iHeartMedia 2014 Annual Report Download - page 53

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Certain Covenants and Events of Default
If borrowing availability is less than the greater of (a) $50.0 million and (b) 10% of the aggregate commitments under the
receivables based credit facility, in each case, for five consecutive business days (a “Liquidity Event”), we will be required to comply
with a minimum fixed charge coverage ratio of at least 1.00 to 1.00 for fiscal quarters ending on or after the occurrence of the
Liquidity Event, and will be continued to comply with this minimum fixed charge coverage ratio until borrowing availability exceeds
the greater of (x) $50.0 million and (y) 10% of the aggregate commitments under the receivables based credit facility, in each case, for
30 consecutive calendar days, at which time the Liquidity Event shall no longer be deemed to be occurring. In addition, the
receivables based credit facility includes negative covenants that, subject to significant exceptions, limit our ability and the ability of
our restricted subsidiaries to, among other things:
incur additional indebtedness;
create liens on assets;
engage in mergers, consolidations, liquidations and dissolutions;
sell assets;
pay dividends and distributions or repurchase 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 lines of business.
The receivables based credit facility includes 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 and a change of control. If an event of
default occurs, the lenders under the receivables based credit facility will be entitled to take various actions, including the acceleration
of all amounts due under our receivables based credit facility and all actions permitted to be taken by a secured creditor.
9% Priority Guarantee Notes Due 2019
As of December 31, 2014, we had outstanding $2.0 billion aggregate principal amount of 9.0% priority guarantee notes due
2019 (the “Priority Guarantee Notes due 2019”).
The Priority Guarantee Notes due 2019 mature on December 15, 2019 and bear interest at a rate of 9.0% per annum, payable
semi-annually in arrears on June 15 and December 15 of each year, which began on June 15, 2013. The Priority Guarantee Notes due
2019 are our senior obligations and are fully and unconditionally guaranteed, jointly and severally, on a senior basis by the guarantors
named in the indenture. The Priority Guarantee Notes due 2019 and the guarantors’ obligations under the guarantees are secured by
(i) a lien on (a) our capital stock and (b) certain property and related assets that do not constitute “principal property” (as defined in the
indenture governing certain Legacy Notes of ours), in each case equal in priority to the liens securing the obligations under our senior
secured credit facilities and our priority guarantee notes due 2021 and 2022, subject to certain exceptions, and (ii) a lien on the
accounts receivable and related assets securing our receivables based credit facility junior in priority to the lien securing our
obligations thereunder, subject to certain exceptions. In addition to the collateral granted to secure the Priority Guarantee Notes due
2019, the collateral agent and the trustee for the Priority Guarantee Notes due 2019 entered into an agreement with the administrative
agent for the lenders under the senior secured credit facilities to turn over to the trustee under the Priority Guarantee Notes due 2019,
for the benefit of the holders of the Priority Guarantee Notes due 2019, a pro rata share of any recovery received on account of the
principal properties, subject to certain terms and conditions.
We may redeem the Priority Guarantee Notes due 2019 at our option, in whole or part, at any time prior to July 15, 2015, at a
price equal to 100% of the principal amount of the Priority Guarantee Notes due 2019 redeemed, plus accrued and unpaid interest to
the redemption date and plus an applicable premium. We may redeem the Priority Guarantee Notes due 2019, in whole or in part, on
or after July 15, 2015, at the redemption prices set forth in the indenture plus accrued and unpaid interest to the redemption date. Prior
to July 15, 2015, we may elect to redeem up to 40% of the aggregate principal amount of the Priority Guarantee Notes due 2019 at a
redemption price equal to 109.0% of the principal amount thereof, plus accrued and unpaid interest to the redemption date, with the
net proceeds of one or more equity offerings.
The indenture governing the Priority Guarantee Notes due 2019 contains covenants that limit our ability and the ability of our
restricted subsidiaries to, among other things: (i) pay dividends, redeem stock or make other distributions or investments; (ii) incur