iHeartMedia 2009 Annual Report Download - page 119

If at any time the sum of the outstanding amounts under the receivables based credit facility (including the letter of credit outstanding
amounts and swingline loans thereunder) exceeds the lesser of (i) the borrowing base and (ii) the aggregate commitments under the
receivables based credit facility, the Company will be required to repay outstanding loans and cash collateralize letters of credit in an
aggregate amount equal to such excess.
The Company may voluntarily repay outstanding loans under the receivables based credit facility at any time without premium or
penalty, other than customary “breakage” costs with respect to Eurocurrency rate loans.
The receivables based credit facility is guaranteed by, subject to certain exceptions, the guarantors of the senior secured credit
facilities. All obligations under the receivables based credit facility, and the guarantees of those obligations, are secured by a
perfected first priority security interest in all of the Company’s and all of the guarantors’ accounts receivable and related assets and
proceeds thereof, subject to permitted liens and certain exceptions.
The receivables based credit facility includes negative covenants, representations, warranties, events of default, conditions precedent
and termination provisions substantially similar to those governing our senior secured credit facilities.
Senior Cash Pay Notes and Senior Toggle Notes
Clear Channel has outstanding $796.3 million aggregate principal amount of 10.75% senior cash pay notes due 2016 and $915.2
million aggregate principal amount of 11.00%/11.75% senior toggle notes due 2016.
The senior toggle notes mature on August 1, 2016 and may require a special redemption of up to $30.0 million on August 1, 2015.
The Company may elect on each interest election date to pay all or 50% of such interest on the senior toggle notes in cash or by
increasing the principal amount of the senior toggle notes or by issuing new senior toggle notes (such increase or issuance, “PIK
Interest”). Interest on the senior toggle notes payable in cash will accrue at a rate of 11.00% per annum and PIK Interest will accrue at
a rate of 11.75% per annum.
The Company may redeem some or all of the notes at any time prior to August 1, 2012, at a price equal to 100% of the principal
amount of such notes plus accrued and unpaid interest thereon to the redemption date and a “make-whole premium,” as described in
the notes. The Company may redeem some or all of the notes at any time on or after August 1, 2012 at the redemption prices set forth
in notes. In addition, the Company may redeem up to 40% of any series of the outstanding notes at any time on or prior to August 1,
2011 with the net cash proceeds raised in one or more equity offerings. If the Company undergoes a change of control, sells certain of
its assets, or issues certain debt offerings, it may be required to offer to purchase notes from holders.
The notes are senior unsecured debt and rank equal in right of payment with all of the Company’s existing and future senior debt.
Guarantors of obligations under the senior secured credit facilities and the receivables based credit facility guarantee the notes with
unconditional guarantees that are unsecured and equal in right of payment to all existing and future senior debt of such guarantors,
except that the guarantees are subordinated in right of payment only to the guarantees of obligations under the senior secured credit
facilities and the receivables based credit facility. In addition, the notes and the guarantees are structurally senior to Clear Channel’s
senior notes and existing and future debt to the extent that such debt is not guaranteed by the guarantors of the notes. The notes and
the guarantees are effectively subordinated to the existing and future secured debt and that of the guarantors to the extent of the value
of the assets securing such indebtedness and are structurally subordinated to all obligations of subsidiaries that do not guarantee the
notes.
On January 15, 2009, Clear Channel made a permitted election under the indenture governing the senior toggle notes to pay PIK
Interest with respect to 100% of the senior toggle notes for the semi-annual interest period commencing February 1, 2009. For
subsequent interest periods, Clear Channel must make an election regarding whether the applicable interest payment on the senior
toggle notes will be made entirely in cash, entirely through PIK Interest or 50% in cash and 50% in PIK Interest. In the absence of
such an election for any interest period, interest on the senior toggle notes will be payable according to the election for the
immediately preceding interest period. As a result, Clear Channel is deemed to have made the PIK Interest election for future interest
periods unless and until it elects otherwise.
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