This excerpt taken from the CCO 8-K filed Dec 11, 2009.
Change of Control
The Notes will provide that if a Change of Control occurs, unless the Issuer has previously or concurrently mailed a redemption notice with respect to all the outstanding 2017 A Notes as described under Optional Redemption, the Issuer will make an offer to purchase all of the 2017 A Notes pursuant to the offer described below (the Change of Control Offer) at a price in cash (the Change of Control Payment) equal to 101.0% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the right of Holders of the 2017 A Notes of record on
the relevant record date to receive interest due on the relevant interest payment date. Within 30 days following any Change of Control, the Issuer will send notice of such Change of Control Offer by first-class mail, with a copy to the Trustee, to each Holder of 2017 A Notes to the address of such Holder appearing in the security register with a copy to the Trustee, or otherwise in accordance with the procedures of DTC, with the following information:
(1) that a Change of Control Offer is being made pursuant to the covenant entitled Repurchase at the Option of HoldersChange of Control, and that all 2017 A Notes properly tendered pursuant to such Change of Control Offer will be accepted for payment by the Issuer;
(2) the purchase price and the purchase date, which will be no earlier than 30 days nor later than 60 days from the date such notice is mailed (the Change of Control Payment Date);
(3) that any 2017 A Note not properly tendered will remain outstanding and continue to accrue interest;
(4) that unless the Issuer defaults in the payment of the Change of Control Payment, all 2017 A Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Payment Date;
(5) that Holders electing to have any 2017 A Notes purchased pursuant to a Change of Control Offer will be required to surrender such 2017 A Notes, with the form entitled Option of Holder to Elect Purchase on the reverse of such 2017 A Notes completed, to the Paying Agent specified in the notice at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;
(6) that Holders will be entitled to withdraw their tendered 2017 A Notes and their election to require the Issuer to purchase such 2017 A Notes, provided that the Paying Agent receives, not later than the close of business on the fifth Business Day preceding the Change of Control Payment Date, a telegram, facsimile transmission or letter setting forth the name of the Holder of the 2017 A Notes, the principal amount of 2017 A Notes tendered for purchase, and a statement that such Holder is withdrawing its tendered 2017 A Notes and its election to have such 2017 A Notes purchased;
(7) that the Holders whose 2017 A Notes are being repurchased only in part will be issued new 2017 A Notes equal in principal amount to the unpurchased portion of the 2017 A Notes surrendered. The unpurchased portion of the 2017 A Notes must be equal to a minimum of $2,000 or an integral multiple of $1,000 in principal amount;
(8) if such notice is mailed prior to the occurrence of a Change of Control, stating that the Change of Control Offer is conditional on the occurrence of such Change of Control; and
(9) the other instructions, as determined by the Issuer, consistent with the covenant described hereunder, that a Holder must follow.
The Issuer 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 or regulations are applicable in connection with the repurchase of 2017 A Notes by the Issuer pursuant to a Change of Control Offer. To the extent that the provisions of any securities laws or regulations conflict with the provisions of the 2017 A Indenture, the Issuer will comply with the applicable securities laws and regulations and shall not be deemed to have breached its obligations described in the 2017 A Indenture by virtue thereof.
On the Change of Control Payment Date, the Issuer will, to the extent permitted by law,
(1) accept for payment all 2017 A Notes or portions thereof properly tendered pursuant to the Change of Control Offer,
(2) deposit with the Paying Agent an amount equal to the aggregate Change of Control Payment in respect of all 2017 A Notes or portions thereof so tendered, and
(3) deliver, or cause to be delivered, to the Trustee for cancellation (and delivery to the Paying Agent) the 2017 A Notes so accepted together with an Officers Certificate to the Trustee stating that such 2017 A Notes or portions thereof have been tendered to and purchased by the Issuer.
The CCU Intercompany Note will, and future credit agreements or other agreements to which the Company or the Issuer become a party may, provide that certain change of control events with respect to the Company would constitute a default thereunder (including a Change of Control under the 2017 A Indenture). If we experience a change of control that triggers a default under any Credit Facilities, we could seek a waiver of such default or seek to refinance our Credit Facilities. In the event we do not obtain such a waiver or refinance the Credit Facilities, such default could result in amounts outstanding under our Credit Facilities being declared due and payable.
Our ability to pay cash to the Holders of 2017 A Notes following the occurrence of a Change of Control may be limited by our then-existing financial resources. Therefore, sufficient funds may not be available when necessary to make any required repurchases. See Risk FactorsRisks Related to the Notes and the OfferingClear Channel Worldwide may not be able to fulfill its repurchase obligations in the event of a change of control.
The Change of Control purchase feature of the 2017 A Notes may in certain circumstances make more difficult or discourage a sale or takeover of us and, thus, the removal of incumbent management. The Change of Control purchase feature is a result of negotiations between the Initial Purchasers and us. As of the Issue Date, we have no present intention to engage in a transaction involving a Change of Control, although it is possible that we could decide to do so in the future. Subject to the limitations discussed below, we could, in the future, enter into certain transactions, including acquisitions, dispositions, refinancings or other recapitalizations, that would not constitute a Change of Control under the 2017 A Indenture, but that could increase the amount of indebtedness outstanding at such time or otherwise affect our capital structure or credit ratings. Restrictions on our ability to incur additional Indebtedness (including Secured Indebtedness) are contained in the covenants described under Certain Covenants in the 2017 A IndentureLimitation on Incurrence of Indebtedness and Issuance of Disqualified Stock and Preferred Stock and Certain Covenants in the 2017 A IndentureLiens. In addition, a Change of Control could be triggered by changes in ownership resulting from an insolvency of CCU or a restructuring of its Indebtedness. Accordingly, events relating to CCU and over which we and they do not have control could trigger a Change of Control. Such restrictions in the 2017 A Indenture can be waived only with the consent of the Holders of a majority in principal amount of the 2017 A Notes then outstanding. Except for the limitations contained in such covenants, however, the 2017 A Indenture will not contain any covenants or provisions that may afford Holders of the 2017 A Notes protection in the event of a highly leveraged transaction. Such limitations are subject to a number of important exceptions, baskets and qualifications.
We will not be required to make a Change of Control Offer following 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 2017 A Indenture applicable to a Change of Control Offer made by us and purchases all 2017 A Notes validly tendered and not withdrawn under such Change of Control Offer. Notwithstanding anything to the contrary herein, a Change of Control Offer may be made in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.
The definition of Change of Control includes a disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries to any Person. 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, in certain circumstances there may be a degree of uncertainty as to whether a particular transaction would involve a disposition of all or substantially all of the assets of the Company and its Restricted Subsidiaries. As a result, it may be unclear as to whether a Change of Control has occurred and whether a Holder of 2017 A Notes may require the Issuer to make an offer to repurchase the 2017 A Notes as described above. In addition, Holders may not be entitled to require us to purchase their 2017 A Notes in certain circumstances involving a significant change in the composition of our Board of Directors, including in connection with a proxy contest where our Board of Directors does not endorse a dissident slate of directors but approves them as Continuing Directors.
Except as described in clause (11) of the second paragraph under Amendment, Supplement and Waiver, the provisions in the 2017 A Indenture relative to the Issuers obligation to make an offer to repurchase the 2017 A Notes as a result of a Change of Control may be waived or modified at any time with the written consent of the Holders of a majority in principal amount of the then outstanding 2017 A Notes under the 2017 A Indenture.