iHeartMedia 2009 Annual Report Download - page 64

All obligations under the senior secured credit facilities, and the guarantees of those obligations, are secured, subject to
permitted liens and other exceptions, by:
The obligations of any foreign subsidiaries that are borrowers under the revolving credit facility will also be guaranteed by
certain of their material wholly-owned restricted subsidiaries, and secured by substantially all assets of all such borrowers and
guarantors, subject to permitted liens and other exceptions.
The senior secured credit facilities require us to comply on a quarterly basis with a maximum consolidated senior secured
net debt to adjusted EBITDA ratio (maximum of 9.5:1). This financial covenant becomes more restrictive over time beginning in the
second quarter of 2013. Our secured debt consists of the senior secured credit facilities, the receivables based credit facility and
certain other secured subsidiary debt. Secured leverage, defined as secured debt, net of cash, divided by the trailing 12-month
consolidated EBITDA was 7.4:1 at December 31, 2009. Our consolidated adjusted EBITDA of $1.6 billion is calculated as the
trailing twelve months operating income before depreciation, amortization, impairment charge, other operating income (expense) –
net, all as shown on the consolidated statement of operations plus non-cash compensation, and is further adjusted for certain items,
including: (i) an increase for expected cost savings (limited to $100.0 million in any twelve month period) of $100.0 million; (ii) an
increase of $20.9 million for cash received from nonconsolidated affiliates; (iii) an increase of $24.6 million for non-cash items;
(iv) an increase of $164.4 million related to expenses incurred associated with our cost savings program; and (v) an increase of $38.8
million for various other items.
In addition, the senior secured credit facilities include negative covenants that, subject to significant exceptions, limit our
ability and the ability of our restricted subsidiaries to, among other things:
The senior secured credit facilities include certain customary representations and warranties, affirmative covenants and
events of default, including payment defaults, breach of representations and warranties, covenant defaults, cross-defaults to certain
indebtedness, certain events of bankruptcy, certain events under ERISA, material judgments, the invalidity of material provisions of
the senior secured credit facilities documentation, the failure of collateral under the security documents for the senior secured credit
facilities, the failure of the senior secured credit facilities to be senior debt under the subordination provisions of certain of our
subordinated debt and a change of control. If an event of default occurs, the lenders under the senior secured credit facilities will be
entitled to take various actions, including the acceleration of all amounts due under the senior secured credit facilities and all actions
permitted to be taken by a secured creditor.
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eceivables Based Credit Facility
The receivables based credit facility of $783.5 million provides revolving credit commitments in an amount equal to the
initial borrowing of $533.5 million on the closing date plus $250 million, subject to a borrowing base. The borrowing base at any time
equals 85% of our and certain of our subsidiaries’ eligible accounts receivable. The receivables based credit facility includes a letter
of credit sub-facility and a swingline loan sub-facility.
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• a first-priority lien on the our capital stock;
• 100% of the capital stock of any future material wholly-owned domestic license subsidiary that is not a “Restricted
Subsidiary” under the indenture governing our senior notes;
• certain assets that do not constitute “principal property” (as defined in the indenture governing our senior notes);
• certain assets that constitute “principal property” (as defined in the indenture governing our senior notes) securing
obligations under the senior secured credit facilities up to the maximum amount permitted to be secured by such
assets without requiring equal and ratable security under the indenture governing our senior notes; and
• a second-priority lien on the accounts receivable and related assets securing our receivables based credit facility.
• incur additional indebtedness;
• create liens on assets;
• engage in mergers, consolidations, liquidations and dissolutions;
• sell assets;
• pay dividends and distributions or repurchase its capital stock;
• make investments, loans, or advances;
• prepay certain junior indebtedness;
• engage in certain transactions with affiliates;
• amend material agreements governing certain junior indebtedness; and
• change our lines of business.