As filed with the Securities and Exchange Commission on January 29, 2002
Registration Nos. 333-
333- -01
333- -02
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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Radio One, Inc.*
Radio One Trust I
Radio One Trust II
(Exact name of Registrant as specified in its charter)
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Delaware 52-1166660 4832
Delaware TO BE APPLIED FOR
Delaware TO BE APPLIED FOR
(State of other (I.R.S. Employer (Primary Standard Industry
jurisdiction of Identification No.) Classification Number)
incorporation or
organization)
5900 Princess Garden Parkway, 7th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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ALFRED C. LIGGINS, III
Chief Executive Officer and President
Radio One, Inc.
5900 Princess Garden Parkway, 7th Floor
Lanham, MD 20706
Telephone: (301) 306-1111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
With copy to:
TERRANCE L. BESSEY, ESQ.
LAURA S. HARPER, ESQ.
Kirkland & Ellis
655 Fifteenth Street, N.W.
Washington, D.C. 20005
Telephone: (202) 879-5000
* The entities listed on the page following the Registration Fee Calculation
Table (on next page) are also included in this Registration Statement on
Form S-3 as additional Registrants.
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Approximate date of commencement of the proposed sale to the public: From
time to time after this Registration Statement becomes effective, as determined
by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, check the following box.
[_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 (the "Securities Act"), other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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(c)
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 delivery of the prospectus is expected to be made pursuant to Rule
434,please check the following box. [_]
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
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, as amended, 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.
CALCULATION OF REGISTRATION FEE
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Proposed
Number/ Maximum Proposed
Amount of Offering Maximum
Securities to Price Per Aggregate
Title of Each Class of Securities to be Registered be Registered Unit/Share Offering Price
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PRIMARY OFFERING:
Class D Common Stock, par value $0.001 per share /(1)/........
Preferred stock, par value $0.001 per share /(1)/.............
Warrants to purchase class D common stock, preferred stock or
debt securities /(1)/........................................
Stock purchase contracts of Radio One, Inc. /(1)/.............
Stock purchase units of Radio One, Inc. /(1)/.................
8 7/8% Senior Subordinated Notes due 2011 /(1)/...............
Other debt securities of Radio One, Inc. /(1)/................
Guarantees of debt securities of Radio One, Inc. /(1)(2)/.....
Junior subordinated debentures of Radio One, Inc. /(1)(3)/....
Trust preferred securities of Radio One Trust I /(1)(4)/......
Trust preferred securities of Radio One Trust II /(1)(4)/.....
Radio One, Inc. guarantees with respect to the Trust preferred
securities /(1) (2)/.........................................
Primary Offering Total...................................... $500,000,000/(1)(5)/ N/A/(5)(6)/ $500,000,000/(1)(5)/
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SECONDARY OFFERING:
Class D Common Stock, par value $0.001 per share.............. 3,483,510 $17.48/(7)/ $ 60,891,755/(1)(5)/
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TOTAL......................................................... N/A N/A $560,891,755
Amount of
Registration
Title of Each Class of Securities to be Registered Fee
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PRIMARY OFFERING:
Class D Common Stock, par value $0.001 per share /(1)/........
Preferred stock, par value $0.001 per share /(1)/.............
Warrants to purchase class D common stock, preferred stock or
debt securities /(1)/........................................
Stock purchase contracts of Radio One, Inc. /(1)/.............
Stock purchase units of Radio One, Inc. /(1)/.................
8 7/8% Senior Subordinated Notes due 2011 /(1)/...............
Other debt securities of Radio One, Inc. /(1)/................
Guarantees of debt securities of Radio One, Inc. /(1)(2)/.....
Junior subordinated debentures of Radio One, Inc. /(1)(3)/....
Trust preferred securities of Radio One Trust I /(1)(4)/......
Trust preferred securities of Radio One Trust II /(1)(4)/.....
Radio One, Inc. guarantees with respect to the Trust preferred
securities /(1) (2)/.........................................
Primary Offering Total...................................... $46,000
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SECONDARY OFFERING:
Class D Common Stock, par value $0.001 per share.............. $ 5,602
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TOTAL......................................................... $51,602/(8)/
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/(1)/ Such indeterminate number or amount of class D common stock, preferred
stock, warrants, stock purchase contracts, stock purchase units, 8 7/8%
Senior Subordinated Notes due 2011, other senior and subordinated debt
securities and junior subordinated debentures of Radio One, Inc., and
trust preferred securities of Radio One Trust I and Radio One Trust II,
as may from time to time be issued at indeterminate prices, with an
aggregate initial offering price not to exceed $500,000,000 or the
equivalent thereof in one or more foreign currencies, foreign currency
units or composite currencies. Securities registered hereunder may be
sold separately, together or as units with other securities registered
hereunder.
/(2)/ Pursuant to Rule 457(h), no separate fee is payable with respect to the
guarantees being registered hereby.
/(3)/ Junior subordinated debentures or other debt securities may be issued and
sold to Radio One Trust I or Radio One Trust II in connection with the
issuance of trust preferred securities by Radio One Trust I or Radio One
Trust II, in which event such junior subordinated debentures or other
debt securities may later be distributed to holders of the trust
preferred securities upon dissolution and liquidation of Radio One Trust
I or Radio One Trust II. No separate consideration will be received for
the junior subordinated debentures or other debt securities of Radio One,
Inc. distributed upon any liquidation of Radio One Trust I or Radio One
Trust II.
/(4)/ Radio One, Inc. is also registering under this Registration Statement all
other obligations that it may have with respect to trust preferred
securities issued by Radio One Trust I and Radio One Trust II. No
separate consideration will be received for the Radio One, Inc.
guarantees or any other such obligations.
/(5)/ United States dollars or the equivalent thereof in one or more foreign
currencies, foreign currency units or composite currencies estimated in
accordance with Rule 457(o) under the Securities Act of 1933, as amended.
Pursuant to Rule 457(o), which permits the registration fee to be
calculated on the basis of the maximum offering price of all the
securities listed, the table does not specify by each class information
as to the amount to be registered, proposed maximum offering price per
unit or proposed maximum aggregate offering price.
/(6)/ The Registrants will determine the proposed maximum offering price per
unit/share from time to time in connection with issuance of the
securities registered hereunder.
/(7)/ These amounts, estimated solely for the purpose of determining the
registration fee, were calculated pursuant to Rule 457(c) under the
Securities Act of 1933, as amended, and were based on the average high
and low sale price per share on The Nasdaq Stock Market's National Market
of Radio One, Inc.'s class D common stock, par value $0.001 per share,
determined on January 28, 2002.
/(8) /As permitted by Rule 429 under the Securities Act of 1933, as amended,
and Securities Act Release No. 33-7168, footnote 21, Radio One is carrying
forward the filing fee related to Registration Statement No. 333-58436
previously filed, as to which all 5,000,000 shares of class D common stock
of Radio One thereunder remain unsold. The registration fee of $24,750
associated with such securities was previously paid. Accordingly, the
registration fee owed with respect to the securities being registered
hereby is $26,852.
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The following direct and indirect subsidiaries of Radio One, Inc. are
guarantors of the 8 7/8% Senior Subordinated Notes due 2011 and may guarantee
certain of the other debt securities and are additional Registrants under this
Registration Statement:
I.R.S. Employer
Exact Name of Additional Registrants* Jurisdiction of Formation Identification No.
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RADIO ONE LICENSES, LLC................. Delaware 52-1166660
BELL BROADCASTING COMPANY............... Michigan 38-1537987
RADIO ONE OF DETROIT, LLC............... Delaware 38-1537987
RADIO ONE OF ATLANTA, LLC............... Delaware 52-1166660
ROA LICENSES, LLC....................... Delaware 52-1166660
RADIO ONE OF CHARLOTTE, LLC............. Delaware 57-1103928
RADIO ONE OF AUGUSTA, LLC............... Delaware 52-1166660
CHARLOTTE BROADCASTING, LLC............. Delaware 52-1166660
RADIO ONE OF NORTH CAROLINA, LLC........ Delaware 52-1166660
RADIO ONE OF BOSTON, INC................ Delaware 52-2297366
RADIO ONE OF BOSTON LICENSES, LLC....... Delaware 52-2297366
BLUE CHIP MERGER SUBSIDIARY, INC........ Delaware 52-2334006
BLUE CHIP BROADCAST COMPANY............. Ohio 31-1402186
BLUE CHIP BROADCASTING, LTD............. Ohio 31-1459349
BLUE CHIP BROADCASTING LICENSES, LTD.... Ohio 31-1402186
BLUE CHIP BROADCASTING LICENSES II, LTD. Nevada 31-1688377
RADIO ONE OF INDIANA, L.P............... Delaware 52-2359338
RADIO ONE OF INDIANA, LLC............... Delaware 52-1166660
RADIO ONE OF TEXAS, L.P................. Delaware 52-2359336
RADIO ONE OF TEXAS I, LLC............... Delaware 52-2359328
RADIO ONE OF TEXAS II, LLC.............. Delaware 52-2359333
SATELLITE ONE, L.L.C.................... Delaware To Be Applied For
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* The address for each of the additional Registrants is Radio One, Inc., 5900
Princess Garden Parkway, 7th Floor, Lanham, MD 20706, telephone (301)
306-1111. The primary standard industrial classification number for each of
the additional Registrants is 4832.
EXPLANATORY NOTE
This registration statement consists of two separate prospectuses. The first
prospectus relates to (i) the offer and sale from time to time by Radio One,
Inc. of its class D common stock, preferred stock, warrants, stock purchase
contracts, stock purchase units, debt securities and guarantees, and (ii) the
offer and sale from time to time of trust preferred securities by Radio One
Trust I and Radio One Trust II. The second prospectus relates to the offer and
sale from time to time by certain selling stockholders of Radio One, Inc. named
therein of class D common stock of Radio One, Inc.
The information in this preliminary prospectus is not complete and may be
changed. Radio One and the Radio One Trusts may not sell these securities
until the Securities and Exchange Commission declares the registration
statement effective. This preliminary prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 29, 2002
[LOGO] Radio One Logo
$500,000,000
RADIO ONE, INC.
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Class D Common Stock
Preferred Stock
8 7/8% Senior Subordinated Notes Due 2011
Senior Debt Securities
Subordinated Debt Securities
Junior Subordinated Debentures
Warrants
Stock Purchase Contracts
Stock Purchase Units
RADIO ONE TRUST I
RADIO ONE TRUST II
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Trust Preferred Securities Fully and Unconditionally Guaranteed
to the Extent Provided in this Prospectus by Radio One, Inc.
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This prospectus is part of a shelf registration statement which Radio One
and the Radio One Trusts have filed with the Securities and Exchange
Commission. Under the shelf registration statement, Radio One may offer: shares
of class D common stock; shares of preferred stock; stock purchase contracts to
purchase shares of class D common stock; stock purchase units to purchase
shares of class D common stock; 8 7/8% senior subordinated notes due 2011,
other unsecured debentures, notes, bonds or other evidences of indebtedness;
and warrants to purchase shares of class D common stock, preferred stock or
debt securities; and the Radio One Trusts may offer trust preferred securities,
all of which securities combined, have an aggregate initial public offering
price of $500,000,000, including the U.S. dollar equivalent if the initial
public offering is denominated in one or more foreign currencies, foreign
currency units or composite currencies.
Under the shelf registration process, we may sell the securities from time
to time in one or more separate offerings, in amounts, at prices and on terms
to be determined at the time of sale. Radio One's debt securities may be
issuable in global form, in registered form without coupons attached, or in
bearer form with or without coupons attached.
Our class D common stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ROIAK." The last reported sale price for our class D
common stock on January 28, 2002 was $17.65 per share.
In addition to class D common stock, Radio One also has shares of class A
common stock, class B common stock and class C common stock issued and
outstanding. The rights of holders of each of these classes of common stock
differ with respect to some aspects of convertibility and voting. Radio One
will not offer or sell any shares of class A common stock, class B common stock
or class C common stock using this prospectus.
This prospectus provides a general description of the securities Radio One
and the Radio One Trusts may offer. Each time Radio One sells a particular
series of debt securities or preferred stock, shares of class D common stock,
stock purchase contracts, stock purchase units or warrants or a Radio One Trust
sells trust preferred securities, it will provide a prospectus supplement which
will contain the specific terms of the securities being offered at that time.
Unless otherwise specified in the prospectus supplement, the debt securities
will be senior debt securities of Radio One.
The prospectus supplement may add, update or change information contained in
the prospectus. You should read both this prospectus and the prospectus
supplement in conjunction with the additional information described under the
headings "Where You Can Find More Information" and "Information Incorporated by
Reference."
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is , 2002.
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TABLE OF CONTENTS
Page
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RADIO ONE, INC.................... 1
THE RADIO ONE TRUSTS.............. 1
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS...... 2
USE OF PROCEEDS................... 2
RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS... 3
GENERAL DESCRIPTION OF SECURITIES. 3
RISK FACTORS...................... 3
DESCRIPTION OF CAPITAL STOCK...... 3
DESCRIPTION OF NOTES.............. 5
DESCRIPTION OF OTHER DEBT
SECURITIES...................... 41
DESCRIPTION OF GUARANTEES......... 49
DESCRIPTION OF JUNIOR SUBORDINATED
DEBENTURES...................... 50
DESCRIPTION OF TRUST PREFERRED
SECURITIES...................... 59
Page
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DESCRIPTION OF PREFERRED SECURITIES
GUARANTEES....................... 68
RELATIONSHIP AMONG THE TRUST
PREFERRED SECURITIES, THE
CORRESPONDING JUNIOR
SUBORDINATED DEBENTURES OR OTHER
DEBT SECURITIES AND THE PREFERRED
SECURITIES GUARANTEES............ 73
DESCRIPTION OF WARRANTS............ 74
DESCRIPTION OF STOCK PURCHASE
CONTRACTS AND STOCK PURCHASE
UNITS............................ 76
PLAN OF DISTRIBUTION............... 77
LEGAL MATTERS...................... 78
EXPERTS............................ 78
WHERE YOU CAN FIND MORE
INFORMATION...................... 79
INFORMATION INCORPORATED BY
REFERENCE........................ 79
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You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities.
i
RADIO ONE, INC.
Radio One was founded in 1980 and is one of the largest radio broadcasting
companies in the United States. We are also the largest radio broadcasting
company in the United States primarily targeting African-Americans.
Our strategy is to expand within our existing markets and into new markets
that have a significant African-American presence. We believe radio
broadcasting primarily targeting African-Americans has significant growth
potential. We also believe that we have a competitive advantage in the
African-American market and the radio industry in general, due to our primary
focus on urban formats, our skill in programming and marketing these formats,
and our turnaround expertise.
Radio One is led by our Chairperson and co-founder, Catherine L. Hughes, and
her son, Alfred C. Liggins, III, our Chief Executive Officer and President, who
together have 45 years of operating experience in radio broadcasting. Ms.
Hughes, Mr. Liggins and our strong management team have successfully executed a
strategy of acquiring and turning around underperforming radio stations.
Our principal executive offices are located at 5900 Princess Garden Parkway,
7th Floor, Lanham, Maryland 20706 and our telephone number is (301) 306-1111.
For more information about our business, please see our Form 10-K/A for the
year ended December 31, 2000, which is incorporated by reference in this
prospectus. The description of our business contained in our Form 10-K/A for
the year ended December 31, 2000 will be updated and superseded by later
filings we make with the SEC that are incorporated by reference in this
prospectus.
THE RADIO ONE TRUSTS
Each Radio One Trust is a statutory business trust created under Delaware
law pursuant to:
. a trust agreement executed by Radio One as sponsor for each Radio One
Trust and by the initial trustees of such Radio One Trust; and
. the filing of a certificate of trust with the Delaware Secretary of
State.
Each Radio One Trust exists for the exclusive purposes of:
. issuing and selling trust preferred securities representing preferred
undivided beneficial interests in the assets of such Radio One Trust and
trust common securities representing common undivided beneficial
interests in the assets of such Radio One Trust;
. using the proceeds from the sale of such trust securities to acquire a
series of corresponding junior subordinated debentures or other debt
securities of Radio One; and
. engaging in only those other activities necessary, advisable or
incidental to these purposes.
Radio One's junior subordinated debentures or other debt securities, as the
case may be, will be the sole assets of a Radio One Trust and, accordingly,
payments under the corresponding junior subordinated debentures or other debt
securities, as the case may be, will be the sole revenues of that Radio One
Trust.
All of the trust common securities of a Radio One Trust will be owned by
Radio One and will rank equally, and payments will be made on trust common
securities pro rata, with the trust preferred securities of such Radio One
Trust, except that upon the occurrence and continuance of an event of default
under the applicable trust agreement resulting from an event of default under
the applicable indenture, the rights of Radio One as the trust common
securities holder to payments in respect of distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of trust preferred securities of such Radio One Trust.
1
See "Description of Trust Preferred Securities--Subordination of Trust Common
Securities." Radio One will acquire trust common securities of each Radio One
Trust in an aggregate liquidation amount equal to at least 3% of the total
capital of that Radio One Trust. Each Radio One Trust will dissolve on the date
specified in the applicable prospectus supplement, but may dissolve earlier as
provided in the applicable trust agreement.
Each Radio One Trust's business and affairs are conducted by its trustees
who are appointed by Radio One as the trust common securities holder. Unless
otherwise specified in the prospectus supplement, the trustees for each Radio
One Trust will be Wilmington Trust Company, as property trustee, Wilmington
Trust Company, as Delaware trustee, and three individual trustees, which are
referred to as administrative trustees, who are officers or employees of Radio
One. Wilmington Trust Company, as property trustee, will act as sole indenture
trustee under each trust agreement. Wilmington Trust Company will act as
indenture trustee under any preferred securities guarantee and the junior
subordinated debenture indenture. See "Description of Preferred Securities
Guarantees," "Description of Other Debt Securities" and "Description of Junior
Subordinated Debentures." The trust common securities holder of a Radio One
Trust or, if an event of default under the trust agreement has occurred and is
continuing, the holders of a majority in liquidation amount of the trust
preferred securities of such Radio One Trust will be entitled to appoint,
remove or replace such Radio One Trust's property trustee and the Delaware
trustee. In no event will the holders of trust preferred securities have the
right to vote to appoint, remove or replace the administrative trustees; such
voting rights will be vested exclusively in Radio One as the trust common
securities holder. The duties and obligations of the trustees will be governed
by the applicable trust agreement.
Radio One, as sponsor of the Radio One Trusts, will pay all fees, expenses,
debts and obligations, other than payments in respect of trust securities,
related to each Radio One Trust and the offering of the trust preferred
securities and will pay, directly or indirectly, all ongoing costs, expenses
and liabilities of each Radio One Trust, other than payments in respect of
trust securities.
For financial reporting purposes, we will treat the Radio One Trusts as our
subsidiaries. Accordingly, we will include the accounts of the Radio One Trusts
in our consolidated financial statements. We will present the Radio One Trusts'
preferred securities as a separate line item in our consolidated balance sheet,
as mandatorily redeemable preferred securities of Radio One Trust I and Radio
One Trust II, and we will include appropriate disclosures about these
securities in the notes to our consolidated financial statements.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus by
reference contain forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements are not historical facts, but rather are based
on our current expectations, estimates and projections about Radio One's
industry, our beliefs and assumptions. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions
are intended to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements. These risks
and uncertainties are described in "Risk Factors" and elsewhere in this
prospectus. We undertake no obligation to publicly update or revise any
forward-looking statements because of new information, future events or
otherwise. In light of these risks and uncertainties, the forward-looking
events and circumstances discussed in this prospectus might not transpire.
USE OF PROCEEDS
Unless we state otherwise in the accompanying prospectus supplement, we
intend to use the net proceeds from the sale of the securities offered in such
prospectus supplement for general corporate purposes, which may include
additions to working capital, repayment or redemption of existing indebtedness
and financing of capital expenditures, pending and future acquisitions and
strategic investment opportunities. We may borrow additional funds from time to
time from public and private sources on both a long-term and short-term basis
to fund our future capital and working capital requirements in excess of
internally generated funds.
2
The proceeds from the sale of trust preferred securities by a Radio One
Trust will be invested in either junior subordinated debentures or other debt
securities of Radio One. Except as may otherwise be described in the related
prospectus supplement, Radio One expects to use the net proceeds from the sale
of such junior subordinated debentures or other debt securities to the
applicable Radio One Trust for general corporate purposes. Any specific
allocation of the proceeds to a particular purpose that has been made at the
date of any prospectus supplement will be described therein.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED STOCK DIVIDENDS
The following table sets forth our consolidated ratio of earnings to
combined fixed charges and preferred stock dividends for the periods indicated.
Fiscal Year Ended December 31, Nine Months Ended September 30,
--------------------------------- -------------------------------
1996 1997 1998 1999 2000 2000 2001
---- ---- ---- ---- ---- ---- ----
-- -- -- 1.08x -- 2.0x --
Earnings were insufficient to cover combined fixed charges and preferred stock
dividends for the fiscal years ended December 31, 1996, 1997, 1998 and 2000 and
for the nine months ended September 30, 2001 by approximately $3.6 million,
$5.0 million, $4.5 million, $12.7 million and $66.9 million, respectively.
GENERAL DESCRIPTION OF SECURITIES
Radio One may offer shares of class D common stock, preferred stock, 8 7/8%
senior subordinated notes due 2011, other debt securities, junior subordinated
debentures, warrants, stock purchase contracts, stock purchase units, or any
combination of them either individually or as units consisting of one or more
securities under this prospectus. Each Radio One Trust may offer trust
preferred securities under this prospectus.
RISK FACTORS
The securities to be offered may involve a high degree of risk. These risks
will be set forth in a prospectus supplement relating to the securities to be
offered by that prospectus supplement. You should carefully consider the
important factors set forth under the heading "Risk Factors" in the applicable
supplement to this prospectus before investing in any securities that may be
offered.
DESCRIPTION OF CAPITAL STOCK
The following description of Radio One's capital stock sets forth general
terms and provisions of the particular issuance of capital stock to which any
prospectus supplement may relate. The prospectus supplement will describe the
particular terms of any sale of capital stock and the extent, if any, to which
such general provisions will not apply to such sale. The following description
is a summary of the material provisions of our certificate of incorporation and
is qualified in its entirety by Radio One's certificate of incorporation, which
is incorporated as an exhibit to our registration statement of which this
prospectus is a part.
Our capital stock consists of (1) 480,000,000 authorized shares of common
stock, $0.001 par value per share, which consists of (a) 30,000,000 shares of
class A common stock, (b) 150,000,000 shares of class B common stock, (c)
150,000,000 shares of class C common stock, and (d) 150,000,000 shares of class
D common stock, and (2) 1,000,000 shares of preferred stock, par value $0.001
per share, 310,000 shares of which have been designated as 61/2% Convertible
Preferred Securities, Remarketable Term Income Deferrable Equity Securities,
known as HIGH TIDES. We have no shares of preferred stock other than the HIGH
TIDES designated or outstanding.
3
Class A Common Stock
The holders of class A common stock are entitled to one vote for each share
held on all matters voted upon by stockholders, including the election of
directors and any proposed amendment to the certificate of incorporation. The
holders of class A common stock are entitled to vote as a class to elect two
directors to the board of directors. The holders of class A common stock will
be entitled to such dividends as may be declared at the discretion of the board
of directors out of funds legally available for that purpose. The holders of
class A common stock will be entitled to share ratably with all other classes
of common stock in the net assets of Radio One upon liquidation after payment
or provision for all liabilities. All shares of class A common stock may be
converted at any time into a like number of shares of class C common stock or
class D common stock at the option of the holder of such shares.
Class B Common Stock
The holders of class B common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock, except
that the holders of class B common stock will be entitled to ten votes per
share. All shares of class B common stock may be converted at any time into a
like number of shares of class A common stock at the option of the holder of
such shares. Catherine L. Hughes and Alfred C. Liggins, III may transfer shares
of class B common stock held by them only to "Class B Permitted Transferees,"
and Class B Permitted Transferees may transfer shares of class B common stock
only to other Class B Permitted Transferees. If any shares of class B common
stock are transferred to any person or entity other than a Class B Permitted
Transferee, such shares will automatically be converted into a like number of
shares of class A common stock. "Class B Permitted Transferees" include Ms.
Hughes, Mr. Liggins, their respective estates, spouses, former spouses, parents
or grandparents or lineal descendants thereof, and certain trusts and other
entities for the benefit of, or beneficially owned by, such persons. Ms. Hughes
and Mr. Liggins have agreed to vote their shares of common stock together in
elections of members of the board of directors.
Class C Common Stock
The holders of class C common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock and
class B common stock, except that the holders of class C common stock, unless
otherwise required by law, will be entitled to no votes per share. All shares
of class C common stock may be converted at any time into a like number of
shares of class A common stock at the option of the holder of such shares,
except that Class B Permitted Transferees may convert shares of class C common
stock into shares of class A common stock, or otherwise acquire shares of class
A common stock, only in connection with:
. a merger or consolidation of Radio One with or into, or other
acquisition of, another entity pursuant to which the Class B Permitted
Transferees are to receive shares of class A common stock in exchange
for their interest in such entity;
. the transfer of such shares of class A common stock to a person or
entity other than a Class B Permitted Transferee; or
. a registered public offering of such shares of class A common stock.
Class D Common Stock
The holders of class D common stock are entitled to the same rights,
privileges, benefits and notices as the holders of class A common stock, class
B common stock, and class C common stock except that the holders of class D
common stock, unless otherwise required by law, will be entitled to no votes
per share. The class D common stock is not convertible into shares of any other
class of common stock.
4
Preferred Stock
Radio One may issue preferred stock with such designations, powers,
preferences and other rights and qualifications, limitations or restrictions as
our board of directors may authorize, without further action by our
stockholders, including but not limited to:
. the distinctive designation of each series and the number of shares that
will constitute such series;
. the voting rights, if any, of shares of the series and the terms and
conditions of such voting rights;
. the dividend rate on the shares of the series, the dates on which
dividends are payable, any restriction, limitation or condition upon the
payment of dividends, whether dividends will be cumulative and the dates
from and after which dividends shall accumulate;
. the prices at which, and the terms and conditions on which, the shares
of the series may be redeemed, if such shares are redeemable;
. the terms and conditions of a sinking or purchase fund for the purchase
or redemption of shares of the series, if such a fund is provided;
. any preferential amount payable upon shares of the series in the event
of the liquidation, dissolution or winding up of, or upon the
distribution of any of the assets of, Radio One; and
. the prices or rates of conversion or exchange at which, and the terms
and conditions on which, the shares of such series may be converted or
exchanged into other securities, if such shares are convertible or
exchangeable.
The particular terms of any series of preferred stock will be described in a
prospectus supplement. Any material United Stated federal income tax
consequences and other special considerations with respect to any preferred
stock offered under this prospectus will also be described in the applicable
prospectus supplement.
Foreign Ownership
Radio One's certificate of incorporation restricts the ownership, voting and
transfer of our capital stock, in accordance with the Communications Act of
1934, as amended, and the rules of the FCC, which prohibit the issuance of more
than 25% of our outstanding capital stock (or more than 25% of the voting
rights such stock represents) to or for the account of aliens (as defined by
the FCC) or corporations otherwise subject to domination or control by aliens.
Our certificate of incorporation prohibits any transfer of our capital stock
that would cause a violation of this prohibition. In addition, the certificate
of incorporation authorizes the board of directors to take action to enforce
these prohibitions, including restricting the transfer of shares of capital
stock to aliens and placing a legend restricting foreign ownership on the
certificates representing the class A common stock.
Transfer Agent
The transfer agent and registrar for the class D common stock is American
Stock Transfer & Trust Company.
DESCRIPTION OF NOTES
You can find the definitions of certain terms used in this description under
the subheading "--Certain Definitions." In this description, the word "Radio
One" refers only to Radio One, Inc. and not to any of its subsidiaries.
As of the date of this prospectus, Radio One may issue up to $200.0 million
in aggregate principal amount of 8 7/8% Senior Subordinated Notes due 2011
under an Indenture among itself, the Guarantors and The Bank of New York, as
trustee, as amended by that First Supplemental Indenture dated as of August 10,
2001 and Second
5
Supplemental Indenture dated as of December 31, 2001. The terms of these Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939. The prospectus supplement,
including any related pricing supplement, relating to the Notes will state the
price at which the Notes will be offered.
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 and the applicable prospectus supplement because they, and
not this description, define your rights as holders of the Notes. Copies of the
Indenture are available as set forth below under "--Additional Information."
Certain defined terms used in this description but not defined below under
"--Certain Definitions" have the meanings assigned to them in the Indenture.
The registered Holder of a Note will be treated as the owner of it for all
purposes. Only registered Holders will have rights under the Indenture.
Brief Description of the Notes and the Guarantees
The Notes
The Notes:
. are general unsecured obligations of Radio One;
. are subordinated in right of payment to all existing and future Senior
Debt of Radio One;
. are pari passu in right of payment with any future senior subordinated
Indebtedness of Radio One; and
. are unconditionally guaranteed by the Guarantors.
The Guarantees
The Notes are guaranteed by all of Radio One's Domestic Subsidiaries.
Each guarantee of the Notes:
. is a general unsecured obligation of the Guarantor;
. is subordinated in right of payment to all existing and future Senior
Debt of that Guarantor; and
. is pari passu in right of payment with any future senior subordinated
Indebtedness of that Guarantor.
The applicable prospectus supplement or the information we incorporate by
reference will indicate the approximate amount of total Senior Debt outstanding
as of the end of the most recent fiscal quarter. As indicated above and as
discussed in detail below under the caption "--Subordination," payments on the
Notes and under these guarantees will be subordinated to the payment of Senior
Debt. The Indenture permits us and the Guarantors to incur additional Senior
Debt.
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." Our Unrestricted Subsidiaries will not be subject to many of the
restrictive covenants in the Indenture. Our Unrestricted Subsidiaries will not
guarantee the Notes.
Principal, Maturity and Interest
The Indenture permits Radio One to issue Notes with a maximum aggregate
principal amount of $500.0 million, of which $300.0 million were initially
issued in a private transaction that was not subject to the registration
requirements of the Securities Act. In accordance with the provisions of the
Indenture and related documents, on November 16, 2001, Radio One completed an
exchange offer pursuant to which all of the Notes issued in the initial private
transaction were exchanged for a like principal amount of substantially
identical
6
Notes registered under the Securities Act. Radio One may issue additional Notes
from time to time. Any offering of additional Notes is subject to the covenant
described below under the caption "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock." The initial Notes and any
additional Notes subsequently issued under the Indenture will be treated as a
single class for all purposes under the Indenture, including, without
limitation, waivers, amendments, redemptions and offers to purchase. Radio One
will issue Notes in denominations of $1,000 and integral multiples of $1,000.
The Notes will mature on July 1, 2011.
Interest on the Notes will accrue at the rate of 8 7/8% per annum and will
be payable semi-annually in arrears on January 1 and July 1. Radio One will
make each interest payment to the Holders of record on the immediately
preceding December 15 and June 15.
Interest on the 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.
Methods of Receiving Payments on the Notes
If a Holder has given wire transfer instructions to Radio One, Radio One
will pay all principal, interest and premium and Liquidated Damages, if any, on
that Holder's Notes in accordance with those instructions. All other payments
on Notes will be made at the office or agency of the paying agent and registrar
within the City and State of New York unless Radio One 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. Radio One may
change the paying agent or registrar without prior notice to the Holders of the
Notes, and Radio One or any of its Subsidiaries may act as paying agent or
registrar.
Transfer and Exchange
A Holder may transfer or exchange Notes in accordance with the Indenture.
The registrar and the trustee may require a Holder to furnish appropriate
endorsements and transfer documents in connection with a transfer of Notes.
Holders will be required to pay all taxes due on transfer. Radio One is not
required to transfer or exchange any Note selected for redemption. Also, Radio
One is not required to transfer or exchange any Note for a period of 15 days
before a selection of Notes to be redeemed.
Subsidiary Guarantees
The Notes will be guaranteed by each of Radio One's current and future
Domestic Subsidiaries. These Subsidiary Guarantees will be joint and several
obligations of the Guarantors. Each Subsidiary Guarantee will be subordinated
to the prior payment in full of all Senior Debt of that Guarantor. 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.
A Guarantor may not sell or otherwise dispose of all or substantially all of
its assets to, or consolidate with or merge with or into (whether or not such
Guarantor is the surviving Person), another Person, other than Radio One or
another Guarantor, unless:
(1) immediately after giving effect to that transaction, no Default or
Event of Default exists; and
(2) either:
(a) the Person acquiring the property in any such sale or
disposition or the Person formed by or surviving any such consolidation
or merger assumes all the obligations of that Guarantor under the
Indenture, its Subsidiary Guarantee and the registration rights
agreement pursuant to a supplemental Indenture satisfactory to the
trustee; or
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(b) 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) to a Person that is not (either before or after
giving effect to such transaction) a Subsidiary of Radio One, if the sale or
other disposition complies with the "Asset Sale" provisions of the Indenture;
(2) in connection with any sale of all of the Capital Stock of a
Guarantor to a Person that is not (either before or after giving effect to
such transaction) a Subsidiary of Radio One, if the sale complies with the
"Asset Sale" provisions of the Indenture;
(3) if Radio One designates any Restricted Subsidiary that is a
Guarantor as an Unrestricted Subsidiary in accordance with the applicable
provisions of the Indenture;
(4) in connection with any transaction whereby a Guarantor is no longer
a Restricted Subsidiary immediately after giving effect to such transaction
if the transaction complies with the "Asset Sale Provisions" of the
Indenture; or
(5) upon the discharge or release of all guarantees of such Guarantor,
and all pledges of property or assets of such Guarantor securing all other
Indebtedness of Radio One and its Restricted Subsidiaries.
See "--Repurchase at the Option of Holders--Asset Sales."
Subordination
The payment of principal, interest and premium and Liquidated Damages, if
any, on the Notes will be subordinated to the prior payment in full of all
Senior Debt of Radio One, including Senior Debt incurred after the date of the
Indenture.
The holders of Senior Debt will be entitled to receive payment in full of
all Obligations due in respect of Senior Debt (including interest after the
commencement of any bankruptcy proceeding at the rate specified in the
applicable Senior Debt whether or not a claim for such interest would be
allowed in such proceeding) before the Holders of Notes will be entitled to
receive any payment with respect to the Notes or on account of any purchase or
redemption or other acquisition on any Note (except that Holders of Notes may
receive and retain Permitted Junior Securities and payments made from the trust
described under "--Legal Defeasance and Covenant Defeasance" so long as, on the
date or dates the respective amounts were paid into trust, such payments were
made without violating the subordination provisions described herein), in the
event of any distribution to creditors of Radio One:
(1) in a liquidation or dissolution of Radio One;
(2) in a bankruptcy, reorganization, insolvency, receivership or similar
proceeding relating to Radio One or its property;
(3) in an assignment for the benefit of creditors; or
(4) in any marshaling of Radio One's assets and liabilities.
Neither Radio One nor any Guarantor may make any payment in respect of the
Notes or on account of any purchase or redemption or other acquisition of any
Note (except in Permitted Junior Securities or from the trust described under
"--Legal Defeasance and Covenant Defeasance" so long as, on the date or dates
the respective
8
amounts were paid into trust, such payments were made without violating the
subordination provisions described herein) if:
(1) a default in the payment of the principal of, or premium, if any, or
interest on, or any fees or other amounts relating to Designated Senior Debt
occurs and is continuing beyond any applicable grace period; or
(2) any other default occurs and is continuing on any series of
Designated Senior Debt that permits holders of that series of Designated
Senior Debt to accelerate its maturity and the trustee receives a notice of
such default (a "Payment Blockage Notice") from Radio One or the holders of
any Designated Senior Debt.
Payments on the Notes (including any missed payments) may and will be
resumed:
(1) in the case of a payment default, upon the date on which such
default is cured or waived; and
(2) in the case of a nonpayment default, upon the earlier of the date on
which such nonpayment default is cured or waived, 179 days after the date on
which the applicable Payment Blockage Notice is received, or the date on
which the trustee receives notice from or on behalf of the holders of
Designated Senior Debt to terminate the applicable Payment Blockage Notice,
unless the maturity of any Designated Senior Debt has been accelerated. the
holders of Designated Senior Debt to terminate the applicable Payment
Blockage Notice, 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 delivery 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 will be, or be made, the basis
for a subsequent Payment Blockage Notice unless such default has been cured or
waived for a period of not less than 90 days.
If the trustee or any Holder of the Notes receives a payment in respect of
the Notes (except in Permitted Junior Securities or from the trust described
under "--Legal Defeasance and Covenant Defeasance" so long as, on the date or
dates the respective amounts were paid into trust, such payments were made
without violating the subordination provisions described herein) when the
payment is prohibited by these subordination provisions, the trustee or Holder,
as the case may be, will hold the payment in trust for the benefit of the
holders of Senior Debt. Upon the proper written request of the holders of
Senior Debt, the trustee or the Holder, as the case may be, will deliver the
amounts in trust to the holders of Senior Debt or their proper representative.
Radio One 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 Radio One, Holders of Notes may
recover less ratably than creditors of Radio One who are holders of Senior Debt.
"Designated Senior Debt" means:
(1) any Indebtedness outstanding under the Credit Agreement; and
(2) any other Senior Debt permitted under the Indenture the principal
amount of which is $25.0 million or more (or otherwise available under a
committed facility) and that has been designated by Radio One or a Guarantor
as "Designated Senior Debt."
"Permitted Junior Securities" means:
(1) Equity Interests in Radio One or, subject to the provisions of the
Credit Agreement, any Guarantor; or
(2) debt securities that are 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 under the Indenture.
9
"Senior Debt" means:
(1) all Indebtedness of Radio One or any Guarantor outstanding under the
Credit Facility and all Hedging Obligations with respect thereto;
(2) any other Indebtedness of Radio One or any Guarantor permitted to be
incurred 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 or any Subsidiary
Guarantee; 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 Radio One;
(2) any intercompany Indebtedness of Radio One or any of its Restricted
Subsidiaries to Radio One or any of its Affiliates;
(3) any trade payables; or
(4) the portion of any Indebtedness that is incurred in violation of the
Indenture.
Optional Redemption
At any time prior to July 1, 2004, Radio One may on any one or more
occasions redeem up to 35% of the aggregate principal amount of Notes issued
under the Indenture at a redemption price of 108.875% of the principal amount,
plus accrued and unpaid interest and Liquidated Damages, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that:
(1) at least 65% of the aggregate principal amount of Notes issued under
the Indenture remains outstanding immediately after the occurrence of such
redemption (excluding Notes held by Radio One and its Subsidiaries); and
(2) the redemption occurs within 180 days of the date of the closing of
such Equity Offering.
Except pursuant to the preceding paragraph, the Notes will not be redeemable
at Radio One's option prior to July 1, 2006.
On or after July 1, 2006, Radio One may redeem all or a part of the 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, if any, on the Notes redeemed, to the
applicable redemption date, if redeemed during the twelve-month period
beginning on July 1 of the years indicated below:
Year Percentage
---- ----------
2006............... 104.438%
2007............... 102.958%
2008............... 101.479%
2009 and thereafter 100.000%
Mandatory Redemption
Radio One is not required to make mandatory redemption or sinking fund
payments with respect to the Notes.
10
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 Radio One to repurchase all or any part (equal to $1,000 or an integral
multiple of $1,000) of that Holder's Notes pursuant to a Change of Control
Offer on the terms set forth in the Indenture. In the Change of Control Offer,
Radio One 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, if any, on the Notes repurchased, to the date
of purchase. Within 10 days following any Change of Control, Radio One 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 the notice, which date will be no earlier
than 30 days and no later than 60 days from the date such notice is mailed,
pursuant to the procedures required by the Indenture and described in such
notice. Radio One will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with the
repurchase of the Notes as a result of a Change of Control. To the extent that
the provisions of any securities laws or regulations conflict with the Change
of Control provisions of the Indenture, Radio One will comply with the
applicable securities laws and regulations and will not be deemed to have
breached its obligations under the Change of Control provisions of the
Indenture by virtue of such conflict.
On the Change of Control Payment Date, Radio One will, to the extent lawful:
(1) accept for payment all Notes or portions of Notes 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 of Notes properly
tendered; and
(3) deliver or cause to be delivered to the trustee the Notes properly
accepted together with an officers' certificate stating the aggregate
principal amount of Notes or portions of Notes being purchased by Radio One.
The paying agent will promptly mail to each Holder of Notes properly
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 new note will be in a
principal amount of $1,000 or an integral multiple of $1,000.
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, Radio
One 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. Radio One will
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 described above that require Radio One to make a Change of
Control Offer following a Change of Control will be applicable 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 Radio One repurchase or
redeem the Notes in the event of a takeover, recapitalization or similar
transaction.
Radio One 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 Radio
One and purchases all Notes properly tendered and not withdrawn under the
Change of Control Offer.
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The definition of Change of Control includes a phrase relating to the direct
or indirect sale, lease, transfer, conveyance or other disposition of "all or
substantially all" of the properties or assets of Radio One 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 Radio One to repurchase its Notes as a result of a
sale, lease, transfer, conveyance or other disposition of less than all of the
assets of Radio One and its Subsidiaries taken as a whole to another Person or
group may be uncertain.
Asset Sales
(A) Radio One will not, and will not permit any of its Restricted
Subsidiaries to, consummate an Asset Sale unless:
(1) Radio One (or the Restricted Subsidiary, as the case may be)
receives consideration at the time of the Asset Sale at least equal to the
fair market value of the assets or Equity Interests issued or sold or
otherwise disposed of;
(2) the fair market value is determined by Radio One'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 75% of the consideration received in the Asset Sale by
Radio One or such Restricted Subsidiary is in the form of cash or Cash
Equivalents except to the extent Radio One is undertaking a Permitted Asset
Swap. For purposes of this provision and the next paragraph, each of the
following will be deemed to be cash:
(a) any liabilities, as shown on Radio One's or such Restricted
Subsidiary's most recent balance sheet, of Radio One 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 Radio One or such Restricted
Subsidiary from further liability; and
(b) any securities, notes or other obligations received by Radio One
or any such Restricted Subsidiary from such transferee that are
converted by Radio One or such Restricted Subsidiary within 90 days into
cash or Cash Equivalents, to the extent of the cash or Cash Equivalents
received in that conversion.
The 75% limitation referred to in clause (3) above will not apply to any
Asset Sale in which the cash or Cash Equivalents portion of the consideration
received therefrom, determined in accordance with the preceding provision, is
equal to or greater than what the after-tax proceeds would have been had such
Asset Sale complied with the aforementioned 75% limitation.
Notwithstanding the foregoing, Radio One, a Guarantor or any Restricted
Subsidiary will be permitted to consummate an Asset Sale without complying with
the foregoing if:
(x) Radio One, such Guarantor or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the fair
market value of the assets or other property sold, issued or otherwise
disposed of;
(y) the fair market value is determined by Radio One'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
(z) at least 75% of the consideration for such Asset Sale constitutes a
controlling interest in a Permitted Business, assets used or useful in a
Permitted Business and/or cash;
provided that any cash (other than any amount deemed cash under clause
(3)(a) of the preceding paragraph) received by Radio One, such Guarantor or
such Restricted Subsidiary in connection with any Asset Sale permitted to be
consummated under this paragraph shall constitute Net Proceeds subject to the
provisions of the next paragraph.
12
(B) Within 360 days after the receipt of any Net Proceeds from an Asset
Sale, provided that (i) such Net Proceeds either singularly or when aggregated
with all other Net Proceeds from all Asset Sales consummated since the date of
the Indenture exceed $10,000,000; and (ii) the Leverage Ratio as of the end of
the fiscal quarter immediately prior to the date on which such application of
such Net Proceeds would otherwise be required is greater than 6.00 to 1.00, and
then only to the extent necessary to reduce the Leverage Ratio to 6.00 to 1.00,
Radio One, such Guarantor or such Restricted Subsidiary may apply those Net
Proceeds at its option:
(1) to repay Senior Debt and, if the Senior Debt repaid is revolving
credit Indebtedness, to correspondingly reduce commitments with respect
thereto;
(2) to acquire all or substantially all of the assets of, or a majority
of the Voting Stock of, another Permitted Business;
(3) to make capital expenditures; or
(4) to acquire other assets that are used or useful in a Permitted
Business.
Pending the final application of any Net Proceeds, Radio One may temporarily
reduce revolving credit borrowings or otherwise invest the Net Proceeds in any
manner that is not prohibited by the Indenture.
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 $10.0 million, Radio One 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 Sale Offer will be equal to
100% of principal amount plus accrued and unpaid interest and Liquidated
Damages, 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, Radio One may
use those Excess Proceeds for any purpose not otherwise prohibited by the
Indenture. If the aggregate principal amount of Notes and other pari passu
Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess
Proceeds, the trustee will 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 will be reset at zero.
(C) Radio One will comply with the requirements of Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder to the
extent those laws and regulations are applicable in connection with each
repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the
provisions of any securities laws or regulations conflict with the Asset Sale
provisions of the Indenture, Radio One will comply with the applicable
securities laws and regulations and will not be deemed to have breached its
obligations under the Asset Sale provisions of the Indenture by virtue of such
conflict.
The agreements governing Radio One's outstanding Senior Debt currently
prohibit Radio One from purchasing any Notes, and also provide that certain
change of control or asset sale events with respect to Radio One would
constitute a default under these agreements. Any future credit agreements or
other agreements relating to Senior Debt to which Radio One becomes a party may
contain similar restrictions and provisions. In the event a Change of Control
or Asset Sale occurs at a time when Radio One is prohibited from purchasing
Notes, Radio One 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 Radio One does not obtain such a consent or repay such
borrowings, Radio One will remain prohibited from purchasing Notes. In such
case, Radio One's 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.
13
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 on any national securities exchange, in
compliance with the requirements of the principal national securities
exchange on which the Notes are listed; or
(2) if the Notes are not listed on any national securities exchange, on
a pro rata basis, by lot or by such method as the trustee deems fair and
appropriate.
No Notes of $1,000 or less can be redeemed in part. Notices of redemption
will 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, except that redemption notices may be mailed more than 60 days prior
to a redemption date if the notice is issued in connection with a defeasance of
the Notes or a satisfaction and discharge of the Indenture. 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 will state the portion of the principal amount of that
Note that is 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 of Notes 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
Radio One 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 Radio One's or any of its Restricted
Subsidiaries' Equity Interests (including, without limitation, any payment
in connection with any merger or consolidation involving Radio One or any of
its Restricted Subsidiaries) or to the direct or indirect holders of Radio
One'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 Radio One and other than
dividends or distributions payable to Radio One or a Restricted Subsidiary
of Radio One);
(2) purchase, redeem or otherwise acquire or retire for value
(including, without limitation, in connection with any merger or
consolidation involving Radio One) any Equity Interests of Radio One or any
direct or indirect parent of Radio One (other than any such Equity Interests
owned by Radio One or a Restricted Subsidiary);
(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, except a payment of
interest or principal at the Stated Maturity thereof (except for payments
into a trust within one year of the stated maturity of any such Subordinated
Indebtedness which payments effect a defeasance or discharge of such
Indebtedness); or
(4) make any Restricted Investment (all such payments and other actions
set forth in these clauses (1) through (4) above 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 has occurred and is continuing or
would occur as a consequence of such Restricted Payment;
(2) Radio One 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
14
(3) such Restricted Payment, together with the aggregate amount of all
other Restricted Payments made by Radio One and its Restricted Subsidiaries
after the date of the Indenture (excluding Restricted Payments permitted by
clauses (1), (2), (3), (4), (5), (7), (9) and (11) of the next succeeding
paragraph) is less than the sum, without duplication of:
(a) (i) 100% of the aggregate Consolidated Cash Flow of Radio One
(or, in the event such Consolidated Cash Flow shall be a deficit, minus
100% of such deficit) accrued for the period beginning April 1, 2001 and
ending on the last day of Radio One's most recent calendar month for
which financial information is available to Radio One ending prior to
the date of such proposed Restricted Payment, taken as one accounting
period, less (ii) 1.4 times Consolidated Interest Expense for the same
period, plus
(b) 100% of the aggregate net proceeds (including the fair market
value of property other than cash or Cash Equivalents) received by Radio
One since the date of the Indenture from the issue or sale of Equity
Interests of Radio One (other than Disqualified Stock), or of
Disqualified Stock or debt securities of Radio One that have been
converted into such Equity Interests (other than Equity Interests (or
Disqualified Stock or convertible debt securities) sold to a Restricted
Subsidiary and other than Disqualified Stock or convertible debt
securities that have been converted into Disqualified Stock), plus
(c) to the extent that any Unrestricted Subsidiary is redesignated
as a Restricted Subsidiary after the date of the Indenture, the fair
market value of such Subsidiary as of the date of such redesignation,
plus
(d) the aggregate amount returned in cash with respect to
Investments (other than Permitted Investments) made after the issue date
whether through interest payments, principal payments, dividends or
other distributions, plus
(e) the net cash proceeds received by Radio One or any of its
Restricted Subsidiaries from the disposition, retirement or redemption
of all or any portion of such Investments referred to in clause (4)
above (other than to a Restricted Subsidiary), plus
(f) $15.0 million.
The preceding provisions will not prohibit:
(1) the payment of any dividend within 60 days after the date of
declaration of the dividend, if at the date of declaration the dividend
payment would have complied with the provisions of the Indenture;
(2) the redemption, repurchase, retirement, defeasance or other
acquisition of any subordinated Indebtedness of Radio One or any Guarantor
or of any Equity Interests of Radio One in exchange for, or out of the net
cash proceeds of the substantially concurrent sale (other than to a
Restricted Subsidiary of Radio One) of, Equity Interests of Radio One (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 will be excluded from clause (3) (b) of the
preceding paragraph;
(3) the defeasance, redemption, repurchase or other acquisition of
subordinated Indebtedness of Radio One 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 Radio One
to the holders of its common Equity Interests on a pro rata basis;
(5) so long as no Default has occurred and is continuing or would be
caused thereby, the payment of dividends on Existing Preferred Stock in
accordance with the terms thereof;
(6) loans to members of management of Radio One or any Restricted
Subsidiary, the proceeds of which are used for a concurrent purchase of
Equity Interests of Radio One or a capital contribution to Radio One
(provided that the proceeds from such purchase of Equity Interests or
capital contribution shall be excluded from the calculation of amounts under
clause (3) above), provided that such loans shall be included in the
calculation of the amount of Restricted Payments from and after such time;
15
(7) the repurchase, redemption or other acquisition or retirement for
value of any Equity Interests of Radio One or any Restricted Subsidiary of
Radio One or the payment of a dividend to any Restricted Subsidiary of Radio
One to effect the repurchase, redemption, acquisition or retirement of Radio
One or its Restricted Subsidiary's Equity Interests, that are held by any
member or former member of Radio One's (or any of the Restricted
Subsidiaries') management, or by any of their respective directors,
employees or consultants; provided that the aggregate price paid for all
such repurchased, redeemed, acquired or retired Equity Interests may not
exceed the sum of (a) $1,000,000 in any calendar year (with unused amounts
in any calendar year being available to be so utilized in succeeding
calendar years) and (b) the net cash proceeds to Radio One and its
Restricted Subsidiaries from any issuance or reissuance of Equity Interests
of Radio One or its Restricted Subsidiaries (other than Disqualified Stock)
to members of management (which are excluded from the calculation set forth
in clause (3)(b) of the proceeding paragraph) and the net cash proceeds to
Radio One and its Restricted Subsidiaries of any "key man" life insurance
proceeds; provided that the cancellation of Indebtedness owing to Radio One
and its Restricted Subsidiaries from members of management shall not be
deemed Restricted Payments;
(8) payment of the dividends on Disqualified Stock the incurrence of
which was permitted by the Indenture;
(9) repurchases of Equity Interests deemed to occur upon the exercise of
stock options;
(10) the retirement of any shares of Disqualified Stock of Radio One by
conversion into, or by exchange for, shares of Disqualified Stock of Radio
One, or out of the net cash proceeds of the substantially concurrent sale
(other than to a Restricted Subsidiary of Radio One) of other shares of
Disqualified Stock of Radio One, provided that the Disqualified Stock of
Radio One that replaces the retired shares of Disqualified Stock of Radio
One shall not require the direct or indirect payment of the liquidation
preference earlier in time than the final stated maturity of the retired
shares of Disqualified Stock of Radio One;
(11) repurchases of Equity Interests of Radio One in open market
purchases, provided that the aggregate amount expended for such repurchases
shall not exceed $40.0 million; and
(12) redemption of the Existing Preferred Stock in accordance with the
terms thereof, provided that either (i) after giving pro forma effect to
such redemption, the Leverage Ratio is 4.00 to 1.00 or lower, or (ii) such
redemption is funded with the net cash proceeds of one or more Equity
Offerings (so long as such redemption occurs within 180 days of the date of
the closing of such Equity Offering).
The amount of all Restricted Payments (other than cash) will 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 Radio One 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 will be determined by the Board of Directors whose resolution with
respect thereto will 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 $10.0 million.
Incurrence of Indebtedness and Issuance of Preferred Stock
Radio One and the Guarantors will not, and will not permit any of their
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 will not issue any Disqualified Stock and will
not permit any of its Subsidiaries to issue any shares of preferred stock;
provided, however, that Radio One or any Guarantor may incur Indebtedness
(including
16
Acquired Debt) or issue shares of Disqualified Stock or preferred stock if
Radio One's Leverage Ratio at the time of incurrence of such Indebtedness or
the issuance of such Disqualified Stock or such preferred stock, as the case
may be, after giving pro forma effect to such incurrence or issuance as of such
date and to the use of the proceeds therefrom as if the same had occurred at
the beginning of the most recently ended four full fiscal quarter period of
Radio One for which internal financial statements are available, would have
been no greater than 7.0 to 1.
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 Radio One and any Guarantor of additional
Indebtedness and letters of credit under Credit Facilities in an aggregate
principal amount at any one time outstanding under this clause (1) (with
letters of credit being deemed to have a principal amount equal to the
maximum potential liability of Radio One and its Subsidiaries thereunder)
not to exceed $600.0 million less the aggregate amount applied by Radio One
and the Restricted Subsidiaries to permanently reduce the availability of
Indebtedness under the Credit Facility pursuant to the covenant described
under the caption "--Repurchase as the Option of Holders--Asset Sales";
(2) the incurrence by Radio One and its Restricted Subsidiaries of the
Existing Indebtedness;
(3) the incurrence by Radio One and the Guarantors of Indebtedness
represented by the Notes and the related Subsidiary Guarantees to be issued
on the date of the Indenture;
(4) the incurrence by Radio One 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 whether through the direct
purchase of assets or at least a majority of the Voting Stock of any person
owning such assets, in an aggregate principal amount, including all
Permitted Refinancing Indebtedness incurred to refund, refinance or replace
any Indebtedness incurred pursuant to this clause (4), not to exceed $10.0
million at any time outstanding;
(5) the incurrence by Radio One 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 the Indenture to be
incurred under the first paragraph of this covenant or clauses (2), (3),
(4), (5), (10) or (12) of this paragraph;
(6) the incurrence by Radio One or any of its Restricted Subsidiaries of
intercompany Indebtedness between or among Radio One and any of its Wholly
Owned Subsidiaries; provided, however, that (i) any subsequent issuance or
transfer of Equity Interests that results in any such Indebtedness being
held by a Person other than Radio One or a Subsidiary of Radio One and (ii)
any sale or other transfer of any such Indebtedness to a Person that is not
either Radio One or a Restricted Subsidiary of Radio One will be deemed, in
each case, to constitute an incurrence of such Indebtedness by Radio One or
such Restricted Subsidiary, as the case may be, that was not permitted by
this clause (6);
(7) the incurrence by Radio One or any of its Restricted Subsidiaries of
Hedging Obligations that are incurred for the purpose of fixing or hedging
(x) interest rate risk with respect to any floating rate Indebtedness that
is permitted by the terms of the Indenture to be outstanding or (y) currency
exchange rate risk in ordinary course of business;
(8) the guarantee by Radio One of Indebtedness of any Restricted
Subsidiary of Radio One that was permitted to be incurred by another
provision of this covenant;
(9) the guarantee by any Restricted Subsidiary of Indebtedness of Radio
One or any Guarantor that was permitted to be incurred by another provision
of this covenant;
17
(10) Indebtedness incurred by Radio One or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to letters
of credit issued in the ordinary course of business, including without
limitation letters of credit in respect to workers' compensation claims or
self-insurance, or other Indebtedness with respect to reimbursement type
obligations regarding workers' compensation claims; provided, however, that
upon the drawing of such letters of credit or the incurrence of such
Indebtedness, such obligations are reimbursed within 30 days following such
drawing or incurrence;
(11) Obligations in respect of performance and surety bonds and
completion guarantees provided by Radio One or any of its Restricted
Subsidiaries in the ordinary course of business;
(12) Acquisition Debt of Radio One or any Restricted Subsidiary if (w)
such Acquisition Debt is incurred within 270 days after the date on which
the related definitive acquisition agreement or LMA, as the case may be, was
entered into by Radio One or such Restricted Subsidiary, (x) the aggregate
principal amount of such Acquisition Debt is no greater than the aggregate
principal amount of Acquisition Debt set forth in a notice from Radio One to
the Trustee (an "Incurrence Notice") within ten days after the date on which
the related definitive acquisition agreement or LMA, as the case may be, was
entered into by Radio One or such Restricted Subsidiary, which notice shall
be executed on Radio One's behalf by the chief financial officer of Radio
One in such capacity and shall describe in reasonable detail the acquisition
or LMA, as the case may be, which such Acquisition Debt will be incurred to
finance, (y) after giving pro forma effect to the acquisition or LMA, as the
case may be, described in such Incurrence Notice, Radio One or such
Restricted Subsidiary could have incurred such Acquisition Debt under the
Indenture as of the date upon which Radio One delivers such Incurrence
Notice to the Trustee and (z) such Acquisition Debt is utilized solely to
finance the acquisition or LMA, as the case may be, described in such
Incurrence Notice (including to repay or refinance indebtedness or other
obligations incurred in connection with such acquisition or LMA, as the case
may be, and to pay related fees and expenses);
(13) guarantees by Radio One or any Restricted Subsidiary of
Indebtedness of officers of Radio One or any Restricted Subsidiary in an
aggregate principal amount not to exceed $5.0 million at any time
outstanding;
(14) the incurrence by Radio One'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 will be
deemed to constitute an incurrence of Indebtedness by a Restricted
Subsidiary of Radio One that was not permitted by this clause (14); and
(15) the incurrence by Radio One 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 (15), not to exceed $20.0
million.
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 (15) above, or is entitled to
be incurred pursuant to the first paragraph of this covenant, Radio One will be
permitted to classify such item of Indebtedness on the date of its incurrence,
or later reclassify all or a portion of such item of Indebtedness, in any
manner that complies with this covenant. Accrual of interest, accretion or
amortization of original issue discount and the accretion of accreted value
will not be deemed to be an incurrence of Indebtedness for purposes of this
covenant. Indebtedness under Credit Facilities outstanding on the date on which
Notes are first issued and authenticated under the Indenture will be deemed to
have been incurred on such date in reliance on the exception provided by clause
(1) of the definition of Permitted Debt.
No Senior Subordinated Debt
Radio One 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 Radio One and senior in any respect in
18
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 the Senior Debt of such Guarantor and senior
in any respect in right of payment to such Guarantor's Subsidiary Guarantee.
Liens
Radio One will not, and will not permit any of its Subsidiaries to, directly
or indirectly, create, incur, assume or suffer to exist any Lien of any kind
securing Indebtedness, or trade payables on any asset now owned or hereafter
acquired, except Permitted Liens.
Dividend and Other Payment Restrictions Affecting Subsidiaries
Radio One will not, and will not permit any of its Restricted Subsidiaries
to, directly or indirectly, create or permit to exist or become effective any
consensual encumbrance or restriction on the ability of any Restricted
Subsidiary to:
(1) pay dividends or make any other distributions on its Capital Stock
to Radio One or any of its Restricted Subsidiaries, or with respect to any
other interest or participation in, or measured by, its profits, or pay any
indebtedness owed to Radio One or any of its Restricted Subsidiaries;
(2) make loans or advances to Radio One or any of its Restricted
Subsidiaries; or
(3) transfer any of its properties or assets to Radio One or any of its
Restricted Subsidiaries.
However, the preceding restrictions will not apply to encumbrances or
restrictions existing under or by reason of:
(1) agreements governing Existing Indebtedness and Credit Facilities as
in effect on the date of the Indenture and any amendments, modifications,
restatements, renewals, increases, supplements, refundings, replacements or
refinancings of those agreements, provided that the 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 those agreements on the date of the Indenture;
(2) the Indenture, the Notes and the Subsidiary Guarantees;
(3) applicable law, rule, regulation or order;
(4) any instrument governing Indebtedness or Capital Stock of a Person
acquired by Radio One or any of its Restricted Subsidiaries as in effect at
the time of such acquisition (except to the extent such Indebtedness or
Capital Stock 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 (including Capital Lease Obligations) for
property acquired in the ordinary course of business that impose
restrictions only on that property of the nature described in clause (3) of
the preceding paragraph;
(7) contracts for the sale of assets, including without limitation any
agreement for the sale or other disposition of a Restricted Subsidiary that
restricts distributions by that 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;
19
(9) Liens securing Indebtedness otherwise permitted to be incurred
under the provisions of the covenant described above under the caption
"--Liens" that limit the right of the debtor to dispose of the assets
subject to such Liens;
(10) provisions with respect to the disposition or distribution of
assets or property in joint venture agreements, assets sale agreements,
stock sale 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
Radio One may not, directly or indirectly: (1) consolidate or merge with or
into another Person (whether or not Radio One is the surviving corporation); or
(2) sell, assign, transfer, convey or otherwise dispose of all or substantially
all of the properties or assets of Radio One and its Restricted Subsidiaries
taken as a whole, in one or more related transactions, to another Person,
unless:
(1) either: (a) Radio One is the surviving corporation; or (b) the
Person formed by or surviving any such consolidation or merger (if other
than Radio One) or to which such sale, assignment, transfer, conveyance or
other disposition has been made is a corporation organized or existing under
the laws of the United States, any state of the United States or the
District of Columbia;
(2) the Person formed by or surviving any such consolidation or merger
(if other than Radio One) or the Person to which such sale, assignment,
transfer, conveyance or other disposition has been made assumes all the
obligations of Radio One under the Notes, the Indenture and the registration
rights agreement pursuant to agreements reasonably satisfactory to the
trustee;
(3) immediately after such transaction no Default or Event of Default
exists; and
(4) Radio One or the Person formed by or surviving any such
consolidation or merger (if other than Radio One), or to which such sale,
assignment, transfer, conveyance or other disposition has been made (a)
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," or
(b) would have a lower Leverage Ratio immediately after the transaction,
after giving pro forma effect to the transaction as if the transaction had
occurred at the beginning of the applicable four quarter period, than Radio
One's Leverage Ratio immediately prior to the transaction.
The preceding clause (4) will not prohibit: (a) a merger between Radio One
and one of Radio One's Wholly Owned Restricted Subsidiaries; or (b) a merger
between Radio One and one of Radio One's Affiliates incorporated solely for the
purpose of reincorporating in another state of the United States.
In addition, Radio One 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 Radio One and any of its Wholly
Owned Restricted Subsidiaries.
Transactions with Affiliates
Radio One 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 (each, an "Affiliate Transaction"), unless:
20
(1) the Affiliate Transaction is on terms that are no less favorable to
Radio One or the relevant Restricted Subsidiary than those that would have
been obtained in a comparable transaction by Radio One or such Restricted
Subsidiary with an unrelated Person; and
(2) Radio One 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
$10.0 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 will 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 Radio One or any of its
Subsidiaries in the ordinary course of business and consistent with the past
practice of Radio One or such Subsidiary;
(2) transactions between or among Radio One and/or its Restricted
Subsidiaries;
(3) loans, advances, payment of reasonable fees, indemnification of
directors, or similar arrangements to officers, directors employees and
consultants who are not otherwise Affiliates of Radio One;
(4) sales of Equity Interests (other than Disqualified Stock) to
Affiliates of Radio One;
(5) transactions under any contract or agreement in effect on the date
of the Indenture as the same may be amended, modified or replaced from time
to time so long as any amendment, modification, or replacement is no less
favorable to Radio One and its Restricted Subsidiaries than the contract or
agreement as in effect on the date of the Indenture;
(6) services provided to any Unrestricted Subsidiary of Radio One in
the ordinary course of business, which the Board of Directors has
determined, pursuant to a resolution thereof, that such services are
provided on terms at least as favorable to Radio One and its Restricted
Subsidiaries as those that would have been obtained in a comparable
transaction with an unrelated Person; and
(7) Permitted Investments and Restricted Payments that are permitted by
the provisions of the Indenture described above under the caption
"--Restricted Payments."
Additional Subsidiary Guarantees
If Radio One or any of its Subsidiaries acquires or creates another Domestic
Subsidiary after the date of the Indenture, excluding all Subsidiaries that
have been properly designated as Unrestricted Subsidiaries in accordance with
the Indenture for so long as they continue to constitute Unrestricted
Subsidiaries, then that newly acquired or created Domestic Subsidiary will
become a Guarantor and execute a supplemental Indenture and deliver an opinion
of counsel satisfactory 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, the
aggregate fair market value of all outstanding Investments owned by Radio One
and the Restricted Subsidiaries in the Subsidiary properly designated will be
deemed to be an Investment made as of the time of the designation
21
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 determined by Radio One. That
designation will only be permitted if the Investment would be permitted at that
time and if the 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.
Limitation on Issuances and Sales of Equity Interests in Wholly Owned
Subsidiaries
Radio One will not, and will not permit any of its Subsidiaries to,
transfer, convey, sell, lease or otherwise dispose of any Equity Interests in
any Wholly Owned Restricted Subsidiary of Radio One to any Person (other than
Radio One or a Wholly Owned Restricted Subsidiary of Radio One), unless:
(1) as a result of such transfer, conveyance, sale, lease or other
disposition or issuance such Restricted Subsidiary no longer constitutes a
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 "--Repurchase at the Option of Holders--Asset Sales."
In addition, Radio One will not permit any Wholly Owned Restricted
Subsidiary of Radio One 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 Radio One or a Wholly Owned Restricted
Subsidiary of Radio One.
Payments for Consent
Radio One 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,
Radio One 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
Radio One 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 Radio One's certified independent accountants; and
(2) all current reports that would be required to be filed with the SEC
on Form 8-K if Radio One were required to file such reports.
If Radio One or any Guarantor has designated any of its Subsidiaries as
Unrestricted Subsidiaries, then the quarterly and annual financial information
required by the preceding paragraph will include, 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, a
reasonably detailed summary of financial condition and results of operations of
the Unrestricted Subsidiaries containing line items substantially consistent
with those contained in the summary section of this prospectus.
22
In addition, following the consummation of the exchange offer for the
initial Notes on November 16, 2001, whether or not required by the SEC, Radio
One is obligated to 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. In addition, Radio One has
agreed that, for so long as any Notes remain outstanding, it will furnish to
the Holders and to securities analysts and prospective investors, upon their
request, the information required to be delivered pursuant to Rule 144A(d)(4)
under the Securities Act.
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 Radio One or any of its Restricted Subsidiaries to
comply with the provisions described under the captions "--Repurchase at the
Option of Holders--Change of Control;"
(4) failure by Radio One or any of its Restricted Subsidiaries for 30
days after notice from the trustee or holders of at least 25% in principal
amount of the Notes to comply with the provisions described under the
captions "--Repurchase at the Option of Holders--Asset Sales," "--Certain
Covenants--Restricted Payments," "--Certain Covenants--Incurrence of
Indebtedness and Issuance of Preferred Stock" or "--Certain
Covenants--Merger, Consolidation or Sale of Assets;"
(5) failure by Radio One or any of its Restricted Subsidiaries for 60
days after notice from the trustee or holders of 25% in principal amount of
the Notes to comply with any of the other agreements in the Indenture;
(6) 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 Radio One or any of its Restricted
Subsidiaries (or the payment of which is guaranteed by Radio One 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 such Indebtedness at
the final stated maturity thereof (a "Payment Default"), or
(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 $10.0 million or more;
(7) failure by Radio One or any of its Restricted Subsidiaries to pay
final judgments aggregating in excess of $5.0 million not covered by
insurance, which judgments are not paid, discharged or stayed for a period
of 60 days;
(8) except as permitted by the Indenture, any Guarantee of a
Significant Subsidiary 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 Significant Subsidiary that is a Guarantor, or any Person
acting on behalf of any such Guarantor, shall deny or disaffirm its
obligations under its Guarantee; and
23
(9) certain events of bankruptcy or insolvency described in the
Indenture with respect to Radio One or any of its Restricted Subsidiaries.
In the event of a declaration of acceleration of the Notes because an Event
of Default has occurred and is continuing as a result of the acceleration of
any Indebtedness described in clause (6) of the preceding paragraph, the
declaration of acceleration of the Notes shall be automatically annulled if the
holders of any Indebtedness described in clause (6) of the preceding paragraph
have rescinded the declaration of acceleration in respect of the Indebtedness
within 30 days of the date of the declaration and if:
(1) the annulment of the acceleration of Notes would not conflict with
any judgment or decree of a court of competent jurisdiction; and
(2) all existing Events of Default, except nonpayment of principal or
interest on the Notes that became due solely because of the acceleration of
the Notes, have been cured or waived.
In the case of an Event of Default arising from certain events of bankruptcy
or insolvency, with respect to Radio One, any Restricted Subsidiary that is a
Significant Subsidiary or any group of Restricted Subsidiaries that, taken
together, would constitute a Significant Subsidiary, all outstanding notes 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 then outstanding notes 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 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 if it
determines that withholding notice is in their interest, except a Default or
Event of Default relating to the payment of principal or interest or Liquidated
Damages.
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 or Liquidated Damages 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 Radio One with the
intention of avoiding payment of the premium that Radio One would have had to
pay if Radio One then had elected to redeem the Notes pursuant to the optional
redemption provisions of the Indenture, an equivalent premium will 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, by reason of
any willful action (or inaction) taken (or not taken) by or on behalf of Radio
One with the intention of avoiding the prohibition on redemption of the Notes
prior to July 1, 2006, then the premium specified in the Indenture will also
become immediately due and payable to the extent permitted by law upon the
acceleration of the Notes.
Radio One 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, Radio One 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 Radio One,
any Subsidiary of Radio One, or any Guarantor, as such, will have any liability
for any obligations of Radio One or the Guarantors under the Notes, the
Indenture, the Subsidiary Guarantees, or for any claim based on, in respect of,
or by reason of, such
24
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
Radio One may, at its option and at any time elect to have all of its
obligations discharged with respect to the outstanding notes and all
obligations of the Guarantors discharged with respect to their Subsidiary
Guarantees ("Legal Defeasance") except for:
(1) the rights of Holders of outstanding notes to receive payments in
respect of the principal of, or interest or premium and Liquidated Damages,
if any, on such Notes when such payments are due from the trust referred to
below;
(2) Radio One's 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 Radio One's and the Guarantors' obligations in connection therewith; and
(4) the Legal Defeasance provisions of the Indenture.
In addition, Radio One may, at its option and at any time, elect to have the
obligations of Radio One and the Guarantors released with respect to certain
covenants that are described in the Indenture ("Covenant Defeasance") and
thereafter any omission to comply with those covenants will 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 and Remedies" will no longer constitute an Event of Default with
respect to the Notes.
In order to exercise either Legal Defeasance or Covenant Defeasance:
(1) Radio One 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 of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient, in the
opinion of a nationally recognized firm of independent public accountants,
to pay the principal of, or interest and premium and Liquidated Damages, if
any, on the outstanding notes on the stated maturity or on the applicable
redemption date, as the case may be, and Radio One must specify whether the
Notes are being defeased to maturity or to a particular redemption date;
(2) in the case of Legal Defeasance, Radio One has delivered to the
trustee an opinion of counsel reasonably acceptable to the trustee
confirming that (a) Radio One 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
will 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;
(3) in the case of Covenant Defeasance, Radio One has delivered to the
trustee an opinion of counsel 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;
(4) no Default or Event of Default has occurred and is continuing 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);
25
(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 Radio One or any of its
Restricted Subsidiaries is a party or by which Radio One or any of its
Restricted Subsidiaries is bound;
(6) Radio One must deliver to the trustee an officers' certificate
stating that the deposit was not made by Radio One with the intent of
preferring the Holders of Notes over the other creditors of Radio One with
the intent of defeating, hindering, delaying or defrauding creditors of
Radio One or others; and
(7) Radio One must deliver to the trustee an officers' certificate and
an opinion of counsel, which opinion may be subject to customary assumptions
and exclusions, each stating that all conditions precedent relating to the
Legal Defeasance or the Covenant Defeasance have been complied with.
The Credit Agreement restricts Radio One's ability to effect a Legal
Defeasance or a Covenant Defeasance.
Amendment, Supplement and Waiver
Except as provided in the next three 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 then
outstanding notes (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 interest or premium, or Liquidated Damages, if any, 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);
(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 interest or premium or Liquidated Damages, if
any, 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, (x) 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 or (y) the release any Guarantor from any of its
obligations under its Subsidiary Guarantee or the Indenture, except in
accordance with the terms of the Indenture will require the consent of the
Holders of at least 75% in aggregate principal amount of Notes then outstanding.
26
Notwithstanding the preceding, without the consent of any Holder of Notes,
Radio One, the Guarantors 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 Radio One's obligations to Holders
of Notes in the case of a merger or consolidation or sale of all or
substantially all of Radio One's 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;
(5) to comply with requirements of the SEC in order to effect or
maintain the qualification of the Indenture under the Trust Indenture Act;
(6) to provide for the issuance of additional Notes in accordance with
the limitations set forth in the Indenture as of its date; or
(7) to allow any Guarantor to execute a supplemental Indenture and/or a
Guarantee with respect to the Notes.
Satisfaction and Discharge
The Indenture will be discharged and will cease to be of further effect as
to all Notes issued thereunder, when:
(1) either:
(a) all Notes that have been authenticated, except lost, stolen or
destroyed Notes that have been replaced or paid and Notes for whose
payment money has been deposited in trust and thereafter repaid to Radio
One, have been delivered to the trustee for cancellation; or
(b) all Notes that have not been delivered to the trustee for
cancellation have become due and payable by reason of the mailing of a
notice of redemption or otherwise or will become due and payable within
one year and Radio One or any Guarantor has irrevocably deposited or
caused to be deposited with the trustee as trust funds in trust solely
for the benefit of the Holders, cash in U.S. dollars, non-callable
Government Securities, or a combination of cash in U.S. dollars and
non-callable Government Securities, in amounts as will be sufficient
without consideration of any reinvestment of interest, to pay and
discharge the entire indebtedness on the Notes not delivered to the
trustee for cancellation for principal, premium and Liquidated Damages,
if any, and accrued interest to the date of maturity or redemption;
(2) no Default or Event of Default has occurred and is continuing on
the date of the deposit or will occur as a result of the deposit and the
deposit will not result in a breach or violation of, or constitute a default
under, any other instrument to which Radio One or any Guarantor is a party
or by which Radio One or any Guarantor is bound;
(3) Radio One or any Guarantor has paid or caused to be paid all sums
payable by it under the Indenture; and
(4) Radio One has delivered irrevocable instructions to the trustee
under the Indenture to apply the deposited money toward the payment of the
Notes at maturity or the redemption date, as the case may be.
27
In addition, Radio One must deliver an officers' certificate and an opinion
of counsel, which may be subject to customary assumptions and exclusions, to
the trustee stating that all conditions precedent to satisfaction and discharge
have been satisfied.
Concerning the Trustee
If the trustee becomes a creditor of Radio One or any Guarantor, the
Indenture limits its right to obtain payment of claims in certain cases, or to
realize on certain 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 then outstanding notes
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
occurs and is continuing, the trustee will be required, in the exercise of its
power, to use the degree of care of a prudent man in the conduct of his 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 has offered to the trustee security and
indemnity satisfactory to it against any loss, liability or expense.
Additional Information
Anyone who receives this prospectus may obtain a copy of the Indenture
without charge by writing to Radio One, Inc., 5900 Princess Garden Parkway, 7th
Floor, Lanham, Maryland 20706, Attention: Investor Relations, or by sending an
email message to invest@radio-one.com.
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.
"Acquisition Debt" means Indebtedness the proceeds of which are utilized
solely to (x) acquire all or substantially all of the assets or a majority of
the Voting Stock of an existing radio broadcasting business or station or (y)
finance an LMA (including to repay or refinance indebtedness or other
obligations incurred in connection with such acquisition or LMA, as the case
may be, and to pay related fees and expenses).
"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, means 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. For purposes of this definition, the terms
"controlling," "controlled by" and "under common control with" have correlative
meanings.
28
"Asset Sale" means:
(1) the sale, lease, conveyance or other disposition of any assets or
rights, other than in the ordinary course of business; provided that the
sale, conveyance or other disposition of all or substantially all of the
assets of Radio One and its Subsidiaries taken as a whole will be governed
by the provisions of the Indenture described above under the caption
"--Repurchase at the Option of Holders--Change of Control" and/or the
provisions described above under the caption "--Certain Covenants--Merger,
Consolidation or Sale of Assets" and not by the provisions of the Asset Sale
covenant; and
(2) the issuance of Equity Interests in any of Radio One's Restricted
Subsidiaries or the sale of Equity Interests in any of its Restricted
Subsidiaries.
Notwithstanding the preceding, the following items will not be deemed to be
Asset Sales:
(1) any single transaction or series of related transactions that
involves assets having a fair market value of $1.0 million or less;
(2) a transfer of assets between or among Radio One and its
Subsidiaries;
(3) an issuance of Equity Interests by a Subsidiary to Radio One or to
another Subsidiary;
(4) the sale or lease of equipment, inventory, accounts receivable or
other assets in the ordinary course of business;
(5) the sale and leaseback of any assets within 90 days of the
acquisition thereof;
(6) foreclosures on assets;
(7) the disposition of equipment no longer used or useful in the
business of such entity;
(8) the sale or other disposition of cash or Cash Equivalents;
(9) a Restricted Payment or Permitted Investment that is permitted by
the covenant described above under the caption "--Certain
Covenants--Restricted Payments;" and
(10) the licensing of intellectual property.
"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 that term is used in Section 13(d)(3)
of the Exchange Act), such "person" will be deemed to have beneficial ownership
of all securities that such "person" has the right to acquire by conversion or
exercise of other securities, whether such right is currently exercisable or is
exercisable only upon the occurrence of a subsequent condition. The terms
"Beneficially Owns" and "Beneficially Owned" have a corresponding meaning.
"Board of Directors" means:
(1) with respect to a corporation, the board of directors of the
corporation;
(2) with respect to a partnership, the board of directors of the general
partner of the partnership; and
(3) with respect to any other Person, the board or committee of such
Person serving a similar function.
"Capital Lease Obligation" means, at the time any determination 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.
29
"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 of the United
States government having maturities of not more than one year from the date
of acquisition;
(3) certificates of deposit and eurodollar time deposits with
maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any lender party to the Credit Facility or any
domestic commercial bank having capital and surplus in excess of $500.0
million and a Thomson Bank Watch Rating of "B" or better;
(4) repurchase obligations with a term of not more than 30 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 one of the two highest ratings obtainable
from Moody's Investors Service, Inc. or Standard & Poor's Rating Services
and in each case maturing within one year 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 direct or indirect 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
properties or assets of Radio One and its Restricted Subsidiaries, taken as
a whole to any "person" (as that 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 Radio One;
(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 50% of the Voting
Stock of Radio One, measured by voting power rather than number of shares; or
(4) the first day on which a majority of the members of the Board of
Directors of Radio One are not Continuing Directors.
30
"Consolidated Cash Flow" means, with respect to any specified Person for any
period, the Consolidated Net Income of such Person for such period plus:
(1) an amount equal to any extraordinary loss plus any net loss,
together with any related provision for taxes, realized by such Person or
any of its Restricted Subsidiaries in connection with (a) an Asset Sale
(including any sale and leaseback transaction), or (b) the disposition of
any securities by such Person or any of the Restricted Subsidiaries or the
extinguishment of any Indebtedness of such Person or any of the Restricted
Subsidiaries, 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 obligations with respect to any sale and leaseback transaction,
all fees, including but not limited to agency fees, letter of credit fees,
commitment fees, commissions, discounts and other fees and charges incurred
in respect of Indebtedness and net of the effect of all payments made or
received pursuant to Hedging Obligations), to the extent that any such
expense was deducted in computing such Consolidated Net Income; plus
(4) depreciation, amortization (including non-cash employee and officer
equity compensation expenses, amortization of goodwill and other
intangibles, amortization of programming costs and barter expenses, 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 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) any extraordinary or non-recurring expenses of such Person and the
Restricted Subsidiaries for such period to the extent that such charges were
deducted in computing such Consolidated Net Income; plus
(6) any non-capitalized transaction costs incurred in connection with
actual or proposed financings, acquisitions or transactions; minus
(7) non-cash items increasing such Consolidated Net Income for such
period, other than the accrual of revenue in the ordinary course of
business; minus
(8) cash payments related to non-cash charges that increased
Consolidated Cash Flow in any prior period; minus
(9) barter revenues,
in 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
expenses of, a Subsidiary of Radio One will be added to Consolidated Net Income
to compute Consolidated Cash Flow of Radio One only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to Radio One by such Subsidiary without prior governmental approval
(that has not been obtained), and without direct or indirect restriction
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.
31
"Consolidated Interest Expense" means, with respect to any Person for any
period, the sum, without duplication of:
(1) the consolidated interest expense of such Person and the Restricted
Subsidiaries for such period, whether paid or accrued (including, without
limitation, amortization of 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 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);
(2) the consolidated interest expense of such Person and the Restricted
Subsidiaries that was capitalized during such period;
(3) any interest expense on Indebtedness of another Person that is
guaranteed by such Person or any of the Restricted Subsidiaries or secured
by a Lien on assets of such Person or any of the Restricted Subsidiaries
(whether or not such guarantee or Lien is called upon); and
(4) the product of:
(a) all cash dividend payments (and non-cash dividend payments in
the case of a Person that is a Restricted Subsidiary) on any series of
preferred stock of such Person or any of the Restricted Subsidiaries,
times
(b) a fraction, the numerator of which is one and the denominator
of which is one minus the then current combined federal, state and local
statutory tax rate of such Person, expressed as a decimal, in each case,
on a consolidated basis and in accordance with GAAP.
"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 of any Unrestricted Subsidiary will be excluded,
whether or not distributed to the specified Person or a Restricted
Subsidiary of the Person;
(2) the Net Income of any Restricted Subsidiary will 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 will be
excluded; and
(4) the cumulative effect of a change in accounting principles will be
excluded.
"Continuing Directors" means, as of any date of determination, any member of
the Board of Directors of Radio One who:
(1) was a member of or nominated to such Board of Directors on the date
of the Indenture; or
(2) was nominated for election by either (a) one or more of the
Principals or (b) the Board of Directors of Radio One, a majority of whom
were members of or nominated to the Board of Directors on the date of the
Indenture or whose election or nomination for election was previously
approved by one or more of the Principals beneficially owning at least 25%
of the Voting Stock of Radio One (determined by reference to voting power
and not number of shares held) or such directors.
32
"Credit Agreement" means that certain Second Amended and Restated Credit
Agreement, dated as of July 17, 2000, by and among Radio One, the guarantors
party thereto, Bank of America, N.A., as administrative agent and the lenders
party thereto, including any related notes, guarantees, collateral documents,
instruments and agreements executed in connection therewith, as amended,
modified, renewed, refunded, replaced or refinanced from time to time
(including any increase in principal amount).
"Credit Facilities" means, one or more debt facilities (including, without
limitation, the Credit Agreement) or commercial paper facilities, in each case
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) 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 (including any increase in principal amount).
"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.
"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 of the Capital Stock),
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 of the Capital Stock, in whole or in part, on or prior to the
date on which the Notes mature. Notwithstanding the preceding sentence, any
Capital Stock that would constitute Disqualified Stock solely because the
holders of the Capital Stock have the right to require Radio One to repurchase
such Capital Stock upon the occurrence of a change of control or an asset sale
will not constitute Disqualified Stock if the terms of such Capital Stock
provide that Radio One may not 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 Subsidiary" means any Restricted Subsidiary of Radio One that was
formed under the laws of the United States or any state of the United States or
the District of Columbia or that guarantees or otherwise provides direct credit
support for any Indebtedness of Radio One.
"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).
"Equity Offering" means an offering of Capital Stock (other than
Disqualified Stock) of Radio One or one of its Subsidiaries, the net proceeds
of which are contributed to Radio One, in each case to any Person that is not
an Affiliate of Radio One, which offering results in at least $25.0 million of
net aggregate proceeds to Radio One.
"Existing Indebtedness" means Indebtedness of Radio One and its Restricted
Subsidiaries (other than Indebtedness under the Credit Agreement) in existence
on the date of the Indenture.
"Existing Preferred Stock" means the 61/2% Convertible Preferred
Remarketable Term Income Deferrable Equity Securities of Radio One pursuant to
the Certificate of Designations filed with the State of Delaware on July 13,
2000, as in effect on the date of the Indenture.
"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 on the date of the Indenture.
33
"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) Radio One's Restricted Subsidiaries on the date of the Indenture; and
(2) any other subsidiary of Radio One that executes a Subsidiary
Guarantee in accordance with the provisions of the Indenture;
and their respective successors and assigns.
"Hedging Obligations" means, with respect to any specified 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 currency exchange rates or interest rates.
"Indebtedness" means, with respect to any specified Person, any indebtedness
of such Person, whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, Notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations;
(5) representing 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 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) and, to the extent not otherwise included, the Guarantee
by the specified Person of any indebtedness of any other Person; provided that
Indebtedness shall not include the pledge of the Capital Stock of an
Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted
Subsidiary; and, provided further, in no event shall the Existing Preferred
Stock (including all accrued dividends thereon) be deemed Indebtedness.
The amount of any Indebtedness outstanding as of any date will be:
(1) the accreted value of the Indebtedness, in the case of any
Indebtedness issued with original issue discount; and
(2) the principal amount of the Indebtedness, together with any interest
on the Indebtedness that is more than 30 days past due, in the case of any
other Indebtedness.
"Investments" means, with respect to any Person, all direct or indirect
investments by such Person in other Persons (including Affiliates) in the forms
of loans (including Guarantees 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
34
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 Radio One
or any Subsidiary of Radio One sells or otherwise disposes of any Equity
Interests of any direct or indirect Subsidiary of Radio One such that, after
giving effect to any such sale or disposition, such Person is no longer a
Subsidiary of Radio One, Radio One will 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 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 the ratio of (i) the aggregate outstanding amount of
Indebtedness of each of Radio One and the Restricted Subsidiaries as of the
last day of the most recently ended fiscal quarter for which financial
statements are internally available as of the date of calculation on a combined
consolidated basis in accordance with GAAP (subject to the terms described in
the next paragraph) plus the aggregate liquidation preference of all
outstanding Disqualified Stock of Radio One and preferred stock of the
Restricted Subsidiaries (except preferred stock issued to Radio One or a
Restricted Subsidiary) as of the last day of such fiscal quarter to (ii) the
aggregate Consolidated Cash Flow of Radio One for the last four full fiscal
quarters for which financial statements are internally available ending on or
prior to the date of determination (the "Reference Period").
For purposes of this definition, the aggregate outstanding principal amount
of Indebtedness of Radio One and the Restricted Subsidiaries and the aggregate
liquidation preference of all outstanding preferred stock of the Restricted
Subsidiaries for which such calculation is made shall be determined on a pro
forma basis as if the Indebtedness and preferred stock giving rise to the need
to perform such calculation had been incurred and issued and the proceeds
therefrom had been applied, and all other transactions in respect of which such
Indebtedness is being incurred or preferred stock is being issued had occurred,
on the first day of such Reference Period. In addition to the foregoing, for
purposes of this definition, the Leverage Ratio shall be calculated on a pro
forma basis after giving effect to (i) the incurrence of the Indebtedness of
such Person and the Restricted Subsidiaries and the issuance of the preferred
stock of such Subsidiaries (and the application of the proceeds therefrom)
giving rise to the need to make such calculation and any incurrence (and the
application of the proceeds therefrom) or repayment of other Indebtedness or
preferred stock, at any time subsequent to the beginning of the Reference
Period and on or prior to the date of determination (including any such
incurrence or issuance which is the subject of an Incurrence Notice delivered
to the Trustee during such period pursuant to clause (12) of the definition of
Permitted Debt), as if such incurrence or issuance (and the application of the
proceeds thereof), or the repayment, as the case may be, occurred on the first
day of the Reference Period (except that, in making such computation, the
amount of Indebtedness under any revolving credit facility shall be computed
based upon the average balance of such Indebtedness at the end of each month
during such period) and (ii) any acquisition at any time on or subsequent to
the first day of the Reference Period and on or prior to the date of
determination (including any such incurrence or issuance which is the subject
of an Incurrence Notice delivered to the Trustee during such period pursuant to
clause (12) of the definition of Permitted Debt), as if such acquisition
(including the incurrence, assumption or liability for any such Indebtedness
and the issuance of such preferred stock and also including any Consolidated
Cash Flow associated with such acquisition) occurred on the first day of the
Reference Period giving pro forma effect to any non-recurring expenses,
non-recurring costs and cost reductions within the first year after such
acquisition Radio One reasonably anticipates in good faith if Radio One
delivers to the Trustee an officer's certificate executed by the chief
financial or accounting officer of Radio One certifying to and describing and
quantifying with reasonable specificity such non-recurring expenses,
non-recurring costs and cost reductions. Furthermore, in calculating
Consolidated Interest Expense for purposes of the calculation of Consolidated
Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of
the date of determination (including Indebtedness actually incurred on the date
of the transaction giving rise to the need to calculate the Leverage Ratio) and
which will continue to be so determined thereafter shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest on such
Indebtedness as in effect on the date of determination and (b) notwithstanding
(a) above, interest determined on a fluctuating basis, to the extent such
interest is covered by Hedging Obligations, shall be deemed to accrue at the
rate per annum resulting after giving effect to the operation of such
agreements.
35
"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.
"LMA" means a local marketing arrangement, joint sales agreement, time
brokerage agreement, shared services agreement, management agreement or similar
arrangement pursuant to which a Person, subject to customary preemption rights
and other limitations (i) obtains the right to sell a portion of the
advertising inventory of a radio station of which a third party is the
licensee, (ii) obtains the right to exhibit programming and sell advertising
time during a portion of the air time of a radio station or (iii) manages a
portion of the operations of a radio station.
"Net Income" means, with respect to any specified Person, the net income
(loss) of such Person, determined in accordance with GAAP 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 Radio One 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 (i) 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 of the Asset Sale, (ii) taxes paid or payable as a result
of the Asset Sale, in each case, after taking into account any available tax
credits or deductions and any tax sharing arrangements, (iii) 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 and
(iv) any reserve for adjustment in respect of the sale price of such asset or
assets established in accordance with GAAP.
"Non-Recourse Debt" means Indebtedness:
(1) as to which neither Radio One, the Guarantors, nor any of the
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; and
(2) no default with respect to which (including any rights that the
holders of the Indebtedness 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 Radio One, the
Guarantors, or any of the Restricted Subsidiaries to declare a default on
such other Indebtedness or cause the payment of the Indebtedness to be
accelerated or payable prior to its stated maturity.
"Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness and in all cases whether direct or
indirect, absolute or contingent, now outstanding or hereafter created, assumed
or incurred and including, without limitation, interest accruing subsequent to
the filing of a petition in bankruptcy or the commencement of any insolvency,
reorganization or similar proceedings at the rate provided in the relevant
documentation, whether or not an allowed claim, and any obligation to redeem or
defease any of the foregoing.
36
"Permitted Asset Swap" means, with respect to any Person, the substantially
concurrent exchange of assets of such Person (including Equity Interests of a
Restricted Subsidiary) for assets of another Person, which assets are useful to
the business of such aforementioned Person.
"Permitted Business" means any business engaged in by Radio One or its
Restricted Subsidiaries as of the Closing Date or any business reasonably
related, ancillary or complementary thereto.
"Permitted Investments" means:
(1) any Investment in Radio One or in a Restricted Subsidiary;
(2) any Investment in Cash Equivalents;
(3) any Investment by Radio One or any Restricted Subsidiary in a
Person, if as a result of such Investment:
(a) such Person becomes a Restricted Subsidiary of Radio One; 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, Radio One or a Restricted Subsidiary;
(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;"
(5) any acquisition of assets (including Investments in Unrestricted
Subsidiaries) solely in exchange for the issuance of Equity Interests (other
than Disqualified Stock) of Radio One;
(6) notes and accounts receivable incurred in the ordinary course of
business and any Investments received in compromise of obligations of such
persons incurred in the ordinary course of trade creditors or customers that
were incurred in the ordinary course of business, including pursuant to any
plan of reorganization or similar arrangement upon the bankruptcy or
insolvency of any trade creditor or customer;
(7) Hedging Obligations;
(8) guarantees of loans to management incurred pursuant to clause (13)
of the definition of Permitted Debt;
(9) loans and advances to employees of Radio One or any Restricted
Subsidiary in the ordinary course of business not in excess of $10,000,000
in aggregate principal amount at any time outstanding; or
(10) 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 (10) that are at the time
outstanding not to exceed $30.0 million.
"Permitted Liens" means:
(1) Liens of Radio One and any Guarantor securing Indebtedness and other
Obligations under Credit Facilities that were securing Senior Debt that was
permitted by the terms of the Indenture to be incurred;
(2) Liens in favor of Radio One or the Guarantors;
37
(3) Liens on property of a Person existing at the time such Person is
merged with or into or consolidated with Radio One or any Restricted
Subsidiary of Radio One; 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 Radio
One or the Subsidiary;
(4) Liens on property existing at the time of acquisition of the
property by Radio One or any Restricted Subsidiary of Radio One, 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 the covenant entitled
"--Certain Covenants--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 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 is required in
conformity with GAAP has been made therefor;
(9) Liens incurred in the ordinary course of business of Radio One or
any Restricted Subsidiary with respect to obligations that do not exceed
$5.0 million at any one time outstanding;
(10) Liens on assets of Unrestricted Subsidiaries that secure
Non-Recourse Debt of Unrestricted Subsidiaries;
(11) Liens to secure Indebtedness that is pari passu in right of payment
with the Notes, provided that the Notes are equally and ratably secured
thereby;
(12) Liens securing Permitted Refinancing Indebtedness where the liens
securing indebtedness being refinanced were permitted under the Indenture;
(13) easements, rights-of-way, zoning and similar restrictions and other
similar encumbrances or title defects incurred or imposed, as applicable, in
the ordinary course of business and consistent with industry practices;
(14) any interest or title of a lessor under any Capital Lease
Obligation;
(15) Liens securing reimbursement obligations with respect to commercial
letters of credit which encumber documents and other property relating to
letters of credit and products and proceeds thereof;
(16) Liens encumbering deposits made to secure statutory, regulatory,
contractual or warranty obligations, including rights of offset and set-off;
(17) Liens securing Hedging Obligations which Hedging Obligations relate
to Indebtedness that is otherwise permitted under the Indenture;
(18) leases or subleases granted to others;
(19) Liens under licensing agreements;
(20) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
38
(21) judgment Liens not giving rise to an Event of Default;
(22) Liens encumbering property of Radio One or a Restricted Subsidiary
consisting of carriers, warehousemen, mechanics, materialmen, repairmen, and
landlords, and other Liens arising by operation of law and incurred in the
ordinary course of business for sums which are not overdue or which are
being contested in good faith by appropriate proceedings and (if so
contested) for which appropriate reserves with respect thereto have been
established and maintained on the books of Radio One or a Restricted
Subsidiary in accordance with GAAP; and
(23) Liens encumbering property of Radio One or a Restricted Subsidiary
incurred in the ordinary course of business in connection with workers'
compensation, unemployment insurance, or other forms of governmental
insurance or benefits, or to secure performance of bids, tenders, statutory
obligations, leases, and contracts (other than for Indebtedness) entered
into in the ordinary course of business of Radio One or a Restricted
Subsidiary.
"Permitted Refinancing Indebtedness" means any Indebtedness of Radio One 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 Radio One 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 (or
accreted value, if applicable) of the Indebtedness extended, refinanced,
renewed, replaced, defeased or refunded (plus all accrued interest on the
Indebtedness and the amount of all expenses and premiums 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 Radio One 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, joint venture,
association, joint-stock company, trust, unincorporated organization, limited
liability company or government or other entity.
"Principals" means Catherine L. Hughes and Alfred C. Liggins, III.
"Related Party" means:
(1) any controlling stockholder, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of any 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 any one or
more Principals and/or such other Persons referred to in the immediately
preceding clause (1).
39
"Restricted Investment" means an Investment other than a Permitted
Investment.
"Restricted Subsidiary" all current and future Domestic Subsidiaries of
Radio One, other than Unrestricted Subsidiaries.
"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
hereof.
"Stated Maturity" means, with respect to any installment of interest or
principal on any series of Indebtedness, the date on which the payment of
interest or principal was scheduled to be paid in the original documentation
governing such Indebtedness, and will 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 specified 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 of the corporation, association
or other business entity is at the time owned or controlled, directly or
indirectly, by that 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 that Person or one or more Subsidiaries
of that Person (or any combination thereof).
"Unrestricted Subsidiary" means any Subsidiary of Radio One that is
designated by the Board of Directors as an Unrestricted Subsidiary pursuant to
a resolution of the Board of Directors, 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 Radio One or any Restricted Subsidiary unless the terms
of any such agreement, contract, arrangement or understanding are no less
favorable to Radio One or such Restricted Subsidiary than those that might
be obtained at the time from Persons who are not Affiliates of Radio One;
(3) is a Person with respect to which neither Radio One nor any of the
Restricted Subsidiaries has any direct or indirect obligation to maintain or
preserve such Person's financial condition or to cause such Person to
achieve any specified levels of operating results; and
(4) has not guaranteed or otherwise directly or indirectly provided
credit support for any Indebtedness of Radio One or any of the Restricted
Subsidiaries.
Any designation of a Subsidiary of Radio One as an Unrestricted Subsidiary
will 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
"--Certain Covenants--Restricted Payments." If, at any time, any Unrestricted
Subsidiary would fail to meet the preceding requirements as an Unrestricted
Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for
purposes of the Indenture and any Indebtedness of such Subsidiary will be
deemed to be incurred by a Restricted Subsidiary 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 "--Certain Covenants--Incurrence of Indebtedness
and Issuance of Preferred Stock," Radio One will be in default of such
covenant. The Board of Directors of Radio One may at any time designate any
Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such
designation will be deemed to be an incurrence of Indebtedness by a
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Restricted Subsidiary of any outstanding Indebtedness of such Unrestricted
Subsidiary and such designation will 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.
"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 of the Indebtedness, 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 specified 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)
will at the time be owned by such Person or by one or more Wholly Owned
Restricted Subsidiaries of such Person.
DESCRIPTION OF OTHER DEBT SECURITIES
Subject to compliance with the Credit Agreement and the Indenture, we may
issue senior or subordinated debt securities. The senior debt securities will
constitute part of our senior debt, will be issued under a senior debt
indenture, and will rank on a parity with all of our other unsecured and
unsubordinated debt. The subordinated debt securities will be issued under a
subordinated debt indenture, and will be subordinate and junior in right of
payment, as set forth in the subordinated debt indenture, to all of our senior
indebtedness. If this prospectus is being delivered in connection with a series
of subordinated debt securities, the accompanying prospectus supplement or the
information we incorporate in this prospectus by reference will indicate the
approximate amount of senior indebtedness outstanding as of the end of the most
recent fiscal quarter. We refer to our senior debt indenture and our
subordinated debt indenture individually as an "indenture" and collectively as
the "indentures." The forms of the indentures are exhibits to the registration
statement we filed with the SEC, of which this prospectus is a part.
We have summarized below the material provisions of the indentures and the
debt securities, or indicated which material provisions will be described in
the related prospectus supplement. These descriptions are only summaries, and
each investor should refer to the applicable indenture, which describes
completely the terms and definitions summarized below and contains additional
information regarding the debt securities. Any reference to particular sections
or defined terms of the applicable indenture in any statement under this
heading qualifies the entire statement and incorporates by reference the
applicable section or definition into that statement.
General
The debt securities that may be offered under the indentures are not limited
in aggregate principal amount. We may issue debt securities at one or more
times in one or more series. Each series of debt securities may have different
terms. The terms of any series of debt securities will be described in, or
determined by action taken pursuant to, a resolution of our board of directors
or in a supplement to the indenture relating to that series.
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The prospectus supplement, including any related pricing supplement,
relating to any series of debt securities that we may offer will state the
price or prices at which the debt securities will be offered, and will contain
the specific terms of that series. These terms may include the following:
. the title of the series of debt securities;
. whether the debt securities are senior debt securities or subordinated
debt securities or any combination thereof;
. the purchase price, denomination and any limit on the aggregate
principal amount of the debt securities;
. the date or dates on which principal and premium, if any, on the debt
securities will be payable;
. the terms and conditions, if any, under which the debt securities may be
converted into or exchanged for our class D common stock or other
securities;
. the rate or rates at which the debt securities will bear interest, if
any, or the method of calculating the rate or rates of interest, whether
the interest on the debt securities will be paid in the form of
additional debt securities and if so, the terms and provisions for the
payment of those additional debt securities, including the method for
calculating the amount of additional debt securities so payable, the
date or dates from which interest will accrue or the method by which the
date or dates will be determined, the dates on which interest will be
payable, and any regular record date for payment of interest;
. the place or places where the principal of, premium, if any, and
interest on the debt securities will be payable;
. any covenants to which Radio One may be subject with respect to the debt
securities;
. the place or places where the debt securities may be exchanged or
transferred;
. the terms and conditions upon which we may redeem the debt securities,
in whole or in part, at our option;
. the terms and conditions upon which we may be obligated to redeem or
purchase the debt securities under any sinking fund or similar
provisions or upon the happening of a specified event or at the option
of a holder;
. the denominations in which the debt securities will be issuable, if
other than denominations of $1,000 and any integral multiple of $1,000;
. if other than U.S. dollars, the currency or currencies, including the
currency unit or units, in which payments of principal of, premium, if
any, and interest on the debt securities will or may be payable, or in
which the debt securities shall be denominated, and any particular
related provisions;
. if we or a holder may elect that payments of principal of, premium, if
any, or interest on the debt securities be made in a currency or
currencies, including currency unit or units, other than that in which
the debt securities are denominated or designated to be payable, the
currency or currencies in which such payments are to be made, including
the terms and conditions applicable to any payments and the manner in
which the exchange rate with respect to such payments will be
determined, and any particular related provisions;
. if the amount of payments of principal of, premium, if any, and interest
on debt securities are determined with reference to an index, formula or
other method, which may be based, without limitation, on a currency or
currencies other than that in which the debt securities are denominated
or designated to be payable, the index, formula or other method by which
the amounts will be determined;
. if other than the full principal amount, the portion of the principal
amount of the debt securities which will be payable upon declaration of
acceleration of maturity;
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. the applicability of the provisions described in "--Defeasance and
Covenant Defeasance" below;
. whether the subordination provisions summarized below or different
subordination provisions will apply to any debt securities that are
subordinated debt securities;
. the events of default;
. any agents for the debt securities, including trustees, depositories,
authenticating or paying agents, transfer agents or registrars;
. any provisions relating to the satisfaction and discharge of the debt
securities;
. if we will issue the debt securities in whole or in part in the form of
global securities; and
. any other terms of the debt securities, whether in addition to, or by
modification or deletion of, the terms described herein.
The debt securities may be offered and sold at a substantial discount below
their stated principal amount and may be "original issue discount securities."
"Original issue discount securities" will bear no interest or interest at a
rate below the prevailing market rate at the time of issuance. In addition,
less than the entire principal amount of these securities will be payable upon
declaration of acceleration of their maturity. We will describe any United
States federal income tax consequences and other special considerations
applicable to any such original issue discount securities in the applicable
prospectus supplement.
Exchange, Registration, Transfer and Payment
Unless otherwise indicated in the applicable prospectus supplement, the
principal of, premium, if any, and interest on the debt securities will be
payable, and the exchange of and the transfer of debt securities will be
registrable, at our office or agency maintained for such purpose in New York
and at any other office or agency maintained for that purpose. We will issue
the debt securities in denominations of $1,000 or integral multiples of $1,000.
Unless otherwise provided in the debt securities to be transferred or
exchanged, no service charge will be made for any registration of transfer or
exchange of the debt securities, but we may require payment of a sum sufficient
to cover any tax or other governmental charge imposed because of the
transactions.
All money paid by us to a paying agent for the payment of principal of,
premium, if any, or interest on any debt security which remains unclaimed for
one year after the principal, premium or interest has become due and payable
may be repaid to us, and thereafter the holder of the debt security may look
only to us for payment of those amounts.
In the event of any redemption, we will not be required to (a) issue,
register the transfer of or exchange the debt securities of any series during a
period beginning 15 days before the mailing of a notice of redemption of debt
securities of that series to be redeemed and ending on the date of the mailing
or (b) register the transfer of or exchange any debt security, or portion
thereof, called for redemption, except the unredeemed portion of any debt
security being redeemed in part.
Global Debt Securities and Book-Entry System
The following provisions will apply to the debt securities of any series,
including the 8 7/8% Senior Subordinated Notes due 2011, if the prospectus
supplement relating to such series so indicates.
Unless otherwise indicated in the applicable prospectus supplement, the debt
securities of that series will be issued in book-entry form and will be
represented by one or more global securities registered in the name of The
Depository Trust Company, New York, or its nominee. This means that we will not
issue certificates to each holder. Each global security will be issued to DTC,
which will keep a computerized record of its participants,
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such as your broker, whose clients have purchased debt securities. Each
participant will then keep a record of its clients who purchased the debt
securities. Unless it is exchanged in whole or in part for a certificate, a
global security may not be transferred, except that DTC, its nominees, and
their successors may transfer a global security as a whole to one another.
Beneficial interests in global securities will be shown on, and transfers of
global securities will be made only through, records maintained by DTC and its
participants. If you are not a participant in DTC, you may beneficially own
debt securities held by DTC only through a participant.
The laws of some states require that certain purchasers of securities take
physical delivery of the securities in definitive form. These limits and laws
may impair the ability to transfer beneficial interests in a global security.
DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the United States Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered under the provisions of Section 17A of the Securities
Exchange Act. DTC holds the securities that its participants deposit. DTC also
records the settlement among participants of securities transactions, such as
transfers and pledges, in deposited securities through computerized records for
participants' accounts. This eliminates the need to exchange certificates.
Participants include securities brokers and dealers, banks, trust companies,
clearing corporations and certain other organizations. The rules that apply to
DTC and its participants are on file with the SEC.
DTC's book-entry system is also used by other organizations such as
securities brokers and dealers, banks and trust companies that work through a
participant.
DTC is owned by a number of its participants and by the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire payments of principal, premium, if any, and interest to DTC's
nominee. We and the trustee will treat DTC's nominee as the owner of the global
securities for all purposes. Accordingly, we, the trustee and any paying agent
will have no direct responsibility or liability to pay amounts due on the
global securities to owners of beneficial interests in the global securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit participants' accounts on the payment date according to
their respective holdings of beneficial interests in the global securities as
shown on DTC's records. In addition, it is DTC's current practice to assign any
consenting or voting rights to participants whose accounts are credited with
debt securities on a record date, by using an omnibus proxy. Payments by
participants to owners of beneficial interests in the global securities, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with debt
securities held for the account of customers registered in "street name."
However, payments will be the responsibility of the participants and not of
DTC, the trustee or us.
So long as DTC or its nominee is the registered owner of a global security,
DTC or that nominee, as the case may be, will be considered the sole owner or
holder of the debt securities represented by that global security for all
purposes under the indenture. Owners of beneficial interests in a global
security (a) will not be entitled to have the debt securities represented by
that global security registered in their names, (b) will not receive or be
entitled to receive physical delivery of the debt securities in definitive
form, and (c) will not be considered the owners or holders of the debt
securities under the indenture. We will issue debt securities of any series
then represented by global securities in definitive form in exchange for those
global securities if:
. DTC notifies us that it is unwilling or unable to continue as depositary
or if DTC ceases to be a clearing agency registered under applicable law
and a successor depositary is not appointed by us within 90 days; or
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. we determine not to require all of the debt securities of a series to be
represented by a global security.
If we issue debt securities in definitive form in exchange for a global
security, an owner of a beneficial interest in the global security will be
entitled to have debt securities equal in principal amount to the beneficial
interest registered in its name and will be entitled to physical delivery of
those debt securities in definitive form. Debt securities issued in definitive
form will, except as set forth in the applicable prospectus supplement, be
issued in denominations of $1,000 and any multiple of $1,000 and will be issued
in registered form only, without coupons.
Indentures
Debt securities that will be senior debt will be issued under a senior
indenture between us and Wilmington Trust Company, as trustee. We call that
indenture, as it may be supplemented from time to time, the Senior Debt
Indenture. Debt securities that will be subordinated debt will be issued under
a subordinated indenture between us and Wilmington Trust Company, as trustee.
We call that indenture, as it may be supplemented from time to time, the
Subordinated Debt Indenture. We refer to Wilmington Trust Company as the
"senior debt indenture trustee" or as the "subordinated debt indenture trustee"
as the context may require.
Subordination of Subordinated Debt Securities
Holders of subordinated debt securities should recognize that contractual
provisions in the Subordinated Debt Indenture may prohibit us from making
payments on these securities. Subordinated debt securities are subordinate and
junior in right of payment, to the extent and in the manner stated in the
Subordinated Debt Indenture, to all of our senior indebtedness.
Unless otherwise provided in the applicable prospectus supplement, the
subordination provisions of the Subordinated Debt Indenture will apply to
subordinated debt securities. The Subordinated Debt Indenture provides that,
unless all principal of and any premium or interest on the senior indebtedness
has been paid in full, or provision has been made to make these payments in
full, no payment of principal of, or any premium or interest on, any
subordinated debt securities may be made in the event:
. of any insolvency or bankruptcy proceedings, or any receivership,
liquidation, reorganization or other similar proceedings involving us or
a substantial part of our property;
. that (a) a default has occurred in the payment of principal, any
premium, interest or other monetary amounts due and payable on any
senior indebtedness or (b) there has occurred any other event of default
concerning senior indebtedness, that permits the holder or holders of
the senior indebtedness to accelerate the maturity of the senior
indebtedness, with notice or passage of time, or both, and that event of
default has continued beyond the applicable grace period, if any, and
that default or event of default has not been cured or waived or has not
ceased to exist; or
. that the principal of and accrued interest on any subordinated debt
securities have been declared due and payable upon an event of default
as defined under the Subordinated Debt Indenture and that declaration
has not been rescinded and annulled as provided under the Subordinated
Debt Indenture.
Consolidation, Merger and Sale of Assets
We may not consolidate or merge with or into any other person, including any
other entity, or convey, transfer or lease all or substantially all of our
properties and assets to any person or group of affiliated persons unless:
. we are the continuing corporation or the person, if other than us,
formed by such consolidation or with which or into which we are merged
or the person to which all or substantially all our properties and
assets are conveyed, transferred or leased is a corporation or other
entity organized and existing under the laws of the United States, any
of its States or the District of Columbia and expressly assumes our
obligations under the debt securities and each indenture; and
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. immediately after giving effect to the transaction, there is no default
and no event of default under the relevant indenture.
If we consolidate with or merge into any other corporation or entity or
convey, transfer or lease all or substantially all of our property and assets
as described in the preceding paragraph, the successor corporation or entity
shall succeed to and be substituted for us, and may exercise our rights and
powers under the indentures, and thereafter, except in the case of a lease, we
will be relieved of all obligations and covenants under the indentures and all
outstanding debt securities.
Events of Default
Unless otherwise specified in the applicable prospectus supplement, "events
of default" under each indenture with respect to debt securities of any series
will include:
. default in the payment of interest on any debt security of that series
when due that continues for a period of 30 days;
. default in the payment of principal of or premium on any debt security
of that series when due;
. default in the deposit of any sinking fund payment on that series for
five days after it becomes due;
. failure to comply with any of our other agreements contained in the
indenture for a period of 60 days after written notice to us in
accordance with the terms of the indenture;
. failure to pay when due the principal of, or acceleration of, any
indebtedness for money borrowed by us in excess of the amount specified
in the indenture, if the indebtedness is not discharged, or the
acceleration is not annulled, within 30 days of our receiving written
notice of the failure in accordance with the indenture;
. certain events of bankruptcy, insolvency or reorganization; and
. any other events of default specified in the applicable prospectus
supplement.
No event of default with respect to a particular series of debt securities,
except as to certain events involving bankruptcy, insolvency or reorganization
with respect to us, necessarily constitutes an event of default with respect to
any other series of debt securities.
In general, each indenture obligates the trustee to give notice of a default
with respect to a series of debt securities to the holders of that series. The
trustee may withhold notice of any default, except a default in payment on any
debt security, if the trustee determines it is in the best interest of the
holders of that series to do so.
If there is a continuing event of default, the trustee or the holders of at
least 25% in aggregate principal amount of the then outstanding debt securities
of an affected series may require us to repay immediately the unpaid principal,
or if the debt securities of that series are original issue discount
securities, the portion of the principal amount as may be specified in the
terms of that series, of and interest on all debt securities of that series.
Subject to certain conditions, the holders of a majority in principal amount of
the debt securities of a series may rescind our obligation to accelerate
repayment and may waive past defaults, except a default in payment of the
principal of and premium, if any, and interest on any debt security of that
series and some covenant defaults under the terms of that series.
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Under the terms of each indenture, the trustee may refuse to enforce the
indenture or the debt securities unless it first receives satisfactory security
or indemnity from the holders of debt securities. Subject to limitations
specified in each indenture, the holders of a majority in principal amount of
the debt securities of any series will have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
trustee or exercising any trust or power conferred on the trustee.
No holder of any debt security of any series will have any right to
institute any proceeding, judicial or otherwise, with respect to each indenture
or for the appointment of a receiver or trustee, or for any other remedy under
each indenture except as set forth in the applicable prospectus supplement.
Notwithstanding the foregoing, the holder of any debt security will have an
absolute and unconditional right to receive payment of the principal of and
premium, if any, and interest on the debt security on or after the due dates
expressed in the debt security and to institute suit for the enforcement of any
such payment.
Each indenture requires us to furnish to the trustee annually a certificate
as to our compliance with such indenture.
Satisfaction and Discharge
We can discharge or defease our obligations under the indentures as stated
below or as provided in the applicable prospectus supplement.
Unless otherwise provided in the applicable prospectus supplement, we may
discharge obligations to holders of any series of debt securities that have not
already been delivered to the trustee for cancellation and that have either
become due and payable or are by their terms to become due and payable, or are
scheduled for redemption, within one year. We may effect a discharge by
irrevocably depositing with the trustee cash or United States government
obligations, as trust funds, in an amount certified to be enough to pay when
due, whether at maturity, upon redemption or otherwise, the principal of,
premium, if any, and interest on the debt securities and any mandatory sinking
fund payments.
Modification of the Indentures
Each indenture permits us and the relevant trustee to amend the indenture
without the consent of the holders of any of the debt securities:
. to evidence the succession of another corporation and the assumption of
our covenants under such indenture and the debt securities;
. to add to our covenants or to the events of default or to make certain
other changes which would not adversely affect in any material respect
the holder of any outstanding debt securities;
. to cure any ambiguity, defect or inconsistency; and
. for other purposes as described in each indenture.
Each indenture also permits us and the trustee, with the consent of the
holders of a majority in principal amount of the debt securities of each series
affected by the amendment, with each such series voting as a class, to add any
provisions to or change or eliminate any of the provisions of such indenture or
any supplemental indenture or to modify the rights of the holders of debt
securities of each series, provided, however, that, without the consent of the
holder of each debt security so affected, no such amendment may:
. change the maturity of the principal of or premium, if any, or any
installment of principal or interest on any debt security;
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. reduce the principal amount of any debt security, or the rate of
interest or any premium payable upon the redemption, repurchase or
repayment of any debt security, or change the manner in which the amount
of any of the foregoing is determined;
. reduce the amount of principal payable upon acceleration of maturity;
. change the place of payment where, or the currency or currency unit in
which, any debt security or any premium or interest on the debt security
is payable;
. reduce the percentage in principal amount of affected debt securities
the consent of whose holders is required for amendment of the indenture
or for waiver of compliance with some provisions of the indenture or for
waiver of some defaults; or
. modify the provisions relating to waiver of some defaults or any of the
provisions relating to amendment of the indenture except to increase the
percentage required for consent or to provide that some other provisions
of the indenture may not be modified or waived.
The holders of a majority in principal amount of the debt securities of any
series may, on behalf of the holders of all debt securities of that series,
waive, insofar as is applicable to that series, our compliance with some
restrictive provisions of the indentures.
We may not amend the Subordinated Debt Indenture to alter the subordination
of any outstanding subordinated debt securities in a manner adverse to the
holders of senior indebtedness without the written consent of the holders of
senior indebtedness then outstanding under the terms of such senior
indebtedness.
Defeasance and Covenant Defeasance
Except as provided in the applicable prospectus supplement, we may elect
either:
. to be discharged from all our obligations in respect of debt securities
of any series, except for our obligations to register the transfer or
exchange of debt securities, to replace temporary, destroyed, stolen,
lost or mutilated debt securities, to maintain paying agencies and to
hold monies for payment in trust (we will refer to this discharge as
"defeasance"), or
. to be released from our obligations to comply with some restrictive
covenants applicable to the debt securities of any series (we will refer
to this release as "covenant defeasance");
in either case upon the deposit with the trustee, or other qualifying trustee,
in trust, of money and/or U.S. government obligations which will provide money
sufficient to pay all principal of and any premium and interest on the debt
securities of that series when due. We may establish such a trust only if,
among other things, we have received an opinion of counsel to the effect that
the holders of debt securities of the series (a) will not recognize income,
gain or loss for federal income tax purposes as a result of the deposit,
defeasance or covenant defeasance and (b) will be subject to federal income tax
on the same amounts, and in the same manner and at the same times as would have
been the case if the deposit, defeasance or covenant defeasance had not
occurred. The opinion, in the case of defeasance under the first bullet point
above, must refer to and be based upon a ruling of the Internal Revenue Service
or a change in applicable federal income tax laws occurring after the date of
the relevant indenture.
We may exercise the defeasance option with respect to debt securities
notwithstanding our prior exercise of the covenant defeasance option. If we
exercise the defeasance option, payment of the debt securities may not be
accelerated because of a default. If we exercise the covenant defeasance
option, payment of the debt securities may not be accelerated by reason of a
default with respect to the covenants to which covenant defeasance is
48
applicable. However, if the acceleration were to occur by reason of another
default, the realizable value at the acceleration date of the money and U.S.
government obligations in the defeasance trust could be less than the principal
and interest then due on the debt securities, in that the required deposit in
the defeasance trust is based upon scheduled cash flow rather than market
value, which will vary depending upon interest rates and other factors.
Conversion Rights
The terms and conditions, if any, on which debt securities being offered are
convertible into common stock or other of our securities will be set forth in
an applicable prospectus supplement. Those terms will include the conversion
price, the conversion period, provisions as to whether conversion will be at
the option of the holder or us, the events requiring an adjustment of the
conversion price and provisions affecting conversion in the event that the debt
securities are redeemed.
Regarding The Trustee
Wilmington Trust Company will serve as the senior debt indenture trustee and
as the subordinated debt indenture trustee.
Each indenture contains limitations on the rights of the trustee, should the
trustee become our creditor, to obtain payment of claims in some cases, or to
realize on specified property received in respect of these claims, as security
or otherwise. The trustee and its affiliates engage in, and will be permitted
to continue to engage in, other transactions with us and our affiliates,
provided, however, that if it acquires any conflicting interest as described
under the Trust Indenture Act of 1939, it must eliminate the conflict or resign.
DESCRIPTION OF GUARANTEES
Certain of the direct and indirect wholly-owned subsidiaries of Radio One
may guarantee the obligations of Radio One relating to its debt securities
issued under this prospectus.
The specific terms and provisions of each guarantee, including any
provisions relating to the subordination of any guarantee, will be described in
the applicable prospectus supplement. The obligations of each guarantor under
its guarantee will be limited as necessary to seek to prevent that guarantee
from constituting a fraudulent conveyance or fraudulent transfer under
applicable federal or state law.
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DESCRIPTION OF JUNIOR SUBORDINATED DEBENTURES
General
The junior subordinated debentures will be issued from time to time in one
or more series under a junior subordinated debenture indenture, as
supplemented, between Radio One and Wilmington Trust Company, as the debenture
trustee or another junior subordinated debenture trustee named in a prospectus
supplement. The junior subordinated debenture indenture will be qualified under
the Trust Indenture Act, and will be subject to, and governed by, the Trust
Indenture Act and is included as an exhibit to the registration statement of
which this prospectus is a part. This summary of certain terms and provisions
of the junior subordinated debentures and the junior subordinated debenture
indenture does not purport to be complete and is subject to, and is qualified
in its entirety by reference to, all of the provisions of such junior
subordinated debentures and the junior subordinated debenture indenture,
including the definitions therein of certain terms, and those terms made a part
of the junior subordinated debenture indenture by the Trust Indenture Act.
The prospectus supplement will describe the specific terms of each series of
junior subordinated debentures offered thereby, including:
. the specific title and designation, aggregate principal amount,
including any limit on the principal amount, purchase price and
denominations of those junior subordinated debentures;
. the date or dates on which the junior subordinated debentures will
mature, the principal of those junior subordinated debentures is payable
or the method of determining the same, if applicable;
. the rate or rates, which may be fixed or variable, at which those junior
subordinated debentures will bear interest, if any, or the method of
determining the same, if applicable;
. whether the interest on those junior subordinated debentures will be
paid in the form of additional junior subordinated debentures and if so,
the terms and provisions for the payment of those additional junior
subordinated debentures, including the method for calculating the amount
of additional junior subordinated debentures so payable;
. the date or dates from which interest, if any, shall accrue or the
method of determining the same, if applicable, the interest payment
dates, if any, on which interest will be payable or the manner of
determining the same, if applicable, and the record dates for the
determination of holders to whom interest is payable on those junior
subordinated debentures;
. the duration of the maximum consecutive period that Radio One may elect
to defer payments of interest on those junior subordinated debentures;
. the terms of any mandatory or optional redemption, including any
provisions for any sinking, purchase or other similar funds, or
repayment or purchase options;
. if other than U.S. dollars, the currency, currencies or currency units
in which the principal of and premium and interest, if any, on the
junior subordinated debentures of the series may be denominated or
payable;
. if the currency, currencies or currency units for which the junior
subordinated debentures may be purchased or in which the principal, any
premium and any interest may be payable is at Radio One's election or
the purchaser's election, the manner in which the election may be made;
. if the amount of payments on the junior subordinated debentures is
determined by an index or indices based on one or more currencies or
currency units, changes in the price of one or more securities or
changes in the price of one more commodities, the manner in which the
amounts may be determined;
. the extent to which any of the junior subordinated debentures will be
issuable in a temporary or permanent global form, or the manner in which
any interest payable on a temporary or permanent global security will be
paid, including, in any such case, the respective depositaries for the
temporary or permanent global securities and the form of any legend or
legends which will be borne by any global security, if applicable;
50
. the appointment of any paying agent or agents for the junior
subordinated debentures of the series;
. whether those junior subordinated debentures are convertible into or
exchangeable for class D common stock, preferred stock, indebtedness, or
other securities or rights of Radio One or other issuers, or a
combination of the foregoing and, if so, the applicable conversion or
exchange terms and conditions;
. information with respect to book-entry procedures, if any;
. a discussion of the United States federal income tax, accounting and
other special considerations, procedures and limitations with respect to
the junior subordinated debentures; and
. any other specific terms pertaining to those junior subordinated
debentures, whether in addition to, or by modification or deletion of,
the terms described herein.
Ranking
Unless otherwise stated in the applicable prospectus supplement, each series
of junior subordinated debentures will rank equally with all other series of
junior subordinated debentures to be issued by Radio One and sold to other
trusts or other entities to be established by Radio One that are similar to the
Radio One Trusts and will be unsecured and will rank subordinate and junior in
right of payment, to the extent and in the manner set forth in the junior
subordinated debenture indenture, to all senior indebtedness of Radio One as
defined in the junior subordinated debenture indenture. The junior subordinated
debenture indenture will not limit the amount of secured or unsecured debt,
including senior indebtedness, that may be incurred by Radio One or its
subsidiaries. See "Subordination."
Form, Registration and Transfer
The junior subordinated debentures will be issued in fully registered form.
Until any dissolution of the applicable Radio One Trust, the junior
subordinated debentures will be held in the name of the property trustee in
trust for the benefit of the holders of the related trust securities. If the
junior subordinated debentures are distributed to the holders of the related
trust securities, the junior subordinated debentures will be issued to such
holders in the same form as the trust securities were held. Accordingly, any
depositary arrangements for such junior subordinated debentures are expected to
be substantially similar to those in effect for the trust preferred securities.
See "Description of Trust Preferred Securities--Global Trust Preferred
Securities."
Payment and Paying Agents
Unless otherwise indicated in the applicable prospectus supplement, payment
of principal of and premium and interest, if any, on the junior subordinated
debentures will be made at the office of the debenture trustee in Wilmington,
Delaware, or at the office of such paying agent or paying agents as Radio One
may designate from time to time, except that at the option of Radio One payment
of any interest may be made, except in the case of a global security
representing junior subordinated debentures, by:
1. check mailed to the address of the person entitled thereto as such
address shall appear in the applicable securities register for junior
subordinated debentures; or
2. transfer to an account maintained by the person entitled thereto as
specified in such securities register, provided that proper transfer
instructions have been received by the relevant record date.
Payment of any interest on any junior subordinated debenture will be made to
the person in whose name such junior subordinated debenture is registered at
the close of business on the record date for such interest, except in the case
of defaulted interest. Radio One may at any time designate additional paying
agents or rescind the designation of any paying agent; provided, however, Radio
One will at all times be required to maintain a paying agent in each place of
payment for the junior subordinated debentures.
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Any moneys deposited with the debenture trustee or any paying agent, or then
held by Radio One in trust, for the payment of the principal of or premium or
interest, if any, on any junior subordinated debentures and remaining unclaimed
for two years after such principal or premium or interest, if any, has become
due and payable shall, at the request of Radio One, be repaid to Radio One and
the holder of such junior subordinated debentures shall thereafter look, as a
general unsecured creditor, only to Radio One for payment thereof.
Option to Extend Interest Payment Date
So long as no debenture event of default has occurred and is continuing,
Radio One will have the right under the junior subordinated debenture indenture
to defer the payment of interest, if any, on the junior subordinated debentures
at any time or from time to time up to the maximum period specified in the
applicable prospectus supplement for the deferral of interest. Each of these
deferral periods is referred to in this prospectus as an extension period. An
extension period must end on an interest payment date and may not extend beyond
the stated maturity of such junior subordinated debentures. At the end of an
extension period, Radio One must pay all interest then accrued and unpaid,
together with interest on the accrued and unpaid interest, to the extent
permitted by applicable law. During an extension period, interest will continue
to accrue on the junior subordinated debentures, compounded on the same
periodic basis upon which interest otherwise accrues and deferred interest
payments will accrue additional interest. No interest will be due and payable
on the junior subordinated debentures until the end of the extension period
except upon a redemption of the junior subordinated debentures during an
extension period. Holders of junior subordinated debentures and holders of the
related trust securities that are outstanding may be required to accrue such
deferred interest income for United States federal income tax purposes prior to
the receipt of cash attributable to such income, regardless of the method of
accounting used by the holders.
Prior to the termination of any extension period, Radio One may extend such
extension period, provided that such extension does not:
. cause such extension period to exceed the maximum extension period;
. end on a date other than an interest payment date; or
. extend beyond the stated maturity of the related junior subordinated
debentures.
Upon the termination of any extension period, or any extension of the
related extension period, and the payment of all amounts then due, Radio One
may begin a new extension period, subject to the limitations described above.
No interest shall be due and payable during an extension period except at the
end thereof. Radio One must give the debenture trustee notice of its election
to begin or extend an extension period at least five business days prior to the
earlier of:
. the date cash distributions on the related trust securities would have
been payable except for the election to begin or extend such extension
period; or
. the date the applicable Radio One Trust is required to give notice to
any securities exchange or to holders of its trust preferred securities
of the record date or the date cash distributions are payable, but in
any event not less than five business days prior to such record date.
The debenture trustee shall give notice of Radio One's election to begin or
extend an extension period to the holders of the trust preferred securities.
Subject to the foregoing limitations, there is no limitation on the number of
times that Radio One may begin or extend an extension period.
Restrictions on Certain Payments
Radio One will covenant that if at any time:
1. there shall have occurred any event of which Radio One has actual
knowledge that is, or with the giving of notice or the lapse of time, or
both, would be, a debenture event of default;
52
2. Radio One shall be in default with respect to any of its payment
obligations under the preferred securities guarantee; or
3. Radio One shall have given notice of its election to exercise its right
to begin or extend an extension period as provided in the junior
subordinated debenture indenture and shall not have rescinded such
notice, and such extension period, or any extension thereof, shall have
commenced and be continuing,
then it will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of Radio
One's capital stock; or
. make any payment of principal of or premium or interest, if any, on or
repay, repurchase or redeem any debt securities of Radio One, including
other junior subordinated debentures, that rank equally with or junior
in right of payment to the junior subordinated debentures; or
. make any guarantee payments with respect to any guarantee by Radio One
of the debt securities of any subsidiary of Radio One, including under
any guarantees to be issued by Radio One with respect to securities of
other Radio One trusts or entities to be established by Radio One
similar to the Radio One Trusts, if such guarantee ranks equally with or
junior in right of payment to the junior subordinated debentures
other than:
. dividends, redemptions, purchases, acquisitions, distributions or
payments made by Radio One by way of issuance of shares of, or options,
warrants or rights to subscribe for, its class A or class D common stock;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
. payments under the preferred securities guarantee;
. as a result of reclassification of Radio One's capital stock or the
exchange or conversion of one class or series of Radio One's capital
stock for another class or series of Radio One's capital stock;
. the purchase of fractional interests in shares of Radio One's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
. purchases of class A or class D common stock related to the issuance of
class A or class D common stock or rights under any of Radio One's
benefit plans for its directors, officers or employees or any of Radio
One's dividend reinvestment or stockholder stock purchase plans.
So long as the trust securities remain outstanding, Radio One also will
covenant:
. to maintain 100% direct or indirect ownership of the related trust
common securities, provided that any permitted successor of Radio One
under the junior subordinated debenture indenture may succeed to Radio
One's ownership of such trust common securities;
. to use its best efforts to cause each Radio One Trust:
. to remain a business trust, except in connection with the
distribution of junior subordinated debentures to the holders of
related trust securities in liquidation of such Radio One Trust, the
conversion, exchange or redemption of all of such trust securities,
or certain mergers, consolidations or amalgamations, each as
permitted by the trust agreement;
53
. to otherwise continue to be classified as a grantor trust for United
States federal income tax purposes;
. to use its reasonable best efforts to cause each holder of its trust
securities to be treated as owning an undivided beneficial interest
in the related junior subordinated debentures; and
. not to cause, as sponsor of the Radio One Trusts, or to permit, as
the trust common securities holder, the dissolution, liquidation or
winding-up of any Radio One Trust, except as provided in the trust
agreement.
Modification of Junior Subordinated Debenture Indenture
From time to time, Radio One and the debenture trustee may, without the
consent of the holders of the junior subordinated debentures, amend, waive or
supplement the junior subordinated debenture indenture for specified purposes,
including, among other things, curing ambiguities or adding provisions,
provided that any such action does not adversely affect the interests of the
holders of the junior subordinated debentures in any material respect, and
maintaining the qualification of the junior subordinated debenture indenture
under the Trust Indenture Act. The junior subordinated debenture indenture will
permit Radio One and the debenture trustee, with the consent of the holders of
a majority in principal amount of all outstanding junior subordinated
debentures affected thereby, to modify the junior subordinated debenture
indenture in a manner affecting the rights of the holders of junior
subordinated debentures; provided, however, that no such modification may,
without the consent of the holder of each outstanding junior subordinated
debenture so affected:
. change the stated maturity or reduce the principal amount of any such
junior subordinated debentures;
. change the interest rate, or the manner of calculation of the interest
rate, or extend the time of payment of interest on any such junior
subordinated debentures except pursuant to Radio One's right under the
junior subordinated debenture indenture to defer the payment of interest
as provided therein (see "--Option to Extend Interest Payment Date");
. change any of the conversion, exchange or redemption provisions
applicable to any such junior subordinated debentures;
. change the currency in respect of which payments of principal of or any
premium or interest on any such junior subordinated debentures are to be
made;
. change the right of holders of trust securities to bring a direct action
in respect of any required payments or conversion or exchange rights;
. impair or affect the right of any holder of any such junior subordinated
debentures to institute suit for the payment of the principal thereof or
premium or interest, if any, thereon or for the conversion or exchange
of any such junior subordinated debentures in accordance with their
terms;
. change the subordination provisions adversely to the holders of the
junior subordinated debentures; or
. reduce the percentage of principal amount of junior subordinated
debentures the holders of which are required to consent to any such
modification of the junior subordinated debenture indenture.
Debenture Events of Default
The following described events with respect to any series of junior
subordinated debentures will constitute a debenture event of default, whatever
the reason for such debenture event of default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body, unless such event is specifically deleted
or modified in or pursuant to the supplemental indenture, board resolution or
officer's certificate establishing the terms of such series pursuant to the
junior subordinated debenture indenture:
54
1. failure for 30 days to pay any interest on that series of junior
subordinated debentures when due, subject to any permitted deferral
thereof; provided that, during any extension period for such series of
junior subordinated debentures, failure to pay interest on such series
of junior subordinated debentures shall not constitute a debenture event
of default; or
2. failure to pay any principal of or premium, if any, on that series of
junior subordinated debentures when due, whether at maturity, upon any
redemption, by declaration of acceleration of maturity or otherwise; or
3. if applicable, failure by Radio One to deliver the required securities
or other rights upon an appropriate conversion or exchange election by
holders of that series of junior subordinated debentures or the related
trust preferred securities; or
4. failure to observe or perform any other agreement or covenant contained
in the junior subordinated debenture indenture in respect of that series
of junior subordinated debentures for 90 days after written notice to
Radio One from the debenture trustee or, if that series of junior
subordinated debentures is held by a Radio One Trust, from the holders
of at least 25% in aggregate liquidation amount of that series of the
outstanding trust preferred securities; or
5. certain events in bankruptcy, insolvency or reorganization of Radio One.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures of any series have, subject to certain
exceptions, the right to direct the time, method and place of conducting any
proceeding for any remedy available to the debenture trustee in respect of such
junior subordinated debentures. The debenture trustee or the holders of at
least 25% in aggregate outstanding principal amount of the junior subordinated
debentures of any series may declare the principal of and any accrued interest
on such junior subordinated debentures due and payable immediately upon a
debenture event of default, other than a debenture event of default referred to
in paragraph (5) above, which shall result in the immediate acceleration of the
junior subordinated debentures. The holders of a majority in aggregate
outstanding principal amount of the junior subordinated debentures of any
series may annul such declaration and waive the default in respect of such
junior subordinated debentures if the default, other than the non-payment of
the principal and interest of the junior subordinated debentures which has
become due solely by such acceleration, has been cured and a sum sufficient to
pay all matured installments of interest and premium, if any, and principal due
otherwise than by acceleration has been deposited with the debenture trustee.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures of any series may, on behalf of the holders of
all of the junior subordinated debentures of such series, waive any past
default except:
. a default in the payment of the principal of or premium or interest, if
any, on the junior subordinated debentures, unless such default has been
cured and a sum sufficient to pay all matured installments of interest
and premium, if any, and principal due otherwise than by acceleration
has been deposited with the debenture trustee; or
. a default in respect of a covenant or provision which under the junior
subordinated debenture indenture cannot be modified or amended without
the consent of the holder of each outstanding junior subordinated
debenture of such series.
Enforcement of Certain Rights by Holders of Trust Preferred Securities
To the extent any action under the junior subordinated debenture indenture
is entitled to be taken by the holders of at least a specified percentage of
junior subordinated debentures, holders of the corresponding trust preferred
securities may take such action if such action is not taken by the property
trustee of the related Radio One Trust. Notwithstanding the foregoing, if a
debenture event of default has occurred and is continuing and is attributable
either to:
. the failure of Radio One to pay the principal of or premium or interest,
if any, on the junior subordinated debentures on the due date; or
55
. the failure by Radio One to deliver the required securities or other
rights upon an appropriate conversion or exchange right election,
a holder of the related trust preferred securities may institute a legal
proceeding directly against Radio One for enforcement of payment to such holder
of the principal of or premium or interest, if any, on such junior subordinated
debentures having a principal amount equal to the liquidation amount of the
trust preferred securities held by such holder or for enforcement of such
conversion or exchange rights, as the case may be, which is referred to as a
direct action. Radio One may not amend the junior subordinated debenture
indenture to remove the foregoing right to bring a direct action without the
prior written consent of the holders of all of the trust preferred securities
outstanding. If the right to bring a direct action is removed, the applicable
Radio One Trust may become subject to the reporting obligations under the
Exchange Act. Notwithstanding any payments made to a holder of trust preferred
securities by Radio One in connection with a direct action, Radio One shall
remain obligated to pay the principal of and premium and interest, if any, on
the related junior subordinated debentures, and Radio One shall be subrogated
to the rights of the holder of such trust preferred securities with respect to
payments on the trust preferred securities to the extent of any payments made
by Radio One to such holder in any direct action.
The holders of the trust preferred securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the related junior subordinated debentures unless
an event of default has occurred and is continuing under the applicable trust
agreement. See "Description of Trust Preferred Securities--Events of Default;
Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
Radio One shall not consolidate with or merge into any other person or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any person, and no person shall consolidate
with or merge into Radio One or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to Radio One, unless:
. in case Radio One consolidates with or merges into another person or
conveys or transfers its properties and assets as an entirety or
substantially as an entirety to any person, the successor person is
organized under the laws of the United States or any State or the
District of Columbia, and such successor person expressly assumes Radio
One's obligations under the junior subordinated debentures and the
preferred securities guarantee;
. immediately after giving effect thereto, no debenture event of default,
and no event which, after notice or lapse of time or both, would become
a debenture event of default, shall have occurred and be continuing; and
. certain other conditions as prescribed in the junior subordinated
debenture indenture are met.
Satisfaction and Discharge
The junior subordinated debenture indenture will cease to be of further
effect, except as to Radio One's obligations to pay all other sums due pursuant
to the junior subordinated debenture indenture and to provide the required
officers' certificates and opinions of counsel, and Radio One will be deemed to
have satisfied and discharged the junior subordinated debenture indenture,
when, among other things, all junior subordinated debentures not previously
delivered to the debenture trustee for cancellation:
. have become due and payable;
. will become due and payable at maturity or upon redemption within one
year; or
56
. if redeemable at the option of Radio One, are to be called for
redemption within one year under arrangements satisfactory to the
debenture trustee for the giving of notice of redemption by the
debenture trustee in the name, and at the expense, of Radio One;
and Radio One deposits or causes to be deposited with the debenture trustee
funds, in trust, for the purpose and in an amount sufficient to pay and
discharge the entire indebtedness on the junior subordinated debentures not
previously delivered to the debenture trustee for cancellation, for the
principal, and premium and interest, if any, to the date of the deposit or to
the stated maturity thereof, as the case may be.
Subordination
The junior subordinated debentures will rank subordinate and junior in right
of payment to all senior indebtedness to the extent provided in the junior
subordinated debenture indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors, marshaling of assets or any
bankruptcy, insolvency, debt restructuring or similar proceedings in connection
with any insolvency or bankruptcy proceeding of Radio One, the holders of
senior indebtedness will first be entitled to receive payment in full of such
senior indebtedness before the holders of junior subordinated debentures will
be entitled to receive or retain any payment in respect thereof.
In the event of the acceleration of the maturity of junior subordinated
debentures, the holders of all senior indebtedness outstanding at the time of
such acceleration will first be entitled to receive payment in full of such
senior indebtedness before the holders of junior subordinated debentures will
be entitled to receive or retain any payment in respect of the junior
subordinated debentures.
No payments on account of principal or premium or interest, if any, in
respect of the junior subordinated debentures may be made if there shall have
occurred and be continuing a default in any payment with respect to senior
indebtedness, or an event of default with respect to any senior indebtedness
resulting in the acceleration of the maturity thereof, or if any judicial
proceeding shall be pending with respect to any such default.
Indebtedness, under the junior subordinated debentures indenture, shall mean:
1. every obligation of Radio One for money borrowed;
2. every obligation of Radio One evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses;
3. every reimbursement obligation of Radio One with respect to letters of
credit, banker's acceptances or similar facilities issued for the
account of Radio One;
4. every obligation of Radio One issued or assumed as the deferred purchase
price of property or services, excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business;
5. every capital lease obligation of Radio One which generally accepted
accounting principles require to be classified and accounted for as a
capital lease on Radio One's balance sheet;
6. all indebtedness of Radio One, whether incurred on or prior to the date
of the junior subordinated debenture indenture or thereafter incurred,
for claims in respect of derivative products, including interest rate,
foreign exchange rate and commodity forward contracts, options and swaps
and similar arrangements;
7. letters of credit, performance bonds and similar obligations issued in
favor of governmental or licensing authorities as a term of a
governmental franchise, license, permit or authorization held by such
entity or any of its subsidiaries;
57
8. every obligation of the type referred to in paragraphs (1) through (7)
of another person and all dividends of another person the payment of
which, in either case, Radio One has guaranteed or is responsible or
liable for, directly or indirectly, as obligor or otherwise; and
9. obligations of the type referred to in paragraphs (1) through (8) of
another person secured by any lien on any property or asset of Radio
One, whether or not such obligation is assumed by Radio One; and all
deferrals, renewals, extensions and refundings of, and amendments,
modifications and supplements to, any of the foregoing obligations.
Indebtedness ranking on a parity with the junior subordinated debentures
shall mean:
1. Indebtedness, whether outstanding on the date of execution of the junior
subordinated debenture indenture or thereafter created, assumed or
incurred, to the extent such Indebtedness specifically by its terms
ranks equally with and not prior to the junior subordinated debentures
in the right of payment upon the happening of the dissolution,
winding-up, liquidation or reorganization of Radio One; and
2. all other debt securities, and guarantees in respect of those debt
securities, issued to any other trust, or a trustee of such trust,
partnership or other entity affiliated with Radio One that is a
financing vehicle of Radio One, which is referred to as a financing
entity, in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by Radio One pursuant
to an instrument that ranks equally with or junior in right of payment
to the preferred securities guarantee. The securing of any Indebtedness
otherwise constituting indebtedness ranking on a parity with the junior
subordinated debentures shall not prevent such Indebtedness from
constituting indebtedness ranking on a parity with the junior
subordinated debentures.
Indebtedness ranking junior to the junior subordinated debentures shall mean
any Indebtedness, whether outstanding on the date of execution of the junior
subordinated debenture indenture or thereafter created, assumed or incurred, to
the extent such Indebtedness by its terms ranks junior to and not equally with
or prior to:
. the junior subordinated debentures; and
. any other Indebtedness ranking equally with the junior subordinated
debentures in right of payment upon the happening of the dissolution,
winding-up, liquidation or reorganization of Radio One.
The securing of any Indebtedness otherwise constituting indebtedness ranking
junior to the junior subordinated debentures shall not be deemed to prevent
such Indebtedness from constituting Indebtedness ranking junior to the junior
subordinated debentures.
Senior indebtedness shall mean all Indebtedness, whether outstanding on the
date of execution of the junior subordinated debenture indenture or thereafter
created, assumed or incurred, except indebtedness ranking on a parity with the
junior subordinated debentures or indebtedness ranking junior to the junior
subordinated debentures.
Governing Law
The junior subordinated debenture indenture and the junior subordinated
debentures will be governed by and construed in accordance with the laws of the
State of Delaware.
Information Concerning the Debenture Trustee
The debenture trustee shall be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to the foregoing, the debenture trustee will not be
under any obligation to exercise any of the powers vested in it by the junior
subordinated debenture indenture at the request of any holder of junior
subordinated debentures, unless offered reasonable indemnity by such holder
against the costs, expenses and liabilities which might be incurred thereby.
The debenture trustee will not be required to expend or risk its own funds or
otherwise incur personal financial liability in the performance of its duties
if the debenture trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
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DESCRIPTION OF TRUST PREFERRED SECURITIES
The trust preferred securities will be issued by a Radio One Trust under a
trust agreement of such Radio One Trust and will represent preferred beneficial
interests in the assets of such Radio One Trust. The holders of such beneficial
interests will be entitled to a preference over the trust common securities of
such Radio One Trust with respect to the payment of distributions and amounts
payable on redemption of the trust preferred securities or the liquidation of
such Radio One Trust under the circumstances described under "Subordination of
Trust Common Securities." The trust agreement will be qualified under the Trust
Indenture Act and will be subject to, and governed by, the Trust Indenture Act.
This summary of certain terms and provisions of the trust preferred securities
and the trust agreement does not purport to be complete and is subject to, and
is qualified in its entirety by reference to, all of the provisions of the
trust preferred securities and such trust agreement, including the definitions
therein of certain terms, and those made a part of such trust agreement by the
Trust Indenture Act.
Reference is made to the applicable prospectus supplement for a description
of the specific terms of the trust preferred securities offered thereby,
including:
. the particular Radio One Trust issuing such trust preferred securities;
. the specific designation, number and purchase price of such trust
preferred securities;
. the annual distribution rate, or method of calculation of the
distribution rate, for such trust preferred securities and, if
applicable, the dates from which and upon which such distributions shall
accumulate and be payable and the record dates therefor, and the maximum
extension period for which such distributions may be deferred;
. the liquidation amount per trust preferred security which shall be paid
out of the assets of such Radio One Trust to the holders thereof upon
voluntary or involuntary dissolution, winding-up and liquidation of such
Radio One Trust;
. the obligation or right, if any, of such Radio One Trust to purchase or
redeem its trust preferred securities and the price or prices at which,
the date or dates on which or period or periods within which and the
terms and conditions upon which, such trust preferred securities shall
or may be purchased or redeemed, in whole or in part, pursuant to such
obligation or right;
. the terms and conditions, if any, upon which such trust preferred
securities may be converted or exchanged, in addition to the
circumstances described herein, into other securities or rights, or a
combination of the foregoing, including the name of the issuer of such
securities or rights, the initial conversion or exchange price or rate
per trust preferred security and the date or dates on which or period or
periods within which such conversion or exchange may be effected;
. the voting rights, if any, of such trust preferred securities issued by
the Radio One Trust in addition to those required by law, including the
number of votes per trust preferred security and any requirement for the
approval by the holders of such trust preferred securities, or of trust
preferred securities issued by one or more Radio One Trusts, or of both,
as a condition to specified actions or amendments to the trust agreement
of the Radio One Trust;
. if applicable, any securities exchange upon which such trust preferred
securities shall be listed;
. whether such trust preferred securities are issuable in book-entry form
only and, if so, the identity of the depositary and disclosure relating
to the depositary arrangements; and
. any other rights, preferences, privileges, limitations or restrictions
of such trust preferred securities consistent with the trust agreement
or with law which may differ from those described in this prospectus,
whether in addition to, or by modification or deletion of, the terms
described herein.
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Certain material United States federal income tax considerations applicable
to any offering of trust preferred securities will also be described in the
applicable prospectus supplement.
General
The trust preferred securities of a Radio One Trust will rank equally, and
payments will be made thereon pro rata, with the trust common securities of
that Radio One Trust except as described under --"Subordination of Trust Common
Securities." The proceeds from the sale of trust preferred securities and trust
common securities by a Radio One Trust will be used by such Radio One Trust to
purchase an aggregate principal amount of junior subordinated debentures or
other debt securities of Radio One equal to the aggregate liquidation amount of
such trust preferred securities and trust common securities. Legal title to
such junior subordinated debentures will be held by the property trustee of the
Radio One Trust for the benefit of the Radio One Trust and the holders of the
related trust securities. In addition, Radio One will execute a preferred
securities guarantee for the benefit of the holders of the related trust
preferred securities. The preferred securities guarantee will not guarantee
payment of distributions or amounts payable on redemption of the trust
preferred securities or liquidation of a Radio One Trust when such Radio One
Trust does not have funds legally available for the payment thereof. See
"Description of Preferred Securities Guarantees."
The revenue of a Radio One Trust available for distribution to holders of
its trust preferred securities will be limited to payments received under the
related junior subordinated debentures which such Radio One Trust purchased
with the proceeds from the sale of its trust securities. If Radio One fails to
make a required payment in respect of such junior subordinated debentures, the
applicable Radio One Trust will not have sufficient funds to make the related
payments, including distributions, in respect of its trust preferred
securities. Each of the Radio One Trusts is a separate legal entity, and the
assets of one are not available to satisfy the obligations of the other.
Deferral of Distributions
So long as no debenture event of default has occurred and is continuing,
Radio One will have the right to defer the payment of interest on the junior
subordinated debentures at any time or from time to time for up to the maximum
extension period specified in the applicable prospectus supplement, provided
that an extension period must end on an interest payment date and may not
extend beyond the stated maturity of such junior subordinated debentures. If
Radio One elects to exercise such right, distributions on the related trust
preferred securities will be deferred during any such extension period.
Distributions to which holders of the trust preferred securities are entitled
during any extension period will continue to accumulate additional
distributions thereon. Radio One has no current intention to exercise its right
to defer payments of interest on the junior subordinated debentures Radio One
may issue and, accordingly, distributions on the related trust preferred
securities.
Redemption
Upon the repayment at the stated maturity or redemption, in whole or in
part, prior to the stated maturity of the junior subordinated debentures, the
proceeds from such repayment or redemption shall be applied by the property
trustee to redeem an aggregate liquidation amount of the related trust
securities equal to the aggregate principal amount of such junior subordinated
debentures so repaid or redeemed, upon not less than 30 nor more than 60 days
prior written notice, at a redemption price equal to such aggregate liquidation
amount plus accumulated distributions to the redemption date. Any redemption of
trust securities shall be made and the applicable redemption price shall be
payable on the redemption date only to the extent that the applicable Radio One
Trust has funds legally available for the payment thereof. See "--Subordination
of Trust Common Securities."
If less than all of the junior subordinated debentures are to be redeemed
prior to the stated maturity thereof, then the proceeds of such redemption
shall be used to redeem the related trust securities on a pro rata basis among
the trust preferred securities and the trust common securities of the
applicable Radio One Trust except as described under "--Subordination of Trust
Common Securities." If less than all of the trust preferred securities held in
book-entry form, if any, are to be redeemed, such trust preferred securities
will be redeemed in accordance with the procedures of The Depository Trust
Company. See "--Global Trust Preferred Securities."
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Redemption Procedures
If a Radio One Trust gives a notice of redemption in respect of its trust
preferred securities, then, by 12:00 noon, New York City time, on the
redemption date, to the extent funds are legally available,
. with respect to trust preferred securities held by The Depository Trust
Company or its nominee, the property trustee will deposit, or cause the
paying agent to deposit, irrevocably with The Depository Trust Company
funds sufficient to pay the applicable redemption price, and
. with respect to trust preferred securities held in certificated form,
the property trustee will pay the applicable redemption price to the
holders thereof.
If notice of redemption shall have been given and funds irrevocably
deposited as required, then, upon the date of such deposit, all rights of the
holders of the trust preferred securities called for redemption will cease,
except the right of such holders to receive the applicable redemption price,
but without interest thereon, and such trust preferred securities will cease to
be outstanding. In the event that any redemption date is not a business day,
then the applicable redemption price payable on that date will be paid on the
next succeeding day that is a business day, without any interest or other
payment in respect of any delay, with the same force and effect as if made on
that date. In the event that payment of the applicable redemption price is
improperly withheld or refused and not paid either by the applicable Radio One
Trust or by Radio One pursuant to the preferred securities guarantee as
described under "Description of Preferred Securities Guarantees,"
. distributions on the related trust preferred securities will continue to
accumulate from the redemption date originally established by such Radio
One Trust to the date such applicable redemption price is actually paid;
and
. the actual payment date will be the redemption date for purposes of
calculating the applicable redemption price.
Subject to applicable law, including, without limitation, United States
federal securities law, Radio One or its subsidiaries may at any time and from
time to time purchase outstanding trust preferred securities by tender, in the
open market or by private agreement.
Liquidation of a Radio One Trust and Distribution of Junior Subordinated
Debentures
Radio One will have the right at any time to dissolve a Radio One Trust and
cause the related junior subordinated debentures to be distributed to the
holders of the trust securities of such Radio One Trust in liquidation of such
Radio One Trust after satisfaction, or reasonable provision for satisfaction,
of liabilities to creditors of such Radio One Trust as required by applicable
law. Such right is subject to the administrative trustees of such Radio One
Trust having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of the trust preferred
securities of such Radio One Trust.
The applicable Radio One Trust shall automatically dissolve upon the first
to occur of:
1. certain events of bankruptcy, dissolution or liquidation of Radio One;
2. the distribution of the related junior subordinated debentures to the
holders of the trust securities of such Radio One Trust, if Radio One,
as sponsor, has given written direction to the property trustee to
dissolve such Radio One Trust, which direction is optional and, except
as described above, wholly within the discretion of Radio One, as
sponsor;
3. the redemption of all of the trust securities of such Radio One Trust;
4. expiration of the term of such Radio One Trust; and
5. the entry of an order for the dissolution of such Radio One Trust by a
court of competent jurisdiction.
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If a dissolution occurs as described in paragraph (1), (2), (4) or (5)
above, the applicable Radio One Trust shall be liquidated by the trustees as
expeditiously as the trustees determine to be possible by distributing, after
satisfaction, or reasonable provision for satisfaction, of liabilities to
creditors of such Radio One Trust as provided by applicable law, to the holders
of the trust securities and the related junior subordinated debentures, unless
such distribution is determined by the property trustee not to be practicable,
in which event such holders will be entitled to receive out of the assets of
such Radio One Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of such Radio One Trust as provided by
applicable law, distributing an amount equal to the aggregate of the
liquidation amount per trust security specified in the applicable prospectus
supplement plus accumulated distributions thereon to the date of payment. If
the liquidation distribution can be paid only in part because the applicable
Radio One Trust has insufficient assets legally available to pay in full the
aggregate liquidation distribution, then the amounts payable directly by such
Radio One Trust on its trust securities shall be paid on a pro rata basis,
except that if a debenture event of default has occurred and is continuing, the
trust preferred securities of such Radio One Trust shall have a priority over
the trust common securities of such Radio One Trust in respect of such amounts.
See "--Subordination of Trust Common Securities."
After a date is fixed for any distribution of junior subordinated debentures
to holders of the related trust securities:
. such trust securities will no longer be deemed to be outstanding;
. each registered global certificate, if any, representing such trust
securities will be exchanged for a registered global certificate
representing the junior subordinated debentures to be delivered upon
such distribution; and
. any trust securities in certificated form will be deemed to represent
junior subordinated debentures having a principal amount equal to the
liquidation amount of such trust securities, and bearing accrued
interest in an amount equal to the accumulated distributions on such
trust securities until such certificates are presented to the
administrative trustees or their agent for cancellation, whereupon
Radio One will issue to such holder, and the debenture trustee will
authenticate, junior subordinated debentures in certificated form.
There can be no assurance as to the market prices for the trust preferred
securities or the junior subordinated debentures that may be distributed in
exchange for such trust preferred securities if a dissolution and liquidation
of the applicable Radio One Trust were to occur. Accordingly, the trust
preferred securities that an investor may purchase, or the junior subordinated
debentures that the investor may receive on dissolution and liquidation of the
applicable Radio One Trust, may trade at a discount to the price that the
investor paid to purchase such trust preferred securities.
Subordination of Trust Common Securities
Payment of distributions on, and the applicable redemption price of, trust
securities shall be made pro rata among the trust preferred securities and the
trust common securities of the applicable Radio One Trust based on their
respective liquidation amounts; provided, however, that if on any distribution
date or redemption date a debenture event of default has occurred and is
continuing, no payment of any distribution on, or applicable redemption price
of, any of the trust common securities of the applicable Radio One Trust, and
no other payment on account of the redemption, liquidation or other acquisition
of such trust common securities, shall be made unless payment in full in cash
of all accumulated distributions on all of the outstanding trust preferred
securities of such Radio One Trust for all distribution periods terminating on
or prior thereto, or in the case of payment of the applicable redemption price,
the full amount of such redemption price, shall have been made or provided for,
and all funds available to the property trustee shall first be applied to the
payment in full in cash of all distributions on, or applicable redemption price
of, such trust preferred securities then due and payable.
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Upon the occurrence and continuance of an event of default under the trust
agreement, Radio One, as the trust common securities holder of the applicable
Radio One Trust, will be deemed to have waived any right to act with respect to
such event of default until the effect of such event of default shall have been
cured, waived or otherwise eliminated. Until any such event of default has been
so cured, waived or otherwise eliminated, the property trustee shall act solely
on behalf of the holders of the trust preferred securities of such Radio One
Trust and not on behalf of Radio One as the trust common securities holder, and
only the holders of such trust preferred securities will have the right to
direct the property trustee to act on their behalf.
Events of Default; Notice
The occurrence of a debenture event of default under the junior subordinated
debenture indenture will constitute an event of default under the trust
agreement. Within 90 business days after the occurrence of an event of default
under the trust agreement actually known to the property trustee, the property
trustee shall transmit notice of such event of default to the holders of the
trust preferred securities of the applicable Radio One Trust, the
administrative trustees and Radio One, as sponsor, unless such event of default
shall have been cured or waived.
For a discussion of the limited circumstances in which holders of trust
preferred securities may bring a direct action against Radio One, see
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights
by Holders of Trust Preferred Securities."
Removal of Trustees
Unless a debenture event of default has occurred and is continuing, any
trustee may be removed at any time by Radio One as the trust common securities
holder of the applicable Radio One Trust. If a debenture event of default has
occurred and is continuing, the property trustee and the Delaware trustee may
be removed at such time only by the holders of a majority in liquidation amount
of the outstanding trust preferred securities of the applicable Radio One
Trust. In no event will the holders of the trust preferred securities have the
right to vote to appoint, remove or replace the administrative trustees, which
voting rights are vested exclusively in Radio One as the trust common
securities holder. No resignation or removal of a trustee, and no appointment
of a successor trustee, shall be effective until the acceptance of appointment
by the successor trustee in accordance with the provisions of the trust
agreement.
Merger or Consolidation of Trustees
Any person into which the property trustee, the Delaware trustee or any
administrative trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any person resulting from any merger,
conversion or consolidation to which such trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such trustee, shall be the successor of such trustee under the trust agreement,
provided such person shall be otherwise qualified and eligible.
Mergers, Conversions, Consolidations, Amalgamations or Replacements of a Radio
One Trust
The applicable Radio One Trust may not merge with or into, convert into,
consolidate, amalgamate or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
corporation or other person, except as described below or as otherwise
described under "--Liquidation of a Radio One Trust and Distribution of Junior
Subordinated Debentures." A Radio One Trust may, at the request of Radio One,
as sponsor, with the consent of the administrative trustees but without the
consent of the holders of its trust preferred securities, merge with or into,
convert into, consolidate, amalgamate or be replaced by or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to a trust organized as such under the laws of any State; provided that:
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. such successor entity either:
. expressly assumes all of the obligations of such Radio One Trust with
respect to the trust securities of such Radio One Trust; or
. substitutes for the trust securities of such Radio One Trust other
securities having substantially the same terms as such trust
securities so long as the successor securities rank the same as such
trust securities rank in priority with respect to distributions and
payments upon liquidation, redemption and otherwise;
. Radio One expressly appoints a trustee of such successor entity
possessing the same powers and duties as the property trustee with
respect to the related junior subordinated debentures;
. the successor securities are listed, or any successor securities will be
listed upon notification of issuance, on each national securities
exchange or other organization on which the trust securities of such
Radio One Trust are then listed, if any;
. such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the trust securities,
including any successor securities, of such Radio One Trust or the
related junior subordinated debentures to be downgraded or placed under
surveillance or review by any nationally recognized statistical rating
organization;
. such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Radio One Trust in any
material respect, other than any dilution of such holders' interests in
the new entity;
. such successor entity has a purpose substantially identical to that of
such Radio One Trust;
. prior to such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, Radio One has received an
opinion from independent counsel to such Radio One Trust experienced in
such matters to the effect that:
. such merger, conversion, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of the trust securities,
including any successor securities, of such Radio One Trust in any
material respect, other than any dilution of such holders' interests
in the new entity; and
. following such merger, conversion, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither such Radio One
Trust nor such successor entity will be required to register as an
investment company under the Investment Company Act of 1940, as
amended; and
. Radio One or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of
such successor entity under the successor securities at least to the
extent provided by the preferred securities guarantee and the common
securities guarantee for the benefit of the owner of the common
securities of such Radio One Trust.
Notwithstanding the foregoing, such Radio One Trust shall not, except with
the consent of each holder of its trust securities, consolidate, amalgamate,
merge with or into, or be replaced by or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause such Radio One Trust or
the successor entity not to be classified as a grantor trust for United States
federal income tax purposes.
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Voting Rights; Amendment of a Trust Agreement
Except as provided below and under --"Mergers, Conversions, Consolidations,
Amalgamations or Replacements of a Radio One Trust" and "Description of
Preferred Securities Guarantees--Amendments and Assignment" and as otherwise
required by law and the applicable trust agreement, the holders of trust
preferred securities will have no voting rights. The trust agreement may be
amended from time to time by Radio One, the property trustee and the
administrative trustees, without the consent of the holders of the trust
securities of the applicable Radio One Trust:
. to cure any ambiguity, correct or supplement any provisions in such
trust agreement that may be inconsistent with any other provision, or to
make any other provisions with respect to matters or questions arising
under such trust agreement, which shall not be inconsistent with the
other provisions of such trust agreement; or
. to modify, eliminate or add to any provisions of such trust agreement to
such extent as shall be necessary to ensure that such Radio One Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any of its trust securities are
outstanding or to ensure that such Radio One Trust will not be required
to register as an investment company under the Investment Company Act;
provided, however, that in each case, such action shall not adversely affect in
any material respect the interests of the holders of such trust securities.
A trust agreement may be amended by the trustees and Radio One:
. with the consent of holders of a majority in liquidation amount of the
outstanding trust securities of the applicable Radio One Trust; and
. upon receipt by the trustees of an opinion of counsel experienced in
such matters to the effect that such amendment or the exercise of any
power granted to the trustees in accordance with such amendment will not
affect such Radio One Trust's status as a grantor trust for United
States federal income tax purposes or such Radio One Trust's exemption
from status as an investment company under the Investment Company Act;
provided, however, that, without the consent of each holder of such trust
securities, such trust agreement may not be amended to:
. change the distribution rate or manner of calculation of the
distribution rate, amount, timing or currency or otherwise adversely
affect the method of any required payment;
. change the purpose of the applicable Radio One Trust;
. authorize the issuance of any additional beneficial interests in such
Radio One Trust;
. change the conversion, exchange or redemption provisions;
. change the conditions precedent for Radio One to elect to dissolve such
Radio One Trust and distribute the related junior subordinated
debentures to the holders of such trust securities;
. change the liquidation distribution or other provisions relating to the
distribution of amounts payable upon the dissolution and liquidation of
such Radio One Trust;
. affect the limited liability of any holder of such trust securities; or
. restrict the right of a holder of such trust securities to institute
suit for the enforcement of any required payment on or after the due
date therefor or, in the case of redemption, on the redemption date.
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So long as any junior subordinated debentures are held by the property
trustee, the trustees shall not:
. direct the time, method and place of conducting any proceeding for any
remedy available to such debenture trustee, or execute any trust or
power conferred on the trustee, with respect to the junior subordinated
debentures;
. waive certain past defaults under the junior subordinated debenture
indenture;
. exercise any right to rescind or annul a declaration of acceleration of
the maturity of the principal of such junior subordinated debentures; or
. consent to any amendment, modification or termination of the junior
subordinated debenture indenture or such junior subordinated debentures
where such consent shall be required, without, in each case, obtaining
the prior approval of the holders of a majority in liquidation amount of
all outstanding trust preferred securities of the applicable Radio One
Trust;
provided, however, that where a consent under the junior subordinated debenture
indenture would require the consent of each holder affected thereby, no such
consent shall be given by the property trustee without the prior approval of
each holder of the related trust preferred securities. The trustees shall not
revoke any action previously authorized or approved by a vote of the holders of
trust preferred securities except by subsequent vote of such holders. The
property trustee shall notify each holder of trust preferred securities of any
notice of default with respect to the related junior subordinated debentures.
In addition to obtaining approvals of holders of trust preferred securities
referred to above, prior to taking any of the foregoing actions, the trustees
shall obtain an opinion of counsel experienced in such matters to the effect
that the applicable Radio One Trust will not be classified as an association
taxable as a corporation for United States federal income tax purposes on
account of such action.
Any required approval of holders of trust preferred securities may be given
at a meeting of such holders convened for such purpose or pursuant to written
consent. The administrative trustees will cause a notice of any meeting at
which holders of trust preferred securities are entitled to vote to be given to
each holder of record of trust preferred securities in the manner set forth in
the applicable trust agreement. Notwithstanding that holders of trust preferred
securities are entitled to vote or consent under any of the circumstances
referred to above, any trust preferred securities that are owned by Radio One
or any affiliate of Radio One shall, for purposes of such vote or consent, be
treated as if they were not outstanding.
Global Trust Preferred Securities
If specified in the prospectus supplement, trust preferred securities may be
represented by one or more global certificates deposited with, or on behalf of,
The Depository Trust Company, or other depositary identified in such prospectus
supplement, or a nominee thereof, in each case for credit to an account of a
participant in The Depository Trust Company, or other depositary. The identity
of the depositary and the specific terms of the depositary arrangements with
respect to the trust preferred securities to be represented by one or more
global certificates will be described in the prospectus supplement. However,
unless otherwise specified in the prospectus supplement, The Depository Trust
Company will be the depositary and the depositary arrangements described with
respect to the debt securities will apply to such trust preferred securities as
well, except all references to Radio One shall include Radio One Trust and all
references to the applicable indenture will refer to the applicable trust
agreement. See "Description of Other Debt Securities--Global Debt Securities
and Book-Entry System."
Payment and Paying Agent
Payments in respect of any global certificate representing trust preferred
securities shall be made to Cede & Co. as nominee of The Depository Trust
Company, or other applicable depositary or its nominee, which shall credit the
relevant accounts at The Depository Trust Company or such other depositary on
the applicable payment dates, while payments in respect of trust preferred
securities in certificated form shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register. The
paying agent
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shall initially be the property trustee and any co-paying agent chosen by the
property trustee and acceptable to the administrative trustees and Radio One.
The paying agent shall be permitted to resign as paying agent upon 30 days'
prior written notice to the property trustee, the administrative trustees and
Radio One. In the event that the property trustee shall no longer be the paying
agent, the administrative trustees shall appoint a successor, which shall be a
bank or trust company acceptable to the administrative trustees and Radio One,
to act as paying agent.
Registrar and Transfer Agent
The property trustee will act as registrar and transfer agent for the trust
preferred securities. Registration of transfers of trust preferred securities
will be effected without charge by or on behalf of the applicable Radio One
Trust, but upon payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. A Radio One Trust will not
be required to register or cause to be registered the transfer of its trust
preferred securities after they have been converted, exchanged, redeemed or
called for redemption.
Information Concerning the Property Trustee
The property trustee, other than during the occurrence and continuance of an
event of default under the applicable trust agreement, will undertake to
perform only such duties as are specifically set forth in such trust agreement
and, during the continuance of such event of default, must exercise the same
degree of care and skill as a prudent person would exercise or use in the
conduct of his or her own affairs. Subject to the foregoing, the property
trustee will not be under any obligation to exercise any of the powers vested
in it by such trust agreement at the request of any holder of the related trust
securities unless it is offered reasonable indemnity against the costs,
expenses and liabilities that might be incurred thereby. If no such event of
default has occurred and is continuing and the property trustee is required to
decide between alternative causes of action, construe ambiguous provisions in
such trust agreement or is unsure of the application of any provision of such
trust agreement, and the matter is not one on which holders of trust preferred
securities or trust common securities are entitled under such trust agreement
to vote, then the property trustee shall take such action as is directed by
Radio One and if not so directed, shall take such action as it deems advisable
and in the best interests of the holders of the related trust securities and
will have no liability except for its own bad faith, negligence or willful
misconduct.
Miscellaneous
The administrative trustees are authorized and directed to conduct the
affairs of and to operate the applicable Radio One Trust in such a way that:
. such Radio One Trust will not be deemed to be an investment company
required to be registered under the Investment Company Act;
. such Radio One Trust will be classified as a grantor trust for United
States federal income tax purposes; and
. the related junior subordinated debentures will be treated as
indebtedness of Radio One for United States federal income tax purposes.
Radio One and the administrative trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the
applicable Radio One Trust or the applicable trust agreement, that the
administrative trustees determine in their discretion to be necessary or
desirable for such purposes, as long as such action does not materially
adversely affect the interests of the holders of the related trust securities.
Holders of trust preferred securities will not have any preemptive or
similar rights.
A Radio One Trust may not borrow money, issue debt, execute mortgages or
pledge any of its assets.
Each trust agreement and the related preferred securities will be governed
by and construed in accordance with the laws of the State of Delaware.
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DESCRIPTION OF PREFERRED SECURITIES GUARANTEES
A preferred securities guarantee will be executed and delivered by Radio One
concurrently with the issuance by a Radio One Trust of its trust preferred
securities for the benefit of the holders from time to time of such trust
preferred securities and will be held for such holders by Wilmington Trust
Company, as preferred securities guarantee trustee. Each preferred securities
guarantee will be qualified as an indenture under the Trust Indenture Act and
will be subject to, and governed by, the Trust Indenture Act. This summary of
certain terms and provisions of a preferred securities guarantee does not
purport to be complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of such preferred securities guarantee,
including the definitions therein of certain terms, and those made a part of
such preferred securities guarantee by the Trust Indenture Act.
General
Radio One will irrevocably agree to pay in full, to the extent set forth
herein, the guarantee payments to the holders of the related trust preferred
securities, as and when due, regardless of any defense, right of set-off or
counterclaim that the applicable Radio One Trust may have or assert other than
the defense of payment. The following payments, which are referred to as
guarantee payments, with respect to trust preferred securities, to the extent
not paid by or on behalf of the applicable Radio One Trust, will be subject to
the preferred securities guarantee:
. any accumulated distributions required to be paid on such trust
preferred securities, to the extent that such Radio One Trust has funds
legally available therefor at such time;
. the applicable redemption price with respect to such trust preferred
securities called for redemption, to the extent that such Radio One
Trust has funds legally available therefor at such time; or
. upon a voluntary or involuntary dissolution and liquidation of such
Radio One Trust, other than in connection with the distribution of the
related junior subordinated debentures to holders of such trust
preferred securities or the redemption of the trust preferred
securities, the lesser of:
. the amounts due upon the dissolution and liquidation of such Radio
One Trust, to the extent that such Radio One Trust has funds legally
available therefor at the time; and
. the amount of assets of such Radio One Trust remaining available for
distribution to holders of its trust preferred securities after
satisfaction of liabilities to creditors of such Radio One Trust as
required by applicable law.
Radio One's obligation to make a guarantee payment may be satisfied by
direct payment of the required amounts by Radio One to the holders of the trust
preferred securities entitled thereto or by causing the applicable Radio One
Trust to pay such amounts to such holders.
Radio One will, through the preferred securities guarantee, the trust
agreement, the related junior subordinated debentures and the junior
subordinated debenture indenture, taken together, fully, irrevocably and
unconditionally guarantee all of the applicable Radio One Trust's obligations
under its trust preferred securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of a
Radio One Trust's obligations under its trust preferred securities.
Ranking
Unless otherwise specified in the applicable prospectus supplement, each
preferred securities guarantee will constitute an unsecured obligation of Radio
One and will rank:
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. subordinate and junior in right of payment to all other liabilities of
Radio One, including all senior debt securities, any subordinated debt
securities and the junior subordinated debentures, except those made
ratable or subordinate by their terms;
. senior to all capital stock now or hereafter issued by Radio One and to
any guarantee now or hereafter entered into by Radio One in respect of
any of its capital stock.
The trust agreement will provide that each holder of trust preferred
securities by acceptance thereof agrees to the subordination provisions and
other terms of the related preferred securities guarantee. The preferred
securities guarantee will rank subordinate to, or equally with, all other
guarantees to be issued by Radio One with respect to securities of other trusts
or other entities to be established by Radio One that are similar to a Radio
One Trust.
The preferred securities guarantees will not limit the amount of secured or
unsecured debt, including senior indebtedness as defined in the junior
subordinated debenture indenture, that may be incurred by Radio One or any of
its subsidiaries.
Preferred Securities Guarantee of Payment
Each preferred securities guarantee will constitute a guarantee of payment
and not of collection. In other words, the guaranteed party may institute a
legal proceeding directly against Radio One to enforce its rights under such
preferred securities guarantee without first instituting a legal proceeding
against any other person or entity. A preferred securities guarantee will not
be discharged except by payment of the related preferred securities guarantee
payments in full to the extent not paid by the applicable Radio One Trust or
upon distribution of its trust preferred securities to the holders of the
related junior subordinated debentures.
Guarantee of Common Securities
Radio One also will irrevocably and unconditionally guarantee the
obligations of the applicable trust regarding that trust's common securities to
the same extent as its guarantee of the applicable preferred securities, except
that upon the occurrence and the continuation of an event of default under the
applicable trust agreement, holders of these preferred securities will have
priority over holders of the common securities regarding distributions and
payment on liquidation, redemption or otherwise.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the related trust preferred securities, in which case
no approval will be required, the applicable preferred securities guarantee may
not be amended without the prior approval of the holders of a majority of the
liquidation amount of such outstanding trust preferred securities. The manner
of obtaining any such approval will be as set forth under "Description of Trust
Preferred Securities--Voting Rights; Amendment of a Trust Agreement." All
guarantees and agreements contained in a preferred securities guarantee shall
bind the successors, assigns, receivers, trustees and representatives of Radio
One and shall inure to the benefit of the holders of the related trust
preferred securities then outstanding.
Events of Default
An event of default under a preferred securities guarantee will occur upon
the failure of Radio One to perform any of its payment or other obligations
thereunder. The holders of a majority in liquidation amount of the related
trust preferred securities will have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the preferred
securities guarantee trustee in respect of the applicable preferred securities
guarantee or to direct the exercise of any trust or power conferred upon the
preferred securities guarantee trustee under such preferred securities
guarantee.
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If the preferred securities guarantee trustee fails to enforce a preferred
securities guarantee, any holder of the related trust preferred securities may
institute a legal proceeding directly against Radio One to enforce its rights
under such preferred securities guarantee without first instituting a legal
proceeding against the applicable Radio One Trust, the preferred securities
guarantee trustee or any other person or entity.
Restrictions on Certain Payments
In general, Radio One will covenant in each guarantee that, so long as any
preferred securities issued by a trust remain outstanding, if:
. there shall have occurred any event of which Radio One has actual
knowledge that is, or with the giving of notice or the lapse of time, or
both, would be, a debenture event of default under the indenture
regarding the applicable series of junior subordinated debentures;
. Radio One shall be in default with respect to any of its payment
obligations under the preferred securities guarantee; or
. Radio One shall have given notice of its election to exercise its right
to begin or extend an extension period as provided in the junior
subordinated debenture indenture and shall not have rescinded such
notice, and such extension period, or any extension thereof, shall have
commenced and be continuing,
then it will not:
. declare or pay any dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of Radio
One's capital stock; or
. make any payment of principal of or premium or interest, if any, on or
repay, repurchase or redeem any debt securities of Radio One, including
other junior subordinated debentures, that rank equally with or junior
in right of payment to the junior subordinated debentures; or
. make any guarantee payments with respect to any guarantee by Radio One
of the debt securities of any subsidiary of Radio One, including under
any guarantees to be issued by Radio One with respect to securities of
other Radio One trusts or entities to be established by Radio One
similar to the Radio One Trusts, if such guarantee ranks equally with or
junior in right of payment to the junior subordinated debentures
other than:
. dividends, redemptions, purchases, acquisitions, distributions or
payments made by Radio One by way of issuance of shares of, or options,
warrants or rights to subscribe for, its class A and class D common
stock;
. any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any such plan
in the future, or the redemption or repurchase of any such rights
pursuant thereto;
. payments under the preferred securities guarantee;
. as a result of reclassification of Radio One's capital stock or the
exchange or conversion of one class or series of Radio One's capital
stock for another class or series of Radio One's capital stock;
. the purchase of fractional interests in shares of Radio One's capital
stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and
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. purchases of class A and class D common stock related to the issuance of
class A and class D common stock or rights under any of Radio One's
benefit plans for its directors, officers or employees or any of Radio
One's dividend reinvestment or stockholder stock purchase plans.
Termination
A preferred securities guarantee will terminate and be of no further force
and effect upon:
. full payment of the applicable redemption price of the related trust
preferred securities;
. full payment of all amounts due upon the dissolution and liquidation of
the applicable Radio One Trust; or
. upon the conversion or exchange of all of the related trust preferred
securities, whether upon distribution of junior subordinated debentures
to the holders of such trust preferred securities or otherwise.
A preferred securities guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the related trust
preferred securities must restore payment of any sums paid under such trust
preferred securities or such preferred securities guarantee.
Governing Law
Each preferred securities guarantee will be governed by and construed in
accordance with the laws of the State of Delaware.
Information Concerning the Preferred Securities Guarantee Trustee
The preferred securities guarantee trustee, other than during the occurrence
and continuance of a default by Radio One in performance of a preferred
securities guarantee, will undertake to perform only such duties as are
specifically set forth in the preferred securities guarantee and, during the
continuance of such default, must exercise the same degree of care and skill as
a prudent person would exercise or use in the conduct of his or her own
affairs. Subject to the foregoing, the preferred securities guarantee trustee
will not be under any obligation to exercise any of the powers vested in it by
a preferred securities guarantee at the request of any holder of the related
trust preferred securities unless it is offered reasonable indemnity against
the costs, expenses and liabilities that might be incurred thereby.
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Limited Purpose of a Radio One Trust
The trust preferred securities will represent preferred beneficial interests
in the applicable Radio One Trust, and each Radio One Trust exists for the sole
purpose of issuing and selling its trust securities, using the proceeds from
the sale of its trust securities to acquire the related junior subordinated
debentures of Radio One and engaging in only those other activities necessary,
advisable or incidental thereto.
Rights Upon Dissolution
Unless the junior subordinated debentures are distributed to holders of the
related trust securities, upon any voluntary or involuntary dissolution and
liquidation of the applicable Radio One Trust, after satisfaction of the
liabilities of creditors of such Radio One Trust as required by applicable law,
the holders of such trust securities will be entitled to receive, out of assets
held by such Radio One Trust, the liquidation distribution in cash. See
"Description of Trust Preferred Securities--Liquidation of a Radio One Trust
and Distribution of Junior Subordinated Debentures." Upon any voluntary or
involuntary liquidation or bankruptcy of Radio One, the property trustee, as
holder of the junior subordinated debentures, would be a creditor of Radio One,
subordinated in right of payment to all senior indebtedness as set forth in the
junior subordinated debenture indenture, but entitled to receive payment in
full of principal and premium and interest, if any, in respect of such junior
subordinated debentures, before any stockholders of Radio One receive payments
or distributions.
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RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE CORRESPONDING
JUNIOR SUBORDINATED DEBENTURES OR OTHER DEBT SECURITIES
AND THE PREFERRED SECURITIES GUARANTEES
Full and Unconditional Guarantee. Radio One will irrevocably guarantee
payments of distributions and other amounts due on the trust preferred
securities to the extent the applicable Radio One Trust has funds available for
the payment of the distributions as and to the extent set forth under
"Description of Preferred Securities Guarantees." Taken together, Radio One's
obligations under the junior subordinated debentures, the securities
resolution, the junior subordinated debenture indenture, the trust agreement
and the preferred securities guarantee agreements provide, in the aggregate, a
full, irrevocable and unconditional guarantee of payments of distributions and
other amounts due on the trust preferred securities. No single document
standing alone or operating in conjunction with fewer than all of the other
documents constitutes the full guarantee. It is only the combined operation of
these documents that has the effect of providing a full, irrevocable and
unconditional guarantee of the applicable Radio One Trust's obligations under
the trust preferred securities.
If and to the extent that Radio One does not make payments on the junior
subordinated debentures or other debt securities, the applicable Radio One
Trust will not pay distributions or other amounts due on its trust preferred
securities. A preferred securities guarantee does not cover payment of
distributions when such Radio One Trust does not have sufficient funds to pay
the distributions. In that event, the remedy for a holder of trust preferred
securities is to institute a legal proceeding directly against Radio One for
enforcement of payment of the distributions to such holder.
Sufficiency of Payments. As long as all payments are made when due on the
junior subordinated debentures or other debt securities, as the case may be,
those payments will be sufficient to cover distributions and other payments due
on the trust preferred securities. This is primarily because:
. the aggregate principal amount of the junior subordinated debentures or
other debt securities, as the case may be, will be equal to the sum of
the aggregate stated liquidation amount of the trust preferred
securities and trust common securities;
. the interest rate and interest and other payment dates on the junior
subordinated debentures or other debt securities, as the case may be,
will match the distribution rate and distribution and other payment
dates for the trust preferred securities;
. Radio One has promised to pay any and all costs, expenses and
liabilities of the applicable Radio One Trust except such Radio One
Trust's obligations under its trust preferred securities; and
. the trust agreement provides that the applicable Radio One Trust will
not engage in any activity that is not consistent with the limited
purposes of such Radio One Trust.
Radio One has the right to set-off any payment Radio One is otherwise
required to make under the junior subordinated debenture indenture if and to
the extent Radio One has already made, or is concurrently making, a payment
under the applicable preferred securities guarantee agreement.
Enforcement Rights of Holders of Trust Preferred Securities. A holder of a
trust preferred security may institute a legal proceeding directly against
Radio One to enforce its rights under the applicable preferred securities
guarantee agreement without first instituting a legal proceeding against the
preferred securities guarantee trustee, the applicable Radio One Trust or
anyone else.
Radio One's default or event of default under any other senior or
subordinated indebtedness would not necessarily constitute a trust event of
default. However, in the event of payment defaults under, or acceleration of,
Radio One's senior or subordinated indebtedness, the subordination provisions
of the applicable securities resolution will provide that no payments may be
made in respect of the junior subordinated debentures or other debt securities
until the senior or subordinated indebtedness has been paid in full or any
payment default thereunder has been cured or waived. Radio One's failure to
make required payments on any junior subordinated debentures or other debt
securities would constitute a trust event of default.
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Limited Purpose of a Radio One Trust. The applicable Radio One Trust's
trust preferred securities evidence undivided beneficial ownership interests in
the assets of the applicable Radio One Trust, and each Radio One Trust exists
for the sole purposes of issuing its trust preferred securities and trust
common securities, investing the proceeds in junior subordinated debentures or
other debt securities and engaging in only those other activities necessary,
convenient or incidental to those purposes. A principal difference between the
rights of a holder of a trust preferred security and a holder of a
corresponding junior subordinated debenture or other debt securities is that a
holder of a junior subordinated debenture or other debt securities is entitled
to receive from Radio One the principal amount of and interest accrued on the
corresponding junior subordinated debentures or other debt securities, while a
holder of trust preferred securities is entitled to receive distributions from
the applicable Radio One Trust, or from Radio One under the applicable
preferred securities guarantee agreement, if and to the extent the applicable
Radio One Trust has funds available for the payment of the distributions.
Rights Upon Dissolution. Upon any voluntary or involuntary dissolution of a
Radio One Trust involving the liquidation of the junior subordinated debentures
or other debt securities, the holders of the trust preferred securities will be
entitled to receive the liquidation distribution in cash, out of assets of such
Radio One Trust and after satisfaction of creditors of such Radio One Trust as
provided by applicable law. If Radio One becomes subject to any voluntary or
involuntary liquidation or bankruptcy, the property trustee, as holder of the
junior subordinated debentures or other debt securities, would be one of Radio
One's junior subordinated creditors. The property trustee would be subordinated
in right of payment to all of Radio One's senior indebtedness and subordinated
indebtedness, but it would be entitled to receive payment in full of principal
and interest before Radio One's stockholders receive payments or distributions.
Radio One is the guarantor under the preferred securities guarantee agreements
and pursuant to the junior subordinated debenture indenture, has agreed to pay
all costs, expenses and liabilities of the applicable Radio One Trust other
than the applicable Radio One Trust's obligations to the holders of the trust
preferred securities. Accordingly, in the event of Radio One's liquidation or
bankruptcy the positions of a holder of trust preferred securities and of a
holder of junior subordinated debentures or other debt securities are expected
to be substantially the same relative to Radio One's other creditors and to
Radio One's stockholders.
DESCRIPTION OF WARRANTS
Radio One may issue warrants for the purchase of debt securities, junior
subordinated debentures, shares of preferred stock or shares of class D common
stock. Warrants may be issued independently or together with any debt
securities, junior subordinated debentures, or shares of preferred stock or
class D common stock offered by any prospectus supplement and may be attached
to or separate from the debt securities, junior subordinated debentures, or
shares of preferred stock or class D common stock. The warrants are to be
issued under warrant agreements to be entered into between Radio One and
Wilmington Trust Company, as warrant agent, or such other bank or trust company
as is named in the prospectus supplement relating to the particular issue of
warrants. The warrant agent will act solely as an agent of Radio One in
connection with the warrants and will not assume any obligation or relationship
of agency or trust for or with any holders of warrants or beneficial owners of
warrants. The following description summarizes certain general provisions of
the form of warrant agreement to which any prospectus supplement may relate.We
will describe the specific terms of any warrants and the extent, if any, to
which the general provisions summarized below may apply to any warrants in the
prospectus supplement relating to those warrants.
General
If warrants are offered, the prospectus supplement will describe the terms
of the warrants, including the following:
. the offering price;
. the currency, currencies or currency units for which warrants may be
purchased;
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. the designation, aggregate principal amount, currency, currencies or
currency units and terms of the debt securities or junior subordinated
debentures purchasable upon exercise of the debt warrants and the price
at which the debt securities or junior subordinated debentures may be
purchased upon such exercise;
. the designation, number of shares and terms of the preferred stock
purchasable upon exercise of the preferred stock warrants and the price
at which the shares of preferred stock may be purchased upon such
exercise;
. the designation, number of shares and terms of the class D common stock
purchasable upon exercise of the common stock warrants and the price at
which the shares of class D common stock may be purchased upon such
exercise;
. if applicable, the designation and terms of the debt securities, junior
subordinated debentures, preferred stock or class D common stock with
which the warrants are issued and the number of warrants issued with
each debt security, junior subordinated debenture or share of preferred
stock or class D common stock upon such exercise;
. if applicable, the date on and after which the warrants and the related
debt securities, junior subordinated debentures, preferred stock or
class D common stock will be separately transferable;
. the date on which the right to exercise the warrants will commence and
the date on which the right will expire;
. whether the warrants will be issued in registered or bearer form;
. a discussion of federal income tax, accounting and other special
considerations, procedures and limitations relating to the warrants; and
. any other terms of the warrants.
Warrants may be exchanged for new warrants of different denominations, may
(if in registered form) be presented for registration of transfer, and may be
exercised at the corporate trust office of the warrant agent or any other
office indicated in the prospectus supplement. Before the exercise of their
warrants, holders of warrants will not have any of the rights of holders of the
various securities purchasable upon the exercise of the warrants, including the
right to receive payments of principal of, any premium on, or any interest on,
the debt securities or junior subordinated debentures purchasable upon the
exercise or to enforce the covenants in the indenture or to receive payments of
dividends, if any, on the preferred stock or class D common stock purchasable
upon the exercise or to exercise any applicable right to vote. If Radio One
maintains the ability to reduce the exercise price of any stock warrant and the
right is triggered, it will comply with the federal securities laws, including
Rule 13e-4 under the Exchange Act, to the extent applicable.
Exercise of Warrants
Each warrant will entitle the holder to purchase a principal amount of debt
securities or junior subordinated debentures or a number of shares of preferred
stock or class D common stock at the exercise price as will in each case be set
forth in, or calculable from, the prospectus supplement relating to the
warrant. Warrants may be exercised at the times that are set forth in the
prospectus supplement relating to the warrants. After the close of business on
the date on which the warrant expires, or any later date to which Radio One may
extend the expiration date, any unexercised warrants will become void.
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Subject to any restrictions and additional requirements that may be set
forth in a prospectus supplement relating thereto, warrants may be exercised by
delivery to the warrant agent of the certificate evidencing the warrants
properly completed and duly executed and of payment as provided in the
prospectus supplement of the amount required to purchase the debt securities,
junior subordinated debentures or shares of preferred stock or class D common
stock purchasable upon exercise. The exercise price will be the price
applicable on the date of payment in full, as set forth in the prospectus
supplement relating to the warrants. Upon receipt of the payment and the
certificate representing the warrants to be exercised, properly completed and
duly executed at the corporate trust office of the warrant agent or any other
office indicated in the prospectus supplement, Radio One will, as soon as
practicable, issue and deliver the debt securities, junior subordinated
debentures or shares of preferred stock or class D common stock purchasable
upon exercise. If fewer than all of the warrants represented by a certificate
are exercised, a new certificate will be issued for the remaining amount of
warrants.
Additional Provisions
The exercise price payable and the number of shares of class D common or
preferred stock purchasable upon the exercise of each stock warrant may be
adjusted to account for certain circumstances, including the issuance of a
stock dividend to holders of class D common or preferred stock, respectively,
or a combination, subdivision or reclassification of class D common or
preferred stock, respectively. In lieu of adjusting the number of shares of
class D common or preferred stock purchasable upon exercise of each stock
warrant, Radio One may elect to adjust the number of stock warrants. No
adjustment in the number of shares purchasable upon exercise of the stock
warrants will be required until cumulative adjustments require an adjustment of
at least 1% thereof. Radio One may, at its option, reduce the exercise price at
any time. No fractional shares will be issued upon the exercise of stock
warrants, but Radio One will pay the cash value of any fractional shares
otherwise issuable. In case of any consolidation, merger, or sale or conveyance
of the property of Radio One as an entirety or substantially as an entirety,
the holder of each outstanding stock warrant will have the right upon the
exercise to the kind and amount of shares of stock and other securities and
property, including cash, receivable by a holder of the number of shares of
class D common stock or preferred stock into which the stock warrants were
exercisable immediately prior thereto.
No Rights as Stockholders
Holders of stock warrants will not be entitled, by virtue of holding stock
warrants, to vote, to consent, to receive dividends, to receive notice as
stockholders with respect to any meeting of stockholders for the election of
Radio One's directors or any other matter, or to exercise any rights whatsoever
as its stockholders.
DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK PURCHASE UNITS
Radio One may issue stock purchase contracts. Stock purchase contracts are
contracts obligating holders to purchase from Radio One, and Radio One to sell
to the holders, a specified number of shares of class D common stock at a
future date or dates. The price per share of class D common stock may be fixed
at the time the stock purchase contracts are issued or may be determined by
reference to a specific formula set forth in the stock purchase contracts. The
formula may include anti-dilution provisions to adjust the number of shares
issuable under the stock purchase contracts upon events that would otherwise
dilute the interests of the holders. The stock purchase contracts may be issued
separately or as a part of stock purchase units. Stock purchase units consist
of a stock purchase contract and, in order to secure the holder's obligations
to purchase the class D common stock under the stock purchase contracts, any
one or more of the following:
. senior debt securities, subordinated debt securities or junior
subordinated debentures of Radio One;
. debt obligations of third parties, including U.S. Treasury securities; or
. preferred securities of a Radio One Trust.
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When stock purchase units include debt obligations of the United States of
America or its agencies or instrumentalities, the principal of the debt
obligations, when paid at maturity, will automatically be applied to satisfy
the holder's obligation to purchase class D common stock under the stock
purchase contracts unless the holder of the units settles its obligations under
the stock purchase contracts early by rendering payment to Radio One or its
agent in the manner discussed below.
Except as otherwise described in the applicable prospectus supplement,
holders of stock purchase units may be entitled to settle the underlying stock
purchase contracts prior to the stated settlement date by surrendering the
certificate evidencing the stock purchase units, accompanied by the payment
due, in the form and calculated pursuant to the formula as may be prescribed in
the stock purchase contracts and described in the applicable prospectus
supplement. Upon early settlement, the holder would receive the number of
shares of class D common stock deliverable under the stock purchase contracts,
subject to adjustment in certain cases. Holders of stock purchase units may be
entitled to exchange their stock purchase units together with appropriate
collateral, for separate stock purchase contracts and preferred securities,
debt securities or debt obligations of the United States of America or its
agencies or instrumentalities. The applicable prospectus supplement will
describe in more detail the provisions of such exchange. In the event of either
such early settlement or exchange, the preferred securities, debt securities,
or debt obligations that were pledged as security for the obligation of the
holder to perform under the stock purchase contracts would be transferred to
the holder free and clear of Radio One's security interest therein.
Except as otherwise described in the applicable prospectus supplement, when
stock purchase units include junior subordinated debentures or preferred
securities, the junior subordinated debentures or preferred securities will
automatically be presented to the applicable Radio One Trust for redemption at
100% of face or liquidation value and the Radio One Trust will present junior
subordinated debentures in an equal principal amount to Radio One for
redemption at 100% of principal amount unless there is an early settlement or
the holder elects to pay the consideration specified in the stock purchase
contracts. Amounts received in respect of the redemption will automatically be
transferred to Radio One and applied to satisfy in full the holder's obligation
to purchase common stock under the stock purchase contracts. The stock purchase
contracts may require Radio One to make periodic payments to the holders of the
stock purchase units or vice versa, and the payments may be unsecured or
refunded on some basis. The stock purchase contracts may require holders to
secure their obligations in a specified manner.
The applicable prospectus supplement will describe the terms of any stock
purchase contracts or stock purchase units, including differences, if any, from
the terms described above.
PLAN OF DISTRIBUTION
Radio One and the Radio One Trusts may sell the securities to one or more
underwriters or dealers for public offering and sale by them, or we may sell
the securities to investors directly or through agents. The accompanying
prospectus supplement will set forth the terms of the offering and the method
of distribution and will identify any firms acting as underwriters, dealers or
agents in connection with the offering, including:
. the name or names of any underwriters;
. the purchase price of the securities and the proceeds to Radio One or
the Radio One Trusts from the sale;
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. any underwriting discounts and other items constituting underwriters'
compensation;
. any public offering price;
. any discounts or concessions allowed or reallowed or paid to dealers; and
. any securities exchange or market on which the securities offered in the
prospectus supplement may be listed.
Only those underwriters identified in such prospectus supplement are deemed
to be underwriters in connection with the securities offered in the prospectus
supplement.
We may distribute the securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at prices
determined as the prospectus supplement specifies. We may sell securities
through a rights offering, forward contracts or similar arrangements. In
connection with the sale of the securities, underwriters, dealers or agents may
be deemed to have received compensation from Radio One in the form of
underwriting discounts or commissions and also may receive commissions from
securities purchasers for whom they may act as agent. Underwriters may sell the
securities to or through dealers, and such dealers may receive compensation in
the form of discounts, concessions or commissions from the underwriters or
commissions from the purchasers for whom they may act as agent. Some of the
underwriters, dealers or agents who participate in the securities distribution
may engage in other transactions with, and perform other services for, Radio
One and its subsidiaries in the ordinary course of business.
Any underwriting discounts or other compensation which we pay to
underwriters or agents in connection with the securities offering, and any
discounts, concessions or commissions which underwriters allow to dealers, are
set forth in the prospectus supplement. Underwriters, dealers and agents
participating in the securities distribution may be deemed to be underwriters,
and any discounts and commissions they receive and any profit they realize on
the resale of the securities may be deemed to be underwriting discounts and
commissions under the Securities Act. The maximum commission or discount to be
received by any NASD member acting in any capacity to distribute the securities
will not be greater than 8%. Underwriters and their controlling persons,
dealers and agents may be entitled, under agreements entered into with Radio
One and the Radio One Trusts, to indemnification against and contribution
toward specific civil liabilities, including liabilities under the Securities
Act.
LEGAL MATTERS
The validity of any securities issued hereunder will be passed upon for
Radio One by Kirkland & Ellis, Washington, D.C. (a partnership that includes
professional corporations), counsel to Radio One, and for the Radio One Trusts
by Richards, Layton & Finger, P.A., of Wilmington, Delaware, special Delaware
counsel to the Radio One Trusts. Unless otherwise indicated in the applicable
prospectus supplement, certain legal matters will be passed upon for any agents
or underwriters by Skadden, Arps, Slate, Meagher & Flom, LLP, Washington, D.C.
EXPERTS
The consolidated financial statements of Radio One, Inc. and subsidiaries as
of December 31, 1999 and 2000, and for each of the years in the three-year
period ended December 31, 2000, incorporated by reference in this prospectus
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and are included herein in
reliance upon the authority of said firm as experts in giving said reports.
The financial statements of selected operations of Clear Channel
Communications as of December 31, 1998 and 1999, and for each of the years in
the three-year period ended December 31, 1999 incorporated by reference in this
prospectus have been audited by Arthur Andersen, LLP, independent public
accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.
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The financial statements of selected operations of AMFM, Inc. as of December
31, 1998 and 1999, and for each of the years in the three-year period ended
December 31, 1999, incorporated by reference in this prospectus have been
audited by Arthur Andersen, LLP, independent public accountants, as indicated
in their report with respect thereto, and are included herein in reliance upon
the authority of said firm as experts in giving said reports.
The financial statements of Blue Chip Broadcasting, Inc. and subsidiaries as
of December 31, 2000 and 1999 and for each of the two years in the period ended
December 31, 2000 incorporated by reference in this prospectus by reference to
pages 1-19 of Radio One Inc.'s Form 8-K/A dated April 9, 2001 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Blue Chip Broadcast Company and subsidiary as of
December 31, 1998 and for the year then ended incorporated by reference in this
prospectus have been audited by Clark, Schaefer, Hackett & Co., independent
public accountants as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
giving said reports.
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, and, in accordance therewith, file reports, proxy
statements and other information with the SEC. Such reports, proxy statements
and other information may be inspected and copied at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material can be obtained from the Public Reference
Section of the SEC upon payment of certain fees prescribed by the SEC. The
SEC's web site contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of that site on the world wide web is sec.gov. The information on the
SEC's web site is not part of this prospectus, and any references to this web
site or any other web site are inactive textual references only.
INFORMATION INCORPORATED BY REFERENCE
The SEC permits us to "incorporate by reference" the information contained
in documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents rather than by including
them herein. Information that is incorporated by reference is considered to be
part of this prospectus. Information that we file with the SEC after the
initial filing date of the registration statement of which this prospectus is a
part, and before the effectiveness of that registration statement, will
automatically update and supersede the information that is either contained
herein or incorporated by reference herein, and will be considered to be a part
of this prospectus from the date such documents are filed. We have filed with
the SEC, and incorporate by reference in this prospectus, the following
documents:
. our Amended Annual Report on Form 10-K/A for the year ended December 31,
2000 filed on August 7, 2001;
. our Quarterly Reports on Form 10-Q for the Quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;
. our Definitive Proxy Statement on Form DEF 14A filed on April 26, 2001;
. our Current Reports on Form 8-K filed on April 9, 2001, April 18, 2001,
May 4, 2001, May 16, 2001, August 3, 2001, August 6, 2001, August 13,
2001, August 24, 2001 and November 7, 2001; and
. our Registration Statement on Form 8-A dated May 17, 2000.
We also incorporate by reference any future filings under the terms of
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act, which are made after
the date of this prospectus and prior to the termination of any offering of
securities offered by this prospectus. Any statement contained in this
prospectus or in a document incorporated in, or deemed to be incorporated by
reference to, this prospectus shall be deemed to be modified or superseded, for
purposes of this prospectus, to the extent that a statement contained in
79
. the prospectus;
. the accompanying prospectus supplement; or
. any other subsequently filed document which also is incorporated in, or
is deemed to be incorporated by reference to, this prospectus;
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this prospectus.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Investor Relations, Radio One, Inc., 5900 Princess
Garden Parkway, 7/th/ Floor, Lanham, MD 20706, or to our e-mail address:
invest@radio-one.com. Our telephone number is (301) 306-1111.
Radio One has not included or incorporated by reference separate financial
statements of the Radio One Trusts into this prospectus. Radio One does not
consider such financial statements to be material to holders of the trust
preferred securities of the Radio One Trusts because:
. all of the voting securities of the Radio One Trusts will be owned,
directly or indirectly, by Radio One, a reporting company under the
Exchange Act, as amended;
. each of the Radio One Trusts is a special purpose entity, has no
operating history, has no independent operations and is not engaged in,
and does not propose to engage in, any activity other than issuing
securities representing undivided beneficial interests in the assets of
such Radio One Trust and investing the proceeds thereof in junior
subordinated debentures or other debt securities issued by Radio One; and
. Radio One's obligations described in this prospectus and in any
accompanying prospectus supplement under the trust agreement of a Radio
One Trust, the preferred securities guarantee issued by Radio One with
respect to the trust preferred securities issued by such Radio One
Trust, the debt securities or junior subordinated debentures of Radio
One purchased by the Radio One Trusts and the applicable indenture
pursuant to which such debt securities or junior subordinated debentures
are issued, taken together, constitute direct obligations of Radio One
and a full and unconditional guarantee of the trust preferred securities
of each such Radio One Trust.
80
[LOGO] Radio One Logo
The information in this preliminary prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until the
registration statement covering them has been declared effective by the SEC.
This preliminary prospectus is not an offer to sell these securities, and
neither Radio One nor the selling stockholders are soliciting offers to buy
these securities in any state where the offer or sale is not permitted.
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED JANUARY 29, 2002
[LOGO] Radio One Logo
3,483,510 Shares
of Class D Common Stock
-----------------
The information in this preliminary prospectus is not complete and may be
changed. The selling stockholders may not sell these securities until the
registration statement covering them has been declared effective by the SEC.
This preliminary prospectus is not an offer to sell these securities, and
neither Radio One nor the selling stockholders are soliciting offers to buy
these securities in any state where the offer or sale is not permitted.
This prospectus relates to 3,483,510 shares of our class D common stock
which may be offered from time to time by the selling stockholders named in
this prospectus, or by their transferees, pledgees, donees or successors, all
of which we refer to as selling stockholders.
Our class D common stock is traded on The Nasdaq Stock Market's National
Market under the symbol "ROIAK." The last reported sale price for our class D
common stock on January 28, 2002 was $17.65 per share.
You should carefully consider the risk factors that begin on page 3 of this
prospectus before purchasing any of the class D common stock offered hereby.
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or passed upon the adequacy or accuracy of this
prospectus. Any representation to the contrary is a criminal offense.
Concurrently with the filing of this prospectus, we are filing a prospectus
under Rule 415 of the Securities Act of 1933, registering up to $500,000,000
aggregate amount of our class D common stock, preferred stock, debt securities,
junior subordinated debentures, warrants, stock purchase contracts, stock
purchase units, preferred securities of Radio One Trust I and Radio One Trust
II, and guarantees by us of such preferred securities. Sales by the selling
stockholders under this prospectus are not contingent upon the completion of
any sales of securities by us or the Radio One Trusts.
The date of this prospectus is , 2002.
Page
----
SUMMARY..................... 1
RADIO ONE, INC.............. 1
RISK FACTORS................ 3
CAUTIONARY NOTE REGARDING
FORWARD-LOOKING STATEMENTS 7
USE OF PROCEEDS............. 7
SELLING STOCKHOLDERS........ 8
Page
----
PLAN OF DISTRIBUTION......... 9
LEGAL MATTERS................ 10
EXPERTS...................... 10
WHERE YOU CAN FIND ADDITIONAL
INFORMATION................ 10
INCORPORATION BY REFERENCE... 11
-----------------
TABLE OF CONTENTS
-----------------
You should rely only on the information contained in this document or to
which we have referred you. We have not authorized anyone to provide you with
information that is different. This document may only be used where it is legal
to sell these securities.
i
SUMMARY
This summary highlights information contained elsewhere or incorporated by
reference in this prospectus. This summary does not contain all of the
information that you should consider before you make an investment decision.
You should carefully read this entire prospectus, including the "Risk Factors"
section, and the documents we have referred you to, including the documents
incorporated herein by reference, before making your investment decision.
RADIO ONE, INC.
Radio One was founded in 1980 and is one of the largest radio broadcasting
companies in the United States. We are also the largest radio broadcasting
company in the United States primarily targeting African-Americans.
Our strategy is to expand within our existing markets and into new markets
that have a significant African-American presence. We believe radio
broadcasting primarily targeting African-Americans has significant growth
potential. We also believe that we have a competitive advantage in the
African-American market and the radio industry in general, due to our primary
focus on urban formats, our skill in programming and marketing these formats,
and our turnaround expertise.
Radio One is led by our Chairperson and co-founder, Catherine L. Hughes, and
her son, Alfred C. Liggins, III, our Chief Executive Officer and President, who
together have 45 years of operating experience in radio broadcasting. Ms.
Hughes, Mr. Liggins and our strong management team have successfully executed a
strategy of acquiring and turning around underperforming radio stations.
Our principal executive offices are located at 5900 Princess Garden Parkway,
7th Floor, Lanham, Maryland 20706 and our telephone number is (301) 306-1111.
For more information about our business, please see our Form 10-K/A for the
year ended December 31, 2000, which is incorporated by reference in this
prospectus. The description of our business contained in our Form 10-K/A for
the year ended December 31, 2000 will be updated and superseded by later
filings we make with the SEC that are incorporated by reference in this
prospectus.
1
Securities to be Registered
Issuer..................................... Radio One, Inc.
Class D Common Stock Offered by the Selling
Stockholders............................. 3,483,510 shares
Use of Proceeds............................ The selling stockholders will receive all of the net proceeds
from the resale of their securities in this offering. We will not
receive any proceeds.
Trading.................................... Our class D common stock is listed on The Nasdaq Stock
Market's National Market under the symbol "ROIAK."
2
RISK FACTORS
Investing in the class D common stock involves risk. You should consider
carefully the risk factors described below before purchasing the class D common
stock.
Integration of Acquisitions--We may have difficulty integrating the operations,
systems and management of the stations that we have recently acquired or agreed
to acquire. Our failure to integrate successfully stations we have acquired
could have a material adverse effect on our business and operating results.
From January 1, 2000 through December 31, 2001, we acquired or agreed to
acquire and/or operate 47 radio stations, including 16 stations that we own
and/or operate as the result of the August 10, 2001 consummation of our
acquisition of Blue Chip Broadcasting, Inc., and we expect to make acquisitions
of other stations and station groups in the future.
We cannot assure you that we will be able to integrate successfully the
operations, systems or management acquired in the Blue Chip acquisition, or any
other operations, systems or management that might be acquired in the future.
The recent consummation of the Blue Chip acquisition will require us to manage
a significantly larger and geographically more diverse radio station portfolio
than historically has been the case. Our failure to integrate and manage newly
acquired stations successfully could have a material adverse effect on our
business and operating results. In addition, in the event that the operations
of a new station do not meet our expectations, we may restructure or write-off
the value of some portion of the assets of the new station.
Risks of Growth Strategy--If we are unable to execute successfully our
strategy, our business may not grow as expected.
We intend to grow by acquiring radio stations primarily in the top 50
African-American markets. We may also make strategic investments that are
complementary to our business and provide growth opportunities. However, we may
not successfully identify and consummate future acquisitions or investments,
and stations that we do acquire or investments that we make may not increase
our broadcast cash flow or yield other anticipated benefits. Our failure to
execute our growth strategy successfully could have a material adverse effect
on our business and operating results.
Dependence on Key Personnel--The loss of key personnel, including on-air
talent, could disrupt the management and operation of our business.
Our business depends upon the continued efforts, abilities and expertise of
our executive officers, including our chief executive officer, chief financial
officer, chief operating officer and general counsel, and other key employees,
including on-air personalities. We believe that the unique combination of
skills and experience possessed by our executive officers would be difficult to
replace, and that the loss of any one of them could have a material adverse
effect on us, including the impairment of our ability to execute our business
strategy. Additionally, our radio stations employ or independently contract
with several on-air personalities and hosts of syndicated radio programs with
significant loyal audiences in their respective broadcast areas. These on-air
personalities are sometimes significantly responsible for the ranking of a
station, and thus, the ability of the station to sell advertising. We cannot be
assured that these individuals will remain with our radio stations or will
retain their audiences.
3
Competition for Advertising Revenue--We compete for advertising revenue against
radio stations and other media, many of which have greater resources than we
do, and if we are unable to maintain or grow our advertising revenue share, our
business and operating results may be adversely affected.
In the competitive broadcasting industry, the success of each of our radio
stations is primarily dependent upon its share of the overall advertising
revenue within its market. 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 maintain or increase its current audience ratings or market share,
or that advertisers will not decrease the amount they spend on advertising.
Our advertising revenue may suffer if any of our stations cannot maintain
its audience ratings or market share. Shifts in population, demographics,
audience tastes and other factors beyond our control could cause us to lose
market share. Our stations also compete for audiences and advertising revenues
directly with other radio stations, and some of the owners of those competing
stations have greater resources than we do. If a competing station converts to
a format similar to that of one of our stations, or if one of our competitors
strengthens its operations, our stations could suffer a reduction in ratings
and advertising revenue. Other radio companies which are larger and have more
resources may also enter markets in which we operate. In addition, our stations
also compete with other media such as broadcast and cable television,
newspapers, magazines, direct mail, music videos, the Internet and outdoor
advertising, some of which may be controlled by horizontally-integrated
companies. We also anticipate that our stations will compete with
satellite-based radio services, including Sirius Satellite Radio and XM
Satellite Radio. We currently program five channels for XM Satellite Radio.
Decline in Level of Advertising Spending--The ongoing recession that has
impacted business sectors which advertise heavily on radio has resulted in a
reduction in advertising spending in those sectors, and has had a negative
impact on our advertising revenue and business. If the current recession
continues or worsens, our advertising revenue and business could be impacted
even more significantly.
We believe that advertising is a discretionary business expense, meaning
that spending on advertising tends to decline during an economic recession or
downturn. Consequently, recessions or downturns in the United States economy
and the economies of individual geographic markets in which we own or operate
stations directly affect our advertising revenue and, therefore, our results of
operations. Individual business sectors that are especially impacted by a
recession or downturn and that tend to spend more on advertising than other
sectors are likely to reduce their advertising expenditures as a result of the
recession or downturn. If those sectors' spending represent a significant
portion of our advertising revenues, any reduction in their expenditures could
negatively impact our revenue.
Over the past year, the radio industry has been experiencing negative year
over year advertising revenue growth, primarily as a result of the current
recession in the United States economy. A number of business sectors that
traditionally have been heavy radio advertisers, including the automotive,
retail sales and television broadcast industries, as well as Internet related
businesses which in recent years have become significant radio advertisers,
have been especially adversely affected by the recession. Even prior to the
start of the current recession, the Internet-related business sector, which in
recent years had become a significant radio advertiser, experienced a sharp
economic decline. While we have continued to experience positive year over year
advertising revenue growth, our advertising growth rate has been impacted by
the recession, and if the factors that have contributed to the radio industry's
overall negative advertising revenue growth, including the economic recession,
persist or worsen, our advertising growth rate could be even more significantly
affected.
Restrictions Imposed by Our Debt--The terms of our debt restrict us from
engaging in many activities and require us to satisfy various financial tests,
and these restrictions may make it more difficult to pursue our acquisition
strategy.
Our bank credit facility and the agreements governing our other outstanding
debt, including our 8 7/8% senior subordinated notes, contain covenants that
restrict, among other things, our ability to incur additional debt, pay cash
dividends, purchase our capital stock, make capital expenditures, make
investments or other
4
restricted payments, swap or sell assets, engage in transactions with related
parties, secure non-senior debt with our assets, or merge, consolidate or sell
all or substantially all of our assets.
Our bank credit facility requires that we obtain our banks' consent for
acquisitions that do not meet specific criteria. These restrictions may make it
more difficult to pursue our acquisition strategy. Our bank credit facility
also requires that we maintain specific financial ratios, which could be
affected by events beyond our control.
The loans under our bank credit facility will be due in August 2007 and our
8 7/8% senior subordinated notes will be due in July 2011. A breach of any of
the covenants contained in our bank credit facility could allow our lenders to
declare all amounts outstanding under our bank credit facility to be
immediately due and payable and a breach of any of the covenants contained in
the indenture covering our 8 7/8% senior subordinated notes could allow the
holders of those notes to declare the notes immediately due and payable. In
addition, our banks could proceed against the collateral granted to them to
secure that indebtedness. If the amounts outstanding under our bank credit
facility or payment of our senior subordinated notes are accelerated, our
assets might not be sufficient to repay in full the money owed to the banks or
to our other debt holders.
Substantial Debt--Our substantial level of debt could limit our ability to grow
and compete.
We have a substantial amount of debt, a portion of which bears interest at
variable rates. The amount and nature of our debt is described in greater
detail in our reports filed with the SEC. Our substantial level of indebtedness
could adversely affect us for various reasons, including limiting our ability
to:
. obtain additional financing for working capital, capital expenditures,
acquisitions, debt payments or other corporate purposes;
. have sufficient funds available for operations, future business
opportunities or other purposes;
. compete with competitors that have less debt than we do; and
. react to changing market conditions, changes in our industry and
economic downturns.
Controlling Stockholders--Two common stockholders have a majority voting
interest in Radio One and have the power to control matters on which Radio
One's common stockholders may vote, and their interests may conflict with yours.
As of December 26, 2001, Catherine L. Hughes and her son, Alfred C. Liggins,
III, collectively held approximately 56.1% of the outstanding voting power of
Radio One's common stock. As a result, Ms. Hughes and Mr. Liggins will control
most decisions involving Radio One, including transactions involving a change
of control of Radio One, such as a sale or merger. In addition, certain
covenants in Radio One's debt instruments require that Ms. Hughes and Mr.
Liggins maintain specified ownership and voting interests in Radio One, and
prohibit other parties' voting interests from exceeding specified amounts. Ms.
Hughes and Mr. Liggins have agreed to vote their shares together in elections
of members of the board of directors.
Technology Changes, New Services and Evolving Standards--We must respond to the
rapid changes in technology, services and standards which characterize our
industry in order to remain competitive.
The radio broadcasting industry is subject to rapid technological change,
evolving industry standards and the emergence of new media technologies. We
cannot assure you that we will have the resources to acquire new technologies
or to introduce new services that could compete with these new technologies.
Several new media technologies are being developed, including the following:
5
. Audio programming by cable television systems, direct broadcast
satellite systems, Internet content providers and other digital audio
broadcast formats;
. Satellite digital audio radio service, which has resulted in the
introduction of several new satellite radio services with sound quality
equivalent to that of compact discs; and
. In-band on-channel digital radio, which could provide multi-channel,
multi-format digital radio services in the same bandwidth currently
occupied by traditional AM and FM radio services.
We have entered into a programming agreement with a satellite digital audio
radio service, and have also invested in a developer of digital audio broadcast
technology. However, we cannot assure you that these arrangements will be
successful or enable us to adapt effectively to these new media technologies.
Government Regulation--Our business depends on maintaining our licenses with
the FCC. We could be prevented from operating a radio station if we fail to
maintain its license.
Radio broadcasters depend upon maintaining radio broadcasting licenses
issued by the FCC. These licenses are ordinarily issued for a maximum term of
eight years and may be renewed. Our radio broadcasting licenses expire at
various times from October 1, 2003 to August 1, 2006. Although we may apply to
renew our FCC licenses, interested third parties may challenge our renewal
applications. In addition, if Radio One or any of our stockholders, officers,
or directors violates the FCC's rules and regulations or the Communications Act
of 1934, as amended, or is convicted of a felony, the FCC may commence a
proceeding to impose sanctions upon us. Examples of possible sanctions include
the imposition of fines, the renewal of one or more of our broadcasting
licenses for a term of fewer than eight years or the revocation of our
broadcast licenses. If the FCC were to issue an order denying a license renewal
application or revoking a license, we would be required to cease operating the
radio station covered by the license only after we had exhausted administrative
and judicial review without success.
The radio broadcasting industry is subject to extensive and changing federal
regulation, as described in greater detail in our reports filed with the SEC.
Among other things, the Communications Act and FCC rules and policies limit the
number of broadcasting properties that any person or entity may own (directly
or by attribution) in any market and require FCC approval for transfers of
control and assignments of licenses. The FCC recently commenced a rulemaking
proceeding in which it will examine its rules and policies concerning ownership
of multiple radio stations within a local market. The new rulemaking could lead
to significant changes in how the FCC reviews radio station transactions that,
according to the FCC, could result in substantial economic concentration and
thus raise competition concerns. The filing of petitions or complaints against
Radio One or any FCC licensee from which we are acquiring a station could
result in the FCC delaying the grant of, or refusing to grant or imposing
conditions on its consent to the assignment or transfer of control of licenses.
The Communications Act and FCC rules and policies also impose limitations on
non-U.S. ownership and voting of the capital stock of Radio One.
Antitrust Matters--We may have difficulty obtaining regulatory approval for
acquisitions in our existing markets and, potentially, new markets, which could
affect the implementation of our acquisition strategy.
An important part of our growth strategy is the acquisition of additional
radio stations. The agencies responsible for enforcing the federal antitrust
laws, the Federal Trade Commission or the Department of Justice, may
investigate certain acquisitions. After the passage of the Telecommunications
Act of 1996, the Department of Justice became more aggressive in reviewing
proposed acquisitions of radio stations. The Justice Department is particularly
aggressive when the proposed buyer already owns one or more radio stations in
the market of the station it is seeking to buy. The Justice Department has
challenged a number of radio broadcasting transactions. Some of those
challenges ultimately resulted in consent decrees requiring, among other
things, divestitures of certain stations. In general, the Justice Department
has more closely scrutinized radio broadcasting acquisitions that result in
local market shares in excess of 40% of radio advertising revenue.
6
We cannot predict the outcome of any specific Department of Justice or FTC
investigation. Any decision by the Department of Justice or FTC to challenge a
proposed acquisition could affect our ability to consummate an acquisition or
to consummate it on the proposed terms. For an acquisition meeting certain size
thresholds, the Hart-Scott-Rodino Act requires the parties to file Notification
and Report Forms concerning antitrust issues with the Department of Justice and
the FTC and to observe specified waiting period requirements before
consummating the acquisition. If the investigating agency raises substantive
issues in connection with a proposed transaction, then the parties frequently
engage in lengthy discussions or negotiations with the investigating agency
concerning possible means of addressing those issues, including restructuring
the proposed acquisition or divesting assets. In addition, the investigating
agency could file suit in federal court to enjoin the acquisition or to require
the divestiture of assets, among other remedies. Acquisitions that are not
required to be reported under the Hart-Scott-Rodino Act may be investigated by
the Department of Justice or the FTC under the antitrust laws before or after
consummation. In addition, private parties may under certain circumstances
bring legal action to challenge an acquisition under the antitrust laws. As
part of its increased scrutiny of radio station acquisitions, the Department of
Justice has stated publicly that it believes that local marketing agreements,
joint sales agreements, time brokerage agreements and other similar agreements
customarily entered into in connection with radio station transfers could
violate the Hart-Scott-Rodino Act if such agreements take effect prior to the
expiration of the waiting period under the Hart-Scott-Rodino Act. Furthermore,
the Department of Justice has noted that joint sales agreements may raise
antitrust concerns under Section 1 of the Sherman Act and has challenged joint
sales agreements in certain locations. As indicated above, the Department of
Justice also has stated publicly that it has established certain revenue and
audience share concentration benchmarks with respect to radio station
acquisitions, above which a transaction may receive additional antitrust
scrutiny. However, to date, the Department of Justice has also investigated
transactions that do not meet or exceed these benchmarks and has cleared
transactions that do exceed these benchmarks.
Similarly, the FCC staff has adopted procedures to review proposed radio
broadcasting transactions even if the proposed acquisition otherwise complies
with the FCC's ownership limitations. The FCC uses its so-called "50/70" screen
to "flag" proposed radio transactions that it believes may raise competition
concerns. Under the screen, the FCC flags an application for closer
consideration if it proposes a combination that would result in one broadcaster
controlling at least 50 percent-or two broadcasters collectively controlling 70
percent-of local market ad revenue in the relevant Arbitron market, as reported
by BIA. The FCC will conduct a public interest/competitive analysis of those
applications proposing combinations at or above the 50/70 percent level. Those
applications will be designated on public notice as proposing transactions that
raise competition issues.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus and the documents incorporated in this prospectus by
reference contain forward-looking statements within the meaning of Section 27A
of the Securities Act and Section 21E of the Securities Exchange Act of 1934.
These forward-looking statements are not historical facts, but rather are based
on our current expectations, estimates and projections about Radio One's
industry, our beliefs and assumptions. Words such as "anticipates," "expects,"
"intends," "plans," "believes," "seeks," "estimates" and similar expressions
are intended to identify forward-looking statements. These statements are not
guarantees of future performance and are subject to certain risks,
uncertainties and other factors, some of which are beyond our control, are
difficult to predict and could cause actual results to differ materially from
those expressed or forecasted in the forward-looking statements. These risks
and uncertainties are described in "Risk Factors" and elsewhere in this
prospectus. In light of these risks and uncertainties, the forward-looking
events and circumstances discussed in this prospectus might not occur.
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of class D common
stock which may be offered by the selling stockholders.
7
SELLING STOCKHOLDERS
The following table sets forth with respect to each of the selling
stockholders (1) the number of shares of class D common stock held by that
selling stockholder prior to the offering contemplated by this prospectus,
(2) the number of shares of class D common stock to be registered for that
selling stockholder hereunder, (3) the number of shares of class D common stock
that the selling stockholder will hold after completion of the sale of the
class D common stock registered for that selling stockholder hereunder, and (4)
the percentage of the outstanding class D common stock that the selling
stockholder will hold after completion of the sale of the class D common stock
registered for that selling stockholder hereunder. Information regarding the
number of shares of class D common stock held by a selling stockholder prior to
the registration contemplated by this prospectus has been obtained from that
selling stockholder. Except as noted, none of the selling stockholders has, or
within the past three years has had, any position, office or other material
relationship with us or any of our predecessors.
Number of Shares of Percentage of
Number of Shares Class D Common Class D Common
of Class D Stock Held After Stock Held After
Common Stock Number of Shares Completion of the Completion of the
Held Prior to the of Class D Sale of the Class D Sale of the
Sale of Shares Common Stock to Common Stock Class D Common
Registered be Registered Registered Stock Registered
Name of Selling Stockholders Hereunder Hereunder Hereunder Hereunder
---------------------------- ----------------- ---------------- ------------------- -----------------
Alfred C. Liggins, III Revocable Trust,
dated March 2, 1999 /(1)/ 11,663,782/(2)/ 1,000,000 10,663,782 16.2%
LRL Trading, L.L.C./ (3) (4)/ 1,657,368 849,664 807,704 1.2%
Cheryl H. Love /(5)/ 44,479 35,325 9,154 *
LRC Love Limited Partnership /(6)/ 115,439 65,439 50,000 *
Love Family Limited Partnership /(6)/ 28,045 28,045 0 *
J. Kenneth Blackwell 71,679 71,179 500 *
Windings Lane Partnership, Ltd. /(7)/ 53,887 32,387 21,500 *
Lovie L. Ross 198,287 128,241 70,046 *
Calvin D. Buford 53,329 49,840 3,489 *
Buford Family Limited Partnership /(8)/ 1,943 1,943 0 *
C. Howard Buford 11,128 11,128 0 *
Thomas Revely, III 18,184 18,184 0 *
Steven R. Love /(9)/ 19,676 7,557 12,119 *
Stephen E. Kaufmann 16,287 6,405 9,882 *
George C. Hale, Sr. 3,261 3,261 0 *
R. Dean Meiszer 16,677 6,405 10,272 *
Thomas Ross 11,874 11,874 0 *
Paul Landry 7,844 7,844 0 *
Devin Miller 1,485 1,485 0 *
Quetzal/J.P. Morgan Partners, L.P. 2,294,607 1,147,304 1,147,303 1.7%
- --------
*: Less than 1%
(1) Alfred C. Liggins, III, the President, Chief Executive Officer and a
director of Radio One, is the trustee and sole beneficiary of Alfred C.
Liggins, III Revocable Trust, dated March 2, 1999.
(2) Includes shares held by (i) Alfred C. Liggins, III Revocable Trust, dated
March 2, 1999, (ii) Alfred C. Liggins, III, individually, and
(iii) Hughes-Liggins Family Partners, L.P.
(3) LRL Trading, L.L.C. is owned by LRL Investments, L.P. (99.725%) and Vada
Hill (0.275%). LRL Investments, L.P. is owned by L. Ross Love (99.9%) and
LRL Management Corporation (0.1%). LRL Management Corporation is
wholly-owned by L. Ross Love. Accordingly, L. Ross Love may be deemed the
beneficial owner of some or all of the shares held by LRL Trading, L.L.C.
(4) L. Ross Love, who may be deemed beneficial owner of some or all of the
shares held by LRL Trading, L.L.C. (see note (3) above) was elected as a
member of our board of directors on June 5, 2001.
(5) Cheryl H. Love is the spouse of L. Ross Love, a director of Radio One (see
note (4)), and, accordingly, Mr. Love may be deemed to beneficially own
some or all of the shares held by Mrs. Love.
(6) L. Ross Love has a controlling interest in LRC Love Limited Partnership and
Love Family Limited Partnership, and, accordingly, Mr. Love may be deemed
to beneficially own some or all of the shares held by LRC Love Limited
Partnership and Love Family Limited Partnership.
(7) J. Kenneth Blackwell has a controlling interest in Windings Lane
Partnership, Ltd., and, accordingly, Mr. Blackwell may be deemed to
beneficially own some or all of the shares held by Windings Lane
Partnership, Ltd.
(8) Calvin D. Buford has a controlling interest in Buford Family Limited
Partnership, and, accordingly, Mr. Buford may be deemed to beneficially own
some or all of the shares held by Buford Family Limited Partnership.
(9) Steven R. Love is the brother of L. Ross Love, a director of Radio One (see
note (4)).
8
PLAN OF DISTRIBUTION
The class D common stock being offered by the selling stockholders may be
offered and sold from time to time to purchasers directly by such selling
stockholders. Alternatively, the selling stockholders may from time to time
offer those securities to or through underwriters, broker-dealers or agents,
who may receive compensation in the form of underwriting discounts, concessions
or commissions from the selling stockholders or the purchasers of the
securities for whom they act as agents. The selling stockholders and any
underwriters, broker-dealers or agents that participate in the distribution of
the securities may be deemed to be "underwriters" within the meaning of the
Securities Act, and any profit on the sale of such securities and any
discounts, commissions, concessions or other compensation received by any such
underwriter, broker-dealer or agent may be deemed to be underwriting discounts
and commissions under the Securities Act. The maximum commission or discount to
be received by any NASD member acting in any capacity to distribute the
securities will not be greater than 8%.
The securities may be sold from time to time in one or more transactions at
fixed prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale or at negotiated prices. We have not yet
determined when we will effect the sale of the securities. The sale of the
securities may be effected in transactions, which may involve crosses or block
transactions:
. on any national securities exchange or quotation service on which the
securities may be listed or quoted at the time of sale;
. in the over-the-counter market;
. in transactions otherwise than on such exchanges or services or in the
over-the-counter market; or
. through the issuance by the selling stockholders or others of derivative
securities, including without limitation, warrants, exchangeable
securities, forward delivery contracts and the writing of options.
The selling stockholders may enter into hedging transactions with
broker-dealers in connection with distributions of shares or otherwise. In such
transactions, broker-dealers may engage in short sales of shares in the course
of hedging the positions they assume with selling stockholders. The selling
stockholders also may sell shares short and redeliver shares to close out such
short positions. The selling stockholders may enter into option, forward or
other transactions with broker-dealers which require the delivery of shares to
the broker-dealer. The broker-dealer may then resell or otherwise transfer such
shares pursuant to this prospectus. The selling stockholders may also loan or
pledge shares to the broker-dealer. The broker-dealer may sell the shares so
loaned, or upon default the broker-dealer may sell the shares so pledged,
pursuant to this prospectus.
At the time a particular offering of the securities is made, a prospectus
supplement, if required in addition to this prospectus, will be distributed,
which will set forth the aggregate amount and type of securities being offered
and the terms of the offering, including the name or names of any underwriters,
broker-dealers or agents, any discounts, commissions and other terms
constituting compensation from the selling stockholders and any discounts,
commissions or concessions allowed or reallowed to broker-dealers. Only
underwriters named in the prospectus supplement are deemed to be underwriters
in connection with the securities offered by that prospectus supplement.
To comply with the securities laws of certain jurisdictions, if applicable,
the securities will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain
jurisdictions the securities may not be offered or sold unless they have been
registered or qualified for sale in such jurisdictions or any exemption from
registration or qualification is available and is complied with.
The selling stockholders will be subject to applicable provisions of the
Exchange Act and rules and regulations under the Exchange Act, which provisions
may limit the timing of purchases and sales of any of the securities by the
selling stockholders. This may affect the marketability of those securities.
9
We shall bear all fees and expenses incurred in connection with the
registration of the securities, except that selling stockholders will pay all
brokers' commissions and, in connection with any underwritten offering, all
expenses customarily borne by selling stockholders in an underwritten offering,
including underwriting discounts and commissions. Certain of the selling
stockholders will be indemnified by us, against certain civil liabilities,
including certain liabilities under the Securities Act or the Exchange Act or
otherwise, or alternatively will be entitled to contribution in connection with
those liabilities.
LEGAL MATTERS
Kirkland & Ellis, Washington, D.C. (a partnership that includes professional
corporations) will pass upon the validity of the class D common stock offered
by this prospectus.
EXPERTS
The consolidated financial statements of Radio One, Inc. and subsidiaries as
of December 31, 1999 and 2000, and for each of the years in the three-year
period ended December 31, 2000, incorporated by reference in this prospectus
have been audited by Arthur Andersen LLP, independent public accountants, as
indicated in their report with respect thereto, and included herein in reliance
upon the authority of said firm as experts in giving said reports.
The financial statements of selected operations of Clear Channel
Communications as of December 31, 1998 and 1999, and for each of the years in
the three-year period ended December 31, 1999 incorporated by reference in this
prospectus have been audited by Arthur Andersen, LLP, independent public
accountants, as indicated in their report with respect thereto, and included
herein in reliance upon the authority of said firm as experts in giving said
reports.
The financial statements of selected operations of AMFM, Inc. as of December
31, 1998 and 1999, and for each of the years in the three-year period ended
December 31, 1999, incorporated by reference in this prospectus have been
audited by Arthur Andersen, LLP, independent public accountants, as indicated
in their report with respect thereto, and included herein in reliance upon the
authority of said firm as experts in giving said reports.
The financial statements of Blue Chip Broadcasting, Inc. and subsidiaries as
of December 31, 2000 and 1999 and for each of the two years in the period ended
December 31, 2000 incorporated by reference in this prospectus by reference to
pages 1-19 of Radio One Inc.'s Form 8-K/A dated April 9, 2001 have been so
incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Blue Chip Broadcast Company and subsidiary as of
December 31, 1998 and for the year then ended incorporated by reference in this
prospectus have been audited by Clark, Schaefer, Hackett & Co., independent
public accountants, as indicated in their report with respect thereto, and
included herein in reliance upon the authority of said firm as experts in
giving said reports.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We are subject to the reporting requirements of the Securities Exchange Act
of 1934, as amended, and, in accordance therewith, file reports, proxy
statements and other information with the SEC. Such reports, proxy statements
and other information may be inspected and copied at the public reference
facilities maintained by the SEC at 450 Fifth Street, N.W., Washington, D.C.
20549. Copies of such material can be obtained from the Public Reference
Section of the SEC upon payment of certain fees prescribed by the SEC. The
SEC's web site contains reports, proxy and information statements and other
information regarding registrants that file electronically with the SEC. The
address of that site on the world wide web is sec.gov. The information on the
SEC 's web site is not part of this prospectus, and any references to this web
site or any other web site are inactive textual references only.
10
INCORPORATION BY REFERENCE
The SEC permits us to "incorporate by reference" the information in
documents 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 the
information that we file with the SEC after the initial filing date of the
registration statement of which this prospectus is part, and prior to the
effectiveness of that registration statement, will automatically update and
supercede this information. We have filed the following documents with the SEC
and incorporate in this prospectus by reference:
. our Amended Annual Report on Form 10-K/A for the year ended December 31,
2000 filed on August 7, 2001;
. our Quarterly Reports on Form 10-Q for the Quarters ended March 31,
2001, June 30, 2001 and September 30, 2001;
. our Definitive Proxy Statement on Form DEF 14A filed on April 26, 2001;
. our Current Reports on Form 8-K filed on April 9, 2001, April 18, 2001,
May 4, 2001, May 16, 2001, August 3, 2001, August 6, 2001, August 13,
2001, August 24, 2001 and November 7, 2001; and
. our Registration Statement on Form 8-A dated May 17, 2000.
We also incorporate by reference any future filings made with the SEC under
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act. Statements
contained in documents incorporated or deemed to be incorporated by reference
after the initial filing date of the registration statement of which this
prospectus is a part will modify statements in any other subsequently filed
documents to the extent the new information differs from the old information.
Any statements modified or superseded will no longer constitute a part of this
prospectus in their original form.
If you request a copy of any or all of the documents incorporated by
reference, then we will send to you the copies you requested at no charge.
However, we will not send exhibits to such documents, unless such exhibits are
specifically incorporated by reference in such documents. You should direct
requests for such copies to Investor Relations, Radio One, Inc., 5900 Princess
Garden Parkway, 7th Floor, Lanham, MD 20706, or to our e-mail address:
invest@radio-one.com. Our telephone number is (301) 306-1111.
We have filed with the SEC a registration statement on Form S-3 under the
Securities Act of 1933, as amended, covering the securities described in this
prospectus. This prospectus does not contain all of the information included in
the registration statement, some of which is contained in exhibits to the
registration statement. The registration statement, including the exhibits, can
be read at the SEC web site or at the SEC office referred to above. Any
statement made in this prospectus concerning the contents of any contract,
agreement or other document is only a summary of the actual contract, agreement
or other document. If we have filed any contract, agreement or other document
as an exhibit to the registration statement, you should read the exhibit for a
more complete understanding of the document or matter involved.
11
[LOGO] Radio One Logo
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the expenses of the Radio One in connection
with the registration of the securities being registered, other than
underwriting discounts and commissions. All such amounts are estimates, other
than the fees payable to the Commission.
SEC registration fee........ $ 51,602*
NASD filing fee............. 30,500
Rating agency fees.......... 50,000
Legal fees and expenses..... 250,000
Accounting fees and expenses 100,000
Printing.................... 40,000
Trustee's Fees.............. 55,000
--------
Total.................... $577,102
========
- --------
* Includes $46,000 for the securities registered by us hereunder and $5,602
paid by us on behalf of the selling stockholders registering securities
hereunder.
Item 15. Indemnification of Directors and Officers.
Registrants Incorporated or Organized Under Delaware Law
All Registrants, other than Bell Broadcasting Company, Blue Chip Broadcast
Company, Blue Chip Broadcasting, Ltd., Blue Chip Broadcasting Licenses, Ltd.,
and Blue Chip Broadcasting Licenses II, Ltd., are incorporated or organized
under the laws of the State of Delaware. Section 102(b)(7) of the General
Corporation Law of the State of Delaware permits a Delaware corporation to
limit the personal liability of its directors in accordance with the provisions
set forth therein. The Restated Certificate of Incorporation of the Registrant
provides that the personal liability of its directors shall be limited to the
fullest extent permitted by applicable law.
Section 145 of the General Corporation Law of the State of Delaware contains
provisions permitting corporations organized thereunder to indemnify directors,
officers, employees or agents against expenses, judgments and fines reasonably
incurred and against certain other liabilities in connection with any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person was or is a director, officer, employee or agent of the corporation. The
Amended and Restated Certificate of Incorporation or equivalent constituting
document of each of the Registrants, other than Bell Broadcasting Company, Blue
Chip Broadcast Company, Blue Chip Broadcasting, Ltd., Blue Chip Broadcasting
Licenses, Ltd., Blue Chip Broadcasting Licenses II, Ltd. and the Radio One
Trusts, provides for indemnification of its directors and officers to the
fullest extent permitted by applicable law.
Radio One of Indiana, L.P. and Radio One of Texas, L.P. are organized as
limited partnerships under the laws of the State of Delaware. Section 17-108 of
the Delaware Revised Uniform Limited Partnership Act provides that a limited
partnership, subject to any standards and restrictions in its partnership
agreement, may indemnify and hold harmless any partner or other person from and
against any and all claims and demands. The Limited Partnership Agreement of
each of Radio One of Indiana, L.P. and Radio One of Texas, L.P. provides that
the partnership shall indemnify and save harmless its general partners from any
loss or damage incurred by reason of any act performed by them for and on
behalf of the partnership unless the act constituted gross negligence, willful
or wanton misconduct, or intentional malfeasance.
II-1
Satellite One, L.L.C., Radio One of Charlotte, LLC, Radio One Licenses, LLC,
Radio One of Detroit, LLC, Radio One of Atlanta, LLC, ROA Licenses, LLC, Radio
One of Augusta, LLC, Charlotte Broadcasting, LLC, Radio One of North Carolina,
LLC, Radio One of Boston Licenses, LLC, Radio One of Indiana, LLC, Radio One of
Texas I, LLC and Radio One of Texas II, LLC are organized as limited liability
companies under the laws of the State of Delaware. Section 18-108 of the
Delaware Limited Liability Company Act provides that a limited liability
company, subject to any standards and restrictions in its limited liability
company agreement, may indemnify and hold harmless any member or manager or
other person from and against any and all claims and demands. The Limited
Liability Company Agreement of each of Satellite One, L.L.C., Radio One
Licenses, LLC, Radio One of Detroit, LLC, Radio One of Atlanta, LLC, ROA
Licenses, LLC, Radio One of Augusta, LLC, Charlotte Broadcasting, LLC, Radio
One of North Carolina, LLC, Radio One of Boston Licenses, LLC, Radio One of
Indiana, LLC, Radio One of Texas I, LLC and Radio One of Texas II, LLC provides
that the company shall, in accordance with Section 18-108 of the Delaware
Limited Liability Company Act, indemnify and hold harmless any member, manager
or officer of such company (or of an affiliate thereof) to the fullest extent
permitted by law against any loss, liability, damage, judgment, demand, claim,
cost or expense incurred by or asserted against such indemnitee, including,
without limitation, reasonable attorney's fees and disbursements incurred in
the defense thereof, arising out of any act or omission of such indemnitee in
connection with the company. The limited liability company agreement of Radio
One of Charlotte, LLC provides that, to the maximum extent permitted by law,
the company shall indemnify any person who is or was a manager of the company
or is or was serving at the request of the company, if he or she acted in good
faith and in a manner he or she reasonably believed to be in, or not opposed
to, the best interests of the company and, with respect to any criminal
proceeding, had no reasonable cause to believe his or her conduct was unlawful.
The company may also, to the maximum extent permitted by law, indemnify any
employee or agent who is not a manager under the same standard if such
indemnification is approved by the company's managers.
Registrant Incorporated Under Michigan Law
Bell Broadcasting Company ("BBC") is incorporated under the laws of the
State of Michigan. Under Sections 561-571 of the Michigan Business Corporation
Act, directors and officers of a Michigan corporation may be entitled to
indemnification by the corporation against judgments, expenses, fines and
amounts paid by the director or officer in settlement of claims brought against
them by third persons or by or in the right of the corporation if those
directors and officers acted in good faith and in a manner reasonably believed
to be in, or not opposed to, the best interests of the corporation or its
shareholders. BBC's Restated Articles of Incorporation provide that its
directors shall not be personally liable to BBC or its shareholders for
monetary damages for breach of the director's fiduciary duty. However, BBC's
Restated Articles of Incorporation do not eliminate or limit the liability of a
director for any of the following: (i) a breach of the director's duty of
loyalty to us or our shareholders; (ii) acts or omissions not in good faith or
that involve intentional misconduct or knowing violation of law; (iii) a
violation of Section 551(1) of the Michigan Business Corporation Act; (iv) a
transaction from which the director derived an improper personal benefit; or
(v) an act or omission occurring before the effective date of the Restated
Articles of Incorporation. In addition, BBC's By-Laws generally provide that
BBC shall indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of BBC) by reason of the fact that he is or
was a BBC director, officer, employee or agent or is or was serving at BBC's
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise.
Registrants Organized Under Nevada Law
Blue Chip Broadcasting Licenses II, Ltd. is organized as a limited liability
company under the laws of the State of Nevada. Under Chapter 86 of the Nevada
Revised Statutes, a limited liability company may indemnify a manager, member,
employee, agent or certain other persons against expenses, including attorney's
fees, judgments, fines, and amounts paid in settlement actually and reasonably
incurred in connection with an action, suit or proceeding, if such manager,
member, employee, agent or other person acted in good faith and in a
II-2
manner reasonably believed to be in, or not opposed to, the best interests of
the company and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. A limited liability
company may also indemnify a manager, member, employee, agent or certain other
persons against expenses, including attorney's fees, actually and reasonably
incurred in connection with an action or suit by or in the right of such
company, if such manager, member, employee, agent or other person acted in good
faith and in a manner reasonably believed to be in, or not opposed to, the best
interests of the company. The Bylaws of Blue Chip Broadcasting Licenses II,
Ltd. provide that the company shall grant indemnification to the foregoing
persons to the extent authorized by the Nevada Revised Statutes.
Registrants Incorporated or Organized Under Ohio Law
Blue Chip Broadcast Company is incorporated under the laws of the State of
Ohio. Under Section 1701.13 of the Ohio Revised Code, a corporation may
indemnify a director, officer, employee or agent or certain other persons
against expenses, including attorney's fees, judgments, fines, and amounts paid
in settlement, actually and reasonably incurred in connection with an action,
suit or proceeding, if such director, officer, employee, agent or other person
acted in good faith and in a manner reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. A corporation may also indemnify a director, officer, employee or
agent or certain other persons against expenses, including attorney's fees,
actually and reasonably incurred in connection with an action or suit by or in
the right of such corporation, subject to certain exceptions, if such director,
officer, employee, agent or other person acted in good faith and in a manner
reasonably believed to be in, or not opposed to, the best interests of the
corporation. Article IV of the Regulations of Blue Chip Broadcast Company
provides that the company shall indemnify all the foregoing persons to the full
extent permitted by the General Corporation Law of Ohio.
Blue Chip Broadcasting, Ltd. and Blue Chip Broadcasting Licenses, Ltd. are
organized as limited liability companies under the laws of the State of Ohio.
Under Section 1705.32 of the Ohio Revised Code, a limited liability company may
indemnify a manager, member, partner, officer, employee, agent or certain other
persons against expenses, including attorney's fees, judgments, fines, and
amounts paid in settlement, actually and reasonably incurred in connection with
an action, suit or proceeding, if such manager, member, partner, officer,
employee, agent or other person acted in good faith and in a manner reasonably
believed to be in, or not opposed to, the best interests of the company and, in
connection with any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. A limited liability company may also
indemnify a manager, officer, employee, agent or certain other persons against
expenses, including attorney's fees, actually and reasonably incurred in
connection with an action or suit by or in the right of such company, if such
manager, officer, employee, agent or other person acted in good faith and in a
manner reasonably believed to be in, or not opposed to, the best interests of
the company. The Bylaws of each of Blue Chip Broadcasting, Ltd. and Blue Chip
Broadcasting Licenses, Ltd. provide that the company shall indemnify the
foregoing persons to the full extent authorized by the Ohio Revised Code.
The above discussion of the relevant statutes and the governing documents of
the registrants is not intended to be exhaustive and is qualified in its
entirety by reference to such statutes and governing documents.
We refer you to the proposed Form of Underwriting Agreement, filed as
Exhibit 1.1, for additional provisions relating to indemnification of Radio One
and its directors and officers.
Indemnification of Trustees of the Radio One Trusts
Each trust agreement provides that no trustee, affiliate of any trustee or
any officers, directors, stockholders, members, partners, employees,
representatives or agents of any trustee or any employee or agent of a Radio
One Trust or its affiliates, each referred to as an indemnified person, shall
be liable, responsible or accountable in
II-3
damages or otherwise to any employee or agent of a Radio One Trust or its
affiliates or any officers, directors, stockholders, employees, representatives
or agents of Radio One or its affiliates, or to any holders of trust securities
of a Radio One Trust for any loss, damage or claim incurred by reason of any
act or omission performed or omitted by such indemnified person in good faith
on behalf of a Radio One Trust and in a manner such indemnified person
reasonably believed to be within the scope of the authority conferred on such
indemnified person by the trust agreement of a Radio One Trust or by law,
except that an indemnified person shall be liable for any such loss, damage or
claim incurred by reason of such indemnified person's gross negligence (or, in
the case of the property trustee of a Radio One Trust, negligence), willful
misconduct or bad faith with respect to such acts or omissions. The trust
agreement also provides that, to the fullest extent permitted by applicable
law, Radio One shall indemnify and hold harmless each indemnified person from
and against any loss, damage or claim incurred by such indemnified person by
reason of any act or omission performed or omitted by such indemnified person
in good faith on behalf of a Radio One Trust and in a manner such indemnified
person reasonably believed to be within the scope of authority conferred on
such indemnified person by the trust agreement, except that no indemnified
person shall be entitled to be indemnified in respect of any loss, damage or
claim incurred by such indemnified person by reason of gross negligence (or, in
the case of the property trustee of a Radio One Trust, negligence), willful
misconduct or bad faith with respect to such acts or omissions. Each trust
agreement further provides that to the fullest extent permitted by applicable
law, expenses (including legal fees) incurred by an indemnified person in
defending any claim, demand, action, suit or the final disposition of such
claim, demand, action, suit or proceeding shall, from time to time, be advanced
by Radio One prior to the final disposition of such claim, demand, action, suit
or proceeding upon receipt by Radio One of an undertaking by or on behalf of
the indemnified person to repay such amount if it shall be determined that the
indemnified person is not entitled to be indemnified pursuant to the trust
agreement.
II-4
Item 16. Exhibits.
Exhibit
Number Description
- ------ ----------------------------------------------------------------------------------------------------
1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of Radio One, Inc. (dated as of May 4, 2000) as
filed with the State of Delaware on May 9, 2000 (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended March 31, 2000 (File No. 000-25969; Film No. 631638)).
3.1.1 Certificate of Amendment (dated as of September 21, 2000) of the Amended and Restated Certificate of
Incorporation of Radio One, Inc. (dated as of May 4, 2000), as filed with the State of Delaware on
September 21, 2000 (incorporated by reference to Radio One's Current Report on Form 8-K filed
October 6, 2000 (File No. 000-25969; Film No. 736375)).
3.2 Amended and Restated By-laws of Radio One, Inc., amended as of June 5, 2001 (incorporated by
reference to Radio One's Form 10-Q filed on August 14, 2001 (File No. 000-25969; Film
No. 1714323)).
3.3 Certificate Of Designations, Rights and Preferences of the 6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES) of Radio One, Inc., as filed
with the State of Delaware on July 13, 2000 (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
4.14 Indenture, dated as of May 18, 2001, between Radio One, Inc. and United States Trust Company of
New York, as Trustee (incorporated by reference to Radio One's Registration Statement on Form S-4
filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.14.1 First Supplemental Indenture, dated as of August 10, 2001, among Radio One, Inc., the Guaranteeing
Subsidiaries and other Guarantors listed therein, and The Bank of New York (as successor to The
United States Trust Company of New York), as trustee (incorporated by reference to Amendment
No. 1, filed October 4, 2001, to Radio One's Registration Statement on Form S-4 (File No. 333-65278;
Film No. 1752425)).
4.14.2 Second Supplemental Indenture, dated as of December 31, 2001, among Radio One, Inc., the
Guaranteeing Subsidiaries and other Guarantors listed therein, and The Bank of New York (as
successor to The United States Trust Company of New York), as trustee.
4.15 Form of 8 7/8% Senior Subordinated Notes, due 2011 (incorporated by reference to Radio One's
Registration Statement on Form S-4 filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.17 Form of Senior Indenture.
4.18 Form of Senior Debt Security (included in Form of Senior Indenture filed as Exhibit 4.17).
4.19 Form of Subordinated Indenture.
4.20 Form of Subordinated Debt Security (included in Form of Subordinated Indenture filed as
Exhibit 4.19).
4.21 Form of Junior Subordinated Indenture.
4.22 Certificate of Trust of Radio One Trust I.
4.23 Trust Agreement of Radio One Trust I.
4.24 Certificate of Trust of Radio One Trust II.
4.25 Trust Agreement of Radio One Trust II.
4.26 Form of Amended and Restated Trust Agreement.
4.27 Form of Preferred Securities Guarantee Agreement.
4.28 Form of Preferred Securities Certificate (included in Form of Amended and Restated Trust Agreement
filed as Exhibit 4.26).
4.29 Form of Warrant Agreement.
4.30 Form of Standard Stock Warrant Agreement Provisions.
II-5
Exhibit
Number Description
- ------ -----------------------------------------------------------------------------------------------------
4.31 Form of Stock Purchase Contract Agreement.
5.1 Opinion of Kirkland & Ellis regarding the legality of the securities being registered.
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the legality of the securities being registered.
12.1 Statement setting forth computation of ratios.
23.1 Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2).
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of PricewaterhouseCoopers, LLP
23.5 Consent of Clark, Schaefer, Hackett & Co.
24.1 Power of Attorney for Radio One, Inc. (included on the signature pages hereto).
24.2 Power of Attorney for Radio One, as Sponsor, to sign the Registration Statement on behalf of Radio
One Trust I (included in Exhibit 4.23).
24.3 Power of Attorney for Radio One, as Sponsor, to sign the Registration Statement on behalf of Radio
One Trust II (included in Exhibit 4.25).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for The Bank of New York (as
successor to United States Trust Company of New York),as trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Senior Indenture.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Subordinated Indenture.
25.4 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Junior Subordinated Debenture Indenture.
25.5 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as guarantee trustee under the Preferred Securities Guarantee Agreement for Radio One
Trust I.
25.6 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as guarantee trustee under the Preferred Securities Guarantee Agreement for Radio One
Trust II.
25.7 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as property trustee under the Amended and Restated Trust Agreement for Radio One Trust I.
25.8 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as property trustee under the Amended and Restated Trust Agreement for Radio One
Trust II.
Item 17. Undertakings.
Each 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:
(a) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(b) 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; provided, however, that
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 Securities and
Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
II-6
(c) 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 clauses (1)(a) and (1)(b) do not apply if the
information required to be included in a post-effective amendment
by those clauses is contained in periodic reports filed with or
furnished to the Securities and Exchange Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in this
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment (whether or not containing a form of
prospectus) 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) That, for the purpose of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to Section 15(d) of
the Exchange Act) 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.
(5) That, for the purpose of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part
of this registration statement in reliance upon Rule 430A and contained
in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to
be part of this registration statement as of the time it was declared
effective.
(6) If any of the securities are offered at a competitive bidding, (a) to
use its best efforts to distribute prior to the opening of bids, to
prospective bidders, underwriters, and dealers, a reasonable number of
copies of a prospectus which at that time meets the requirements of
Section 10(a) of the Securities Act, and relating to the securities
offered at competitive bidding, as contained in the registration
statement, together with any supplements thereto, and (b) to file an
amendment to the registration statement reflecting the results of
bidding, the terms of the reoffering and related matters to the extent
required by the applicable form, not later than the first use,
authorized by the issuer after the opening of bids, of a prospectus
relating to the securities offered at competitive bidding, unless no
further public offering of such securities by the issuer and no
reoffering of such securities by the purchasers is proposed to be made.
Insofar as indemnification for liabilities arising under the Securities Act
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 Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (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 of
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
Each undersigned registrant hereby undertakes to file an application for the
purpose of determining the eligibility of the trustee to act under subsection
(a) of Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Securities and Exchange Commission under Section
305(b)(2) of the Act.
II-7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, each
of the Registrants certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Lanham, Maryland, on January 29, 2002.
RADIO ONE, INC.
By: /s/ Alfred C. Liggins, III
-----------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
RADIO ONE LICENSES, LLC
BELL BROADCASTING COMPANY
RADIO ONE OF DETROIT, LLC
RADIO ONE OF ATLANTA, LLC
ROA LICENSES, LLC
RADIO ONE OF CHARLOTTE, LLC,
RADIO ONE OF AUGUSTA, LLC
CHARLOTTE BROADCASTING, LLC
RADIO ONE OF NORTH CAROLINA, LLC
RADIO ONE OF BOSTON, INC.
RADIO ONE OF BOSTON LICENSES, LLC
BLUE CHIP MERGER SUBSIDIARY, INC.
BLUE CHIP BROADCAST COMPANY
BLUE CHIP BROADCASTING, LTD.
BLUE CHIP BROADCASTING LICENSES, LTD.
BLUE CHIP BROADCASTING LICENSES II,
LTD.
RADIO ONE OF INDIANA, LLC
RADIO ONE OF TEXAS I, LLC
RADIO ONE OF TEXAS II, LLC
SATELLITE ONE, L.L.C.
By: /s/ Alfred C. Liggins, III
-----------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
RADIO ONE OF INDIANA, L.P.
By: RADIO ONE, INC.,
its general partner
By: /s/ Alfred C. Liggins, III
-----------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
RADIO ONE OF TEXAS, L.P.
By: RADIO ONE OF TEXAS I, LLC,
its general partner
By: /s/ Alfred C. Liggins, III
-----------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
II-8
POWER OF ATTORNEY AND SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons on the date and
in the capacity indicated. We, the undersigned officers and directors of
Registrants, hereby severally constitute and appoint Alfred C. Liggins, III,
Scott R. Royster and Linda J. Eckard Vilardo, and each of them singly, our true
and lawful attorneys, with full power to them and each of them singly, to sign
for us in our names in the capacities indicated below, all pre-effective and
post-effective amendments to this Registration Statement (or any other
registration statement for the same offering that is to be effective upon
filing pursuant to Rule 462(b) under the Securities Act), and generally to do
all things in our names and on our behalf in such capacities to enable the
Registrants to comply with the provisions of the Securities Act, as amended,
and all requirements of the SEC.
Registrants
Signature Title(s) Date
--------- -------- ----
/s/ Catherine L. Hughes Chairperson of the Board of Directors /(1)/ January 29, 2002
- --------------------------
Catherine L. Hughes
/s/ Terry L. Jones Director /(1)/ January 29, 2002
- --------------------------
Terry L. Jones
/s/ Brian W. McNeill Director /(1)/ January 29, 2002
- --------------------------
Brian W. McNeill
/s/ Larry D. Marcus Director /(2)/ January 29, 2002
- --------------------------
Larry D. Marcus
/s/ L. Ross Love Director /(3)/ January 29, 2002
- --------------------------
L. Ross Love
/s/ D. Geoffrey Armstrong Director /(3)/ January 29, 2002
- --------------------------
D. Geoffrey Armstrong
/s/ Alfred C. Liggins, III Director /(1),/ President and Chief January 29, 2002
- -------------------------- Executive Officer (Principal
Alfred C. Liggins, III Executive Officer)/ (4)/ and in the
capacity described below /(5)/
/s/ Scott R. Royster Executive Vice President and Chief January 29, 2002
- -------------------------- Financial Officer (Principal
Scott R. Royster Financial and Accounting
Officer)/ (4)/
- --------
/(1)/ Radio One, Inc., Bell Broadcasting Company, Radio One of Boston, Inc.,
Blue Chip Merger Subsidiary, Inc., and Blue Chip Broadcast Company.
/(2)/ Radio One, Inc., Radio One of Boston, Inc., Blue Chip Merger Subsidiary,
Inc., and Blue Chip Broadcast Company.
/(3)/ Radio One, Inc.
/(4)/ All Registrants, other than the Radio One Trusts and the limited
partnership Registrants.
/(5)/ For the Registrants that are limited liability companies or limited
partnerships , Alfred C. Liggins, III is executing on behalf of such
Registrants in the following capacity: (a) for each of Radio One
Licenses, LLC, Radio One of Atlanta, LLC, Radio One of Charlotte, LLC,
Radio One of Texas I, LLC, Radio One of Texas II, LLC and Satellite One,
L.L.C., as President and Chief Executive Officer of Radio One, Inc., the
sole member of each such limited liability company, (b) for Radio One of
Detroit, LLC, as President and Chief Executive Officer of Bell
Broadcasting Company, its sole member, (c) for ROA Licenses, LLC, as
President and Chief Executive Officer of Radio One of Atlanta, LLC, its
sole member, (d) for Radio One of Augusta, LLC and Charlotte
Broadcasting, LLC, as President and Treasurer of Radio One of Charlotte,
LLC, the sole member of each such limited liability company, (e) for
Radio One of North Carolina, LLC, as President and Chief Executive
Officer of Charlotte Broadcasting, LLC, its sole member, (f) for Radio
One of Boston Licenses, LLC, as President and Chief Executive Officer of
Radio One of Boston, Inc., its sole member, (g) for Blue Chip
Broadcasting, Ltd., as President and Chief Executive Officer of Blue Chip
Broadcast Company, its sole member, (h) for Blue Chip Broadcasting
Licenses, Ltd., as President and Chief Executive Officer of Blue Chip
Broadcasting, Ltd., its sole member, (i) for Blue Chip Broadcasting
Licenses II, Ltd., as President and Chief Executive Officer of Blue Chip
Merger Subsidiary, Inc., its sole member, (j) for Radio One of Indiana,
L.P., as President and Chief Executive Officer of Radio One, Inc., its
general partner, (k) for Radio One of Indiana, LLC, as President and
Chief Executive Officer of Radio One, Inc., the general partner of Radio
One of Indiana, L.P., its sole member, and (l) for Radio One of Texas,
L.P., as President and Chief Executive Officer of Radio One of Texas I,
LLC, its general partner.
II-9
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Radio One Trust I certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Lanham, Maryland, on January 29, 2002.
RADIO ONE TRUST I
By: Radio One, Inc., as Sponsor
By: /S/ ALFRED C. LIGGINS, III
------------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
II-10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
Radio One Trust II certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Lanham, Maryland, on January 29, 2002.
RADIO ONE TRUST II
By: Radio One, Inc., as Sponsor
By: /s/ Alfred C. Liggins, III
------------------------------------
Name: Alfred C. Liggins, III
Title: President and Chief Executive
Officer
II-11
EXHIBIT INDEX
Exhibit
Number Description
- ------- -----------------------------------------------------------------------------------------------------
1.1 Form of Underwriting Agreement.
3.1 Amended and Restated Certificate of Incorporation of Radio One, Inc. (dated as of May 4, 2000) as
filed with the State of Delaware on May 9, 2000 (incorporated by reference to Radio One's
Quarterly Report on Form 10-Q for the period ended March 31, 2000 (File No. 000-25969; Film No.
631638)).
3.1.1 Certificate of Amendment (dated as of September 21, 2000) of the Amended and Restated
Certificate of Incorporation of Radio One, Inc. (dated as of May 4, 2000), as filed with the State of
Delaware on September 21, 2000 (incorporated by reference to Radio One's Current Report on Form
8-K filed October 6, 2000 (File No. 000-25969; Film No. 736375)).
3.2 Amended and Restated By-laws of Radio One, Inc., amended as of June 5, 2001 (incorporated by
reference to Radio One's Form 10-Q filed on August 14, 2001 (File No. 000-25969; Film
No. 1714323)).
3.3 Certificate Of Designations, Rights and Preferences of the 6 1/2% Convertible Preferred Securities
Remarketable Term Income Deferrable Equity Securities (HIGH TIDES) of Radio One, Inc., as filed
with the State of Delaware on July 13, 2000 (incorporated by reference to Radio One's Quarterly
Report on Form 10-Q for the period ended June 30, 2000 (File No. 000-25969; Film No. 698190)).
4.14 Indenture, dated as of May 18, 2001, between Radio One, Inc. and United States Trust Company of
New York, as Trustee (incorporated by reference to Radio One's Registration Statement on Form
S-4 filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.14.1 First Supplemental Indenture, dated as of August 10, 2001, among Radio One, Inc., the Guaranteeing
Subsidiaries and other Guarantors listed therein, and The Bank of New York (as successor to The
United States Trust Company of New York), as trustee (incorporated by reference to Amendment
No. 1, filed October 4, 2001, to Radio One's Registration Statement on Form S-4 (File No. 333-
65278; Film No. 1752425)).
4.14.2 Second Supplemental Indenture, dated as of December 31, 2001, among Radio One, Inc., the
Guaranteeing Subsidiaries and other Guarantors listed therein, and The Bank of New York (as
successor to The United States Trust Company of New York), as trustee.
4.15 Form of 8 7/8% Senior Subordinated Notes, due 2011 (incorporated by reference to Radio One's
Registration Statement on Form S-4 filed July 17, 2001 (File No. 333-65278; Film No. 1683373)).
4.17 Form of Senior Indenture.
4.18 Form of Senior Debt Security (included in Form of Senior Indenture filed as Exhibit 4.17).
4.19 Form of Subordinated Indenture.
4.20 Form of Subordinated Debt Security (included in Form of Subordinated Indenture filed as Exhibit
4.19).
4.21 Form of Junior Subordinated Indenture.
4.22 Certificate of Trust of Radio One Trust I.
4.23 Trust Agreement of Radio One Trust I.
4.24 Certificate of Trust of Radio One Trust II.
4.25 Trust Agreement of Radio One Trust II.
4.26 Form of Amended and Restated Trust Agreement.
4.27 Form of Preferred Securities Guarantee Agreement.
4.28 Form of Preferred Securities Certificate (included in Form of Amended and Restated Trust
Agreement filed as Exhibit 4.26).
Exhibit
Number Description
- ------- -----------------------------------------------------------------------------------------------------
4.29 Form of Warrant Agreement.
4.30 Form of Standard Stock Warrant Agreement Provisions.
4.31 Form of Stock Purchase Contract Agreement.
5.1 Opinion of Kirkland & Ellis regarding the legality of the securities being registered.
5.2 Opinion of Richards, Layton & Finger, P.A. regarding the legality of the securities being registered.
12.1 Statement setting forth computation of ratios.
23.1 Consent of Kirkland & Ellis (included in Exhibit 5.1).
23.2 Consent of Richards, Layton & Finger, P.A. (included in Exhibit 5.2).
23.3 Consent of Arthur Andersen LLP.
23.4 Consent of PricewaterhouseCoopers, LLP
23.5 Consent of Clark, Schaefer, Hackett & Co.
24.1 Power of Attorney for Radio One, Inc. (included on the signature pages hereto).
24.2 Power of Attorney for Radio One, as Sponsor, to sign the Registration Statement on behalf of Radio
One Trust I (included in Exhibit 4.23).
24.3 Power of Attorney for Radio One, as Sponsor, to sign the Registration Statement on behalf of Radio
One Trust II (included in Exhibit 4.25).
25.1 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for The Bank of New York
(as successor to United States Trust Company of New York), as trustee under the Indenture.
25.2 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Senior Indenture.
25.3 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Subordinated Indenture.
25.4 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as trustee under the Junior Subordinated Debenture Indenture.
25.5 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as guarantee trustee under the Preferred Securities Guarantee Agreement for Radio One
Trust I.
25.6 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as guarantee trustee under the Preferred Securities Guarantee Agreement for Radio One
Trust II.
25.7 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as property trustee under the Amended and Restated Trust Agreement for Radio One
Trust I.
25.8 Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 for Wilmington Trust
Company, as property trustee under the Amended and Restated Trust Agreement for Radio One
Trust II.