIS 105.7 FM RADIO CORPORATION OF INDIANAPOLIS EMMIS DAR, INC. EMMIS 1380 AM RADIO CORPORATION OF ST. LOUIS MEDIATEX COMMUNICATIONS CORPORATION MEDIATEX DEVELOPMENT CORPORATION TEXAS MONTHLY, INC. EMMIS FM HOLDING CORPORATION OF NEW YORK EMMIS RADIO CORPORATION OF NEW YORK EMMIS 101.9 FM RADIO CORPORATION OF NEW YORK EMMIS INTERNATIONAL CORPORATION EMMIS INTERNATIONAL BROADCASTING CORPORATION /s/ J. SCOTT ENRIGHT By: -------------------------------------- J. Scott Enright Vice President and Associate General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on March 12, 1999, by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- JEFFREY H. SMULYAN* Director and Chairman of the Board - --------------------------------------------- (Principal Executive Officer) Jeffrey H. Smulyan WALTER Z. BERGER* Vice President, Chief Financial Officer and Treasurer - --------------------------------------------- (Principal Financial Officer and Principal Accounting Walter Z. Berger Officer) /s/ J. SCOTT ENRIGHT *By: --------------------------------------- J. Scott Enright Attorney-in-Fact
II-6 136 Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Indianapolis, Indiana, on March 12, 1999. EMMIS FM LICENSE CORPORATION OF INDIANAPOLIS EMMIS FM LICENSE CORPORATION OF ST. LOUIS KPWR LICENSE, INC. EMMIS LICENSE CORPORATION OF NEW YORK EMMIS FM LICENSE CORPORATION OF CHICAGO EMMIS FM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS AM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS RADIO LICENSE CORPORATION OF NEW YORK EMMIS 104.1 FM RADIO LICENSE CORPORATION OF ST. LOUIS EMMIS 106.5 FM LICENSE CORPORATION OF ST. LOUIS EMMIS 1310 AM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS 105.7 FM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS LICENSE CORPORATION EMMIS 1480 AM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS 99.9 FM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS 105.5 FM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS TELEVISION LICENSE CORPORATION OF HONOLULU EMMIS TELEVISION LICENSE CORPORATION OF MOBILE EMMIS TELEVISION LICENSE CORPORATION OF CAPE CORAL EMMIS TELEVISION LICENSE CORPORATION OF GREEN BAY EMMIS TELEVISION LICENSE CORPORATION OF TERRE HAUTE EMMIS TELEVISION LICENSE CORPORATION OF NEW ORLEANS /s/ J. SCOTT ENRIGHT By: -------------------------------------- J. Scott Enright Vice President and Associate General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on March 12, 1999, by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- JEFFREY H. SMULYAN* Director and Chairman of the Board - --------------------------------------------- (Principal Executive Officer) Jeffrey H. Smulyan DOYLE L. ROSE* Director and Radio Division President - --------------------------------------------- Doyle L. Rose Director - --------------------------------------------- Richard F. Cummings
II-7 137
SIGNATURE TITLE --------- ----- GARY L. KASEFF* Director - --------------------------------------------- Gary L. Kaseff WALTER Z. BERGER* Vice President, Chief Financial Officer and Treasurer - --------------------------------------------- (Principal Financial Officer and Principal Accounting Walter Z. Berger Officer) /s/ J. SCOTT ENRIGHT *By: --------------------------------------- J. Scott Enright Attorney-in-Fact
II-8 138 Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in Indianapolis, Indiana, on March 12, 1999. EMMIS INDIANA BROADCASTING, L.P. EMMIS TELEVISION BROADCASTING, L.P. EMMIS PUBLISHING, L.P. By: EMMIS COMMUNICATIONS CORPORATION General Partner /s/ J. SCOTT ENRIGHT By: -------------------------------------- J. Scott Enright Vice President and Associate General Counsel Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed on March 12, 1999, by the following persons in the capacities indicated.
SIGNATURE TITLE --------- ----- JEFFREY H. SMULYAN* Director and Chairman of the Board - --------------------------------------------- (Principal Executive Officer) Jeffrey H. Smulyan DOYLE L. ROSE* Director and Radio Division President - --------------------------------------------- Doyle L. Rose Director - --------------------------------------------- Susan B. Bayh GARY L. KASEFF* Director - --------------------------------------------- Gary L. Kaseff RICHARD A. LEVENTHAL* Director - --------------------------------------------- Richard A. Leventhal GREG NATHANSON* Director - --------------------------------------------- Greg Nathanson FRANK V. SICA* Director - --------------------------------------------- Frank V. Sica Director - --------------------------------------------- Lawrence B. Sorrel WALTER Z. BERGER* Vice President, Chief Financial Officer and Treasurer - --------------------------------------------- (Principal Financial Officer and Principal Accounting Walter Z. Berger Officer) /s/ J. SCOTT ENRIGHT *By: --------------------------------------- J. Scott Enright Attorney-in-Fact
II-9 EX-4.1 2 INDENTURE 1 EXHIBIT 4.1 -------------------------------------------------------------------- EMMIS COMMUNICATIONS CORPORATION 8 1/8% SENIOR SUBORDINATED NOTES DUE 2009 -------------------------------- INDENTURE Dated as of February 12, 1999 -------------------------------- -------------------------------- IBJ Whitehall Bank & Trust Company Trustee -------------------------------- -------------------------------------------------------------------- 2 CROSS-REFERENCE TABLE
Trust Indenture Act Section Indenture Section 310 (a)(1).......................................... 7.10 (a)(2)............................................. 7.10 (a)(3)............................................. N.A. (a)(4)............................................. N.A. (a)(5)............................................. 7.10 (b)................................................ 7.10 (c)................................................ N.A. 311 (a)............................................. 7.11 (b)................................................ 7.11 (c)................................................ N.A. 312 (a)............................................. 2.05 (b)................................................ 12.03 (c)................................................ 12.03 313 (a)............................................. 7.06 (b)(1)............................................. 10.02 (b)(2)............................................. 7.07 (c)................................................ 7.06; 12.02 (d)................................................ 7.06 314 (a)............................................. 4.03; 12.05 (c)(1)............................................. 12.04 (c)(2)............................................. 12.04 (c)(3)............................................. N.A. (d)................................................ N.A. (e)................................................ 11.05 (f)................................................ N.A. 315 (a)............................................. 7.01 (b)................................................ 7.05, 12.02 (c)................................................ 7.01 (d)................................................ 7.01 (e)................................................ 6.11 316 (a) (last sentence)............................. 2.09 (a)(1)(A).......................................... 6.05 (a)(1)(B).......................................... 6.04 (a)(2)............................................. N.A. (b)................................................ 6.07 (c)................................................ 2.12 317 (a)(1).......................................... 6.08 (a)(2)............................................. 6.09 (b)................................................ 2.04
3
Trust Indenture Act Section Indenture Section 318 (a)............................................. 12.01 (b)................................................ N.A. (c)................................................ 12.01
N.A. means not applicable. * This Cross-Reference Table is not part of this Indenture. 4 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions.................................................... 1 Section 1.02. Other Definitions.............................................. 22 Section 1.03. Incorporation by Reference of Trust Indenture Act.............. 23 Section 1.04. Rules of Construction.......................................... 23
ARTICLE 2 THE NOTES Section 2.01. Form and Dating................................................ 24 Section 2.02. Execution and Authentication................................... 25 Section 2.03. Registrar and Paying Agent..................................... 26 Section 2.04. Paying Agent to Hold Money in Trust............................ 26 Section 2.05. Holder Lists................................................... 26 Section 2.06. Transfer and Exchange.......................................... 27 Section 2.07. Replacement Notes.............................................. 40 Section 2.08. Outstanding Notes.............................................. 41 Section 2.09. Treasury Notes................................................. 41 Section 2.10. Temporary Notes................................................ 41 Section 2.11. Cancellation................................................... 42 Section 2.12. Defaulted Interest............................................. 42
ARTICLE 3 REDEMPTION AND PREPAYMENT Section 3.01. Notices to Trustee........... ................................. 42 Section 3.02. Selection of Notes to Be Redeemed.............................. 42 Section 3.03. Notice of Redemption........................................... 43 Section 3.04. Effect of Notice of Redemption................................. 44 Section 3.05. Deposit of Redemption Price.................................... 44 3.06. Notes Redeemed in Part................................................. 44 Section 3.07. Optional Redemption............................................ 44 Section 3.08. Mandatory Redemption........................................... 45 Section 3.09. Offer to Purchase by Application of Excess Proceeds............ 45
ARTICLE 4 COVENANTS Section 4.01. Payment of Notes............................................... 47 Section 4.02. Maintenance of Office or Agency................................ 47 Section 4.03. Reports........................................................ 48 Section 4.04. Compliance Certificate......................................... 48 Section 4.05. Taxes.......................................................... 49 Section 4.06. Stay, Extension and Usury Laws................................. 49
i 5 Page Section 4.07. Restricted Payments............................................ 50 Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries. 53 Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock..... 54 Section 4.10. Asset Sales.................................................... 56 Section 4.11. Transactions with Affiliates................................... 58 Section 4.12. Liens.......................................................... 59 Section 4.13. Corporate Existence............................................ 59 Section 4.14. Offer to Repurchase Upon Change of Control..................... 60 Section 4.15. No Senior Subordinated Debt.................................... 61 Section 4.16. Sale and Leaseback Transactions................................ 61 Section 4.17. Limitation on Issuances and Sales of Equity Interests in Wholly 61 Owned Subsidiaries. Section 4.18. Limitation on Issuances of Guarantees of Indebtedness.......... 62 Section 4.19. Payments for Consent........................................... 62 Section 4.20. Additional Guarantees.......................................... 62 Section 4.21. Designation of Restricted and Unrestricted Subsidiaries........ 63
ARTICLE 5 SUCCESSORS Section 5.01. Merger, Consolidation, or Sale of Assets....................... 63 Section 5.02. Successor Corporation Substituted.............................. 64
ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default.............................................. 64 Section 6.02. Acceleration................................................... 66 Section 6.03. Other Remedies................................................. 67 Section 6.04. Waiver of Past Defaults........................................ 67 Section 6.05. Control by Majority............................................ 68 Section 6.06. Limitation on Suits............................................ 68 Section 6.07. Rights of Holders of Notes to Receive Payment.................. 68 Section 6.08. Collection Suit by Trustee..................................... 68 Section 6.09. Trustee May File Proofs of Claim............................... 69 Section 6.10. Priorities..................................................... 69 Section 6.11. Undertaking for Costs.......................................... 70
ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee.............................................. 70 Section 7.02. Rights of Trustee.............................................. 71 Section 7.03. Individual Rights of Trustee................................... 72 Section 7.04. Trustee's Disclaimer........................................... 72 Section 7.05. Notice of Defaults............................................. 72 Section 7.06. Reports by Trustee to Holders of the Notes..................... 72 Section 7.07. Compensation and Indemnity..................................... 73 Section 7.08. Replacement of Trustee......................................... 73
ii 6 Page Section 7.09. Successor Trustee by Merger, etc............................... 74 Section 7.10. Eligibility; Disqualification.................................. 74 Section 7.11. Preferential Collection of Claims Against Company.............. 75
ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance....... 75 Section 8.02. Legal Defeasance and Discharge................................. 75 Section 8.03. Covenant Defeasance............................................ 76 Section 8.04. Conditions to Legal or Covenant Defeasance..................... 76 Section 8.05. Deposited Money and Government Securities to be Held in........ 77 Trust; Other Miscellaneous Provisions. Section 8.06. Repayment to Company........................................... 78 Section 8.07. Reinstatement.................................................. 78
ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Notes............................ 79 Section 9.02. With Consent of Holders of Notes............................... 79 Section 9.03. Compliance with Trust Indenture Act............................ 81 Section 9.04. Revocation and Effect of Consents.............................. 81 Section 9.05. Notation on or Exchange of Notes............................... 81 Section 9.06. Trustee to Sign Amendments, etc................................ 82
ARTICLE 10 SUBORDINATION Section 10.01. Agreement to Subordinate...................................... 82 Section 10.02. Liquidation; Dissolution; Bankruptcy.......................... 82 Section 10.03. Default on Designated Senior Debt............................. 83 Section 10.04.Reinstatement of Payments...................................... 83 Section 10.05. Acceleration of Notes......................................... 84 Section 10.06. When Distribution Must Be Paid Over........................... 84 Section 10.07. Notice by Company............................................. 84 Section 10.08. Subrogation................................................... 84 Section 10.09. Relative Rights............................................... 85 Section 10.10. Subordination May Not Be Impaired by Company or Holders....... 85 Section 10.11. Distribution or Notice to Representatives..................... 86 Section 10.12. Rights of Trustee and Paying Agent............................ 86 Section 10.13. Authorization to Effect Subordination......................... 86 Section 10.14. Amendments.................................................... 87
ARTICLE 11 NOTE GUARANTEES Section 11.01. Guarantee..................................................... 87 Section 11.02. Subordination of Subsidiary Guaranties....................... 88 Section 11.03. Limitation on Guarantor Liability............................. 88
iii 7 Page Section 11.04. Execution and Delivery of Note Guarantee...................... 88 Section 11.05. Guarantors May Consolidate, etc., on Certain Terms............ 89 Section 11.06. Releases Following Sale of Assets............................. 90
ARTICLE 12 MISCELLANEOUS Section 12.01. Trust Indenture Act Controls.................................. 91 Section 12.02. Notices....................................................... 91 Section 12.03. Communication by Holders of Notes with Other Holders of Notes. 92 Section 12.04. Certificate and Opinion as to Conditions Precedent............ 92 Section 12.05. Statements Required in Certificate or Opinion................. 92 Section 12.06. Rules by Trustee and Agents................................... 93 Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders............................................... 93 Section 12.08. Governing Law................................................. 93 Section 12.09. No Adverse Interpretation of Other Agreements................. 93 Section 12.10. Successors.................................................... 93 Section 12.11. Severability.................................................. 94 Section 12.12. Counterpart Originals......................................... 94 Section 12.13. Table of Contents, Headings, etc.............................. 94
EXHIBITS Exhibit A1 FORM OF NOTE Exhibit A2 FORM OF REGULATION S TEMPORARY GLOBAL NOTE Exhibit B FORM OF CERTIFICATE OF TRANSFER Exhibit C FORM OF CERTIFICATE OF EXCHANGE Exhibit D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR Exhibit E FORM OF NOTE GUARANTEE Exhibit F FORM OF SUPPLEMENTAL INDENTURE iv 8 INDENTURE dated as of February 12, 1999 between Emmis Communications Corporation, a Delaware corporation (the "Company" or "Emmis"), the Guarantors listed on Schedule 1 hereto, and IBJ Whitehall Bank & Trust Company, a New York banking corporation, as trustee (the "Trustee"). The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders of the 8 1/8 % Senior Subordinated Notes due 2009 (the "Notes"): ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE Section 1.01. Definitions. "144A Global Note" means a global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A. "Acquired Debt" means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person. "Additional Notes" means up to $100 million aggregate principal amount of Notes (other than the Initial Notes) issued under this Indenture in accordance with Sections 2.02 and 4.09 hereof, as part of the same series as the Initial Notes. "Affiliate" of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person. For purposes of this definition, "control," as used with respect to any Person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise; provided that beneficial ownership of 10% or more of the Voting Stock of a Person shall be deemed to be control. For purposes of this definition, the terms "controlling," "controlled by" and "under common control with" shall have correlative meanings. 1 9 "Agent" means any Registrar, Paying Agent or co-registrar. "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Cedel that apply to such transfer or exchange. "Asset Sale" means: (1) the sale, lease, conveyance or other disposition of any assets or rights, other than sales of inventory in the ordinary course of business consistent with past practices; provided that the sale, conveyance or other disposition of all or substantially all of the assets of Emmis and its Restricted Subsidiaries taken as a whole will be governed by Sections 4.14 and 5.01 of this Indenture and not by the provisions of Section 4.10 of this Indenture; and (2) the issuance of Equity Interests by any of Emmis' Restricted Subsidiaries or the sale of Equity Interests in any of its Subsidiaries. Notwithstanding the preceding, the following items shall not be deemed to be Asset Sales: (1) any single transaction or series of related transactions that: (a) involves assets having a fair market value of less than $1.0 million; or (b) results in net proceeds to Emmis and its Restricted Subsidiaries of less than $1.0 million; (2) a transfer of assets between or among Emmis and any of its Guarantors; (3) an issuance of Equity Interests by a Guarantor to Emmis or to a Guarantor; (4) a transfer by Emmis of assets in a transaction that qualifies as a charitable contribution or donation and which does not exceed $2.0 million in the aggregate; and (5) a Restricted Payment that is permitted by Section 4.07 of this Indenture. "Attributable Debt" in respect of a sale and leaseback transaction means, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such sale and leaseback transaction including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP. "Bankruptcy Law" means Title 11, U.S. Code or any similar federal or state law for the relief of debtors. 2 10 "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular "person" (as such term is used in Section 13(d)(3) of the Exchange Act), such "person" shall be deemed to have beneficial ownership of all securities that such "person" has the right to acquire, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. "Board of Directors" means the Board of Directors of the Company, or any authorized committee of the Board of Directors. "Broker-Dealer" has the meaning set forth in the Registration Rights Agreement. "Business Day" means any day other than a Legal Holiday. "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP. "Capital Stock" means: (1) in the case of a corporation, corporate stock; (2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; (3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and (4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. "Cash Equivalents" means: (1) United States dollars; (2) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (provided that the full faith and credit of the United States is pledged in support thereof) having maturities of not more than six months from the date of acquisition; (3) certificates of deposit and eurodollar time deposits with maturities of six months or less from the date of acquisition, bankers' acceptances with maturities not exceeding six months and overnight bank deposits, in each case, with any domestic commercial bank having capital and surplus in 3 11 excess of $500.0 million and a Thompson Bank Watch Rating of "B" or better; (4) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above; (5) commercial paper having the highest rating obtainable from Moody's or S&P and in each case maturing within six months after the date of acquisition; and (6) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (5) of this definition. "Cedel" means Cedel Bank, SA. "Change of Control" means the occurrence of any of the following: (1) the sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the assets of The Company and its Subsidiaries taken as a whole to any "person" (as such term is used in Section 13(d)(3) of the Exchange Act) other than a Principal or a Related Party of a Principal; (2) the adoption of a plan relating to the liquidation or dissolution of The Company; (3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any "person" (as defined above), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 35% of the Voting Stock of The Company, measured by voting power rather than number of shares; (4) the first day on which a majority of the members of the Board of Directors of The Company are not Continuing Directors; or (5) The Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into, The Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of The Company is converted into or exchanged for cash, securities or other property, other than any such transaction where the Voting Stock of The Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than 4 12 Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person immediately after giving effect to such issuance. "Company" or "Emmis" means Emmis Communications Corporation, and any and all successors thereto. "Consolidated EBITDA" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus: (1) an amount equal to any extraordinary loss on an after tax basis plus any loss realized in connection with an Asset Sale or any refinancing of a Credit Facility on an after tax basis, to the extent such losses were deducted in computing such Consolidated Net Income; plus (2) provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (3) consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus (4) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income; plus (5) all one-time cash compensation payments in connection with employment agreements as in effect on the date of this Indenture; minus (6) non-cash items increasing such Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business, in 5 13 each case, on a consolidated basis and determined in accordance with GAAP. Notwithstanding the preceding, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash charges of, a Restricted Subsidiary of the Company shall be added to Consolidated Net Income to compute Consolidated EBITDA of the Company only to the extent that a corresponding amount would be permitted at the date of determination to be dividended to the Company by such Restricted Subsidiary without prior approval (that has not been obtained), pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders. "Consolidated Net Income" means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that: (1) the Net Income or loss of any Person that is not a Restricted Subsidiary or Unrestricted Subsidiary or that is accounted for by the equity method of accounting shall be excluded; provided, however, that such Net Income shall be included to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Restricted Subsidiary thereof; (2) the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders; (3) the Net Income of any Person acquired in a pooling of interests transaction for any period prior to the date of such acquisition shall be excluded; (4) the Net Income or loss of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the specified Person or one of its Subsidiaries; and (5) the cumulative effect of a change in accounting principles shall be excluded. "Consolidated Net Worth" means, with respect to any Person as of any date, the sum of: (1) the consolidated equity of the common stockholders of such Person and its consolidated Subsidiaries as of such date; plus 6 14 (2) the respective amounts reported on such Person's balance sheet as of such date with respect to any series of preferred stock (other than Disqualified Stock) that by its terms is not entitled to the payment of dividends unless such dividends may be declared and paid only out of net earnings in respect of the year of such declaration and payment, but only to the extent of any cash received by such Person upon issuance of such preferred stock. "Continuing Directors" means, as of any date of determination, any member of the Board of Directors of Emmis who: (1) was a member of such Board of Directors on the date of this Indenture; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board at the time of such nomination or election. "Corporate Trust Office of the Trustee" shall be at the address of the Trustee specified in Section 12.02 hereof or such other address as to which the Trustee may give notice to the Company. "Credit Agreement" means the Second Amended and Restated Revolving Credit and Term Loan Agreement, dated as of July 16, 1998, as amended, among Emmis, the lenders named therein, Toronto Dominion (Texas), Inc., as Administrative Agent, BankBoston, N.A., as Documentation Agent and First Union National Bank, as Syndication Agent, as further amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Credit Facilities" means one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) and/or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Custodian" means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto. "Default" means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default. "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto. 7 15 "Depositary" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture. "Designated Senior Debt" means (i) any and all Indebtedness (including all principal, premium, interest, fees, expenses and other obligations and liabilities) outstanding under the Credit Agreement and all Hedging Obligations with respect thereto and (ii) any Senior Debt permitted under this Indenture the principal amount of which is $25 million or more and that has been designated by the Company as "Designated Senior Debt"; provided, however, that so long as the Credit Agreement remains in effect, lenders holding a majority of the loan commitments or outstanding loans thereunder shall have consented in writing to such designation by the Company of additional Indebtedness as Designated Senior Debt. "Disqualified Stock" means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control or an asset sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with Section 4.07 of this Indenture. "Domestic Restricted Subsidiary" means any Restricted Subsidiary organized under or incorporated in any State of the United States or the District of Columbia and has its principal place of business in the United States. "Equity Interests" means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock). "Euroclear" means Morgan Guaranty Trust Company of New York, Brussels office, as operator of the Euroclear system. "Exchange Act" means the Securities Exchange Act of 1934, as amended. "Exchange Notes" means those notes, having terms substantially identical to the Notes, offered to the Holders of the Notes under the Exchange Offer Registration Statement. "Exchange Offer" means the offer made to the Holders of the Notes to exchange their Notes for the Exchange Notes. 8 16 "Exchange Offer Registration Statement" means that certain registration statement filed by Emmis with the Commission to register the Exchange Offer. "Existing Indebtedness" means up to $0.5 million in aggregate principal amount of Indebtedness of the Company and its Restricted Subsidiaries in existence on the date of this Indenture, until such amounts are repaid. "Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of: (1) the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to Attributable Debt, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings, and net payments, if any, pursuant to Hedging Obligations; plus (2) the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period; plus (3) any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon and limited to the amount of such Guarantee or the fair market value of the property secured by such Lien, as the case may be. "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect from time to time. "Global Notes" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, substantially in the form of Exhibit A hereto issued in accordance with Section 2.01, 2.06(b)(iv), 2.06(d)(ii) or 2.06(f) hereof. "Global Note Legend" means the legend set forth in Section 2.06(g)(ii), which is required to be placed on all Global Notes issued under this Indenture. "Government Securities" means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit. 9 17 "Guarantee" means a guarantee other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness. "Guarantors" means each of: (1) the Company's Domestic Restricted Subsidiaries and (2) any other Subsidiary of the Company that executes a Guarantee in accordance with the provisions of this Indenture; and their respective successors and assigns. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under: (i) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (ii) other agreements or arrangements designed to protect such Person against fluctuations in interest rates. "Holder" means a Person in whose name a Note is registered. "IAI Global Note" means the global Note substantially in the form of Exhibit A hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors. "Indebtedness" means, without duplication, with respect to any specified Person, any indebtedness of such Person, whether or not contingent, in respect of: (1) borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); (3) banker's acceptances; (4) representing Capital Lease Obligations; (5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations, if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in 10 18 accordance with GAAP. In addition, the term "Indebtedness" includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) (limited to the fair market value of the property securing such Lien) and, to the extent not otherwise included, the Guarantee by such Person of any indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be: (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Indenture" means this Indenture, as amended or supplemented from time to time. "Indirect Participant" means a Person who holds a beneficial interest in a Global Note through a Participant. "Initial Notes" means the first $300.0 million aggregate principal amount of Notes issued under this Indenture on the date hereof. "Institutional Accredited Investor" means an institution that is an "accredited investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the forms of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Equity Interests of such Restricted Subsidiary not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07 of this Indenture. "Legal Holiday" means a Saturday, a Sunday or a day on which banking institutions in The City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period. 11 19 "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer. "Leverage Ratio" means, with respect to any specified Person on any date of determination (the "Calculation Date"), the ratio, on a pro forma basis, of (1) the sum of the aggregate outstanding amount of Indebtedness and Disqualified Stock of such Person and its Restricted Subsidiaries as of the Calculation Date determined on a consolidated basis in accordance with GAAP to (2) the Consolidated EBITDA of such Person and its Restricted Subsidiaries attributable to continuing operations and businesses (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Reference Period. For purposes of calculating the Leverage Ratio: (1) acquisitions that have been made by the specified Person or any of its Restricted Subsidiaries, including through mergers or consolidations and including any related financing transactions, during the Reference Period or subsequent to such Reference Period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the Reference Period and Consolidated EBITDA for such Reference Period shall be calculated without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income; and (2) transactions giving rise to the need to calculate the Leverage Ratio shall be assumed to have occurred on the first day of the Reference Period. "Lien" means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction. "Liquidated Damages" means all liquidated damages then owing pursuant to Section 5 of the Registration Rights Agreement. "Marketable Securities" means publicly traded debt or equity securities that are listed for trading on a national securities exchange and that were issued by a corporation with debt securities are rated at least "AAA-" from S&P or "Aaa3" from Moody's. "Moody's" means Moody's Investors Service, Inc. "Net Income" means, with respect to any Person, the net income (loss) of such Person and its Restricted Subsidiaries, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: 12 20 (1) any gain (but not loss), together with any related provision for taxes on such gain (but not loss), realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and (2) any extraordinary gain (but not loss), together with any related provision for taxes on such extraordinary gain (but not loss). "Net Proceeds" means the aggregate cash proceeds received by Emmis or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result thereof, taxes paid or payable as a result thereof, in each case after taking into account any available tax credits or deductions and any tax sharing arrangements and amounts required to be applied to the repayment of Indebtedness, other than Senior Debt, secured by a Lien on the asset or assets that were the subject of such Asset Sale. "Non-Recourse Debt" means Indebtedness: (1) as to which neither the Company nor any of its Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly or indirectly liable as a guarantor or otherwise, or (c) constitutes the lender; (2) no default with respect to which (including any rights that the holders thereof may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of the Company or any of its Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its stated maturity; and (3) as to which the lenders have been notified in writing that they will not have any recourse to the stock or assets of the Company or any of its Restricted Subsidiaries. "Non-U.S. Person" means a Person who is not a U.S. Person. "Note Guarantee" means the Guarantee by each Guarantor of the Company's payment obligations under this Indenture and on the Notes, executed pursuant to the provisions of this Indenture. 13 21 "Notes" has the meaning assigned to it in the preamble to this Indenture. The Initial Notes and the Additional Notes shall be treated as a single class for all purposes under this Indenture. "Obligations" means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable under the documentation governing any Indebtedness including, without limitation, post-petition interest whether or not allowed as a claim in any bankruptcy, reorganization, insolvency, receivership or similar proceedings with respect to such Indebtedness. "Offering" means the offering of $300.0 million in aggregate principal amount of Notes pursuant to the Company's Offering Memorandum, dated February 9, 1999. "Officer" means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice-President of such Person. "Officers' Certificate" means a certificate signed on behalf of the Company by two Officers of the Company, one of whom must be the principal executive officer, the principal financial officer, the treasurer or the principal accounting officer of the Company, that meets the requirements of Section 12.05 hereof. "Opinion of Counsel" means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 12.05 hereof. The counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee. "Participant" means, with respect to the Depositary, Euroclear or Cedel, a Person who has an account with the Depositary, Euroclear or Cedel, respectively (and, with respect to DTC, shall include Euroclear and Cedel). "Permitted Business" means any business in which the Company and its Restricted Subsidiaries are engaged on the date of this Indenture or any business reasonably related, incidental, complementary or ancillary thereto. "Permitted Investments" means: (1) any Investment in the Company or in a Restricted Subsidiary of Emmis; (2) any Investment in Cash Equivalents; (3) any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment: (a) such Person becomes a Restricted Subsidiary of the Company; or 14 22 (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of Emmis; (4) any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 of this Indenture; (5) any acquisition of assets solely in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; (6) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (6) since the date of this Indenture, not to exceed $15.0 million in the aggregate; (7) Investments in Permitted Joint Ventures, provided that, at the time of and immediately after giving pro forma effect to such Investment (and any related transaction or series of transactions), the Leverage Ratio would be less than or equal to the Leverage Ratio immediately prior to such Investment; and (8) any Investment in the form of loans or advances to employees of the Company not to exceed $3.0 million in aggregate principal amount at any one time outstanding. "Permitted Joint Ventures" means a corporation, partnership or other entity (other than a Subsidiary) engaged in one or more Permitted Businesses in respect of which the Company or a Restricted Subsidiary (a) beneficially owns at least 20% of the Capital Stock of such entity and (b) either is a party to an agreement empowering one or more parties to such agreement (which may or may not be the Company or a Subsidiary), or is a member of a group that, pursuant to the constituent documents of the applicable corporation, partnership or other entity, has the power, to direct the policies, management and affairs of such entity. "Permitted Junior Securities" means: (1) Equity Interests in Emmis or any Guarantor; or (2) debt securities of the Company or any Guarantor that are unsecured and subordinated to all Senior Debt (and any debt securities issued in exchange for Senior Debt), to substantially the same extent as, or to a greater extent than, the Notes and the Guarantees are subordinated to Senior Debt pursuant to this Indenture. Without limiting the foregoing, such Permitted Junior Securities shall have no required principal payments or equity redemption requirements until after the final maturity of the Senior Debt. 15 23 "Permitted Liens" means: (1) Liens on the assets of the Company and any Guarantor securing Senior Debt and Indebtedness and other Obligations under Credit Facilities to the extent such Indebtedness was permitted by the terms of this Indenture to be incurred; (2) Liens in favor of the Company or the Guarantors; (3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company; provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary; (4) Liens on property existing at the time of acquisition thereof by Emmis or any Restricted Subsidiary of the Company, provided that such Liens were in existence prior to the contemplation of such acquisition; (5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business; (6) Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of Section 4.09 of this Indenture covering only the assets acquired with such Indebtedness; (7) Liens existing on the date of this Indenture; (8) Liens on Assets of Guarantors to secure Senior Debt of such Guarantor, to the extent such Senior Debt was permitted by the terms of this Indenture to be incurred; (9) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded, provided that any reserve or other appropriate provision as shall be required in conformity with GAAP shall have been made therefor; and (10) Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed $5.0 million at any one time outstanding. "Permitted Refinancing Indebtedness" means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used 16 24 to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that: (1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount of (or accreted value, if applicable), plus accrued interest on, the Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus the amount of reasonable expenses incurred in connection therewith); (2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; (3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and (4) such Indebtedness is incurred either by the Company or by the Restricted Subsidiary who is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded. "Person" means any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or agency or political subdivision thereof (including any subdivision or ongoing business of any such entity or substantially all of the assets of any such entity, subdivision or business). "Principal" means Jeffrey H. Smulyan. "Private Placement Legend" means the legend set forth in Section 2.06(g)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture. "Productive Assets" means assets (including Capital Stock) that are used or usable by the Company and its Restricted Subsidiaries in Permitted Businesses; provided that for any Capital Stock to qualify as Productive Assets, it must, after giving pro forma effect to the transaction in which it was acquired, be Capital Stock of a Restricted Subsidiary. "Public Equity Offering" means any underwritten public offering of common stock of the Company in which the net proceeds to the Company are at least $25.0 million. 17 25 "Reference Period" means, with regard to any Person, the four full fiscal quarters (or such lesser period during which such Person has been in existence) ended immediately preceding any date upon which any determination or calculation is to be made pursuant to the terms of this Indenture. "QIB" means a "qualified institutional buyer" as defined in Rule 144A. "Registration Rights Agreement" means that certain agreement among the Company and the Initial Purchasers requiring the Company to file the Exchange Offer Registration Statement and the Shelf Registration Statement. "Regulation S" means Regulation S promulgated under the Securities Act. "Regulation S Global Note" means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate. "Regulation S Permanent Global Note" means a permanent Global Note in the form of Exhibit A1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period. "Regulation S Temporary Global Note" means a temporary Global Note in the form of Exhibit A2 hereto bearing the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S. "Related Party" with respect to any Principal means: (1) any controlling stockholder, 80% or more owned Subsidiary, or spouse or immediate family member (in the case of an individual) of such Principal; or (2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of such Principal and/or such other Persons referred to in the immediately preceding clause (1). "Representative" means the indenture trustee or other trustee, agent or representative for any Senior Debt. "Responsible Officer," when used with respect to the Trustee, means any officer within the Corporate Trust Administration of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and also means, with respect to a particular corporate 18 26 trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject. "Restricted Definitive Note" means a Definitive Note bearing the Private Placement Legend. "Restricted Global Note" means a Global Note bearing the Private Placement Legend. "Restricted Investment" means any Investment other than a Permitted Investment. "Restricted Period" means the 40-day restricted period as defined in Regulation S. "Restricted Subsidiary" of a Person means any Subsidiary of the referent Person that is not an Unrestricted Subsidiary. "Rule 144" means Rule 144 promulgated under the Securities Act. "Rule 144A" means Rule 144A promulgated under the Securities Act. "Rule 903" means Rule 903 promulgated under the Securities Act. "Rule 904" means Rule 904 promulgated the Securities Act. "S&P" means Standard & Poor's Corporation. "SEC" means the Securities and Exchange Commission. "Securities Act" means the Securities Act of 1933, as amended. "Senior Debt" means: (1) all principal, premium, interest, fees, expenses and other obligations and liabilities of any kind outstanding under the Credit Facilities and any Guarantees thereof, together with available undrawn amounts under letters of credit issued thereunder and any other Indebtedness outstanding under the Credit Facilities (including, without limitation, post-petition interest whether or not allowed as a claim in any bankruptcy, reorganization, insolvency, receivership or similar proceeding with respect to Indebtedness outstanding under the Credit Facilities) and all Hedging Obligations with respect thereto; (2) any other Indebtedness permitted to be incurred by the Company under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes; and 19 27 (3) all Obligations with respect to the items listed in the preceding clauses (1) and (2). Notwithstanding anything to the contrary in the preceding, Senior Debt will not include: (1) any liability for federal, state, local or other taxes owed or owing by the Company; (2) any Indebtedness of the Company to any of its Subsidiaries or other Affiliates; (3) any trade payables; or (4) any Indebtedness that is incurred in violation of this Indenture. "Senior Guarantees" means the Guarantees by the Guarantors of Obligations under the Senior Debt. "Shelf Registration Statement" means that certain shelf registration statement filed by Emmis with the Commission to register resales of the Notes or the Exchange Notes. "Significant Subsidiary" means any Subsidiary that would be a "significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture. "Stated Maturity" means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which such payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof. "Subsidiary" means, with respect to any Person: (1) any corporation, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and (2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof). "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section Section 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA. 20 28 "Trustee" means the party named as such above until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder. "Unrestricted Definitive Note" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend. "Unrestricted Global Note" means a permanent global Note substantially in the form of Exhibit A attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depositary, representing a series of Notes that do not bear the Private Placement Legend. "Unrestricted Subsidiary" means Radio Hungaria Co. Ltd. and any other Subsidiary of the Company that is designated by the Board of Directors as an Unrestricted Subsidiary pursuant to a Board Resolution, but only to the extent that such Subsidiary: (1) has no Indebtedness other than Non-Recourse Debt; (2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; (3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person's financial condition or to cause such Person to achieve any specified levels of operating results; (4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries; and (5) has at least one director on its board of directors that is not a director or executive officer of the Company or any of its Restricted Subsidiaries and has at least one executive officer that is not a director or executive officer of the Company or any of its Restricted Subsidiaries. Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary shall be evidenced to the Trustee by filing with the Trustee a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate certifying that such designation complied with the preceding conditions and was permitted by Section 4.07 of this Indenture. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding 21 29 requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary shall be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date under Section 4.09 of this Indenture, the Company shall be in default of such section. The Board of Directors of the Company may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation shall be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation shall only be permitted if (1) such Indebtedness is permitted under Section 4.09 of this Indenture, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation. "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act. "Voting Stock" of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years obtained by dividing: (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (2) the then outstanding principal amount of such Indebtedness. "Wholly Owned Restricted Subsidiary" of any Person means a Restricted Subsidiary of such Person all of the outstanding Capital Stock or other ownership interests of which (other than directors' qualifying shares) shall at the time be owned by such Person and/or by one or more Wholly Owned Restricted Subsidiaries of such Person. Section 1.02. Other Definitions.
Defined in Term Section ---- ---------- "Affiliate Transaction".................... 4.11 "Asset Sale Offer"......................... 3.09 "Authentication Order"..................... 2.02 "Change of Control Offer".................. 4.14 "Change of Control Payment"................ 4.14 "Change of Control Payment Date"........... 4.14 "Covenant Defeasance"...................... 8.03
22 30
Defined in Term Section ---- ---------- "Event of Default"....................... 6.01 "Excess Proceeds"........................ 4.10 "incur".................................. 4.09 "Legal Defeasance"....................... 8.02 "Offer Amount"........................... 3.09 "Offer Period"........................... 3.09 "Paying Agent"........................... 2.03 "Permitted Debt"......................... 4.09 "Purchase Date".......................... 3.09 "Registrar".............................. 2.03 "Restricted Payments".................... 4.07
Section 1.03. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings: "indenture securities" means the Notes; "indenture security Holder" means a Holder of a Note; "indenture to be qualified" means this Indenture; "indenture trustee" or "institutional trustee" means the Trustee; and "obligor" on the Notes and the Note Guarantees means the Company and the Guarantors, respectively, and any successor obligor upon the Notes and the Note Guarantees, respectively. All other terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule under the TIA have the meanings so assigned to them. Section 1.04. Rules of Construction. Unless the context otherwise requires: (a) a term has the meaning assigned to it; (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP; 23 31 (c) "or" is not exclusive; (d) words in the singular include the plural, and in the plural include the singular; (e) provisions apply to successive events and transactions; and (f) references to sections of or rules under the Securities Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time. ARTICLE 2 THE NOTES Section 2.01. Form and Dating. (a) General. The Notes and the Trustee's certificate of authentication shall be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note shall be dated the date of its authentication. The Notes shall be in denominations of $1,000 and integral multiples thereof. The terms and provisions contained in the Notes shall constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. (b) Global Notes. Notes issued in global form shall be substantially in the form of Exhibits A1 or A2 attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Notes issued in definitive form shall be substantially in the form of Exhibit A1 attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof. (c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, at its New York office, as custodian for the Depositary, and registered in the name of the 24 32 Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Cedel Bank, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period shall be terminated upon the receipt by the Trustee of (i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Cedel Bank certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof), and (ii) an Officers' Certificate from the Company. Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures. Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided. (d) Euroclear and Cedel Procedures Applicable. The provisions of the "Operating Procedures of the Euroclear System" and "Terms and Conditions Governing Use of Euroclear" and the "General Terms and Conditions of Cedel Bank" and "Customer Handbook" of Cedel Bank shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Cedel Bank. Section 2.02. Execution and Authentication. An Officer shall sign the Notes for the Company by manual or facsimile signature. If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note shall nevertheless be valid. A Note shall not be valid until authenticated by the manual signature of the Trustee. The signature shall be conclusive evidence that the Note has been authenticated under this Indenture. The Trustee shall, upon a written order of the Company signed by two Officers (an "Authentication Order"), authenticate Notes for original issue up to the aggregate principal amount stated in paragraph 4 of the Notes. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof. The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. An authenticating agent may authenticate Notes whenever the Trustee may 25 33 do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. An authenticating agent has the same rights as an Agent to deal with Holders or an Affiliate of the Company. Section 2.03. Registrar and Paying Agent. The Company shall maintain an office or agency where Notes may be presented for registration of transfer or for exchange ("Registrar") and an office or agency where Notes may be presented for payment ("Paying Agent"). The Registrar shall keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term "Registrar" includes any co-registrar and the term "Paying Agent" includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar. The Company initially appoints The Depository Trust Company ("DTC") to act as Depositary with respect to the Global Notes. The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes. Section 2.04. Paying Agent to Hold Money in Trust. The Company shall require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium or Liquidated Damages, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) shall have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it shall segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes. Section 2.05. Holder Lists. The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders and shall otherwise comply with TIA Section 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may 26 34 reasonably require of the names and addresses of the Holders of Notes and the Company shall otherwise comply with TIA Section 312(a). Section 2.06. Transfer and Exchange. (a) Transfer and Exchange of Global Notes. A Global Note may not be transferred as a whole except by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if (i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary or (ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act. Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a); however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof. (b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable: (i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Temporary Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Beneficial interests in any Unrestricted Global Note may be transferred to 27 35 Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i). (ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon consummation of an Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the Holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof. (iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following: (A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and 28 36 (C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications and certificates and Opinion of Counsel required by item (3) thereof, if applicable. (iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in the Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer 29 37 contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. If any such transfer is effected pursuant to subparagraph (B) or (D) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) above. Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note. (c) Transfer or Exchange of Beneficial Interests for Definitive Notes. (i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation: (A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof; (B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, 30 38 including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such beneficial interest is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein. (ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(c)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904. (iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of such beneficial interest, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; 31 39 (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or (2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a Definitive Note that does not bear the Private Placement Legend, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(h) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iii) shall not bear the Private Placement Legend. 32 40 (d) Transfer and Exchange of Definitive Notes for Beneficial Interests. (i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation: (A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof; (B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof; (C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof; (D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144 under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof; (E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; (F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or (G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof, the Trustee shall cancel the Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate 33 41 Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and, in all other cases, the IAI Global Note. (ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or (2) if the Holder of such Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. 34 42 Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel the Definitive Notes and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note. (iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Notes to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes. If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred. (e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e). (i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following: (A) if the transfer will be made pursuant to Rule 144A under the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; (B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and (C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable. 35 43 (ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if: (A) such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a broker-dealer, (2) a Person participating in the distribution of the Exchange Notes or (3) a Person who is an affiliate (as defined in Rule 144) of the Company; (B) any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; (C) any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or (D) the Registrar receives the following: (1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or (2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof; and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act. (iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof. (f) Exchange Offer. Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an 36 44 Authentication Order in accordance with Section 2.02, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by Persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the Persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount. (g) Legends. The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture. (i) Private Placement Legend. (A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form: "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS, EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF OR OF A BENEFICIAL INTEREST HEREIN, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) (A "QIB"), (B) IT IS NOT A U.S. PERSON, IS NOT ACQUIRING THIS NOTE FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, OR (C) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT) (AN "IAI"), (2) AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO UNDER RULE 144(k) (TAKING INTO ACCOUNT THE PROVISIONS OF RULE 144(d) UNDER THE SECURITIES ACT, IF APPLICABLE) UNDER THE SECURITIES ACT AS IN EFFECT ON THE DATE OF THE TRANSFER OF THIS NOTE, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A PERSON WHOM THE HOLDER REASONABLY BELIEVES IS A QIB 37 45 PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) TO AN IAI THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE REGISTRATION OF TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE OR AN INTEREST HEREIN IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE OR ANY INTEREST HEREIN WITHIN THE TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. EACH IAI THAT IS NOT A QIB WILL BE REQUIRED TO EFFECT ANY TRANSFER OF NOTES OR INTERESTS THEREIN (OTHER THAN PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT) THROUGH ONE OF THE INITIAL PURCHASERS. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM BY RULE 902 OF REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS." (B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv), (c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend. (ii) Global Note Legend. Each Global Note shall bear a legend in substantially the following form: "THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.07 38 46 OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF EMMIS COMMUNICATIONS CORPORATION." (iii) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note shall bear a legend in substantially the following form: "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON." (h) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase. (i) General Provisions Relating to Transfers and Exchanges. (i) To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon the Company's order or at the Registrar's request. (ii) No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.14 and 9.05 hereof). 39 47 (iii) The Registrar shall not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part. (iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange. (v) The Company shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date. (vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary. (vii) The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof. (viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile. Section 2.07. Replacement Notes. If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company may charge for its expenses in replacing a Note. Every replacement Note is an additional obligation of the Company and shall be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder. 40 48 Section 2.08. Outstanding Notes. The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof. If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue. If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes shall be deemed to be no longer outstanding and shall cease to accrue interest. Section 2.09. Treasury Notes. In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company, or by any Person directly or indirectly controlling or controlled by or under direct or indirect common control with the Company, shall be considered as though not outstanding, except that for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned shall be so disregarded. Section 2.10. Temporary Notes. Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of Definitive Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate Definitive Notes in exchange for temporary Notes. Holders of temporary Notes shall be entitled to all of the benefits of this Indenture. 41 49 Section 2.11. Cancellation. The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent shall forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else shall cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and shall destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes shall be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation. Section 2.12. Defaulted Interest. If the Company defaults in a payment of interest on the Notes, it shall pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company shall notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company shall fix or cause to be fixed each such special record date and payment date, provided that no such special record date shall be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid. ARTICLE 3 REDEMPTION AND PREPAYMENT Section 3.01. Notices to Trustee. If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee, at least 30 days but not more than 60 days before a redemption date, an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price. Section 3.02. Selection of Notes to Be Redeemed. If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee shall select the Notes to be redeemed or purchased among the Holders of the Notes in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis, by lot or in accordance with any other method the Trustee considers fair and appropriate. In the event of partial redemption by lot, the particular Notes to be redeemed shall be selected, 42 50 unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption. The Trustee shall promptly notify the Company in writing of the Notes selected for redemption and, in the case of any Note selected for partial redemption, the principal amount thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption. Section 3.03. Notice of Redemption. Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company shall mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address. The notice shall identify the Notes to be redeemed and shall state: (a) the redemption date; (b) the redemption price; (c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion shall be issued upon cancellation of the original Note; (d) the name and address of the Paying Agent; (e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price; (f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date; (g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and (h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes. At the Company's request, the Trustee shall give the notice of redemption in the Company's name and at its expense; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the redemption date, an Officers' Certificate requesting 43 51 that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph. Section 3.04. Effect of Notice of Redemption. Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. Section 3.05. Deposit of Redemption Price. One Business Day prior to the redemption date, the Company shall deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption price of and accrued interest on all Notes to be redeemed on that date. The Trustee or the Paying Agent shall promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption price of, and accrued interest on, all Notes to be redeemed. If the Company complies with the provisions of the preceding paragraph, on and after the redemption date, interest shall cease to accrue on the Notes or the portions of Notes called for redemption. If a Note is redeemed on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption shall not be so paid upon surrender for redemption because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof. Section 3.06. Notes Redeemed in Part. Upon surrender of a Note that is redeemed in part, the Company shall issue and, upon the Company's written request, the Trustee shall authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed portion of the Note surrendered. Section 3.07. Optional Redemption. (a) Except as set forth in clause (b) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to March 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below: 44 52
Year Percentage ---- ---------- 2004........................... 104.063% 2005........................... 102.708% 2006........................... 101.354% 2007 and thereafter............ 100.000%
(b) Notwithstanding the provisions of clause (a) of this Section 3.07, at any time prior to March 15, 2002 the Company may on any one or more occasions redeem Notes with the net cash proceeds of one or more Public Equity Offerings at a redemption price equal to 108.125% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the redemption date; provided that at least 65% in aggregate principal amount of the Notes originally issued under this Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and that such redemption occurs within 45 days of the date of the closing of such Public Equity Offering. (c) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof. Section 3.08. Mandatory Redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes. Section 3.09. Offer to Purchase by Application of Excess Proceeds. In the event that, pursuant to Section 4.10 hereof, the Company shall be required to commence an offer to all Holders to purchase Notes (an "Asset Sale Offer"), it shall follow the procedures specified below. The Asset Sale Offer shall remain open for a period of 20 Business Days following its commencement and no longer, except to the extent that a longer period is required by applicable law (the "Offer Period"). No later than five Business Days after the termination of the Offer Period (the "Purchase Date"), the Company shall purchase the principal amount of Notes required to be purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if less than the Offer Amount has been tendered, all Notes tendered in response to the Asset Sale Offer. Payment for any Notes so purchased shall be made in the same manner as interest payments are made. If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest shall be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Asset Sale Offer. Upon the commencement of an Asset Sale Offer, the Company shall send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice 45 53 shall contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The Asset Sale Offer shall be made to all Holders. The notice, which shall govern the terms of the Asset Sale Offer, shall state: (a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer shall remain open; (b) the Offer Amount, the purchase price and the Purchase Date; (c) that any Note not tendered or accepted for payment shall continue to accrete or accrue interest; (d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrete or accrue interest after the Purchase Date; (e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in integral multiples of $1,000 only; (f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer shall be required to surrender the Note, with the form entitled "Option of Holder to Elect Purchase" on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date; (g) that Holders shall be entitled to withdraw their election if the Company, any Depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased; (h) that, if the aggregate principal amount of Notes surrendered by Holders exceeds the Offer Amount, the Company shall select the Notes to be purchased on a pro rata basis (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $1,000, or integral multiples thereof, shall be purchased); and (i) that Holders whose Notes were purchased only in part shall be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer). On or before the Purchase Date, the Company shall, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes tendered, and shall deliver to the Trustee an Officers' Certificate stating that such Notes or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case 46 54 may be, shall promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company shall promptly issue a new Note, and the Trustee, upon written request from the Company shall authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company shall publicly announce the results of the Asset Sale Offer on the Purchase Date. Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof. ARTICLE 4 COVENANTS Section 4.01. Payment of Notes. The Company shall pay or cause to be paid the principal of, premium, if any, and interest on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and interest shall be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 10:00 a.m. New York City Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and interest then due. The Company shall pay all Liquidated Damages, if any, in the same manner on the dates and in the amounts set forth in the Registration Rights Agreement The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to 1% per annum in excess of the then applicable interest rate on the Notes to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace period) at the same rate to the extent lawful. Section 4.02. Maintenance of Office or Agency. The Company shall maintain in the Borough of Manhattan, The City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and demands to or upon the Company in respect of the Notes and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee. 47 55 The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, The City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency. The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03. Section 4.03. Reports. (a) Whether or not required by the SEC, so long as any Notes are outstanding, the Company shall furnish to the Holders of Notes, within the time periods specified in the SEC's rules and regulations: (i) all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and (ii) all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports. If the Company has designated any of its Subsidiaries as Unrestricted Subsidiaries or if any Restricted Subsidiaries of the Company are not Guarantors, then the quarterly and annual financial information required by the preceding paragraph shall include a reasonably detailed presentation, either on the face of the financial statements or in the footnotes thereto, and in "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the financial condition and results of operations of the Company and its Restricted Subsidiaries separate from the financial condition and results of operations of the non-Guarantor Subsidiaries of the Company. In addition, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in clauses (i) and (ii) above with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request. The Company shall at all times comply with TIA Section 314(a). Section 4.04. Compliance Certificate. (a) The Company and each Guarantor (to the extent that such Guarantor is so required under the TIA) shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officers' Certificate stating that a review of the activities of the Company and its Subsidiaries during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to each such Officer signing 48 56 such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default shall have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action the Company is taking or proposes to take with respect thereto. (b) So long as not contrary to the then current recommendations of the American Institute of Certified Public Accountants, the year-end financial statements delivered pursuant to Section 4.03(a) above shall be accompanied by a written statement of the Company's independent public accountants (who shall be a firm of established national reputation) that in making the examination necessary for certification of such financial statements, nothing has come to their attention that would lead them to believe that the Company has violated any provisions of Article Four or Article Five hereof or, if any such violation has occurred, specifying the nature and period of existence thereof, it being understood that such accountants shall not be liable directly or indirectly to any Person for any failure to obtain knowledge of any such violation. (c) The Company shall, so long as any of the Notes are outstanding, deliver to the Trustee, forthwith upon any Officer becoming aware of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company is taking or proposes to take with respect thereto. Section 4.05. Taxes. The Company shall pay, and shall cause each of its Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes. Section 4.06. Stay, Extension and Usury Laws. The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it shall not, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law has been enacted. 49 57 Section 4.07. Restricted Payments. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly: (1) declare or pay any dividend or make any other payment or distribution on account of the Company's or any of its Restricted Subsidiaries' Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company's or any of its Restricted Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary of the Company); (2) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company or any Restricted Subsidiary of the Company (other than any such Equity Interests owned by the Company or any Restricted Subsidiary of the Company); (3) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Guarantees (other than the Notes or the Guarantees), except a payment of interest or principal at the Stated Maturity thereof; or (4) make any Restricted Investment (all such payments and other actions set forth in the foregoing clauses (1) through (4) being collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to such Restricted Payment: (1) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and (2) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of Section 4.09 of this Indenture; and (3) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this Indenture (excluding Restricted Payments permitted 50 58 by clauses (2) and (3) of the next succeeding paragraph), is less than the sum, without duplication, of: (a) (i) the aggregate Consolidated EBITDA of the Company for the period (taken as one accounting period) from the beginning of the first fiscal quarter commencing after the date of this Indenture to the end of the Company's most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, in the event aggregate Consolidated EBITDA for such period is a deficit, then minus such deficit) less (ii) 1.4 times the aggregate Fixed Charges of the Company for the same period; plus (b) the aggregate net cash proceeds received by the Company since the date of this Indenture as a contribution to its common equity capital or from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or from the issue or sale of convertible or exchangeable Disqualified Stock or convertible or exchangeable debt securities of the Company that have been converted into or exchanged for such Equity Interests (other than Equity Interests (or Disqualified Stock or debt securities) sold to a Subsidiary of the Company); plus (c) to the extent that any Restricted Investment is sold for cash or otherwise liquidated or repaid for cash, the lesser of (i) the cash return of capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment; plus (d) if any Unrestricted Subsidiary (i) is redesignated as a Restricted Subsidiary, the fair market value of such redesignated Subsidiary (as determined in good faith by the Board of Directors) as of the date of its redesignation or (ii) pays any cash dividends or cash distributions to the Company or any of its Restricted Subsidiaries, 100% of any such cash dividends or cash distributions made after the date of this Indenture; plus (e) $10 million. So long as no Default has occurred and is continuing or would be caused thereby, the preceding provisions shall not prohibit: (1) the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of this Indenture; 51 59 (2) the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock); provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clause (3)(b) of the preceding paragraph; (3) the defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an incurrence of Permitted Refinancing Indebtedness; (4) the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its common Equity Interests on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company or any Restricted Subsidiary of the Company held by any former member of the Company's (or any of its Subsidiaries') management pursuant to any management equity subscription agreement or stock option agreement in effect as of the date of this Indenture; provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests shall not exceed $1 million in any twelve-month period; and (6) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company (other than those described in clause (5) above) in an amount not to exceed $25 million in the aggregate. The amount of all Restricted Payments (other than cash) shall be the fair market value on the date of the Restricted Payment of the asset(s) or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this covenant shall be determined by the Board of Directors whose resolution with respect thereto shall be delivered to the Trustee. The Board of Directors' determination must be based upon an opinion or appraisal issued by an accounting, appraisal or investment banking firm of national standing if the fair market value exceeds $5 million. Not later than the date of making any Restricted Payment, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Restricted Payments" covenant were computed, together with a copy of any fairness opinion or appraisal required by this Indenture. 52 60 Section 4.08. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create or permit to exist or become effective any encumbrance or restriction on the ability of any Restricted Subsidiary to: (1) pay dividends or make any other distributions on its Capital Stock to the Company or any of the Company's Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of the Company's Restricted Subsidiaries; (2) make loans or advances to the Company or any of the Company's Restricted Subsidiaries; or (3) transfer any of its properties or assets to the Company or any of the Company's Restricted Subsidiaries. However, the preceding restrictions shall not apply to encumbrances or restrictions existing under or by reason of: (1) Existing Indebtedness as in effect on the date of this Indenture and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings thereof, provided that such amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings are no more restrictive, taken as a whole, with respect to such dividend and other payment restrictions than those contained in such Existing Indebtedness, as in effect on the date of this Indenture; (2) this Indenture and the Notes; (3) applicable law; (4) any instrument governing Indebtedness or Capital Stock of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred; (5) customary non-assignment provisions in leases entered into in the ordinary course of business and consistent with past practices; 53 61 (6) purchase money obligations for property acquired in the ordinary course of business that impose restrictions on the property so acquired of the nature described in clause (3) of the preceding paragraph; (7) any agreement for the sale or other disposition of a Restricted Subsidiary that restricts distributions by such Restricted Subsidiary pending its sale or other disposition; (8) Permitted Refinancing Indebtedness, provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are no more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced; (9) Liens securing Indebtedness otherwise permitted to be incurred pursuant to the provisions of Section 4.12 of this Indenture that limit the right of the Company or any of its Restricted Subsidiaries to dispose of the assets subject to such Lien; (10) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; and (11) restrictions on cash or other deposits or net worth imposed by customers under contracts entered into in the ordinary course of business. Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, "incur") any Indebtedness (including Acquired Debt), and the Company shall not issue any Disqualified Stock and shall not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company and any Restricted Subsidiary may incur Indebtedness (including Acquired Debt), and may issue Disqualified Stock, if the Leverage Ratio of the Company for the Reference Period immediately preceding the date on which such additional Indebtedness is incurred or such Disqualified Stock is issued would not have been greater than 7.0 to 1, determined on a pro forma basis (after giving pro forma effect to such incurrence or issuance and to the application of the net proceeds therefrom) and in accordance with the definition of Leverage Ratio. So long as no Default shall have occurred and be continuing or would be caused thereby, the first paragraph of this covenant shall not prohibit the incurrence of any of the following items of Indebtedness (collectively, "Permitted Debt"): (1) the incurrence by the Company and any Restricted Subsidiary of Indebtedness under the Credit Agreement; provided that the aggregate 54 62 principal amount of all Indebtedness of the Company and the Restricted Subsidiaries outstanding under the Credit Agreement after giving effect to such incurrence does not exceed an amount equal to $750 million less the aggregate amount of all Net Proceeds of Asset Sales required to be applied by the Company or any of its Restricted Subsidiaries since the date of this Indenture to repay Indebtedness under the Credit Facilities pursuant to Section 4.10 of this Indenture; (2) the incurrence by the Company and its Restricted Subsidiaries of Existing Indebtedness; (3) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued in this Offering and the Guarantees; (4) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount not to exceed $5 million at any time outstanding; (5) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this covenant or clauses (2), (3), (4), (8) or (9) of this paragraph; (6) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness between or among the Company and any Guarantor; provided, however, that: (a) if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Guarantee of such Guarantor, in the case of a Guarantor; and (b) (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Guarantor and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Guarantor shall be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); 55 63 (7) the incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are incurred for the purpose of fixing or hedging interest rate risk with respect to any floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding; (8) the guarantee by the Company or any of the Restricted Subsidiaries of Indebtedness of the Company or a Restricted Subsidiary of the Company that is also a Guarantor that was permitted to be incurred by another provision of this covenant; (9) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (9), not to exceed $25.0 million; (10) the incurrence by the Company's Unrestricted Subsidiaries of Non-Recourse Debt; provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event shall be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (10); (11) the accrual of interest, accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms (provided, in each such case, that the amount thereof is included in Fixed Charges of the Company as accrued) , and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock; and (12) the incurrence by the Company and any Restricted Subsidiary of up to an aggregate principal amount of $250 million of Indebtedness under the Credit Facilities for the purpose of acquiring Permitted Businesses. For purposes of determining compliance with this "Incurrence of Indebtedness and Issuance of Preferred Stock" covenant, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (1) through (12) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall be permitted to classify such item of Indebtedness on the date of its incurrence in any manner that complies with this covenant. Section 4.10. Asset Sales. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless: 56 64 (1) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; (2) such fair market value is determined by the Company's Board of Directors and evidenced by a resolution of the Board of Directors set forth in an Officers' Certificate delivered to the Trustee; and (3) at least 80% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash. For purposes of this provision, each of the following shall be deemed to be cash: (a) any liabilities (as shown on the Company's or such Restricted Subsidiary's most recent balance sheet), of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and (b) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are contemporaneously (subject to ordinary settlement periods) converted by the Company or such Restricted Subsidiary into cash (to the extent of the cash received in that conversion). Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company may apply such Net Proceeds at its option: (1) to repay Senior Debt; (2) to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, another Permitted Business that is owned by the Company or a Guarantor; (3) to make a capital expenditure; or (4) to acquire other long-term assets that are used or useful in a Permitted Business that is owned by the Company or a Guarantor. Pending the final application of any such Net Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by this Indenture. Notwithstanding the immediately preceding paragraph, the Company and its Restricted Subsidiaries will be permitted to consummate an Asset Sale without complying with such paragraph to the extent (i) at least 80% of the consideration for such Asset 57 65 Sale constitutes Productive Assets, cash, Cash Equivalents and/or Marketable Securities and (ii) such Asset Sale is for fair market value (as determined in good faith by the Board of Directors and certified to in an Officers' Certificate); provided that any consideration not constituting Productive Assets received by the Company or any of its Restricted Subsidiaries in connection with any Asset Sale permitted to be consummated under this paragraph shall be subject to the provisions of the preceding paragraph. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph will constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $5 million, the Company shall make an Asset Sale Offer to all Holders of Notes and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of principal amount plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. Section 4.11. Transactions with Affiliates. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an "Affiliate Transaction"), unless: (1) such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and (2) the Company delivers to the Trustee: (a) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $1 million, a resolution of the Board of Directors set forth in an Officers' Certificate certifying that such Affiliate Transaction complies with this covenant and that such Affiliate Transaction has been approved by a majority of the disinterested members of the Board of Directors; and 58 66 (b) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $5 million, an opinion as to the fairness to the Holders of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing. The following items shall not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph: (1) any employment agreement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and consistent with the past practice of the Company or such Restricted Subsidiary; (2) transactions between or among the Company and/or its Restricted Subsidiaries; (3) payment of reasonable directors fees to Persons who are not otherwise Affiliates of the Company; and (4) Restricted Payments that are permitted by Section 4.07 of this Indenture. Section 4.12. Liens. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness, Attributable Debt or trade payables on any asset now owned or hereafter acquired, except Permitted Liens. Section 4.13. Corporate Existence. Subject to Article Five hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect (i) its corporate existence, and the corporate, partnership or other existence of each of its Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Subsidiary and (ii) the rights (charter and statutory), licenses and franchises of the Company and its Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Subsidiaries, if the Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole, and that the loss thereof is not adverse in any material respect to the Holders of the Notes. 59 67 Section 4.14. Offer to Repurchase Upon Change of Control. If a Change of Control occurs, each Holder of Notes shall have the right to require the Company to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of that Holder's Notes pursuant to the Change of Control Offer. In the Change of Control Offer, the Company shall offer a Change of Control Payment in cash equal to 101% of the aggregate principal amount of Notes repurchased plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase. Within ten days following any Change of Control, the Company shall mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and offering to repurchase Notes on the Change of Control Payment Date specified in such notice, pursuant to the procedures required by this Indenture and described in such notice. The Company shall comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control. On the Change of Control Payment Date, the Company shall, to the extent lawful: (1) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; (2) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and (3) deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. The Paying Agent will promptly mail to each Holder of Notes so tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof. Prior to complying with any of the provisions of this "Change of Control" covenant, but in any event within 90 days following a Change of Control, the Company shall either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all agreements governing outstanding Senior Debt to permit the repurchase of Notes required by this covenant. The Company shall publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date. The provisions of this Section 4.14 shall be applicable regardless of whether or not any other provisions of this Indenture are applicable. Except to the extent of the provisions of this Section 4.14, this Indenture does provide for the right of the Holders of the Notes to require that the Company repurchase or redeem the Notes in the event of a takeover, recapitalization or similar transaction. 60 68 Notwithstanding anything in this Section 4.14 to the contrary, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes validly tendered and not withdrawn under such Change of Control Offer. Section 4.15. No Senior Subordinated Debt. The Company shall not incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of the Company and senior in any respect in right of payment to the Notes. No Guarantor will incur, create, issue, assume, guarantee or otherwise become liable for any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of such Guarantor and senior in any respect in right of payment to such Guarantor's Guarantee. Section 4.16. Sale and Leaseback Transactions. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, enter into any sale and leaseback transaction; provided that the Company or any Guarantor may enter into a sale and leaseback transaction if: (1) the Company or that Guarantor, as applicable, could have (a) incurred Indebtedness in an amount equal to the Attributable Debt relating to such sale and leaseback transaction under the Leverage Ratio test in the first paragraph of Section 4.09 of this Indenture and (b) incurred a Lien to secure such Indebtedness pursuant to Section 4.12 of this Indenture; (2) the gross cash proceeds of that sale and leaseback transaction are at least equal to the fair market value, as determined in good faith by the Board of Directors and set forth in an Officers' Certificate delivered to the Trustee, of the property that is the subject of such sale and leaseback transaction; and (3) the transfer of assets in that sale and leaseback transaction is permitted by, and the Company applies the proceeds of such transaction in compliance with Section 4.10 of this Indenture. Section 4.17. Limitation on Issuances and Sales of Equity Interests in Wholly Owned Subsidiaries. The Company shall not, and shall not permit any of its Restricted Subsidiaries to, transfer, convey, sell, lease or otherwise dispose of any Equity Interests in any Wholly Owned Restricted Subsidiary of the Company to any Person (other than the Company or a Wholly Owned Restricted Subsidiary of the Company), unless: 61 69 (1) such transfer, conveyance, sale, lease or other disposition is of all the Equity Interests in such Wholly Owned Restricted Subsidiary; and (2) the cash Net Proceeds from such transfer, conveyance, sale, lease or other disposition are applied in accordance with Section 4.10 of this Indenture. In addition, the Company shall not permit any Wholly Owned Restricted Subsidiary of the Company to issue any of its Equity Interests (other than, if necessary, shares of its Capital Stock constituting directors' qualifying shares) to any Person other than to the Company or a Wholly Owned Restricted Subsidiary of the Company. Section 4.18. Limitation on Issuances of Guarantees of Indebtedness. The Company shall not permit any of its Restricted Subsidiaries, directly or indirectly, to Guarantee or pledge any assets to secure the payment of any other Indebtedness of the Company unless such Restricted Subsidiary simultaneously executes and delivers a supplemental indenture providing for the Guarantee of the payment of the Notes by such Restricted Subsidiary, which Guarantee shall be senior to or pari passu with such Restricted Subsidiary's Guarantee of or pledge to secure such other Indebtedness, unless such other Indebtedness is Senior Debt, in which case the Guarantee of the Notes may be subordinated to the Guarantee of such Senior Debt to the same extent as the Notes are subordinated to such Senior Debt. Notwithstanding the preceding paragraph, any Guarantee of the Notes shall provide by its terms that it will be automatically and unconditionally released and discharged under the circumstances described in Article One of this Indenture. The form of the Guarantee is attached as an exhibit to this Indenture. Section 4.19. Payments for Consent. The Company shall not, and shall not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. Section 4.20. Additional Guarantees. If the Company or any of its Restricted Subsidiaries acquires or creates another Subsidiary after the date of this Indenture, then, unless such Subsidiary either (1) is designated as an "Unrestricted Subsidiary" in accordance with Section 4.21 of this Indenture or (2) is not a Domestic Restricted Subsidiary, that newly acquired or created Restricted Subsidiary shall become a Guarantor and execute a supplemental indenture satisfactory to the Trustee and deliver an Opinion of Counsel to the Trustee within 10 Business Days of the date on which it was acquired or created. 62 70 Section 4.21. Designation of Restricted and Unrestricted Subsidiaries. The Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary so designated will be deemed to be an Investment made as of the time of such designation and will reduce the amount available for Restricted Payments under the first paragraph of Section 4.07 of this Indenture or Permitted Investments, as applicable. All such outstanding Investments will be valued at their fair market value at the time of such designation. In addition, such designation will only be permitted if such Restricted Payment would be permitted at that time and if such Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Board of Directors may redesignate any Unrestricted Subsidiary to be a Restricted Subsidiary if the redesignation would not cause a Default. ARTICLE 5 SUCCESSORS Section 5.01. Merger, Consolidation, or Sale of Assets. The Company shall not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets, in one or more related transactions, to another Person; unless: (1) either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; (2) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes and this Indenture pursuant to agreements reasonably satisfactory to the Trustee; (3) immediately after such transaction no Default or Event of Default exists; and (4) the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company): 63 71 (a) will have Consolidated Net Worth immediately after the transaction equal to or greater than the Consolidated Net Worth of the Company immediately preceding the transaction; and (b) will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of Section 4.09 of this Indenture. In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This "Merger, Consolidation, or Sale of Assets" covenant will not apply to a sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Wholly Owned Subsidiaries. Section 5.02. Successor Corporation Substituted. Upon any consolidation or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in accordance with Section 5.01 hereof, the successor corporation formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture referring to the "Company" or "Emmis" shall refer instead to the successor corporation and not to the Company), and may exercise every right and power of the Company under this Indenture with the same effect as if such successor Person had been named as the Company herein; provided, however, that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale of all of the Company's assets that meets the requirements of Section 5.01 hereof. ARTICLE 6 DEFAULTS AND REMEDIES Section 6.01. Events of Default. An "Event of Default" occurs if: (a) the Company defaults in the payment when due of interest on, or Liquidated Damages with respect to, the Notes, whether or not prohibited by the subordination provisions of this Indenture, and such default continues for a period of 30 days; (b) the Company defaults in the payment when due of principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption 64 72 (including in connection with an offer to purchase) or otherwise, whether or not prohibited by the subordination provisions of this Indenture; (c) the Company or any of its Subsidiaries, as applicable, fails to comply with any of the provisions of Section 4.07, 4.09, 4.10, 4.14 or 5.01 hereof; (d) the Company or any of its Restricted Subsidiaries fails to observe or perform any other covenant, representation, warranty or other agreement in this Indenture or the Notes for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class; (e) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of its Restricted Subsidiaries), whether such Indebtedness or guarantee now exists, or is created after the date of this Indenture, which default (i) is caused by a failure to pay principal of or premium, if any, or interest on such Indebtedness prior to the expiration of the grace period provided in such Indebtedness on the date of such default (a "Payment Default"), and (ii) results in the acceleration of such Indebtedness prior to its express maturity and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $5.0 million or more; (f) a final judgment or final judgments for the payment of money are entered by a court or courts of competent jurisdiction against the Company or any of its Restricted Subsidiaries and such judgment or judgments remain undischarged for a period (during which execution shall not be effectively stayed) of 60 days, provided that the aggregate of all such undischarged judgments exceeds $5 million; (g) the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary pursuant to or within the meaning of Bankruptcy Law: (i) commences a voluntary case, (ii) consents to the entry of an order for relief against it in an involuntary case, (iii) consents to the appointment of a custodian of it or for all or substantially all of its property, (iv) makes a general assignment for the benefit of its creditors, or (v) generally is not paying its debts as they become due; or 65 73 (h) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that: (i) is for relief against the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case; (ii) appoints a custodian of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or (iii) orders the liquidation of the Company or any of its Restricted Subsidiaries; and the order or decree remains unstayed and in effect for 60 consecutive days; or (i) except as permitted by this Indenture, any Guarantee is held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Guarantee. Section 6.02. Acceleration. If any Event of Default (other than an Event of Default specified in clause (g) or (h) of Section 6.01 hereof with respect to the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (g) or (h) of Section 6.01 hereof occurs with respect to the Company, any of its Restricted Subsidiaries that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived. If an Event of Default occurs on or after March 15, 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding payment of the premium that the Company would have had to pay if the Company then had elected to redeem the Notes pursuant to Section 3.07 hereof, then, upon acceleration of the 66 74 Notes, an equivalent premium shall also become and be immediately due and payable, to the extent permitted by law, anything in this Indenture or in the Notes to the contrary notwithstanding. If an Event of Default occurs prior to March 15, 2004 by reason of any willful action (or inaction) taken (or not taken) by or on behalf of the Company with the intention of avoiding the prohibition on redemption of the Notes prior to such date, then, upon acceleration of the Notes, an additional premium shall also become and be immediately due and payable in an amount, for each of the years beginning on March 15 of the years set forth below, as set forth below (expressed as a percentage of the principal amount of the Notes on the date of payment that would otherwise be due but for the provisions of this sentence):
YEAR PERCENTAGE ---- ---------- 1999 110.833% 2000 109.479% 2001 108.125% 2002 106.771% 2003 105.417%
Section 6.03. Other Remedies. If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal, premium and Liquidated Damages, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture. The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law. Section 6.04. Waiver of Past Defaults. Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive an existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of the principal of, or interest on, the Notes (including in connection with an offer to purchase) (provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes may rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration). Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 67 75 Section 6.05. Control by Majority. Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law or this Indenture that the Trustee determines may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability. Section 6.06. Limitation on Suits. A Holder of a Note may pursue a remedy with respect to this Indenture or the Notes only if: (a) the Holder of a Note gives to the Trustee written notice of a continuing Event of Default; (b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy; (c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense; (d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and (e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request. A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note. Section 6.07. Rights of Holders of Notes to Receive Payment. Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal, premium and Liquidated Damages, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder. Section 6.08. Collection Suit by Trustee. If an Event of Default specified in Section 6.01(a) or (b) occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal of, premium and Liquidated Damages, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and such further amount as shall be sufficient to cover the costs and 68 76 expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel. Section 6.09. Trustee May File Proofs of Claim. The Trustee is authorized to file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the Holders of the Notes allowed in any judicial proceedings relative to the Company (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is hereby authorized by each Holder to make such payments to the Trustee, and in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.07 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding. Section 6.10. Priorities. If the Trustee collects any money pursuant to this Article, it shall pay out the money in the following order: First: to the Trustee, its agents and attorneys for amounts due under Section 7.07 hereof, including payment of all compensation, expenses and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection; Second: to Holders of Notes for amounts due and unpaid on the Notes for principal, premium and Liquidated Damages, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal, premium and Liquidated Damages, if any, and interest, respectively; and Third: to the Company or to such party as a court of competent jurisdiction shall direct. The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10. 69 77 Section 6.11. Undertaking for Costs. In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes. ARTICLE 7 TRUSTEE Section 7.01. Duties of Trustee. (a) If an Event of Default has occurred and is continuing, the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in its exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs. (b) Except during the continuance of an Event of Default: (i) the duties of the Trustee shall be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee shall examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture. (c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that: (i) this paragraph does not limit the effect of paragraph (b) of this Section; (ii) the Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and (iii) the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof. 70 78 (d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section. (e) No provision of this Indenture shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holders shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense. (f) The Trustee shall not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law. Section 7.02. Rights of Trustee. (a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document. (b) Before the Trustee acts or refrains from acting, it may require an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel shall be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon. (c) The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. (d) The Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture. (e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company. (f) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee security or indemnity satisfactory to it against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction. 71 79 Section 7.03. Individual Rights of Trustee. The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 hereof. Section 7.04. Trustee's Disclaimer. The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company's use of the proceeds from the Notes or any money paid to the Company or upon the Company's direction under any provision of this Indenture, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it shall not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication. Section 7.05. Notice of Defaults. If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, premium or Liquidated Damages, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes. Section 7.06. Reports by Trustee to Holders of the Notes. Within 60 days after each May 15 beginning with the May 15 following the date of this Indenture, and for so long as Notes remain outstanding, the Trustee shall mail to the Holders of the Notes a brief report dated as of such reporting date that complies with TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred within the twelve months preceding the reporting date, no report need be transmitted). The Trustee also shall comply with TIA Section 313(b)(2). The Trustee shall also transmit by mail all reports as required by TIA Section 313(c). A copy of each report at the time of its mailing to the Holders of Notes shall be mailed to the Company and filed with the SEC and each stock exchange on which the Notes are listed in accordance with TIA Section 313(d). The Company shall promptly notify the Trustee when the Notes are listed on any stock exchange. 72 80 Section 7.07. Compensation and Indemnity. The Company shall pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company shall reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel. The Company shall indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company (including this Section 7.07) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its negligence or bad faith. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel. The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld. The obligations of the Company under this Section 7.07 shall survive the satisfaction and discharge of this Indenture. To secure the Company's payment obligations in this Section, the Trustee shall have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien shall survive the satisfaction and discharge of this Indenture. When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(g) or (h) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law. Section 7.08. Replacement of Trustee. A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section. The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of 73 81 the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if: (a) the Trustee fails to comply with Section 7.10 hereof; (b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law; (c) a custodian or public officer takes charge of the Trustee or its property; or (d) the Trustee becomes incapable of acting. If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company. If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee. If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.10, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee. A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee shall mail a notice of its succession to Holders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor Trustee, provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.08, the Company's obligations under Section 7.07 hereof shall continue for the benefit of the retiring Trustee. Section 7.09. Successor Trustee by Merger, etc. If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act shall be the successor Trustee. Section 7.10. Eligibility; Disqualification. There shall at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is 74 82 authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100.0 million as set forth in its most recent published annual report of condition. This Indenture shall always have a Trustee who satisfies the requirements of TIA Section 310(a)(1), (2) and (5). The Trustee is subject to TIA Section 310(b). Section 7.11. Preferential Collection of Claims Against Company. The Trustee is subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b). A Trustee who has resigned or been removed shall be subject to TIA Section 311(a) to the extent indicated therein. ARTICLE 8 LEGAL DEFEASANCE AND COVENANT DEFEASANCE Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance. The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officers' Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article Eight. Section 8.02. Legal Defeasance and Discharge. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from its obligations with respect to all outstanding Notes and the Guarantors shall, subject to the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to their Guarantees on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance"). For this purpose, Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all its other obligations under such Notes and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which shall survive until otherwise terminated or discharged hereunder: (a) the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.04 hereof, and as more fully set forth in such Section, payments in respect of the principal of, premium and Liquidated Damages, if any, and interest on such Notes when such payments are due, (b) the Company's obligations with respect to such Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust, (c) the rights, powers, trusts, duties and immunities of the Trustee hereunder and the Company's 75 83 obligations in connection therewith and (d) this Article Eight. Subject to compliance with this Section 8.02, the Company may exercise its option under this Section 8.02 notwithstanding the prior exercise of its option under Section 8.03 hereof. Section 8.03. Covenant Defeasance. Upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and the Guarantors shall, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16 and 4.17 hereof and clause (iv) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, "Covenant Defeasance"), and the Notes shall thereafter be deemed not "outstanding" for the purposes of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder (it being understood that such Notes shall not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes, the Company may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes shall be unaffected thereby. In addition, upon the Company's exercise under Section 8.01 hereof of the option applicable to this Section 8.03 hereof, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(f) hereof shall not constitute Events of Default. Section 8.04. Conditions to Legal or Covenant Defeasance. The following shall be the conditions to the application of either Section 8.02 or 8.03 hereof to the outstanding Notes: In order to exercise either Legal Defeasance or Covenant Defeasance: (a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium and Liquidated Damages, if any, and interest on the outstanding Notes on the stated date for payment thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; (b) in the case of an election under Section 8.02 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date of this Indenture, there has been a change 76 84 in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; (c) in the case of an election under Section 8.03 hereof, the Company shall have delivered to the Trustee an Opinion of Counsel in the United States reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; (d) no Default or Event of Default shall have occurred and be continuing either: (a) on the date of such deposit (other than a Default or Event of Default resulting from the incurrence of Indebtedness all or a portion of the proceeds of which will be used to defease the Notes pursuant to this Article Eight concurrently with such incurrence); or (b) insofar as Sections 6.01(g) or 6.01(h) hereof is concerned, at any time in the period ending on the 91st day after the date of deposit; (e) such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound, including without limitation the Credit Facilities; (f) the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that on the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally; (g) the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over any other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding any other creditors of the Company; and (h) the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent provided for or relating to the Legal Defeasance or the Covenant Defeasance have been complied with. Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions. Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the "Trustee") pursuant to Section 8.04 hereof in 77 85 respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and Liquidated Damages, if any, and interest, but such money need not be segregated from other funds except to the extent required by law. The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof or the principal and interest received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes. Anything in this Article Eight to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance. Section 8.06. Repayment to Company. Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the payment of the principal of, premium and Liquidated Damages, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium and Liquidated Damages, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) shall be discharged from such trust; and the Holder of such Note shall thereafter look only to the Company for payment thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be published once, in the New York Times and The Wall Street Journal (national edition), notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of such notification or publication, any unclaimed balance of such money then remaining will be repaid to the Company. Section 8.07. Reinstatement. If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, as the case may be, by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the Company's obligations under this Indenture and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case 78 86 may be; provided, however, that, if the Company makes any payment of principal of, premium or Liquidated Damages, if any, or interest on any Note following the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent. ARTICLE 9 AMENDMENT, SUPPLEMENT AND WAIVER Section 9.01. Without Consent of Holders of Notes. Notwithstanding Section 9.02 of this Indenture and except as otherwise provided in Article Ten of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Note Guarantees or the Notes without the consent of any Holder of a Note: (a) to cure any ambiguity, defect or inconsistency; (b) to provide for uncertificated Notes in addition to or in place of certificated Notes or to alter the provisions of Article Two hereof (including the related definitions) in a manner that does not materially adversely affect any Holder; (c) to provide for the assumption of the Company's or a Guarantor's obligations to the Holders of the Notes by a successor to the Company pursuant to Article Five hereof; (d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights hereunder of any Holder of the Notes; or (e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company and the Guarantors in the execution of any amended or supplemental Indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee shall not be obligated to enter into such amended or supplemental Indenture that affects its own rights, duties or immunities under this Indenture or otherwise. Section 9.02. With Consent of Holders of Notes. Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including Section 3.09, 4.10 and 4.14 hereof), the Guarantees and the Notes with the consent of the Holders of at least a majority in principal 79 87 amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes). Without the consent of at least 75% in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes), no waiver or amendment to this Indenture may make any change in the provisions of Article Ten hereof that adversely affects the rights of any Holder of Notes. Section 2.08 hereof shall determine which Notes are considered to be "outstanding" for purposes of this Section 9.02. Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee shall join with the Company in the execution of such amended or supplemental Indenture unless such amended or supplemental Indenture directly affects the Trustee's own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but shall not be obligated to, enter into such amended or supplemental Indenture. It shall not be necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it shall be sufficient if such consent approves the substance thereof. After an amendment, supplement or waiver under this Section becomes effective, the Company shall mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such amended or supplemental Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder): (a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; 80 88 (b) reduce the principal of or change the fixed maturity of any Note or alter or waive any of the provisions with respect to the redemption of the Notes except as provided above with respect to Sections 4.10 and 4.14 hereof; (c) reduce the rate of or change the time for payment of interest, including default interest, on any Note; (d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes (including Additional Notes, if any) and a waiver of the payment default that resulted from such acceleration); (e) make any Note payable in money other than that stated in the Notes; (f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or premium, if any, or interest on the Notes; (g) waive a redemption payment with respect to any Note (other than a payment required by Sections 4.10 or 4.14 hereof); or (h) make any change in the foregoing amendment and waiver provisions. Section 9.03. Compliance with Trust Indenture Act. Every amendment or supplement to this Indenture or the Notes shall be set forth in an amended or supplemental Indenture that complies with the TIA as then in effect. Section 9.04. Revocation and Effect of Consents. Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder. Section 9.05. Notation on or Exchange of Notes. The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver. 81 89 Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver. Section 9.06. Trustee to Sign Amendments, etc. The Trustee shall sign any amended or supplemental Indenture authorized pursuant to this Article Nine if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental Indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee shall be entitled to receive and (subject to Section 7.01 hereof) shall be fully protected in relying upon, in addition to the documents required by Section 12.04 hereof, an Officers' Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture. ARTICLE 10 SUBORDINATION Section 10.01. Agreement to Subordinate. The Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article Ten, to the prior payment in full in cash of all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt. Section 10.02. Liquidation; Dissolution; Bankruptcy. Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, in an assignment for the benefit of creditors or any marshaling of the Company's assets and liabilities: (i) holders of Senior Debt shall be entitled to receive payment in full in cash of all Obligations due in respect of such Senior Debt (including interest after the commencement of any such proceeding at the rate specified in the applicable Senior Debt) before Holders of the Notes shall be entitled to receive any payment with respect to the Notes (except that Holders may receive and retain (A) Permitted Junior Securities and (B) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof); and (ii) until all Obligations with respect to Senior Debt (as provided in clause (i) above) are paid in full in cash, any distribution to which Holders would be entitled but for this Article Ten shall be made to holders of Senior Debt (except that Holders of Notes may receive (A) Permitted Junior Securities and (B) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof), as their interests may appear. 82 90 Section 10.03. Default on Designated Senior Debt. (a) The Company may not make any payment or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property (other than (A) Permitted Junior Securities and (B) payments and other distributions made from any defeasance trust created pursuant to Section 8.01 hereof) until all principal and other Obligations with respect to the Senior Debt have been paid in full in cash if: (i) a default in the payment of any principal or other Obligations with respect to Designated Senior Debt occurs and is continuing; or (ii) a default, other than a payment default, on Designated Senior Debt occurs and is continuing that permits holders of the Designated Senior Debt currently or with the passage of time or the giving of notices, to accelerate its maturity and the Trustee receives a notice of the default (a "Payment Blockage Notice") from a Person who may give it pursuant to Section 10.11 hereof. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice shall be effective for purposes of this Section unless and until at least 360 days shall have elapsed since the commencement of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage Notice unless such default shall have been waived for a period of not less than 120 days. (b) The Company may and shall resume payments on and distributions in respect of the Notes and may acquire them upon the earlier of: (i) in the case of payment default, upon the date on which such default is cured or waived in writing by the representatives of the holders of Designated Senior Debt, and (ii) in the case of a default referred to in clause (ii) of Section 10.03(a) hereof, upon the earlier of the date upon which the default is cured or waived in writing by the representatives of the holders of Designated Senior Debt or 179 days after the date on which the applicable Payment Blockage Notice is received by the Trustee, unless the maturity of any Designated Senior Debt has been accelerated. Section 10.04. Reinstatement of Payments To the extent any payment of Senior Debt (whether by or on behalf of the Company or any Subsidiary, as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Senior Debt or part thereof originally intended to be satisfied shall be 83 91 deemed to be reinstated and outstanding as if such payment had not occurred. To the extent the obligation to repay any Senior Debt is declared to be fraudulent, invalid, or otherwise set aside under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then the obligations so declared fraudulent, invalid or otherwise set aside (and all other amounts that would come due with respect thereto had such obligation not been affected) shall be deemed to be reinstated and outstanding as Senior Debt for all purposes hereof as if such declaration, invalidity or setting aside had not occurred. Section 10.05. Acceleration of Notes. If payment of the Notes is accelerated because of an Event of Default, the Company shall promptly notify holders of Senior Debt of the acceleration. Section 10.06. When Distribution Must Be Paid Over. In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes at a time when such payment is prohibited by this Article Ten, such payment shall be held by the Trustee or such Holder, in trust for the benefit of, and shall be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Representatives under the indenture or other agreement (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in cash in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt. With respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article Ten, and no implied covenants or obligations with respect to the holders of Senior Debt shall be read into this Indenture against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Debt, and shall not be liable to any such holders if the Trustee shall pay over or distribute to or on behalf of Holders or the Company or any other Person money or assets to which any holders of Senior Debt shall be entitled by virtue of this Article Ten, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee. Section 10.07. Notice by Company. The Company shall promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article Ten, but failure to give such notice shall not affect the subordination of the Notes to the Senior Debt as provided in this Article Ten. Section 10.08. Subrogation. After all Senior Debt is paid in full in cash and until the Notes are paid in full, Holders of Notes shall be subrogated (equally and ratably with all other Indebtedness pari passu 84 92 with the Notes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders of Notes have been applied to the payment of Senior Debt. A distribution made under this Article Ten to holders of Senior Debt that otherwise would have been made to Holders of Notes is not, as between the Company and Holders, a payment by the Company on the Notes. Section 10.09. Relative Rights. This Article Ten defines the relative rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture shall: (i) impair, as between the Company and Holders of Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of, premium and Liquidated Damages, if any, and interest on the Notes in accordance with their terms; (ii) affect the relative rights of Holders of Notes and creditors of the Company other than their rights in relation to holders of Senior Debt; or (iii) prevent the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders of Notes. If the Company fails because of this Article Ten to pay principal of, premium and Liquidated Damages, if any, or interest on a Note on the due date, the failure is still a Default or Event of Default. Section 10.10. Subordination May Not Be Impaired by Company or Holders. No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Notes shall be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any Holder to comply with this Indenture. The Trustee and the Holders will not challenge or contest the enforceability or validity of the Senior Debt or any obligation, lien or encumbrance thereunder. As between the holders of the Senior Debt on the one hand and the Trustee and Holders of the Notes on the other, the subordination terms set forth in the Indenture shall govern even if all or part of the Senior Debt or all liens and security interests securing the Senior Debt are avoided, disallowed, subordinated, set aside or otherwise invalidated in any judicial proceeding or otherwise, regardless of the theory upon which such action is premised. Without in any way limiting the generality of the foregoing, the holders of Senior Debt may, at any time and from time to time, without the consent of or notice to the Trustee or the Holders, without incurring responsibility to the Trustee or the Holders and without impairing or releasing the subordination of the Notes or the obligations of the Holders to the holders of Senior Debt, do any one or more of the following: (a) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Senior Debt, the Credit 85 93 Agreement or any instrument evidencing the same or any agreement under which Senior Debt is outstanding or secured, (b) sell, exchange, release, foreclose against or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt, (c) release any person liable in any manner for the collection of Senior Debt, and (d) exercise or refrain from exercising any rights against Emmis, any Subsidiary of Emmis or any other Person. Section 10.11. Distribution or Notice to Representatives. Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representatives. Upon any payment or distribution of assets of the Company referred to in this Article Ten, the Trustee and the Holders of Notes shall be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of any such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts paid or distributed thereon and all other facts pertinent thereto or to this Article Ten. Section 10.12. Rights of Trustee and Paying Agent. Notwithstanding the provisions of this Article Ten or any other provision of this Indenture, the Trustee shall not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee shall have received at its Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article Ten. Only the Company or a Representative may give the notice. Nothing in this Article Ten shall impair the claims of, or payments to, the Trustee under or pursuant to Section 7.07 hereof. The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights. Section 10.13. Authorization to Effect Subordination. Each Holder of Notes, by the Holder's acceptance thereof, authorizes and directs the Trustee on such Holder's behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article Ten, and appoints the Trustee to act as such Holder's attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, the Representatives of the Senior Debt are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes. 86 94 Section 10.14. Amendments. The provisions of this Article Ten shall not be amended or modified without the written consent of the holders of all Senior Debt. ARTICLE 11 NOTE GUARANTEES Section 11.01. Guarantee. Subject to this Article Eleven, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes or the obligations of the Company hereunder or thereunder, that: (a) the principal of, premium and Liquidated Damages, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of premium and Liquidated Damages, if any, and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a guarantee of payment and not a guarantee of collection. The Guarantors hereby agree that their obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and this Indenture. If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. 87 95 Each Guarantor agrees that it shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. Section 11.02. Subordination of Subsidiary Guaranties. The Obligations of each Guarantor under its Guarantee pursuant to this Article Eleven shall be general unsecured obligations and junior and subordinated to the Senior Guarantee of such Guarantor on the same basis as the Notes are junior and subordinated to Senior Debt of the Company. For the purposes of the foregoing sentence, the Trustee and the Holders shall have the right to receive and/or retain payments by any of the Guarantors only at such times as they may receive and/or retain payments in respect of the Notes pursuant to this Indenture, including Article Ten hereof. Section 11.03. Limitation on Guarantor Liability. Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Note Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Note Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article Eleven, result in the obligations of such Guarantor under its Note Guarantee not constituting a fraudulent transfer or conveyance. Section 11.04. Execution and Delivery of Note Guarantee. To evidence its Note Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Note Guarantee substantially in the form included in Exhibit E shall be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture shall be executed on behalf of such Guarantor by its President or one of its Vice Presidents. 88 96 Each Guarantor hereby agrees that its Note Guarantee set forth in Section 11.01 shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. If an Officer whose signature is on this Indenture or on the Note Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Note Guarantee is endorsed, the Note Guarantee shall be valid nevertheless. The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of the Note Guarantee set forth in this Indenture on behalf of the Guarantors. In the event that the Company creates or acquires any new Subsidiaries subsequent to the date of this Indenture, if required by Section 4.2 hereof, the Company shall cause such Subsidiaries to execute supplemental indentures to this Indenture and Note Guarantees in accordance with Section 4.2 hereof and this Article Eleven, to the extent applicable. Section 11.05. Guarantors May Consolidate, etc., on Certain Terms. Except as otherwise provided in this Section 11.05, a Guarantor may not sell or otherwise dispose of all or substantially all of its assets, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person unless: (1) immediately after giving effect to that transaction, no Default or Event of Default exists and either (a) such Guarantor is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or to which such sale, assignment, transfer, conveyance or other disposition shall have been made is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia or the jurisdiction in which such Guarantor is organized and under the laws of which it is existing; (2) the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of such Guarantor under the Guarantees and this Indenture, as applicable, pursuant to agreements reasonably satisfactory to the Trustee; (3) immediately after such transaction no Default or Event of Default exists; (4) such Guarantor or the Person formed by or surviving any such consolidation or merger (if other than such Guarantor) shall have Consolidated Net Worth immediately after the transaction equal to or 89 97 greater than the Consolidated Net Worth of such Guarantor immediately preceding the transaction; and (5) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture. In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under this Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. Except as set forth in Articles Four and Five hereof, and notwithstanding clauses 2 and 3 above, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. Section 11.06. Releases Following Sale of Assets. In the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all of the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transactions) a Restricted Subsidiary of the Company, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture, including without limitation Section 4.10 hereof. The Guarantee of a Guarantor shall be released if the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such designation, sale or other disposition was made by the Company in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee. Any Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of, premium and Liquidated Damages, if any, and 90 98 interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article Eleven. ARTICLE 12 MISCELLANEOUS Section 12.01. Trust Indenture Act Controls. If any provision of this Indenture limits, qualifies or conflicts with the duties imposed by TIA Section 318(c), the imposed duties shall control. Section 12.02. Notices. Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others' address: If to the Company and/or any Guarantor: Emmis Communications Corporation One Emmis Plaza 40 Monument Circle Suite 700 Indianapolis, IN 46204 Telecopier No.: (317) 631-3750 Attention: Chief Financial Officer With a copy to: Bose McKinney & Evans 135 North Pennsylvania Street Indianapolis, IN 46204 Telecopier No.: (317) 684-5173 Attention: Alan Becker If to the Trustee: IBJ Whitehall Bank & Trust Company 1 State Street, 10th floor New York, New York 10004 Telecopier No.: (212) 858-2952 Attention: Corporate Trust Administration The Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications. 91 99 All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery. Any notice or communication to a Holder shall be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Any notice or communication shall also be so mailed to any Person described in TIA Section 313(c), to the extent required by the TIA. Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it. If the Company mails a notice or communication to Holders, it shall mail a copy to the Trustee and each Agent at the same time. Section 12.03. Communication by Holders of Notes with Other Holders of Notes. Holders may communicate pursuant to TIA Section 312(b) with other Holders with respect to their rights under this Indenture or the Notes. The Company, the Trustee, the Registrar and anyone else shall have the protection of TIA Section 312(c). Section 12.04. Certificate and Opinion as to Conditions Precedent. Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee: (a) an Officers' Certificate in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and (b) an Opinion of Counsel in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 12.05 hereof) stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied. Section 12.05. Statements Required in Certificate or Opinion. Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate provided pursuant to TIA Section 314(a)(4)) shall comply with the provisions of TIA Section 314(e) and shall include: (a) a statement that the Person making such certificate or opinion has read such covenant or condition; 92 100 (b) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based; (c) a statement that, in the opinion of such Person, he or she has made such examination or investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been satisfied; and (d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied. Section 12.06. Rules by Trustee and Agents. The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions. Section 12.07. No Personal Liability of Directors, Officers, Employees and Stockholders. No past, present or future director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or such Guarantor under the Notes, the Guarantees or this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Section 12.08. Governing Law. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE NOTE GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. Section 12.09. No Adverse Interpretation of Other Agreements. This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture. Section 12.10. Successors. All agreements of the Company in this Indenture and the Notes shall bind its successors. All agreements of the Trustee in this Indenture shall bind its successors. All agreements of each Guarantor in this Indenture shall bind its successors, except as otherwise provided in Section 11.05. 93 101 Section 12.11. Severability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. Section 12.12. Counterpart Originals. The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. Section 12.13. Table of Contents, Headings, etc. The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and shall in no way modify or restrict any of the terms or provisions hereof. Signatures on following page 94 102 SIGNATURES Dated as of February 12, 1999 EMMIS COMMUNICATIONS CORPORATION BY: /s/ J. Scott Enright ___________________________________ NAME: TITLE: IBJ Whitehall Bank & Trust Company BY: /s/ Stephen J. Giurlando ___________________________________ NAME: Stephen J. Giurlando TITLE: Vice President Emmis FM Broadcasting Corporation of Indianapolis Emmis FM Broadcasting Corporation of St. Louis KPWR, Inc. Emmis Broadcasting Corporation of New York 103 Emmis FM Broadcasting Corporation of Chicago Emmis FM License Corporation of Indianapolis Emmis FM License Corporation of St. Louis KPWR License, Inc. Emmis License Corporation of New York Emmis FM License Corporation of Chicago 2 104 Emmis Meadowlands Corporation Emmis Publishing Corporation Emmis AM Radio Corporation of Indianapolis Emmis FM Radio Corporation of Indianapolis Emmis AM Radio License Corporation of Indianapolis Emmis FM Radio License Corporation of Indianapolis 3 105 Emmis Radio License Corporation of New York Emmis 104.1 FM Radio Corporation of St. Louis Emmis 104.1 FM Radio License Corporation of St. Louis Emmis 106.5 FM Broadcasting Corporation of St. Louis Emmis 106.5 FM License Corporation of St. Louis Emmis 1310 AM Radio Corporation of Indianapolis 4 106 Emmis 1310 AM Radio License Corporation of Indianapolis Emmis 105.7 FM Radio Corporation of Indianapolis Mediatex Communications Corporation Mediatex Development Corporation Texas Monthly, Inc. Emmis License Corporation 5 107 Emmis International Broadcasting Corporation Emmis DAR, Inc. Emmis International Corporation Emmis 1380 AM Radio Corporation of St. Louis 6 108 Emmis Television License Corporation of Honolulu Emmis Television License Corporation of Mobile Emmis Television License Corporation of Cape Coral Emmis Television License Corporation of Green Bay Emmis FM Holding Corporation of New York Emmis 101.9 FM Radio Corporation of New York 7 109 Emmis Radio Corporation of New York Emmis 1480 AM Radio License Corporation of Terre Haute Emmis Television License Corporation of Terre Haute Emmis 99.9 FM Radio License Corporation of Terre Haute Emmis 105.7 FM Radio License Corporation of Indianapolis Emmis Television License Corporation of New Orleans 8 110 Emmis 105.5 FM Radio License Corporation of Terre Haute BY: /s/ David L. Wills ------------------------------------ NAME: David L. Wills TITLE: Assistant Secretary Emmis Indiana Broadcasting, L.P. Emmis Television Broadcasting, L.P. Emmis Publishing, L.P. By: Emmis Communications Corporation General Partner of each of the above limited partnerships BY: /s/ David L. Wills -------------------------------- NAME: David L. Wills TITLE: Assistant Secretary 9 111 EXHIBIT A-1 [Face of Note] - ------------------------------------------------------------------------------- CUSIP/CINS ____________ 8 1/8% Senior Subordinated Notes due 2009 No. ___ $____________ EMMIS COMMUNICATIONS CORPORATION promises to pay to______________________________________________________________ or registered assigns, the principal sum of___________________________________________________________ Dollars on _____________, 2009. Interest Payment Dates: March 15 and September 15 Record Dates: March 1 and September 1 Dated: _______________, ____ EMMIS COMMUNICATIONS CORPORATION BY: _______________________________________ NAME: TITLE: This is one of the Notes referred to in the within-mentioned Indenture: IBJ WHITEHALL BANK & TRUST COMPANY, as Trustee By:___________________________________ Authorized Signatory - ------------------------------------------------------------------------------- A1-1 112 EXHIBIT A1 [Back of Note] - ------------------------------------------------------------------------------- 8 1/8% Senior Subordinated Notes due 2009 [Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture] [Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture] Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. Emmis Communications Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at 8 1/8% per annum from February 12, 1999 until maturity and shall pay the Liquidated Damages payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages semi-annually in arrears on March 15 and September 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be September 15, 1999. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Liquidated Damages to the Persons who are registered Holders of Notes at the close of business on the March 15 or September 15 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Liquidated Damages may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be required with respect to principal of and interest, premium and Liquidated Damages on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. A1-2 113 EXHIBIT A1 3. PAYING AGENT AND REGISTRAR. Initially, IBJ Whitehall Bank & Trust Company, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of February 12, 1999 ("Indenture") among the Company, the Guarantors listed in Schedule 1 thereto and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Section Section 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the indenture shall govern and be controlling. The Notes are obligations of the Company limited to $400 million in aggregate principal amount, plus amounts, if any, issued to pay Liquidated Damages on outstanding Notes as set forth in Paragraph 2 hereof. 5. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to March 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below:
Year Percentage ---- ---------- 2004................................ 104.063% 2005................................ 102.708% 2006................................ 101.354% 2007 and thereafter................. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to March 15, 2002, the Company may on one or more occasions redeem Notes with the net cash proceeds of one or more Public Equity Offerings at a redemption price equal to 108.125% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any; provided that at least 65% in aggregate principal amount of the Notes originally issued under the Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and that such redemption occurs within 45 days of the date of the closing of such Public Equity Offering. 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. A1-3 114 EXHIBIT A1 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "Change of Control Payment"). Within 10 days following any Change of Control, the Company shall mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. (b) If the Company or a Subsidiary consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall commence an offer to all Holders of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes (including any Additional Notes) that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (including any Additional Notes) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. A1-4 115 EXHIBIT A1 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class, and any existing default or compliance with any provision of the Indenture, the Note Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or Guarantor's obligations to Holders of the Notes in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes. 12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest or Liquidated Damages on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise; (iii) failure by the Company to comply with Section 4.07, 4.09, 4.10, 4.14 or 5.01 of the Indenture; (iv) failure by the Company for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes (including Additional Notes, if any) then outstanding voting as a single class to comply with certain other agreements in the Indenture, the Notes; (v) default under certain other agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries; and (ix) except as permitted by the Indenture, any Note Guarantee shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor or any Person acting on its behalf shall deny or disaffirm its obligations under such Guarantor's Note Guarantee. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or A1-5 116 EXHIBIT A1 Event of Default relating to the payment of principal, premium or Liquidated Damages, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall not have any liability for any obligations of the Company or such Guarantor under the Notes, the Notes Guarantee or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 15. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the A/B Exchange Registration Rights Agreement dated as of February, 1999, between the Company and the parties named on the signature pages thereof (the "Registration Rights Agreement"). 18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: A1-6 117 EXHIBIT A1 Emmis Communications Corporation [Address] Attention: ______________ A1-7 118 EXHIBIT A1 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to:___________________________________ (Insert assignee's legal name) ________________________________________________________________________________ (Insert assignee's Soc. Sec. or tax I.D. no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint_________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date:__________________ Your Signature:______________________________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee*:_________________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-8 119 EXHIBIT A1 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.14 of the Indenture, check the appropriate box below: [ ] Section 4.10 [ ] Section 4.14 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.14 of the Indenture, state the amount you elect to have purchased: $__________________ Date:_______________________ Your Signature:________________________________________________ (Sign exactly as your name appears on the face of this Note) Tax Identification No.:________________________________________ Signature Guarantee*:___________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A1-9 120 EXHIBIT A1 SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE* The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:
Principal Amount Signature of Amount of decrease in Amount of increase in of this Global Note authorized officer of Principal Amount Principal Amount following such decrease Trustee or Note Date of Exchange of this Global Note of this Global Note (or increase) Custodian - ---------------- --------------------- --------------------- ----------------------- ---------------------
A1-10 121 EXHIBIT A2 * This schedule should be included only if the Note is issued in global form. [Face of Regulation S Temporary Global Note] - -------------------------------------------------------------------------------- CUSIP/CINS __________ Series A 8 1/8% Senior Subordinated Notes due 2009 No. __ $______________ EMMIS COMMUNICATIONS CORPORATION promises to pay to Cede & Co. or registered assigns, the principal sum of ______________________________________________________ Dollars on March 15, 2009. Interest Payment Dates: March 15 and September 15 Record Dates: March 1 and September 1 Dated: February 12, 1999 EMMIS COMMUNICATIONS CORPORATION BY: NAME: TITLE: This is one of the Notes referred to in the within-mentioned Indenture: IBJ WHITEHALL BANK & TRUST COMPANY, as Trustee By: __________________________________ Authorized Signatory A2-1 122 EXHIBIT A2 Back of Regulation S Temporary Global Note 8 1/8% Senior Subordinated Notes due 2009 THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) ("DTC"), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. THE NOTE (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE NOTE EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE NOTE EVIDENCED HEREBY IS HEREBY NOTIFIED THAT THE SELLER MAY BE RELYING ON THE EXEMPTION PROVIDED BY RULE 144A UNDER THE SECURITIES ACT. THE HOLDER OF THE NOTE EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) SUCH NOTE MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (1) (a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN OF RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES TO A FOREIGN PERSON IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE COMPANY SO REQUESTS), A2-2 123 EXHIBIT A2 (2) TO THE COMPANY OR (3) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE JURISDICTION AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THE NOTE EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (1) ABOVE. Capitalized terms used herein shall have the meanings assigned to them in the Indenture referred to below unless otherwise indicated. 1. INTEREST. Emmis Communications Corporation, a Delaware corporation (the "Company"), promises to pay interest on the principal amount of this Note at 8 1/8% per annum from February 12, 1999 until maturity and shall pay the Liquidated Damages payable pursuant to Section 5 of the Registration Rights Agreement referred to below. The Company will pay interest and Liquidated Damages semi-annually in arrears on March and September of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be September 15, 1999. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at a rate that is 1% per annum in excess of the rate then in effect; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months. Until this Regulation S Temporary Global Note is exchanged for one or more Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as other Senior Subordinated Notes under the Indenture. 2. METHOD OF PAYMENT. The Company will pay interest on the Notes (except defaulted interest) and Liquidated Damages to the Persons who are registered Holders of Notes at the close of business on the March 1 or September 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal, premium and Liquidated Damages, if any, and interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of interest and Liquidated Damages may be made by check mailed to the Holders at their addresses set forth in the register of Holders, and provided that payment by wire transfer of immediately available funds will be A2-3 124 EXHIBIT A2 required with respect to principal of and interest, premium and Liquidated Damages on, all Global Notes and all other Notes the Holders of which shall have provided wire transfer instructions to the Company or the Paying Agent. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. 3. PAYING AGENT AND REGISTRAR. Initially, IBJ Whitehall Bank & Trust Company, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity. 4. INDENTURE. The Company issued the Notes under an Indenture dated as of February 12, 1999 ("Indenture") among the Company, the Guarantors listed on a Schedule thereto and the Trustee. The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code Section Section 77aaa-77bbbb). The Notes are subject to all such terms, and Holders are referred to the Indenture and such Act for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the indenture shall govern and be controlling. The Notes are obligations of the Company limited to $400 million in aggregate principal amount, plus amounts, if any, issued to pay Liquidated Damages on outstanding Notes as set forth in Paragraph 2 hereof. 5. OPTIONAL REDEMPTION. (a) Except as set forth in subparagraph (b) of this Paragraph 5, the Company shall not have the option to redeem the Notes prior to March 15, 2004. Thereafter, the Company shall have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days' notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below:
Year Percentage ---- ---------- 2004............................ 104.063% 2005............................ 102.708% 2006............................ 101.354% 2007 and thereafter............. 100.000%
(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to March 15, 2002 the Company may on one or more occasions redeem Notes with the net cash proceeds of one or more Public Equity Offerings at a redemption price equal to 108.125% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any; provided that at least 65% in aggregate principal amount of the Notes originally issued under the Indenture remain outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and that such redemption occurs within 45 days of the date of the closing of such Public Equity Offering. A2-4 125 EXHIBIT A2 6. MANDATORY REDEMPTION. Except as set forth in paragraph 7 below, the Company shall not be required to make mandatory redemption payments with respect to the Notes. 7. REPURCHASE AT OPTION OF HOLDER. (a) If there is a Change of Control, the Company shall be required to make an offer (a "Change of Control Offer") to repurchase all or any part (equal to $1,000 or an integral multiple thereof) of each Holder's Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date of purchase (the "Change of Control Payment"). Within 10 days following any Change of Control, the Company shall mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture. (b) If the Company or a Subsidiary consummates any Asset Sales, within five days of each date on which the aggregate amount of Excess Proceeds exceeds $5.0 million, the Company shall commence an offer to all Holders of Notes (as "Asset Sale Offer") pursuant to Section 3.09 of the Indenture to purchase the maximum principal amount of Notes (including any Additional Notes) that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages thereon, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture. To the extent that the aggregate amount of Notes (including any Additional Notes) tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Subsidiary) may use such deficiency for general corporate purposes. If the aggregate principal amount of Notes surrendered by Holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select the Notes to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled "Option of Holder to Elect Purchase" on the reverse of the Notes. 8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part but only in whole multiples of $1,000, unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. 9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $1,000 and integral multiples of $1,000. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange A2-5 126 EXHIBIT A2 or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date. This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Global Notes only (i) on or after the termination of the 40-day restricted period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article Two of the Indenture. Upon exchange of this Regulation S Temporary Global Note for one or more Global Notes, the Trustee shall cancel this Regulation S Temporary Global Note. 10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes. 11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Note Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class, and any existing default or compliance with any provision of the Indenture, the Note Guarantees or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and Additional Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Note Guarantees or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, to provide for the assumption of the Company's or Guarantor's obligations to Holders of the Notes in case of a merger or consolidation, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture of any such Holder, to comply with the requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act, to provide for the issuance of Additional Notes in accordance with the limitations set forth in the Indenture, or to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Note Guarantee with respect to the Notes. 12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest or Liquidated Damages on the Notes; (ii) default in payment when due of principal of or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise, (iii) failure by the Company to comply with Section 4.07, 4.09, 4.10, 4.14 or 5.01 of the Indenture, which failure remains uncured for 30 days; (iv) failure by the Company for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding to comply with certain other agreements in the Indenture, the Notes or the Pledge Agreement; (v) default under certain other agreements relating to Indebtedness of the Company which default results in the acceleration of such Indebtedness prior to its express maturity; (vi) certain final judgments for the payment of money that remain undischarged for a period of 60 days; (vii) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries; and (viii) the breach of certain covenants in the Pledge Agreement or the Pledge Agreement shall be held in any judicial A2-6 127 EXHIBIT A2 proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium or Liquidated Damages, if any, or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default. 13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee. 14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator or stockholder of the Company or any Guarantor, as such, shall not have any liability for any obligations of the Company or any Guarantor under the Notes, the Notes Guaranteeor the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes. 15. AUTHENTICATION. This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent. 16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act). 17. ADDITIONAL RIGHTS OF HOLDERS OF RESTRICTED GLOBAL NOTES AND RESTRICTED DEFINITIVE NOTES. In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the A/B Exchange Registration Rights Agreement dated as of February 12, 1999, between the Company and the parties named on the signature pages thereof (the "Registration Rights Agreement"). A2-7 128 EXHIBIT A2 18. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon. The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Emmis Communications Corporation Attention: ______________ A2-8 129 EXHIBIT A2 ASSIGNMENT FORM To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to:___________________________________ (Insert assignee's legal name) ________________________________________________________________________________ (Insert assignee's soc. sec. or tax I.D. no.) ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ (Print or type assignee's name, address and zip code) and irrevocably appoint_________________________________________________________ to transfer this Note on the books of the Company. The agent may substitute another to act for him. Date:_________________ Your Signature:__________________________________________________ (Sign exactly as your name appears on the face of this Note) Signature Guarantee*:_______________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-9 130 EXHIBIT A2 OPTION OF HOLDER TO ELECT PURCHASE If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below: [ ] Section 4.10 [ ] Section 4.15 If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased: $_______________ Date:__________________ Your Signature:____________________________________________________ (Sign exactly as your name appears on the face of this Note) Tax Identification No.:____________________________________________ Signature Guarantee*:________________________ * Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee). A2-10 131 EXHIBIT A2 SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note, or of other Restricted Global Notes for an interest in this Regulation S Temporary Global Note, have been made:
Principal Amount Amount of decrease in Amount of increase in of this Signature of Principal Amount Principal Amount Global Note authorized officer of of of following such decrease Trustee or Note Date of Exchange this Global Note this Global Note (or increase) Custodian - ---------------- --------------------- --------------------- ----------------------- ---------------------
A2-11 132 EXHIBIT B FORM OF CERTIFICATE OF TRANSFER [Company address block] [Registrar address block] Re: [fill in full title of securities] Reference is hereby made to the Indenture, dated as of February 12, 1999 (the "Indenture"), among Emmis Communications Corporation (the "Company"), as issuer, the Guarantors listed on Schedule 1 thereto and IBJ Whitehall Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. ___________________ (the "Transferor") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $___________ in such Note[s] or interests (the "Transfer"), to ___________________________ (the "Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that: [CHECK ALL THAT APPLY] 1. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE 144A GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO RULE 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 2. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE REGULATION S GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO REGULATION S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither B-1 133 such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act. 3. [ ] CHECK AND COMPLETE IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN THE IAI GLOBAL NOTE OR A DEFINITIVE NOTE PURSUANT TO ANY PROVISION OF THE SECURITIES ACT OTHER THAN RULE 144A OR REGULATION S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one): (a) [ ] such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act; or (b) [ ] such Transfer is being effected to the Company or a subsidiary thereof; or (c) [ ] such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act. or (d) [ ] such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that B-2 134 such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Definitive Notes and in the Indenture and the Securities Act. 4. [ ] CHECK IF TRANSFEREE WILL TAKE DELIVERY OF A BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE OR OF AN UNRESTRICTED DEFINITIVE NOTE. (a) [ ] CHECK IF TRANSFER IS PURSUANT TO RULE 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (b) [ ] CHECK IF TRANSFER IS PURSUANT TO REGULATION S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture. (c) [ ] CHECK IF TRANSFER IS PURSUANT TO OTHER EXEMPTION. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. _________________________________________ [Insert Name of Transferor] B-3 135 By:_________________________________________ Name: Title: Dated:__________________ B-4 136 ANNEX A TO CERTIFICATE OF TRANSFER 1. The Transferor owns and proposes to transfer the following: [CHECK ONE OF (a) OR (b)] (a) [ ] a beneficial interest in the: (i) [ ] 144A Global Note (CUSIP_____________), or (ii) [ ] Regulation S Global Note (CUSIP_____________), or (iii) [ ] IAI Global Note (CUSIP____________); or (b) [ ] a Restricted Definitive Note. 2. After the Transfer the Transferee will hold: [CHECK ONE] (a) [ ] a beneficial interest in the: (i) [ ] 144A Global Note (CUSIP_________), or (ii) [ ] Regulation S Global Note (CUSIP _____________), or (iii) [ ] IAI Global Note (CUSIP_____________); or (iv) [ ] Unrestricted Global Note (CUSIP_____________); or (b) [ ] a Restricted Definitive Note; or (c) [ ] an Unrestricted Definitive Note, in accordance with the terms of the Indenture. B-5 137 EXHIBIT C FORM OF CERTIFICATE OF EXCHANGE [Company address block] [Registrar address block] Re: [fill in full title of securities] (CUSIP ____________) Reference is hereby made to the Indenture, dated as of February 12, 1999 (the "Indenture"), among Emmis Communications Corporation, as issuer (the "Company"), the Guarantors listed on Schedule 1 thereto and IBJ Whitehall Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. __________________________ (the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $____________ in such Note[s] or interests (the "Exchange"). In connection with the Exchange, the Owner hereby certifies that: 1. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN A RESTRICTED GLOBAL NOTE FOR UNRESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN AN UNRESTRICTED GLOBAL NOTE (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (b) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive C-1 138 Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (c) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN AN UNRESTRICTED GLOBAL NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. (d) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO UNRESTRICTED DEFINITIVE NOTE. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States. 2. EXCHANGE OF RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES FOR RESTRICTED DEFINITIVE NOTES OR BENEFICIAL INTERESTS IN RESTRICTED GLOBAL NOTES (a) [ ] CHECK IF EXCHANGE IS FROM BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE TO RESTRICTED DEFINITIVE NOTE. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner's own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act. (b) [ ] CHECK IF EXCHANGE IS FROM RESTRICTED DEFINITIVE NOTE TO BENEFICIAL INTEREST IN A RESTRICTED GLOBAL NOTE. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE] [ ] 144A Global Note, [ ] Regulation S Global Note, [ ] IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities C-2 139 Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act. This certificate and the statements contained herein are made for your benefit and the benefit of the Company. _____________________________________________ [Insert Name of Transferor] By: ________________________________________ Name: Title: Dated: _____________________ C-3 140 EXHIBIT D FORM OF CERTIFICATE FROM ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR [Company address block] [Registrar address block] Re: [fill in full title of securities] Reference is hereby made to the Indenture, dated as of February __, 1999 (the "Indenture"), among Emmis Communications Corporation, as issuer (the "Company"), the Guarantors listed on Schedule 1 thereto and IBJ Whitehall Bank & Trust Company, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture. In connection with our proposed purchase of $____________ aggregate principal amount of: (a) [ ] a beneficial interest in a Global Note, or (b) [ ] a Definitive Note, we confirm that: 1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act"). 2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (C) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein. D-1 141 3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect. 4. We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment. 5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion. You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby. _________________________________________ [Insert Name of Accredited Investor] By: ________________________________________ Name: Title: Dated:___________________ D-2 142 EXHIBIT E [FORM OF NOTATION OF GUARANTEE] For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of February __, 1999 (the "Indenture") among Emmis Communications Corporation, the Guarantors listed on Schedule I thereto and IBJ Whitehall Bank & Trust Company, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium and Liquidated Damages, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium and Liquidated Damages, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Note Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Note Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that the Indebtedness evidenced by this Note Guarantee shall cease to be so subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture. [Name of Guarantor(s)] BY:_________________________________________ NAME: TITLE: E-1 143 EXHIBIT F [FORM OF SUPPLEMENTAL INDENTURE TO BE DELIVERED BY SUBSEQUENT GUARANTORS] SUPPLEMENTAL INDENTURE (this "Supplemental Indenture"), dated as of ________________, among __________________ (the "Guaranteeing Subsidiary"), a subsidiary of Emmis Communications Corporation (or its permitted successor), a [Delaware] corporation (the "Company"), the Company, the other Guarantors (as defined in the Indenture referred to herein) and IBJ Whitehall Bank & Trust Company, as trustee under the indenture referred to below (the "Trustee"). W I T N E S S E T H WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the "Indenture"), dated as of February 12, 1999 providing for the issuance of an aggregate principal amount of up to $400.0 million of 8 1/8% Senior Subordinated Notes due 2009 (the "Notes"); WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company's Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the "Note Guarantee"); and WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture. NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows: 1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture. 2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees as follows: (a) Along with all Guarantors named in the Indenture, to jointly and severally Guarantee to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, the Notes or the obligations of the Company hereunder or thereunder, that: (i) the principal of, premium and Liquidated Damages, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of, premium and Liquidated Damages, if any, and interest on the Notes, if any, if F-1 144 lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors shall be jointly and severally obligated to pay the same immediately. (b) The obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or the Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. (c) The following are hereby waived: diligence presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever. (d) This Note Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes and the Indenture, and the Guaranteeing Subsidiary accepts all obligations of a Guarantor under the Indenture. (e) If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors, or any Custodian, Trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Note Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. (f) The Guaranteeing Subsidiary shall not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. (g) As between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six of the Indenture for the purposes of this Note Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article Six of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Note Guarantee. F-2 145 (h) The Guarantors shall have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee. (i) Pursuant to Section 10.02 of the Indenture, after giving effect to any maximum amount and any other contingent and fixed liabilities that are relevant under any applicable Bankruptcy Law or fraudulent conveyance laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under Article 11 of the Indenture, this new Note Guarantee shall be limited to the maximum amount permissible such that the obligations of such Guarantor under this Note Guarantee will not constitute a fraudulent transfer or conveyance. 3. EXECUTION AND DELIVERY. Each Guaranteeing Subsidiary agrees that the Note Guarantees shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Note Guarantee. 4. GUARANTEEING SUBSIDIARY MAY CONSOLIDATE, ETC. ON CERTAIN TERMS. (a) The Guaranteeing Subsidiary may not consolidate with or merge with or into (whether or not such Guarantor is the surviving Person) another corporation, Person or entity whether or not affiliated with such Guarantor unless: (i) subject to Sections 11.04 and 11.05 of the Indenture, the Person formed by or surviving any such consolidation or merger (if other than a Guarantor or the Company) unconditionally assumes all the obligations of such Guarantor, pursuant to a supplemental indenture in form and substance reasonably satisfactory to the Trustee, under the Notes, the Indenture and the Note Guarantee on the terms set forth herein or therein; and (ii) immediately after giving effect to such transaction, no Default or Event of Default exists. (b) In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor corporation, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Note Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of the Indenture to be performed by the Guarantor, such successor corporation shall succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor corporation thereupon may cause to be signed any or all of the Note Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Note Guarantees so issued shall in all respects have the same legal rank and benefit under the Indenture as the Note Guarantees theretofore and thereafter issued in accordance with the terms of the Indenture as though all of such Note Guarantees had been issued at the date of the execution hereof. F-3 146 (c) Except as set forth in Articles 4 and 5 and Section 11.05 of Article 11 of the Indenture, and notwithstanding clauses (a) and (b) above, nothing contained in the Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or shall prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor. 5. RELEASES. (a) In the event of a sale or other disposition of all of the assets of any Guarantor, by way of merger, consolidation or otherwise, or a sale or other disposition of all to the capital stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, then such Guarantor (in the event of a sale or other disposition, by way of merger, consolidation or otherwise, of all of the capital stock of such Guarantor) or the corporation acquiring the property (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) will be released and relieved of any obligations under its Note Guarantee; provided that the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of the Indenture, including without limitation Section 4.10 of the Indenture. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of the Indenture, including without limitation Section 4.10 of the Indenture, the Trustee shall execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Note Guarantee. (b) Any Guarantor not released from its obligations under its Note Guarantee shall remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under the Indenture as provided in Article 11 of the Indenture. 6. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Note Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy. 7. NEW YORK LAW TO GOVERN. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE BUT WITHOUT GIVING EFFECT TO APPLICABLE F-4 147 PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY. 8. COUNTERPARTS The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement. 9. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof. 10. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company. F-5 148 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written. Dated: _______________, ____ [Guaranteeing Subsidiary] BY: _______________________________ NAME: TITLE: EMMIS COMMUNICATIONS CORPORATION BY: _______________________________ NAME: TITLE: [Existing Guarantors] BY:_________________________________ NAME: TITLE: IBJ WHITEHALL BANK & TRUST COMPANY, AS TRUSTEE BY:________________________________ AUTHORIZED SIGNATORY F-6 149 SCHEDULE I SCHEDULE OF GUARANTORS The following schedule lists each Guarantor under the Indenture as of the Issue Date: Emmis FM Broadcasting Corporation of Indianapolis Emmis FM Broadcasting Corporation of St. Louis KPWR, Inc. Emmis Broadcasting Corporation of New York Emmis FM Broadcasting Corporation of Chicago Emmis FM License Corporation of Indianapolis Emmis FM License Corporation of St. Louis KPWR License, Inc. Emmis License Corporation of New York Emmis FM License Corporation of Chicago Emmis Meadowlands Corporation Emmis Publishing Corporation Emmis AM Radio Corporation of Indianapolis Emmis FM Radio Corporation of Indianapolis Emmis AM Radio License Corporation of Indianapolis Emmis FM Radio License Corporation of Indianapolis Emmis Radio License Corporation of New York Emmis 104.1 FM Radio Corporation of St. Louis Emmis 104.1 FM Radio License Corporation of St. Louis Emmis 106.5 FM Broadcasting Corporation of St. Louis Emmis 106.5 FM License Corporation of St. Louis Emmis 1310 AM Radio Corporation of Indianapolis Emmis 1310 AM Radio License Corporation of Indianapolis Emmis 105.7 FM Radio Corporation of Indianapolis Mediatex Communications Corporation Mediatex Development Corporation Texas Monthly, Inc. Emmis License Corporation Emmis International Broadcasting Corporation Emmis DAR, Inc. Emmis Publishing, L.P. Emmis International Corporation Emmis 1380 AM Radio Corporation of St. Louis Emmis Television License Corporation of Honolulu Emmis Television License Corporation of Mobile Emmis Television License Corporation of Cape Coral Emmis Television License Corporation of Green Bay Emmis FM Holding Corporation of New York 150 Emmis 101.9 FM Radio Corporation of New York Emmis Radio Corporation of New York Emmis 1480 AM Radio License Corporation of Terre Haute Emmis Television License Corporation of Terre Haute Emmis 99.9 FM Radio License Corporation of Terre Haute Emmis 105.7 FM Radio License Corporation of Indianapolis Emmis Television License Corporation of New Orleans Emmis 105.5 FM Radio License Corporation of Terre Haute Emmis Indiana Broadcasting, L.P. Emmis Television Broadcasting, L.P. EX-4.2 3 REGISTRATION RIGHTS AGREEMENT 1 EXHIBIT 4.2 A/B EXCHANGE REGISTRATION RIGHTS AGREEMENT Dated as of February 12, 1999 by and among Emmis Communications Corporation and its Subsidiary Guarantors and Donaldson, Lufkin & Jenrette Securities Corporation BancBoston Robertson Stephens Inc. First Union Capital Markets Corp. Goldman, Sachs & Co. TD Securities (USA) Inc. 2 This Registration Rights Agreement (this "AGREEMENT") is made and entered into as of February __, 1999, by and among Emmis Communications Corporation, an Indiana corporation (the "COMPANY"), the subsidiaries of the Company identified on Schedule A hereto (each a "GUARANTOR and collectively, the GUARANTORS"), and Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston Robertson Stephens Inc., First Union Capital Markets Corp., Goldman, Sachs & Co. and TD Securities (USA) Inc. (each an "INITIAL PURCHASER" and, collectively, the "INITIAL PURCHASERS"), each of whom has agreed to purchase the Company's 8 1/8% Series A Senior Subordinated Notes due 2009 (the "SERIES A NOTES") pursuant to the Purchase Agreement (as defined below). This Agreement is made pursuant to the Purchase Agreement, dated February 9, 1999, (the "PURCHASE AGREEMENT"), by and among the Company, the Guarantors and the Initial Purchasers. In order to induce the Initial Purchasers to purchase the Series A Notes, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to the obligations of the Initial Purchasers set forth in the Purchase Agreement. Capitalized terms used herein and not otherwise defined shall have the meaning assigned to them in the Indenture, dated February 12, 1999, between the Company and IBJ Whitewall Bank & Trust Company, as Trustee, relating to the Series A Notes and the Series B Notes (the "INDENTURE"). The parties hereby agree as follows: SECTION 1. DEFINITIONS As used in this Agreement, the following capitalized terms shall have the following meanings: ACT: The Securities Act of 1933, as amended. AFFILIATE: As defined in Rule 144 of the Act. BROKER-DEALER: Any broker or dealer registered under the Exchange Act. BUSINESS DAY: A day other than a Saturday, Sunday or other day on which banking institutions in New York State are authorized or required by law to close. CERTIFICATED SECURITIES: Definitive Notes, as defined in the Indenture. CLOSING DATE: The date hereof. COMMISSION: The Securities and Exchange Commission. CONSUMMATE: An Exchange Offer shall be deemed "Consummated" for purposes of this Agreement upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer Registration Statement relating to the Series B Notes to be issued in the Exchange Offer, (b) the maintenance of such Exchange Offer Registration Statement continuously effective and the keeping of the Exchange Offer open for a period not less than the period required pursuant to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of Series B Notes in the same aggregate principal amount as the aggregate principal amount of Series A Notes tendered by Holders thereof pursuant to the Exchange Offer. CONSUMMATION DEADLINE: As defined in Section 3(b) hereof. EFFECTIVENESS DEADLINE: As defined in Sections 3(a) and 4(a) hereof. 1 3 EXCHANGE ACT: The Securities Exchange Act of 1934, as amended. EXCHANGE OFFER: The exchange and issuance by the Company of a principal amount of Series B Notes (which shall be registered pursuant to the Exchange Offer Registration Statement) equal to the outstanding principal amount of Series A Notes that are tendered by such Holders in connection with such exchange and issuance. EXCHANGE OFFER REGISTRATION STATEMENT: The Registration Statement relating to the Exchange Offer, including the related Prospectus. EXEMPT RESALES: The transactions in which the Initial Purchasers propose to sell the Series A Notes to certain "qualified institutional buyers," as such term is defined in Rule 144A under the Act and pursuant to Regulation S under the Act. FILING DEADLINE: As defined in Sections 3(a) and 4(a) hereof. HOLDERS: As defined in Section 2 hereof. PROSPECTUS: The prospectus included in a Registration Statement at the time such Registration Statement is declared effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into such Prospectus. RECOMMENCEMENT DATE: As defined in Section 6(d) hereof. REGISTRATION DEFAULT: As defined in Section 5 hereof. REGISTRATION STATEMENT: Any registration statement of the Company and the Guarantors relating to (a) an offering of Series B Notes pursuant to an Exchange Offer or (b) the registration for resale of Transfer Restricted Securities pursuant to the Shelf Registration Statement, in each case, (i) that is filed pursuant to the provisions of this Agreement and (ii) including the Prospectus included therein, all amendments and supplements thereto, including post-effective amendments, and all exhibits and material incorporated by reference therein. REGULATION S: Regulation S promulgated under the Act. RULE 144: Rule 144 promulgated under the Act. SERIES B NOTES: The Company's 8 1/8% Series B Senior Subordinated Notes due 2009 to be issued pursuant to the Indenture: (i) in the Exchange Offer or (ii) as contemplated by Section 4 hereof. SHELF REGISTRATION STATEMENT: As defined in Section 6(b) hereof. SUSPENSION NOTICE: As defined in Section 6(d) hereof. TIA: The Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on the date of the Indenture. TRANSFER RESTRICTED SECURITIES: Each Series A Note, until the earliest to occur of (a) the date on which such Series A Note is exchanged in the Exchange Offer for a Series B Note which is entitled to be resold to the public by the Holder thereof without complying with the prospectus delivery requirements of the Act, (b) the date on which such Series A Note has been disposed of in accordance with a Shelf Registration Statement (and the purchasers thereof have been issued Series B Notes), or (c) 2 4 the date on which such Series A Note is distributed to the public pursuant to Rule 144 under the Act (and purchasers thereof have been issued Series B Notes) and each Series B Note until the date on which such Series B Note is disposed of by a Broker-Dealer pursuant to the "Plan of Distribution" contemplated by the Exchange Offer Registration Statement (including the delivery of the Prospectus contained therein). SECTION 2. HOLDERS A Person is deemed to be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever such Person owns Transfer Restricted Securities. SECTION 3. REGISTERED EXCHANGE OFFER (a) Unless the Exchange Offer shall not be permitted by applicable federal law (after the procedures set forth in Section 6(a)(i) below have been complied with), the Company and the Guarantors shall (i) cause the Exchange Offer Registration Statement to be filed with the Commission as soon as practicable after the Closing Date, but in no event later than 30 days after the Closing Date (such 30th day being the "FILING DEADLINE"), (ii) use their respective best efforts to cause such Exchange Offer Registration Statement to become effective at the earliest possible time, but in no event later than 90 days after the Closing Date (such 90th day being the "EFFECTIVENESS DEADLINE"), (iii) in connection with the foregoing, (A) file all pre-effective amendments to such Exchange Offer Registration Statement as may be necessary in order to cause it to become effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in connection with the registration and qualification of the Series B Notes to be made under the Blue Sky laws of such jurisdictions as are necessary to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange Offer Registration Statement, commence and Consummate the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting (i) registration of the Series B Notes to be offered in exchange for the Series A Notes that are Transfer Restricted Securities and (ii) resales of Series B Notes by Broker-Dealers that tendered into the Exchange Offer Series A Notes that such Broker-Dealer acquired for its own account as a result of market making activities or other trading activities (other than Series A Notes acquired directly from the Company or any of its Affiliates) as contemplated by Section 3(c) below. (b) The Company and the Guarantors shall use their respective best efforts to cause the Exchange Offer Registration Statement to be effective continuously, and shall keep the Exchange Offer open for a period of not less than the minimum period required under applicable federal and state securities laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be less than 20 Business Days. The Company and the Guarantors shall cause the Exchange Offer to comply with all applicable federal and state securities laws. No securities other than the Series B Notes shall be included in the Exchange Offer Registration Statement. The Company and the Guarantors shall use their respective best efforts to cause the Exchange Offer to be Consummated on the earliest practicable date after the Exchange Offer Registration Statement has become effective, but in no event later than 30 Business Days thereafter (such 30th day being the "CONSUMMATION DEADLINE"). (c) The Company shall include a "Plan of Distribution" section in the Prospectus contained in the Exchange Offer Registration Statement and indicate therein that any Broker-Dealer who holds Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result of market-making activities or other trading activities (other than Series A Notes acquired directly from the Company or any Affiliate of the Company), may exchange such Transfer Restricted Securities pursuant to the Exchange Offer. Such "Plan of Distribution" section shall also contain all other information with respect to such sales by such Broker-Dealers that the Commission may require in order to permit such sales pursuant thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer or disclose 3 5 the amount of Transfer Restricted Securities held by any such Broker-Dealer, except to the extent required by the Commission as a result of a change in policy, rules or regulations after the date of this Agreement. See the Shearman & Sterling no-action letter (available July 2, 1993). Because such Broker-Dealer may be deemed to be an "underwriter" within the meaning of the Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection with its initial sale of any Series B Notes received by such Broker-Dealer in the Exchange Offer, the Company and Guarantors shall permit the use of the Prospectus contained in the Exchange Offer Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement. To the extent necessary to ensure that the prospectus contained in the Exchange Offer Registration Statement is available for sales of Series B Notes by Broker-Dealers, the Company and the Guarantors agree to use their respective best efforts to keep the Exchange Offer Registration Statement continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(a) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of one year from the Consummation Deadline or such shorter period as will terminate when all Transfer Restricted Securities covered by such Registration Statement have been sold pursuant thereto. The Company and the Guarantors shall provide sufficient copies of the latest version of such Prospectus to such Broker-Dealers, promptly upon request, and in no event later than one day after such request, at any time during such period. SECTION 4. SHELF REGISTRATION (a) Shelf Registration. If (i) the Exchange Offer is not permitted by applicable law (after the Company and the Guarantors have complied with the procedures set forth in Section 6(a)(i) below) or (ii) if any Holder of Transfer Restricted Securities shall notify the Company within 20 Business Days following the Consummation Deadline that (A) such Holder was prohibited by law or Commission policy from participating in the Exchange Offer or (B) such Holder may not resell the Series B Notes acquired by it in the Exchange Offer to the public without delivering a prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and holds Series A Notes acquired directly from the Company or any of its Affiliates, then the Company and the Guarantors shall: (x) cause to be filed, on or prior to 30 days after the earlier of (i) the date on which the Company determines that the Exchange Offer Registration Statement cannot be filed as a result of clause (a)(i) above and (ii) the date on which the Company receives the notice specified in clause (a)(ii) above, (such earlier date, the "FILING DEADLINE"), a shelf registration statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer Registration Statement (the "SHELF REGISTRATION STATEMENT")), relating to all Transfer Restricted Securities, and (y) shall use their respective best efforts to cause such Shelf Registration Statement to become effective on or prior to 60 days after the Filing Deadline for the Shelf Registration Statement (such 60th day the "EFFECTIVENESS DEADLINE"). If, after the Company has filed an Exchange Offer Registration Statement that satisfies the requirements of Section 3(a) above, the Company is required to file and make effective a Shelf Registration Statement solely because the Exchange Offer is not permitted under applicable federal law (i.e., clause (a)(i) above), then the filing of the Exchange Offer Registration Statement shall be deemed to satisfy the requirements of clause (x) above; provided that, in such event, the Company shall remain obligated to meet the Effectiveness Deadline set forth in clause (y). 4 6 To the extent necessary to ensure that the Shelf Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this Section 4(a) and the other securities required to be registered therein pursuant to Section 6(b)(ii) hereof, the Company and the Guarantors shall use their respective best efforts to keep any Shelf Registration Statement required by this Section 4(a) continuously effective, supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and (c) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission as announced from time to time, for a period of at least two years (as extended pursuant to Section 6(d)) following the Closing Date, or such shorter period as will terminate when all Transfer Restricted Securities covered by such Shelf Registration Statement have been sold pursuant thereto. (b) Provision by Holders of Certain Information in Connection with the Shelf Registration Statement. No Holder of Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such information. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to make the information previously furnished to the Company by such Holder not materially misleading. SECTION 5. LIQUIDATED DAMAGES If (i) any Registration Statement required by this Agreement is not filed with the Commission on or prior to the applicable Filing Deadline, (ii) any such Registration Statement has not been declared effective by the Commission on or prior to the applicable Effectiveness Deadline, (iii) the Exchange Offer has not been Consummated on or prior to the Consummation Deadline or (iv) any Registration Statement required by this Agreement is filed and declared effective but shall thereafter cease to be effective or fail to be usable for its intended purpose without being succeeded within two Business Days by a post-effective amendment to such Registration Statement that cures such failure and that is itself declared effective within five Business Days of filing such post-effective amendment to such Registration Statement (each such event referred to in clauses (i) through (iv), a "REGISTRATION DEFAULT"), then the Company and the Guarantors hereby jointly and severally agree to pay to each Holder of Transfer Restricted Securities affected thereby liquidated damages in an amount equal to $.05 per week per $1,000 in principal amount of Transfer Restricted Securities held by such Holder for each week or portion thereof that the Registration Default continues for the first 90-day period immediately following the occurrence of such Registration Default. The amount of the liquidated damages shall increase by an additional $.05 per week per $1,000 in principal amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all Registration Defaults have been cured, up to a maximum amount of liquidated damages of $.50 per week per $1,000 in principal amount of Transfer Restricted Securities; provided that the Company and the Guarantors shall in no event be required to pay liquidated damages for more than one Registration Default at any given time. Notwithstanding anything to the contrary set forth herein, (1) upon filing of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (i) above, (2) upon the effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement), in the case of (ii) above, (3) upon Consummation of the Exchange Offer, in the case of (iii) above, or (4) upon the filing of a post-effective amendment to the Registration Statement or an additional Registration Statement that causes the Exchange Offer Registration Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective or made usable, in the case of (iv) above, the liquidated damages payable with 5 7 respect to the Transfer Restricted Securities as a result of such clause (i), (ii), (iii) or (iv), as applicable, shall cease. All accrued liquidated damages shall be paid to the Holders entitled thereto, in the manner provided for the payment of interest in the Indenture, on each interest payment date, as more fully set forth in the Indenture and the Notes. Notwithstanding the fact that any securities for which liquidated damages are due cease to be Transfer Restricted Securities, all obligations of the Company and the Guarantors to pay liquidated damages with respect to securities shall survive until such time as such obligations with respect to such securities shall have been satisfied in full. SECTION 6. REGISTRATION PROCEDURES (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the Company and the Guarantors shall (x) comply with all applicable provisions of Section 6(c) below, (y) use their respective best efforts to effect such exchange and to permit the resale of Series B Notes by Broker-Dealers that tendered in the Exchange Offer Series A Notes that such Broker-Dealer acquired for its own account as a result of its market making activities or other trading activities (other than Series A Notes acquired directly from the Company or any of its Affiliates) being sold in accordance with the intended method or methods of distribution thereof, and (z) comply with all of the following provisions: (i) If, following the date hereof there has been announced a change in Commission policy with respect to exchange offers such as the Exchange Offer, that in the reasonable opinion of counsel to the Company raises a substantial question as to whether the Exchange Offer is permitted by applicable federal law, the Company and the Guarantors hereby agree to seek a no-action letter or other favorable decision from the Commission allowing the Company and the Guarantors to Consummate an Exchange Offer for such Transfer Restricted Securities. The Company and the Guarantors hereby agree to pursue the issuance of such a decision to the Commission staff level. In connection with the foregoing, the Company and the Guarantors hereby agree to take all such other actions as may be requested by the Commission or otherwise required in connection with the issuance of such decision, including without limitation (A) participating in telephonic conferences with the Commission, (B) delivering to the Commission staff an analysis prepared by counsel to the Company setting forth the legal bases, if any, upon which such counsel has concluded that such an Exchange Offer should be permitted and (C) diligently pursuing a resolution (which need not be favorable) by the Commission staff. (ii) As a condition to its participation in the Exchange Offer, each Holder of Transfer Restricted Securities (including, without limitation, any Holder who is a Broker Dealer) shall furnish, upon the request of the Company, prior to the Consummation of the Exchange Offer, a written representation to the Company and the Guarantors (which may be contained in the letter of transmittal contemplated by the Exchange Offer Registration Statement) to the effect that (A) it is not an Affiliate of the Company, (B) it is not engaged in, and does not intend to engage in, and has no arrangement or understanding with any person to participate in, a distribution of the Series B Notes to be issued in the Exchange Offer and (C) it is acquiring the Series B Notes in its ordinary course of business. As a condition to its participation in the Exchange Offer, each Holder using the Exchange Offer to participate in a distribution of the Series B Notes shall acknowledge and agree that, if the resales are of Series B Notes obtained by such Holder in exchange for Series A Notes acquired directly from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in effect on the date of this Agreement, rely on the position of the Commission enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters (including, if applicable, any no-action letter obtained 6 8 pursuant to clause (i) above), and (2) must comply with the registration and prospectus delivery requirements of the Act in connection with a secondary resale transaction and that such a secondary resale transaction must be covered by an effective registration statement containing the selling security holder information required by Item 507 or 508, as applicable, of Regulation S-K. (iii) Prior to effectiveness of the Exchange Offer Registration Statement, the Company and the Guarantors shall provide a supplemental letter to the Commission (A) stating that the Company and the Guarantors are registering the Exchange Offer in reliance on the position of the Commission enunciated in Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and Co., Inc. (available June 5, 1991) as interpreted in the Commission's letter to Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action letter obtained pursuant to clause (i) above, (B) including a representation that neither the Company nor any Guarantor has entered into any arrangement or understanding with any Person to distribute the Series B Notes to be received in the Exchange Offer and that, to the best of the Company's and each Guarantor's information and belief, each Holder participating in the Exchange Offer is acquiring the Series B Notes in its ordinary course of business and has no arrangement or understanding with any Person to participate in the distribution of the Series B Notes received in the Exchange Offer and (C) any other undertaking or representation required by the Commission as set forth in any no-action letter obtained pursuant to clause (i) above, if applicable. (b) Shelf Registration Statement. In connection with the Shelf Registration Statement, the Company and the Guarantors shall: (i) comply with all the provisions of Section 6(c) below and use their respective best efforts to effect such registration to permit the sale of the Transfer Restricted Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and pursuant thereto the Company and the Guarantors will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof. (ii) issue, upon the request of any Holder or purchaser of Series A Notes covered by any Shelf Registration Statement contemplated by this Agreement, Series B Notes having an aggregate principal amount equal to the aggregate principal amount of Series A Notes sold pursuant to the Shelf Registration Statement and surrendered to the Company for cancellation; the Company shall register Series B Notes on the Shelf Registration Statement for this purpose and issue the Series B Notes to the purchaser(s) of securities subject to the Shelf Registration Statement in the names as such purchaser(s) shall designate. (c) General Provisions. In connection with any Registration Statement and any related Prospectus required by this Agreement, the Company and the Guarantors shall: (i) use their respective best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in Section 3 or 4 of this Agreement, as applicable. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact or omit to state any material fact necessary to make the statements therein not misleading or (B) not to be effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Company and the Guarantors shall file promptly an appropriate amendment to such Registration Statement curing such defect, and, if Commission 7 9 review is required, use their respective best efforts to cause such amendment to be declared effective as soon as practicable. (ii) prepare and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep such Registration Statement effective for the applicable period set forth in Section 3 or 4 hereof, as the case may be; cause the Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; (iii) advise each Holder and their counsel, in connection with a Shelf Registration Statement, and each Initial Purchaser and their counsel, in connection with the Exchange Offer Registration Statement, promptly and, if requested by such Holder, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective, (B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Company and the Guarantors shall use their respective best efforts to obtain the withdrawal or lifting of such order at the earliest possible time; (iv) subject to Section 6(c)(i), if any fact or event contemplated by Section 6(c)(iii)(D) above shall exist or have occurred, prepare a supplement or post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; (v) furnish to each Holder and their counsel, in connection with a Shelf Registration Statement, and each Initial Purchaser and their counsel, in connection with the Exchange Offer Registration Statement, before filing with the Commission, copies of any such Registration Statement or any Prospectus included therein or any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which documents will be subject to the review and comment of such Holders in connection with such sale, if any, for a period of at least five Business Days, and the Company will not file any such Registration Statement or Prospectus or any 8 10 amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which such Holders shall reasonably object within five Business Days after the receipt thereof. A Holder shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading or fails to comply with the applicable requirements of the Act; (vi) promptly prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to each Holder and their counsel, in connection with a Shelf Registration Statement, and each Initial Purchaser and their counsel, in connection with the Exchange Offer Registration Statement, make the Company's and the Guarantors' representatives available for discussion of such document and other customary due diligence matters, and include such information in such document prior to the filing thereof as such Holders may reasonably request; (vii) make available, at reasonable times, for inspection by each Holder and any attorney or accountant retained by such Holders, all financial and other records, pertinent corporate documents of the Company and the Guarantors and cause the Company's and the Guarantors' officers, directors and employees to supply all information reasonably requested by any such Holder, attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness; (viii) if requested by any Holders in connection with such exchange or sale, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective amendment if necessary, such information as such Holders may reasonably request to have included therein, including, without limitation, information relating to the "Plan of Distribution" of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement or post-effective amendment as soon as practicable after the Company is notified of the matters to be included in such Prospectus supplement or post-effective amendment; (ix) furnish to each Holder and their counsel, in connection with a Shelf Registration Statement, and each Initial Purchaser and their counsel, in connection with the Exchange Offer Registration Statement, without charge, at least one copy of such Registration Statement, as first filed with the Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); (x) deliver to each Holder without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or supplement thereto as such Persons reasonably may request; the Company and the Guarantors hereby consent to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each selling Holder in connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto; (xi) upon the request of any Holder, enter into such agreements (including underwriting agreements) and make such representations and warranties and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities pursuant to any applicable Registration Statement contemplated by this Agreement as may be reasonably requested by any Holder in connection with any sale or resale pursuant to any applicable Registration Statement. In such connection, the Company and the Guarantors shall: (A) upon request of any Holder, furnish (or in the case of paragraphs (2) and (3),use their respective best efforts to cause to be furnished) to each Holder, upon Consummation of the 9 11 Exchange Offer or upon the effectiveness of the Shelf Registration Statement, as the case may be: (1) a certificate, dated such date, signed on behalf of the Company and each Guarantor by (x) the President or any Vice President and (y) a principal financial or accounting officer of the Company and such Guarantor, confirming, as of the date thereof, the matters set forth in Sections 6(x), 9(a) and 9(b) of the Purchase Agreement and such other similar matters as such Holders may reasonably request; (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the Company and the Guarantors covering matters similar to those set forth in paragraph (e) of Section 9 of the Purchase Agreement and such other matters as such Holder may reasonably request, and in any event including a statement to the effect that such counsel has participated in conferences with officers and other representatives of the Company and the Guarantors, representatives of the independent public accountants for the Company and the Guarantors and have considered the matters required to be stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that, on the basis of the foregoing, no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any post-effective amendment thereto became effective and, in the case of the Exchange Offer Registration Statement, as of the date of Consummation of the Exchange Offer, 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 not misleading, or that the Prospectus contained in such Registration Statement as of its date and, in the case of the opinion dated the date of Consummation of the Exchange Offer, as of the date of Consummation, contained an untrue statement of a material fact or omitted 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. Without limiting the foregoing, such counsel may state further that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data included in any Registration Statement contemplated by this Agreement or the related Prospectus; and (3) a customary comfort letter, dated the date of Consummation of the Exchange Offer, or as of the date of effectiveness of the Shelf Registration Statement, as the case may be, from the Company's independent accountants, in the customary form and covering matters of the type customarily covered in comfort letters to underwriters in connection with underwritten offerings, and affirming the matters set forth in the comfort letters delivered pursuant to Section 9(h) of the Purchase Agreement; and (B) deliver such other documents and certificates as may be reasonably requested by the selling Holders to evidence compliance with the matters covered in clause (A) above and with any customary conditions contained in any agreement entered into by the Company and the Guarantors pursuant to this clause (xi); (xii) prior to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders may request and do any and all other acts or things necessary or advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable 10 12 Registration Statement; provided, however, that neither the Company nor any Guarantor shall be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would subject it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; (xiii) in connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such Transfer Restricted Securities in such denominations and such names as the selling Holders may request at least two Business Days prior to such sale of Transfer Restricted Securities; (xiv) use their respective best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the proviso contained in clause (xii) above; (xv) provide a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted Securities and provide the Trustee under the Indenture with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with The Depository Trust Company; (xvi) otherwise use their respective best efforts to comply with all applicable rules and regulations of the Commission, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the Registration Statement (as such term is defined in paragraph (c) of Rule 158 under the Act); (xvii) cause the Indenture to be qualified under the TIA not later than the effective date of the first Registration Statement required by this Agreement and, in connection therewith, cooperate with the Trustee and the Holders to effect such changes to the Indenture as may be required for such Indenture to be so qualified in accordance with the terms of the TIA; and execute and use its best efforts to cause the Trustee to execute, all documents that may be required to effect such changes and all other forms and documents required to be filed with the Commission to enable such Indenture to be so qualified in a timely manner; and (xviii) provide promptly to each Holder, upon request, each document filed with the Commission pursuant to the requirements of Section 13, Section 14 or Section 15(d) of the Exchange Act. (d) Restrictions on Holders. Each Holder agrees by acquisition of a Transfer Restricted Security that, upon receipt of the notice referred to in Section 6(c)(iii)(C) or any notice from the Company of the existence of any fact of the kind described in Section 6(c)(iii)(D) hereof (in each case, a "SUSPENSION NOTICE"), such Holder will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement until (i) such Holder has received copies of the supplemented or amended Prospectus contemplated by Section 6(c)(iv) hereof, or (ii) such Holder is advised in writing by the Company that the use of the Prospectus may be resumed, and has received copies of any additional or supplemental filings that are incorporated by reference in the Prospectus (in each case, the "RECOMMENCEMENT DATE"). Each Holder receiving a Suspension Notice hereby agrees 11 13 that it will either (i) destroy any Prospectuses, other than permanent file copies, then in such Holder's possession which have been replaced by the Company with more recently dated Prospectuses or (ii) deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of receipt of the Suspension Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable, shall be extended by a number of days equal to the number of days in the period from and including the date of delivery of the Suspension Notice to the date of delivery of the Recommencement Date. SECTION 7. REGISTRATION EXPENSES (a) All expenses incident to the Company's and the Guarantors' performance of or compliance with this Agreement will be borne by the Company, regardless of whether a Registration Statement becomes effective, including without limitation: (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state Blue Sky or securities laws; (iii) all expenses of printing (including printing certificates for the Series B Notes to be issued in the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone; (iv) all fees and disbursements of counsel for the Company, the Guarantors and one counsel for the Holders of Transfer Restricted Securities; (v) all application and filing fees in connection with listing the Series B Notes on a national securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Company and the Guarantors (including the expenses of any special audit and comfort letters required by or incident to such performance). The Company will, in any event, bear its and the Guarantors' internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Company or the Guarantors. (b) In connection with any Registration Statement required by this Agreement (including, without limitation, the Exchange Offer Registration Statement and the Shelf Registration Statement), the Company and the Guarantors will reimburse the Initial Purchasers and the Holders of Transfer Restricted Securities who are tendering Series A Notes in the Exchange Offer and/or selling or reselling Series A Notes or Series B Notes pursuant to the "Plan of Distribution" contained in the Exchange Offer Registration Statement or the Shelf Registration Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel, who shall be Dow, Lohnes & Albertson, PLLC, unless another firm shall be chosen by the Holders of a majority in principal amount of the Transfer Restricted Securities for whose benefit such Registration Statement is being prepared. SECTION 8. INDEMNIFICATION (a) The Company and the Guarantors agree, jointly and severally, to indemnify and hold harmless each Holder, its directors, officers and each Person, if any, who controls such Holder (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities, judgments, (including without limitation, any legal or other expenses incurred in connection with investigating or defending any matter, including any action that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement thereto) provided by the Company to any Holder or any prospective purchaser of Series B Notes or registered Series A Notes, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not 12 14 misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by an untrue statement or omission or alleged untrue statement or omission that is based upon information relating to any of the Holders furnished in writing to the Company by any of the Holders. (b) Each Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Company and the Guarantors, and their respective directors and officers, and each person, if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company or the Guarantors to the same extent as the foregoing indemnity from the Company and the Guarantors set forth in Section 8(a) above, but only with reference to information relating to such Holder furnished in writing to the Company by such Holder expressly for use in any Registration Statement. In no event shall any Holder, its directors, officers or any Person who controls such Holder be liable or responsible for any amount in excess of the amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such Holder, its directors, officers or any Person who controls such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. (c) In case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 8(a) or 8(b) (the "INDEMNIFIED PARTY"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the "INDEMNIFYING PERSON") in writing, and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that in the case of any action in respect of which indemnity may be sought pursuant to both Sections 8(a) and 8(b), a Holder shall not be required to assume the defense of such action pursuant to this Section 8(c), but may employ separate counsel and participate in the defense thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Holder). Any indemnified party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i) the employment of such counsel shall have been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in writing by a majority of the Holders, in the case of the parties indemnified pursuant to Section 8(a), and by the Company and Guarantors, in the case of parties indemnified pursuant to Section 8(b). The indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action (i) effected with its written consent or (ii) effected without its written consent if the settlement is entered into more than 20 Business Days after the indemnifying party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which 13 15 the indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action 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 the indemnified party. (d) To the extent that the indemnification provided for in this Section 8 is unavailable to an indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Company and the Guarantors, on the one hand, and the Holders, on the other hand, from their sale of Transfer Restricted Securities or (ii) if the allocation provided by clause 8(d)(i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause 8(d)(i) above but also the relative fault of the Company and the Guarantors, on the one hand, and of the Holder, on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The relative fault of the Company and the Guarantors, on the one hand, and of the Holder, on the other hand, 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 such Guarantor, on the one hand, or by the Holder, on the other hand, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company, the Guarantors and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders 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 in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to in the immediately preceding paragraph shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such indemnified party in connection with investigating or defending any matter, including any action that could have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the provisions of this Section 8, no Holder, its directors, its officers or any Person, if any, who controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which the total received by such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages which such Holder 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 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' obligations to contribute pursuant to this Section 8(d) are several in proportion to the respective principal amount of Transfer Restricted Securities held by each Holder hereunder and not joint. 14 16 SECTION 9. RULE 144A AND RULE 144 The Company and each Guarantor agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Company or such Guarantor (i) is not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder, to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15 (d) of the Exchange Act, to make all filings required thereby in a timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144. SECTION 10. MISCELLANEOUS (a) Remedies. The Company and the Guarantors acknowledge and agree that any failure by the Company and/or the Guarantors to comply with their respective obligations under Sections 3 and 4 hereof may result in material irreparable injury to the Initial Purchasers or the Holders that it will not be possible to measure damages for such injuries precisely and that, in the event of any such failure, the Initial Purchasers or any Holder may obtain such relief as may be required to specifically enforce the Company's and the Guarantors' obligations under Sections 3 and 4 hereof. The Company and the Guarantors further agree to waive the defense in any action for specific performance that a remedy at law would be adequate. (b) No Inconsistent Agreements. Neither the Company nor any Guarantor will, on or after the date of this Agreement, enter into any agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. Neither the Company nor any Guarantor has previously entered into any agreement granting any registration rights with respect to its securities to any Person, except for those rights provided under [the SF Note]. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's and the Guarantors' securities under any agreement in effect on the date hereof. (c) Amendments and Waivers. The provisions of this Agreement may not be amended, modified or supplemented, and waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of Section 5 hereof and this Section 10(c)(i), the Company has obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii) in the case of all other provisions hereof, the Company has obtained the written consent of Holders of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Company or its Affiliates). Notwithstanding the foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to the rights of Holders whose Transfer Restricted Securities are being tendered pursuant to the Exchange Offer, and that does not affect directly or indirectly the rights of other Holders whose Transfer Restricted Securities are not being tendered pursuant to such Exchange Offer, may be given by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities subject to such Exchange Offer. (d) Third Party Beneficiary. Each Holder shall be a third party beneficiary to the agreements made hereunder between the Company and the Guarantors, on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it may deem such enforcement necessary or advisable to protect its rights or the rights of other Holders hereunder. 15 17 (e) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: (i) if to a Holder, at the address set forth on the records of the Registrar under the Indenture, with a copy to the Registrar under the Indenture; and (ii) if to the Company or the Guarantors: Emmis Communications Corporation 40 Monument Circle, Suite 700 Indianapolis, IN 46204 Telecopier No.: 317-631-3750 Attention: Associate General Counsel With a copy to: Bose McKinney & Evans 135 N. Pennsylvania Street, Suite 2700 Indianapolis, IN 46204 Telecopier No.: 317-684-5173 Attention: Alan W. Becker All such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when receipt 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 at the address specified in the Indenture. (f) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns 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 Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Transfer Restricted 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 Purchase Agreement, and such Person shall be entitled to receive the benefits hereof. (g) 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. (h) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof. 16 18 (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. (j) 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. (k) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement supersedes all prior agreements and understandings between the parties with respect to such subject matter. 17 19 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above. EMMIS COMMUNICATIONS CORPORATION By: /s/ HOWARD L. SCHROTT ______________________________ Name: Title: EMMIS COMMUNICATIONS CORPORATION EMMIS FM BROADCASTING CORPORATION OF INDIANAPOLIS EMMIS FM BROADCASTING CORPORATION OF ST. LOUIS KPWR, INC. EMMIS BROADCASTING CORPORATION OF NEW YORK EMMIS FM BROADCASTING CORPORATION OF CHICAGO EMMIS FM LICENSE CORPORATION OF INDIANAPOLIS EMMIS FM LICENSE CORPORATION OF ST. LOUIS KPWR LICENSE, INC. EMMIS LICENSE CORPORATION OF NEW YORK EMMIS FM LICENSE CORPORATION OF CHICAGO EMMIS MEADOWLANDS CORPORATION EMMIS PUBLISHING CORPORATION EMMIS AM RADIO CORPORATION OF INDIANAPOLIS EMMIS FM RADIO CORPORATION OF INDIANAPOLIS EMMIS AM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS FM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS RADIO LICENSE CORPORATION OF NEW YORK EMMIS 104.1 FM RADIO CORPORATION OF ST. LOUIS EMMIS 104.1 FM RADIO LICENSE CORPORATION OF ST. LOUIS EMMIS 106.5 FM BROADCASTING CORPORATION OF ST. LOUIS EMMIS 106.5 FM LICENSE CORPORATION OF ST. LOUIS EMMIS 1310 AM RADIO CORPORATION OF INDIANAPOLIS EMMIS 1310 AM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS 105.7 FM RADIO CORPORATION OF INDIANAPOLIS MEDIATEX COMMUNICATIONS CORPORATION MEDIATEX DEVELOPMENT CORPORATION TEXAS MONTHLY, INC. EMMIS LICENSE CORPORATION EMMIS INTERNATIONAL BROADCASTING CORPORATION EMMIS DAR, INC. EMMIS PUBLISHING, L.P. EMMIS INTERNATIONAL CORPORATION EMMIS 1380 AM RADIO CORPORATION OF ST. LOUIS Registration Rights Agreement Page 1 of 2 EMMIS TELEVISION LICENSE CORPORATION OF HONOLULU EMMIS TELEVISION LICENSE CORPORATION OF MOBILE EMMIS TELEVISION LICENSE CORPORATION OF CAPE CORAL 20 EMMIS TELEVISION LICENSE CORPORATION OF GREEN BAY EMMIS FM HOLDING CORPORATION OF NEW YORK EMMIS 101.9 FM RADIO CORPORATION OF NEW YORK EMMIS RADIO CORPORATION OF NEW YORK EMMIS 1480 AM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS TELEVISION LICENSE CORPORATION OF TERRE HAUTE EMMIS 99.9 FM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS 105.7 FM RADIO LICENSE CORPORATION OF INDIANAPOLIS EMMIS TELEVISION LICENSE CORPORATION OF NEW ORLEANS EMMIS 105.5 FM RADIO LICENSE CORPORATION OF TERRE HAUTE EMMIS INDIANA BROADCASTING, L.P. EMMIS TELEVISION BROADCASTING, L.P. By: /s/ Howard L. Schrott ________________________________ Title: DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION BANCBOSTON ROBERTSON STEPHENS INC. FIRST UNION CAPITAL MARKETS CORP. GOLDMAN, SACHS & CO. TD SECURITIES (USA) INC. By: Donaldson, Lufkin & Jenrette Securities Corporation By: /s/ Robert A. Lockwood _______________________________ Name: Robert A. Lockwood Title: Vice President Registration Rights Agreement Page 2 of 2 21 SCHEDULE A GUARANTORS Emmis FM Broadcasting Corporation of Indianapolis Emmis FM Broadcasting Corporation of St. Louis KPWR, Inc. Emmis Broadcasting Corporation of New York Emmis FM Broadcasting Corporation of Chicago Emmis FM License Corporation of Indianapolis Emmis FM License Corporation of St. Louis KPWR License, Inc. Emmis License Corporation of New York Emmis FM License Corporation of Chicago Emmis Meadowlands Corporation Emmis Publishing Corporation Emmis AM Radio Corporation of Indianapolis Emmis FM Radio Corporation of Indianapolis Emmis AM Radio License Corporation of Indianapolis Emmis FM Radio License Corporation of Indianapolis Emmis Radio License Corporation of New York Emmis 104.1 FM Radio Corporation of St. Louis Emmis 104.1 FM Radio License Corporation of St. Louis Emmis 106.5 FM Broadcasting Corporation of St. Louis Emmis 106.5 FM License Corporation of St. Louis Emmis 1310 AM Radio Corporation of Indianapolis Emmis 1310 AM Radio License Corporation of Indianapolis Emmis 105.7 FM Radio Corporation of Indianapolis Mediatex Communications Corporation Mediatex Development Corporation Texas Monthly, Inc. Emmis License Corporation Emmis International Broadcasting Corporation Emmis DAR, Inc. Emmis Publishing, L.P. Emmis International Corporation Emmis 1380 AM Radio Corporation of St. Louis Emmis Television License Corporation of Honolulu Emmis Television License Corporation of Mobile Emmis Television License Corporation of Cape Coral Emmis Television License Corporation of Green Bay Emmis FM Holding Corporation of New York Emmis 101.9 FM Radio Corporation of New York Emmis Radio Corporation of New York Emmis 1480 AM Radio License Corporation of Terre Haute Emmis Television License Corporation of Terre Haute Emmis 99.9 FM Radio License Corporation of Terre Haute Emmis 105.7 FM Radio License Corporation of Indianapolis Emmis Television License Corporation of New Orleans A-1 22 Emmis 105.5 FM Radio License Corporation of Terre Haute Emmis Indiana Broadcasting, L.P. Emmis Television Broadcasting, L.P. A-2 EX-5 4 OPINION AND CONSENT OF BOSE MCKINNEY & EVANS 1 Exhibit 5 BOSE McKINNEY & EVANS 2700 First Indiana Plaza 135 North Pennsylvania Street Indianapolis, Indiana 46240 (317) 684-5000 March 11, 1999 Emmis Communications Corporation 40 Monument Circle Indianapolis, Indiana 46204 Dear Sirs: We are acting as counsel to Emmis Communications Corporation, an Indiana corporation (the "Company"), and certain of its subsidiaries (the "Subsidiary Guarantors") in connection with the registration by the Company under the Securities Act of 1933, as amended, of its 8-1/8% Senior Subordinated Notes due 2009 (the "Exchange Notes") and the guarantees thereof (the "Guarantees") by the Subsidiary Guarantors to be offered in exchange (the "Exchange Offer") for the Company's outstanding 8-1/8% Senior Subordinated Notes due 2009 (the "Old Notes") and the guarantees thereof by the Subsidiary Guarantors. The Old Notes were issued under, and the Exchange Notes are to be issued under, an Indenture, dated as of February 12, 1999, among the Company, the Subsidiary Guarantors and IBJ Whitehall Bank & Trust Company, as Trustee (the "Indenture"). The Exchange Notes and the Guarantees are the subject of a registration statement (the "Registration Statement") on Form S-4 filed by the Company and the Subsidiary Guarantors. We have examined originals or copies of (i) the Indenture, (ii) the Registration Rights Agreement, dated as of February 12, 1999 (the "Registration Rights Agreement"), by and among the Company, the Subsidiary Guarantors, Donaldson, Lufkin & Jenrette Securities Corporation, BancBoston Robertson Stephens Inc., First Union Capital Markets Corp., Goldman, Sachs & Co. and TD Securities (USA) Inc. and (iii) the Registration Statement. We have also examined all such records of the Company and the Subsidiary Guarantors and all such agreements, certificates of public officials, certificates of officers or representatives of the Company, the Subsidiary Guarantors and others, and such other documents, certificates and corporate or other records as we have deemed necessary or appropriate as a basis for the opinion set forth herein. In our examination we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals of such latter documents. As to any facts relevant to the opinion expressed herein, we have relied upon statements and representations of officers and other representatives of the Company, the Subsidiary Guarantors and others (all of which we assume to be true, complete and accurate in all respects). 2 Emmis Communications Corporation Page 2 Based upon the foregoing and subject to the other qualifications, assumptions and limitations stated herein, we are of the opinion that (i) the Exchange Notes have been duly authorized and when executed by the proper officers of the Company, duly authenticated by the Trustee, and issued by the Company in accordance with the provisions of the Indenture, against surrender and cancellation of a like aggregate principal amount at maturity of Old Notes pursuant to the Exchange Offer as contemplated in the Registration Rights Agreement, will constitute the legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, and (ii) the Guarantees have been duly authorized and when executed by the proper officers of the Subsidiary Guarantors in accordance with the provisions of the Indenture, against surrender and cancellation of a like aggregate principal amount at maturity of guarantees of the Old Notes pursuant to the Exchange Offer as contemplated in the Registration Rights Agreement, will constitute the legal, valid and binding obligations of the Subsidiary Guarantors. The foregoing opinions are limited to the extent that (a) the enforceability of the Exchange Notes or the Guarantees may be limited by bankruptcy, insolvency, reorganization, moratorium (whether general or specific), fraudulent conveyance or other laws now or hereafter in effect affecting the enforcement of creditors' rights and remedies generally, and (b) the remedy of specific performance and injunctive and other forms of equitable relief may be limited by equitable defenses and the discretion of the court before which any proceeding therefor may be brought (whether such proceeding is at law or in equity or in a bankruptcy proceeding) or limited by other equitable principles of general applicability, including without limitation concepts of materiality, reasonableness, good faith, and fair dealing and the power of a court to declare waivers as to usury, stay or extension laws to be unenforceable. We do not hold ourselves out as being conversant with the laws of any jurisdiction other than those of the United States and the State of Indiana and, therefore, this opinion is limited to the laws of those jurisdictions. We consent to the filing of this opinion as an exhibit to the Registration Statement on Form S-4 filed under the Securities Act of 1933 relating to the Exchange Notes and the Subsidiary Guarantees and to the reference to this firm under the caption "Legal Matters" in the prospectus included in the Registration Statement. In giving such consent, we do not thereby admit that we are in the category of persons whose consent is required under Section 7 of the Securities Act of 1933. Very truly yours, /s/ BOSE McKINNEY & EVANS EX-12 5 STATEMENTS RE COMPUTATION OF RATIOS 1 COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES (DOLLARS IN THOUSANDS) EMMIS COMMUNICATIONS CORPORATION
PRO FORMA FEBRUARY (29) 28, NOVEMBER 30, FEBRUARY 28, NOVEMBER 30, -------------------------------------- --------------- ------------------------- 1994 1995 1996 1997 1998 1997 1998 1998 1998 EARNINGS: Pre tax income.................................. $343 $12,155 $17,908 $25,940 $14,884 $20,219 $23,711 $14,884 $23,711 Add: Fixed charges.................................. 14,373 8,786 15,004 10,631 15,261 11,473 26,892 18,209 29,103 Loss from equity investments................... - 348 3,111 - - - - - - Less: Capitalized interest........................... - - - - - - 666 - 666 Minority loss in consolidated subsidiaries..... - - - - - - 1,875 - 1,875 ------- ------- ------- ------- ------- ------- ------- ------- ------- Earnings........................................$14,716 $21,289 $36,023 $36,571 $30,145 $31,692 $48,062 $33,093 $50,273 ------- ------- ------- ------- ------- ------- ------- ------- ------- FIXED CHARGES: Interest expense (including amortization of debt expenses).................................$13,588 $ 7,849 $13,540 $9,633 $13,772 $10,356 $24,942 $16,720 $27,153 Capitalized interest............................ - - - - - - 666 - 666 Portion of rents representative of the interest factor................................ 785 937 1,464 998 1,489 1,117 1,284 1,489 1,284 ------- ------- ------- ------- ------- ------- ------- ------- ------- Fixed Charges...................................$14,373 $ 8,786 $15,004 $10,631 $15,261 $11,473 $26,892 $18,209 $29,103 ------- ------- ------- ------- ------- ------- ------- ------- ------- Ratio of Earnings to Fixed Charges.............. 1.02 2.42 2.40 3.44 1.98 2.76 1.79 1.82 1.73 ======= ======= ======= ======= ======= ======= ======= ======= =======
EX-15 6 LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION 1 EXHIBIT 15 March 12, 1999 Mr. Walter Z. Berger Chief Financial Officer Emmis Communications Corporation One Emmis Plaza 40 Monument Circle, Suite 700 Indianapolis, IN 46204 Dear Mr. Berger: We are aware that Emmis Communications Corporation has incorporated by reference in this registration statement its Form 10-Q for the quarter ended May 31, 1998, which includes our report dated June 19, 1998, covering the unaudited interim financial information contained therein, its Form 10-Q for the quarter ended August 31, 1998, which includes our report dated October 7, 1998, covering the unaudited interim financial information contained therein and its Form 10-Q for the quarter ended November 30, 1998, which includes our report dated December 17, 1998, covering the unaudited interim financial information contained therein. Pursuant to Regulation C of the Securities Act of 1933, those reports are not considered a part of the registration statement prepared or certified by our firm or reports prepared or certified by our firm within the meaning of Sections 7 and 11 of the Act. Very truly yours, /s/ Arthur Andersen LLP Arthur Andersen LLP EX-23.1 7 CONSENT OF ARTHUR ANDERSEN LLP 1 EXHIBIT 23.1 CONSENTS OF INDEPENDENT PUBLIC ACCOUNTANTS As independent public accountants, we hereby consent to the incorporation by reference in this registration statement of our reports dated March 31, 1998, on the consolidated financial statements of Emmis Communications Corporation for the three years ended February 28, 1998, included in Emmis Communications Corporation's Form 8-K to be filed on or about March 12, 1999 and to the incorporation by reference of our reports dated May 1, 1998, on the financial statements of Tribune New York Radio, Inc. included in Emmis Communications Corporation's Form 8-K filed on May 7, 1998 and to all references to our Firm included in this registration statement. /s/ ARTHUR ANDERSEN LLP ARTHUR ANDERSEN LLP Indianapolis, Indiana, March 12, 1999. EX-23.2 8 CONSENT OF ERNST & YOUNG LLP 1 EXHIBIT 23.2 CONSENT OF INDEPENDENT AUDITORS We consent to the reference to our firm under the caption "Experts" in the Registration Statement (Form S-4) and related Prospectus of Emmis Communications Corporation for the registration of $300,000,000 of 8-1/8% Senior Subordinated Notes due 2009 and to the incorporation by reference therein of our report dated February 20, 1998 (except for Note 10, as to which the date is March 18, 1998) with respect to the combined financial statements of SF Broadcasting of Wisconsin, Inc. and SF Multistations, Inc. and Subsidiaries filed with the Securities and Exchange Commission. Ernst & Young LLP New York, New York March 12, 1999 EX-24 9 POWERS OF ATTORNEY 1 EXHIBIT 24 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Jeffrey H. Smulyan ------------------------- Jeffrey H. Smulyan 2 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Richard A. Leventhal ------------------------- Richard A. Leventhal 3 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Doyle L. Rose ------------------------- Doyle L. Rose 4 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Gary L. Kaseff ------------------------- Gary L. Kaseff 5 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Frank V. Sica ------------------------- Frank V. Sica 6 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, Walter Z. Berger, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Greg Nathanson ------------------------- Greg Nathanson 7 POWER OF ATTORNEY KNOW ALL MEN BY THESE PRESENTS, that the person whose signature appears below, hereby constitutes and appoints Jeffrey H. Smulyan, J. Scott Enright and Norman H. Gurwitz, or any of them, his attorneys-in-fact and agents, with full power of substitution and resubstitution for him in any and all capacities, to sign a Registration Statement under the Securities Act of 1933, as amended (the "Registration Statement"), for the registration of the exchange of 8-1/8% Senior Subordinated Notes due 2009 of Emmis Communications Corporation (the "Company") and guarantees thereof by certain subsidiaries for outstanding notes and guarantees, any or all pre-effective amendments or post-effective amendments to the Registration Statement (which amendments may make such changes in and additions to the Registration Statement as such attorneys-in-fact may deem necessary or appropriate), and any registration statement for the offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, as amended, and to file the same, with exhibits thereto and other documents in connection therewith, with the Securities and Exchange Commission, granting unto each of such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary in connection with such matters and hereby ratifying and confirming all that each of such attorneys-in-fact and agents or his substitute or substitutes may do or cause to be done by virtue hereof. Dated: March 9, 1999 /s/ Walter Z. Berger ------------------------- Walter Z. Berger EX-25 10 STATEMENT RE ELIGIBILITY OF TRUSTEE 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM T-1 STATEMENT OF ELIGIBILITY UNDER THE TRUST INDENTURE ACT OF 1939 OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) IBJ WHITEHALL BANK & TRUST COMPANY (Exact name of trustee as specified in its charter) New York 13-6022258 (Jurisdiction of incorporation (I.R.S. employer or organization if not a U.S. national bank) identification No.) One State Street, New York, New York 10004 (Address of principal executive offices) (Zip code)
STEPHEN J. GIURLANDO, VICE PRESIDENT IBJ WHITEHALL BANK & TRUST COMPANY One State Street New York, New York 10004 (212) 858-2000 (Name, address and telephone number of agent for service) Emmis Communications Corporation (Exact name of Registrant as specified in its charter) Indiana 35-1542018 (State or other jurisdiction of (I.R.S. employer identification No.) incorporation or organization) 40 Monument Circle 7th Floor Indianapolis, Indiana 46204 (Address of principal executive offices) (Zip code)
8.125% Senior Subordinated Notes Due 2009 (Title of indenture securities) 2 Item 1. General information Furnish the following information as to the trustee: (a) Name and address of each examining or supervising authority to which it is subject. New York State Banking Department Two Rector Street New York, New York Federal Deposit Insurance Corporation Washington, D.C. Federal Reserve Bank of New York Second District, 33 Liberty Street New York, New York (b) Whether it is authorized to exercise corporate trust powers. Yes Item 2. Affiliations with the Obligor. If the obligor is an affiliate of the trustee, describe each such affiliation. The obligor is not an affiliate of the trustee. Item 13. Defaults by the Obligor. (a) State whether there is or has been a default with respect to the securities under this indenture. Explain the nature of any such default. None 2 3 (b) If the trustee is a trustee under another indenture under which any other securities, or certificates of interest or participation in any other securities, of the obligors are outstanding, or is trustee for more than one outstanding series of securities under the indenture, state whether there has been a default under any such indenture or series, identify the indenture or series affected, and explain the nature of any such default. None Item 16. List of exhibits. List below all exhibits filed as part of this statement of eligibility. *1. A copy of the Charter of IBJ Whitehall Bank & Trust Company as amended to date. (See Exhibit 1A to Form T-1, Securities and Exchange Commission File No 22-18460 and Exhibit 25.1 to Form T-1, Securities and Exchange Commission File No. 333-46849). *2. A copy of the Certificate of Authority of the trustee to Commence Business (Included in Exhibit 1 above). *3. A copy of the Authorization of the trustee to exercise corporate trust powers, as amended to date (See Exhibit 4 to Form T-1, Securities and Exchange Commission File No. 22-19146). *4. A copy of the existing By-Laws of the trustee, as amended to date (See Exhibit 25.1 to Form T-1, Securities and Exchange Commission File No. 333-46849). 5. Not Applicable 6. The consent of United States institutional trustee required by Section 321(b) of the Act. 7. A copy of the latest report of condition of the trustee published pursuant to law or the requirements of its supervising or examining authority. * The Exhibits thus designated are incorporated herein by reference as exhibits hereto. Following the description of such Exhibits is a reference to the copy of the Exhibit heretofore filed with the Securities and Exchange Commission, to which there have been no amendments or changes. 3 4 NOTE In answering any item in this Statement of Eligibility which relates to matters peculiarly within the knowledge of the obligor and its directors or officers, the trustee has relied upon information furnished to it by the obligor. Inasmuch as this Form T-1 is filed prior to the ascertainment by the trustee of all facts on which to base responsive answers to Item 2, the answer to said Item is based on incomplete information. Item 2, may, however, be considered as correct unless amended by an amendment to this Form T-1. Pursuant to General Instruction B, the trustee has responded to Items 1, 2 and 16 of this form since to the best knowledge of the trustee as indicated in Item 13, the obligor is not in default under any indenture under which the applicant is trustee. 4 5 SIGNATURE Pursuant to the requirements of the Trust Indenture Act of 1939, the trustee, IBJ Whitehall Bank & Trust Company, a corporation organized and existing under the laws of the State of New York, has duly caused this statement of eligibility & qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of New York, and State of New York, on the 10th day of March, 1999. IBJ WHITEHALL BANK & TRUST COMPANY By: /s/Stephen J. Giurlando ------------------------------ Stephen J. Giurlando Vice President 6 EXHIBIT 6 CONSENT OF TRUSTEE Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the issuance by Emmis Communications Corporation, of its 8.125% Senior Subordinated Notes due 2009, we hereby consent that reports of examinations by Federal, State, Territorial, or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor. IBJ WHITEHALL BANK & TRUST COMPANY By: /s/Stephen J. Giurlando ------------------------------ Stephen J. Giurlando Vice President Dated: March 10, 1999 7 EXHIBIT 7 CONSOLIDATED REPORT OF CONDITION OF IBJ SCHRODER BANK & TRUST COMPANY OF NEW YORK, NEW YORK AND FOREIGN AND DOMESTIC SUBSIDIARIES REPORT AS OF DECEMBER 31, 1998
DOLLAR AMOUNTS IN THOUSANDS -------------- ASSETS 1. Cash and balance due from depository institutions: a. Non-interest-bearing balances and currency and coin ................................................$ 26,852 b. Interest-bearing balances.............................................................................$ 17,489 2. Securities: a. Held-to-maturity securities...........................................................................$ -0- b. Available-for-sale securities.........................................................................$ 207,069 3. Federal funds sold and securities purchased under agreements to resell in domestic offices of the bank and of its Edge and Agreement subsidiaries and in IBFs Federal Funds sold and Securities purchased under agreements to resell....................................$ 80,389 4. Loans and lease financing receivables: a. Loans and leases, net of unearned income................................................$ 2,033,599 b. LESS: Allowance for loan and lease losses...............................................$ 62,853 c. LESS: Allocated transfer risk reserve...................................................$ -0- d. Loans and leases, net of unearned income, allowance, and reserve......................................$ 1,970,746 5. Trading assets held in trading accounts...................................................................$ 848 6. Premises and fixed assets (including capitalized leases)..................................................$ 1,583 7. Other real estate owned...................................................................................$ -0- 8. Investments in unconsolidated subsidiaries and associated companies.......................................$ -0- 9. Customers' liability to this bank on acceptances outstanding..............................................$ 340 10. Intangible assets.........................................................................................$ 11,840 11. Other assets..............................................................................................$ 66,691 12. TOTAL ASSETS..............................................................................................$ 2,383,847
8 LIABILITIES 13. Deposits: a. In domestic offices........................................................................$ 804,562 (1) Noninterest-bearing ..........................................................$ 168,822 (2) Interest-bearing .............................................................$ 635,740 b. In foreign offices, Edge and Agreement subsidiaries, and IBFs..............................$ 885,076 (1) Noninterest-bearing ..........................................................$ 16,554 (2) Interest-bearing .............................................................$ 868,522 14. Federal funds purchased and securities sold under agreements to repurchase in domestic offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: Federal Funds purchased and Securities sold under agreements to repurchase.....................$ 225,000 15. a. Demand notes issued to the U.S. Treasury...................................................$ 674 b. Trading Liabilities........................................................................$ 560 16. Other borrowed money: a. With a remaining maturity of one year or less..............................................$ 38,002 b. With a remaining maturity of more than one year............................................$ 1,375 c. With a remaining maturity of more than three years.........................................$ 1,550 17. Not applicable. 18. Bank's liability on acceptances executed and outstanding.......................................$ 340 19. Subordinated notes and debentures..............................................................$ 100,000 20. Other liabilities..............................................................................$ 74,502 21. TOTAL LIABILITIES..............................................................................$ 2,131,641 22. Limited-life preferred stock and related surplus...............................................$ N/A
EQUITY CAPITAL 23. Perpetual preferred stock and related surplus..................................................$ -0- 24. Common stock...................................................................................$ 28,958 25. Surplus (exclude all surplus related to preferred stock).......................................$ 210,319 26. a. Undivided profits and capital reserves.....................................................$ 11,655 b. Net unrealized gains (losses) on available-for-sale securities.............................$ 1,274 27. Cumulative foreign currency translation adjustments............................................$ -0- 28. TOTAL EQUITY CAPITAL...........................................................................$ 252,206 29. TOTAL LIABILITIES AND EQUITY CAPITAL...........................................................$ 2,383,847
EX-99.1 11 FORM OF LETTER OF TRANSMITTAL 1 EXHIBIT 99.1 PURSUANT TO THE PROSPECTUS DATED ______________, 1999, THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON _________________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). EMMIS COMMUNICATIONS CORPORATION LETTER OF TRANSMITTAL 8-1/8% SENIOR SUBORDINATED NOTES DUE 2009 To: IBJ Whitehall Bank & Trust Company, the Exchange Agent By Registered or Certified Mail: By Overnight Courier or by Hand: IBJ Whitehall Bank & Trust Company IBJ Whitehall Bank & Trust Company 1 State Street, 10TH Floor 1 State Street, 10TH Floor New York, New York 10004 New York, New York 10004 Attn: Corporate Trust Administration Attn: Corporate Trust Administration By Facsimile: (212) 858-2952 Confirm by telephone: (800) DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS INSTRUMENT VIA A FACSIMILE NUMBER OTHER THAN THE ONE LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED. The undersigned acknowledges receipt of the Prospectus, dated ___________________, 1999 (the "Prospectus") of Emmis Communications Corporation (the "Issuer") and the related Letter of Transmittal (the "Letter of Transmittal"), which together describe the Issuer's offer (the "Exchange Offer") to exchange $1,000 principal amount at maturity of its 8-1/8% Senior Subordinated Notes Due 2009 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), pursuant to a Registration Statement, for each $1,000 principal amount at maturity of its outstanding 8-1/8% Senior Subordinated Notes Due 2009 (the "Old Notes"), of which $300 million original principal amount at maturity is outstanding. The term "Expiration Date" means 5:00 p.m., New York City time, on ________________ 1999, unless the Issuer, in its sole discretion, extends the Exchange Offer, in which case the term means the latest date and time to which the Exchange Offer is extended. The term "Holder" with respect to the Exchange Offer means any person: (i) in whose name Old Notes are registered on the books of the Issuer or any other person who has obtained a properly completed bond power from the registered Holder or (ii) whose Old Notes are held of record by The Depository Trust Company ("DTC") and who desires to deliver such Old Notes by book-entry transfer at DTC. Capitalized terms used but not defined herein have the respective meanings set forth in the Prospectus. 2 This Letter of Transmittal is to be used by Holders if: (i) certificates representing Old Notes are to be physically delivered to the Exchange Agent herewith by Holders; (ii) tender of Old Notes is to be made by book-entry transfer to the Exchange Agent's account at DTC pursuant to the procedures set forth in the Prospectus under "The Exchange Offer--Procedures for Tendering" by any financial institution that is a participant in DTC and whose name appears on a security position listing as the owner of Old Notes (such participants, acting on behalf of Holders, are referred to herein as "Acting Holders"); or (iii) tender of Old Notes is to be made according to the guaranteed delivery procedures described in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2 below. Delivery of documents to DTC does not constitute delivery to the Exchange Agent. The undersigned has completed, executed and delivered this Letter of Transmittal to indicate the action the undersigned desires to take with respect to the Exchange Offer. Holders who wish to tender their Old Notes must complete this Letter of Transmittal in its entirety. [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED BY DTC TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE FOLLOWING: Name of Tendering Institution: ________________________________________ DTC Book-Entry Account No.:____________________________________________ Transaction Code No.:__________________________________________________ [_] CHECK HERE IF TENDERED OLD NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY DELIVERED TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 2): Name of Registered or Acting Holder(s):________________________________ Window Ticket No. (if any):____________________________________________ Date of Execution of Notice of Guaranteed Delivery:____________________ Name of Eligible Institution that Guaranteed Delivery:______________________________________________ If Delivered by Book-Entry Transfer, DTC Book-Entry Account No.:____________________________________________ Transaction Code Number:_______________________________________________ [_] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO. PLEASE NOTE: THE ISSUER HAS AGREED THAT, FOR A PERIOD OF 180 DAYS AFTER THE EXPIRATION DATE, OR UNTIL ALL BROKER-DEALERS WHO EXCHANGE OLD NOTES WHICH WERE ACQUIRED AS A RESULT OF MARKET MAKING ACTIVITIES FOR EXCHANGE NOTES HAVE SOLD ALL EXCHANGE NOTES HELD BY THEM, THE ISSUER WILL MAKE COPIES OF THE PROSPECTUS AVAILABLE TO ANY PARTICIPATING BROKER-DEALER FOR USE IN CONNECTION WITH RESALES OF THE EXCHANGE NOTES (PROVIDED THAT SUCH BROKER-DEALER REQUESTS COPIES OF THE PROSPECTUS). Name:__________________________________________________________________ Address:_______________________________________________________________ _______________________________________________________________________ Attention:_____________________________________________________________ 2 3 PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING ANY BOX BELOW List below the Old Notes to which this Letter of Transmittal relates. If the space provided below is inadequate, the certificate numbers and principal amount at maturity of Old Notes should be listed on a separate signed schedule affixed hereto. DESCRIPTION OF 8-1/8% SENIOR SUBORDINATED NOTES DUE 2009 (OLD NOTES) Box 1
- ------------------------------------ ------------------------ ------------------------ ============================= Name(s) and Aggregate Principal Principal Amount at Address(es)of Amount at Maturity Maturity Tendered (must be Registered Holder(s) Certificate Represented by in integral multiple of (Please fill in, if blank) Number(s)** Certificate(s) $1,000)* - ------------------------------------ ------------------------ ------------------------ ============================= - ------------------------------------ ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= ------------------------ ------------------------ ============================= Total - ------------------------------------ ------------------------ ------------------------ =============================
* Need not be completed by Holders who wish to tender with respect to all Old Notes listed. See Instruction 4. If the space provided above is inadequate, list the certificate numbers and Principal Amounts at Maturity on a separate signed schedule and affix the list to this Letter of Transmittal. ** Need not be completed by Holders tendering by book-entry transfer. Box 2 SPECIAL REGISTRATION INSTRUCTIONS (See Instructions 4, 5 and 6) To be completed ONLY if certificates for Old Notes in a principal amount at maturity not tendered, or Exchange Notes issued in exchange for Old Notes accepted for exchange, are to be issued in a name other than the name appearing in Box 1 above. Issue certificate(s) to: Name _________________________________ (Please Print) Address ______________________________ ______________________________________ (Include Zip Code) ______________________________________ (Tax Identification or Social Security Number) Box 3 SPECIAL DELIVERY INSTRUCTIONS (See Instructions 4, 5 and 6) To be completed ONLY if certificates for Old Notes in a principal amount at maturity not tendered, or Exchange Notes issued in exchange for Old Notes accepted for exchange, are to be sent to an address other than the address appearing in Box 1 above, or if Box 2 is filled in, to an address other than the address appearing in Box 2. Deliver certificate(s) to: Name_________________________________ (Please Print) Address______________________________ ____________________________________ (Include Zip Code) ____________________________________ (Tax Identification or Social Security Number) Box 4 3 4 BROKER-DEALER STATUS [_] Check this box if the beneficial owner of the Old Notes is a Participating Broker-Dealer and such Participating Broker-Dealer acquired the Old Notes for its own account as a result of market-making activities or other trading activities. NOTE: SIGNATURES MUST BE PROVIDED BELOW PLEASE READ ACCOMPANYING INSTRUCTIONS CAREFULLY Ladies and Gentlemen: Subject to the terms and conditions of the Exchange Offer, the undersigned hereby tenders to Emmis Communications Corporation (the "Issuer") the principal amount at maturity of Old Notes indicated above. Subject to and effective upon the acceptance for exchange of the principal amount at maturity of Old Notes tendered in accordance with this Letter of Transmittal, the undersigned sells, assigns and transfers to, or upon the order of, the Issuer all right, title and interest in and to the Old Notes tendered hereby. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent its agent and attorney-in-fact (with full knowledge that the Exchange Agent also acts as the agent of the Issuer) with respect to the tendered Old Notes with the full power of substitution to (i) present such Old Notes and all evidences of transfer and authenticity to, or transfer ownership of, such Old Notes on the account books maintained by DTC to, or upon, the order of, the Issuer, (ii) deliver certificates for such Old Notes to the Issuer and deliver all accompanying evidences of transfer and authenticity to, or upon the order of, the Issuer and (iii) present such Old Notes for transfer on the books of the Issuer and receive all benefits and otherwise exercise all rights of beneficial ownership of such Old Notes, all in accordance with the terms of the Exchange Offer. The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, sell, assign and transfer the Old Notes tendered hereby and that the Issuer will acquire good, valid and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances and not subject to any adverse claims, when the same are acquired by the Issuer. The undersigned hereby further represents that (i) the Exchange Notes are to be acquired by the Holder or the person receiving such Exchange Notes, whether or not such person is the Holder, in the ordinary course of business, (ii) the Holder or any such other person is not engaging and does not intend to engage in the distribution of the Exchange Notes, (iii) the Holder or any such other person has no arrangement or understanding with any person to participate in the distribution of the Exchange Notes, and (iv) neither the Holder nor any such other person is an "affiliate" of the Issuer within the meaning of Rule 405 under the Securities Act. As indicated above, each Participating Broker-Dealer that receives an Exchange Note for its own account in exchange for Old Notes must acknowledge that it (i) acquired the Old Notes for its own account as a result of market-making activities or other trading activities, (ii) has not entered into any arrangement or understanding with the Issuer or any "affiliate" of the Issuer (within the meaning of Rule 405 under the Securities Act) to distribute the Exchange Notes to be received in the Exchange Offer and (iii) 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. If applicable, the undersigned shall use its reasonable best efforts to notify the Issuer when it is no longer subject to such Prospectus delivery requirements. Unless otherwise notified in accordance with the instructions set forth herein in Box 4 under "Broker-Dealer Status," the Issuer will assume that the undersigned is not a Participating Broker-Dealer. If the undersigned is not a broker-dealer, the undersigned represents that it is not engaged in and does not intend to engage in, a distribution of Exchange Notes. For purposes of the Exchange Offer, the Issuer shall be deemed to have accepted validly tendered Old Notes when, as and if the Issuer has given oral or written notice thereof to the Exchange Agent. If any Old Notes tendered herewith are not accepted for exchange pursuant to the Exchange Offer for any reason, certificates for any such unaccepted Old Notes will be returned (except as noted below with respect to tenders through DTC), without expense, to the undersigned at the address shown below or to a different address as may be indicated herein in Box 3 under "Special Delivery Instructions" as promptly as practicable after the Expiration Date. All authority conferred or agreed to be conferred by this Letter of Transmittal shall survive the death, incapacity or dissolution of the undersigned, and every obligation of the undersigned under this Letter of Transmittal shall be binding upon the undersigned's heirs, personal representatives, successors and assigns. The undersigned understands that tenders of Old Notes pursuant to the procedures described under the caption "The Exchange Offer--Procedures for Tendering" in the Prospectus and in the instructions hereto will constitute a binding agreement between the 4 5 undersigned and the Issuer upon the terms and subject to the conditions of the Exchange Offer, subject only to withdrawal of such tenders on the terms set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." Unless otherwise indicated in Box 2 under "Special Registration Instructions," please issue the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged, in the name(s) of the registered Holder of the Old Notes appearing in Box 1 above (or in such event in the case of Old Notes tendered by DTC, by credit to the account of DTC). Similarly, unless otherwise indicated in Box 3 under "Special Delivery Instructions," please send the certificates, if any, representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange and any certificates for Old Notes not tendered or not exchanged (and accompanying documents, as appropriate) to the undersigned at the address shown below in the undersigned's signature(s), unless tender is being made through DTC. In the event that the box entitled "Special Registration Instructions" and the box entitled "Special Delivery Instructions" both are completed, please issue the certificates representing the Exchange Notes issued in exchange for the Old Notes accepted for exchange in the name(s) of, and return any certificates for Old Notes not tendered or not exchanged to, the person(s) so indicated. The undersigned understands that the Issuer has no obligation pursuant to the "Special Registration Instructions" and "Special Delivery Instructions" to transfer any Old Notes from the name of the registered Holder(s) thereof if the Issuer does not accept for exchange any of the Old Notes so tendered. Holders who wish to tender their Old Notes and (i) whose Old Notes are not immediately available or (ii) who cannot deliver the Old Notes, this Letter of Transmittal or any other documents required hereby to the Exchange Agent prior to the Expiration Date, may tender their Old Notes according to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer--Guaranteed Delivery Procedures." See Instruction 2. 5 6 The lines below must be signed by the registered Holder(s) exactly as their name(s) appear(s) on the Old Notes or, if tendered by a participant in DTC, exactly as such participant's name appears on a security position listing as the owner of Old Notes, or by person(s) authorized to become registered Holder(s) by a properly completed bond power from the registered Holder(s), a copy of which must be transmitted with this Letter of Transmittal. If Old Notes to which this Letter of Transmittal relate are held of record by two or more joint Holders, then all such Holders must sign this Letter of Transmittal. PLEASE SIGN HERE WHETHER OR NOT OLD NOTES ARE BEING PHYSICALLY TENDERED HEREBY x -------------------------------------------------------------- ------------- Date x -------------------------------------------------------------- ------------- Signature(s) of Registered Holder(s) Date or Authorized Signatory Area Code and Telephone Number: ___________________________ If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer of a corporation or other person acting in a fiduciary or representative capacity, then such person must (i) set forth his or her full title below and (ii) submit evidence satisfactory to the Issuer of such person's authority so to act. See Instruction 5. Name(s): _____________________________________________________________________ (Please Print) Capacity: ____________________________________________________________________ Address: _____________________________________________________________________ (Include Zip Code) MEDALLION SIGNATURE GUARANTEE (If required by Instruction 5) Certain Signatures must be Guaranteed by an Eligible Institution Signature(s) Guaranteed by an Eligible Institution: ----------------------------------------------------------------------------- (Authorized Signature) ----------------------------------------------------------------------------- (Title) ----------------------------------------------------------------------------- (Name of Firm) ----------------------------------------------------------------------------- (Address, Include Zip Code) ----------------------------------------------------------------------------- (Area Code and Telephone Number) Dated: ____________, 1998 6 7 INSTRUCTIONS FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER 1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND CERTIFICATES FOR OLD NOTES OR BOOK-ENTRY CONFIRMATIONS. Certificates representing the tendered Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC), as well as a properly completed and duly executed copy of this Letter of Transmittal (or facsimile thereof) (or, in the case of a book-entry transfer, an Agent's Message), a Substitute Form W-9 (or facsimile thereof) and any other documents required by this Letter of Transmittal must be received by the Exchange Agent at its address set forth herein prior to the Expiration Date. The method of delivery of certificates for Old Notes and all other required documents is at the election and sole risk of the tendering Holder and delivery will be deemed made only when actually received by the Exchange Agent. If delivery is by mail, registered mail with return receipt requested, properly insured, is recommended. As an alternative to delivery by mail, the Holder may wish to use an overnight or hand delivery service. In all cases, sufficient time should be allowed to assure timely delivery. Neither the Issuer nor the Exchange Agent is under an obligation to notify any tendering Holder of the Issuer's acceptance of tendered Old Notes prior to the completion of the Exchange Offer. 2. GUARANTEED DELIVERY PROCEDURES. Holders who wish to tender their Old Notes but whose Old Notes are not immediately available and who cannot deliver their certificates for Old Notes (or comply with the procedures for book-entry transfer prior to the Expiration Date), the Letter of Transmittal and any other documents required by the Letter of Transmittal to the Exchange Agent prior to the Expiration Date must tender their Old Notes according to the guaranteed delivery procedures set forth below. Pursuant to such procedures: (i) such tender must be made by or through a firm which is a member of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States (an "Eligible Institution"); (ii) prior to the Expiration Date, the Exchange Agent must have received from the Holder and the Eligible Institution a properly completed and duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail, or hand delivery) setting forth the name and address of the Holder, the certificate number or numbers of the tendered Old Notes, and the principal amount of tendered Old Notes and stating that the tender is being made thereby and guaranteeing that, within five New York Stock Exchange trading days after the Expiration Date, the Letter of Transmittal (or facsimile thereof) (or, in the case of a book-entry transfer, an Agent's Message), together with the tendered Old Notes (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC) and any other required documents will be deposited by the Eligible Institution with the Exchange Agent; and (iii) the certificates representing the tendered Old Notes in proper form for transfer (or a confirmation of book-entry transfer of such Old Notes into the Exchange Agent's account with DTC), together with the Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees (or, in the case of a book-entry transfer, an Agent's Message) and all other documents required by the Letter of Transmittal must be received by the Exchange Agent within five New York Stock Exchange trading days after the Expiration Date. Failure to complete the guaranteed delivery procedures outlined above will not, of itself, affect the validity or effect a revocation of any Letter of Transmittal form properly completed and executed by a Holder who attempted to use the guaranteed delivery procedure. 3. TENDER BY HOLDER. Only a Holder or Acting Holder of Old Notes may tender such Old Notes in the Exchange Offer. Any beneficial owner of Old Notes who is not the registered Holder and who wishes to tender should arrange with such Holder to execute and deliver this Letter of Transmittal on such owner's behalf or must, prior to completing and executing this Letter of Transmittal and delivering such Old Notes, either make appropriate arrangements to register ownership of the Old Notes in such owner's name or obtain a properly completed bond power from the registered Holder. 4. PARTIAL TENDERS. Tenders of Old Notes will be accepted only in integral multiples of $1,000 principal amount at maturity. If less than the entire principal amount at maturity of Old Notes is tendered, the tendering Holder should fill in the principal amount at maturity tendered in the column labeled "Principal Amount at Maturity Tendered" of the box entitled "Description of Old Notes" (Box 1) above. The entire principal amount at maturity of Old Notes delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated. If the entire principal amount at maturity of Old Notes is not tendered, Old Notes for the principal amount at maturity of Old Notes not tendered and Exchange Notes exchanged for any Old 8 8 Notes tendered will be sent to the Holder at his or her registered address, unless a different address is provided in the appropriate box on this Letter of Transmittal or unless tender is made through DTC, as soon as practicable following the Expiration Date. 5. SIGNATURES ON THE LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS; MEDALLION GUARANTEE OF SIGNATURE. If this Letter of Transmittal is signed by the registered Holder(s) of the Old Notes tendered herewith, the signatures must correspond with the name(s) as written on the face of the tendered Old Notes without alteration, enlargement, or any change whatsoever. If any of the tendered Old Notes are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal. If any tendered Old Notes are held in different names on several Old Notes, it will be necessary to complete, sign, and submit as many separate copies of the Letter of Transmittal documents as there are names in which tendered Old Notes are held. If this Letter of Transmittal is signed by the registered Holder, and Exchange Notes are to be issued and any untendered or unaccepted principal amount at maturity of Old Notes are to be reissued or returned to the registered Holder, then the registered Holder need not and should not endorse any tendered Old Notes nor provide a separate bond power. In any other case, the registered Holder must either properly endorse the Old Notes tendered or transmit a properly completed separate bond power with this Letter of Transmittal (executed exactly as the name(s) of the registered Holder(s) appear(s) on such Old Notes), with the signature(s) on the endorsement or bond power guaranteed by an Eligible Institution unless such certificates or bond powers are signed by an Eligible Institution. If this Letter of Transmittal or any Old Notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations, or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and evidence satisfactory to the Issuer of their authority to so act must be submitted with this Letter of Transmittal. No medallion signature guarantee is required if (i) this Letter of Transmittal is signed by the registered Holder(s) of the Old Notes tendered herewith and the issuance of Exchange Notes (and any Old Notes not tendered or not accepted) are to be issued directly to such registered Holder(s) and neither the "Special Registration Instructions" (Box 2) nor the "Special Delivery Instructions" (Box 3) has been completed. In all other cases, all signatures on this Letter of Transmittal must be guaranteed by an Eligible Institution. 6. SPECIAL REGISTRATION AND DELIVERY INSTRUCTIONS. Tendering Holders should indicate, in the applicable box, the name and address in which the Exchange Notes and/or substitute Old Notes for Principal Amounts at Maturity not tendered or not accepted for exchange are to be sent, if different from the name and address or account of the person signing this Letter of Transmittal. In the case of issuance in a different name, the employer identification number or social security number of the person named must also be indicated and the indicated and the tendering Holders should complete the applicable box. If no such instructions are given, the Exchange Notes (and any Old Notes not tendered or not accepted) will be issued in the name of and sent to the registered Holder of the Old Notes. 7. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any, applicable to the sale and transfer of Old Notes to the Issuer or its order pursuant to the Exchange Offer. If, however, a transfer tax is imposed for any reason other than the transfer and sale of Old Notes to the Issuer or its order pursuant to the Exchange Offer, then the amount of any such transfer taxes (whether imposed on the registered Holder or on any other person) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption from such taxes is not submitted with this Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder. Except as provided in this Instruction 7, it will not be necessary for transfer tax stamps to be affixed to the Old Notes listed in this Letter of Transmittal. 8. TAX IDENTIFICATION NUMBER. Under the federal income tax laws, payments that may be made by the Issuer on account of Exchange Notes issued pursuant to the Exchange Offer may be subject to backup withholding at the rate of 31%. In order to avoid such backup withholding, each tendering Holder should complete and sign the Substitute Form W-9 included in this Letter of Transmittal and either (a) provide the correct taxpayer identification number ("TIN") and certify, under penalties of perjury, that the TIN provided is correct and that (i) the Holder has not been notified by the Internal Revenue Service (the "IRS") that the Holder is subject to backup withholding as a result of failure to report all interest or dividends or (ii) the IRS has notified the Holder that the Holder is no longer subject to backup withholding; or (b) provide an adequate basis for exemption. If the tendering Holder has not been issued a TIN and has applied for one, or intends to apply for one in the near future, such holder should write "Applied For" in the space provided for the TIN in Part I of the Substitute Form W-9, sign and date the Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer Identification Number. If "Applied For" is written in Part I, the Issuer (or the Exchange 9 9 Agent with respect to the Exchange Notes or a broker or custodian) may still withhold 31% of the amount of any payments made on account of the Exchange Notes until the Holder furnishes the Issuer or the Exchange Agent with respect to the Exchange Notes, broker or custodian with its TIN. In general, if a Holder is an individual, the taxpayer identification number is the Social Security number of such individual. If the Exchange Agent or the Issuer are not provided with the correct TIN, the Holder may be subject to a $50 penalty imposed by the IRS. Certain Holders (including, among others, all corporations and certain foreign individuals) are not subject to these backup withholding and reporting requirements. In order for a foreign individual to qualify as an exempt recipient, such Holder must submit a statement (generally, IRS Form W-8), signed under penalties of perjury, attesting to that individual's exempt status. Such statements can be obtained from the Exchange Agent. Failure to complete the Substitute Form W-9 will not, by itself, cause Old Notes to be deemed invalidly tendered, but may require the Issuer or the Exchange Agent with respect to the Exchange Notes, broker or custodian to withhold 31% of the amount of any payments made on account of the Exchange Notes. Backup withholding is not an additional federal income tax. Rather, the federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained from the IRS. 9. VALIDITY OF TENDERS. All questions as to the validity, form, eligibility (including time of receipt), and acceptance of tendered Old Notes will be determined by the Issuer, in its sole discretion, which determination will be final and binding. The Issuer reserves the right to reject any and all Old Notes not validly tendered or any Old Notes, the Issuer's acceptance of which would, in the opinion of the Issuer or its counsel, be unlawful. The Issuer also reserves the right to waive any conditions of the Exchange Offer or defects or irregularities in tenders of Notes as to any ineligibility of any Holder who seeks to tender Old Notes in the Exchange Offer. The interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) by the Issuer shall be final and binding on all parties. Unless waived, any defects or irregularities in connection with tenders of Old Notes must be cured within such time as the Issuer shall determine. The Issuer will use reasonable efforts to give notification of defects or irregularities with respect to tenders of Old Notes, but shall not incur any liability for failure to give such notification. 10. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to amend, waive, or modify specified conditions in the Exchange Offer in the case of any tendered Old Notes. 11. NO CONDITIONAL TENDER. No alternative, conditional, irregular, or contingent tender of Old Notes will be accepted. 12. MUTILATED, LOST, STOLEN, OR DESTROYED OLD NOTES. Any tendering Holder whose Old Notes have been mutilated, lost, stolen, or destroyed should contact the Exchange Agent at the address indicated above for further instructions. 13. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions and requests for assistance and requests for additional copies of the Prospectus may be directed to the Exchange Agent at the address set forth on the first page of this Letter of Transmittal. Holders may also contact their broker, dealer, commercial bank, trust company, or other nominee for assistance concerning the Exchange Offer. 14. ACCEPTANCE OF TENDERED OLD NOTES AND ISSUANCE OF EXCHANGE NOTES; RETURN OF OLD NOTES. Subject to the terms and conditions of the Exchange Offer, the Issuer will accept for exchange all validly tendered Old Notes as soon as practicable after the Expiration Date and will issue Exchange Notes therefor as soon as practicable thereafter. For purposes of the Exchange Offer, the Issuer shall be deemed to have accepted tendered Old Notes when, as and if the Issuer has given written and oral notice thereof to the Exchange Agent. If any tendered Old Notes are not exchanged pursuant to the Exchange Offer for any reason, such unexchanged Old Notes will be returned, without expense, to the undersigned at the address shown above or at a different address as may be indicated under "Special Delivery Instructions." 15. WITHDRAWAL. Tenders may be withdrawn only pursuant to the limited withdrawal rights set forth in the Prospectus under the caption "The Exchange Offer--Withdrawal of Tenders." (DO NOT WRITE IN SPACE BELOW)
- --------------------------------------- ------------------------------------- ------------------------------------- Certificate Old Notes Old Notes Surrendered Tendered Accepted - --------------------------------------- ------------------------------------- ------------------------------------- - --------------------------------------- ------------------------------------- ------------------------------------- - --------------------------------------- ------------------------------------- ------------------------------------- - --------------------------------------- ------------------------------------- ------------------------------------- - --------------------------------------- ------------------------------------- -------------------------------------
10 10 Delivery Prepared By: _____________ Checked By: ______________ Date: _________ 11 11 ================================================================================ PAYORS' NAMES: EMMIS COMMUNICATIONS CORPORATION ================================================================================ SUBSTITUTE Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See instructions if your name has changed.) FORM W-9 ====================================================== Department of Address the Treasury ====================================================== Internal Revenue City, State and ZIP Code Service ------------------------------------------------------ Part 1 - PLEASE PROVIDE YOUR Social Security TAXPAYER IDENTIFICATION Number or TIN NUMBER ("TIN") IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW ------------------------------------------------------ Part 2 - Check the box if you are NOT subject to backup withholding under the provisions of section 3408(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. ===================================================== CERTIFICATION--UNDER THE PENALTIES OF Part 3 - PERJURY, I CERTIFY THAT THE AWAITING TIN INFORMATION PROVIDED ON THIS FORM IS TRUE, CORRECT AND COMPLETE. Signature: _________________ Date: ___________ - ------------------------- --------------------------------------------------- Note: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administrative Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of the exchange, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. - ------------------------------------------- ----------------------------- Signature Date 220629v1 12 12 PAYORS' NAMES: EMMIS COMMUNICATIONS CORPORATION SUBSTITUTE Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part 1 below. See instructions if your name has changed.) FORM W-9 ====================================================== Department of Address the Treasury ====================================================== Internal Revenue City, State and ZIP Code Service ------------------------------------------------------ Part 1 - PLEASE PROVIDE YOUR TAXPAYER IDENTIFICATION Social Security NUMBER ("TIN") IN THE BOX AT Number or TIN RIGHT AND CERTIFY BY SIGNING AND DATING BELOW ------------------------------------------------------ Part 2 - Check the box if you are NOT subject to backup withholding under the provisions of section 3408(a)(1)(C) of the Internal Revenue Code because (1) you have not been notified that you are subject to backup withholding as a result of failure to report all interest or dividends or (2) the Internal Revenue Service has notified you that you are no longer subject to backup withholding. ===================================================== CERTIFICATION--UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT Part 3 - THE INFORMATION PROVIDED AWAITING TIN ON THIS FORM IS TRUE, CORRECT AND COMPLETE. Signature: _________________ Date: ___________ - ------------------------- ---------------------------------------------------- Note: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE OFFER. YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART 3 OF SUBSTITUTE FORM W-9 CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER I certify under penalties of perjury that a Taxpayer Identification Number has not been issued to me, and either (a) I have mailed or delivered an application to receive a Taxpayer Identification Number to the appropriate Internal Revenue Service Center or Social Security Administrative Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a Taxpayer Identification Number by the time of the exchange, 31 percent of all reportable payments made to me thereafter will be withheld until I provide a number. ----------------------------------------- ----------------------------- Signature Date 13 EX-99.2 12 FORM OF NOTICE OF GUARANTEED DELIVERY 1 EXHIBIT 99.2 Notice of Guaranteed Delivery for 8-1/8% SENIOR SUBORDINATED NOTES DUE 2009 of EMMIS COMMUNICATIONS CORPORATION This form or one substantially equivalent hereto must be used to accept the Exchange Offer of Emmis Communicaitons Corporation (the "Issuer") made pursuant to the Prospectus dated ______________________, 1999 (the "Prospectus") if Holders of certificates for the 8-1/8% Senior Subordinated Notes Due 2009 (the "Old Notes") who wish to tender their Old Notes but whose Old Notes are not immediately available and who cannot deliver their certificates for Old Notes (or comply with the procedures for book-entry transfer prior to the Expiration Date), the Letter of Transmittal and any other documents required by the Letter of Transmittal to the Exchange Agent prior to 5:00 P.M., New York City time, on the Expiration Date (as defined in the Prospectus). Such form may be delivered by hand or transmitted by facsimile transmission, overnight courier or mail to the Exchange Agent. Capitalized terms used but not defined herein have the meaning given to them in the Prospectus. To: IBJ Whitehall Bank & Trust Company, the Exchange Agent By Registered or Certified Mail: By Overnight Courier or by Hand: IBJ Whitehall Bank & Trust Company IBJ Whitehall Bank & Trust Company 1 State Street, 10TH Floor 1 State Street, 10TH Floor New York, New York 10004 New York, New York 10004 Attn: Corporate Trust Administration Attn: Corporate Trust Administration By Facsimile: (212) 858-2952 Confirm by telephone: (800) Delivery of this instrument to an address, or transmission of instructions via a facsimile other than as set forth above, does not constitute a valid delivery. This form is not to be used to guarantee signatures. If a signature on the Letter of Transmittal to be used to tender Old Notes is required to be guaranteed by an "Eligible Institution" under the instructions thereto, such signature guarantee must appear in the applicable space provided in the Letter of Transmittal. Ladies and Gentlemen: The undersigned hereby tenders to the Issuer, upon the terms and subject to the conditions set forth in the Prospectus and the Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, ____________ (number of Old Notes) Old Notes pursuant to the guaranteed delivery procedures set forth in Instruction 2 of the Letter of Transmittal. 2 NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW. Certificate No(s). for Old Notes (if available) Name(s) of Record Holder(s) ____________________ _________________________________________ ____________________ _________________________________________ Please Print or Type Address: _________________________________________ _________________________________________ Telephone. No.( )__________________________ Signature(s)_______________________________ ___________________________________________ Dated:_____________________________________ GUARANTEE (Not to be used for signature guarantee) The undersigned, a member firm of a registered national securities exchange or of the National Association of Securities Dealers, Inc., or a commercial bank or trust company having an office or correspondent in the United States or an "eligible guarantor institution" within the meaning of Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, hereby (a) represents that the above named person(s) own(s) the Old Notes tendered hereby and (b) guarantees that delivery to the Exchange Agent of certificates for the Old Notes tendered hereby, in proper form for transfer, with delivery of a properly completed and duly executed Letter of Transmittal (or manually signed facsimile thereof) with any required signature and any other required documents, will be received by the Exchange Agent at one of its addresses set forth above within five business days after the Expiration Date. Name of Firm: _____________________________________ Authorized Signature _____________________________________ Address: Name___________________________________ _____________________________________ Please Print or Type _____________________________________ Title__________________________________ Zip Code Telephone. No.( )___________________ Date:_______________ Dated: , 1999 NOTE: DO NOT SEND OLD NOTES WITH THIS FORM; OLD NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN FIVE BUSINESS DAYS AFTER THE EXPIRATION DATE. -----END PRIVACY-ENHANCED MESSAGE-----