THE BANK OF NEW YORK, as Administrative Agent| | | | |
| | | | |
| | By: | /s/ Steve Nettler | |
| | |
| |
| | Name: | Steve Nettler | |
| | | | |
Annex 1 to
First Amended and Restated Parent Security Agreement
Dated as of June 15, 2001
PLEDGED STOCK
================================= =================== ======================= ======================================
Certificate Number of
Shares
Issuer Number Registered Owner
- --------------------------------- ------------------- ----------------------- --------------------------------------
Salem Communications Holding 1 Salem Communications 1,000 shares of common stock, par
Corporation Corporation value $0.01
- --------------------------------- ------------------- ----------------------- --------------------------------------
Salem Communications 1 Salem Communications 1,000 shares of common stock, par
Acquisition Corporation Corporation value $0.01
================================= =================== ======================= ======================================
(ii)
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION.................................................................................2
1.1. Certain Defined Terms...............................................................................2
1.2. Interpretation......................................................................................4
2. COLLATERAL.....................................................................................................4
2.1. Grant...............................................................................................4
2.2. Perfection..........................................................................................5
2.3. Preservation and Protection of Security Interests...................................................5
2.4. Attorney-in-Fact....................................................................................6
2.5. Special Provisions Relating to Stock Collateral.....................................................6
2.6. Rights and Obligations..............................................................................7
2.7. Termination.........................................................................................7
3. CASH PROCEEDS OF COLLATERAL....................................................................................8
3.1. Cash Collateral Account.............................................................................8
3.2. Certain Proceeds....................................................................................8
3.3. Investment of Balance in Cash Collateral Account....................................................8
4. REPRESENTATIONS................................................................................................9
4.1. Title...............................................................................................9
4.2. Stock Collateral....................................................................................9
5. COVENANTS.....................................................................................................10
5.1. Books and Records..................................................................................10
5.2. Removals, Etc......................................................................................10
5.3. Sales and Other Liens..............................................................................10
5.4. Stock Collateral...................................................................................10
5.5. Further Assurances.................................................................................11
6. EVENTS OF DEFAULT; REMEDIES...................................................................................11
6.1. Events of Default..................................................................................11
6.2. Remedies...........................................................................................11
6.3. Deficiency.........................................................................................12
6.4. Private Sale.......................................................................................12
6.5. Application of Proceeds............................................................................13
6.6. Certain Regulatory Requirements....................................................................13
7. MISCELLANEOUS.................................................................................................14
7.1. Notices............................................................................................14
7.2. Expenses...........................................................................................14
7.3. Relationship to Credit Agreement...................................................................14
7.4. Governing Law; Terms...............................................................................15
EXHIBIT 4.24.02
SECOND AMENDED AND RESTATED PARENT GUARANTY
-------------------------------------------
SECOND AMENDED AND RESTATED PARENT GUARANTY (as the same may be amended, supplemented or otherwise modified from time to
time, this "Agreement"), dated as of June 15, 2001, by and among SALEM COMMUNICATIONS CORPORATION, a Delaware corporation (the
---------
"Guarantor"), SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware corporation (the "Borrower") and THE BANK OF NEW YORK (the
- ---------- --------
"Administrative Agent"), in its capacity as Administrative Agent for the Lenders under the Credit Agreement referred to below and the
- ----------------------
Rate Protection Lenders as defined herein.
RECITALS
--------
A. Reference is made to the First Amended and Restated Parent Guaranty, dated as of November 7, 2000, by and among the
Guarantor, the Borrower and the Administrative Agent (as previously amended, the "Existing Parent Guaranty").
------------------------
B. Reference is made to the Third Amended and Restated Credit Agreement, dated as of November 7, 2000, by and among the
Borrower, the lenders party thereto, and The Bank of New York, as Administrative Agent, Bank of America, N.A., as Syndication Agent,
Fleet National Bank, as Documentation Agent, and Union Bank of California, N.A. and The Bank of Nova Scotia, as Co-Agents (as
amended, the "Existing Credit Agreement").
-------------------------
C. Reference is made to the Parent Security Agreement, dated as of November 7, 2000, by and between the Guarantor and
the Administrative Agent (the "Existing Parent Security Agreement").
----------------------------------
D. On and as of the date hereof, the Borrower is entering into the Fourth Amended and Restated Credit Agreement, dated
as of June 15, 2001, by and among the Borrower, the Lenders party thereto, the Administrative Agent, Bank of America, N.A., as
Syndication Agent, Fleet National Bank, as Documentation Agent, and Union Bank of California, N.A. and The Bank of Nova Scotia, as
Co-Agents (as the same may be amended, supplemented or otherwise modified from time to time, the "Credit Agreement").
----------------
E. On and as of the date hereof, the Guarantor is entering into the First Amended and Restated Parent Security
Agreement, dated as of June 15, 2001, by and between the Guarantor and the Administrative Agent (as the same may be amended,
supplemented or otherwise modified from time to time, the "Parent Security Agreement").
-------------------------
F. The Guarantor owns, directly or indirectly, all of the issued and outstanding Stock of the Borrower and expects to
derive substantial benefit from the Credit Agreement and the transactions contemplated thereby.
G. The Guarantor acknowledges that the Credit Parties are relying on this Agreement in entering into the Credit
Agreement, and that the Credit Parties would not enter into the Credit Agreement without the execution and delivery of this Agreement.
H. It is a condition precedent to the effectiveness of the Credit Agreement and the making of all Loans and all Letters
of Credit under the Credit Agreement that the Guarantor shall have executed and delivered this Agreement.
I. This Agreement is intended solely as an amendment of, and contemporaneous restatement of, the terms and conditions
of the Existing Parent Guaranty and is not intended, and should not be construed in any way, to extinguish or terminate the
obligations of the Guarantor under the Existing Parent Guaranty.
J. For convenience, this Agreement is dated as of June 15, 2001 (the "Fourth Restatement Date") and references to
-------------------------
certain matters relating to the period prior thereto have been deleted.
In consideration of the premises and in order to induce the Credit Parties to enter into the Credit Agreement, the
parties hereto agree as follows:
1. Defined Terms
-------------
(a) Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings ascribed thereto in
the Credit Agreement.
(b) When used in this Agreement, the following capitalized terms shall have the respective meanings ascribed thereto as follows:
"Borrower Obligations": collectively, all of the obligations and liabilities of the Borrower under the Loan
--------------------
Documents and under each Interest Rate Protection Arrangement entered into or assumed by the Borrower with a Rate Protection Lender,
whether direct or indirect, absolute or contingent, due or to become due, now existing or hereafter incurred, which may arise under,
out of or in connection with the Loan Documents, in each case whether fixed, contingent, now existing or hereafter arising, created,
assumed, incurred or acquired, and whether before or after the occurrence of any Event of Default under Section 9.1(h) or (i) of the
Credit Agreement and including any obligation or liability in respect of any breach of any representation or warranty and all
post-petition interest and funding losses, whether or not allowed as a claim in any proceeding arising in connection with such an
event, as such obligations and liabilities may be amended, increased, modified, renewed, refinanced by the Administrative Agent and
the Lenders, refunded or extended from time to time.
"Credit Agreement": as defined in paragraph Recital B.
----------------
"Event of Default": as defined in Section 6.
----------------
"Existing Credit Agreement": as defined in Recital A.
-------------------------
"Existing Parent Guaranty": as defined in Recital A.
------------------------
"Existing Parent Security Agreement": as defined in Recital C.
----------------------------------
"Fourth Restatement Date": as defined in Recital J.
-----------------------
"Guaranteed Parties": collectively, (i) the Administrative Agent, the Issuing Bank and the Lenders, (ii)
-------------------
each Rate Protection Lender and (iii) the successors and assigns of each of the foregoing.
"Guarantor Obligations": collectively, all of the obligations and liabilities of the Guarantor hereunder,
----------------------
whether direct or indirect, absolute or contingent, due or to become due, whether now existing or hereafter arising, created,
assumed, incurred or acquired and whether before or after the occurrence of any Event of Default under Section 9.1(h) or (i) of the
Credit Agreement and including any obligation or liability in respect of any breach of any representation or warranty and all
post-petition interest and funding losses, whether or not allowed as a claim in any proceeding arising in connection with such an
event.
"Obligations": collectively, the Borrower Obligations and the Guarantor Obligations.
-----------
"Parent Security Agreement": as defined in Recital E.
-------------------------
"Payment": the indefeasible payment in full in cash.
-------
"Rate Protection Lenders": collectively, each counterparty to an Interest Rate Protection Arrangement with
-----------------------
or assumed by the Borrower if such counterparty was a Lender (or an Affiliate thereof) at the time such Interest Rate Protection
Arrangement was entered into or assumed, as applicable.
"Subsidiary": with respect to any Person (the "parent") at any date, any corporation, association,
---------- ------
partnership, joint venture or other business entity of which the parent, directly or indirectly, either (i) in respect of a
corporation, owns or controls more than 50% of the outstanding Stock having ordinary voting power to elect a majority of the board of
directors or similar managing body, irrespective of whether or not a class or classes shall or might have voting power by reason of
the happening of any contingency, or (ii) in respect of an association, partnership, joint venture or other business entity, is
entitled to share in more than 50% of the profits and losses, however determined. Unless the context otherwise requires, references
in this Agreement to a "Subsidiary" or to "Subsidiaries" shall be deemed to refer to a Subsidiary or Subsidiaries of the Guarantor.
2. Guaranty
--------
The Guarantor hereby absolutely, irrevocably and unconditionally guarantees the full and prompt payment when due
(whether at stated maturity, by acceleration or otherwise) of the Borrower Obligations. This Agreement constitutes a guaranty of
payment and neither the Administrative Agent nor any other Guaranteed Party shall have any obligation to enforce any Loan Document or
any Interest Rate Protection Arrangement or exercise any right or remedy with respect to any collateral security thereunder by any
action, including making or perfecting any claim against any Person or any collateral security for any of the Borrower Obligations,
prior to being entitled to the benefits of this Agreement. The Administrative Agent may, at its option, proceed against the
Guarantor in the first instance, to enforce the Guarantor Obligations without first proceeding against the Borrower or any other
Person, and without first resorting to any other rights or remedies, as the Administrative Agent may deem advisable. In furtherance
hereof, if the Administrative Agent or any other Guaranteed Party is prevented by law from collecting or otherwise hindered from
collecting or otherwise enforcing any Borrower Obligation in accordance with its terms, the Administrative Agent or such other
Guaranteed Party shall be entitled to receive hereunder from the Guarantor after demand therefor, the sums which would have been
otherwise due had such collection or enforcement not been prevented or hindered.
3. Absolute Obligation
-------------------
The Guarantor shall not be released from liability hereunder unless and until the Maturity Date shall have occurred
and either (a) the Issuing Bank shall not have any obligation under the Letters of Credit and the Borrower shall have paid in full in
cash the outstanding principal balance of the Loans, together with all accrued interest thereon, all of the Reimbursement
Obligations, and all other sums then due and owing under the Loan Documents, or (b) the Guarantor Obligations of the Guarantor shall
have been paid in full in cash. The Guarantor acknowledges and agrees that (i) neither the Administrative Agent nor any other
Guaranteed Party has made any representation or warranty to the Guarantor with respect to the Borrower or any other Subsidiary, any
Loan Document, any Interest Rate Protection Arrangement, or any agreement, instrument or document executed or delivered in connection
therewith, or any other matter whatsoever, and (ii) the Guarantor shall be liable hereunder, and such liability shall not be affected
or impaired, irrespective of (A) the validity or enforceability of any Loan Document, any Interest Rate Protection Arrangement, or
any agreement, instrument or document executed or delivered in connection therewith, or the collectability of any of the Borrower
Obligations, (B) the preference or priority ranking with respect to any of the Borrower Obligations, (C) the existence, validity,
enforceability or perfection of any security interest or collateral security under any Loan Document, or any Interest Rate
Protection Arrangement, or the release, exchange, substitution or loss or impairment of any such security interest or collateral
security, (D) any failure, delay, neglect or omission by the Administrative Agent or any other Guaranteed Party to realize upon,
enforce or protect any direct or indirect collateral security, indebtedness, liability or obligation, any Loan Document, any Interest
Rate Protection Arrangement, or any agreement, instrument or document executed or delivered in connection therewith, or any of the
Borrower Obligations, (E) the existence or exercise of any right of setoff by the Administrative Agent or any other Guaranteed Party,
(F) the existence, validity or enforceability of any other guaranty with respect to any of the Borrower Obligations, the liability of
any other Person in respect of any of the Borrower Obligations, or the release of any such Person or any other guarantor of any of
the Borrower Obligations, (G) any act or omission of the Administrative Agent or any other Guaranteed Party in connection with the
administration of any Loan Document, any Interest Rate Protection Arrangement, or any of the Borrower Obligations, (H) the
bankruptcy, insolvency, reorganization or receivership of, or any other proceeding for the relief of debtors commenced by or against,
any Person, (I) the disaffirmance or rejection, or the purported disaffirmance or purported rejection, of any of the Borrower
Obligations, any Loan Document, any Interest Rate Protection Arrangement, or any agreement, instrument or document executed or
delivered in connection therewith, in any bankruptcy, insolvency, reorganization or receivership, or any other proceeding for the
relief of debtor, relating to any Person, (J) any law, regulation or decree now or hereafter in effect which might in any manner
affect any of the terms or provisions of any Loan Document, any Interest Rate Protection Arrangement, or any agreement, instrument or
document executed or delivered in connection therewith or any of the Borrower Obligations, or which might cause or permit to be
invoked any alteration in the time, amount, manner or payment or performance of any of the Borrower's obligations and liabilities
(including the Borrower Obligations), (K) the merger or consolidation of the Borrower into or with any Person, (L) the sale by the
Borrower of all or any part of its assets, (M) the fact that at any time and from time to time none of the Borrower Obligations may
be outstanding or owing to the Administrative Agent or any other Guaranteed Party, (N) any amendment or modification of, or
supplement to, any Loan Document or any Interest Rate Protection Arrangement or (O) any other reason or circumstance which might
otherwise constitute a defense available to or a discharge of the Borrower in respect of its obligations or liabilities (including
the Borrower Obligations) or of the Guarantor in respect of any of the Guarantor Obligations (other than by the performance in full
thereof).
4. Representations and Warranties
------------------------------
The Guarantor hereby represents and warrants to the Administrative Agent that the representations and warranties
contained in the Credit Agreement are true and correct.
5. Covenants
---------
The Guarantor hereby covenants and agrees that, until the Payment of all of the obligations of the Loan Parties
under the Loan Documents to any Credit Party and the nonexistence of any obligation of any Credit Party under any of the Loan
Documents or any Letter of Credit, it shall comply and cause the Borrower and each other Subsidiary (other than an Unrestricted
Parent Subsidiary) to comply with all covenants and agreements contained in Sections 6, 7 and 8 of the Credit Agreement.
6. Events of Default
-----------------
Each of the following shall constitute an "Event of Default":
----------------
(a) If the Guarantor shall fail to observe or perform any term, covenant or agreement contained in Section 2 or Section 5 (with
respect to Section 6, Section 7.3, 7.5, 7.10, 7.11, 7.12 or 7.13, or Section 8 of the Credit Agreement) of this Agreement; or
(b) If the Guarantor shall fail to observe or perform any term, covenant or agreement contained in Section 5 (other than with
respect to Section 6, Section 7.3, 7.5, 7.10, 7.11, 7.12 or 7.13, or Section 8 of the Credit Agreement) or any other term, covenant,
or agreement contained in this Agreement and such failure shall have continued unremedied for a period of 30 days from the first date
when the Guarantor or the Borrower shall have obtained knowledge thereof; or
(c) The occurrence and continuance of an Event of Default under, and as such term is defined in, the Credit Agreement.
7. Notices
-------
Except as otherwise specifically provided herein, all notices, requests, consents, demands, waivers and other
communications hereunder shall be in writing (including facsimile) and shall be electronically transmitted or mailed by registered or
certified mail or delivered in person, and all statements, reports, documents, certificates and papers to be delivered hereunder
shall be mailed by first class mail or delivered in person, in each case to the respective parties to this Agreement as follows:
(a) in the case of the Administrative Agent or the Borrower, as set forth in Section 11.2 of the Credit Agreement, and
(b) in the case of the Guarantor, to:
Salem Communications Corporation,
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: David Evans,
Senior Vice President and Chief Financial Officer
Telephone: (805) 987-0400 (ext. 1031)
Telecopy: (805) 384-4532)
with a copy to
Salem Communications Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Esq.,
Secretary
Telephone: (805) 987-0400 (ext. 1106)
Telecopy: (805) 384-4505).
8. Expenses.
--------
The Guarantor agrees that it shall, upon demand, pay to the Administrative Agent any and all reasonable
out-of-pocket sums, costs and expenses, which any Guaranteed Party may pay or incur defending, protecting or enforcing this Agreement
(whether suit is instituted or not), reasonable attorneys' fees and disbursements. All sums, costs and expenses which are due and
payable pursuant to this Section shall bear interest, payable on demand, at the highest rate then payable on the Borrower Obligations.
9. Repayment in Bankruptcy, etc.
----------------------------
If, at any time or times subsequent to the payment of all or any part of the Borrower Obligations or the Guarantor
Obligations, any Guaranteed Party shall be required to repay any amounts previously paid by or on behalf of the Borrower or the
Guarantor in reduction thereof by virtue of an order of any court having jurisdiction in the premises, as a result of an adjudication
that such amounts constituted preferential payments or fraudulent conveyances, the Guarantor unconditionally agrees to pay to the
Administrative Agent within ten days after demand a sum in cash equal to the amount of such repayment, together with interest on such
amount from the date of such repayment by the applicable Guaranteed Party to the date of payment to the Administrative Agent at the
applicable after maturity rate set forth in the Credit Agreement.
10. Termination
-----------
This Agreement shall terminate on the date upon which (i) the Lenders shall no longer have any obligation to make
Loans, (ii) the Issuing Bank shall no longer have (A) any obligation to issue Letters of Credit and (B) any obligations under the
Letters of Credit theretofor issued, and (iii) the Obligations shall have been paid in full in cash.
11. Miscellaneous
-------------
(a) Except as otherwise expressly provided in this Agreement, the Guarantor hereby waives presentment, demand for payment,
notice of default, nonperformance and dishonor, protest and notice of protest of or in respect of this Agreement, the other Loan
Documents, each Interest Protection Arrangement, and the Borrower Obligations, notice of acceptance of this Agreement and reliance
hereupon by the Administrative Agent, the Issuing Bank and each Lender, and the incurrence of any of the Borrower Obligations, notice
of any sale of collateral security or any default of any sort.
(b) The Guarantor is not relying upon the Administrative Agent, the Issuing Bank or any Lender to provide to it any information
concerning the Borrower or any other Subsidiary, and the Guarantor has made arrangements satisfactory to it to obtain from the
Borrower and each other Subsidiary on a continuing basis such information concerning the Borrower and each other Subsidiary as it may
desire.
(c) The Guarantor agrees that any statement of account with respect to the Borrower Obligations from the Administrative Agent,
the Issuing Bank or any Lender to the Borrower which binds the Borrower shall also be binding upon the Guarantor, and that copies of
said statements of account maintained in the regular course of the Administrative Agent's, the Issuing Bank's or such Lender's
business, as the case may be, may be used in evidence against the Guarantor in order to establish its Guarantor Obligations.
(d) The Guarantor acknowledges that it has received a copy of the Loan Documents and each Interest Rate Protection Arrangement
and has approved of the same. In addition, the Guarantor acknowledges having read each Loan Document and each such Interest Rate
Protection Arrangement and having had the advice of counsel in connection with all matters concerning its execution and delivery of
this Agreement.
(e) The Guarantor may not assign any right, or delegate any duty, it may have under this Agreement.
(f) The Guarantor Obligations hereunder shall be joint and several with the obligations of the Subsidiary Guarantors.
(g) This Agreement is the "Parent Guaranty" referred to in the Credit Agreement, and is subject to, and should be construed in
accordance with, the provisions thereof. Each of the Administrative Agent, the Guarantor and the Borrower acknowledges that certain
provisions of the Credit Agreement, including, without limitation, Sections 1.2 (Principles of Construction), 11.1 (Amendments and
Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4 (Survival of Certain Obligations), 11.7 (Successors and Assigns), 11.8
(Counterparts), 11.9 (Adjustments; Setoff), 11.12 (Governing Law), 11.13 (Headings), 11.14 (Severability), 11.15 (Integration), 11.16
(Limitation of Liability), 11.17 (Consent to Jurisdiction), 11.18 (Service of Process), 11.19 (No Limitation on Service or Suit) and
11.20 (WAIVER OF TRIAL BY JURY) thereof, are made applicable to this Agreement mutatis mutandis and all such provisions are
incorporated by reference herein mutatis mutandis as if fully set forth herein.
(h) No right of the Administrative Agent to enforce this Agreement shall at any time or in any way be prejudiced or impaired by
any act or failure to act on the part of the Guarantor, or by any noncompliance by the Guarantor with the terms, provisions and
covenants herein, and the Guaranteed Parties are hereby expressly authorized to extend, waive, renew, increase, decrease, modify or
amend the terms of the Borrower Obligations or any collateral security therefor, to waive any default, modify, amend, rescind or
waive any provision of any document executed and delivered in connection with the Borrower Obligations and to release, sell or
exchange any such collateral security and otherwise deal freely with the Borrower, all without notice to or consent of the Guarantor
and without affecting the liabilities and obligations of the parties hereto.
(i) The Guarantor waives notice of acceptance of this Agreement by the Administrative Agent and the Guaranteed Parties, and the
Guarantor waives notice of and consents to the making, amount and terms of the Borrower Obligations which may exist from time to time
and any renewal, extension, increase, amendment or modification thereof and any other action which the Administrative Agent or the
Lenders in their sole and absolute discretion, may take or omit to take with respect thereto. This Section shall constitute a
continuing offer to the Administrative Agent and the Guaranteed Parties, its provisions are made for the benefit of the
Administrative Agent and the Guaranteed Parties, and the Administrative Agent and the Guaranteed Parties are made obligees hereunder
and may enforce such provisions.
(j) The Guarantor agrees that no payment or distribution to the Administrative Agent pursuant to the provisions of this
Agreement shall entitle the Guarantor to exercise any rights of subrogation in respect thereof until the Payment of all of the
obligations of the Loan Parties under the Loan Documents to the Guaranteed Parties, and the nonexistence of any obligation of any
Guaranteed Party under any of the Loan Documents or any Letter of Credit.
(k) The Guarantor agrees that the provisions of this Agreement shall be applicable to the Borrower Obligations whenever the same
may arise and notwithstanding the fact that no Borrower Obligations may be outstanding from time to time and may have been paid down
to zero at any time or from time to time, it being understood that the Credit Agreement permits the Borrower to borrow, repay and
reborrow from time to time subject to the terms and conditions thereof, all or any of which terms and conditions may be waived.
(l) The Guarantor authorizes the Administrative Agent, without notice or demand and without affecting or impairing the
obligations of the Guarantor, from time to time to (i) renew, compromise, extend, increase, accelerate or otherwise change the time
for payment of, or otherwise change the terms of the Borrower Obligations, or any part thereof, including, without limitation, to
increase or decrease the rate of interest thereon or the principal amount thereof; (ii) take or hold security for the payment of the
Borrower Obligations and exchange, enforce, foreclose upon, waive and release any such security; (iii) apply such security and direct
the order or manner of sale thereof as the Administrative Agent, in its sole discretion, may determine; (iv) release and substitute
one or more endorsers, warrantors, borrowers or other obligors; and (v) exercise or refrain from exercising any rights against the
Borrower or any other Person.
[Signature pages follow]
SECOND AMENDED AND RESTATED PARENT GUARANTY
SALEM COMMUNICATIONS CORPORATION
IN EVIDENCE of the agreement by the parties hereto to the terms and conditions herein contained, each such party has
caused this Parent Guaranty to be duly executed on its behalf.
SALEM COMMUNICATIONS CORPORATION
| | | | |
| | | | |
| | By: | /s/ Jonathan Block | |
| | |
| |
| | Name: | Jonathan Block | |
| | Title: | Vice President and Secretary | |
SALEM COMMUNICATIONS HOLDING CORPORATION| | | | |
| | | | |
| | By: | /s/ Jonathan Block | |
| | |
| |
| | Name: | Jonathan Block | |
| | Title: | Vice President and Secretary | |
THE BANK OF NEW YORK, as Administrative Agent| | | | |
| | | | |
| | By: | /s/ Steve Nettler | |
| | |
| |
| | Name: | Steve Nettler | |
| | | | |
EXHIBIT 4.25
SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware corporation, as Issuer,
SALEM COMMUNICATIONS CORPORATION
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INLAND RADIO, INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.,
as Guarantors,
and
THE BANK OF NEW YORK, as Trustee
_________________
INDENTURE
Dated as of June 25, 2001
_________________
$150,000,000
9% Senior Subordinated Notes due 2011
Table of Contents
(continued)
Page
iv
Sal.Indenture.doc
Table of Contents
Page
i
Sal.Indenture.doc
ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................................2
Section 1.01 Definitions........................................................................2
Section 1.02 Other Definitions.................................................................15
Section 1.03 Compliance Certificates and Opinions..............................................15
Section 1.04 Form of Documents Delivered to Trustee............................................15
Section 1.05 Acts of Holders...................................................................15
Section 1.06 Notices, etc., to Trustee, the Company and any Guarantor..........................15
Section 1.07 Notice to Holders: Waiver.........................................................15
Section 1.08 Conflict with Trust Indenture Act.................................................15
Section 1.09 Effect of Headings and Table of Contents..........................................15
Section 1.10 Successors and Assigns............................................................15
Section 1.11 Separability Clause...............................................................15
Section 1.12 Benefits of Indenture.............................................................15
Section 1.13 Governing Law.....................................................................15
Section 1.14 Legal Holidays....................................................................15
Section 1.15 Schedules and Exhibits............................................................15
Section 1.16 Counterparts......................................................................15
ARTICLE II SECURITY FORMS...................................................................................15
Section 2.01 Forms Generally...................................................................15
Section 2.02 Form of Face of Security..........................................................15
Section 2.03 Form of Reverse of Securities.....................................................15
Section 2.04 Additional Provisions Required in Global Security.................................15
Section 2.05 Form of Trustee's Certificate of Authentication...................................15
Section 2.06 Form of Guarantee of Each of the Guarantors.......................................15
ARTICLE III THE SECURITIES..................................................................................15
Section 3.01 Title and Terms...................................................................15
Section 3.02 Denominations.....................................................................15
Section 3.03 Execution, Authentication, Delivery and Dating....................................15
Section 3.04 Temporary Securities..............................................................15
Section 3.05 Global Securities.................................................................15
Section 3.06 Registration, Registration of Transfer and Exchange...............................15
Section 3.07 Special Transfer Provisions.......................................................15
Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities..................................15
Section 3.09 Payment of Interest; Interest Rights Preserved....................................15
Section 3.10 Persons Deemed Owners.............................................................15
Section 3.11 Cancellation......................................................................15
Section 3.12 Computation of Interest...........................................................15
Section 3.13 CUSIP Numbers.....................................................................15
ARTICLE IV DEFEASANCE AND COVENANT DEFEASANCE...............................................................15
Section 4.01 Company's Option to Effect Defeasance or Covenant Defeasance......................15
Section 4.02 Defeasance and Discharge..........................................................15
Section 4.03 Covenant Defeasance...............................................................15
Section 4.04 Conditions to Defeasance or Covenant Defeasance...................................15
Section 4.05 Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions....................................................15
Section 4.06 Reinstatement.....................................................................15
ARTICLE V REMEDIES..........................................................................................15
Section 5.01 Events of Default.................................................................15
Section 5.02 Acceleration of Maturity; Rescission and Annulment................................15
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee...................15
Section 5.04 Trustee May File Proofs of Claim..................................................15
Section 5.05 Trustee May Enforce Claims without Possession of Securities.......................15
Section 5.06 Application of Money Collected....................................................15
Section 5.07 Limitation on Suits...............................................................15
Section 5.08 Unconditional Right of Holders to Receive Principal, Premium and Interest.........15
Section 5.09 Restoration of Rights and Remedies................................................15
Section 5.10 Rights and Remedies Cumulative....................................................15
Section 5.11 Delay or Omission Not Waiver......................................................15
Section 5.12 Control by Holders................................................................15
Section 5.13 Waiver of Past Defaults...........................................................15
Section 5.14 Undertaking for Costs.............................................................15
Section 5.15 Waiver of Stay, Extension or Usury Laws...........................................15
ARTICLE VI THE TRUSTEE......................................................................................15
Section 6.01 Notice of Defaults................................................................15
Section 6.02 Certain Rights and Duties of Trustee..............................................15
Section 6.03 Trustee Not Responsible for Recitals, Dispositions of Securities or
Application of Proceeds Thereof...................................................15
Section 6.04 Trustee and Agents May Hold Securities; Collections; etc..........................15
Section 6.05 Money Held in Trust...............................................................15
Section 6.06 Compensation and Indemnification of Trustee and Its Prior Claim...................15
Section 6.07 Conflicting Interests.............................................................15
Section 6.08 Corporate Trustee Required, Eligibility...........................................15
Section 6.09 Resignation and Removal: Appointment of Successor Trustee.........................15
Section 6.10 Acceptance of Appointment by Successor............................................15
Section 6.11 Merger, Conversion, Consolidation or Succession to Business.......................15
Section 6.12 Preferential Collection of Claims Against Company.................................15
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE...........................................................15
Section 7.01 Company to Furnish Trustee with Names and Addresses of Holders....................15
Section 7.02 Disclosure of Names and Addresses of Holders......................................15
Section 7.03 Reports by Trustee................................................................15
Section 7.04 Reports by Company and Guarantors.................................................15
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE...........................................15
Section 8.01 Company or Any Guarantor May Consolidate, etc., Only on Certain Terms.............15
Section 8.02 Successor Substituted.............................................................15
ARTICLE IX SUPPLEMENTAL INDENTURES..........................................................................15
Section 9.01 Supplemental Indentures and Agreements without Consent of Holders.................15
Section 9.02 Supplemental Indentures and Agreements with Consent of Holders....................15
Section 9.03 Execution of Supplemental Indentures and Agreements...............................15
Section 9.04 Effect of Supplemental Indentures.................................................15
Section 9.05 Conformity with Trust Indenture Act...............................................15
Section 9.06 Reference in Securities to Supplemental Indentures................................15
Section 9.07 Effect on Senior Indebtedness.....................................................15
ARTICLE X COVENANTS.........................................................................................15
Section 10.01 Payment of Principal, Premium and Interest........................................15
Section 10.02 Maintenance of Office or Agency...................................................15
Section 10.03 Money for Security Payments to Be Held in Trust...................................15
Section 10.04 Corporate Existence...............................................................15
Section 10.05 Payment of Taxes and Other Claims.................................................15
Section 10.06 Maintenance of Properties.........................................................15
Section 10.07 Insurance.........................................................................15
Section 10.08 Limitation on Indebtedness........................................................15
Section 10.09 Limitation on Restricted Payments.................................................15
Section 10.10 Limitation on Transactions with Affiliates........................................15
Section 10.11 Limitation on Senior Subordinated Indebtedness....................................15
Section 10.12 Limitation on Liens...............................................................15
Section 10.13 Limitation on Sale of Assets......................................................15
Section 10.14 Limitation on Issuances of Guarantees of and Pledges for Indebtedness.............15
Section 10.15 Restriction on Transfer of Assets.................................................15
Section 10.16 Purchase of Securities upon a Change of Control...................................15
Section 10.17 Limitation on Subsidiary Equity Interests.........................................15
Section 10.18 Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries......................................................................15
Section 10.19 Limitation on Unrestricted Subsidiaries...........................................15
Section 10.20 Provision of Financial Statements.................................................15
Section 10.21 Statement by Officers as to Default...............................................15
Section 10.22 Waiver of Certain Covenants.......................................................15
Section 10.23 Limitation on Asset Swaps.........................................................15
ARTICLE XI REDEMPTION OF SECURITIES.........................................................................15
Section 11.01 Rights of Redemption..............................................................15
Section 11.02 Applicability of Article..........................................................15
Section 11.03 Election to Redeem; Notice to Trustee.............................................15
Section 11.04 Selection by Trustee of Securities to Be Redeemed.................................15
Section 11.05 Notice of Redemption..............................................................15
Section 11.06 Deposit of Redemption Price.......................................................15
Section 11.07 Securities Payable on Redemption Date.............................................15
Section 11.08 Securities Redeemed or Purchased in Part..........................................15
ARTICLE XII SUBORDINATION OF SECURITIES.....................................................................15
Section 12.01 Securities Subordinate to Senior Indebtedness.....................................15
Section 12.02 Payment Over of Proceeds Upon Dissolution, etc....................................15
Section 12.03 Suspension of Payment When Senior Indebtedness in Default.........................15
Section 12.04 Payment Permitted if No Default...................................................15
Section 12.05 Subrogation to Rights of Holders of Senior Indebtedness...........................15
Section 12.06 Provisions Solely to Define Relative Rights.......................................15
Section 12.07 Trustee to Effectuate Subordination...............................................15
Section 12.08 No Waiver of Subordination Provisions.............................................15
Section 12.09 Notice to Trustee.................................................................15
Section 12.10 Reliance on Judicial Order or Certificate of Liquidating Agent....................15
Section 12.11 Rights of Trustee as a Holder of Senior Indebtedness Preservation of
Trustee's Rights..................................................................15
Section 12.12 Article Applicable to Paying Agents...............................................15
Section 12.13 No Suspension of Remedies.........................................................15
Section 12.14 Trustee's Relation to Senior Indebtedness.........................................15
ARTICLE XIII SATISFACTION AND DISCHARGE.....................................................................15
Section 13.01 Satisfaction and Discharge of Indenture...........................................15
Section 13.02 Application of Trust Money........................................................15
ARTICLE XIV GUARANTEE.......................................................................................15
Section 14.01 Guarantors' Guarantee.............................................................15
Section 14.02 Continuing Guarantee; No Right of Set-Off; Independent Obligation.................15
Section 14.03 Guarantee Absolute................................................................15
Section 14.04 Right to Demand Full Performance..................................................15
Section 14.05 Waivers...........................................................................15
Section 14.06 The Guarantors Remain Obligated in Event the Company Is No Longer
Obligated to Discharge Indenture Obligations......................................15
Section 14.07 Fraudulent Conveyance; Subrogation................................................15
Section 14.08 Guarantee Is in Addition to Other Security........................................15
Section 14.09 Release of Security Interests.....................................................15
Section 14.10 No Bar to Further Actions.........................................................15
Section 14.11 Failure to Exercise Rights Shall Not Operate as a Waiver; No Suspension
of Remedies.......................................................................15
Section 14.12 Trustee's Duties, Notice to Trustee...............................................15
Section 14.13 Successors and Assigns............................................................15
Section 14.14 Release of Guarantee..............................................................15
Section 14.15 Execution of Guarantee............................................................15
Section 14.16 Guarantee Subordinate to Guarantor Senior Indebtedness............................15
Section 14.17 Payment Over of Proceeds Upon Dissolution of the Guarantor, etc...................15
Section 14.18 Default on Guarantor Senior Indebtedness..........................................15
Section 14.19 Payment Permitted by Each of the Guarantors if No Default.........................15
Section 14.20 Subrogation to Rights of Holders of Guarantor Senior Indebtedness.................15
Section 14.21 Provisions Solely to Define Relative Rights.......................................15
Section 14.22 Trustee to Effectuate Subordination...............................................15
Section 14.23 No Waiver of Subordination Provisions.............................................15
Section 14.24 Notice to Trustee by Each of the Guarantors.......................................15
Section 14.25 Reliance on Judicial Order or Certificate of Liquidating Agent....................15
Section 14.26 Rights of Trustee as a Holder of Guarantor Senior Indebtedness;
Preservation of Trustee's Rights..................................................15
Section 14.27 Article Applicable to Paying Agents...............................................15
Section 14.28 No Suspension of Remedies.........................................................15
Section 14.29 Trustee's Relation to Guarantor Senior Indebtedness...............................15
Section 14.30 Limitation on Guarantee...........................................................15
SCHEDULE I Existing Indebtedness of Salem Communications Corporation and its Restricted Subsidiaries
EXHIBIT A Form of Restricted Securities Transfer Certificate (General)
EXHIBIT B Form of Restricted Securities Transfer Certificate (Non-U.S. Persons)
EXHIBIT C Form of Intercompany Note
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
3.10(a)(1)................................................................................................6.08
(a)(2) ................................................................................6.08
(a)(3 ................................................................................N.A.
(a)(4) ................................................................................N.A.
(b) ........................................................1.06; 6.07; 6.08; 6.09; 7.03
(c) ................................................................................N.A.
3.11(a)...................................................................................................6.12
(b) ................................................................................6.12
(c) ................................................................................N.A.
3.12(a)...................................................................................................7.01
(b) ................................................................................7.02
(c) ................................................................................7.02
3.13(a)...................................................................................................7.03
(b)(1) ................................................................................N.A.
(b)(2) ................................................................................7.03
(c) ..........................................................................1.07; 7.03
(d) ................................................................................7.03
3.14(a)............................................................................................1.06; 10.20
(b) ................................................................................N.A.
(c)(1) ................................................................................1.03
(c)(2) ................................................................................1.03
(c)(3) ................................................................................N.A.
(d) ................................................................................N.A.
(e) ................................................................................1.03
(f) ................................................................................N.A.
3.15(a)................................................................................................6.02(a)
(b) ..........................................................................1.07; 6.01
(c) .............................................................................6.02(k)
(d) .............................................................................6.02(e)
(e) ................................................................................5.14
3.16(a)(last sentence)......................................................1.01 (definition of "Outstanding")
(a)(1) ................................................................................5.12
(a)(2) ................................................................................N.A.
(b) ................................................................................5.08
(c) ................................................................................1.05
3.17(a)(1)................................................................................................5.03
(a)(2) ................................................................................5.04
(b) ...............................................................................10.03
3.18(a)...................................................................................................1.08
N.A. means not applicable.
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INDENTURE, dated as of June 25, 2001, among SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware
corporation (as further defined below, the "Company"), SALEM COMMUNICATIONS CORPORATION, a Delaware corporation
(as further defined below, "Parent"), ATEP RADIO, INC., a California corporation, BISON MEDIA, INC., a Colorado
corporation, CARON BROADCASTING, INC., an Ohio corporation, CCM COMMUNICATIONS, INC., a Tennessee corporation,
COMMON GROUND BROADCASTING, INC., an Oregon corporation, GOLDEN GATE BROADCASTING COMPANY INC., a California
corporation, INLAND RADIO, INC., a California corporation, INSPIRATION MEDIA, INC., a Washington corporation,
INSPIRATION MEDIA OF PENNSYLVANIA, LP, a Delaware limited partnership, INSPIRATION MEDIA OF TEXAS, LLC, a Texas
limited liability company, KINGDOM DIRECT, INC., a California corporation, NEW ENGLAND CONTINENTAL MEDIA, INC., a
Massachusetts corporation, NEW INSPIRATION BROADCASTING COMPANY, INC., a California corporation, OASIS RADIO,
INC., a California corporation, ONEPLACE, LLC, a Delaware limited liability company, PENNSYLVANIA MEDIA
ASSOCIATES, INC., a Pennsylvania corporation, RADIO 1210, INC., a California corporation, REACH SATELITE NETWORK,
INC., a Tennessee corporation, SALEM COMMUNICATIONS ACQUISITION CORPORATION, a Delaware corporation, SALEM MEDIA
CORPORATION, a New York corporation, SALEM MEDIA OF COLORADO, INC., a Colorado corporation, SALEM MEDIA OF
GEORGIA, INC., a Delaware corporation, SALEM MEDIA OF HAWAII, INC., a Delaware corporation, SALEM MEDIA OF
ILLINOIS, LLC, a Delaware limited liability company, SALEM MEDIA OF KENTUCKY, INC., a Kentucky corporation, SALEM
MEDIA OF OHIO, INC., an Ohio corporation, SALEM MEDIA OF NEW YORK, LLC, a Delaware limited liability company,
SALEM MEDIA OF OREGON, INC., an Oregon corporation, SALEM MEDIA OF PENNSYLVANIA, INC., a Pennsylvania
corporation, SALEM MEDIA OF TEXAS, INC., a Texas corporation, SALEM MEDIA OF VIRGINIA, INC., a Virginia
corporation, SALEM MUSIC NETWORK, INC., a Texas corporation, SALEM RADIO NETWORK INCORPORATED, a Delaware
corporation, SALEM RADIO OPERATIONS, LLC, a Delaware limited liability company, SALEM RADIO OPERATIONS -
PENNSYLVANIA, INC., a Delaware corporation, SALEM RADIO PROPERTIES, INC., Delaware corporation, SALEM RADIO
REPRESENTATIVES, INC., a Texas corporation, SCA LICENSE CORPORATION, a Delaware corporation, SOUTH TEXAS
BROADCASTING, INC., a Texas corporation, SRN NEWS NETWORK, INC., a Texas corporation, and VISTA BROADCASTING,
INC., a California corporation, (collectively with Parent, the "Guarantors"), and THE BANK OF NEW YORK, a New
York banking corporation, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the issuance of 9% Senior Subordinated Notes due 2011, Series A, and the
issuance of 9% Senior Subordinated Notes due 2011, Series B, of substantially the tenor and amount hereinafter
set forth, and to provide therefor the Company has duly authorized the execution and delivery of this Indenture
and the Securities.
Each Guarantor has duly authorized the issuance of a guarantee (the "Guarantees") of the Securities, of
substantially the tenor hereinafter set forth, and to provide therefor, each Guarantor has duly authorized the
execution and delivery of this Indenture and the Guarantee.
This Indenture is subject to, and shall be governed by, the provisions of the Trust Indenture Act that
are required to be part of and to govern indentures qualified under the Trust Indenture Act.
All acts and things necessary have been done to make (i)the Securities, when executed by the Company
and authenticated and delivered hereunder and duly issued by the Company, the valid obligations of the Company,
(ii) the Guarantees, when executed by each of the Guarantors and delivered hereunder, the valid obligation of
each of the Guarantors and (iii) this Indenture a valid and legally binding agreement of the Company and each of
the Guarantors in accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities by the Holders thereof, it
is mutually covenanted and agreed, for the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE I.........
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01......Definitions.
For all purposes of this Indenture, except as otherwise expressly provided or unless the context
otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them in this Article, and include the
plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture Act, either directly or by reference
therein, have the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with
GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture
as a whole and not to any particular Article, Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer to the lawful currency of the
United States of America.
"Accredited Investor" means an institutional "accredited investor" within the meaning of Rule 501
(a)(1), (2), (3)or (7)of Regulation D under the Securities Act.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the time such Person becomes a
Subsidiary or (ii) assumed in connection with the acquisition of assets from such Person, in each case, other
than Indebtedness incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or such
acquisition. Acquired Indebtedness shall be deemed to be incurred on the date of the related acquisition of
assets from any Person or the date the acquired Person becomes a Subsidiary.
"Additional Securities" means any Securities issued under this Indenture in addition to the Original
Securities (other than any Securities issued pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06, 10.13,
10.16 or 11.08).
"Affiliate" means, with respect to any specified Person, (i) any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with such specified Person, (ii) any
other Person that owns, directly or indirectly, 5% or more of such Person's Equity Interests or any officer or
director of any such Person or other Person or, with respect to any natural Person, any person having a
relationship with such Person or other Person by blood, marriage or adoption not more remote than first cousin or
(iii) any other Person 10% or more of the voting Equity Interests of which are beneficially owned or held
directly or indirectly by such specified person. For the purposes of this definition, "control" when used with
respect to any specified Person means the power to direct the management and policies of such Person directly or
indirectly, whether through ownership of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or other disposition (including,
without limitation, by way of merger, consolidation or Sale and Leaseback Transaction) (collectively, a
"transfer"), directly or indirectly, in one or a series of related transactions, of (i) any Equity Interest of any
Restricted Subsidiary of the Company (other than directors' qualifying shares and, to the extent required by
local ownership laws in foreign countries, shares owned by foreign shareholders); (ii) all or substantially all
of the properties and assets of any division or line of business of the Company or its Restricted Subsidiaries;
or (iii) any other properties or assets of the Company or any of its Restricted Subsidiaries, other than in the
ordinary course of business. For the purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties and assets (A) that is governed by Section 8.01(a) or Section 10.23, (B) that is by the
Company to any Wholly Owned Restricted Subsidiary of the Company, or by any Restricted Subsidiary of the Company
to the Company or any Wholly Owned Restricted Subsidiary of the Company, in accordance with the terms of this
Indenture, (C) that aggregates not more than $1,000,000 in gross proceeds or (D) any Restricted Payments
permitted under Section 10.09 or any Permitted Investment.
"Agent Member" means any member of, or participant in, the Depositary.
"Asset Swap" means an Asset Sale by the Company or any Restricted Subsidiary of the Company in exchange
for properties or assets that will be used in the business of the Company and its Restricted Subsidiaries
existing on the date of this Indenture or reasonably related thereto.
"Average Life to Stated Maturity" means, as of the date of determination with respect to any
Indebtedness, the quotient obtained by dividing (i)the sum of the products of (a)the number of years from the
date of determination to the date or dates of each successive scheduled principal payment of such Indebtedness
multiplied by (b)the amount of each such principal payment by (ii)the sum of all such principal payments.
"Bank Credit Agreement" means the Fourth Amended and Restated Credit Agreement, dated as of June 15,
2001, among the Company, the lenders named therein and The Bank of New York, as administrative agent, as such
agreement may be amended, renewed, extended, substituted, refinanced, restructured, replaced, supplemented or
otherwise modified from time to time (including, without limitation, any successive renewals, extensions,
substitutions, refinancings, restructurings, replacements, supplementations or other modifications of the
foregoing). For all purposes under this Indenture, "Bank Credit Agreement" shall include any amendments,
renewals, extensions, substitutions, refinancings, restructurings, replacements, supplements or any other
modifications that increase the principal amount of the Indebtedness or the commitments to lend thereunder and
have been made in compliance with Section 10.08; provided that, for purposes of the definition of "Permitted
Indebtedness," no such increase may result in the principal amount of Indebtedness of the Company under the Bank
Credit Agreement that is permitted to be incurred pursuant to Section 10.08(b)(i) to exceed the amount specified
in Section 10.08(b)(i).
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as amended, or any similar
United States federal or state law relating to bankruptcy, insolvency, receivership, winding-up, liquidation,
reorganization or relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or any Guarantor, as the case may be,
or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of
the Company or any Guarantor, as the case may be, to have been duly adopted by the Board of Directors of such
entity and to be in full force and effect on the date of such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in The City of New York, the State of California or the city in which the Corporate Trust
Office is located are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means, with respect to any Person, any obligation of such Person and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real or personal property which, in
accordance with GAAP, has been recorded as a capitalized lease obligation..
"Cash Equivalents" means, (i) any evidence of Indebtedness with a maturity of one year or less from the
date of acquisition issued or directly and fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and credit of the United States of America is
pledged in support thereof); (ii)certificates of deposit or acceptances with a maturity of one year or less from
the date of acquisition of any financial institution that is a member of the Federal Reserve System having
combined capital and surplus and undivided profits of not less than $500,000,000; (iii) commercial paper with a
maturity of one year or less from the date of acquisition issued by a corporation that is not an Affiliate of the
Company organized under the laws of any state of the United States or the District of Columbia and rated A1 (or
higher) according to S&P or P-1 (or higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating agency: (iv) any money market deposit accounts issued or offered
by a domestic commercial bank having capital and surplus in excess of $500,000,000; and (v) repurchase agreements
and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed
by the government of the United States of America or issued by any agency thereof and backed by the full faith
and credit of the United States of America, in each case maturing within one year from the date of acquisition;
provided that the terms of such agreements comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions With Securities Dealers and Others, as adopted by the Comptroller of the
Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following events: (i) any "Person" or "Group" (as
such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes
the "Beneficial Owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person shall be
deemed to have beneficial ownership of all shares that such Person has the right to acquire, whether such right
is exercisable immediately or only after the passage of time), directly or indirectly, of more than 40% of the
total outstanding Voting Stock of the Company or Parent, provided that the Permitted Holders "Beneficially Own"
(as so defined) a lesser percentage of such Voting Stock than such other Person and do not have the right or
ability by voting power, contract or otherwise to elect or designate for election a majority of the board of
directors of the Company or Parent, as the case may be; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the board of directors of the Company or Parent
(together with any new directors whose election to such board of directors or whose nomination for election by
the shareholders of the Company or Parent, as the case may be, was approved by a vote of 66% of the directors
then still in office who were either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a majority of such board of directors
then in office; (iii) the Company or Parent consolidates with or merges with or into any Person or conveys,
transfers or leases all or substantially all of its assets to any Person, or any corporation consolidates with or
merges into or with the Company or Parent, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company or Parent, as the case may be, is changed into or exchanged for cash, securities or
other property, other than any such transaction in which the outstanding Voting Stock of the Company or Parent,
as the case may be, is not changed or exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company or Parent, as the case may be) or in which (A) the outstanding
Voting Stock of the Company or Parent, as the case may be, is changed into or exchanged for (x) Voting Stock of
the surviving corporation which is not Disqualified Equity Interests or (y) cash, securities and other property
(other than Equity Interests of the surviving corporation) in an amount which could be paid by the Company as a
Restricted Payment in accordance with Section 10.09 (and such amount shall be treated as a Restricted Payment
subject to the provisions of Section 10.09) and (B) no "Person" or "Group" other than Permitted Holders owns
immediately after such transaction directly or indirectly, more than the greater of (1) 40% of the total
outstanding Voting Stock of the surviving corporation and (2) the percentage of the outstanding Voting Stock of
the surviving corporation owned, directly or indirectly, by Permitted Holders immediately after such transaction;
or (iv) the Company or Parent is liquidated or dissolved or adopts a plan of liquidation or dissolution other
than (in the case of the Company) in a transaction which complies with the provisions described under Article
Eight.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to time constituted, created
under the Exchange Act, or if at any time after the execution of this Indenture such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then the body performing such duties
at such time.
"Company" means Salem Communications Holding Corporation, a corporation incorporated under the laws of
Delaware, until a successor Person shall have become such pursuant to the applicable provisions of this
Indenture, and thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order signed in the name of the Company
by any one of its Chairman of the Board, its Vice Chairman, its President or a Vice President (regardless of vice
presidential designation), and by any one of its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Interest Expense" means, with respect to any Person for any period, without duplication,
the sum of (a) the interest expense of such Person and its Consolidated Restricted Subsidiaries for such period,
on a Consolidated basis, including, without limitation, (i) amortization of debt discount, (ii) the net cost
under Interest Rate Agreements (including amortization of discounts), (iii) the interest portion of any deferred
payment obligation and (iv) accrued interest, plus (b) the interest component of the Capital Lease Obligations
paid, accrued and/or scheduled to be paid or accrued by such Person during such period, and all capitalized
interest of such Person and its Consolidated Restricted Subsidiaries, in each case as determined in accordance
with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any Person for any period, the Consolidated net income
(or loss) of such Person and its Consolidated Restricted Subsidiaries for such period as determined in accordance
with GAAP consistently applied, adjusted, to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) all extraordinary gains but not losses (less all fees and expenses relating
thereto), (ii) the portion of net income (or loss) of such Person and its Consolidated Restricted Subsidiaries
allocable to interests in unconsolidated Persons or Unrestricted Subsidiaries, except to the extent of the amount
of dividends or distributions actually paid to such Person or its Consolidated Restricted Subsidiaries by such
other Person during such period, (iii) net income (or loss) of any other Person combined with such Person or any
of its Restricted Subsidiaries on a "pooling of interests" basis attributable to any period prior to the date of
combination, (iv) any gain or loss, net of taxes, realized upon the termination of any employee pension benefit
plan, (v) net gains but not losses (less all fees and expenses relating thereto) in respect of dispositions of
assets other than in the ordinary course of business, or (vi) the net income of any Restricted Subsidiary of such
Person to the extent that the declaration of dividends or similar distributions by such Restricted Subsidiary of
that income is not at the time permitted, 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 such
Restricted Subsidiary or its shareholders.
"Consolidated Net Worth" means the Consolidated equity of the holders of Equity Interests (excluding
Disqualified Equity Interests) of the Company and its Restricted Subsidiaries, as determined in accordance with
GAAP consistently applied.
"Consolidation" means, with respect to any Person, the consolidation of the accounts of such Person and
each of its subsidiaries (other than any Unrestricted Subsidiaries) if and to the extent the accounts of such
Person and each of its subsidiaries (other than any Unrestricted Subsidiaries) would normally be consolidated
with those of such Person, all in accordance with GAAP consistently applied. The term "Consolidated" shall have
a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an affiliate or agent thereof at which at
any particular time the corporate trust business for the purposes of this Indenture shall be principally
administered, which office at the date of execution of this Indenture is located at The Bank of New York, 101
Barclay Street, 21 W, New York, New York 10286, Attention: Corporate Trust Administration.
"Cumulative Consolidated Interest Expense" means, as of any date of determination, Consolidated Interest
Expense of (x) Parent from the date of the Existing Indenture to but not including the Succession Date and (y)
the Company from and including the Succession Date to the end of the Company's most recently ended full fiscal
quarter prior to such date, taken as a single accounting period.
"Cumulative Operating Cash Flow" means, as of any date of determination, Operating Cash Flow of (x)
Parent from the date of the Existing Indenture to but not including the Succession Date and (y) the Company from
and including the Succession Date to the end of the Company's most recently ended full fiscal quarter prior to
such date, taken as a single accounting period.
"Debt to Operating Cash Flow Ratio" means, as of any date of determination, the ratio of (a) the
aggregate principal amount of all outstanding Indebtedness of the Company and its Restricted Subsidiaries as of
such date on a Consolidated basis plus the aggregate liquidation preference or redemption amount of all
Disqualified Equity Interests of the Company (excluding any such Disqualified Equity Interests held by the
Company or a Wholly Owned Restricted Subsidiary of the Company), to (b) Operating Cash Flow of the Company and
its Restricted Subsidiaries on a Consolidated basis for the four most recent full quarters ending immediately
prior to such date, determined on a pro forma basis (and after giving pro forma effect to: (i) the incurrence of
such Indebtedness and (if applicable) the application of the net proceeds therefrom, including to refinance other
Indebtedness, as if such Indebtedness was incurred, and the application of such proceeds occurred, at the
beginning of such four-quarter period; (ii) the incurrence, repayment or retirement of any other Indebtedness by
the Company and its Restricted Subsidiaries since the first day of such four-quarter period as if such
Indebtedness was incurred, repaid or retired at the beginning of such four-quarter 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 four-quarter period); (iii) in the case
of Acquired Indebtedness, the related acquisition, as if such acquisition had occurred at the beginning of such
four-quarter period; and (iv) any acquisition or disposition by the Company and its Restricted Subsidiaries of
any company or any business or any assets out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period, assuming such acquisition,
disposition or repayment had been consummated on the first day of such four-quarter period).
"Default" means any event which is, or after notice or passage of any time or both would be, an Event of
Default.
"Depositary" means, with respect to the Securities issued in the form of Global Securities, if any, The
Depository Trust Company, a New York limited purpose corporation, its nominees and successors, in each case
registered as a "clearing agency" under the Exchange Act and maintaining a book-entry system that qualifies for
treatment as "registered form" under Section 163(f) of the Code.
"Designated Guarantor Senior Indebtedness" means (i)all Guarantor Senior Indebtedness which guarantees
Indebtedness under the Bank Credit Agreement and (ii)any other Guarantor Senior Indebtedness which is incurred
pursuant to an agreement (or series of related agreements) simultaneously entered into providing for
indebtedness, or commitments to lend, of at least $25,000,000 at the time of determination and is specifically
designated in the instrument evidencing such Guarantor Senior Indebtedness or the agreement under which such
Guarantor Senior Indebtedness arises as "Designated Guarantor Senior Indebtedness" by the Guarantor which is the
obligor under such Guarantor Senior Indebtedness.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness outstanding under the Bank Credit
Agreement and (ii) any other Senior Indebtedness which is incurred pursuant to an agreement (or series of related
agreements) simultaneously entered into providing for indebtedness, or commitments to lend, of at least
$25,000,000 at the time of determination and is specifically designated in the instrument evidencing such Senior
Indebtedness or the agreement under which such Senior Indebtedness arises as "Designated Senior Indebtedness" by
the Company.
"Disqualified Equity Interests" means any Equity Interests that, either by their terms or by the terms
of any security into which they are convertible or exchangeable or otherwise, are or upon the happening of an
event or passage of time would be required to be redeemed prior to any Stated Maturity of the principal of the
Securities or are redeemable at the option of the holder thereof at any time prior to any such Stated Maturity,
or are convertible into or exchangeable for debt securities at any time prior to any such Stated Maturity at the
option of the holder thereof..
"Equity Interest" of any Person means any and all shares, interests, rights to purchase, warrants,
options, participations or other equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership interests, whether general or limited, and limited liability company
interests of such Person, including any Preferred Equity Interests.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, and the rules,
regulations and forms promulgated thereunder, all as the same shall be amended from time to time.
"Exchange Offer" means an exchange offer by the Company of Series B Securities for Series A Securities
to be effected pursuant to a Registration Rights Agreement.
"Exchange Offer Registration Statement" means a registration statement under the Securities Act with
respect to an Exchange Offer contemplated by a Registration Rights Agreement.
"Existing Indenture" means the Indenture, dated September 25, 1997, among Parent, the guarantors party
thereto and The Bank of New York as trustee, as supplemented by Supplemental Indenture No. 1, dated as of March
31, 1999, by and between Parent, the guarantors party thereto and The Bank of New York as trustee, by
Supplemental Indenture No. 2, dated as of August 24, 2000, by and between Parent, the Company, the guarantors
party thereto and The Bank of New York as trustee, by Supplemental Indenture No. 3, dated as of March 9, 2001 by
and between the Company, the guarantors party thereto and The Bank of New York as trustee, and by Supplemental
Indenture No. 4, dated as of June 25, 2001 by and between Parent, the Company, the guarantors party thereto and
The Bank of New York as trustee, pursuant to which the Existing Notes were issued.
"Existing Notes" means the 9 1/2% Senior Subordinated Notes due October 1, 2007 of the Company (as
successor issuer to Parent) issued pursuant to the Existing Indenture and outstanding as of the date of this
Indenture.
"Existing Notes Guarantee" means the guarantee by Parent or any of its Subsidiaries of the obligations
of the Company and any other obligor under the Existing Indenture or under the Existing Notes, pursuant to a
guarantee given in accordance with the Existing Indenture.
"Fair Market Value" means, with respect to any asset or property, the sale value that would be obtained
in an arm's-length transaction between an informed and willing seller under no compulsion to sell and an informed
and willing buyer under no compulsion to buy.
"GAAP" means generally accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Guarantee" means the guarantee by any Guarantor of the Company's Indenture Obligations pursuant to a
guarantee given in accordance with this Indenture, including, without limitation, the Guarantees by the
Guarantors included in Article Fourteen of this Indenture and any Guarantee delivered pursuant to Section 10.14.
"Guaranteed Debt" of any Person means, without duplication, all Indebtedness of any other Person
referred to in the definition of Indebtedness guaranteed directly or indirectly in any manner by such Person, or
in effect guaranteed directly or indirectly by such Person through an agreement (i) to pay or purchase such
Indebtedness or to advance or supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder of such Indebtedness against
loss, (iii) to supply funds to, or in any other manner invest in, the debtor (including any agreement to pay for
property or services without requiring that such property be received or such services be rendered), (iv) to
maintain working capital or equity capital of the debtor, or otherwise to maintain the net worth, solvency or
other financial condition of the debtor or (v) otherwise to assure a creditor against loss; provided that the
term "Guarantee" shall not include endorsements for collection or deposit, in either case in the ordinary course
of business.
"Guarantor" means each Person listed as a guarantor in this Indenture or any other guarantor of the
Indenture Obligations.
"Guarantor Senior Indebtedness" means the principal of, premium, if any, and interest (including
interest accruing after the filing of a petition initiating any proceeding under any state, federal or foreign
bankruptcy laws whether or not allowable as a claim in such proceeding) on any Indebtedness of any Guarantor
(other than as otherwise provided in this definition), whether outstanding on the date of this Indenture or
thereafter created, incurred or assumed, and whether at any time owing, actually or contingent, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same
is outstanding expressly provides that such Indebtedness shall not be senior in right of payment to any
Guarantor. Without limiting the generality of the foregoing, "Guarantor Senior Indebtedness" shall include (i)
the principal of, premium, if any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy law whether or not allowable as a claim
in such proceeding) and all other obligations of every nature of any Guarantor from time to time owed to the
lenders (or their agent) under the Bank Credit Agreement; provided, however, that any Indebtedness under any
refinancing, refunding, or replacement of the Bank Credit Agreement shall not constitute Guarantor Senior
Indebtedness to the extent that the Indebtedness thereunder is by its express terms subordinate to any other
Indebtedness of any Guarantor and (ii) Indebtedness under Interest Rate Agreements. Notwithstanding the
foregoing, "Guarantor Senior Indebtedness" shall not include (i) Indebtedness evidenced by the Guarantees or the
Existing Notes Guarantees, (ii) Indebtedness that is subordinate or junior in right of payment, by contract or
otherwise, to any Indebtedness of any Guarantor, (iii) Indebtedness which when incurred and without respect to
any election under Section 1111(b) of Title 11 United States Code, is without recourse to any Guarantor, (iv)
Indebtedness which is represented by Disqualified Equity Interests, (v) any liability for foreign, federal,
state, local or other taxes owed or owing by any Guarantor to the extent such liability constitutes Indebtedness,
(vi) Indebtedness of any Guarantor to a Subsidiary or any other Affiliate of the Company or any of such
Affiliate's subsidiaries, (vii) that portion of any Indebtedness which at the time of issuance is issued in
violation of this Indenture (but, for purposes of this clause (vii), no such Indebtedness shall be deemed to be
issued in violation of this Indenture if the holders of such obligation or their representative shall have
received an officers' certificate of the Company to the effect that the incurrence of such Indebtedness does not
(or, in the case of revolving credit indebtedness, that the incurrence of the entire committed amount thereof at
the date on which the initial borrowing thereunder is made would not) violate such provisions of this Indenture),
(viii) Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari Passu Indebtedness, and
(ix) Indebtedness owed by any Guarantor for compensation to employees or for services rendered by employees.
"Holder" means a Person in whose name a Security is registered in the Security Register.
"Indebtedness" means, with respect to any Person, without duplication, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property or services, excluding any trade
payables and other accrued current liabilities arising in the ordinary course of business, but including, without
limitation, all obligations, contingent or otherwise, of such Person in connection with any letters of credit
issued under letter of credit facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire for value any Equity Interests of
such Person, or any warrants, rights or options to acquire such Equity Interests, now or hereafter outstanding,
(ii) all obligations of such Person evidenced by bonds, notes, debentures or other similar instruments, (iii) all
indebtedness created or arising under any conditional sale or other title retention agreement with respect to
property acquired by such Person (even if the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), but excluding trade payables arising
in the ordinary course of business, (iv) all obligations under Interest Rate Agreements of such Person, (v) all
Capital Lease Obligations of such Person, (vi) all Indebtedness referred to in clauses (i) through (v) above of
other Persons and all dividends of other Persons, the payment of which is secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien, upon or with
respect to property (including, without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such Indebtedness, (vii) all Guaranteed
Debt of such Person, (viii) all Disqualified Equity Interests valued at the greater of their voluntary or
involuntary maximum fixed repurchase price plus accrued and unpaid dividends, and (ix) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above. The amount of Indebtedness of any Person at any date shall be, without
duplication, the principal amount that would be shown on a balance sheet of such Person prepared as of such date
in accordance with GAAP and the maximum determinable liability of any Guaranteed Debt referred to in clause (vii)
above at such date; provided, however, that the amount outstanding at any time of any Indebtedness issued with
original issue discount shall be deemed to be the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as determined in conformity with GAAP.
The Indebtedness of the Company and its Restricted Subsidiaries shall not include any Indebtedness of
Unrestricted Subsidiaries so long as such Indebtedness is non-recourse to the Company and its Restricted
Subsidiaries. For purposes hereof, the "maximum fixed repurchase price" of any Disqualified Equity Interests
which do not have a fixed repurchase price shall be calculated in accordance with the terms of such Disqualified
Equity Interests as if such Disqualified Equity Interests were purchased on any date on which Indebtedness shall
be required to be determined pursuant to this Indenture, and if such price is based upon, or measured by, the
Fair Market Value of such Disqualified Equity Interests, such Fair Market Value to be determined in good faith by
the Board of Directors of the issuer of such Disqualified Equity Interests.
"Indenture Obligations" means the obligations of the Company and any other obligor under this Indenture
or under the Securities, including any Guarantor, to pay principal, premium, if any, and interest when due and
payable, and all other amounts due or to become due under or in connection with this Indenture, the Securities
and the performance of all other obligations to the Trustee and the Holders under this Indenture and the
Securities, according to the terms hereof and thereof
"Independent Director" means a director of the Company other than a director (i) who (apart from being a
director of Parent, the Company or any Subsidiary of Parent or the Company) is an employee, insider, associate or
Affiliate of Parent, the Company or a Subsidiary of Parent or the Company or has held any such position during
the previous five years or (ii) who is a director, an employee, insider, associate or Affiliate of another party
to the transaction in question.
"Initial Purchasers" shall mean Deutsche Banc Alex. Brown Inc., J.P. Morgan Securities Inc., Bear,
Stearns & Co. Inc., BNY Capital Markets, Inc., Credit Suisse First Boston Corporation
Fleet Securities, Inc. and Jefferies & Company, Inc., as initial purchasers of the Securities.
"Initial Additional Series A Securities" means Additional Securities issued in an offering not
registered under the Securities Act.
"Initial Series A Securities" means the Company's 9% Senior Subordinated Notes due 2011, Series A,
issued on the date hereof pursuant to this Indenture (and any Securities issued in respect thereof pursuant to
Sections 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06, 10.13, 10.16 or 11.08).
"Interest Payment Date" means the Stated Maturity of an installment of interest on the Securities.
"Interest Rate Agreements" means one or more of the following agreements which shall be entered into by
one or more financial institutions: interest rate protection agreements (including, without limitation, interest
rate swaps, caps, floors, collars and similar agreements) and/or other types of interest rate hedging agreements
from time to time.
"Investments" means, with respect to any Person, directly or indirectly, any advance, loan (including
guarantees), or other extension of credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or use of others), or any purchase,
acquisition or ownership by such Person of any Equity Interests, bonds, notes, debentures or other securities
issued or owned by any other Person and all other items that would be classified as investments on a balance
sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise), privilege, security interest,
hypothecation or other encumbrance upon or with respect to any property of any kind (including any conditional
sale or other title retention agreement, any leases in the nature thereof, and any agreement to give any security
interest), real or personal, movable or immovable, now owned or hereafter acquired.
"Maturity" means, when used with respect to any Security, the date on which the principal of such
Security becomes due and payable as provided in the Security or as provided in this Indenture, whether at Stated
Maturity, the purchase date, or the redemption date and whether by declaration of acceleration, Offer in respect
of Excess Proceeds, Change of Control, call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating agency.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person, the proceeds thereof in the
form of cash or Temporary Cash Investments including payments in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or Temporary Cash Investments
(except to the extent that such obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary of the Company) net of (i) brokerage commissions and other reasonable fees and expenses (including
fees and expenses of counsel and investment bankers) related to such Asset Sale, (ii) provisions for all taxes
payable as a result of such Asset Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset Sale or would cause a required
repayment under the Bank Credit Agreement, (iv) amounts required to be paid to any Person (other than the Company
or any Restricted Subsidiary of the Company) owning a beneficial interest in the assets subject to the Asset Sale
and (v) appropriate amounts to be provided by the Company or any Restricted Subsidiary of the Company, as the
case may be, as a reserve, in accordance with GAAP, against any liabilities associated with such Asset Sale and
retained by the Company or any Restricted Subsidiary of the Company, as the case may be, after such Asset Sale,
including, without limitation, pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations associated with such Asset Sale, all
as reflected in an Officers' Certificate delivered to the Trustee and (b) with respect to any issuance or sale of
Equity Interests by any Person, or debt securities or Equity Interests of such Person that have been converted
into or exchanged for Equity Interests, as referred to under Section 10.09, the proceeds of such issuance or sale
in the form of cash or Temporary Cash Investments, including payments in respect of deferred payment obligations
when received in the form of, or stock or other assets when disposed for, cash or Temporary Cash Investments
(except to the extent that such obligations are financed or sold with recourse to such Person or any Restricted
Subsidiary of such Person), net of attorney's fees, accountant's fees and brokerage, consultation, underwriting
and other fees and expenses actually incurred in connection with such issuance or sale and net of taxes paid or
payable as a result thereof.
"Nonpayment Default" means any event (other than a Payment Default) the occurrence of which entitles one
or more Persons to accelerate the maturity of any Designated Senior Indebtedness.
"Non-U.S. Person" has the meaning given to it by Regulation S under the Securities Act.
"Officers' Certificate" means a certificate signed by the Chairman of the Board, Vice Chairman, the
President or a Vice President (regardless of vice presidential designation), and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company or any Guarantor, as the case may be, and
delivered to the Trustee.
"Operating Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of
such Person and its Restricted Subsidiaries for such period, plus (a) extraordinary net losses and net losses on
sales of assets outside the ordinary course of business during such period, to the extent such losses were
deducted in computing Consolidated Net Income, plus (b) provision for taxes based on income or profits, to the
extent such provision for taxes was included in computing such Consolidated Net Income, and any provision for
taxes utilized in computing the net losses under clause (a) hereof, plus (c) Consolidated Interest Expense of
such Person and its Restricted Subsidiaries for such period, plus (d) depreciation, amortization and all other
non-cash charges, to the extent such depreciation, amortization and other non-cash charges were deducted in
computing such Consolidated Net Income (including amortization of goodwill and other intangibles).
"Opinion of Counsel" means a written opinion of counsel, who may be counsel for the Company or any of
the Guarantors, unless an Opinion of Independent Counsel is required pursuant to the terms of this Indenture.
"Opinion of Independent Counsel" means a written opinion of counsel issued by someone who is not an
employee or consultant of the Company or any Guarantor.
"Original Securities" means the Initial Series A Securities and any Series B Securities issued in
exchange therefor.
"Outstanding" when used with respect to Securities means, as of the date of determination, all
Securities theretofore authenticated and delivered under this Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(b) Securities, or portions thereof, for which payment or redemption money in the necessary
amount has been theretofore deposited with the Trustee or any Paying Agent (other than the Company or
any Affiliate thereof) in trust or set aside and segregated in trust by the Company or such Affiliate
(if the Company or such Affiliate shall act as the Paying Agent) for the Holders; provided that if such
Securities are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture
or provision therefor reasonably satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 4.02 and 4.03, with respect to which
the Company has effected defeasance or covenant defeasance as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities have been authenticated and
delivered pursuant to this Indenture, other than any such Securities in respect of which there shall
have been presented to the Trustee proof reasonably satisfactory to it that such Securities are held by
a bona fide purchaser in whose hands the Securities are valid obligations of the Company; provided,
however, that in determining whether the Holders of the requisite principal amount of Outstanding
Securities have given any request, demand, authorization, direction, notice, consent or waiver
hereunder, Securities owned by the Company, any Guarantor, or any other obligor upon the Securities or
any Affiliate of the Company, any Guarantor, or such other obligor shall be disregarded and deemed not
to be Outstanding, except that, in determining whether the Trustee shall be protected in relying upon
any such request, demand, authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Trustee actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to
the reasonable satisfaction of the Trustee the pledgee's right so to act with respect to such Securities
and that the pledgee is not the Company, any Guarantor or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor or such other obligor.
"Parent" means Salem Communications Corporation, a Delaware corporation, the parent of the Company, and
any successor Person succeeding to the direct or indirect ownership of the Company.
"Parent Equity Sale Proceeds" means the aggregate amount of Net Cash Proceeds received by Parent after
the date of the Existing Indenture to but not including the Succession Date from capital contributions (other
than from any of its Subsidiaries) or from the issuance or sale (other than to any of its Subsidiaries) of its
Qualified Equity Interests (except, in each case, to the extent such proceeds were used to purchase, redeem or
otherwise retire Equity Interests or Subordinated Indebtedness).
"Parent Subsidiary Guarantor" means any Subsidiary of Parent that is a Guarantor of the Securities other
than a Restricted Subsidiary Guarantor.
"Pari Passu Indebtedness" means the Existing Notes or any Existing Notes Guarantee, as the case may be,
and any other Indebtedness of the Company or any Guarantor that is pari passu in right of payment to the
Securities or any Guarantee, as the case may be.
"Paying Agent" means any Person authorized by the Company to pay the principal of, premium, if any, or
interest on any Securities on behalf of the Company.
"Payment Default" means any default in the payment of principal of, premium, if any, or interest, on any
Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means (so long as the effect of any exclusion employing this
definition is not to cause any Guarantee to be treated in any case or proceeding or similar event described in
clause (a), (b) or (c) of Section 14.17 as part of the same class of claims as the Guarantor Senior Indebtedness
or any class of claims pari passu with, or senior to, the Guarantor Senior Indebtedness) for any payment or
distribution, debt or equity securities of any Guarantor or any successor corporation provided for by a plan of
reorganization or readjustment that are subordinated to any Guarantee at least to the same extent that the
Guarantee is subordinated to the payment of all Guarantor Senior Indebtedness then outstanding; provided that
(1) if a new corporation results from such reorganization or readjustment, such corporation assumes any Guarantor
Senior Indebtedness not paid in full in cash or Cash Equivalents in connection with such reorganization or
readjustment and (2) the rights of the holders of such Guarantor Senior Indebtedness are not, without the consent
of such holders, altered by such reorganization or readjustment.
"Permitted Holders" means as of the date of determination (i) any of Stuart W. Epperson and Edward G.
Atsinger III; (ii) family members or the relatives of the Persons described in clause (i); (iii) any trusts
created for the benefit of the Persons described in clauses (i), (ii) or (iv) or any trust for the benefit of any
such trust; or (iv) in the event of the incompetence or death of any of the Persons described in clauses (i) and
(ii), such Person's estate, executor, administrator, committee or other personal representative or beneficiaries,
in each case who at any particular date shall beneficially own or have the right to acquire, directly or
indirectly, Equity Interests of the Company.
"Permitted Indebtedness" has the meaning specified in Section 10.08.
"Permitted Investments" means any of the following: (i) Temporary Cash Investments; (ii) Investments by
the Company or any of its Restricted Subsidiaries in a Restricted Subsidiary Guarantor and Investments by any
Restricted Subsidiary in the Company; (iii) Investments by the Company or any of its Restricted Subsidiaries in
another Person, if as a result of such Investment (A) such other Person becomes a Restricted Subsidiary of the
Company that is or would be a Guarantor or (B) such other Person is merged or consolidated with or into, or
transfers or conveys all or substantially all of its assets to, the Company or a Restricted Subsidiary of the
Company that is or would be a Guarantor; (iv) promissory notes received as a result of Asset Sales permitted
under Section 10.13; (v) Investments in existence on the date of this Indenture; (vi) direct or indirect loans to
employees, or to a trustee for the benefit of such employees, of the Company or any of its Restricted
Subsidiaries in an aggregate amount outstanding at any time not exceeding $1,000,000; (vii) Permitted
Non-Commercial Educational Station Investments; provided that immediately after giving effect to any such
Investment, the Company could incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant
to the restrictions under Section 10.08; (viii) Interest Rate Agreements entered into in the ordinary course of
business of the Company or a Restricted Subsidiary of the Company and incurred in compliance with Section 10.08;
and (ix) other Investments that do not exceed $5,000,000 at any one time outstanding.
"Permitted Noncommercial Educational Station Investment" means a loan made by the Company or a
Restricted Subsidiary of the Company to a non-profit entity, the proceeds of which are used to acquire assets
used in the operation of a radio station; provided that so long as any such Investment remains outstanding (i)
such loan shall be evidenced by a promissory note and shall not be subordinated to any other Indebtedness of such
non-profit entity; (ii) at least 40% of the board seats (or other comparable governing body) of such non-profit
entity shall be held by executive officers of the Company; and (iii) a technical and professional services
agreement shall be in full force and effect between such non-profit entity and the Company pursuant to which the
Company shall be compensated for providing engineering, accounting, legal and other assistance in connection with
the operation of the station licensed to such non-profit entity (which agreement shall contain customary terms
and conditions for technical and professional services agreements in the radio broadcasting industry generally)..
"Permitted Junior Securities" means (so long as the effect of any exclusion employing this definition is
not to cause the Securities to be treated in any case or proceeding or similar event described in clause (a),
(b) or (c) of Section 12.02 as part of the same class of claims as the Senior Indebtedness or any class of claims
pari passu with, or senior to, the Senior Indebtedness) for any payment or distribution, debt or equity
securities of the Company or any successor corporation provided for by a plan of reorganization or readjustment
that are subordinated to the Securities at least to the same extent that the Securities are subordinated to the
payment of all Senior Indebtedness then outstanding; provided that (1) if a new corporation results from such
reorganization or readjustment, such corporation assumes any Senior Indebtedness not paid in full in cash or Cash
Equivalents in connection with such reorganization or readjustment and (2) the rights of the holders of such
Senior Indebtedness are not, without the consent of such holders, altered by such reorganization or readjustment.
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of any Restricted Subsidiary Guarantor under Capital Lease Obligations
incurred in the ordinary course of business; and
(ii) Indebtedness of any Restricted Subsidiary Guarantor (a) issued to finance or refinance the
purchase or construction of any assets of such Restricted Subsidiary Guarantor or (b) secured by a Lien
on any assets of such Restricted Subsidiary Guarantor where the lender's sole recourse is to the assets
so encumbered, in either case (x) to the extent the purchase or construction prices for such assets are
or should be included in "property and equipment" in accordance with GAAP and (y) if the purchase or
construction of such assets is not part of any acquisition of a Person or business unit.
"Person" means any individual, corporation, limited liability company, partnership, joint venture,
association, jointstock company, trust, unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous Security evidencing all or a
portion of the same debt as that evidenced by such particular Security and, for the purposes of this definition,
any Security authenticated and delivered under Section 3.08 in exchange for a mutilated Security or in lieu of a
lost, destroyed or stolen Security shall be deemed to evidence the same debt as the mutilated, lost, destroyed or
stolen Security.
"Preferred Equity Interest" means, as applied to the Equity Interest of any Person, an Equity Interest
of any class or classes (however designated) which is preferred as to the payment of dividends or distributions,
or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of such Person,
over Equity Interests of any other class of such Person.
"Prospectus" means the prospectus included in a Registration Statement, including any preliminary
prospectus, and any such prospectus as amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion of the Series A Securities covered
by a Shelf Registration Statement, and by all other amendments and supplements to such prospectus, including
post-effective amendments, and in each case including all material incorporated by reference therein.
"Public Equity Offering" means, with respect to any Person, an underwritten public offering by such
Person of some or all of its Equity Interests (other than Disqualified Equity Interests), the net proceeds of
which (after deducting any underwriting discounts and commissions) (x) to the Company or (y) received by the
Company as a capital contribution from Parent, as the case may be, exceed $10,000,000.
"Qualified Equity Interests" of any Person means any and all Equity Interests of such Person other than
Disqualified Equity Interests.
"Redemption Date" when used with respect to any Security to be redeemed pursuant to any provision in
this Indenture means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed pursuant to any provision in
this Indenture means the price at which it is to be redeemed pursuant to this Indenture.
"Registration Rights Agreement" means (a) the Registration Rights Agreement, dated as of the date of
this Indenture, among the Company, the Guarantors and the Initial Purchasers and (b) any registration rights
agreement among the Company, the guarantors named therein and the initial purchasers named therein with respect
to any Initial Additional Series A Notes.
"Registration Statement" means any registration statement of the Company which covers any of the Series
A Securities or Series B Securities pursuant to the provisions of a Registration Rights Agreement or otherwise,
and all amendments and supplements to any such Registration Statement, including post-effective amendments, in
each case including the Prospectus contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Regular Record Date" for the interest payable on any Interest Payment Date means the 15th day (whether
or not a Business Day) next preceding such Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Resale Restriction Termination Date" means, with respect to any Series A Security, the date that is two
years (or such other period as may hereafter be provided under Rule 144(k) under the Securities Act or any
successor provision thereto as permitting the resale by non-affiliates of restricted securities (as such term is
defined in Rule 144(a)(3) under the Securities Act) without restriction) after the later of the original issue
date in respect of such Security and the last date on which the Company or any Affiliate of the Company was the
owner of such Security (or any Predecessor Security thereto).
"Responsible Officer" when used with respect to the Trustee means any officer assigned to the Corporate
Trust Office or the agent of the Trustee appointed hereunder, including any vice president, assistant vice
president, assistant secretary, or any other officer or assistant officer of the Trustee or the agent of the
Trustee appointed hereunder to whom any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Securities Transfer Certificate" means a certificate substantially in the form set forth in
Exhibit A.
"Restricted Security" means each Security required pursuant to Section 2.02(a) to bear a Restricted
Securities Legend.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person other than an Unrestricted
Subsidiary.
"Restricted Subsidiary Guarantor" means any Guarantor of the Securities that is a Restricted Subsidiary
of the Company.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Information" shall be such information with respect to the Company and the Guarantors as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor provision thereto).
"Sale And Leaseback Transaction" means any transaction or series of related transactions pursuant to
which the Company or a Restricted Subsidiary of the Company sells or transfers any property or asset in
connection with the leasing, or the resale against installment payments, of such property or asset to the seller
or transferor.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw Hill Companies, or any successor
rating agency.
"Securities" means the Initial Series A Securities, any Additional Securities and the Series B
Securities.
"Securities Act" means the Securities Act of 1933, or any successor thereto, and the rules, regulations
and forms promulgated thereunder, all as the same shall be amended from time to time.
"Senior Indebtedness" means the principal of, premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding under any state, federal or foreign bankruptcy law
whether or not allowable as a claim in such proceeding) on any Indebtedness of the Company (other than as
otherwise provided in this definition), whether outstanding on the date of this Indenture or thereafter created,
incurred or assumed, and whether at any time owing, actually or on a contingent basis, unless, in the case of any
particular Indebtedness, the instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in right of payment to the Securities.
Without limiting the generality of the foregoing, "Senior Indebtedness" shall include (i) the principal of,
premium, if any, and interest (including interest accruing after the filing of a petition initiating any
proceeding under any state, federal or foreign bankruptcy law whether or not allowable as a claim in such
proceeding) and all other obligations of every nature of the Company from time to time owed to the lenders (or
their agent) under the Bank Credit Agreement; provided, however, that any Indebtedness under any refinancing,
refunding or replacement of the Bank Credit Agreement shall not constitute Senior Indebtedness to the extent that
the Indebtedness thereunder is by its express terms subordinated in right of payment to any other Indebtedness of
the Company, and (ii) Indebtedness under Interest Rate Agreements. Notwithstanding the foregoing, "Senior
Indebtedness" shall not include (i) Indebtedness evidenced by the Securities or the Existing Notes, (ii)
Indebtedness that is subordinate or junior in right of payment, by contract or otherwise, to any Indebtedness of
the Company, (iii) Indebtedness which when incurred and without respect to any election under Section 1111(b) of
Title 11 United States Code, is without recourse to the Company, (iv) Indebtedness which is represented by
Disqualified Equity Interests, (v) any liability for foreign, federal, state, local or other taxes owed or owing
by the Company to the extent such liability constitutes Indebtedness, (vi) Indebtedness of the Company to a
Subsidiary or any other Affiliate of the Company or any of such Affiliate's subsidiaries, (vii) that portion of
any Indebtedness which at the time of issuance is issued in violation of this Indenture (but, for purposes of
this clause (vii), no such Indebtedness shall be deemed to be issued in violation of this Indenture if the
holders of such obligation or their representative shall have received an officers' certificate of the Company to
the effect that the incurrence of such Indebtedness does not (or, in the case of revolving credit indebtedness,
that the incurrence of the entire committed amount thereof at the date on which the initial borrowing thereunder
is made would not) violate such provisions of this Indenture), (viii) Indebtedness evidenced by a guarantee of
any Subordinated Indebtedness or Pari Passu Indebtedness and (ix) Indebtedness owed by the Company for
compensation to employees or for services rendered by employees.
"Series A Securities" means the Initial Series A Securities and any Initial Additional Series A
Securities.
"Series B Securities" means the Company's 9% Senior Subordinated Notes Due 2011, Series B containing
terms substantially identical to the Initial Series A Securities or any Initial Additional Series A Securities
(except that (i) such Series B Securities shall not contain terms with respect to transfer restrictions and shall
be registered under the Securities Act and (ii) certain provisions relating to an increase in the stated rate of
interest thereon shall be eliminated).
"Shelf Registration Statement" means a "shelf" registration statement of the Company pursuant to a
Registration Rights Agreement, which covers all or a portion of the Registrable Securities (as defined in such
Registration Rights Agreement) on an appropriate form under Rule 415 under the Securities Act, or any similar
rule that may be adopted by the Commission, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus contained therein, all exhibits
thereto and all material incorporated by reference therein.
"Special Record Date" for the payment of any Defaulted Interest means a date fixed by the Trustee
pursuant to Section 3.09.
"Stated Maturity" means, when used with respect to any Indebtedness or any installment of interest
thereon, the date specified in such Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any Guarantor subordinated in right of
payment to the Securities or any Guarantee, as the case may be and, with respect to Parent for the period from
the date of the Existing Indenture to but not including the Succession Date, Indebtedness subordinated in right
of payment to the Existing Notes.
"Subsidiary" means, with respect to any Person, any corporation, limited liability company, partnership,
joint venture, association or other business entity a majority of the equity ownership or the Voting Stock of
which is at the time owned, directly or indirectly, by such Person or by one or more other Subsidiaries of such
Person, or by such Person and one or more of its other Subsidiaries.
"Succession Date" means August 24, 2000, the date that the Company became the successor obligor to
Parent with respect to the Existing Notes pursuant to the Existing Indenture.
"Successor Security" of any particular Security means every Security issued after, and evidencing all or
a portion of the same debt as that evidenced by, such particular Security. For the purposes of this definition,
any Security authenticated and delivered under Section 3.08 in exchange for or in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the mutilated, destroyed, lost or stolen
Security.
"Temporary Cash Investments" means (i) any evidence of Indebtedness, maturing not more than one year
after the date of acquisition, issued by the United States of America, or an instrumentality or agency thereof
and guaranteed fully as to principal, premium, if any, and interest by the United States of America; (ii) any
certificate of deposit, maturing not more than one year after the date of acquisition, issued by, or time deposit
of, a commercial banking institution (including the Trustee) that is a member of the Federal Reserve System and
that has combined capital and surplus and undivided profits of not less than $500,000,000, whose debt has a
rating, at the time as of which any investment therein is made, of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P; (iii) commercial paper, maturing not more than one year after the date of
acquisition, issued by a corporation (other than an Affiliate or Subsidiary of the Company, but including the
Trustee) organized and existing under the laws of the United States of America with a rating, at the time as of
which any investment therein is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher) according to
S&P; (iv) any money market deposit accounts issued or offered by a domestic commercial bank having capital and
surplus in excess of $500,000,000; (v) marketable direct obligations issued by any state of the United States or
any political subdivision of any such state or any public instrumentality thereof maturing within one year from
the date of acquisition thereof and, at the time of acquisition, having one of the two highest ratings obtainable
from either S&P or Moody's; (vi) repurchase obligations with a term of not more than 31 days for underlying
securities of the types described in clause (i) above entered into with any bank meeting the qualifications
specified in clause (ii) above; and (vii) investments in money market funds which invest substantially all their
assets in securities of the types described in clauses (i) through (vi) above.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this instrument, until a
successor trustee shall have become such pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at the time of determination
shall be an Unrestricted Subsidiary (as designated by the Board of Directors of the Company, as provided below)
and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company may designate any
Subsidiary of the Company (including any newly acquired or newly formed Subsidiary) to be an Unrestricted
Subsidiary if all of the following conditions apply: (a) such Subsidiary is not liable, directly or indirectly,
with respect to any Indebtedness other than Unrestricted Subsidiary Indebtedness and (b) any Investment in such
Subsidiary made as a result of designating such Subsidiary an Unrestricted Subsidiary shall not violate the
provisions of Section 10.19. Any such designation by the Board of Directors of the Company shall be evidenced to
the Trustee by filing with the Trustee a board resolution giving effect to such designation and an officers'
certificate certifying that such designation complies with the foregoing conditions. The Board of Directors of
the Company may designate any Unrestricted Subsidiary as a Restricted Subsidiary; provided that immediately after
giving effect to such designation, the Company could incur $1.00 of additional Indebtedness (other than Permitted
Indebtedness) pursuant to the restrictions under Section 10.08(a).
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary means Indebtedness of such
Unrestricted Subsidiary (i) as to which neither the Company nor any Restricted Subsidiary is directly or
indirectly liable (by virtue of the Company or any such Restricted Subsidiary being the primary obligor on,
guarantor of, or otherwise liable in any respect to, such Indebtedness), except Guaranteed Debt of the Company or
any Restricted Subsidiary to any Affiliate, in which case (unless the incurrence of such Guaranteed Debt resulted
in a Restricted Payment at the time of incurrence) the Company shall be deemed to have made a Restricted Payment
equal to the principal amount of any such Indebtedness to the extent guaranteed at the time such Affiliate is
designated an Unrestricted Subsidiary and (ii) which, upon the occurrence of a default with respect thereto, does
not result in, or permit any holder of any Indebtedness of the Company or any Restricted Subsidiary to declare, a
default on such Indebtedness of the Company or any Restricted Subsidiary or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.
"Voting Stock" means stock of the class or classes pursuant to which the holders thereof have the
general voting power under ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or
classes shall have or might have voting power by reason of the happening of any contingency).
"Wholly Owned Restricted Subsidiary" means, with respect to any Person, a Restricted Subsidiary of such
Person all the Equity Interests of which are owned by such Person or another Wholly Owned Restricted Subsidiary
of such Person. As of the date of this Indenture, the Wholly Owned Restricted Subsidiaries of the Company will
consist of all of the Company's Subsidiaries.
Section 1.02......Other Definitions.
Defined
Term in Section
"Act"..............................................................................................1.05
"Additional Interest"..............................................................................2.02
"Agent Members"....................................................................................3.05
"Change of Control Offer".........................................................................10.16
"Change of Control Purchase Date".................................................................10.16
"Change of Control Purchase Notice"...............................................................10.16
"Change of Control Purchase Price"................................................................10.16
"Covenant Defeasance"..............................................................................4.03
"Defaulted Interest"...............................................................................3.09
"Defeasance".......................................................................................4.02
"Defeasance Redemption Date".......................................................................4.04
"Defeased Securities"..............................................................................4.01
"Deficiency"......................................................................................10.13
"Excess Proceeds".................................................................................10.13
"Global Securities" ...............................................................................2.01
"Guarantor Senior Representative".................................................................14.24
"Initial Blockage Period".........................................................................12.03
"Offer"...........................................................................................10.13
"Offer Date"......................................................................................10.13
"Offered Price"...................................................................................10.13
"Offshore Global Security" ........................................................................2.01
"Offshore Physical Security" ......................................................................2.01
"Pari Passu Debt Amount"..........................................................................10.13
"Pari Passu Offer"................................................................................10.13
"Payment Blockage Period".........................................................................12.03
"Permitted Indebtedness"..........................................................................10.08
"Permitted Payments"..............................................................................10.09
"Physical Securities"..............................................................................2.01
"QIB" .............................................................................................2.03
"Restricted Payment"..............................................................................10.09
"Restricted Securities Legend" ....................................................................2.02
"Required Filing Dates"...........................................................................10.20
"Security Amount".................................................................................10.13
"Security Register"................................................................................3.06
"Security Registrar"...............................................................................3.06
"Senior Representative"...........................................................................12.03
"Surviving Entity".................................................................................8.01
"U.S. Global Security" ............................................................................2.01
"U.S. Physical Security" ..........................................................................2.01
"U.S. Government Obligations"......................................................................4.04
Section 1.03......Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any action under any provision of
this Indenture, the Company, any Guarantor and any other obligor on the Securities shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent, if any, provided for in this Indenture (including
any covenants compliance with which constitutes a condition precedent) relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that, in the case of any such application or request as to
which the furnishing of such documents, certificates and/or opinions is specifically required by any provision of
this Indenture relating to such particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided
for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or investigation upon which the
statements or opinions contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he or she has made such examination or
investigation as is necessary to enable him or her to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such individual, such condition or covenant has been
complied with.
Section 1.04......Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or covered by an opinion of, any
specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only
one such Person, or that they be so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor or other obligor of the
Securities may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows that the certificate or opinion or representations with
respect to the matters upon which the certificate or opinion is based are erroneous. Any such certificate or
opinion may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company, any Guarantor or other obligor of the Securities
stating that the information with respect to such factual matters is in the possession of the Company, any
Guarantor or other obligor of the Securities, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and counsel delivering such Opinions
of Counsel may rely on certificates of the Company or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact, including that various financial
covenants have been complied with.
If any Person is required to make, give or execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be
consolidated and form one instrument.
Section 1.05......Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this
Indenture to be given or taken by Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become effective when such instrument or
instruments are delivered to the Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "Act" of the Holders signing such instrument or instruments. Proof of execution of any such instrument
or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture if made in the
manner provided in this Section. The fact and date of the execution by any person of any such instrument or
writing or the authority of the person executing the same may also be proved in any other manner which the
Trustee deems sufficient in accordance with such reasonable rules as the Trustee may determine.
(b) The ownership of Securities shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of
any Security shall bind every future Holder of the same Security or the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, suffered or omitted to
be done by the Trustee, any Paying Agent or the Company or any Guarantor in reliance thereon, whether or not
notation of such action is made upon such Security.
(d) If the Company shall solicit from the Holders any request, demand, authorization, direction, notice,
consent, waiver or other Act, the Company may, at its option, by or pursuant to a Board Resolution, fix in
advance a record date for the determination of such Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding Trust Indenture Act Section 3.16(c), any such record date shall be the record date specified in
or pursuant to such Board Resolution, which shall be a date not more than 30 days prior to the first solicitation
of Holders generally in connection therewith and no later than the date such solicitation is completed.
In the absence of any such record date fixed by the Company, regardless as to whether a solicitation of
the Holders is occurring on behalf of the Company or any Holder, the Trustee may, at its option, fix in advance a
record date for the determination of such Holders entitled to give such request, demand, authorization,
direction, notice, consent, waiver or other Act, but the Trustee shall have no obligation to do so. Any such
record date shall be a date not more than 30 days prior to the first solicitation of Holders generally in
connection therewith and no later than a date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization, direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders of record at the close of
business on such record date shall be deemed to be Holders for purposes of determining whether Holders of the
requisite proportion of Securities then Outstanding have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for this purpose the Securities then
Outstanding shall be computed as of such record date; provided that no such request, demand, authorization,
direction, notice, consent, waiver or other Act by the Holders on such record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture not later than six months after the
record date.
Section 1.06......Notices, etc., to Trustee, the Company and any Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or any other obligor of the Securities or a
Senior Representative or holder of Senior Indebtedness shall be sufficient for every purpose hereunder if in
writing (which may be by facsimile) and mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to or with the Trustee at the Corporate Trust Office, Attention: Corporate Trust Division, or at any
other address previously furnished in writing to the Holders, the Company, any Guarantor, any other obligor of
the Securities or a Senior Representative or holder of Senior Indebtedness by the Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose (except as provided in Section
5.01(c)) hereunder if in writing and mailed, first-class postage prepaid, or delivered by recognized overnight
courier, to the Company or such Guarantor addressed to it at Salem Communications Holding Corporation, 4880 Santa
Rosa Road, Suite 300, Camarillo, California 93012, Attention: President, or at any other address previously
furnished in writing to the Trustee by the Company;
Section 1.07......Notice to Holders: Waiver.
If this Indenture provides for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first-class postage prepaid, or delivered
by recognized overnight courier, to each Holder affected by such event, at such Holder's address as it appears in
the Security Register, not later than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case in which notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall affect the sufficiency of such
notice with respect to other Holders. Any notice when mailed to a Holder in the aforesaid manner shall be
conclusively deemed to have been received by such Holder whether or not actually received by such Holder. If
this Indenture provides for notice in any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Holders shall be filed with the Trustee, but such filing shall not be a condition precedent
to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of any other cause, it shall be
impracticable to mail notice of any event as required by any provision of this Indenture, then any method of
giving such notice as shall be reasonably satisfactory to the Trustee shall be deemed to be a sufficient giving
of such notice.
Section 1.08......Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any provision of the Trust Indenture Act or
another provision which is required or deemed to be included in this Indenture by any of the provisions of the
Trust Indenture Act, the provision or requirement of the Trust Indenture Act shall control. If any provision of
this Indenture modifies or excludes any provision of the Trust Indenture Act that may be so modified or excluded,
the latter provision shall be deemed to apply to this Indenture as so modified or to be excluded, as the case may
be. In each case that this Indenture refers to a provision of the Trust Indenture Act, the portion of such
provision required to be incorporated herein in order for this Indenture to be qualified under the Trust
Indenture Act is so incorporated by reference in and made a part of this Indenture.
Section 1.09......Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 1.10......Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the Guarantors shall bind their
successors and assigns, whether so expressed or not.
Section 1.11......Separability Clause.
In case any provision in this Indenture or in the Securities shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
Section 1.12......Benefits of Indenture.
Nothing in this Indenture or in the Securities or the Guarantees, express or implied, shall give to any
Person (other than the parties hereto and their successors hereunder, any Paying Agent, the Holders and the
holders of Senior Indebtedness or Guarantor Senior Indebtedness to the extent specified in this Indenture) any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 1.13......Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 1.14......Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated Maturity of any Security shall
not be a Business Day, then (notwithstanding any other provision of this Indenture or of the Securities) payment
of interest or principal or premium. if any, need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the Interest Payment Date or Redemption
Date, or at the Stated Maturity and no interest shall accrue with respect to such payment for the period from and
after such Interest Payment Date, Redemption Date or Stated Maturity, as the case may be, to the next succeeding
Business Day.
Section 1.15......Schedules and Exhibits.
All schedules and exhibits attached hereto are by this reference made a part hereof with the same effect
as if herein set forth in full.
Section 1.16......Counterparts.
This Indenture may be executed in any number of counterparts, each of which shall be an original; but
such counterparts shall together constitute but one and the same instrument.
ARTICLE II........
SECURITY FORMS
Section 2.01......Forms Generally.
The Securities, the Guarantees set forth on the Securities and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by this Indenture and may have such
letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange, any organizational document or governing instrument
or applicable law or as may, consistently herewith, be determined by the officers executing such Securities, as
evidenced by their execution of the Securities. Any portion of the text of any Security may be set forth on the
reverse thereof, with an appropriate reference thereto on the face of the Security.
The definitive Securities shall be printed, lithographed or engraved or produced by any combination of
these methods or may be produced in any other manner permitted by the rules of any securities exchange on which
the Securities may be listed, all as determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Initial Series A Securities and any Initial Additional Series A Securities offered and sold in reliance
on Rule 144A under the Securities Act shall, unless the Company otherwise notifies the Trustee in writing, be
issued in the form of one or more permanent global Securities in substantially the form set forth in this Article
(each, a "U.S. Global Security"), deposited with the Trustee, as custodian for the Depositary or its nominee,
duly executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal
amount of a U.S. Global Security may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.
Initial Series A Securities and any Initial Additional Series A Securities offered and sold in offshore
transactions in reliance on Regulation S under the Securities Act shall be issued in the form of one or more
permanent global Securities in substantially the form set forth in this Article (each, an "Offshore Global
Security"), deposited with the Trustee, as custodian for the Depositary or its nominee, duly executed by the
Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of an Offshore
Global Security may from time to time be increased or decreased by adjustments made in the records of the
Trustee, as custodian for the Depositary or its nominee, as hereinafter provided.
Subject to the limitations set forth in Sections 3.05, 3.06 and 3.07, Initial Series A Securities and
any Initial Additional Series A Securities issued in certificated form pursuant to Sections 3.05, 3.06 and 3.07
in exchange for or upon transfer of beneficial interests (x) in a U.S. Global Security shall be in the form of
permanent certificated Securities substantially in the form set forth in this Article and shall contain the
Restricted Securities Legend as set forth in Section 2.02(a) (the "U.S. Physical Securities") or (y) in an
Offshore Global Security, after the expiration of the 40-day distribution compliance period set forth in
Regulation S with respect to such Offshore Global Security, shall be in the form of permanent certificated
Securities substantially in the form set forth in this Article and shall not contain the Restricted Securities
Legend (the "Offshore Physical Securities"), respectively, as hereinafter provided.
The U.S. Global Securities and the Offshore Global Securities are sometimes collectively referred to as
the "Global Securities." The U.S. Physical Securities and the Offshore Physical Securities are sometimes
collectively herein referred to as the "Physical Securities."
Series B Securities shall be issued substantially in the form set forth in this Article and, subject to
Section 3.05, shall be in the form of one or more Global Securities.
The terms and provisions contained in the form of Securities set forth in Sections 2.02 through 2.05
shall constitute, and are expressly made, a part of this Indenture and, to the extent applicable, the Company,
the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms
and provisions and to be bound thereby.
Section 2.02......Form of Face of Security.
(a) The form of the face of any Series A Security authenticated and delivered hereunder shall be
substantially as follows:
Unless and until (i) a Series A Security is sold under an effective Registration Statement, (ii) a
Series A Security is exchanged for a Series B Security in connection with an Exchange Offer or (iii) the legend
requirement is otherwise terminated in accordance with Section 3.06 or Section 3.07(d), then each Series A
Security shall bear the legend set forth below (the "Restricted Securities Legend") on the face thereof:
SALEM COMMUNICATIONS HOLDING CORPORATION
9% SENIOR SUBORDINATED NOTE DUE 2011, SERIES A
[IF THE SECURITY IS A RESTRICTED SECURITY INSERT:] THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN
THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY ITS
ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS
SECURITY RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT (A) TO SALEM COMMUNICATIONS HOLDING CORPORATION
("SALEM HOLDING") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS
DEFINED IN RULE 501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR")) THAT, PRIOR TO
SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE FOR THE SECURITY
A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF
THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS SECURITY), (D) OUTSIDE THE
UNITED STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT
(AND BASED UPON AN OPINION OF COUNSEL IF SALEM HOLDING SO REQUESTS), OR (G) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND (2) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THIS
SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFER IS PURSUANT TO
CLAUSE C, D, E OR F ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND SALEM HOLDING SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
No. $ ______________________
CUSIP:
Salem Communications Holding Corporation, a Delaware corporation (herein called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to _____________ or registered assigns, the principal sum of _________ United States dollars
($___________) on July 1, 2011, at the office or agency of the Company referred to below, and to pay interest
thereon from June 25, 2001, or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on January 1 and July 1 of each year, commencing January 1, 2002, at the rate of 9%
per annum, plus Additional Interest (as defined below), if any, in United States dollars, until the principal
hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Series A Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest,
which shall be December 15 or June 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series A Securities, to the extent lawful, shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may be paid to the Person in whose name this
Series A Security (or one or more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Series A Securities not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the
Series A Securities may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
The Holder of this Series A Security is entitled to the benefits of the Registration Rights Agreement,
dated as of June 25, 2001, among the Company, the Guarantors and the Initial Purchasers (the "Registration Rights
Agreement"), pursuant to which, subject to the terms and conditions thereof, the Company is obligated, among
other things, to consummate the Exchange Offer pursuant to which the Holder of this Series A Security shall have
the right to exchange this Series A Security for 9% Senior Subordinated Notes due 2011, Series B (herein called
the "Series B Securities") in like principal amount as provided therein. The Series A Securities and the Series
B Securities are together referred to as the "Securities." The Series A Securities rank pari passu in right of
payment with the Series B Securities.
Additional interest ("Additional Interest") will be assessed on the Series A Securities as follows:
..................(i) if (A) neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement has been filed with the Commission on or prior to 75 days after the date of the Indenture or (B)
notwithstanding that the Company and the Guarantors have consummated or will consummate the Exchange Offer, the
Company and the Guarantors are required to file a Shelf Registration Statement and such Shelf Registration
Statement is not filed on or prior to the date required by the Registration Rights Agreement, then, commencing on
the day after any such lapsed filing date, Additional Interest shall accrue on the principal amount of the Series
A Securities over and above the stated interest at a rate of 0.50% per annum for the first 90 days immediately
following each such lapsed filing date, and such Additional Interest rate shall increase by an additional 0.50%
per annum at the beginning of each subsequent 90-day period; or
..................(ii) if (A) neither the Exchange Offer Registration Statement nor the Shelf Registration
Statement is declared effective by the Commission on or prior to 145 days after the date of the Indenture or (B)
notwithstanding that the Company and the Guarantors have consummated or will consummate the Exchange Offer, the
Company and the Guarantors are required to file a Shelf Registration Statement and such Shelf Registration
Statement is not declared effective by the Commission on or prior to the date required by the Registration Rights
Agreement in respect of such Shelf Registration, then, commencing on the day after either such required
effectiveness date, Additional Interest shall accrue on the principal amount of the Series A Securities over and
above the stated interest at a rate of 0.50% per annum for the first 90 days immediately following the day after
such required effectiveness date, and such Additional Interest rate shall increase by an additional 0.50% per
annum at the beginning of each subsequent 90-day period; or
..................(iii) if (A) the Company and the Guarantors have not exchanged Series B Securities for all
Series A Securities validly tendered in accordance with the terms of the Exchange Offer on or prior to the 175th
day after the date of the Indenture or (B) if applicable, a Shelf Registration Statement has been declared
effective and such Shelf Registration Statement ceases to be effective at any time prior to the second
anniversary of the date of the Indenture (other than after such time as all Securities have been disposed of
thereunder), then Additional Interest shall accrue on the principal amount of the Series A Securities over and
above the stated interest at a rate of 0.50% per annum for the first 90 days commencing on (x) the 176th day
after the date of the Indenture, in the case of (A) above, or (y) the day such Shelf Registration Statement
ceases to be effective in the case of (B) above, and such Additional Interest rate shall increase by an
additional 0.50% per annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Securities may not accrue under more than one of the
clauses (i) through (iii) above at any one time and at no time shall the aggregate amount of Additional Interest
accruing exceed 2.00% per annum; provided, further, however, that (1) upon the filing of the applicable Exchange
Registration Statement or the Shelf Registration (in the case of clause (i) above), (2) upon the effectiveness of
the Exchange Registration Statement or the Shelf Registration (in the case of clause(ii) above), or (3)upon the
exchange of the applicable Series B Securities for all Series A Securities tendered (in the case of
clause(iii)(A) above), or upon the effectiveness of the Shelf Registration which had ceased to remain effective
(in the case of clause(iii)(B) above), Additional Interest on the Securities in respect of which such events
relate as a result of such clause (or the relevant subclause thereof), as the case may be, shall cease to
accrue.
Any Additional Interest due pursuant to clause (i), (ii) or (iii) above will be payable in cash on the
Interest Payment Dates related to the Series A Securities. Additional Interest shall be computed on the basis of
a 360-day year of twelve 30-day months.
Payment of the principal of, premium, if any, and interest on this Series A Security will be made at the
office or agency of the Company maintained for that purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts; provided, however,
that payment of interest may be made at the option of the Company by check mailed to the address of the Person
entitled thereto as such address shall appear on the Security Register. If any of the Series A Securities are
held by the Depositary, payments of interest to the Depositary may be made by wire transfer to the Depositary.
Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Series A Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
This Series A Security is entitled to the benefits of Guarantees by each of the Guarantors of the
punctual payment when due of the Indenture Obligations made in favor of the Trustee for the benefit of the
Holders. Reference is hereby made to Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of the Guarantors.
All references in this Series A Security or in the Indenture to accrued and unpaid interest shall be
deemed to include, to the extent applicable, a reference to Additional Interest.
Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the
reverse hereof or by the authenticating agent appointed as provided in the Indenture by manual signature, this
Series A Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual or
facsimile signature of its authorized officers.
Dated: SALEM COMMUNICATIONS HOLDING CORPORATION
By: ______________________________________________
Attest:
__________________________________________
Secretary
(b) The form of the face of any Series B Security authenticated and delivered hereunder shall be
substantially as follows:
SALEM COMMUNICATIONS HOLDING CORPORATION
9% SENIOR SUBORDINATED NOTE DUE 2011, SERIES B
No. ____________________ $ __________________
CUSIP:
Salem Communications Holding Corporation, a Delaware corporation (herein called the "Company," which
term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby
promises to pay to ________________ or registered assigns, the principal sum of _________ United States dollars
($___________) on July 1, 2011, at the office or agency of the Company referred to below, and to pay interest
thereon from June 25, 2001, or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on January 1 and July 1 of each year, commencing January 1, 2002, at the rate of 9%
per annum, in United States dollars, until the principal hereof is paid or duly provided for. Interest amounts
paid pursuant to any Predecessor Securities to this Security shall be deemed paid pursuant to this Security.
The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Series B Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest,
which shall be December 15 or June 15 (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid, or duly provided for, and interest on such
defaulted interest at the interest rate borne by the Series B Securities, to the extent lawful, shall forthwith
cease to be payable to the Holder on such Regular Record Date, and may be paid to the Person in whose name this
Series B Security (or one or more Predecessor Securities) is registered at the close of business on a Special
Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given
to Holders of Series B Securities not less than 10 days prior to such Special Record Date, or may be paid at any
time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the
Series B Securities may be listed, and upon such notice as may be required by such exchange, all as more fully
provided in said Indenture.
This Series B Security was issued pursuant to the Exchange Offer pursuant to which the 9% Senior
Subordinated notes due 2011, Series A (herein called the "Series A Securities") in like principal amount were
exchanged for the Series B Securities. The Series B Securities rank pari passu in right of payment with the
Series A Securities.
Any Additional Interest payable with respect to any Predecessor Securities to this Security that have
not been paid prior to the consummation of the Exchange Offer will be payable in full in cash on the first
Interest Payment Date related to this Security following consummation of the Exchange Offer.
Payment of the principal of, premium, if any, and interest on this Series B Security will be made at the
office or agency of the Company maintained for that purpose, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts; provided, however,
that payment of interest may be made at the option of the Company by check mailed to the address of the Person
entitled thereto as such address shall appear on the Security Register. If any of the Series B Securities are
held by the Depositary, payments of interest to the Depositary may be made by wire transfer to the Depositary.
Interest shall be computed on the basis of a 360-day year of twelve 30-day months.
Reference is hereby made to the further provisions of this Series B Security set forth on the reverse
hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
This Series B Security is entitled to the benefits of Guarantees by each of the Guarantors of the
punctual payment when due of the Indenture Obligations made in favor of the Trustee for the benefit of the
Holders. Reference is hereby made to Article Fourteen of the Indenture for a statement of the respective rights,
limitations of rights, duties and obligations under the Guarantees of each of the Guarantors.
Unless the certificate of authentication hereon has been duly executed by the Trustee referred to on the
reverse hereof or by the authenticating agent appointed as provided in the Indenture by manual signature, this
Series B Security shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by the manual or
facsimile signature of its authorized officers.
Dated: Salem Communications Holding Corporation
By: ______________________________________________
Attest:
__________________________________________
Secretary
Section 2.03______Form of Reverse of Securities.
(a) The form of the reverse of the Series A Securities shall be substantially as follows:
SALEM COMMUNICATIONS HOLDING CORPORATION
9% SENIOR SUBORDINATED NOTE DUE 2011, SERIES A
This Security is one of a duly authorized issue of Securities of the Company designated as its 9% Senior
Subordinated Notes due 2011, Series A (herein called the "Securities"), which may be issued under an indenture
(herein called the "Indenture"), dated as of June 25, 2001, among the Company, the Guarantors and The Bank of New
York, as trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the
Guarantors, the Trustee and the Holders of the Securities, and of the terms upon which the Securities and the
Guarantees are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)the entire Indebtedness on the
Securities and (b)certain restrictive covenants and related Defaults and Events of Default, in each case upon
compliance with certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness,
whether Outstanding on the date of the Indenture or thereafter, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the same, (a)agrees to and shall be bound by such
provisions, (b)authorizes and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)appoints the Trustee his
attorney-in-fact for such purpose; provided, however, that, subject to Section 4.06 of the Indenture, the
Indebtedness evidenced by this Security shall cease to be so subordinate and subject in right of payment upon any
defeasance of this Security referred to in clause (a) or (b) of the preceding paragraph. This Security is not
senior in right of payment to the Existing Notes.
The Securities are subject to redemption at any time on or after July 1, 2006, at the option of the
Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice by first-class mail in
amounts of $1,000 or an integral multiple of $1,000 at the following redemption prices (expressed as a percentage
of the principal amount), if redeemed during the 12-month period beginning July 1 of the years indicated below:
Redemption Price
- ----------------------------------------------------
Year
2006.............................. 104.500%
2007.............................. 103.000%
2008.............................. 101.500%
2009 and thereafter............... 100.000%
- -------------------------------------------------------------------------------------------------------------------
in each case together with accrued and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on relevant record dates to receive interest due on an interest payment date). If less than
all of the Securities are to be redeemed, the Trustee shall select the Securities or portions thereof to be
redeemed pro rata, by lot or by any other method the Trustee shall deem fair and reasonable.
In addition, at any time on or prior to July 1, 2004, the Company may redeem up to 35% of the aggregate
principal amount of Securities with the net proceeds of a Public Equity Offering of the Company at a Redemption
Price equal to 109% of the aggregate principal amount thereof, together with accrued and unpaid interest, if any,
to the Redemption Date (subject to the right of Holders of record on relevant record dates to receive interest
due on an interest payment date); provided that at least 65% of the aggregate principal amount of the Securities
issued under the Indenture remains outstanding immediately after the occurrence of such redemption, and such
redemption must occur within 60 days of the date of the closing of such Public Equity Offering. If less than all
of the Securities are to be redeemed, the Trustee shall select the Securities or portions thereof to be redeemed
pro rata, by lot or by any other method the Trustee shall deem fair and reasonable.
If a Change of Control shall occur at any time, then each Holder shall have the right to require the
Company to purchase such Holder's Securities in whole or in part in integral multiples of $1,000, at a purchase
price in cash in an amount equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
Under certain circumstances, in the event the Net Cash Proceeds received by the Company or a Restricted
Subsidiary of the Company from any Asset Sale, which proceeds are not used to prepay Senior Indebtedness or
invested in properties or assets used in the businesses of the Company, exceed $5,000,000 the Company will be
required to apply such proceeds to the repayment of the Securities and certain Indebtedness ranking pari passu to
the Securities.
In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior
to the Redemption Date will be payable to the Holders of such Securities of record as of the close of business on
the relevant record date referred to on the face hereof. Securities (or portions thereof) for whose redemption
and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the
date of redemption.
In the event of redemption of this Security in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount of all the Securities may be
declared due and payable in the manner and with the effect provided in the Indenture.
If this Security is a Global Security, except as described below, it is not exchangeable for a Security
or Securities in certificated form. The Securities will be delivered in certificated form if (i)the Depositary
ceases to be registered as a clearing agency under the Exchange Act or is no longer willing or able to provide
securities depository services with respect to the Securities, (ii)the Company so determines or (iii)there
shall have occurred an Event of Default or an event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default with respect to the Securities represented by such Global Security and such
Event of Default or event continues for a period of 90 days. Upon any such issuance, the Trustee is required to
register such certificated Security in the name of, and cause the same to be delivered to, such Person or Persons
(or the nominee of any thereof) identified by the Depository. All such certificated Securities would be required
to include the Restricted Securities Legend, except as otherwise set forth in the Indenture. If this Security is
in certificated form, the Holder hereof may transfer or exchange this Security in accordance with the Indenture
and subject to the limitations set forth therein.
At any time when the Company is not subject to Sections 13 or 15(d) of the Exchange Act, upon the
written request of a Holder of a Security, the Company will promptly furnish or cause to be furnished Rule 144A
Information to such Holder or to a prospective purchaser of such Security who such Holder informs the Company is
reasonably believed to be a "qualified institutional buyer" within the meaning of Rule 144A under the Securities
Act (a "QIB"), as the case may be, in order to permit compliance by such Holder with Rule 144A under the
Securities Act.
The Indenture permits, with certain exceptions (including certain amendments permitted without the
consent of any Holders) as therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the Guarantors and the rights of the Holders under the Indenture and the
Guarantees at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of a
specified percentage in aggregate principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the
Company and the Guarantors with certain provisions of the Indenture and the Guarantees and certain past Defaults
under the Indenture and the Guarantees and their consequences. Any such consent or waiver by or on behalf of the
Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, any Guarantor or any other obligor upon the Securities (in the event
such other obligor is obligated to make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, place, and
rate, and in the coin or currency, herein prescribed, subject to the subordination provisions of the Indenture.
The Securities, if issued in certificated form, are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange or redemption of
Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to and at the time of due presentment of this Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes (subject to provisions with respect to record dates for the
payment of interest), whether or not this Security is overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture and not otherwise defined herein
shall have the meanings assigned to them in the Indenture.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to: _____________________________________
(Insert assignee's legal name)
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________ to
transfer this Security on the books of the Company. The agent may substitute another to act
for him.
Date:______________________________
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee*:________________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to
the Trustee).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to Section 10.13
or 10.16 of the Indenture, check the appropriate box below:
|_| Section 10.13 |_| Section 10.16
If you want to elect to have only part of the Security purchased by the Company pursuant to
Section 10.13 or Section 10.16 of the Indenture, state the amount you elect to have purchased:
$ _______________________
Date:____________________
Your Signature: ____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _______________________________________________
Signature Guarantee*: _______________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to
the Trustee).
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY [IF THE SECURITY IS A GLOBAL SECURITY]
The following exchanges of a part of this Global Security for an interest in another Global
Security or for a certificated Security, or exchanges of a certificated Security or a part of another Global
Security for an interest in this Global Security, have been made:
- ----------------- ------------------ ------------------ ------------------- -------------------------------
Principal Amount
Amount of Amount of of this Global
decrease in increase in Security
Principal Amount Principal Amount following such
of this Global of this Global decrease Signature of authorized
Date of Security Security (or increase) officer of Trustee or
Exchange Security Registrar
- ----------------- ------------------ ------------------ ------------------- -------------------------------
- ----------------- ------------------ ------------------ ------------------- -------------------------------
(b) The form of the reverse of the Series B Securities shall be substantially as follows:
SALEM COMMUNICATIONS HOLDING CORPORATION
9% SENIOR SUBORDINATED NOTE DUE 2011, SERIES B
This Security is one of a duly authorized issue of Securities of the Company designated as its 9% Senior
Subordinated Notes due 2011, Series B (herein called the "Securities"), which may be issued under an indenture
(herein called the "Indenture"), dated as of June 25, 2001, among the Company, the Guarantors and The Bank of New
York, as trustee (herein called the "Trustee," which term includes any successor trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the
Guarantors, the Trustee and the Holders of the Securities, and of the terms upon which the Securities and the
Guarantees are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a)the entire Indebtedness on the
Securities and (b)certain restrictive covenants and related Defaults and Events of Default, in each case upon
compliance with certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in the manner provided in the
Indenture, subordinate and subject in right of payment to the prior payment in full of all Senior Indebtedness,
whether Outstanding on the date of the Indenture or thereafter, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the same, (a)agrees to and shall be bound by such
provisions, (b)authorizes and directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in the Indenture and (c)appoints the Trustee his
attorney-in-fact for such purpose; provided, however, that, subject to Section 4.06 of the Indenture, the
Indebtedness evidenced by this Security shall cease to be so subordinate and subject in right of payment upon any
defeasance of this Security referred to in clause (a) or (b) of the preceding paragraph. This Security is not
senior in right of payment to the Existing Notes.
The Securities are subject to redemption at any time on or after July 1, 2006, at the option of the
Company, in whole or in part, on not less than 30 nor more than 60 days' prior notice by first-class mail in
amounts of $1,000 or an integral multiple of $1,000 at the following redemption prices (expressed as a percentage
of the principal amount), if redeemed during the 12-month period beginning July 1 of the years indicated below:
Redemption Price
- ----------------------------------------------------
Year
2006.............................. 104.500%
2007.............................. 103.000%
2008.............................. 101.500%
2009 and thereafter............... 100.000%
- -------------------------------------------------------------------------------------------------------------------
in each case together with accrued and unpaid interest, if any, to the Redemption Date (subject to the right of
Holders of record on relevant record dates to receive interest due on an interest payment date). If less than
all of the Securities are to be redeemed, the Trustee shall select the Securities or portions thereof to be
redeemed pro rata, by lot or by any other method the Trustee shall deem fair and reasonable.
In addition, at any time on or prior to July 1, 2004, the Company may redeem up to 35% of the aggregate
principal amount of Securities with the net proceeds of a Public Equity Offering of the Company at a Redemption
Price equal to 109% of the aggregate principal amount thereof, together with accrued and unpaid interest, if any,
to the Redemption Date (subject to the right of Holders of record on relevant record dates to receive interest
due on an interest payment date); provided that at least 65% of the aggregate principal amount of the Securities
issued under the Indenture remains outstanding immediately after the occurrence of such redemption, and such
redemption must occur within 60 days of the date of the closing of such Public Equity Offering. If less than all
of the Securities are to be redeemed, the Trustee shall select the Securities or portions thereof to be redeemed
pro rata, by lot or by any other method the Trustee shall deem fair and reasonable.
If a Change of Control shall occur at any time, then each Holder shall have the right to require the
Company to purchase such Holder's Securities in whole or in part in integral multiples of $1,000, at a purchase
price in cash in an amount equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if
any, to the date of purchase.
Under certain circumstances, in the event the Net Cash Proceeds received by the Company or a Restricted
Subsidiary of the Company from any Asset Sale, which proceeds are not used to prepay Senior Indebtedness or
invested in properties or assets used in the businesses of the Company, exceed $5,000,000 the Company will be
required to apply such proceeds to the repayment of the Securities and certain Indebtedness ranking pari passu to
the Securities.
In the case of any redemption of Securities, interest installments whose Stated Maturity is on or prior
to the Redemption Date will be payable to the Holders of such Securities of record as of the close of business on
the relevant record date referred to on the face hereof. Securities (or portions thereof) for whose redemption
and payment provision is made in accordance with the Indenture shall cease to bear interest from and after the
date of redemption.
In the event of redemption of this Security in part only, a new Security or Securities for the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount of all the Securities may be
declared due and payable in the manner and with the effect provided in the Indenture.
If this Security is a Global Security, except as described below, it is not exchangeable for a Security
or Securities in certificated form. The Securities will be delivered in certificated form if (i)the Depositary
ceases to be registered as a clearing agency under the Exchange Act or is no longer willing or able to provide
securities depository services with respect to the Securities, (ii)the Company so determines or (iii)there
shall have occurred an Event of Default or an event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default with respect to the Securities represented by such Global Security and such
Event of Default or event continues for a period of 90 days. Upon any such issuance, the Trustee is required to
register such certificated Security in the name of, and cause the same to be delivered to, such Person or Persons
(or the nominee of any thereof) identified by the Depositary. If this Security is certificated in form, the
Holder hereof may transfer or exchange this Security in accordance with the Indenture and subject to the
limitations set forth therein.
The Indenture permits, with certain exceptions (including certain amendments permitted without the
consent of any Holders) as therein provided, the amendment thereof and the modification of the rights and
obligations of the Company and the Guarantors and the rights of the Holders under the Indenture and the
Guarantees at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of a
specified percentage in aggregate principal amount of the Securities at the time Outstanding. The Indenture also
contains provisions permitting the Holders of specified percentages in aggregate principal amount of the
Securities at the time Outstanding, on behalf of the Holders of all the Securities, to waive compliance by the
Company and the Guarantors with certain provisions of the Indenture and the Guarantees and certain past Defaults
under the Indenture and the Guarantees and their consequences. Any such consent or waiver by or on behalf of the
Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter
or impair the obligation of the Company, any Guarantor or any other obligor upon the Securities (in the event
such other obligor is obligated to make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on this Security at the times, place, and
rate, and in the coin or currency, herein prescribed, subject to the subordination provisions of the Indenture.
The Securities, if issued in certificated form, are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like aggregate principal amount of
Securities of a different authorized denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or exchange or redemption of
Securities, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge
payable in connection therewith.
Prior to and at the time of due presentment of this Security for registration of transfer, the Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is
registered as the owner hereof for all purposes (subject to provisions with respect to record dates for the
payment of interest), whether or not this Security is overdue, and neither the Company, the Trustee nor any agent
shall be affected by notice to the contrary.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture and not otherwise defined herein
shall have the meanings assigned to them in the Indenture.
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to: _____________________________________
(Insert assignee's legal name)
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________ to
transfer this Security on the books of the Company. The agent may substitute another to act
for him.
Date:______________________________
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the face of this
Note)
Signature Guarantee*:________________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to
the Trustee).
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company pursuant to Section 10.13
or 10.16 of the Indenture, check the appropriate box below:
|_| Section 10.13 |_| Section 10.16
If you want to elect to have only part of the Security purchased by the Company pursuant to
Section 10.13 or Section 10.16 of the Indenture, state the amount you elect to have purchased:
$ _______________________
Date:____________________
Your Signature: ____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _______________________________________________
Signature Guarantee*: _______________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to
the Trustee).
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY [IF THE SECURITY IS A GLOBAL SECURITY]
The following exchanges of a part of this Global Security for an interest in another Global
Security or for a certificated Security, or exchanges of a certificated Security or a part of another Global
Security for an interest in this Global Security, have been made:
- ----------------- ------------------ ------------------ ------------------- -------------------------------
Principal Amount
Amount of Amount of of this Global
decrease in increase in Security
Principal Amount Principal Amount following such
of this Global of this Global decrease Signature of authorized
Date of Security Security (or increase) officer of Trustee or
Exchange Security Registrar
- ----------------- ------------------ ------------------ ------------------- -------------------------------
- ----------------- ------------------ ------------------ ------------------- -------------------------------
Section 2.04 Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions contained in Sections2.02 and
2.03, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED
IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE
DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY, EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[IF THE DEPOSITORY TRUST COMPANY IS ACTING AS THE DEPOSITARY, INSERT:] UNLESS THIS CERTIFICATE IS PRESENTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Section 2.05 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be included on the Securities and shall be
substantially in the form as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned Indenture.
The Bank of New York,
as Trustee
Dated: By:
Authorized Signatory
Section 2.06 Form of Guarantee of Each of the Guarantors.
The form of Guarantee shall be set forth on the Securities substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally guarantees, jointly and severally, to
the holder of this Security the payment of principal of, premium, if any, and interest on this Security in the
amounts and at the time when due and interest on the overdue principal and interest, if any, of this Security, if
lawful, and the payment or performance of all other obligations of the Company under the Indenture or the
Securities, to the holder of this Security and the Trustee, all in accordance with and subject to the terms and
limitations of this Security and Article Fourteen of the Indenture. These Guarantees will not become effective
until the Trustee duly executes the certificate of authentication on this Security. The Indebtedness evidenced
by these Guarantees is, to the extent and in the manner provided in the Indenture, subordinate and subject in
right of payment to the prior payment in full of all Guarantor Senior Indebtedness (as defined in the Indenture),
whether Outstanding on the date of the Indenture or thereafter, and these Guarantees are issued subject to such
provisions.
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INLAND RADIO, INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
Attest By
ARTICLE III_______
THE SECURITIES
Section 3.01______Title and Terms.
The Securities shall be known and designated as the "9% Senior Subordinated Notes due 2011", in the case
of either Series A or Series B, of the Company. The Stated Maturity of the Securities shall be July1, 2011, and
interest on the Securities shall accrue at the rate of 9% per annum plus Additional Interest, if any, from the
date of issuance of the Securities (unless otherwise provided in a supplemental indenture with respect to any
Additional Securities) or from the most recent Interest Payment Date to which interest has been paid or duly
provided for, payable semiannually on January 1 and July 1 in each year, commencing January 1, 2002, until the
principal thereof is paid or duly provided for.
Unless otherwise specified herein, the Series A Securities and the Series B Securities will be treated
as one class and are together referred to as the "Securities." The Series A Securities rank pari passu in right
of payment with the Series B Securities.
Unless otherwise specified in a supplemental indenture with respect to any Additional Securities, any
Additional Securities issued pursuant to this Indenture shall vote as a class with other Securities issued
pursuant to this Indenture, and otherwise be treated as Securities for purposes of this Indenture. Any issuance
of Additional Securities shall be subject to Section 10.08.
The principal of, premium, if any, and interest on the Securities shall be payable at the office or
agency of the Company maintained for such purpose; provided, however, that at the option of the Company interest
may be paid by check mailed to addresses of the Persons entitled thereto as such addresses shall appear on the
Security Register. If any of the Securities are held by the Depositary, payments of interest may be made by wire
transfer to the Depositary. The Trustee is hereby initially designated as the Paying Agent under this Indenture.
The Securities shall be redeemable as provided in Article Eleven.
At the election of the Company, the entire Indebtedness on the Securities or certain of the Company's
obligations and covenants and certain Events of Default thereunder may be defeased as provided in Article Four.
The Securities shall be subordinated in right of payment to Senior Indebtedness as provided in Article
Twelve.
The Securities are entitled to the benefits of the Guarantees by each Guarantor.
The aggregate principal amount of Securities which may be authenticated and delivered under this
Indenture is unlimited.
Section 3.02______Denominations.
The Securities shall be issuable only in registered form without coupons and only in denominations of
$1,000 and any integral multiple thereof.
Section 3.03______Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by one of its Chairman of the Board, its
President or one of its Vice Presidents attested by its Secretary or one of its Assistant Secretaries.
Securities bearing the manual or facsimile signatures of individuals who were at any time the proper
officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices on
the date of such Securities.
At any time and from time to time after the execution and delivery of this Indenture, the Company may
deliver Securities executed by the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee in accordance with such Company Order shall
authenticate and make available for delivery (i) Initial Series A Securities for original issue in the aggregate
amount of $150,000,000, (ii) Additional Securities from time to time for original issue in aggregate principal
amount specified by the Company and (iii) Series B Securities from time to time for issue in exchange for a like
principal amount of Initial Series A Securities or Initial Additional Series A Securities, and not otherwise.
Such Company Order shall specify the amount of Securities to be authenticated and the date on which the
Securities are to be authenticated, whether such Securities are to be Initial Series A Securities, Additional
Securities or Series B Securities and whether the Securities are to be issued as one or more Global Securities
and such other information as the Company may include or the Trustee may reasonably require.
Each Security shall be dated the date of its authentication. No Security shall be entitled to any
benefit under this Indenture or be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein duly executed by the Trustee by
manual signature of an authorized officer, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and delivered hereunder.
In case the Company or any Guarantor, pursuant to Article Eight, shall be consolidated, merged with or
into any other Person or shall sell, assign, convey, transfer or lease substantially all of its properties and
assets to any Person, and the successor Person resulting from such consolidation, or surviving such merger, or
into which the Company or such Guarantor shall have been merged, or the Person which shall have received a sale,
assignment, conveyance, transfer or lease as aforesaid, shall have executed an indenture supplemental hereto with
the Trustee pursuant to Article Eight, any of the Securities authenticated or delivered prior to such
consolidation, merger, sale, assignment, conveyance, transfer or lease may, from time to time, at the request of
the successor Person, be exchanged for other Securities executed in the name of the successor Person with such
changes in phraseology and form as may be appropriate, but otherwise in substance of like tenor as the Securities
surrendered for such exchange and of like principal amount; and the Trustee, upon Company Request of the
successor Person, shall authenticate and deliver Securities as specified in such request for the purpose of such
exchange. If Securities shall at any time be authenticated and delivered in any new name of a successor Person
pursuant to this Section in exchange or substitution for or upon registration of transfer of any Securities, such
successor Person, at the option of the Holders but without expense to them, shall provide for the exchange of all
Securities at the time Outstanding for Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the Company to authenticate Securities on
behalf of the Trustee. Unless limited by the terms of such appointment, an authenticating agent may authenticate
Securities whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee
includes authentication by such agent. An authenticating agent has the same rights as any Security Registrar or
Paying Agent to deal with the Company and its Affiliates.
Section 3.04______Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute, and upon Company Order, the
Trustee shall authenticate and make available for delivery, temporary Securities which are printed, lithographed,
typewritten or otherwise produced, in any authorized denomination, substantially of the tenor of the definitive
Securities in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as conclusively evidenced by their
execution of such Securities.
After the preparation of definitive Securities, the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office or agency of the Company
designated for such purpose pursuant to Section 10.02, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities the Company shall execute and the Trustee shall authenticate
and make available for delivery in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities shall in all respects be entitled to the
same benefits under this Indenture as definitive Securities.
Section 3.05______Global Securities.
(a) A Global Security shall, if the Depositary permits, (i)be registered in the name of the Depositary for
such Global Security or the nominee of such Depositary, (ii)be deposited with, or on behalf of, the Depositary
and (iii)bear legends as set forth in Sections 2.02(a) and 2.04; provided, however, that the Securities are
eligible to be in the form of a Global Security.
Transfers of any Restricted Security made to an Accredited Investor in accordance with an exemption from
the registration requirements of the Securities Act or transfers made in accordance with another exemption from
the registration requirements of the Securities Act (other than a transfer made in accordance with Rule 144A,
Rule 144 or Regulation S that complies with all other applicable requirements of this Indenture) shall be made
only in certificated form and not as a beneficial interest in a Global Security.
Members of, or participants in, the Depositary ("Agent Members") shall have no rights under this
Indenture with respect to any Global Security held on their behalf by the Depositary, or the Trustee as its
custodian, or under the Global Security, and the Depositary may be treated by the Company, the Trustee and any
agent of the Company or the Trustee as the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company
from giving effect to any written certification, proxy or other authorization furnished by the Depositary or
shall impair, as between the Depositary and its Agent Members, the operation of customary practices governing the
exercise of the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such Global Security in whole, but not
in part, to the Depositary, its successors or their respective nominees. Interests of beneficial owners in a
Global Security may be transferred in accordance with the rules and procedures of the Depositary and the
provisions of Section 3.07. Under the circumstances described in this clause (b), beneficial owners shall obtain
Physical Securities in exchange for their beneficial interests in a Global Security in accordance with the
Depositary's and the Securities Registrar's procedures. In connection with the execution, authentication and
delivery of such Physical Securities, the Security Registrar shall reflect on its books and records a decrease in
the principal amount of the relevant Global Security equal to the principal amount of such Physical Securities
and the Company shall execute and the Trustee shall authenticate and make available for delivery one or more
Physical Securities having an equal aggregate principal amount. The Securities will be delivered in certificated
form to all beneficial owners in exchange for their beneficial interests in the Global Securities if (i)the
Depositary ceases to be registered as a clearing agency under the Exchange Act or is not willing or no longer
willing or able to provide securities depository services with respect to the Securities, (ii)the Company so
determines or (iii)there shall have occurred an Event of Default or an event which, with the giving of notice or
lapse of time or both, would constitute an Event of Default with respect to the Securities represented by such
Global Security and such Event of Default or event continues for a period of 90 days.
(c) In connection with any transfer of a portion of the beneficial interest in a Global Security to
beneficial owners who are required to hold Physical Securities pursuant to this Section 3.05 or Section 3.07, the
Security Registrar shall reflect on its books and records the date and a decrease in the principal amount of the
relevant Global Security in an amount equal to the principal amount of the beneficial interest in such Global
Security to be transferred, and the Company shall execute, and the Trustee shall authenticate and make available
for delivery, one or more Physical Securities of like tenor and amount.
(d) In connection with the transfer of an entire Global Security to beneficial owners pursuant to subsection
(b)of this Section, such Global Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and make available for delivery, to each beneficial
owner identified by the Depositary in exchange for its beneficial interest in the applicable Global Security, an
equal aggregate principal amount of U.S. Physical Securities (in the case of any U.S. Global Security) or
Offshore Physical Securities (in the case of any Offshore Global Security) of authorized denominations.
(e) Any Physical Security delivered in exchange for an interest in a Global Security pursuant to subsection
(c)or subsection (d)of this Section shall, except as otherwise provided by Section2.01, Section 3.06 and
paragraph (d) of Section 3.07, bear the Restricted Securities Legend.
(f) The registered holder of a Global Security may grant proxies and otherwise authorize any person,
including Agent Members and Persons that may hold interests through Agent Members, to take any action which a
Holder is entitled to take under this Indenture or the Securities.
(g) Prior to the expiration of the 40-day distribution compliance period set forth in Regulation S,
beneficial interests in an Offshore Global Security may be held only through the Euroclear System or Clearstream
Banking, S.A. unless transferred to a QIB in accordance with Section 3.07(b).
Section 3.06______Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office and in any other office or agency
designated pursuant to Section 10.02 being herein sometimes referred to as the "Security Register") in which,
subject to such reasonable regulations as the Security Registrar may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee or an agent thereof or of the Company
shall initially be the "Security Registrar" for the purpose of registering Securities and transfers of Securities
as herein provided.
Upon surrender for registration of transfer of any Security at the office or agency of the Company
designated pursuant to Section 10.02, the Company shall execute, and the Trustee shall authenticate and make
available for delivery, in the name of the designated transferee or transferees, one or more new Securities of
any authorized denomination or denominations, of a like aggregate principal amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such Global Security, agree that
transfers of beneficial interest in such Global Security may be effected only through a book entry system
maintained by the Holder of such Global Security (or its agent), and that ownership of a beneficial interest in
the Securities shall be required to be reflected in a book entry.
At the option of the Holder, Securities may be exchanged for other Securities of any authorized
denomination or denominations, of a like aggregate principal amount, upon surrender of the Securities to be
exchanged at such office or agency. Whenever any Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, the Securities of the same series
which the Holder making the exchange is entitled to receive; provided that no exchange of Series A Securities for
Series B Securities shall occur until an Exchange Offer Registration Statement with respect to the relevant
Series A Securities shall have been declared effective by the Commission and that the Series A Securities
exchanged for the Series B Securities shall be cancelled.
All Securities issued upon any registration of transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same Indebtedness, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer, or for exchange or redemption
shall (if so required by the Company or the Trustee) be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof
or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any registration of transfer or exchange or redemption
of Securities, but the Company may require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in connection with any registration of
transfer or exchange of Securities, other than exchanges pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.07, 3.08,
9.06, 10.13, 10.16 or 11.08 not involving any transfer.
The Company shall not be required (a)to issue, register the transfer of or exchange any Security during
a period beginning at the opening of business (i)15 days before the date of selection of Securities for
redemption under Section 11.04 and ending at the close of business on the day of such selection or (ii)15 days
before an Interest Payment Date and ending on the close of business on the Interest Payment Date, or (b)to
register the transfer of or exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of Securities being redeemed in part.
Every Restricted Security shall be subject to the restrictions on transfer provided in the legend
required to be set forth on the face of each Restricted Security pursuant to Section 2.02(a) and to the
restrictions set forth in Section 3.05, this Section 3.06 and Section 3.07, and the Holder of each Restricted
Security, by such Holder's acceptance thereof (or interest therein), agrees to be bound by such restrictions on
transfer. The restrictions imposed by this Section 3.06 upon the transferability of any particular Restricted
Security shall cease and terminate on (a)the Resale Restriction Termination Date with respect to such Security
or (b)(if earlier) if and when such Restricted Security has been sold pursuant to a Registration Statement or
(subject to Section3.07(d)(ii)) transferred pursuant to Rule144 (or any successor provision), unless the Holder
thereof is an affiliate of the Company within the meaning of Rule144 (or such successor provision). Any
Restricted Security as to which such restrictions on transfer shall have expired in accordance with their terms
or shall have terminated may, upon surrender of such Restricted Security for exchange to the Security Registrar
in accordance with the provision of this Section 3.06 (accompanied, in the event that such restrictions on
transfer have terminated pursuant to Rule 144 (or any successor provision), by an Opinion of Counsel satisfactory
to the Company and the Trustee, to the effect that the transfer of such Restricted Security has been made in
compliance with Rule 144 (or any such successor provision)), be exchanged for a new Security, of like tenor and
aggregate principal amount, which shall not bear the Restricted Securities Legend. The Company shall inform the
Trustee of the effective date of any Registration Statement registering any Securities under the Securities Act
no later than two Business Days after such effective date.
Except as provided in the preceding paragraph and in Sections 3.05 and 3.07, any Security authenticated
and delivered upon registration of transfer of, or in exchange for, or in lieu of, any Global Security, whether
pursuant to this Section, Section 3.04, 3.08, 9.06 or 11.08 or otherwise, shall also be a Global Security and
bear the legend specified in Section 2.02(a).
Section 3.07______Special Transfer Provisions.
Unless and until (i)a Security is sold under an effective Registration Statement, (ii)a Security is
exchanged for a Series B Security in connection with an Exchange Offer or (iii) the restrictions on transfer with
respect to a Security imposed by Section3.06 have ceased and terminated in accordance with Section3.06 or the
Restricted Securities Legend has been removed from a Security pursuant to 3.07(d), the following provisions shall
apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security to an Accredited Investor which is not a QIB:
(i) The Security Registrar shall register the transfer of any Security if it complies with all other
applicable requirements of this Indenture and if (x)the requested transfer is after the relevant Resale
Restriction Termination Date with respect to such Security or (y)the proposed transferor has delivered
to the Company and the Security Registrar a certificate substantially in the form of Annex A and the
proposed transferee has delivered to the Company and the Security Registrar a certificate substantially
in the form set forth in Annex I attached to Exhibit A, together with written legal opinions or other
information as the Trustee or the Company reasonably may request.
(ii) If the proposed transferor is or is acting through an Agent Member holding a beneficial interest in a
Global Security, upon receipt by the Security Registrar of (x)the documents, if any, required by
paragraph (i)and (y)instructions given in accordance with the Depositary's and the Security
Registrar's procedures therefor, the Security Registrar shall reflect on its books and records the date
and a decrease in the principal amount of the relevant Global Security in an amount equal to the
principal amount of the beneficial interest in the relevant Global Security to be transferred, and the
Company shall execute, and the Trustee shall authenticate and make available for delivery, one or more
Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect to the registration of any
proposed transfer of a Security to a QIB:
(i) If the Security to be transferred consists of a Physical Security or consists of a beneficial interest
in a Global Security that after the transfer is to be evidenced by a beneficial interest in a different
Global Security, the Security Registrar shall register the transfer if it complies with all other
applicable requirements of this Indenture and if such transfer is being made by a proposed transferor
who has advised the Company and the Security Registrar in writing pursuant to Exhibit A, that the sale
has been made in compliance with the provisions of Rule 144A to a transferee who has advised the Company
and the Security Registrar in a writing signed by one of its executive officers in the form required by
Rule 144A, that it is purchasing the Security for its own account or an account with respect to which it
exercises sole investment discretion and that it, or the person on whose behalf it is acting with
respect to any such account, is a QIB within the meaning of Rule 144A, and is aware that the sale to it
is being made in reliance on Rule 144A and acknowledges that it has received such information regarding
the Company as it has requested pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing representations in order to claim
the exemption from registration provided by Rule 144A.
(ii) If the proposed transferee is or is acting through an Agent Member, and the Security to be transferred
consists of a Physical Security that after the transfer is to be evidenced by an interest in a Global
Security or consists of a beneficial interest in a Global Security that after the transfer is to be
evidenced by an interest in a different Global Security, upon receipt by the Security Registrar of
instructions given in accordance with the Depositary's and the Security Registrar's procedures therefor,
the Security Registrar shall reflect on its books and records the date and an increase in the principal
amount of the transferee Global Security in an amount equal to the principal amount of the Physical
Security to be transferred or such beneficial interest in such transferor Global Security to be
transferred, and the Trustee shall cancel the Physical Security so transferred or reflect on its books
and records the date and a decrease in the principal amount of such transferor Global Security, as the
case may be.
(c) Transfers to Non-U.S. Persons. The following provisions shall apply with respect to the registration of
any proposed transfer of a Security to a Non-U.S. Person:
(i) The Security Registrar shall register the transfer of any Security if it complies with all other
applicable requirements of this Indenture and if (x)the requested transfer is after the relevant Resale
Restriction Termination Date with respect to such Security or (y), if the Security to be transferred
consists of a Physical Security or consists of a beneficial interest in a Global Security that after the
transfer is to be evidenced by an interest in a different Global Security, the proposed transferor has
delivered to the Security Registrar a certificate substantially in the form of Exhibit B, together with
written legal opinions or other information as the Trustee or the Company reasonably may request.
(ii) If the proposed transferor is or is acting through an Agent Member holding a beneficial interest in a
Global Security, upon receipt by the Security Registrar of (x)the documents, if any, required by
paragraph (i)and (y)instructions given in accordance with the Depositary's and the Security
Registrar's procedures therefor, the Security Registrar shall reflect on its books and records the date
and (if the transfer does not involve a transfer of a Physical Security) a decrease in the principal
amount of the relevant Global Security to be in an amount equal to the principal amount of the
beneficial interest in the relevant Global Security to be transferred, and (ii) either (A) if the
proposed transferee is or is acting through an Agent Member holding a beneficial interest in a Global
Security, the Trustee shall reflect on its books and records the date and an increase in the principal
amount of such Global Security in an amount equal to the principal amount of the beneficial interest
being so transferred or (B) otherwise the Company shall execute, and the Trustee shall authenticate and
make available for delivery, one or more Physical Securities of like tenor and amount.
(d) Restricted Securities Legend. Upon the registration of transfer, exchange or replacement of Securities
not bearing the Restricted Securities Legend, the Security Registrar shall deliver Securities that do not bear
the Restricted Securities Legend. Upon the registration of transfer, exchange or replacement of Securities
bearing the Restricted Securities Legend, the Security Registrar shall deliver only Securities that bear the
Restricted Securities Legend, unless (i)the requested transfer, exchange or replacement occurs after the
relevant Resale Restriction Termination Date with respect to such Securities, (ii)upon the request of the
Company after there is delivered to the Security Registrar an Opinion of Counsel reasonably satisfactory to the
Company and the Trustee to the effect that neither such legend nor the related restrictions on transfer are
required in order to maintain compliance with the Securities Act, (iii) with respect to Offshore Global
Securities or Offshore Physical Securities only, with the agreement of the Company after the expiration of the
40-day distribution compliance period set forth in Regulation S with respect to such Securities or (iv) such
Securities are sold or exchanged pursuant to an effective registration statement under the Securities Act.
(e) Transfers of Beneficial Interests in the Same Global Security. A beneficial interest in any Global
Security that is a Restricted Security may be transferred to a Person who takes delivery thereof in the form of a
beneficial interest in the same Global Security in accordance with the transfer restrictions set forth in the
Restricted Securities Legend thereon and the rules and procedures of the Depositary, and no other written orders,
instructions or certificates shall be required in connection therewith.
(f) Other Transfers. The Security Registrar shall effect and register, upon a written request by the
Company to do so, a transfer not otherwise permitted by this Section 3.07, such registration to be done in
accordance with the otherwise applicable provisions of Section 3.06 and this Section 3.07, upon the furnishing by
the proposed transferor or transferee of an Opinion of Counsel reasonably satisfactory to the Company and the
Trustee to the effect that, and such other certifications (including, without limitation, a certificate in
substantially the form of Exhibit A in the case of a transfer pursuant to Rule 144) or information as the Company
and the Trustee may require to confirm that, the proposed transfer is being made pursuant to an exemption from,
or in a transaction not subject to, the registration requirements of the Securities Act.
(g) General. By its acceptance of any Security bearing the Restricted Securities Legend, each Holder of
such a Security acknowledges the restrictions on transfer of such Security set forth in this Indenture and in the
Restricted Securities Legend and agrees that it will transfer such Security only as provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices and other written communications
received pursuant to Section 3.06 or this Section 3.07. The Company shall have the right to inspect and make
copies of all such letters, notices or other written communications at any reasonable time upon the giving of
reasonable written notice to the Security Registrar.
Section 3.08______Mutilated, Destroyed, Lost and Stolen Securities.
If (a)any mutilated Security is surrendered to the Trustee, or (b)the Company and the Trustee receive
evidence to their satisfaction of the destruction, loss or theft of any Security, and there is delivered to the
Company, each Guarantor and the Trustee, such security or indemnity, in each case, as may be required by them to
save each of them harmless, then, in the absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute and upon its written request the
Trustee shall authenticate and make available for delivery, in exchange for any such mutilated Security or in
lieu of any such destroyed, lost or stolen Security, a replacement Security of like tenor and principal amount,
bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a replacement Security, pay such Security.
Upon the issuance of any replacement Securities under this Section, the Company may require the payment
of a sum sufficient to pay all documentary, stamp or similar issue or transfer taxes or other governmental
charges that may be imposed in relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the Company and the Guarantors,
whether or not the destroyed, lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all benefits of this Indenture equally and proportionately with any and all other Securities duly
issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights
and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Securities.
Section 3.09______Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that Security is registered at the close of business on
the Regular Record Date for such interest.
Any interest on any Security which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date and interest on such defaulted interest at the then applicable interest rate borne by the
Securities, to the extent lawful (such defaulted interest and interest thereon herein collectively called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the Regular Record Date; and such
Defaulted Interest may be paid by the Company, at its election in each case, as provided in Subsection (a)or (b)
below:
(a) The Company may elect to make payment of any Defaulted Interest to the Persons in whose
names the Securities are registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid on each Security and the date
(not less than 30 days after such notice) of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this Subsection provided. Thereupon
the Trustee shall fix a Special Record Date for the payment of such Defaulted Interest which shall be
not more than 15 days and not less than 10 days prior to the date of the proposed payment and not less
than 10 days after the receipt by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company in writing of such Special Record Date. In the name and at the expense of
the Company, the Trustee shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first-class postage prepaid, to each Holder at his address as
it appears in the Security Register, not less than 10 days prior to such Special Record Date. Notice of
the proposed payment of such Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose names the Securities are
registered on such Special Record Date and shall no longer be payable pursuant to the following
Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the Securities may be listed, and
upon such notice as may be required by such exchange, if, after written notice given by the Company to
the Trustee of the proposed payment pursuant to this Subsection, such payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other Security.
Section 3.10______Persons Deemed Owners.
The Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor or the Trustee may
treat the Person in whose name any Security is registered as the owner of such Security for the purpose of
receiving payment of principal of, premium, if any, and (subject to Section 3.09) interest on such Security and
for all other purposes whatsoever, whether or not such Security is overdue, and neither the Company, any
Guarantor, the Trustee nor any agent of the Company, any Guarantor or the Trustee shall be affected by notice to
the contrary. No holder of any beneficial interest in any Global Security held on its behalf by a Depositary
shall have any rights under this Indenture with respect to such Global Security, and such Depositary may be
treated by the Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor or the Trustee as
the owner of such Global Security for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, any Guarantor, the Trustee or any agent of the Company, any Guarantor or the Trustee
from giving effect to any written certification, proxy or other authorization furnished by the Depositary or
impair, as between the Depositary and such holders of beneficial interests, the operation of customary practices
governing the exercise of the rights of the Depositary (or its nominee) as Holder of any Security.
Section 3.11______Cancellation.
All Securities surrendered for payment, purchase, redemption, registration of transfer or exchange shall
be delivered to the Trustee and, if not already cancelled, shall be promptly cancelled by it. The Company and
any Guarantor may at any time deliver to the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company or such Guarantor may have acquired in any manner whatsoever, and all
Securities so delivered shall be promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section, except as expressly permitted by this
Indenture. All cancelled Securities held by the Trustee shall be returned to the Company. The Trustee shall
provide the Company a list of all Securities that have been cancelled from time to time as requested by the
Company.
Section 3.12______Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day year of twelve 30-day months.
Section 3.13______CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then generally in use), and, if so,
the Trustee shall use "CUSIP" numbers in notices of redemption as a convenience to Holders; provided that any
such notice may state that no representation is made as to the correctness of such numbers either as printed on
the Securities or as contained in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Company shall promptly notify the Trustee of any change in the CUSIP numbers.
ARTICLE IV________
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.01______Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with respect to the Securities, elect
to have either Section 4.02 or Section 4.03 be applied to all of the Outstanding Securities (the "Defeased
Securities"), upon compliance with the conditions set forth below in this Article Four.
Section 4.02______Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option applicable to this Section 4.02, the
Company, each of the Guarantors and any other obligor upon the Securities, if any, shall be deemed to have been
discharged from its obligations with respect to the Defeased Securities on the date the conditions set forth
below are satisfied (hereinafter, "Defeasance"). For this purpose, such defeasance means that the Company, the
Guarantors and any other obligor upon the Securities, shall be deemed to have paid and discharged the entire
Indebtedness represented by the Defeased Securities, which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 4.05 and the other Sections of this Indenture referred to in (a)and (b) below, and
to have satisfied all its other obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, and, upon written request, shall execute proper
instruments acknowledging the same), except for the following which shall survive until otherwise terminated or
discharged hereunder: (a)the rights of Holders of Defeased Securities to receive, solely from the trust fund
described in Section 4.04 and as more fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest on such Securities and pay all other Indenture Obligations when such payments are
due, (b)the Company's obligations with respect to such Defeased Securities under Sections 3.04, 3.05, 3.06,
3.08, 10.02 and 10.03, (c)the rights, powers, trusts, duties and immunities of the Trustee hereunder, including,
without limitation, the Trustee's rights under Section 6.06, and (d)this Article Four. Subject to compliance
with this Article Four, the Company may exercise its option under this Section 4.02 notwithstanding the prior
exercise of its option under Section 4.03 with respect to the Securities.
Section 4.03______Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option applicable to this Section 4.03, the
Company and each Guarantor shall be released from its obligations under any covenant or provision contained or
referred to in Sections 10.06 through 10.19 inclusive, and the provisions of Article Twelve and Sections 14.16
through 14.29 shall not apply, with respect to the Defeased Securities on and after the date the conditions set
forth below are satisfied (hereinafter, "Covenant Defeasance"), and the Defeased Securities shall thereafter be
deemed to be not "Outstanding" for the purposes of any direction, waiver, consent or declaration or Act of
Holders (and the consequences of any thereof) in connection with such covenants and the provisions of Article
Twelve and Sections 14.16 through 14.29, but shall continue to be deemed "Outstanding" for all other purposes
hereunder. For this purpose, such covenant defeasance means that, with respect to the Defeased Securities, the
Company and each Guarantor may omit to comply with and shall have no liability in respect of any term, condition
or limitation set forth in any such Section or Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any reference in any such Section or
Article to any other provision herein or in any other document and such omission to comply shall not constitute a
Default or an Event of Default under Section 5.01(c), (d)or (g), but, except as specified above, the remainder
of this Indenture and such Defeased Securities shall be unaffected thereby.
Section 4.04______Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 4.02 or Section 4.03 to the
Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be deposited with the Trustee
(or another trustee satisfying the requirements of Section 6.08 who shall agree to comply with the
provisions of this Article Four applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (a)United States dollars in an amount, or (b)U.S. Government Obligations
which through the scheduled payment of principal and interest in respect thereof in accordance with
their terms will provide, not later than one day before the due date of any payment, money in an amount,
or (c)a combination thereof, sufficient, in the opinion of a nationally recognized firm of independent
public accountants or a nationally recognized investment banking firm expressed in a written
certification thereof delivered to the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the principal of, premium, if any, and
interest on the Defeased Securities on the Stated Maturity of such principal or installment of principal
or interest (or on any date after July 1, 2006 (such date being referred to as the "Defeasance
Redemption Date"), if when exercising under Section 4.01 either its option applicable to Section 4.02 or
its option applicable to Section 4.03, the Company shall have delivered to the Trustee an irrevocable
notice to redeem all of the Outstanding Securities on the Defeasance Redemption Date) and pay all other
Indenture Obligations; provided that the Trustee shall have been irrevocably instructed to apply such
United States dollars or the proceeds of such U.S. Government Obligations to said payments with respect
to the Securities; and provided further, that the United States dollars or U.S. Government Obligations
deposited shall not be subject to the rights of the holders of Senior Indebtedness or Guarantor Senior
Indebtedness pursuant to the provisions of Articles Twelve and Fourteen. For this purpose, "U.S.
Government Obligations" means securities that are (i)direct obligations of the United States of America
for the timely payment of which its full faith and credit is pledged or (ii)obligations of a Person
controlled or supervised by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt issued by a bank (as defined in Section
3(a)(2) of the Securities Act), as custodian with respect to any such U.S. Government Obligation or a
specific payment of principal of or interest on any such U.S. Government Obligation held by such
custodian for the account of the holder of such depository receipt, provided that (except as required by
law) such custodian is not authorized to make any deduction from the amount payable to the holder of
such depository receipt from any amount received by the custodian in respect of the U.S. Government
Obligation or the specific payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
(2) In the case of an election under Section 4.02, the Company shall have delivered to the
Trustee an Opinion of Independent Counsel in the United States stating that (A)the Company has received
from, or there has been published by, the Internal Revenue Service a ruling or (B)since the date of
this 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 Independent Counsel in the United States shall confirm
that, the holders of the Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such 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 defeasance had not
occurred.
(3) In the case of an election under Section 4.03, the Company shall have delivered to the
Trustee an Opinion of Independent Counsel in the United States to the effect that the holders of the
Outstanding Securities 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 shall have occurred and be continuing on the date of such
deposit or insofar as subsections 5.01(h) and (i)are concerned, at any time during the period ending on
the 91st day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee for the Securities to
have a conflicting interest with respect to any securities of the Company or any Guarantor.
(6) Such defeasance or covenant defeasance shall not result in a breach or violation of, or
constitute a Default under, this Indenture or any other material agreement or instrument to which the
Company or any Guarantor is a party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of Independent Counsel to the
effect that (A)the trust funds will not be subject to any rights of holders of Senior Indebtedness or
Guarantor Senior Indebtedness, including, without limitation, those arising under this Indenture and
(B)after the 91st day following the deposit, the trust funds will not be subject to the effect of any
applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally.
(8) The Company shall have delivered to the Trustee an Officers' Certificate stating that the
deposit was not made by the Company with the intent of preferring the holders of the Securities or any
Guarantee over the other creditors of the Company or any Guarantor with the intent of defeating,
hindering, delaying or defrauding creditors of the Company, any Guarantor or others.
(9) No event or condition shall exist that would prevent the Company from making payments of
the principal of, premium, if any, and interest on the Securities and of all other Indenture Obligations
on the date of such deposit or at any time ending on the 91st day after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officers' Certificate and an Opinion
of Independent Counsel, each stating that all conditions precedent provided for relating to either the
defeasance under Section 4.02 or the covenant defeasance under Section 4.03 (as the case may be) have
been complied with as contemplated by this Section 4.04.
Opinions of Counsel or Opinions of Independent Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel delivering such opinions may rely on
certificates of the Company or government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various financial covenants have been
complied with.
Section 4.05______Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions.
Subject to the provisions of the last paragraph of Section 10.03, all United States dollars and U.S.
Government Obligations (including the proceeds thereof) deposited with the Trustee or other qualifying trustee as
permitted under Section 4.04 (collectively, for purposes of this Section 4.05, the "Trustee") pursuant to Section
4.04 in respect of the Defeased Securities shall be held in trust and applied by the Trustee, in accordance with
the provisions of such Securities and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Holders of such
Securities of all sums due and to become due thereon in respect of principal, premium, if any, and interest, but
such money need not be segregated from other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or
assessed against the U.S. Government Obligations deposited pursuant to Section 4.04 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which by law is for the account of the
Holders of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the Trustee shall deliver or pay to the
Company from time to time upon Company Request any United States dollars or U.S. Government Obligations held by
it as provided in Section 4.04 which, in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount
thereof which would then be required to be deposited to effect defeasance or covenant defeasance.
Section 4.06______Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States dollars or U.S. Government
Obligations in accordance with Section 4.02 or 4.03, as the case may be, by reason of any order or judgment of
any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then the
Company's and each Guarantor's obligations under this Indenture and the Securities and the provisions of Articles
Twelve and Fourteen hereof shall be revived and reinstated as though no deposit had occurred pursuant to Section
4.02 or 4.03, as the case may be, until such time as the Trustee or Paying Agent is permitted to apply all such
United States dollars or U.S. Government Obligations in accordance with Section 4.02 or 4.03, as the case may be;
provided, however, that if the Company makes any payment to the Trustee or Paying Agent of principal of, premium,
if any, or interest on any Security following the reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the Securities and the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money held by the Trustee or Paying
Agent.
ARTICLE V_________
REMEDIES
Section 5.01______Events of Default.
"Event Of Default," wherever used herein, means any one of the following events which has occurred and
is continuing (whatever the reason for such Event of Default and whether it shall be occasioned by the provisions
of Article Twelve or 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):
(a) there shall be a default in the payment of any interest on any Security (including any Additional
Interest) when it becomes due and payable, and such default shall continue for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or premium, if any, on) any Security at its
Maturity (upon acceleration, optional or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any covenant or agreement of the Company
or Parent or any other Guarantor under this Indenture (other than a default in the performance, or breach, of a
covenant or agreement which is specifically dealt with in clause (a) or (b) or in clause (ii), (iii) or (iv) of
this clause (c)) and such default or breach shall continue for a period of 30 days after written notice has been
given, by certified mail, (y)to the Company by the Trustee or (z)to the Company and the Trustee by the Holders
of at least 25% in aggregate principal amount of the Outstanding Securities; (ii)there shall be a default in the
performance or breach of the provisions of Article Eight; (iii)the Company shall have failed to make or
consummate an Offer in accordance with the provisions of Section 10.13; or (iv)the Company shall have failed to
make or consummate a Change of Control Offer in accordance with the provisions of Section 10.16;
(d) one or more defaults shall have occurred under any agreements, indentures or instruments under which the
Company, any Guarantor or any Restricted Subsidiary of the Company then has outstanding Indebtedness in excess of
$5,000,000 in the aggregate and, if not already matured at its final maturity in accordance with its terms, such
Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in writing by any Guarantor or the
Company not to be, in full force and effect, enforceable in accordance with its terms, except to the extent
contemplated by this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money in excess of $5,000,000 either
individually or in the aggregate (net of amounts covered by insurance, bond, surety or similar instrument) shall
be entered against the Company, any Guarantor, or any Restricted Subsidiary of the Company or any of their
respective properties and shall not be discharged and either (a)any creditor shall have commenced an enforcement
proceeding upon such judgment, order or decree or (b)there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an appeal or otherwise, shall not be
in effect;
(g) any holder or holders of at least $5,000,000 in aggregate principal amount of Indebtedness of the
Company, any Guarantor or any Restricted Subsidiary of the Company after a default under such Indebtedness shall
notify the Trustee of the intended sale or disposition of any assets of the Company, any Guarantor or any
Restricted Subsidiary of the Company that have been pledged to or for the benefit of such holder or holders to
secure such Indebtedness or shall commence proceedings, or take any action (including by way of set-off), to
retain in satisfaction of such Indebtedness or to collect on, seize, dispose of or apply in satisfaction of
Indebtedness, assets of the Company or any Restricted Subsidiary of the Company (including funds on deposit or
held pursuant to lock-box and other similar arrangements);
(h) there shall have been the entry by a court of competent jurisdiction of (i)a decree or order for relief
in respect of the Company, any Guarantor or any Restricted Subsidiary of the Company in an involuntary case or
proceeding under any applicable Bankruptcy Law or (ii)a decree or order adjudging the Company, any Guarantor or
any Restricted Subsidiary of the Company bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company, any Guarantor or any Restricted Subsidiary of the
Company under any applicable federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company, any Guarantor or any Restricted Subsidiary of
the Company or of any substantial part of their respective properties, or ordering the winding up or liquidation
of their affairs, and any such decree or order for relief shall continue to be in effect, or any such other
decree or order shall be unstayed and in effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary of the Company commences a voluntary case or
proceeding under any applicable Bankruptcy Law or any other case or proceeding to be adjudicated bankrupt or
insolvent, (ii)the Company, any Guarantor or any Restricted Subsidiary of the Company consents to the entry of a
decree or order for relief in respect of the Company, any Guarantor or such Restricted Subsidiary in an
involuntary case or proceeding under any applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (iii)the Company, any Guarantor or any Restricted Subsidiary of the
Company files a petition or answer or consent seeking reorganization or relief under any applicable federal or
state law, (iv)the Company, any Guarantor or any Restricted Subsidiary of the Company (1)consents to the filing
of such petition or the appointment of, or taking possession by, a custodian, receiver, liquidator, assignee,
trustee, sequestrator or other similar official, of the Company, any Guarantor or such Restricted Subsidiary or
of any substantial part of its respective properties, (2)makes an assignment for the benefit of creditors or
(3)admits in writing its inability to pay its debts generally as they become due, or (v)the Company, any
Guarantor or any Restricted Subsidiary of the Company takes any corporate action in furtherance of any such
actions in this paragraph (i).
The Company shall deliver to the Trustee within five days after the occurrence thereof, written notice,
in the form of an Officers' Certificate, of any Default, its status and what action the Company is taking or
proposes to take with respect thereto. Unless the Corporate Trust Office of the Trustee has received written
notice of an Event of Default of the nature described in this Section, the Trustee shall not be deemed to have
knowledge of such Event of Default for the purposes of Article Five or for any other purpose.
Section 5.02______Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in Sections 5.01(h) and (i)), shall
occur and be continuing, the Trustee or the Holders of not less than 25% in aggregate principal amount of the
Securities Outstanding may, and the Trustee at the request of the Holders of not less than 25% in aggregate
principal amount of the Securities Outstanding shall, declare all unpaid principal of, premium, if any, and
accrued interest on all the Securities to be due and payable immediately, by a notice in writing to the Company
(and to the Trustee if given by the Holders of the Securities); provided that so long as the Bank Credit
Agreement is in effect, such declaration shall not become effective until the earlier of (a)five Business Days
after receipt of such notice of acceleration from the Holders or the Trustee by the agent under the Bank Credit
Agreement or (b)acceleration of the Indebtedness under the Bank Credit Agreement. Thereupon the Trustee may, at
its discretion, proceed to protect and enforce the rights of the Holders of the Securities by appropriate
judicial proceedings. If an Event of Default specified in clause (h) or (i) of Section 5.01 occurs and is
continuing, then all the Securities shall ipso facto become and be immediately due and payable, in an amount
equal to the principal amount of the Securities, together with accrued and unpaid interest, if any, to the date
the Securities become due and payable, without any declaration or other act on the part of the Trustee or any
Holder. The Trustee or, if notice of acceleration is given by the Holders, the Holders shall give notice to the
agent under the Bank Credit Agreement of any such acceleration.
After such declaration of acceleration, but before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the Holders of a majority in aggregate
principal amount of the Securities Outstanding, by written notice to the Company and the Trustee, may rescind and
annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to pay:
(i) all sums paid or advanced by the Trustee under this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel,
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities which have become due otherwise than by such
declaration of acceleration and interest thereon at a rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne
by the Securities; and
(b) all Events of Default, other than the nonpayment of principal of the Securities which have become due
solely by such declaration of acceleration, have been cured or waived as provided in Section 5.13. No such
rescission shall affect any subsequent Default or impair any right consequent thereon provided in Section 5.13.
Section 5.03______Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company and each Guarantor covenant that if:
(a) default is made in the payment of any interest on any Security (including any Additional Interest) when
such interest becomes due and payable and such default continues for a period of 30 days, or
(b) default is made in the payment of the principal of or premium, if any, on any Security at the Stated
Maturity thereof,
the Company and any such Guarantor will, upon demand of the Trustee, pay to it, for the benefit of the Holders of
such Securities, subject to Articles Twelve and Fourteen, the whole amount then due and payable on such
Securities for principal and premium, if any, and interest, with interest upon the overdue principal and premium,
if any, and, to the extent that payment of such interest shall be legally enforceable, upon overdue installments
of interest, at the rate borne by the Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company or any Guarantor, as the case may be, fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may institute a judicial proceeding for
the collection of the sums so due and unpaid and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Company or any Guarantor or any other obligor upon the Securities and collect
the moneys adjudged or decreed to be payable in the manner provided by law out of the property of the Company or
any Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders under this Indenture or the Guarantees by such appropriate
private or judicial proceedings as the Trustee shall deem most effectual to protect and enforce such rights,
including, seeking recourse against any Guarantor pursuant to the terms of any Guarantee, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including, without limitation, seeking recourse
against any Guarantor pursuant to the terms of a Guarantee, or to enforce any other proper remedy, subject
however to Section 5.12.
Section 5.04______Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor,
including each Guarantor, upon the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue principal or interest) shall be entitled and empowered, by
intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, and premium, if any, and interest owing and
unpaid in respect of the Securities and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and
(b) subject to Articles Twelve and Fourteen, to collect and receive any moneys, securities or other property
payable or deliverable upon any conversion or exchange of Securities or upon any such claims and to distribute
the same; and any custodian, in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay the Trustee any amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept
or adopt on behalf of any Holder any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof, or to authorize the Trustee to vote in respect of the claim of
any Holder in any such proceeding.
Section 5.05______Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may be prosecuted and enforced by
the Trustee without the possession of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in its own name and as trustee of an
express trust, and any recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, be for the ratable
benefit of the Holders of the Securities in respect of which such judgment has been recovered.
Section 5.06______Application of Money Collected.
Any money collected by the Trustee pursuant to this Article or otherwise on behalf of the Holders or the
Trustee pursuant to this Article or through any proceeding or any arrangement or restructuring in anticipation or
in lieu of any proceeding contemplated by this Article shall be applied, subject to applicable law, in the
following order, at the date or dates fixed by the Trustee and, in case of the distribution of such money on
account of principal, premium, if any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.06;
SECOND: Subject to Articles Twelve and Fourteen, to the payment of the amounts then due and unpaid upon
the Securities for principal, premium, if any, and interest, and of all other Indenture Obligations in respect of
which or for the benefit of which such money has been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such Securities for principal, premium, if any, and interest
and all other Indenture Obligations; and
THIRD: Subject to Articles Twelve and Fourteen, the balance, if any, to the Company, provided that all
sums due and owing to the Holders and the Trustee have been paid in full as required by this Indenture.
Section 5.07______Limitation on Suits.
No Holder of any Securities shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the Outstanding Securities shall have made
written request to the Trustee to institute proceedings in respect of such Event of Default in its own name as
trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity satisfactory to the Trustee against the
costs, expenses and liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture or any Guarantee to affect, disturb or prejudice
the rights of any other Holders, or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner provided in this Indenture or any Guarantee
and for the equal and ratable benefit of all the Holders.
Section 5.08______Unconditional Right of Holders to Receive Principal, Premium and Interest.
Notwithstanding any other provision in this Indenture, but subject to Articles Twelve and Fourteen, the
Holder of any Security shall have the right on the terms stated herein, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section 3.09) interest on such Security on
the respective Stated Maturities expressed in such Security (or, in the case of redemption or repurchase, on the
Redemption Date or repurchase date) and to institute suit for the enforcement of any such payment, and such
rights shall not be impaired without the consent of such Holder, subject to Articles Twelve and Fourteen.
Section 5.09______Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this
Indenture or the Guarantees and such proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the Trustee or to such Holder, then and in every such case the Company, each of the
Guarantors, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been instituted.
Section 5.10______Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or
in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not
prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.11______Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Trustee or
to the Holders may be exercised from time to time, and as often as may be deemed expedient, by the Trustee or by
the Holders, as the case may be.
Section 5.12______Control by Holders.
The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities
shall 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; provided that:
(a) such direction shall not be in conflict with any rule of law or with this Indenture or any Guarantee or
expose the Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the Trustee which is not inconsistent with such
direction.
Section 5.13______Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of the Outstanding Securities may
on behalf of the Holders of all the Securities waive any past Default hereunder and its consequences, except a
Default:
(a) in the payment of the principal of, premium, if any, or interest (including Additional Interest) on any
Security (unless such Default has been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration and any Additional Interest has been deposited with the Trustee); or
(b) in respect of a covenant or a provision hereof which under Article Nine cannot be modified or amended
without the consent of Holders of each Outstanding Security.
Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom
shall be deemed to have been cured, for every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereon.
Section 5.14______Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right
or remedy under this Indenture, or in any suit against the Trustee for any action taken, suffered or omitted by
it as Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including reasonable attorneys' fees and expenses,
against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in the aggregate more than 10% in
principal amount of the Outstanding Securities, or to any suit instituted by any Holder for the enforcement of
the payment of the principal of, premium, if any, or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or after the Redemption Date).
Section 5.15______Waiver of Stay, Extension or Usury Laws.
Each of the Company and any Guarantor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any
stay or extension law or any usury or other law wherever enacted, now or at any time hereafter in force, which
would prohibit or forgive the Company or any Guarantor from paying all or any portion of the principal of,
premium, if any, or interest on the Securities contemplated herein or in the Securities or any other Indenture
Obligations or which may affect the covenants or the performance of this Indenture; and each of the Company and
any Guarantor (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the
Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
ARTICLE VI________
THE TRUSTEE
Section 6.01______Notice of Defaults.
Within 30 days after the occurrence of any Default, the Trustee shall transmit by mail to all Holders,
as their names and addresses appear in the Security Register, notice of such Default hereunder actually known to
a Responsible Officer of the Trustee, unless such Default shall have been cured or waived; provided, however,
that, except in the case of a Default in the payment of the principal of, premium, if any, or interest on any
Security, the Trustee shall be protected in withholding such notice if and so long as a trust committee of
Responsible Officers of the Trustee in good faith determines that the withholding of such notice is in the
interest of the Holders.
Section 6.02______Certain Rights and Duties of Trustee.
Subject to the provisions of Trust Indenture Act Sections 3.15(a) through 3.15(d):
(a) the Trustee may conclusively rely and shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of Indebtedness or other paper or document (whether in its original or
facsimile form) believed by it to be genuine and to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be sufficiently evidenced by a Company
Request or Company Order and any resolution of the Board of Directors may be sufficiently evidenced by a Board
Resolution;
(c) the Trustee may consult with counsel of its choice and any written advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon in accordance with such advice or Opinion of
Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this
Indenture at the request or direction of any of the Holders pursuant to this Indenture, unless such Holders shall
have offered to the Trustee security or indemnity satisfactory to the Trustee against the costs, expenses and
liabilities which might be incurred therein or thereby in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by it in good faith and believed by it
to be authorized or within the discretion, rights or powers conferred upon it by this Indenture other than any
liabilities arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent, order,
approval, appraisal, bond, debenture, note, coupon, security or other paper or document; provided, that the
Trustee in its discretion may make such further inquiry or investigation into such facts or matters as it may
deem fit, and, if the Trustee shall determine to make such further inquiry or investigation, it shall be entitled
to examine the books, records and premises of the Company, personally or by agent or attorney at the expense of
the Company and shall incur no liability or additional liability of any kind by reason of such inquiry or
investigation.
(g) the Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it hereunder;
(h) no provision of this Indenture shall require the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers;
(i) the Trustee shall not be liable for interest on any money received by it except as the Trustee may agree
in writing with the Company, except as otherwise provided herein;
(j) money held in trust by the Trustee need not be segregated from other funds except to the extent required
by law, except as otherwise provided herein;
(k) if an Event of Default has occurred and is continuing, in accordance with Trust Indenture Act Section
3.15(c), the Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the
same degree of care and skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs; and
(l) in the event that the Trustee receives notice pursuant to Section 12.03(b)(2), the Trustee shall use
commercially reasonable efforts to provide a copy of such notice to the Company promptly upon such receipt.
Section 6.03______Trustee Not Responsible for Recitals, Dispositions of Securities or Application of Proceeds
Thereof.
The recitals contained herein and in the Securities, except the Trustee's certificates of
authentication, shall be taken as the statements of the Company, and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or sufficiency of this Indenture or of
the Securities, except that the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder and that the statements made by it
in any Statement of Eligibility and Qualification on Form T-I supplied to the Company are true and accurate
subject to the qualifications set forth therein. The Trustee shall not be accountable for the use or application
by the Company of Securities or the proceeds thereof.
Section 6.04______Trustee and Agents May Hold Securities; Collections; etc.
The Trustee (or any affiliate), any Paying Agent, Security Registrar or any agent of the Company, in its
individual or any other capacity, may purchase or otherwise become the owner or pledgee of Securities, with the
same rights it would have if it were not the Trustee, Paying Agent, Security Registrar or other agent and,
subject to Trust Indenture Act Sections 3.10 and 3.11, may otherwise deal with the Company and receive, collect,
hold and retain collections from the Company with the same rights it would have if it were not the Trustee,
Paying Agent, Security Registrar or such other agent.
Section 6.05______Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for
the purposes for which they were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Except for funds or securities deposited with the Trustee pursuant to
Article Four, the Trustee may invest all moneys received by the Trustee, until used or applied as herein
provided, in Temporary Cash Investments in accordance with the written directions of the Company. The Trustee
shall not be liable for any losses incurred in connection with any investments made in accordance with this
Section 6.05, unless the Trustee acted with gross negligence or in bad faith. With respect to any losses on
investments made under this Section 6.05, the Company is liable for the full extent of any such loss.
Section 6.06______Compensation and Indemnification of Trustee and Its Prior Claim.
The Company covenants and agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation for all services rendered by it hereunder (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust) set forth in writing, and the
Company covenants and agrees to pay or reimburse the Trustee and each predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by or on behalf of it in accordance with any
of the provisions of this Indenture (including the reasonable compensation and the expenses and disbursements of
its counsel and of all agents and other persons not regularly in its employ) except any such expense,
disbursement or advance shall be determined to have been caused by its own negligence or misconduct. The Company
also covenants to indemnify the Trustee and each predecessor Trustee for, and to hold it harmless against, any
loss, liability, tax, assessment or other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence or bad faith on such Trustee's part, arising out
of or in connection with the acceptance or administration of this Indenture or the trusts hereunder and such
Trustee's duties hereunder, including enforcement of this Indenture and also including any liability which the
Trustee may incur as a result of failure to withhold, pay or report any tax, assessment or other governmental
charge, and the costs and expenses of defending itself against or investigating any claim of liability (whether
asserted by any Holder, the Company or any other Person) in connection with the exercise or performance of any of
its powers or duties under this Indenture. The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute an additional obligation hereunder and shall
survive the satisfaction and discharge of this Indenture.
All payments and reimbursements pursuant to this Section 6.06 shall be made with interest at the rate
borne by the Securities.
As security for the performance of the obligations of the Company under this Section 6.06, the Trustee
shall have a Lien prior to the Securities upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or interest on particular Securities.
The Trustee's right to receive payment of any amounts due under this Section 6.06 shall not be subordinate to any
other liability or indebtedness of the Company (even though the Securities may be so subordinate), and the
Securities shall be subordinate to the Trustee's right to receive such payment.
Section 6.07______Conflicting Interests.
The Trustee shall comply with the provisions of Section 3.10(b) of the Trust Indenture Act.
Section 6.08______Corporate Trustee Required, Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to act as trustee under Trust
Indenture Act Section 3.10(a)(1) and which shall have a combined capital and surplus of at least $50,000,000, to
the extent there is an institution eligible and willing to serve. The Trustee shall be a participant in the
Depository Trust Company and FAST distribution systems. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of
such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions
of this Section, the Trustee shall resign immediately in the manner and with the effect hereinafter specified in
this Article. The Corporate Trust Office shall initially be located at The Bank of New York, 101 Barclay Street,
21 W, New York, New York 10286.
Section 6.09______Resignation and Removal: Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a successor trustee pursuant to this
Article shall become effective until the acceptance of appointment by the successor trustee under Section 6.10.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at any time resign by giving written
notice thereof to the Company. Upon receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of Directors of the Company, a copy of
which shall be delivered to the resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance by a successor trustee shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may, or any Holder who has been a bona fide Holder of a
Security for at least six months may, on behalf of himself and all others similarly situated, petition at the
expense of the Company any court of competent jurisdiction for the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper, appoint a successor trustee.
(c) The Trustee may be removed at any time by an Act of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, delivered to the Trustee and to the Company. If the Trustee is so
removed by an Act of Holders, then any Holder of a Security who has been a bona fide Holder of a Security for at
least six months, on behalf of such Holder and all others similarly situated, or the removed Trustee may petition
at the expense of the Company a court of competent jurisdiction for appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust Indenture Act Section
3.10(b) after written request therefor by the Company or by any Holder who has been a bona fide Holder
of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.08 and shall fail to resign after
written request therefor by the Company or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(3) the Trustee shall become incapable of acting or shall be adjudged a bankrupt or insolvent,
or a receiver of the Trustee or of its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any case, (i)the Company by a Board Resolution may remove the Trustee, or (ii)subject to Section 5.14,
the Holder of any Security who has been a bona fide Holder of a Security for at least six months may, on behalf
of such Holder and all others similarly situated, petition any court of competent jurisdiction for the removal of
the Trustee and the appointment of a successor trustee. Such court may thereupon, after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, the Company, by a Board Resolution, shall promptly appoint a successor
trustee. If, within one year after such resignation, removal or incapability, or the occurrence of such vacancy,
a successor trustee shall be appointed by Act of the Holders of a majority in principal amount of the Outstanding
Securities delivered to the Company and the retiring Trustee, the successor trustee so appointed shall, forthwith
upon its acceptance of such appointment, become the successor trustee and supersede the successor trustee
appointed by the Company. If no successor trustee shall have been so appointed by the Company or the Holders of
the Securities and accepted appointment in the manner hereinafter provided, the Holder of any Security who has
been a bona fide Holder for at least six months may, subject to Section 5.14, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each removal of the Trustee and each appointment
of a successor trustee by mailing written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities as their names and addresses appear in the Security Register. Each notice shall include
the name of the successor trustee and the address of its Corporate Trust Office or agent hereunder.
Section 6.10______Acceptance of Appointment by Successor.
Every successor trustee appointed hereunder shall execute, acknowledge and deliver to the Company and to
the retiring Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and duties of the retiring Trustee as if originally named
as Trustee hereunder; but, nevertheless, on the written request of the Company or the successor trustee, upon
payment of its charges then unpaid, such retiring Trustee shall, pay over to the successor trustee all moneys at
the time held by it hereunder and shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless, retain a prior claim upon all
property or funds held or collected by such Trustee or such successor trustee to secure any amounts then due such
Trustee pursuant to the provisions of Section 6.06.
No successor trustee with respect to the Securities shall accept appointment as provided in this Section
6.10 unless at the time of such acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 3.10(a) and this Article Sixth and shall have a combined capital and
surplus of at least $50,000,000 and have a Corporate Trust Office or an agent selected in accordance with Section
6.08.
Upon acceptance of appointment by any successor trustee as provided in this Section 6.10, the Company
shall give notice thereof to the Holders of the Securities, by mailing such notice to such Holders at their
addresses as they shall appear on the Security Register. If the acceptance of appointment is substantially
contemporaneous with the resignation, then the notice called for by the preceding sentence may be combined with
the notice called for by Section 6.09. If the Company fails to give such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such notice to be given at the expense
of the Company.
Section 6.11______Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to which the Trustee shall be a party,
or any corporation succeeding to all or substantially all of the corporate trust business of the Trustee, shall
be the successor of the Trustee hereunder, provided such corporation shall be eligible under Trust Indenture Act
Section 3.10(a) and this Article Sixth and shall have a combined capital and surplus of at least $50,000,000 and
have a Corporate Trust Office or an agent selected in accordance with Section 6.08 without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the trusts created by this Indenture
any of the Securities shall have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver such Securities so authenticated;
and, in case at that time any of the Securities shall not have been authenticated, any successor to the Trustee
may authenticate such Securities either in the name of any predecessor hereunder or in the name of the successor
trustee; and in all such cases such certificate shall have the full force which it is anywhere in the Securities
or in this Indenture provided that the certificate of the Trustee shall have; provided that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate Securities in the name of any
predecessor Trustee shall apply only to its successor or successors by merger, conversion or consolidation.
Section 6.12______Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or other obligor under the
Securities), the Trustee shall be subject to the provisions of the Trust Indenture Act regarding the collection
of claims against the Company (or any such other obligor). A Trustee who has resigned or been removed shall be
subject to the Trust Indenture Act Section 3.11(a) to the extent indicated therein.
ARTICLE VII_______
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 7.01______Company to Furnish Trustee with Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record Date, a list, in such form as the Trustee
may reasonably require, of the names and addresses of the Holders as of such Regular Record Date; and
(b) at such other times as the Trustee may request in writing, within 30 days after receipt by the Company
of any such request, a list of similar form and content as of a date not more than 15 days prior to the time such
list is furnished;
provided, however, that if and so long as the Trustee shall be the Security Registrar, no such list need be
furnished.
Section 7.02______Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any information as to the names and addresses of the Holders in accordance with Trust Indenture
Act Section 3.12, regardless of the source from which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material pursuant to a request made under Trust Indenture Act
Section 3.12.
Section 7.03______Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May 15 after the first issuance of
Securities, the Trustee shall transmit by mail to all Holders, as their names and addresses appear in the
Security Register, as provided in Trust Indenture Act Section 3.13(c), a brief report dated as of such May 15 in
accordance with and to the extent required by Trust Indenture Act Section 3.13(a). The Trustee shall also comply
with Trust Indenture Act Section 3.13(b).
Commencing at the time this Indenture is qualified under the Trustee Indenture Act, a copy of each
report at the time of its mailing to Holders, shall be filed with the Commission and each stock exchange on which
the Securities are listed.
Section 7.04______Reports by Company and Guarantors.
The Company and any Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or any Guarantor, as the case may be, is
required to file the same with the Commission, copies of the annual reports and of the information, documents and
other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) which the Company or any Guarantor may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the case may
be, is not required to file information, documents or reports pursuant to either of said Sections, then it shall
file with the Trustee and the Commission, in accordance with rules and regulations prescribed from time to time
by the Commission, such of the supplementary and periodic information, documents and reports which may be
required pursuant to Section 13 of the Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in accordance with the rules and regulations prescribed from
time to time by the Commission, such additional information, documents and reports with respect to compliance by
the Company or any Guarantor, as the case may be, with the conditions and covenants of this Indenture as may be
required from time to time by such rules and regulations; and
(c) transmit or cause to be transmitted by mail to all Holders, as their names and addresses appear in the
Security Register, within 30 days after the filing thereof with the Trustee, in the manner and to the extent
provided in Trust Indenture Act Section 3.13(c), such summaries of any information, documents and reports
required to by filed by the Company or any Guarantor, as the case may be, pursuant to Subsections (a)and (b)of
this Section as may be required by rules and regulations prescribed from time to time by the Commission.
Delivery of such reports, information and documents to the Trustee is for informational purposes only
and the Trustee's receipt of such shall not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the Company's compliance with any of its covenants
hereunder (as to which the Trustee is entitled to rely exclusively on Officer's Certificates).
ARTICLE VIII______
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 8.01______Company or Any Guarantor May Consolidate, etc., Only on Certain Terms.
(a) The Company shall not, in a single transaction or through a series of related transactions, consolidate
with or merge with or into any other Person or sell, assign, convey, transfer or lease or otherwise dispose of
all or substantially all of its properties and assets to any Person or group of affiliated Persons, or permit any
of its Subsidiaries to enter into any such transaction or transactions if such transaction or transactions, in
the aggregate, would result in a sale, assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its Subsidiaries on a Consolidated basis to any
other Person or group of affiliated Persons, unless at the time and after giving effect thereto:
(i) either (1)the Company shall be the continuing corporation, or (2)the Person (if other than the
Company) formed by such consolidation or into which the Company is merged or the Person which acquires
by sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the
properties and assets of the Company and its Subsidiaries on a Consolidated basis (the "Surviving
Entity") shall be a corporation duly organized and validly existing under the laws of the United States
of America, any state thereof or the District of Columbia and such Person assumes, by a supplemental
indenture in a form reasonably satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture, and this Indenture shall remain in full force and effect;
(ii) immediately before and immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing;
(iii) immediately after giving effect to such transaction on a pro forma basis, the Consolidated Net Worth of
the Company (or the Surviving Entity if the Company is not the continuing obligor under this Indenture)
is equal to or greater than the Consolidated Net Worth of the Company immediately prior to such
transaction;
(iv) immediately before and immediately after giving effect to such transaction on a pro forma basis (on the
assumption that the transaction occurred on the first day of the four-quarter period immediately prior
to the consummation of such transaction with the appropriate adjustments with respect to the transaction
being included in such pro forma calculation), the Company (or the Surviving Entity if the Company is
not the continuing obligor under this Indenture) could incur $1.00 of additional Indebtedness under
Section 10.08 (other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the transactions described above, shall have by
supplemental indenture confirmed that its Guarantee shall apply to such Person's obligations under this
Indenture and the Securities;
(vi) if any of the property or assets of the Company or any of its Subsidiaries would thereupon become
subject to any Lien, the provisions of Section 10.12 are complied with; and
(vii) the Company or the Surviving Entity shall have delivered, or caused to be delivered, to the Trustee, in
form and substance reasonably satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger, transfer, sale, assignment, conveyance,
lease or other transaction and the supplemental indenture in respect thereto comply with the provisions
of this Indenture and that all conditions precedent herein provided for relating to such transaction
have been complied with.
(b) Each Guarantor (including Parent) shall not, and the Company and Parent shall not permit a Restricted
Subsidiary Guarantor or a Parent Subsidiary Guarantor, as the case may be, to, in a single transaction or through
a series of related transactions merge or consolidate with or into any other corporation (other than the Company
or any other Guarantor) or other entity, or sell, assign, convey, transfer, lease or otherwise dispose of all or
substantially all of its properties and assets on a Consolidated basis to any entity (other than the Company or
any other Guarantor) unless at the time and after giving effect thereto:
(i) either (1)such Guarantor shall be the continuing corporation or (2)the entity (if other than such
Guarantor) formed by such consolidation or into which such Guarantor is merged or the entity which
acquires by sale, assignment, conveyance, transfer, lease or disposition the properties and assets of
such Guarantor shall be a corporation duly organized and validly existing under the laws of the United
States, any state thereof or the District of Columbia and shall expressly assume by a supplemental
indenture, executed and delivered to the Trustee, in a form reasonably satisfactory to the Trustee, all
the obligations of such Guarantor under its Guarantee and this Indenture;
(ii) immediately before and immediately after giving effect to such transaction, no Default or Event of
Default shall have occurred and be continuing; and
(iii) such Guarantor shall have delivered to the Trustee, in form and substance reasonably satisfactory to the
Trustee, an Officers' Certificate and an Opinion of Counsel, each stating that such consolidation,
merger, sale, assignment, conveyance, transfer, lease or disposition and such supplemental indenture
comply with this Indenture, and thereafter all obligations of the predecessor shall terminate.
The provisions of this Section 8.01(b) shall not apply to any transaction (including any Asset Sale made in
accordance with Section 10.13) with respect to any Guarantor if the Guarantee of such Guarantor is released in
connection with such transaction in accordance with Section 10.14(d).
Section 8.02______Successor Substituted.
Upon any consolidation or merger, or any sale, assignment, conveyance, transfer, lease or disposition of
all or substantially all of the properties and assets of the Company or any Guarantor in accordance with Section
8.01, the successor Person formed by such consolidation or into which the Company or such Guarantor, as the case
may be, is merged or the successor Person to which such sale, assignment, conveyance, transfer, lease or
disposition is made shall succeed to, and be substituted for, and may exercise every right and power of, the
Company or such Guarantor, as the case may be, under this Indenture, the Securities and/or such Guarantee, as the
case may be, with the same effect as if such successor had been named as the Company or such Guarantor, as the
case may be, herein, in the Securities and/or in such Guarantee, as the case may be. When a successor assumes all
the obligations of its predecessor under this Indenture, the Securities or a Guarantee, as the case may be, the
predecessor shall be released from those obligations; provided that in the case of a transfer by lease, the
predecessor shall not be released from the payment of principal and interest on the Securities or a Guarantee, as
the case may be.
ARTICLE IX________
SUPPLEMENTAL INDENTURES
Section 9.01______Supplemental Indentures and Agreements without Consent of Holders.
Without the consent of any Holders, the Company and the Guarantors, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into one or more indentures
supplemental hereto or agreements or other instruments with respect to any Guarantee, in form and substance
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, any Guarantor or any other obligor upon the
Securities, and the assumption by any such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Securities and in any Guarantee, in each case in compliance with the provisions of this
Indenture;
(b) to add to the covenants of the Company, any Guarantor or any other obligor upon the Securities for the
benefit of the Holders, or to surrender any right or power herein conferred upon the Company, any Guarantor or
any other obligor upon the Securities, as applicable, herein, in the Securities or in any Guarantee;
(c) to cure any ambiguity, to correct or supplement any provision herein which may be defective or
inconsistent with any other provision herein or in any Guarantee, or to make any other provisions with respect to
matters or questions arising under this Indenture, the Securities or any Guarantee; provided that, in each case,
such provisions shall not adversely affect the interests of the Holders;
(d) to comply with the requirements of the Commission in order to effect or maintain the qualification of
this Indenture under the Trust Indenture Act, as contemplated by Section 9.05 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 10.14;
(f) to evidence and provide the acceptance of the appointment of a successor trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security interest in favor of the Trustee for the benefit of
the Holders as additional security for the payment and performance of the Indenture Obligations, in any property
or assets, including any which are required to be mortgaged, pledged or hypothecated, or in which a security
interest is required to be granted to the Trustee pursuant to this Indenture or otherwise; or
(h) to provide for uncertificated Securities in place of or in addition to certificated Securities; or
(i) to provide for or confirm the issuance of Additional Securities.
Section 9.02______Supplemental Indentures and Agreements with Consent of Holders.
With the consent of the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities, by Act of said Holders delivered to the Company, each Guarantor, and the Trustee, the
Company and the Guarantors, when authorized by a Board Resolution, and the Trustee may enter into an indenture or
indentures supplemental hereto or agreements or other instruments with respect to any Guarantee, in form and
substance satisfactory to the Trustee, for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of modifying in any manner the rights of the Holders under
this Indenture, the Securities or any Guarantee; provided, however, that no such supplemental indenture,
agreement or instrument shall, without the consent of the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of interest on, any Security, or
reduce the principal amount thereof or the rate of interest thereon or any premium payable upon the redemption
thereof, or change the coin or currency in which the principal of any Security or any premium or the interest
thereon is payable, or impair the right to institute suit for the enforcement of any such payment after the
Stated Maturity thereof (or, in the case of redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and consummate an Offer with respect to
any Asset Sale or Asset Sales in accordance with Section 10.13 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control in accordance with Section 10.16,
including amending, changing or modifying any definitions with respect thereto;
(c) reduce the percentage in principal amount of the Outstanding Securities, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose Holders is required for any waiver of
compliance with provisions of this Indenture or defaults hereunder and their consequences provided for in this
Indenture or with respect to any Guarantee;
(d) modify any of the provisions of this Section or Sections 5.13 or 10.22, except to increase the
percentage in principal amount of the Outstanding Securities the consent of whose Holders is required for any
such actions or to provide that other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the assignment or transfer by the Company
or any Guarantor of any of its rights and obligations under this Indenture; or
(f) amend or modify any of the provisions of this Indenture relating to the subordination of the Securities
or any Guarantee in any manner adverse to the Holders of the Securities or any Guarantee.
Upon the written request of the Company and each Guarantor, accompanied by a copy of a Board Resolution
authorizing the execution of any such supplemental indenture or Guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall, subject to Section 9.03, join with the
Company and each Guarantor in the execution of such supplemental indenture or Guarantee.
It shall not be necessary for any Act of Holders under this Section to approve the particular form of
any proposed supplemental indenture or Guarantee or agreement or instrument relating to any Guarantee, but it
shall be sufficient if such Act shall approve the substance thereof.
Section 9.03______Execution of Supplemental Indentures and Agreements.
In executing, or accepting the additional trusts created by, any supplemental indenture, agreement or
instrument permitted by this Article or the modifications thereby of the trusts created by this Indenture, the
Trustee shall be entitled to receive, and (subject to Trust Indenture Act Section 3.15(a) through 315(d) and
Section 6.02 hereof) shall be fully protected in relying upon, an Opinion of Counsel and an Officers' Certificate
stating that the execution of such supplemental indenture, agreement or instrument is authorized or permitted by
this Indenture. The Trustee may, but shall not be obligated to, enter into any such supplemental indenture,
agreement or instrument which affects the Trustee's own rights, duties or immunities under this Indenture, any
Guarantee or otherwise.
Section 9.04______Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this Indenture shall be modified in
accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated and delivered hereunder shall be bound thereby.
Section 9.05______Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall conform to the requirements of the
Trust Indenture Act as then in effect.
Section 9.06______Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental indenture pursuant to
this Article may, and shall if required by the Trustee, bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company shall so determine, new Securities so
modified as to conform, in the opinion of the Trustee and the Board of Directors, to any such supplemental
indenture may be prepared and executed by the Company and each Guarantor and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
Section 9.07______Effect on Senior Indebtedness.
No supplemental indenture shall adversely affect the rights under Articles Twelve and Fourteen, or any
definitions or provisions related thereto, or the Guarantees of any holder of Senior Indebtedness or Guarantor
Senior Indebtedness unless the requisite holders of each issue of Senior Indebtedness or Guarantor Senior
Indebtedness affected thereby shall have consented to such supplemental indenture.
ARTICLE X_________
COVENANTS
Section 10.01_____Payment of Principal, Premium and Interest.
Subject to the provisions of Articles Twelve and Fourteen, the Company will duly and punctually pay the
principal of, premium, if any, and interest on the Securities in accordance with the terms of the Securities and
this Indenture.
Section 10.02_____Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may be presented or surrendered for
payment. The Company also will maintain an office or agency where Securities may be surrendered for registration
of transfer, redemption or exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt written notice to the Trustee of the
location and any change in the location of any such offices or agencies. If at any time the Company shall fail
to maintain any such required offices or agencies or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the office of the agent of the
Trustee described above and the Company hereby appoints such agent as its agent to receive all such
presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or agencies where the Securities
may be presented or surrendered for any or all such purposes, and may from time to time rescind such
designation. The Company will give prompt written notice to the Trustee of any such designation or rescission
and any change in the location of any such office or agency.
Section 10.03_____Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on or before 10:00 a.m. each due
date of the principal of, premium, if any, or interest on any of the Securities, segregate and hold in trust for
the benefit of the Holders entitled thereto a sum sufficient to pay the principal, premium, if any, or interest
so becoming due until such sums shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, before each due date of the principal
of, premium, if any, or interest on any Securities, deposit with a Paying Agent a sum in same day funds
sufficient to pay the principal, premium, if any, or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal, premium or interest, and (unless such Paying Agent is the
Trustee) the Company will promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each Paying Agent other than the
Trustee to execute and deliver to the Trustee an instrument in which such Paying Agent shall agree with the
Trustee, subject to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium, if any, or interest on Securities
in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor (or any other obligor upon the
Securities) in the making of any payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such Default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the provisions of this Indenture relating to
the duties, rights and disabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, pay, or by Company Order direct any Paying Agent to pay, to the Trustee all
sums held in trust by the Company or such Paying Agent, such sums to be held by the Trustee upon the same trusts
as those upon which such sums were held by the Company or such Paying Agent; and, upon such payment by any Paying
Agent to the Trustee, such Paying Agent shall be released from all further liability with respect to such money.
In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to the Company or any other obligor,
including each Guarantor, upon the Securities or the property of the Company or of such other obligor or their
creditors, the Trustee shall serve as the Paying Agent.
Any money deposited with the Trustee or any Paying Agent, or then held by the Company, in trust for the
payment of the principal of, premium, if any, or interest on any Security and remaining unclaimed for two years
after such principal and premium, if any, or interest has become due and payable shall promptly be paid to the
Company on Company Request, or (if then held by the Company) shall be discharged from such trust; and the Holder
of such Security shall thereafter, as an unsecured general creditor, look only to the Company for payment
thereof, and all liability of the Trustee or such Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the expense of the Company cause to be
published once, in The New York Times and The Wall Street Journal (national edition), notice that such money
remains unclaimed and that, after a date specified therein, which shall not be less than 30 days from the date of
such notification or publication, any unclaimed balance of such money then remaining will promptly be repaid to
the Company.
Section 10.04_____Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect, the corporate existence and related rights and franchises (charter and statutory)
of the Company and each Subsidiary of the Company; provided, however, that the Company shall not be required to
preserve any such right or franchise or the corporate existence of any such Subsidiary if the Board of Directors
of the Company shall determine that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss thereof could not reasonably be
expected to have a material adverse effect on the ability of the Company to perform its obligations hereunder;
and provided, further, however, that the foregoing shall not prohibit a sale, transfer or conveyance of a
Subsidiary of the Company or any of its assets in compliance with the terms of this Indenture.
Section 10.05_____Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, on or before the date the same
shall become due and payable, (a)all taxes, assessments and governmental charges levied or imposed upon the
Company or any Subsidiary of the Company shown to be due on any return of the Company or any Subsidiary of the
Company or otherwise assessed or upon the income, profits or property of the Company or any Subsidiary of the
Company if failure to pay or discharge the same could reasonably be expected to have a material adverse effect on
the ability of the Company or any Guarantor to perform its obligations hereunder and (b)all lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien upon the property of the Company or
any Subsidiary of the Company, except for any Lien permitted to be incurred under Section 10.12 if failure to pay
or discharge the same could reasonably be expected to have a material adverse effect on the ability of the
Company or any Guarantor to perform its obligations hereunder; provided, however, that the Company shall not be
required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by appropriate proceedings properly instituted
and diligently conducted and in respect of which appropriate reserves (in the good faith judgment of management
of the Company) are being maintained in accordance with GAAP.
Section 10.06_____Maintenance of Properties.
The Company will cause all material properties owned by the Company or any Subsidiary of the Company or
used or held for use in the conduct of its business or the business of any Subsidiary to be maintained and kept
in good condition, repair and working order (ordinary wear and tear excepted) and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Company may be consistent with sound business practice and necessary so
that the business carried on in connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Company from discontinuing the maintenance of
any of such properties if such discontinuance is, in the judgment of the Company, desirable in the conduct of its
business or the business of any Subsidiary of the Company and not reasonably expected to have a material adverse
effect on the ability of the Company to perform its obligations hereunder.
Section 10.07_____Insurance.
The Company will at all times keep all of its and its Subsidiaries' properties which are of an insurable
nature insured with insurers, believed by the Company to be responsible, against loss or damage to the extent
that property of similar character is usually so insured by corporations similarly situated and owning like
properties.
Section 10.08_____Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create, incur, assume
or directly or indirectly guarantee or in any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Indebtedness), except that the Company may incur Indebtedness and a Restricted
Subsidiary Guarantor may incur Permitted Subsidiary Indebtedness if, in each case, the Debt to Operating Cash
Flow Ratio of the Company and its Restricted Subsidiaries at the time of the incurrence of such Indebtedness,
after giving pro forma effect thereto, is 7.0:1 or less.
(b) The foregoing limitation will not apply to the incurrence of any of the following (collectively,
"Permitted Indebtedness"):
(i) Indebtedness of the Company incurred pursuant to the Bank Credit Agreement in an aggregate principal
amount which, when taken together with the amount of all Indebtedness incurred by the Company pursuant
to this clause (i) and then outstanding, does not exceed $75,000,000;
(ii) Indebtedness of the Company pursuant to the Securities (other than Additional Securities issued pursuant
to this Indenture) and Indebtedness of any Restricted Subsidiary Guarantor pursuant to a Guarantee;
(iii) Indebtedness of any Restricted Subsidiary Guarantor consisting of a guarantee of the Company's
Indebtedness under the Bank Credit Agreement;
(iv) Indebtedness of the Company or any of its Restricted Subsidiaries outstanding on the date of this
Indenture and listed on Schedule I hereto;
(v) Indebtedness of the Company owing to a Restricted Subsidiary of the Company; provided that any
Indebtedness of the Company owing to a Restricted Subsidiary of the Company that is not a Guarantor is
made pursuant to an intercompany note in the form attached to this Indenture as Exhibit C and is
subordinated in right of payment from and after such time as the Securities shall become due and payable
(whether at Stated Maturity, by acceleration or otherwise) to the payment and performance of the
Company's obligations under the Securities; provided further that any disposition, pledge or transfer of
any such Indebtedness to a Person (other than a disposition, pledge or transfer to a Wholly Owned
Restricted Subsidiary of the Company or a pledge to or for the benefit of the lenders under the Bank
Credit Agreement) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted
by this clause (v);
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the Company owing to the Company or another
Wholly Owned Restricted Subsidiary of the Company; provided that, with respect to Indebtedness owing to
a Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor, (x)any such Indebtedness
is made pursuant to an intercompany note in the form attached to this Indenture as Exhibit C and (y) any
such Indebtedness shall be subordinated in right of payment from and after such time as the obligations
under the Guarantee, if any, by such Wholly Owned Restricted Subsidiary shall become due and payable to
the payment and performance of such Wholly Owned Restricted Subsidiary's obligations under its
Guarantee; provided further that (a) any disposition, pledge or transfer of any such Indebtedness to a
Person (other than a disposition, pledge or transfer to the Company or a Wholly Owned Restricted
Subsidiary of the Company or pledge to or for the benefit of the lenders under the Bank Credit
Agreement) shall be deemed to be an incurrence of such Indebtedness by the obligor not permitted by this
clause (vi) and (b) any transaction pursuant to which any Wholly Owned Restricted Subsidiary of the
Company, which has Indebtedness owing to the Company or any other Wholly Owned Restricted Subsidiary of
the Company, ceases to be a Wholly Owned Restricted Subsidiary of the Company shall be deemed to be the
incurrence of Indebtedness by such Wholly Owned Restricted Subsidiary that is not permitted by this
clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the provisions of Section 10.14;
(viii) obligations of the Company entered into in the ordinary course of business pursuant to Interest Rate
Agreements in respect of Indebtedness of the Company as long as such obligations at the time incurred do
not exceed the aggregate principal amount of such Indebtedness then outstanding or in good faith
anticipated to be outstanding within 90 days of such incurrence;
(ix) any renewals, extensions, substitutions, refundings, refinancings or replacements (collectively, a
"refinancing") of any Indebtedness described in clauses (ii), (iii), (iv)and (v) above, including any
successive refinancings so long as the aggregate principal amount of Indebtedness represented thereby is
not increased by such refinancing (except, in the case of Guarantees under clause (iii), which
Guarantees do not exceed the aggregate principal amount of the Bank Credit Agreement) plus the lesser of
(I)the stated amount of any premium or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or (II)the amount of premium or
other payment actually paid at such time to refinance the Indebtedness, plus, in either case, the amount
of expenses of the Company incurred in connection with such refinancing and, in the case of Pari Passu
Indebtedness or Subordinated Indebtedness, such refinancing does not reduce the Average Life to Stated
Maturity or the Stated Maturity of such Indebtedness;
(x) the guarantee by the Company or any Restricted Subsidiary Guarantor of Indebtedness of the Company or a
Restricted Subsidiary of the Company that was permitted to be incurred pursuant to another provision of
this 10.08; and
(xi) Indebtedness of the Company in addition to that described in clauses (i) through (x) above, and any
renewals, extensions, substitutions, refinancings, or replacements of such Indebtedness, so long as the
aggregate principal amount of all such Indebtedness shall not exceed $5,000,000.
For purposes of determining compliance with this Section 10.08, in the event that an item of
Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in clauses
(i) through (xi) above or is entitled to be incurred pursuant to Section 10.08(a), the Company shall, in its sole
discretion, classify (or later reclassify) such item of Indebtedness in any manner that complies with this
Section10.08. Accrual of interest, accretion or amortization of original issue discount and the payment of
interest in the form of additional Indebtedness will not be deemed to be an incurrence of Indebtedness for
purposes of this Section 10.08.
Section 10.09_____Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly:
(i) declare or pay any dividend on, or make any distribution to holders of, any of the Company's Equity
Interests (other than dividends or distributions payable solely in its Qualified Equity Interests);
(ii) purchase, redeem or otherwise acquire or retire for value, directly or indirectly, any Equity Interest
of the Company or any Affiliate thereof (except Equity Interests held by the Company or any of its
Wholly Owned Restricted Subsidiaries);
(iii) make any principal payment on, or repurchase, redeem, defease, retire or otherwise acquire for value,
prior to any scheduled principal payment, sinking fund or maturity, any Subordinated Indebtedness of the
Company or such Restricted Subsidiary;
(iv) declare or pay any dividend or distribution on any Equity Interests of any Subsidiary to any Person
(other than the Company or any of its Wholly Owned Restricted Subsidiaries);
(v) incur, create or assume any guarantee of Indebtedness of any Affiliate (other than a Wholly Owned
Restricted Subsidiary of the Company); or
(vi) make any Investment in any Person (other than any Permitted Investments);
(any of the foregoing payments described in clauses (i) through (vi), other than any such action that is a
Permitted Payment, collectively, "Restricted Payments") unless after giving effect to the proposed Restricted
Payment (the amount of any such Restricted Payment, if other than cash, as determined by the Board of Directors
of the Company, whose determination shall be conclusive and evidenced by a Board Resolution): (1)no Default or
Event of Default shall have occurred and be continuing and such Restricted Payment shall not be an event which
is, or after notice or lapse of time or both, would be, an "event of default" under the terms of any Indebtedness
of the Company or its Restricted Subsidiaries; and (2)the aggregate amount of all such Restricted Payments
declared or made (x) by Parent after the date of the Existing Indenture to but not including the Succession Date
(references to the "Company" in the foregoing clauses (i) through (vi) being deemed to refer to Parent for
purposes of calculating the amount of such payments declared or made during such period by Parent) and (y) by the
Company from and including the Succession Date, does not exceed the sum of:
(A) an amount equal to Cumulative Operating Cash Flow less 1.4 times Cumulative Consolidated Interest
Expense and
(B) the aggregate amount of (x) Parent Equity Sale Proceeds plus (y) the aggregate amount of Net Cash
Proceeds received by the Company after the Succession Date from capital contributions (other
than from a Subsidiary) or from the issuance or sale (other than to any of its Subsidiaries) of
its Qualified Equity Interests (except, in each case, to the extent such proceeds are used to
purchase, redeem or otherwise retire Equity Interests or Subordinated Indebtedness as set forth
below).
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through (v) below, so long as there is no
Default or Event of Default continuing, the foregoing provisions shall not prohibit the following actions
(clauses (i) through (v)being referred to as "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of declaration thereof, if at such date of
declaration such payment would be permitted by the provisions of paragraph (a) of this Section and such
payment shall be deemed to have been paid on such date of declaration for purposes of the calculation
required by paragraph (a) of this Section;
(ii) any transaction with an officer or director of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any officer or director of the
Company);
(iii) the repurchase, redemption, or other acquisition or retirement of any Equity Interests of the Company in
exchange for (including any such exchange pursuant to the exercise of a conversion right or privilege
pursuant to which cash is paid in lieu of the issuance of fractional shares or scrip), or out of the Net
Cash Proceeds of, a substantially concurrent issuance and sale for cash (other than to a Subsidiary) of
other Qualified Equity Interests of the Company; provided that the Net Cash Proceeds from the issuance
of such Qualified Equity Interests are excluded from clause (2)(B) of paragraph (a) of this Section;
(iv) any repurchase, redemption, defeasance, retirement, refinancing or acquisition for value or payment of
principal of any Subordinated Indebtedness in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent issuance and sale for cash (other than to any Subsidiary of the Company) of any
Qualified Equity Interests of the Company, provided that the Net Cash Proceeds from the issuance of such
shares of Qualified Equity Interests are excluded from clause (2)(B) of paragraph (a) of this Section;
and
(v) the repurchase, redemption, defeasance, retirement, refinancing or acquisition for value or payment of
principal of any Subordinated Indebtedness (other than Disqualified Equity Interests) (a "refinancing")
through the issuance of new Subordinated Indebtedness of the Company, as the case may be, provided that
any such new Indebtedness (1)shall be in a principal amount that does not exceed the principal amount
so refinanced or, if such Subordinated Indebtedness provides for an amount less than the principal
amount thereof to be due and payable upon a declaration or acceleration thereof, then such lesser amount
as of the date of determination), plus the lesser of (I)the stated amount of any premium, interest or
other payment required to be paid in connection with such a refinancing pursuant to the terms of the
Indebtedness being refinanced or (II)the amount of premium, interest or other payment actually paid at
such time to refinance the Indebtedness, plus, in either case, the amount of expenses of the Company
incurred in connection with such refinancing; (2)has an Average Life to Stated Maturity greater than
the remaining Average Life to Stated Maturity of the Securities; (3)has a Stated Maturity for its final
scheduled principal payment later than the Stated Maturity for the final scheduled principal payment of
the Securities; and (4)is expressly subordinated in right of payment to the Securities at least to the
same extent as the Indebtedness to be refinanced.
Section 10.10_____Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, enter into or suffer to exist any transaction or series of related transactions (including, without
limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the
Company (other than the Company or a Wholly Owned Restricted Subsidiary of the Company) unless (a)such
transaction or series of transactions is in writing on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than would be available in a comparable transaction in arm's length
dealings with an unrelated third party and (b)(i) with respect to any transaction or series of transactions
involving aggregate payments in excess of $1,000,000, the Company delivers an Officers' Certificate to the
Trustee certifying that such transaction or series of related transactions complies with clause (a) above and
such transaction or series of related transactions has been approved by a majority of the members of the Board of
Directors of the Company (and approved by a majority of Independent Directors or, in the event there is only one
Independent Director, by such Independent Director) and (ii)with respect to any transaction or series of
transactions involving aggregate payments in excess of $5,000,000, an opinion as to the fairness to the Company
or such Restricted Subsidiary from a financial point of view issued by an investment banking firm of national
standing. Notwithstanding the foregoing, this provision will not apply to (A)any transaction with an officer or
director of the Company entered into in the ordinary course of business (including compensation or employee
benefit arrangements with any officer or director of the Company), (B)any transaction entered into by the
Company or one of its Wholly Owned Restricted Subsidiaries with a Wholly Owned Restricted Subsidiary of the
Company, (C)transactions in existence on the date of this Indenture and any renewal, replacement or extension
thereof on substantially similar terms and (D) any Permitted Payment.
Section 10.11_____Limitation on Senior Subordinated Indebtedness.
The Company and Parent shall not, and shall not permit any Restricted Subsidiary Guarantor or any Parent
Subsidiary Guarantor, as the case may be, to, directly or indirectly, create, incur, issue, assume, guarantee or
otherwise in any manner become directly or indirectly liable for or with respect to or otherwise permit to exist
any Indebtedness that is subordinated in right of payment, by contract or otherwise, to any Indebtedness of the
Company, Parent, or such Guarantor, as the case may be, unless such Indebtedness is also pari passu with the
Securities or the Guarantee of such Guarantor, or subordinate in right of payment to the Securities or such
Guarantee to at least the same extent as the Securities or such Guarantee are subordinate in right of payment to
Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, as set forth in this Indenture.
Section 10.12_____Limitation on Liens.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, affirm or suffer to exist any Lien of any kind upon any of its property or assets
(including any intercompany notes), now owned or acquired after the date of this Indenture, or any income or
profits therefrom, except if the Securities are directly secured equally and ratably with (or prior to in the
case of Liens with respect to Subordinated Indebtedness) the obligation or liability secured by such Lien,
excluding, however, from the operation of the foregoing any of the following:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (i)any judgment, decree or order of any court, so long as such Lien is
adequately bonded and any appropriate legal proceedings which may have been duly initiated for the review of such
judgment, decree or order shall not have been finally terminated or the period within which such proceedings may
be initiated shall not have expired; (ii)taxes, assessments or other governmental charges not yet delinquent or
which are being contested in good faith; (iii)security for payment of workers' compensation or other insurance;
(iv)good faith deposits in connection with tenders, leases and contracts (other than contracts for the payment
of money); (v)zoning restrictions, easements, licenses, reservations, provisions, covenants, conditions,
waivers, restrictions on the use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred, created, assumed or permitted to exist
and arising by, through or under a landlord or owner of the leased property, with or without consent of the
lessee), none of which materially impairs the use of any parcel of property material to the operation of the
business of the Company or any of its Subsidiaries or the value of such property for the purpose of such
business; (vi)deposits to secure public or statutory obligations, or in lieu of surety or appeal bonds;
(vii)certain surveys, exceptions, title defects, encumbrances, easements, reservations of, or rights of others
for, rights of way, sewers, electric lines, telegraph or telephone lines and other similar purposes or zoning or
other restrictions as to the use of real property not interfering with the ordinary conduct of the business of
the Company or any of its Subsidiaries; or (viii)operation of law in favor of mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of business for sums which are not yet delinquent or are
being contested in good faith by negotiations or by appropriate proceedings which suspend the collection thereof;
(c) any Lien now or hereafter existing on property of the Company or any of its Restricted Subsidiaries
securing Senior Indebtedness or Guarantor Senior Indebtedness, in each case which Indebtedness is permitted under
the provisions of Section 10.08 and provided that the provisions of Section 10.14 are complied with;
(d) any Lien securing Acquired Indebtedness created prior to (and not created in connection with or in
contemplation of) the incurrence of such Indebtedness by the Company or any of its Subsidiaries, in each case
which Indebtedness is permitted under the provisions of Section 10.08; provided that any such Lien only extends
to the assets that were subject to such Lien securing such Acquired Indebtedness prior to the related transaction
by the Company or its Subsidiaries;
(e) any Lien securing Permitted Subsidiary Indebtedness; and
(f) any extension, renewal, refinancing or replacement, in whole or in part, of any Lien described in the
foregoing clauses (a) through (e)so long as the amount of security is not increased thereby.
Section 10.13_____Limitation on Sale of Assets.
(a) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, consummate an Asset Sale unless (i)at least 80% of the consideration from such Asset Sale is
received in cash, provided that (x) the amount of liabilities (excluding any contingent liabilities) assumed by
the transferee or (y) any notes or other obligations received by the Company or such Restricted Subsidiary and
converted into cash within 90 days following the receipt thereof shall be deemed to be "cash," and (ii)the
Company or such Restricted Subsidiary receives consideration at the time of such Asset Sale at least equal to the
Fair Market Value of the shares or assets sold (other than in the case of an involuntary Asset Sale, as
determined by the Board of Directors of the Company and evidenced in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are not required to be applied to repay
permanently any Senior Indebtedness then outstanding as required by the terms thereof, or the Company determines
not to apply such Net Cash Proceeds to the permanent prepayment of such Senior Indebtedness or if no such Senior
Indebtedness is then outstanding, then the Company may, within 12 months of the Asset Sale, invest the Net Cash
Proceeds in properties and assets that (as determined by the Board of Directors) replace the properties and
assets that were the subject of the Asset Sale or in properties and assets that will be used in the businesses of
the Company or its Restricted Subsidiaries existing on the date of this Indenture or reasonably related thereto.
The amount of such Net Cash Proceeds neither used to permanently repay or prepay Senior Indebtedness nor used or
invested as set forth in this paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals $5,000,000 or more, the Company shall apply the
Excess Proceeds to the repayment of the Securities and any Pari Passu Indebtedness required to be repurchased
under the instrument governing such Pari Passu Indebtedness as follows: (1)the Company shall make an offer to
purchase (an "Offer") from all Holders of the Securities in accordance with the procedures set forth in this
Indenture in the maximum principal amount (expressed as a multiple of $1,000) of Securities that may be purchased
out of an amount (the "Security Amount") equal to the product of such Excess Proceeds (less any amounts used to
pay reasonable fees and expenses connected with such Offer and any Pari Passu Offer) multiplied by a fraction,
the numerator of which is the outstanding principal amount of the Securities, and the denominator of which is the
sum of the outstanding principal amount of the Securities and such Pari Passu Indebtedness (subject to proration
in the event such amount is less than the aggregate Offered Price of all Securities tendered) and (2)to the
extent required by such Pari Passu Indebtedness to permanently reduce the principal amount of such Pari Passu
Indebtedness, the Company shall make an offer to purchase or otherwise repurchase or redeem Pari Passu
Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt Amount") equal to the excess of the Excess
Proceeds (less any amounts used to pay reasonable fees and expenses connected with such Offer and any Pari Passu
Offer) over the Security Amount; provided that in no event shall the Pari Passu Debt Amount exceed the principal
amount of such Pari Passu Indebtedness plus the amount of any premium required to be paid to repurchase such Pari
Passu Indebtedness. The offer price shall be payable in cash in an amount equal to 100% of the principal amount
of the Securities plus accrued and unpaid interest, if any, to the date (the "Offer Date") such Offer is
consummated (the "Offered Price"), in accordance with the procedures set forth in this Indenture. To the extent
that the aggregate Offered Price of the Securities tendered pursuant to the Offer is less than the Security
Amount relating thereto or the aggregate amount of Pari Passu Indebtedness that is purchased is less than the
Pari Passu Debt Amount (the amount of such shortfall, if any, constituting a "Deficiency"), the Company shall use
such Deficiency in the business of the Company and its Restricted Subsidiaries. Upon completion of the purchase
of all the Securities tendered pursuant to an Offer and repurchase of the Pari Passu Indebtedness pursuant to a
Pari Passu Offer, the amount of Excess Proceeds, if any, shall be reset at zero.
(d) Pending the final application of any Net Cash Proceeds, the Company may temporarily reduce revolving
credit borrowings or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by this
Indenture.
(e) If the Company becomes obligated to make an Offer pursuant to clause (c) above, the Securities shall be
purchased by the Company, at the option of the Holder thereof, in whole or in part, in integral multiples of
$1,000, on a date that is not earlier than 45 days and not later than 60 days from the date the notice is given
to Holders, subject to proration in the event the Security Amount is less than the aggregate Offered Price of all
Securities tendered.
(f) The Company shall comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange
Act, and any other applicable securities laws or regulations in connection with an Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of the covenant described
hereunder, the Company shall comply with the applicable securities laws and regulations and shall not be deemed
to have breached its obligations under this Section 10.13 by virtue thereof.
(g) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create or permit to
exist or become effective any restriction (other than restrictions existing under (i)Indebtedness as in effect
on the date of this Indenture and listed on Schedule I hereto as such Indebtedness may be refinanced from time to
time, provided that such restrictions are no less favorable to the Holders of the Securities than those existing
on the date of this Indenture or (ii)any Senior Indebtedness and any Guarantor Senior Indebtedness) that would
materially impair the ability of the Company to make an Offer to purchase the Securities or, if such Offer is
made, to pay for the Securities tendered for purchase.
(h) Subject to paragraph (f) above, within 30 days after the date on which the amount of Excess Proceeds
equals or exceeds $5,000,000, the Company shall send or cause to be sent by first-class mail, postage prepaid, to
the Trustee and to each Holder of the Securities, at his address appearing in the Security Register, a notice
stating or including:
(1) that the Holder has the right to require the Company to repurchase, subject to proration,
such Holder's Securities at the Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have its Securities purchased in
accordance with paragraph (c) of this Section; and
(4) (i) the most recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company (or Parent, as the case may be pursuant to Section 10.20), the most
recent subsequently filed Quarterly Report on Form 10-Q and any Current Report on Form 8-K of the
Company (or Parent, as the case may be pursuant to Section 10.20) filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Sales otherwise described in the offering materials
(or corresponding successor reports) (or in the event neither the Company nor Parent is required to
prepare any of the foregoing forms, the comparable information required pursuant to Section 10.20),
(ii)a description of material developments in the Company's business subsequent to the date of the
latest of such Reports, (iii)if material, appropriate pro forma financial information, and (iv)such
other information. if any, concerning the business of the Company which the Company in good faith
believes will enable such Holders to make an informed investment decision.
(i) Holders electing to have Securities purchased hereunder will be required to surrender such Securities at
the address specified in the notice at least three Business Days prior to the Offer Date. Holders will be
entitled to withdraw their election to have their Securities purchased pursuant to this Section 10.13 if the
Company receives, not later than three Business Days prior to the Offer Date, a facsimile transmission or letter
setting forth (1)the name of the Holder, (2)the certificate number of the Security in respect of which such
notice of withdrawal is being submitted, (3)the principal amount of the Security (which shall be $1,000 or an
integral multiple thereof) delivered for purchase by the Holder as to which his election is to be withdrawn,
(4)a statement that such Holder is withdrawing his election to have such principal amount of such Security
purchased, and (5)the principal amount, if any, of such Security (which shall be $1,000 or an integral multiple
thereof) that remains subject to the original notice of the Offer and that has been or will be delivered for
purchase by the Company.
(j) The Company shall (i)not later than the Offer Date, accept for payment Securities or portions thereof
tendered pursuant to the Offer, (ii)not later than 10:00 a.m. (New York City time) on the Offer Date, deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 10.03) an amount of money in same day funds (or New York Clearing House funds if
such deposit is made prior to the Offer Date) sufficient to pay the aggregate Offered Price of all the Securities
or portions thereof that are to be purchased on that date and (iii)not later than the Offer Date, deliver to the
Paying Agent (if other than the Company) an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company.
Subject to applicable escheat laws, as provided in the Securities, the Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed, together with interest, if any, thereon, held by
them for the payment of the Offered Price; provided, however, that (x)to the extent that the aggregate amount of
cash deposited by the Company with the Trustee in respect of an Offer exceeds the aggregate Offered Price of the
Securities or portions thereof to be purchased, the Trustee shall hold such excess for the Company and (y)unless
otherwise directed by the Company in writing, promptly after the Business Day following the Offer Date the
Trustee shall return any such excess to the Company together with interest or dividends, if any, thereon.
(k) Securities to be purchased shall, on the Offer Date, become due and payable at the Offered Price and
from and after such date (unless the Company shall default in the payment of the Offered Price) such Securities
shall cease to bear interest. Such Offered Price shall be paid to such Holder promptly following the later of
the Offer Date and the time of delivery of such Security to the relevant Paying Agent at the office of such
Paying Agent by the Holder thereof in the manner required. Upon surrender of any such Security for purchase in
accordance with the foregoing provisions, such Security shall be paid by the Company at the Offered Price;
provided, however, that installments of interest whose Stated Maturity is on or prior to the Offer Date shall be
payable to the Holders of such Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of Section 3.09; provided, further, that
Securities to be purchased are subject to proration in the event the Excess Proceeds are less than the aggregate
Offered Price of all Securities tendered for purchase, with such adjustments as may be appropriate by the Trustee
so that only Securities in denominations of $1,000 or integral multiples thereof, shall be purchased. If any
Security tendered for purchase shall not be so paid upon surrender thereof by deposit of funds with the Trustee
or a Paying Agent in accordance with paragraph (j) above, the principal thereof shall, until paid, bear interest
from the Offer Date at the rate borne by such Security. Any Security that is to be purchased only in part shall
be surrendered to a Paying Agent at the office of such Paying Agent (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Security Registrar or the Trustee duly executed by, the Holder thereof or such Holder's attorney
duly authorized in writing), and the Company shall execute and the Trustee shall authenticate and deliver to the
Holder of such Security, without service charge, one or more new Securities of any authorized denomination as
requested by such Holder in an aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
Section 10.14_____Limitation on Issuances of Guarantees of and Pledges for Indebtedness.
(a) The Company shall not permit any of its Restricted Subsidiaries, other than the Restricted Subsidiary
Guarantors, directly or indirectly, to secure the payment of any Senior Indebtedness of the Company and the
Company will not, and will not permit any of its Restricted Subsidiaries to, pledge any intercompany notes
representing obligations of any of its Restricted Subsidiaries (other than the Restricted Subsidiary Guarantors)
to secure the payment of any Senior Indebtedness unless in each case such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture providing for a guarantee of payment of the
Securities by such Restricted Subsidiary, which guarantee shall be on the same terms as the guarantee of the
Senior Indebtedness (if a guarantee of Senior Indebtedness is granted by such Restricted Subsidiary) except that
the guarantee of the Securities need not be secured and shall be subordinated to the claims against such
Restricted Subsidiary in respect of Senior Indebtedness to the same extent as the Securities are subordinated to
Senior Indebtedness of the Company under this Indenture.
(b) The Company shall not permit any of its Restricted Subsidiaries, other than the Restricted Subsidiary
Guarantors, directly or indirectly, to guarantee, assume or in any other manner become liable with respect to any
Indebtedness of the Company (other than guarantees in existence on the date of this Indenture) unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental indenture to this Indenture providing
for a guarantee of the Securities on the same terms as the guarantee of such Indebtedness except that, if the
Securities are subordinated in right of payment to such Indebtedness, the guarantee under the supplemental
indenture shall be subordinated to the guarantee of such Indebtedness to the same extent as the Securities are
subordinated to such Indebtedness under this Indenture.
(c) Parent will not, and will not permit any of its Subsidiaries (other than the Company and the Company's
Restricted Subsidiaries, which shall be subject to the foregoing clauses (a) and (b)), other than the Parent
Subsidiary Guarantors, directly or indirectly, to guarantee, assume or in any other manner become liable with
respect to any Indebtedness of the Company (other than guarantees in existence on the date of this Indenture)
unless Parent or such Subsidiary, as the case may be, simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a guarantee of the Securities on the same terms as the guarantee of
such Indebtedness, except that if the Securities are subordinated in right of payment to such Indebtedness, the
guarantee under the supplemental indenture shall be subordinated to the guarantee of such Indebtedness to the
same extent as the Securities are subordinated to such Indebtedness under this Indenture.
(d) Any Guarantee by any Restricted Subsidiary Guarantor or by any Parent Subsidiary Guarantor shall be
automatically and unconditionally released and discharged upon (i)any sale, exchange or transfer, to any Person
not an Affiliate of Parent, of all of the Company's or Parent's, as the case may be, direct or indirect Equity
Interest in, or all or substantially all the assets of, such Restricted Subsidiary or such Parent Subsidiary
Guarantor, as the case may be, which is in compliance with this Indenture or (ii) the release by the holders of
the Indebtedness of the Company described in clauses (a), (b) and (c) above of their security interest or their
guarantee by such Restricted Subsidiary Guarantor or by such Parent Subsidiary Guarantor, as the case may be,
including any deemed release upon payment in full of all obligations under such Indebtedness, at a time when
(A)no other Indebtedness of the Company has been secured or guaranteed by such Restricted Subsidiary Guarantor or
such Parent Subsidiary Guarantor, as the case may be, or (B)the holders of all such other Indebtedness which is
secured or guaranteed by such Restricted Subsidiary Guarantor or such Parent Subsidiary Guarantor, as the case
may be, also release their security interest in, or guarantee by, such Restricted Subsidiary Guarantor or such
Parent Subsidiary Guarantor (including any deemed release upon payment in full of all obligations under such
Indebtedness).
Section 10.15_____Restriction on Transfer of Assets.
The Company and the Restricted Subsidiary Guarantors shall not sell, convey, transfer or otherwise
dispose of their respective assets or property to any of the Company's Restricted Subsidiaries (other than any
Restricted Subsidiary Guarantor), except for sales, conveyances, transfers or other dispositions made in the
ordinary course of business. For purposes of this provision, any sale, conveyance, transfer, lease or other
disposition of property or assets, having a Fair Market Value in excess of (a)$1,000,000 for any sale,
conveyance, transfer, lease or disposition or series of related sales, conveyances, transfers, leases and
dispositions and (b)$5,000,000 in the aggregate for all such sales, conveyances, transfers, leases or
dispositions in any fiscal year of the Company shall not be considered "in the ordinary course of business";
provided that sales by the Company of block program time and spot advertising shall not be deemed not to be "in
the ordinary course of business" solely because of the dollar value of such sales.
Section 10.16_____Purchase of Securities upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each Holder of Securities shall have the right to
require that the Company purchase such Holder's Securities in whole or in part in integral multiples of $1,000,
at a purchase price (the "Change of Control Purchase Price") in cash in an amount equal to 101% of the principal
amount of such Securities, plus accrued and unpaid interest, if any, to the date of purchase (the "Change of
Control Purchase Date"), pursuant to the offer described in Subsection (c)of this Section (the "Change of
Control Offer") and in accordance with the procedures set forth in Subsections (b), (c), (d)and (e)of this
Section.
(b) Within 30 days following any Change of Control, the Company shall notify the Trustee thereof and give
written notice (a "Change of Control Purchase Notice") of such Change of Control to each Holder by first-class
mail, postage prepaid, at his address appearing in the Security Register stating or including:
(1) that a Change of Control has occurred, the date of such event, and that such Holder has
the right to require the Company to repurchase such Holder's Securities at the Change of Control
Purchase Price;
(2) the circumstances and relevant facts regarding such Change of Control (including but not
limited to information with respect to pro forma historical income, cash flow and capitalization after
giving effect to such Change of Control);
(3) (i)the most recently filed Annual Report on Form 10-K (including audited consolidated
financial statements) of the Company (or Parent, as the case may be pursuant to Section 10.20), the most
recent subsequently filed Quarterly Report on Form 10-Q, as applicable, and any Current Report on Form
8-K of the Company (or Parent, as the case may be pursuant to Section 10.20) filed subsequent to such
Quarterly Report (or in the event neither the Company nor Parent is required to prepare any of the
foregoing Forms, the comparable information required pursuant to Section 10.20), (ii)a description of
material developments in the Company's business subsequent to the date of the latest of such reports and
(iii)such other information, if any, concerning the business of the Company that the Company in good
faith believes will enable such Holders to make an informed investment decision;
(4) that the Change of Control Offer is being made pursuant to this Section 10.16(a) and that
all Securities property tendered pursuant to the Change of Control Offer will be accepted for payment at
the Change of Control Purchase Price;
(5) the Change of Control Purchase Date which shall be a Business Day no earlier than 30 days
nor later than 60 days from the date such notice is mailed, or such later date as is necessary to comply
with requirements under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices or agencies referred to in
Section 10.02;
(8) that Securities must be surrendered on or prior to the Change of Control Purchase Date to
the Paying Agent at the office of the Paying Agent or to an office or agency referred to in Section
10.02 to collect payment;
(9) that the Change of Control Purchase Price for any Security which has been properly
tendered and not withdrawn will be paid promptly following the Change of Control Offer Purchase Date;
(10) the procedures for withdrawing a tender of Securities and Change of Control Purchase
Notice;
(11) that any Security not tendered will continue to accrue interest; and
(12) that, unless the Company defaults in the payment of the Change of Control Purchase Price,
any Security accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest
after the Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities, the Holder of the Security in respect of
which such proper tender was made shall (unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to such Security. Upon surrender of
any such Security for purchase in accordance with the foregoing provisions, such Security shall be paid by the
Company at the Change of Control Purchase Price; provided, however, that installments of interest whose Stated
Maturity is on or prior to the Change of Control Purchase Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 3.09. If any Security tendered for purchase shall not be so
paid upon surrender thereof, the principal thereof (and premium, if any, thereon) shall, until paid, bear
interest from the Change of Control Purchase Date at the rate borne by such Security. Holders electing to have
Securities purchased will be required to surrender such Securities to the Paying Agent at the address specified
in the Change of Control Purchase Notice at least two Business Days prior to the Change of Control Purchase
Date. Any Security that is to be purchased only in part shall be surrendered to a Paying Agent at the office of
such Paying Agent (with, if the Company, the Security Registrar or the Trustee so requires, due endorsement by,
or a written instrument of transfer in form satisfactory to the Company and the Security Registrar or the
Trustee, as the case may be, duly executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and deliver to the Holder of such
Security, without service charge, one or more new Securities of any authorized denomination as requested by such
Holder in an aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the
Security so surrendered that is not purchased.
(d) The Company shall (i)not later than the Change of Control Purchase Date, accept for payment Securities
or portions thereof tendered pursuant to the Change of Control Offer, (ii)not later than 10:00 a.m. (New York
City time) on the Change of Control Purchase Date, deposit with the Paying Agent an amount of cash sufficient to
pay the aggregate Change of Control Purchase Price of all the Securities or portions thereof which are to be
purchased as of the Change of Control Purchase Date and (iii)not later than the Change of Control Purchase Date,
deliver to the Paying Agent an Officers' Certificate stating the Securities or portions thereof accepted for
payment by the Company. The Paying Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Change of Control Purchase Price of the Securities purchased from each such
Holder, and the Company shall execute and the Trustee shall promptly authenticate and mail or make available for
delivery to such Holders a new Security equal in principal amount to any unpurchased portion of the Security
surrendered. Any Securities not so accepted shall be promptly returned by the Paying Agent at the Company's
expense to the Holder thereof. The Company will publicly announce the results of the Change of Control Offer on
the Change of Control Purchase Date. For purposes of this Section 10.16, the Company shall choose a Paying Agent
which shall not be the Company.
(e) A Change of Control Purchase Notice may be withdrawn before or after delivery by the Holder to the
Paying Agent at the office of the Paying Agent of the Security to which such Change of Control Purchase Notice
relates, by means of a written notice of withdrawal delivered by the Holder to the Paying Agent at the office of
the Paying Agent or to the office or agency referred to in Section 10.02 to which the related Change of Control
Purchase Notice was delivered not later than three Business Days prior to the Change of Control Purchase Date
specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which such notice of withdrawal is
being submitted;
(3) the principal amount of the Security (which shall be $1,000 or an integral multiple
thereof) delivered for purchase by the Holder as to which such notice of withdrawal is being submitted;
and
(4) the principal amount, if any, of such Security (which shall be $1,000 or an integral
multiple thereof) that remains subject to the original Change of Control Purchase Notice and that has
been or will be delivered for purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying Agent shall return to the Company any
cash that remains unclaimed, together with interest or dividends, if any, thereon, held by them for the payment
of the Change of Control Purchase Price; provided, however, that (x)to the extent that the aggregate amount of
cash deposited by the Company pursuant to clause (ii)of paragraph (d) above exceeds the aggregate Change of
Control Purchase Price of the Securities or portions thereof to be purchased, then the Trustee shall hold such
excess for the Company and (y)unless otherwise directed by the Company in writing, promptly after the Business
Day following the Change of Control Purchase Date the Trustee shall return any such excess to the Company
together with interest, if any, thereon.
(g) The Company shall comply with the applicable tender offer rules, including Rule 14e-1 under the Exchange
Act, and any other applicable securities laws or regulations in connection with a Change of Control Offer. To
the extent that the provisions of any securities laws or regulations conflict with the provisions of the covenant
described hereunder, the Company shall comply with the applicable securities laws and regulations and shall not
be deemed to have breached its obligations under this Section 10.16 by virtue thereof.
(h) The Company shall not, and shall not permit any of its Restricted Subsidiaries to, create or permit to
exist or become effective any restriction (other than restrictions existing under Indebtedness as in effect on
the date of this Indenture) that would materially impair the ability of the Company to make a Change of Control
Offer to purchase the Securities or, if such Change of Control Offer is made, to pay for the Securities tendered
for purchase.
Section 10.17_____Limitation on Subsidiary Equity Interests.
The Company shall not permit any of its Restricted Subsidiaries to issue any Equity Interests, except
for (a)Equity Interests issued to and held by the Company or a Wholly Owned Restricted Subsidiary of the
Company, and (b)Equity Interests issued by a Person prior to the time (A)such Person becomes a Restricted
Subsidiary of the Company, (B)such Person merges with or into a Restricted Subsidiary of the Company or (C)a
Restricted Subsidiary of the Company merges with or into such Person; provided, that such Equity Interests were
not issued or incurred by such Person in anticipation of the type of transaction contemplated by subclause (A),
(B)or (C).
Section 10.18_____Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on
the ability of any Restricted Subsidiary of the Company to (i)pay dividends or make any other distribution on
its Equity Interests, (ii)pay any Indebtedness owed to the Company or a Restricted Subsidiary of the Company,
(iii)make any Investment in the Company or a Restricted Subsidiary of the Company or (iv)transfer any of its
properties or assets to the Company or any Restricted Subsidiary of the Company, except (a)any encumbrance or
restriction pursuant to an agreement in effect on the date of this Indenture; (b)any encumbrance or restriction,
with respect to a Restricted Subsidiary of the Company that is not a Subsidiary of the Company on the date of
this Indenture, in existence at the time such Person becomes a Restricted Subsidiary of the Company and not
incurred in connection with, or in contemplation of, such Person becoming a Restricted Subsidiary; (c)any
encumbrance or restriction existing under any agreement that extends, renews, refinances or replaces the
agreements containing the encumbrances or restrictions in the foregoing clauses (a) and (b), or in this clause
(c), provided that the terms and conditions of any such encumbrances or restrictions are not materially less
favorable to the Holders of the Securities than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced or are not more restrictive than those set forth in
this Indenture; (d)any encumbrance or restriction created pursuant to an asset sale agreement, stock sale
agreement or similar instrument pursuant to which an Asset Sale permitted under Section 10.13 is to be
consummated, so long as such restriction or encumbrance shall be effective only for a period from the execution
and delivery of such agreement or instrument through a termination date not later than 270 days after such
execution and delivery; (e) any such encumbrance or restriction consisting of customary contractual
non-assignment provisions in a contract entered into in the ordinary course of business, to the extent such
provisions restrict the transfer of rights, duties or obligations under such contract; (f) in the case of clause
(iv) above, restrictions contained in security agreements or mortgages securing Indebtedness of a Restricted
Subsidiary permitted to be incurred pursuant to Section 10.08 to the extent such restrictions restrict the
transfer of the property subject to such security agreements or mortgages; and (g) any restriction imposed by
applicable law.
Section 10.19_____Limitation on Unrestricted Subsidiaries.
The Company shall not make, and shall not permit any of its Restricted Subsidiaries to make, any
Investments in Unrestricted Subsidiaries if, at the time thereof, the aggregate amount of such Investments would
exceed the amount of Restricted Payments then permitted to be made pursuant to Section 10.09. Any Investments in
Unrestricted Subsidiaries permitted to be made pursuant to this covenant (i)will be treated as the payment of a
Restricted Payment in calculating the amount of Restricted Payments made by the Company and (ii)may be made in
cash or property.
Section 10.20_____Provision of Financial Statements.
Whether or not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, file with the
Commission the annual reports, quarterly reports, information and other documents which the Company would have
been required to file with the Commission pursuant to such Sections 13(a) or 15(d) if the Company were so
subject, such documents to be filed with the Commission on or prior to the respective dates (the "Required Filing
Dates") by which the Company would have been required so to file such documents if the Company were so subject.
The Company will be deemed to have satisfied such requirements if Parent files and provides reports, information
and documents of the types otherwise so required within the applicable time periods and the Company is not
required to file such reports, documents and information separately under the applicable rules and regulations of
the Commission (after giving effect to any exemptive relief) because of the filings made by Parent as long as
Parent's quarterly and annual reports contain (x)separate audited annual and unaudited quarterly, as the case
may be, consolidated financial statements for the Company and its Subsidiaries or (y)consolidating financial
information which includes separate audited annual and unaudited quarterly, as the case may be, condensed
consolidated financial information for the Company and its Subsidiaries. The Company will also in any event
(x)within 15 days of each Required Filing Date (i)transmit by mail to all Holders, as their names and addresses
appear in the Security Register, without cost to such Holders, and (ii)file with the Trustee copies of the
annual reports, quarterly reports, information and other documents which the Company would have been required to
file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if the Company were subject to
such Sections (unless such documents are filed by Parent as provided above and such documents are then so mailed
to the Holders and filed with the Trustee), (y)if filing such documents by the Company (or Parent, as the case
may be) with the Commission is not permitted under the Exchange Act, promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents to any prospective Holder at the
Company's cost, and (z)otherwise comply with Section 3.14(a) of the Trust Indenture Act. In addition, if the
Company has any Unrestricted Subsidiary at such time, it shall also file with the Trustee, and provide to the
Holders, on the same quarterly basis, all quarterly and annual financial statements (which statements may be
unaudited) as would be required by Forms 10-Q and 10-K if such Subsidiary were not an Unrestricted Subsidiaries.
Section 10.21_____Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, on or before a date not more than 60 days after the end of each
fiscal quarter and not more than 120 days after the end of each fiscal year of the Company ending after the date
hereof, a written statement signed by two executive officers of the Company, one of whom shall be the principal
executive officer, principal financial officer or principal accounting officer or the Company, stating whether or
not, after a review of the activities of the Company during such year or such quarter and of the Company's
performance under this Indenture, to the best knowledge, based on such review, of the signers thereof, the
Company has fulfilled all its obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has been a Default specifying each
Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing, or if the Trustee or any Holder or
the trustee for or the holder of any other evidence of Indebtedness of the Company or any Subsidiary gives any
notice or takes any other action with respect to a claimed default (other than with respect to Indebtedness in
the principal amount of less than $5,000,000), the Company shall deliver to the Trustee by registered or
certified mail or by telegram, overnight courier or facsimile transmission followed by hard copy an Officers'
Certificate specifying such Default, Event of Default, notice or other action within five Business Days of its
occurrence.
Section 10.22_____Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant or condition set forth in
Sections 10.06 through 10.12, 10.14, 10.15 and 10.17 through 10.20, if, before or after the time for such
compliance, the Holders of not less than a majority in aggregate principal amount of the Securities at the time
Outstanding shall, by Act of such Holders, waive such compliance in such instance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full force and effect.
Section 10.23_____Limitation on Asset Swaps.
The Company will not, and will not permit any of its Restricted Subsidiaries to, engage in Asset Swaps,
unless: (i)at the time of entering into such Asset Swap, and immediately after giving effect to such Asset Swap,
no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and
(ii)the Company or such Restricted Subsidiary receives consideration at the time of such Asset Swap at least
equal to the Fair Market Value of the properties or assets exchanged as determined in writing by a nationally
recognized investment banking or appraisal firm.
ARTICLE XI________
REDEMPTION OF SECURITIES
Section 11.01_____Rights of Redemption.
(a) The Securities may be redeemed at the election of the Company, in whole or in part, at any time on or
after July 1, 2006, subject to the conditions, and at the Redemption Price, specified in the form of Security,
together with accrued and unpaid interest, if any, to the Redemption Date.
(b) At any time on or prior to July 1, 2004, the Company may redeem up to 35% of the aggregate principal
amount of Securities with the net proceeds of a Public Equity Offering of the Company subject to the conditions,
and at the Redemption Price, specified in the form of Security, together with accrued and unpaid interest, if
any, to the Redemption Date.
Section 11.02_____Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as permitted or required by any
provision of this Indenture, shall be made in accordance with such provision and this Article.
Section 11.03_____Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section 11.01 shall be evidenced by a
Company Order and an Officers' Certificate. In case of any redemption at the election of the Company, the Company
shall, not less than 30 nor more than 60 days prior to the Redemption Date fixed by the Company (unless a shorter
notice period shall be satisfactory to the Trustee), notify the Trustee in writing of such Redemption Date and of
the principal amount of Securities to be redeemed.
Section 11.04_____Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular Securities or portions thereof to be
redeemed shall be selected not more than 60 days and not less than 30 days prior to the Redemption Date by the
Trustee from the Outstanding Securities not previously called for redemption, pro rata, by lot or such other
method as the Trustee shall deem fair and reasonable, and the amounts to be redeemed may be equal to $1,000 or
any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security Registrar in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires, all provisions relating to
redemption of Securities shall relate, in the case of any Security redeemed or to be redeemed only in part, to
the portion of the principal amount of such Security which has been or is to be redeemed.
Section 11.05_____Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor
more than 60 days prior to the Redemption Date, to each Holder of Securities to be redeemed, at his address
appearing in the Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the identification of the particular
Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal amount of such Security to be redeemed
and that after the Redemption Date upon surrender of such Security, a new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the Paying Agent to collect the Redemption
Price;
(f) that on the Redemption Date the Redemption Price will become due and payable upon each such Security or
portion thereof, and that (unless the Company shall default in payment of the Redemption Price) interest thereon
shall cease to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of the Company shall be given by the
Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company.
The notice, if mailed in the manner herein provided, shall be conclusively presumed to have been given
whether or not the Holder receives such notice. In any case, failure to give such notice to any Holder of any
Security designated for redemption as a whole or in part, or any defect in any such notice, shall not affect the
validity of the proceedings for the redemption of any other Security.
Section 11.06_____Deposit of Redemption Price.
On or prior to 10:00 a.m. (New York time) on any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying Agent, segregate and hold in trust
as provided in Section 10.03) an amount of money in same day funds sufficient to pay the Redemption Price of and
(except if the Redemption Date shall be an Interest Payment Date) accrued interest on, all the Securities or
portions thereof which are to be redeemed on that date. When the Redemption Date falls on an Interest Payment
Date, payments of interest due on such date are to be paid as provided hereunder as if no such redemption were
occurring.
Section 11.07_____Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to be redeemed shall, on the
Redemption Date, become due and payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price and accrued interest) such Securities
shall cease to bear interest. Upon surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price together with accrued interest to the
Redemption Date; provided, however, that installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or more Predecessor Securities,
registered as such on the relevant Regular Record Dates according to the terms and the provisions of Section 3.09.
If any Security called for redemption shall not be so paid upon surrender thereof for redemption, the
principal and premium, if any, shall, until paid, bear interest from the Redemption Date at the rate borne by
such Security.
Section 11.08_____Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part shall be surrendered to the Paying Agent
at the office or agency maintained for such purpose pursuant to Section 10.02 (with, if the Company, the Security
Registrar or the Trustee so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company, the Security Registrar or the Trustee duly executed by, the Holder thereof or such
Holder's attorney duly authorized in writing), and the Company shall execute, and the Trustee shall authenticate
and make available delivery to the Holder of such Security without service charge, a new Security or Securities,
of any authorized denomination as requested by such Holder in aggregate principal amount equal to, and in
exchange for, the unredeemed portion of the principal of the Security so surrendered that is not redeemed or
purchased.
ARTICLE XII_______
SUBORDINATION OF SECURITIES
Section 12.01_____Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the
Indebtedness represented by the Securities and the payment of the principal of, premium, if any, and interest on
each and all of the Securities and all other Indenture Obligations are hereby expressly made subordinate and
subject in right of payment as provided in this Article to the prior payment in full, in cash or Cash Equivalents
or in any other form as acceptable to the holders of Senior Indebtedness, of all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold Senior Indebtedness; and such provisions are made for the
benefit of the holders of Senior Indebtedness; and such holders are made obligees hereunder and they or each of
them may enforce such provisions.
The Securities shall not be senior in right of payment to the Existing Notes and shall be pari passu in
right of payment with the Existing Notes.
Section 12.02_____Payment Over of Proceeds Upon Dissolution, etc.
In the event of (a)any insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith, relative to the Company or to its
creditors, as such, or to its assets, or (b)any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c)any assignment for
the benefit of creditors or any other marshaling of assets or liabilities of the Company, then and in any such
event:
(1) the holders of Senior Indebtedness shall be entitled to receive payment in full in cash or Cash
Equivalents or in any other form as acceptable to the holders of Senior Indebtedness, of all amounts due on or in
respect of all Senior Indebtedness, before the Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding Permitted Junior Securities) on account of the principal of,
premium, if any, or interest on the Securities or any other Indenture Obligations; and
(2) any payment or distribution of assets of the Company of any kind or character, whether in cash,
property or securities (excluding Permitted Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be paid by the liquidating trustee or
agent or other Person making such payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or otherwise, directly to the holders of Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under which any instruments evidencing any of
such Senior Indebtedness may have been issued, ratably according to the aggregate amounts remaining unpaid on
account of the Senior Indebtedness held or represented by each, to the extent necessary to make payment in full
in cash or Cash Equivalents or in any other form as acceptable to the Holders of Senior Indebtedness, of all
Senior Indebtedness remaining unpaid, after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee or the
Holder of any Security shall have received any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities, in respect of principal, premium, if any, and interest on the
Securities or any other Indenture Obligations before all Senior Indebtedness is paid in full, then and in such
event such payment or distribution (excluding Permitted Junior Securities) shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other person
making payment or distribution of assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full in cash or Cash Equivalents or
in any other form as acceptable to the holders of Senior Indebtedness, after giving effect to any concurrent
payment or distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with or into, another Person or the
liquidation or dissolution of the Company following the sale, assignment, conveyance, transfer, lease or other
disposal of all or substantially all of the Company's properties or assets to another Person upon the terms and
conditions set forth in Article Eight shall not be deemed a dissolution, winding up, liquidation, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities of the Company for the purposes
of this Section if the Person formed by such consolidation or the surviving entity of such merger or the Person
which acquires by sale, assignment, conveyance, transfer, lease or other disposal of all or substantially all of
the Company's properties or assets, as the case may be, shall, as a part of such consolidation, merger, sale,
assignment, conveyance, transfer, lease or other disposal, comply with the conditions set forth in Article Eight.
Section 12.03_____Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 12.02 shall be applicable, upon the occurrence of a Payment Default, no payment (other
than any payments previously made pursuant to the provisions described in Article Four) or distribution of any
assets of the Company, of any, kind or character (excluding Permitted Junior Securities) shall be made by the
Company on account of principal of, premium, if any, or interest on, the Securities or any other Indenture
Obligations or on account of the purchase, redemption, defeasance (whether under Section 4.02 or 4.03) or other
acquisition of or in respect of the Securities unless and until such Payment Default shall have been cured or
waived or shall have ceased to exist or the Designated Senior Indebtedness with respect to which such Payment
Default shall have occurred shall have been discharged or paid in full in cash or Cash Equivalents or in any
other form as acceptable to the Holders of such Designated Senior Indebtedness, after which the Company shall
resume making any and all required payments in respect of the Securities, including any missed payments.
(b) Unless Section 12.02 shall be applicable, upon (1)the occurrence of a Nonpayment Default and
(2)receipt by the Trustee from the representative of the holders of Designated Senior Indebtedness (a "Senior
Representative") of written notice of such occurrence, no payment (other than any payments previously made
pursuant to the provisions described in Article Four) or distribution of any assets of the Company of any kind or
character (excluding Permitted Junior Securities) shall be made by the Company on account of any principal of,
premium, if any, or interest on, the Securities or any other Indenture Obligations or on account of the purchase,
redemption, defeasance or other acquisition of or in respect of Securities for a period ("Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice unless and until the earliest of (subject
to any blockage of payments that may then or thereafter be in effect under subsection (a)of this Section 12.03)
(x)179 days having elapsed since receipt of such written notice by the Trustee (provided such Designated Senior
Indebtedness as to which notice was given shall theretofore have not been accelerated), (y)the date such
Nonpayment Default (and all Non-payment Defaults as to which notice is also given after such period is initiated)
shall have been cured or waived or shall have ceased to exist or the Designated Senior Indebtedness related
thereto shall have been discharged or paid in full in cash or Cash Equivalents or in any other form as acceptable
to the Holders of Designated Senior Indebtedness, or (z)the date on which such Payment Blockage Period (and all
Nonpayment Defaults as to which notice is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Trustee from the Senior Representative, after which, in each such case, the
Company shall resume making any and all required payments in respect of the Securities, including any missed
payments. Notwithstanding any other provision of this Indenture, in no event shall a Payment Blockage Period
extend beyond 179 days from the date of the receipt by the Company or the Trustee of the notice referred to in
clause (2) of this paragraph (b) (the "Initial Blockage Period"). Any number of notices of Non-payment Defaults
may be given during the Initial Blockage Period; provided that during any 365 day consecutive period only one
Payment Blockage Period during which payment of principal of, or interest on, the Securities may not be made may
commence and the duration of the Payment Blockage Period may not exceed 179 days. No Non-payment Default with
respect to Designated Senior Indebtedness which existed or was continuing on the date of the commencement of any
Payment Blockage Period will be, or can be, made the basis for the commencement of a second Payment Blockage
Period, whether or not within a period of 365 consecutive days, unless such default shall have been cured or
waived for a period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall make any payment to the Trustee or
the Holder of any Security prohibited by the foregoing provisions of this Section, then and in such event such
payment shall be paid over and delivered forthwith to a Senior Representative of the holders of the Designated
Senior Indebtedness or as a court of competent jurisdiction shall direct.
Section 12.04_____Payment Permitted if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any other Securities shall prevent
the Company, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshaling of assets and liabilities of the Company
referred to in Section 12.02 or under the conditions described in Section 12.03, from making payments at any time
of principal of, premium, if any, or interest on the Securities.
Section 12.05_____Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or Cash Equivalents or in any other
form as acceptable to the holders of Senior Indebtedness, the Holders of the Securities shall be subrogated to
the rights of the holders of such Senior Indebtedness to receive payments and distributions of cash, property and
securities applicable to the Senior Indebtedness until the principal of, premium, if any, and interest on the
Securities shall be paid in full. For purposes of such subrogation, no payments or distributions to the holders
of Senior Indebtedness of any cash, property or securities to which the Holders or the Trustee would be entitled
except for the provisions of this Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment
or distribution by the Company to or on account of the Senior Indebtedness.
Section 12.06_____Provisions Solely to Define Relative Rights.
The provisions of this Article are intended solely for the purpose of defining the relative rights of
the Holders of the Securities on the one hand and the holders of Senior Indebtedness on the other hand. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is intended to or shall (a)impair,
as among the Company, its creditors other than holders of Senior Indebtedness and the Holders of the Securities,
the obligation of the Company, which is absolute and unconditional, to pay to the Holders of the Securities the
principal of, premium, if any, and interest on the Securities as and when the same shall become due and payable
in accordance with their terms; or (b)affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior Indebtedness; or (c)prevent the Trustee
or the Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default
under this Indenture, subject to the rights, if any, under this Article of the holders of Senior Indebtedness
(1)in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors
or other marshaling of assets and liabilities of the Company referred to in Section 12.02, to receive, pursuant
to and in accordance with such Section, cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder, or (2)under the conditions specified in Section 12.03, to prevent any payment prohibited
by such Section or enforce their rights pursuant to Section 12.03(c).
Section 12.07_____Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding up, liquidation or reorganization of the Company whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the unpaid balance of the Indebtedness
of the Company owing to such Holder in the form required in such proceedings and the causing of such claim to be
approved.
Section 12.08_____No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the part of the
Company or by any act or failure to act by any such holder, or by any non compliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any such holder may have
or be otherwise charged with.
(b) Without limiting the generality of Subsection (a)of this Section and notwithstanding any other
provision contained herein, the holders of Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities, without incurring responsibility to the
Holders of the Securities and without impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of Senior Indebtedness, do any one or more
of the following: (1)change the manner, place or terms of payment or extend the time of payment of, or renew or
alter, Senior Indebtedness or any instrument evidencing the same or any agreement under which Senior Indebtedness
is outstanding; (2)sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise
securing Senior Indebtedness; (3)release any Person liable in any manner for the collection or payment of Senior
Indebtedness; and (4)exercise or refrain from exercising any rights against the Company and any other Person,
provided, however, that in no event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities in accordance with the provisions set forth in
Article Five or to pursue any rights or remedies under this Indenture or under applicable laws if the taking of
such action does not otherwise violate the terms of this Article.
Section 12.09_____Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any fact known to the Company which would
prohibit the making of any payment to or by the Trustee in respect of the Securities or other Indenture
Obligations. Notwithstanding the provisions of this Article or any provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts which would prohibit the making of any payment to or
by the Trustee in respect of the Securities, unless and until the Trustee shall have received written notice
thereof from the Company or a holder of Senior Indebtedness or from a Senior Representative or any trustee,
fiduciary or agent therefor; and, prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if the Trustee shall not have
received the notice provided for in this Section prior to the date upon which by the terms hereof any money may
become payable for any purpose (including, without limitation, the payment of the principal of, premium, if any,
or interest on any Security or other Indenture Obligations), then, anything herein contained to the contrary
notwithstanding but without limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and authority to receive such money and to
apply the same to the purpose for which such money was received and shall not be affected by any notice to the
contrary which may be received by it after such date; nor shall the Trustee be charged with knowledge of the
curing of any such default or the elimination of the act or condition preventing any such payment unless and
until the Trustee shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a written notice to the Trustee and the
Company by a Person representing himself to be a Senior Representative or a holder of Senior Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been given by a Senior Representative or
a holder of Senior Indebtedness (or a trustee, fiduciary or agent therefor); provided, however, that failure to
give such notice to the Company shall not affect in any way the ability of the Trustee to rely on such notice.
In the event that the Trustee determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Senior Indebtedness held by such Person, the extent to which such Person is entitled
to participate in such payment or distribution and any other facts pertinent to the rights of such Person under
this Article, and if such evidence is not furnished, the Trustee may defer any payment to such Person pending
judicial determination as to the right of such Person to receive such payment.
Section 12.10_____Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of the Company referred to in this Article, the Trustee and
the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or distribution, the holders of Senior
Indebtedness and other Indebtedness of the Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other facts pertinent thereto or to this Article, provided that the foregoing
shall apply only if such court has been fully apprised of the provisions of this Article.
Section 12.11_____Rights of Trustee as a Holder of Senior Indebtedness Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article
with respect to any Senior Indebtedness which may at any time be held by it, to the same extent as any other
holder of Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of its rights as
such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06.
Section 12.12_____Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting under this Indenture. The term "Trustee" as used in this Article shall in such case (unless the
context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place
of the Trustee; provided, however, that Section 12.11 shall not apply to the Company or any Affiliate of the
Company if it or such Affiliate acts as Paying Agent.
Section 12.13_____No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee or the Holders of Securities to
take any action to accelerate the maturity of the Securities pursuant to Article Five and as set forth in this
Indenture or to pursue any rights or remedies hereunder or under applicable law, subject to the rights, if any,
under this Article of the holders, from time to time, of Senior Indebtedness to receive the cash, property, or
securities receivable upon the exercise of such rights or remedies.
Section 12.14_____Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness. the Trustee undertakes to perform or to observe only
such of its covenants and obligations as are specifically, set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read into this Article against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of Senior Indebtedness and the
Trustee shall not be liable to any holder of Senior Indebtedness if it shall mistakenly in the absence of gross
negligence or willful misconduct pay over or deliver to Holders, the Company or any other Person moneys or assets
to which any holder of Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE XIII______
SATISFACTION AND DISCHARGE
Section 13.01_____Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to surviving rights of registration of
transfer or exchange of Securities herein, rights to payment, including Additional Interest, and rights to
replacement of stolen, lost or mutilated Securities expressly provided for) and the Trustee, on demand of and at
the expense of the Company, shall execute proper instruments acknowledging satisfaction and discharge of this
Indenture, when
(a) either:
(1) all the Securities theretofore authenticated and delivered (other than (i)Securities which have
been destroyed, lost or stolen and which have been replaced or paid as provided in Section 3.08 or (ii)all
Securities for whose payment United States dollars have theretofore been deposited in trust or segregated and
held in trust by the Company and thereafter repaid to the Company or discharged from such trust, as provided in
Section 10.03) have been delivered to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee for cancellation (x)have become due
and payable, (y)will become due and payable at their Stated Maturity within one year, or (z)are to be called
for redemption within one year under arrangements satisfactory to the Trustee for the giving of notice of
redemption by the Trustee in the name, and at the expense, of the Company, and the Company or any Guarantor, in
the case of (2)(x), (y)or (z) above, has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for that purpose an amount in United States dollars sufficient to pay and discharge the
entire Indebtedness on the Securities not theretofore delivered to the Trustee for cancellation, for the
principal of, premium, if any, and accrued interest at such Stated Maturity or Redemption Date;
(b) the Company or any Guarantor has paid or caused to be paid all other sums payable hereunder by the
Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel stating that
(i)all conditions precedent herein provided for relating to the satisfaction and discharge of this Indenture
have been complied with and (ii)such satisfaction and discharge will not result in a breach or violation of or
constitute a default under, this Indenture or any other material agreement or instrument to which the Company or
any Guarantor is a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may have qualifications customary for
opinions of the type required and counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type required, including certificates
certifying as to matters of fact, including that various financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Company to the
Trustee under Section 6.06 and, if United States dollars shall have been deposited with the Trustee pursuant to
subclause (2) of Subsection (a) of this Section. the obligations of the Trustee under Section 13.02 and the last
paragraph of Section 10.03 shall survive such satisfaction and discharge.
Section 13.02_____Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all United States dollars deposited
with the Trustee pursuant to Section 13.01 shall be held in trust and applied by it, in accordance with the
provisions of the Securities and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may determine, to the Persons entitled
thereto, of the principal of, premium, if any, and interest on the Securities for whose payment such United
States dollars have been deposited with the Trustee.
ARTICLE XIV_______
GUARANTEE
Section 14.01_____Guarantors' Guarantee.
For value received, each of the Guarantors, in accordance with this Article Fourteen, hereby absolutely,
unconditionally and irrevocably guarantees, jointly and severally, to the Trustee and the Holders, as if the
Guarantors were the principal debtor, the punctual payment and performance when due of all Indenture Obligations
(which for purposes of this Guarantee shall also be deemed to include all commissions, fees, charges, costs and
other expenses (including reasonable legal fees and disbursements of one counsel in connection with any one
action or separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances) arising out of or incurred by the Trustee or the Holders in connection with the
enforcement of this Guarantee).
Section 14.02_____Continuing Guarantee; No Right of Set-Off; Independent Obligation.
(a) This Guarantee shall be a continuing guarantee of the payment and performance of all Indenture
Obligations and shall remain in full force and effect until the payment in full of all of the Indenture
Obligations and shall apply to and secure any ultimate balance due or remaining unpaid to the Trustee or the
Holders; and this Guarantee shall not be considered as wholly or partially satisfied by the payment or
liquidation at any time or from time to time of any sum of money for the time being due or remaining unpaid to
the Trustee or the Holders. Each Guarantor, jointly and severally, covenants and agrees to comply with all
obligations, covenants, agreements and provisions applicable to it in this Indenture including those set forth in
Article Eight. Without limiting the generality of the foregoing, each of the Guarantors' liability shall extend
to all amounts which constitute part of the Indenture Obligations and would be owed by the Company under this
Indenture and the Securities but for the fact that they are unenforceable, reduced, limited, impaired, suspended
or not allowable due to the existence of a bankruptcy, reorganization or similar proceeding involving the Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the Indenture Obligations will be paid to
the Trustee without set-off or counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the Indenture Obligations shall be paid strictly
in accordance with their terms regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the holders of the Securities.
(d) Each Guarantor's liability to pay or perform or cause the performance of the Indenture Obligations under
this Guarantee shall arise forthwith after demand for payment or performance by the Trustee has been given to the
Guarantors in the manner prescribed in Section 1.06 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen cover all agreements between the
parties hereto relative to this Guarantee and none of the parties shall be bound by any representation, warranty
or promise made by any Person relative thereto which is not embodied herein; and it is specifically acknowledged
and agreed that this Guarantee has been delivered by each Guarantor free of any conditions whatsoever and that no
representations, warranties or promises have been made to any Guarantor affecting its liabilities hereunder, and
that the Trustee shall not be bound by any representations, warranties or promises now or at any time hereafter
made by the Company to any Guarantor.
Section 14.03_____Guarantee Absolute.
The obligations of the Guarantors hereunder are independent of the obligations of the Company under the
Securities and this Indenture and a separate action or actions may be brought and prosecuted against any
Guarantor whether or not an action or proceeding is brought against the Company and whether or not the Company is
joined in any such action or proceeding. The liability of the Guarantors hereunder is irrevocable, absolute and
unconditional and (to the extent permitted by law) the liability and obligations of the Guarantors hereunder
shall not be released, discharged, mitigated, waived, impaired or affected in whole or in part by, and each
Guarantor hereby expressly waives to the fullest extent permitted by law any defense by reason of:
(a) any defect or lack of validity or enforceability in respect of any Indebtedness or other obligation of
the Company or any other Person under this Indenture or the Securities, or any agreement or instrument relating
to any of the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases, discharges or modifications which the
Trustee or the Holders may extend to, or make with, the Company, any Guarantor or any other Person, or any change
in the time, manner or place of payment of, or in any other term of, all or any of the Indenture Obligations, or
any other amendment or waiver of, or any consent to or departure from, this Indenture or the Securities,
including any increase or decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any other Person, and the release, discharge
or alteration of, or other dealing with, such security;
(d) the occurrence of any change in the laws, rules, regulations or ordinances of any jurisdiction by any
present or future action of any governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the Indenture Obligations and the
obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any, Guarantor or any other Person or from
perfecting, continuing to keep perfected or taking advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any security received from the Company, any
Guarantor or any other Person, and including any other guarantees received by the Trustee:
(g) any other dealings with the Company, any Guarantor or any other Person, or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at any time and from time to time received
from the Company, any Guarantor or any other Person on account of any indebtedness and liabilities owing by the
Company or any Guarantor to the Trustee or the Holders, in such manner as the Trustee or the Holders deems best
and the changing of such application in whole or in part and at any time or from time to time, or any manner of
application of collateral, if any, or proceeds thereof, to all or any of the Indenture Obligations, or the manner
of sale of any such collateral;
(j) the release or discharge of the Company or any Guarantor of the Securities or of any Person liable
directly as surety or otherwise by operation of law or otherwise for the Securities, other than an express
release in writing given by the Trustee, on behalf of the Holders, of the liability and obligations of any
Guarantor hereunder;
(k) any change in the name, business, capital structure or governing instrument of the Company or any
Guarantor or any refinancing or restructuring of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part thereof;
(m) subject to Section 14.14, any merger or consolidation, arrangement or reorganization of the Company, any
Guarantor, any Person resulting from the merger or consolidation of the Company or any Guarantor with any other
Person or any other successor to such Person or merged or consolidated Person or any other change in the
corporate existence, structure or ownership of the Company or any Guarantor;
(n) the insolvency, bankruptcy, liquidation, windingup, dissolution, receivership or distribution of the
assets of the Company or its assets or any resulting discharge of any obligations of the Company (whether
voluntary or involuntary) or of any Guarantor or the loss of corporate existence;
(o) subject to Section 14.14, any arrangement or plan of reorganization affecting the Company or any
Guarantor;
(p) any other circumstance (including any statute of limitations) that might otherwise constitute a defense
available to, or discharge of, the Company or any Guarantor;
(q) any modification, compromise, settlement or release by the Trustee, or by operation of law or otherwise,
of the Indenture Obligations or the liability of the Company or any other obligor under the Securities, in whole
or in part, and any refusal of payment by the Trustee, in whole or in part, from any other obligor or other
guarantor in connection with any of the Indenture Obligations, whether or not with notice to, or further assent
by, or any reservation of rights against, each of the Guarantors;
(r) the illegality, invalidity or unenforceability of all or any part of the Indenture Obligations, the
Indenture or the Securities; or
(s) any law that provides that the obligation of a surety or guarantor must neither be larger in amount nor
more burdensome than that of the principal or which reduces a surety's or guarantor's obligation in proportion to
the principal obligation.
Section 14.04_____Right to Demand Full Performance.
In the event of any demand for payment or performance by the Trustee from any Guarantor hereunder, the
Trustee or the Holders shall have the right to demand its full claim and to receive all payments in respect
thereof until the Indenture Obligations have been paid in full, and the Guarantors shall continue to be jointly
and severally liable hereunder for any balance which may be owing to the Trustee or the Holders by the Company
under this Indenture and the Securities. The retention by the Trustee or the Holders of any security, prior to
the realization by the Trustee or the Holders of its rights to such security upon foreclosure thereon, shall not,
as between the Trustee and any Guarantor, be considered as a purchase of such security, or as payment,
satisfaction or reduction of the Indenture Obligations due to the Trustee or the Holders by the Company or any
part thereof.
Section 14.05_____Waivers.
(a) Each Guarantor hereby expressly waives (to the extent permitted by law) notice of the acceptance of this
Guarantee and notice of the existence, renewal, extension or the non-performance, non-payment, or non-observance
on the part of the Company of any of the terms, covenants, conditions and provisions of this Indenture or the
Securities or any other notice whatsoever to or upon the Company or such Guarantor with respect to the Indenture
Obligations. Each Guarantor hereby acknowledges communication to it of the terms of this Indenture and the
Securities and all of the provisions therein contained and consents to and approves the same. Each Guarantor
hereby expressly waives (to the extent permitted by law) diligence, presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the Trustee or the Holders may have against
the Company, each Guarantor hereby expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse against the Company, any Guarantor or any other
Person;
(ii) value, realize upon, or dispose of any security of the Company or any other Person held by the Trustee
or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or the Holders may have in law or equity;
before requiring or becoming entitled to demand payment from such Guarantor under this Guarantee.
Section 14.06_____The Guarantors Remain Obligated in Event the Company Is No Longer Obligated to Discharge
Indenture Obligations.
It is the express intention of the Trustee and the Guarantors that if for any reason the Company has no
legal existence, is or becomes under no legal obligation to discharge the Indenture Obligations owing to the
Trustee or the Holders by the Company or if any of the Indenture Obligations owing by the Company to the Trustee
or the Holders becomes irrecoverable from the Company by operation of law or for any reason whatsoever, this
Guarantee and the covenants, agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until such time as all such Indenture
Obligations have been paid in full to the Trustee and all Indenture Obligations owing to the Trustee or the
Holders by the Company have been discharged, or such earlier time as Section 4.02 shall apply to the Securities
and the Guarantors shall be responsible for the payment thereof to the Trustee or the Holders upon demand.
Section 14.07_____Fraudulent Conveyance; Subrogation.
(a) Any term or provision of this Guarantee to the contrary notwithstanding, the aggregate amount of the
Indenture Obligations guaranteed hereunder shall be reduced to the extent necessary to prevent this Guarantee
from violating or becoming voidable under applicable law relating to fraudulent conveyance or fraudulent transfer
or similar laws affecting the rights of creditors generally.
(b) Each Guarantor hereby waives all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under federal bankruptcy law) or
otherwise by reason of any payment by it pursuant to the provisions of this Article Fourteen. The Guarantor
further agrees that, to the extent that the waiver of, or agreement not to exercise, any such rights, remedies,
powers or privileges is found by a court of competent jurisdiction to be void or voidable for any reason, any
such rights, remedies, powers or privileges the Guarantor may have shall be junior and subordinate to the rights,
remedies, powers and privileges of the Holders against the Guarantor under this Guarantee.
Section 14.08_____Guarantee Is in Addition to Other Security.
This Guarantee shall be in addition to and not in substitution for any other guarantees or other
security which the Trustee may now or hereafter hold in respect of the Indenture Obligations owing to the Trustee
or the Holders by the Company and (except as may be required by law) the Trustee shall be under no obligation to
marshal in favor of each of the Guarantors any other guarantees or other security or any moneys or other assets
which the Trustee may be entitled to receive or upon which the Trustee or the Holders may have a claim.
Section 14.09_____Release of Security Interests.
Without limiting the generality of the foregoing and except as otherwise provided in this Indenture,
each Guarantor hereby consents and agrees, to the fullest extent permitted by applicable law, that the rights of
the Trustee hereunder, and the liability of the Guarantors hereunder, shall not be affected by any releases for
any purpose of any collateral, if any, from the Liens and security interests created by any collateral document
and that this Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time any
payment of any of the Indenture Obligations is rescinded or must otherwise be returned by the Trustee upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment had not been
made.
Section 14.10_____No Bar to Further Actions.
Except as provided by law, no action or proceeding brought or instituted under Article Fourteen and this
Guarantee and no recovery or judgment in pursuance thereof shall be a bar or defense to any further action or
proceeding which may be brought under Article Fourteen and this Guarantee by reason of any further default or
defaults under Article Fourteen and this Guarantee or in the payment of any of the Indenture Obligations owing by
the Company.
Section 14.11_____Failure to Exercise Rights Shall Not Operate as a Waiver; No Suspension of Remedies.
(a) No failure to exercise and no delay in exercising, on the part of the Trustee or the Holders, any right,
power, privilege or remedy under this Article Fourteen and this Guarantee shall operate as a waiver thereof, nor
shall any single or partial exercise of any rights, power, privilege or remedy preclude any other or further
exercise thereof, or the exercise of any other rights, powers, privileges or remedies. The rights and remedies
herein provided for are cumulative and not exclusive of any rights or remedies provided in law or equity.
(b) Nothing contained in this Article Fourteen shall limit the right of the Trustee or the Holders to take
any action to accelerate the maturity of the Securities pursuant to Article Five or to pursue any rights or
remedies hereunder or under applicable law.
Section 14.12_____Trustee's Duties, Notice to Trustee.
Any provision in this Article Fourteen or elsewhere in this Indenture allowing the Trustee to request
any information or to take any action authorized by, or on behalf of any Guarantor, shall be permissive and shall
not be obligatory on the Trustee except as the Holders may direct in accordance with the provisions of this
Indenture or the failure of the Trustee to request any such information or to take any such action arises from
the Trustee's negligence or willful misconduct.
Section 14.13_____Successors and Assigns.
All terms, agreements and conditions of this Article Fourteen shall extend to and be binding upon each
Guarantor and its successors and permitted assigns and shall enure to the benefit of and may be enforced by the
Trustee and its successors and assigns, provided, however, that the Guarantors may not assign any of their rights
or obligations hereunder other than in accordance with Article Eight.
Section 14.14_____Release of Guarantee.
Concurrently with the payment in full of all of the Indenture Obligations, the Guarantors shall be
released from and relieved of their obligations under this Article Fourteen. Upon the delivery by the Company to
the Trustee of an Officer's Certificate and an Opinion of Counsel to the effect that the transaction giving rise
to the release of this Guarantee was made by the Company in accordance with the provisions of this Indenture and
the Securities, the Trustee shall execute any documents reasonably required in order to evidence the release of
the Guarantors from their obligations under this Guarantee. If any of the Indenture Obligations are revived and
reinstated after the termination of this Guarantee, then all of the obligations of the Guarantors under this
Guarantee shall be revived and reinstated as if this Guarantee had not been terminated until such time as the
Indenture Obligations are paid in full, and each Guarantor shall enter into an amendment to this Guarantee,
reasonably satisfactory to the Trustee, evidencing such revival and reinstatement.
This Guarantee shall terminate with respect to each Guarantor and shall be automatically and
unconditionally released and discharged as provided in Section 10.14(d).
Section 14.15_____Execution of Guarantee.
To evidence the Guarantee, each Guarantor hereby agrees to execute the guarantee substantially in the
form set forth in Section 2.06, to be endorsed on each Security authenticated and delivered by the Trustee and
that this Indenture shall be executed on behalf of each Guarantor by its Chairman of the Board, its President, or
one of its Vice Presidents and attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Securities may be manual or facsimile.
Section 14.16_____Guarantee Subordinate to Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder of a Guarantee, by acceptance thereof, likewise
covenants and agrees, that, to the extent and in the manner hereinafter set forth in this Article, the
Indebtedness represented by the Guarantees is hereby made subordinate and subject in right of payment as provided
in this Article to the prior payment in full, in cash or Cash Equivalents or in any other form as acceptable to
the holders of Guarantor Senior Indebtedness, of all Guarantor Senior Indebtedness; provided, however, that the
Indebtedness represented by this Guarantee in all respects shall rank equally with, or prior to, all existing and
future Indebtedness of such Guarantor that is expressly subordinated to such Guarantor's Guarantor Senior
Indebtedness. This Guarantee shall not be senior in right of payment to the Existing Guarantees.
This Article Fourteen shall constitute a continuing offer to all Persons who, in reliance upon such
provisions, become holders of, or continue to hold Guarantor Senior Indebtedness, and such provisions are made
for the benefit of the holders of Guarantor Senior Indebtedness; and such holders are made obligees hereunder and
they or each of them may enforce such provisions.
With respect to the relative rights of Holders and holders of Senior Indebtedness and Guarantor Senior
Indebtedness and for the purpose of Section 14.07(a), each Holder of a Security by his acceptance thereof
acknowledges that all Senior Indebtedness and any guarantee by a Guarantor of such Senior Indebtedness shall be
deemed to have been incurred prior to the incurrence by such Guarantor of its liability under its Guarantee.
Section 14.17_____Payment Over of Proceeds Upon Dissolution of the Guarantor, etc.
In the event of (a)any insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b)any liquidation, dissolution or other winding up of any Guarantor,
whether voluntary or involuntary and whether or not involving insolvency or bankruptcy, or (c)any assignment for
the benefit of creditors or any other marshaling of assets or liabilities of any Guarantor, then and in any such
event:
(1) the holders of Guarantor Senior Indebtedness shall be entitled to receive payment in full
in cash or Cash Equivalents or in any other form as acceptable to the holders of Guarantor Senior
Indebtedness of all amounts due on or in respect of all Guarantor Senior Indebtedness, before the
Holders of the Securities are entitled to receive any payment or distribution of any kind or character
(excluding Permitted Guarantor Junior Securities) on account of the Guarantee of such Guarantor;
(2) any payment or distribution of assets of any Guarantor of any kind or character, whether
in cash, property or securities (excluding Permitted Guarantor Junior Securities), by setoff or
otherwise, to which the Holders or the Trustee would be entitled but for the provisions of this Article
shall be paid by the liquidating trustee or agent or other Person making such payment or distribution.
whether a trustee in bankruptcy, a receiver or liquidating trustee or otherwise, directly to the holders
of Guarantor Senior Indebtedness or their representative or representatives or to the trustee or
trustees under any indenture under which any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to the segregated amounts remaining unpaid on
account of the Senior Guarantor Indebtedness held or represented by each, to the extent necessary to
make payment in full in cash or Cash Equivalents or in any other form as acceptable to the holders of
Guarantor Senior Indebtedness of all Guarantor Senior Indebtedness remaining unpaid, after giving effect
to any concurrent payment or distribution to the holders of such Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this Section, the Trustee
or the Holder of any Security shall have received any payment or distribution of assets of any Guarantor
of any kind or character, whether in cash, property or securities, in respect of the Guarantee of such
Guarantor before all Guarantor Senior Indebtedness is paid in full, then and in such event such payment
or distribution (excluding Permitted Guarantor Junior Securities) shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or
other person making payment or distribution of assets of such Guarantor for application to the payment
of all Guarantor Senior Indebtedness remaining unpaid, to the extent necessary to pay all Guarantor
Senior Indebtedness in full in cash or Cash Equivalents or in any other form as acceptable to the
holders of Guarantor Senior Indebtedness after giving effect to any concurrent payment or distribution
to or for the holders of Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any Guarantor with or into, another Person or
the liquidation or dissolution of any Guarantor following the sale, assignment, conveyance, transfer, lease or
other disposal of all or substantially all of such Guarantor's properties or assets to another Person upon the
terms and conditions set forth in Article Eight shall not be deemed a dissolution, winding up, liquidation,
reorganization, assignment for the benefit of creditors or marshaling of assets and liabilities of such Guarantor
for the purposes of this Section if the Person formed by such consolidation or the surviving entity of such
merger or the Person which acquires by sale, assignment, conveyance, transfer, lease or other disposal of all or
substantially all of such Guarantor's properties and assets, as the case may be, shall, as a part of such
consolidation, merger, sale, assignment, conveyance, transfer, lease or other disposal comply with the conditions
set forth in Article Eight.
Section 14.18_____Default on Guarantor Senior Indebtedness.
(a) Upon the maturity of any Guarantor Senior Indebtedness by lapse of time, acceleration or otherwise, all
principal thereof and interest thereon and other amounts due in connection therewith shall first be paid in full
or such payment duly provided for before any payment is made by any of the Guarantors or any Person acting on
behalf of any of the Guarantors in respect of the Guarantee of such Guarantor.
(b) No payment (excluding payments in the form of Permitted Guarantor Junior Securities) shall be made by
any Guarantor in respect of its Guarantee during the period in which Section 14.17 shall be applicable, during
any suspension of payments in effect under Section 12.03(a) of this Indenture or during any Payment Blockage
Period in effect under Section 12.03(b) of this Indenture.
(c) In the event that, notwithstanding the foregoing, any Guarantor shall make any payment to the Trustee or
the Holder of its Guarantee prohibited by the foregoing provisions of this Section, then and in such event such
payment shall be paid over and delivered forthwith to the Guarantor Senior Representative or as a court of
competent jurisdiction shall direct.
Section 14.19_____Payment Permitted by Each of the Guarantors if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any of the Securities shall prevent
any Guarantor, at any time except during the pendency of any case, proceeding, dissolution, liquidation or other
winding up, assignment for the benefit of creditors or other marshaling of assets and liabilities of such
Guarantor referred to in Section 14.17 or under the conditions described in Section 14.18, from making payments
at any time of principal of, premium, if any, or interest on the Securities.
Section 14.20_____Subrogation to Rights of Holders of Guarantor Senior Indebtedness.
Subject to the payment in full of all Guarantor Senior Indebtedness in cash or Cash Equivalents or in
any other form acceptable to the holders of Guarantor Senior Indebtedness, the Holders of the Securities shall be
subrogated to the rights of the holders of such Guarantor Senior Indebtedness to receive payments and
distributions of cash, property and securities applicable to the Guarantor Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Guarantor Senior Indebtedness of any cash, property
or securities to which the Holders of the Securities or the Trustee would be entitled except for the provisions
of this Article, and no payments over pursuant to the provisions of this Article to the holders of Guarantor
Senior Indebtedness by Holders of the Securities or the Trustee, shall, as among any Guarantor, its creditors
other than holders of Guarantor Senior Indebtedness, and the Holders of the Securities, be deemed to be a payment
or distribution by such Guarantor to or on account of the Guarantor Senior Indebtedness.
Section 14.21_____Provisions Solely to Define Relative Rights.
The provisions of Sections 14.16 through 14.29 of this Indenture are intended solely, for the purpose of
defining the relative rights of the Holders of the Securities on the one hand and the holders of Guarantor Senior
Indebtedness on the other hand. Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a)impair, as among any Guarantor, its creditors other than holders of
Guarantor Senior Indebtedness and the Holders of the Securities, the obligation of such Guarantor, which is
absolute and unconditional, to pay to the Holders of the Securities the principal of, premium, if any, and
interest on the Securities as and when the same shall become due and payable in accordance with their terms; or
(b)affect the relative rights against each of the Guarantors of the Holders of the Securities and creditors of
each of the Guarantors other than the holders of Guarantor Senior Indebtedness; or (c)prevent the Trustee or the
Holder of any Security from exercising all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article of the holders of Guarantor Senior Indebtedness
(1)in any case, proceeding, dissolution, liquidation or other winding up, assignment for the benefit of creditors
or other marshaling of assets and liabilities of the Guarantors referred to in Section 14.17, to receive,
pursuant to and in accordance with such Section, cash, property and securities otherwise payable or deliverable
to the Trustee or such Holder, or (2)under the conditions specified in Section 14.18, to prevent any payment
prohibited by such Section or enforce their rights pursuant to Section 14.18(c).
Section 14.22_____Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs the Trustee on his behalf to
take such action as may be necessary or appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes, including, in the event of any
dissolution, winding-up, liquidation or reorganization of any Guarantor whether in bankruptcy, insolvency,
receivership proceedings, or otherwise, the timely filing of a claim for the unpaid balance of the Indebtedness
of any Guarantor owing to such Holder in the form required in such proceedings and the causing of such claim to
be approved.
Section 14.23_____No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Guarantor Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by any act or failure to act on the
part of any Guarantor or by, any act or failure to act by any such holder, or by any non-compliance by any
Guarantor with the terms, provisions and covenants of this Indenture, regardless of any knowledge thereof any
such holder may have or be otherwise charged with.
(b) Without limiting the generality of Subsection (a)of this Section and notwithstanding any other
provision contained herein, the holders of Guarantor Senior Indebtedness may at any time and from time to time,
without the consent of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or releasing the subordination provided in
this Article or the obligations hereunder of the Holders of the Securities to the holders of Guarantor Senior
Indebtedness, do any one or more of the following: (1)change the manner, place or terms of payment or extend the
time of payment of, or renew or alter, Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (2)sell, exchange, release or otherwise deal
with any property pledged, mortgaged or otherwise securing Guarantor Senior Indebtedness; (3)release any Person
liable in any manner for the collection or payment of Guarantor Senior Indebtedness; and (4)exercise or refrain
from exercising any rights against any of the Guarantors and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities to take any action to accelerate
the maturity of the Securities in accordance with the provisions set forth in Article 5 or to pursue any rights
or remedies under this Indenture or under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
Section 14.24_____Notice to Trustee by Each of the Guarantors.
(a) Each Guarantor shall give prompt written notice to the Trustee of any fact known to such Guarantor which
would prohibit the making of any payment to or by the Trustee in respect of the Guarantee. Notwithstanding the
provisions of this Article or any provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts which would prohibit the making of any payment to or by the Trustee in respect of the
Securities, unless and until the Trustee shall have received written notice thereof from any Guarantor or a
holder of Guarantor Senior Indebtedness or from a Guarantor Senior Representative or any trustee, fiduciary or
agent therefor; and, prior to the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the Trustee shall not have received the
notice provided for in this Section prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of, premium, if any, or interest on
any Security or any other Indenture Obligations), then, anything herein contained to the contrary notwithstanding
but without limiting the rights and remedies of the holders of Guarantor Senior Indebtedness or any trustee,
fiduciary or agent thereof, the Trustee shall have full power and authority to receive such money and to apply
the same to the purpose for which such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged with knowledge of the curing of any
such default or the elimination of the act or condition preventing any such payment unless and until the Trustee
shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a written notice to the Trustee and each
Guarantor by a Person representing himself to be a representative of one or more holders of Designated Guarantor
Senior Indebtedness (a "Guarantor Senior Representative") or a holder of Guarantor Senior Indebtedness (or a
trustee, fiduciary or agent therefor) to establish that such notice has been given by a Guarantor Senior
Representative or a holder of Guarantor Senior Indebtedness (or a trustee, fiduciary or agent therefor);
provided, however, that failure to give such notice to the Company shall not affect in any way the ability of the
Trustee to rely on such notice. In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Guarantor Senior Indebtedness to participate in
any payment or distribution pursuant to this Article, the Trustee may request such Person to furnish evidence to
the reasonable satisfaction of the Trustee as to the amount of Guarantor Senior Indebtedness held by such Person,
the extent to which such Person is entitled to participate in such payment or distribution and any other facts
pertinent to the rights of such Person under this Article, and if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the right of such Person to receive such
payment.
Section 14.25_____Reliance on Judicial Order or Certificate of Liquidating Agent.
Upon any payment or distribution of assets of any Guarantor referred to in this Article, the Trustee and
the Holders of the Securities shall be entitled to rely upon any order or decree entered by any court of
competent jurisdiction in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a certificate of the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of Securities, for the purpose of
ascertaining the Persons entitled to participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other Indebtedness of such Guarantor, the amount thereof or payable thereon, the amount or
amounts paid or distributed thereon and all other facts pertinent thereto or to this Article; provided that the
foregoing shall apply only if such court has been fully apprised of the provisions of this Article.
Section 14.26_____Rights of Trustee as a Holder of Guarantor Senior Indebtedness; Preservation of Trustee's
Rights.
The Trustee in its individual capacity shall be entitled to all the rights set forth in this Article
with respect to any Guarantor Senior Indebtedness which may at any time be held by it, to the same extent as any
other holder of Guarantor Senior Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or payments to, the Trustee under
or pursuant to Section 6.06.
Section 14.27_____Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have been appointed by the Company and
be then acting under this Indenture, the term "Trustee" as used in this Article shall in such case (unless the
context otherwise requires) be construed as extending to and including such Paying Agent within its meaning as
fully for all intents and purposes as if such Paying Agent were named in this Article in addition to or in place
of the Trustee, provided, however, that Sections 14.14, 14.24 and 14.26 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 14.28_____No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee or the Holders of Securities to
take any action to accelerate the maturity of the Securities pursuant to the provisions described under Article
Five and as set forth in this Indenture or to pursue any rights or remedies hereunder or under applicable law,
subject to the rights, if any, under this Article of the holders, from time to time, of Guarantor Senior
Indebtedness to receive the cash, property or securities receivable upon the exercise of such rights or remedies.
Section 14.29_____Trustee's Relation to Guarantor Senior Indebtedness.
With respect to the holders of Guarantor Senior Indebtedness, the Trustee undertakes to perform or to
observe only such of its covenants and obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior Indebtedness shall be read into this
Article against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the holders of
Guarantor Senior Indebtedness and the Trustee shall not be liable to any holder of Guarantor Senior Indebtedness
if it shall mistakenly in the absence of gross negligence or willful misconduct pay over or deliver to Holders,
the Company or any other Person moneys or assets to which any holder of Guarantor Senior Indebtedness shall be
entitled by virtue of this Article or otherwise.
Section 14.30_____Limitation on Guarantee.
In any proceeding involving any state corporate law or any state or federal bankruptcy, insolvency,
reorganization or other law affecting the rights of creditors generally, if the obligations of any Guarantor
under its Guarantee would otherwise, be held or determined to be void, invalid or unenforceable or if the claims
of the Holders in respect of such obligations would be subordinated to the claims of any other creditors other
than creditors under Senior Indebtedness on account of the Guarantor's liability under its Guarantee, then,
notwithstanding any other provision of this Guarantee to the contrary, the amount of such liability shall,
without any further action by the Guarantor, the Holders or any other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated to the claims of other creditors
as determined in such action or proceeding.
If an officer whose signature is on this Indenture no longer holds that office at the time the Trustee
authenticates a Security on which a Guarantee is endorsed, such Guarantee shall be valid nevertheless.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed, all as of the day
and year first above written.
SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware
corporation, as issuer
| | | | |
| | | | |
| | By: | /s/ David A.R. Evans | |
| | |
| |
| | Name: | David A.R. Evans | |
| | Title: | Senior Vice President and Chief Financial Officer | |
| | | | |
| | | | |
| | Attest: | /s/ Jonathan L. Block | |
| | |
| |
| | Name: | Jonathan L. Block | |
| | Title: | Vice President, General Counsel and Secretary | |
ATEP RADIO, INC. BISON MEDIA, INC. CARON BROADCASTING, INC. CCM COMMUNICATIONS, INC. COMMON GROUND BROADCASTING, INC. GOLDEN GATE BROADCASTING COMPANY INC. INLAND RADIO, INC. INSPIRATION MEDIA, INC. INSPIRATION MEDIA OF PENNSYLVANIA, LP INSPIRATION MEDIA OF TEXAS, LLC KINGDOM DIRECT, INC. NEW ENGLAND CONTINENTAL MEDIA, INC. NEW INSPIRATION BROADCASTING COMPANY, INC. OASIS RADIO, INC. ONEPLACE, LLC PENNSYLVANIA MEDIA ASSOCIATES, INC. RADIO 1210, INC. REACH SATELITE NETWORK, INC. SALEM COMMUNICATIONS ACQUISITION CORPORATION SALEM MEDIA CORPORATION SALEM MEDIA OF COLORADO, INC. SALEM MEDIA OF GEORGIA, INC. SALEM MEDIA OF HAWAII, INC. SALEM MEDIA OF ILLINOIS, LLC SALEM MEDIA OF KENTUCKY, INC. SALEM MEDIA OF NEW YORK, LLC SALEM MEDIA OF OHIO, INC. SALEM MEDIA OF OREGON, INC. SALEM MEDIA OF PENNSYLVANIA, INC. SALEM MEDIA OF TEXAS, INC. SALEM MEDIA OF VIRGINIA, INC. SALEM MUSIC NETWORK, INC. SALEM RADIO NETWORK INCORPORATED SALEM RADIO OPERATIONS, LLC SALEM RADIO OPERATIONS - PENNSYLVANIA, INC. SALEM RADIO PROPERTIES, INC. SALEM RADIO REPRESENTATIVES, INC. SCA LICENSE CORPORATION SOUTH TEXAS BROADCASTING, INC. SRN NEWS NETWORK, INC. VISTA BROADCASTING, INC. as Guarantors THE BANK OF NEW YORK, as Trustee| | | | |
| | | | |
| | By: | /s/ David A.R. Evans | |
| | |
| |
| | Name: | David A.R. Evans | |
| | Title: | Chief Financial Officer | |
Sal.Indenture.doc
SCHEDULE I
EXISTING INDEBTEDNESS OF SALEM COMMUNICATIONS HOLDING CORPORATION
AND RESTRICTED SUBSIDIARIES
9½% Senior Subordinated Notes due 2007 and the guarantees thereof pursuant to the Existing Indenture as in effect
on the date hereof.
A-3
Sal.Indenture.doc
Exhibit A
A-1
Sal.Indenture.doc
[Form Of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (GENERAL)
(For transfers pursuant to Section 3.07(a) or (b) of the Indenture referred to below)
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 9% Senior Subordinated Notes Due 2011 (the "Securities")
Reference is made to the Indenture, dated as of June 25, 2001 (the "Indenture"), among Salem
Communications Holding Corporation, a Delaware corporation, the guarantors party thereto and The Bank of New
York, as trustee. Terms used herein and defined in the Indenture, Rule 144A or Rule 144 under the U.S.
Securities Act of 1933 (the "Securities Act") are used herein as so defined.
This certificate relates to $____________ aggregate principal amount of Securities, which are evidenced
by the following certificate(s) (the "Specified Securities"):
CUSIP No(s).____________________________
CERTIFICATE No(s).______________________
CURRENTLY IN BOOKENTRY FORM: Yes __ No __ (check one)
The person in whose name this certificate is executed below (the "Undersigned") hereby certifies that
either (i)such person is the sole beneficial owner of the Specified Securities or (ii)such person is acting on
behalf of all the beneficial owners of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner". If the Specified Securities are
represented by a Global Security, they are held through a Depositary (except in the name of the "The Depository
Trust Company") or an Agent Member in the name of the Undersigned, as or on behalf of the Owner. If the
Specified Securities are not represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a person (the "Transferee") who
will take delivery in the form of a Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective registration statement under the
Securities Act, it is being effected in accordance with Rule 144A or Rule 144 or pursuant to an exemption from
the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Regulation S under the
Securities Act and in any case in compliance with all applicable securities laws of the states of the United
States. Accordingly, the Owner hereby further certifies that:
(1) Rule 144A Transfers. If the transfer is being effected in accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person that the Owner and any person acting on its
behalf reasonably believe is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified institutional buyer; and
(B) the Owner and any person acting on its behalf have taken reasonable steps to ensure that the Transferee
is aware that the Owner may be relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule 144:
(A) the transfer is occurring after a holding period of at least one year (computed in accordance with
paragraph (d) of Rule 144) has elapsed since the date the Specified Securities were acquired
from the Company or from an affiliate (as such term is defined in Rule 144) of the Company,
whichever is later, and is being effected in accordance with the applicable amount, manner of
sale and notice requirements of paragraphs (e), (f)and (h)of Rule 144; or
(B) the transfer is occurring after a holding period by the Owner of at least two years has elapsed since
the date the Specified Securities were acquired from the Company or from an affiliate (as such
term is defined in Rule 144) of the Company, whichever is later, and the Owner is not, and
during the preceding three months has not been, an affiliate of the Company;
(3) Transfers to Accredited Investors. If the transfer is being made to an Accredited Investor:
(A) the transfer is being effected to an institutional Accredited Investor and pursuant to an exemption from
the registration requirements of the Securities Act other than Rule 144A, Rule 144 or
Regulation S under the Securities Act, and the transferor has not engaged in any general
solicitation within the meaning of Regulation D under the Securities Act and the transfer
complies with the transfer restrictions applicable to a Restricted Security and the
requirements of the exemption claimed, which certification is supported by a certificate
executed by the transferee in the form of Annex I attached hereto.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
Dated:______________________________ __________________________________________________
(Print the name of the Undersigned, as such term is defined
in the second paragraph of this certificate.)
By:____________________________________
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of the
Undersigned must be stated.)
Signature Guarantee: _____________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Security
Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Security Registrar in
addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as
amended)
A-5
Sal.Indenture.doc
Annex I
A-4
Sal.Indenture.doc
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 9% Senior Subordinated Notes due 2011
Reference is hereby made to the Indenture, dated as of June 25, 2001 (the "Indenture"), among Salem
Communications Holding Corporation (the "Company"), the guarantors party thereto (the "Guarantors") and The Bank
of New York, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in
the Indenture.
In connection with our proposed purchase of $____________ aggregate principal amount of:
(a) |_| a beneficial interest in a Global Security, or
(b) |_| a Physical Security,
we confirm that:
We understand that any subsequent transfer of the Securities or any interest therein is subject
to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound
by, and not to resell, pledge or otherwise transfer the Securities or any interest therein except in
compliance with, such restrictions and conditions and the United States Securities Act of 1933, as
amended (the "Securities Act").
We understand that the offer and sale of the Securities have not been registered under the
Securities Act, and that the Securities and any interest therein may not be offered or sold except as
permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which
we are acting as hereinafter stated, that if we should sell the Securities or any interest therein, we
will do so only (A) to the Company or any subsidiary thereof, (B) inside the United States to a
"qualified institutional buyer" in compliance with Rule 144A under the Securities Act, (C) inside the
United States to an institutional "accredited investor" (as defined below) that, prior to such transfer,
furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed
letter substantially in the form of this letter to the effect that such transfer is in compliance with
the Securities Act, (D) outside the United States in an offshore transaction in compliance with Rule 904
of Regulation S under the Securities Act (if available), (E) pursuant an exemption from registration
provided by of Rule 144 under the Securities Act (if available), (F) in accordance with another
exemption from the registration requirements of the Securities Act (and based upon an opinion of counsel
if the Company so requests) or (G) pursuant to an effective registration statement under the Securities
Act, and we further agree to provide to any person purchasing the Physical Security or beneficial
interest in a Global Security from us in a transaction meeting the requirements of clauses (A) through
(E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated
herein.
We understand that, on any proposed resale of the Securities or beneficial interest therein, we will be
required to furnish to you such certifications, legal opinions and other information as you may reasonably
require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that
the Securities purchased by us will be in certificated form and will bear a legend to the foregoing effect.
We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of
Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of our investment in the Securities, and we and any accounts
for which we are acting are each able to bear the economic risk of our or its investment.
We are acquiring the Securities or beneficial interest therein purchased by us for our own account or
for one or more accounts (each of which is an institutional "accredited investor") as to each of which we
exercise sole investment discretion.
You and the Guarantors are entitled to rely upon this letter and are irrevocably authorized to produce
this letter or a copy to any interested party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby.
[Insert Name of Transferor]
B-2
Sal.Indenture.doc
EXHIBIT B
B-1
Sal.Indenture.doc
[Form of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (NON-U.S. PERSONS)
(For transfers pursuant to Section 3.07(c) of the Indenture referred to below)
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 9% Senior Subordinated Notes Due 2011 (the "Securities")
Reference is made to the Indenture, dated as of June 25, 2001 (the "Indenture"), among Salem
Communications Holding Corporation, a Delaware corporation, the guarantors party thereto and The Bank of New
York, as trustee. Terms used herein and defined in Regulations S under the U.S. Securities Act of 1933 (the
"Securities Act") are used herein as so defined.
In connection with our proposed sale of ________ aggregate principal amount of the Securities, we
confirm that such sale has been affected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a U.S. person or to a person in United States;
(2) either (a)at the time the buy offer was originated, the transferee was outside the United
States or we and any person acting on our behalf reasonably believed that the transferee was outside the
United States, or (b)the transaction was executed in, on or through the facilities of a designated
offshore securities market and neither we nor any person acting on our behalf knows that the transaction
has been pre arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States in contravention of the
requirements of Rule 903(b) or Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the registration requirements of
the Securities Act;
(5) we have advised the transferee of the transfer restrictions applicable to the Securities;
and
(6) if the transfer is being made prior to the expiration of the 40-day distribution compliance
period set forth in Regulation S, the interest transferred shall be held immediately thereafter through
the Euroclear System or Clearstream Banking, S.A.
This certificate and the statements contained herein are made for your benefit and the benefit of the Company.
Dated:______________________________ __________________________________________________
(Print the name of the Undersigned, as such term is defined
in the second paragraph of this certificate.)
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf of the
Undersigned must be stated.)
Signature Guarantee: _____________________
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Security
Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Security Registrar in
addition to, or in substitution for, Stamp, all in
accordance with the Securities Exchange Act of 1934, as
amended)
C-2
Sal.Indenture.doc
EXHIBIT C
C-1
Sal.Indenture.doc
INTERCOMPANY NOTE
_____________ __, ___
Evidences of all loans or advances ("Loans") hereunder shall be reflected on the grid attached hereto.
FOR VALUE RECEIVED, _____________, a _____________ corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to
the order of _____________ (the "Holder") the principal sum of the aggregate unpaid principal amount of all Loans
(plus accrued interest thereon) at any time and from time to time made hereunder which has not been previously
paid.
All capitalized terms used herein that are defined in, or by reference in, the Indenture among Salem
Communications Holding Corporation, a Delaware corporation (the "Company"), the guarantors party thereto and The
Bank of New York, as trustee, dated as of June 25, 2001 (the "Indenture"), have the meanings assigned to such
terms therein, or by reference therein, unless otherwise defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Forgiveness. Unless the Maker of the Loan hereunder is either of the Company or any
Guarantor, the Holder may not forgive any amounts owing under this intercompany note.
Section 1.02 Interest, Prepayment. (a)The interest rate ("Interest Rate") on the Loans shall be a rate per
annum equal to the interest rate on the Securities.
(b) The interest, if any, payable on each of the Loans shall accrue from the date such Loan is made and,
subject to Section 2.01, shall be payable upon demand of the Holder.
(c) If the principal or accrued interest, if any, of the Loans is not paid on the date demand is made,
interest on the unpaid principal and interest will accrue at a rate equal to the Interest Rate, if any, plus 100
basis points per annum from maturity until the principal and interest on such Loans are fully paid.
(d) Subject to Section 2.01, any amounts hereunder may be prepaid at any time by the Maker.
Section 1.03 Subordination. All loans made to either of the Company or any Guarantor shall be subordinated
in right of payment to the payment and performance of the obligations of the Company and any Subsidiary under the
Indenture, the Securities, the Guarantees or any other Indebtedness ranking senior to or pari passu with the
Securities, or any Guarantees, including, without limitation, any Indebtedness incurred under the Bank Credit
Agreement.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01. Events of Default. If after the date of issuance of this Loan (i)an Event of Default
has occurred under the Indenture, (ii)an "Event of Default" (as defined) has occurred under the Bank Credit
Agreement, or any refinancing of the Bank Credit Agreement or (iii) an "event of default" (as defined) on any
other Indebtedness of the Company or any Guarantor then (x) in the event of the Maker is not either one of the
Company or a Guarantor, all amounts owing under the Loans hereunder shall be immediately due and payable to the
Holder, and (y)in the event the Maker is either the Company or, the amounts owing under the Loans hereunder
shall not be due and payable unless the Maker is a Guarantor and the Holder is the Company; provided, however,
that if such Event of Default or event of default has been waived, cured or rescinded, such amounts shall no
longer be due and payable in the case of clause (x), and such amounts may be payable in the case of clause (y).
If the Holder is a Subsidiary, then the Holder hereby agrees that if it receives any payments or distributions on
any Loan from the Company or a Guarantor which is not payable pursuant to clause (y) of the prior sentence after
any Event of Default or event or default described in clauses (i), (ii) or (iii) above has occurred, is
continuing and has not been waived, cured or rescinded, it will pay over and deliver forthwith to the Company or
such Guarantor, as the case may be, all such payments and distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any provision of this intercompany note, or consent
to depart herefrom is permitted at any time for any reason, except with the consent of the holders of not less
than a majority in aggregate principal amount of the Outstanding Securities.
Section 3.02 Assignment. No party to this Agreement may assign, in whole or in part, any of its rights and
obligations under this intercompany note, except to its legal successor in interest.
Section 3.03 Third Party Beneficiaries. The holders of the Securities or any other Indebtedness ranking
pari passu with or senior to, the Securities or any Guarantees, including without limitation, any Indebtedness
incurred under the Bank Credit Agreement, shall be third party beneficiaries to this intercompany note and shall
have the right to enforce this intercompany note against the Company or any of their Subsidiaries.
Section 3.04 Headings. Article and Section headings in this intercompany note are included for convenience
of reference only and shall not constitute a part of this intercompany note for any other purpose.
Section 3.05 Entire Agreement. This intercompany note sets forth the entire agreement or the parties with
respect to its subject matter and supersedes all previous understandings, written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK.
Section 3.07 Waivers. The Maker hereby waives presentment, demand for payment, notice of protest and all
other demands and notices in connection with the delivery, acceptance, performance or enforcement hereof.
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount of Maturity of Amount Unpaid
Borrowing/ Borrowing/ Principal Paid Principal
Date Principal Principal or Prepaid Balance Notation Made By
- -------------------------------------------------------------------------------------------------------------------
* This Cross-Reference Table is not part of the Indenture.
EXHIBIT 4.28
REGISTRATION RIGHTS AGREEMENT
Dated as of June 25, 2001
by and among
SALEM COMMUNICATIONS HOLDING CORPORATION
THE GUARANTORS
named herein
and
THE INITIAL PURCHASERS
named herein
____________________________
$150,000,000
9% SENIOR SUBORDINATED NOTES DUE 2011
-i-
-i-
Sal.Reg.Rghts.doc
TABLE OF CONTENTS
Page
1. Definitions................................................................................................1
2. Exchange Offer.............................................................................................1
3. Shelf Registration.........................................................................................1
4. Additional Interest........................................................................................1
5. Underwritten Registrations.................................................................................1
6. Registration Procedures....................................................................................1
7. Registration Expenses......................................................................................1
8. Indemnification............................................................................................1
9. Rule 144 and 144A..........................................................................................1
10. Miscellaneous.............................................................................................1
(a) No Inconsistent Agreements
(b) Adjustments Affecting Registrable Securities
(c) Amendments and Waivers
(d) Notices
(e) Successors and Assigns
(f) Counterparts
(g) Headings
(h) Governing Law
(i) Severability
(j) Joint and several obligations
(k) Securities Held by the Issuers or Their Affiliates
(l) Third-Party Beneficiaries
(m) Entire Agreement
31
Sal.Reg.Rghts.doc
Sal.Reg.Rghts.doc
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is made and entered into as of June 25,
2001 by and among SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware corporation (the "Company"), the
Guarantors (defined below) and DEUTSCHE BANC ALEX. BROWN INC., J.P. MORGAN SECURITIES INC., BEAR, STEARNS & CO.
INC., BNY CAPITAL MARKETS, INC., CREDIT SUISSE FIRST BOSTON CORPORATION, FLEET SECURITIES, INC. and JEFFERIES &
COMPANY, INC., as initial purchasers (the "Initial Purchasers"). The Company and the Guarantors are hereinafter
collectively referred to as the "Issuers."
This Agreement is entered into in connection with the Purchase Agreement by and among the
Issuers and the Initial Purchasers, dated as of June 20, 2001 (the "Purchase Agreement"), which provides for,
among other things, the sale by the Company to the Initial Purchasers of $150,000,000 aggregate principal amount
of the Company's 9% Senior Subordinated Notes due 2011 (the "Notes"), guaranteed (the "Guarantees"), jointly and
severally, by Salem Communications Corporation, a Delaware corporation ("Parent") and all of Parent's
subsidiaries (other than the Company) (each a "Guarantor" and collectively, the "Guarantors"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the Issuers have agreed to provide the
registration rights set forth in this Agreement for the benefit of the Initial Purchasers and any subsequent
holder or holders of the Notes. The execution and delivery of this Agreement is a condition to the Initial
Purchasers' obligation to purchase the Notes under the Purchase Agreement. All references to the "Notes"
throughout this Agreement shall mean the Notes, together with the related Guarantees, unless the context requires
otherwise.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the following meanings:
Additional Interest: See Section 4.
Advice: See the last paragraph of Section 6.
Agreement: See the first introductory paragraph to this Agreement.
Applicable Period. See Section 2(b).
Business Day: Any day excluding Saturday, Sunday and any day which is a legal holiday under
the laws of New York, New York or is a day on which banking institutions therein located are authorized or
required by law or other governmental action to close.
Company: See the first introductory paragraph to this Agreement.
DTC: See Section 6(i).
Effectiveness Date: The 145th day after the Issue Date; provided, however, that with respect
to any Shelf Registration, the Effectiveness Date shall be the 145th day after the delivery of a Shelf Notice as
required pursuant to Section 2(c).
Effectiveness Period: See Section 3(a).
Event Date: See Section 4(b).
Exchange Offer: See Section 2(a).
Exchange Notes: See Section 2(a).
Exchange Registration Statement: See Section 2(a).
Filing Date: (A) With respect to an Exchange Registration Statement, the 75th day after the
Issue Date; and (B) with respect to a Shelf Registration, the 75th day after the delivery of a Shelf Notice as
required pursuant to Section 2(c).
Guarantees: See the second introductory paragraph to this Agreement.
Guarantors: See the second introductory paragraph to this Agreement.
Holder: Any holder of a Registrable Security or Registrable Securities.
Indemnified Person: See Section 8(c).
Indemnifying Persons: See Section 8(c).
Indenture: The Indenture dated as of the date hereof by and among the Company, the Guarantors
and the Trustee, pursuant to which the Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Inspectors: See Section 6(p).
Initial Purchasers: See the first introductory paragraph to this Agreement.
Issue Date: The date of the original issuance of the Registrable Securities.
Issuers: See the first introductory paragraph to this Agreement.
NASD: See Section 6(n).
Notes: The 9% Senior Subordinated Notes due 2011 of the Company issued pursuant to the
Indenture.
Participant: See Section 8(a).
Participating Broker-Dealer: See Section 2(b).
Person: An individual, partnership, limited liability company, corporation, trust or
unincorporated organization, or a government or agency or political subdivision thereof.
Private Exchange: See Section 2(b).
Private Exchange Notes: See Section 2(b).
Prospectus: The prospectus included in any Registration Statement (including, without
limitation, any prospectus subject to completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A
promulgated under the Securities Act), as amended or supplemented by any prospectus supplement, with respect to
the terms of the offering of any portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference in such Prospectus.
Registrable Securities: The Notes upon original issuance thereof and at all times subsequent
thereto, until in the case of any such Note (i) a Registration Statement covering such Note has been declared
effective by the SEC and such Note has been disposed of in accordance with such effective Registration Statement,
(ii) it is sold in compliance with Rule 144 or may be sold pursuant to Rule 144(k), (iii) it shall have been
otherwise transferred and a new certificate for any such Note which may be sold without restriction under federal
securities laws and not bearing a legend restricting further transfer shall have been delivered by the Company,
or (iv) it ceases to be outstanding for the purposes of the Indenture.
Registration Statement: Any registration statement of the Issuers filed with the SEC,
including the Prospectus, amendments and supplements to such registration statement, including post-effective
amendments, all exhibits and all material incorporated by reference or deemed to be incorporated by reference in
such registration statement.
Rule 144: Rule 144 under the Securities Act, as such Rule may be amended from time to time, or
any similar rule (other than Rule 144A) or regulation hereafter adopted by the SEC providing for offers and sales
of securities made in compliance therewith resulting in offers and sales by subsequent holders that are not
affiliates of the Company being free of the registration and prospectus delivery requirements of the Securities
Act.
Rule 144A: Rule 144A under the Securities Act, as such Rule may be amended from time to time,
or any similar rule (other than Rule 144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 under the Securities Act, as such Rule may be amended from time to time, or
any similar rule or regulation hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the rules and regulations of the
SEC promulgated thereunder.
Shelf Notice: See Section 2(c).
Shelf Registration: See Section 3(a).
TIA: The Trust Indenture Act of 1939, as amended.
Trustee: The trustee under the Indenture.
Underwritten Registration or Underwritten Offering: A registration in which securities of any
of the Issuers are sold to an underwriter for reoffering to the public.
2. Exchange Offer
(a) The Issuers shall use their best efforts to file with the SEC, no later than the Filing Date, a
Registration Statement (the "Exchange Registration Statement") on an appropriate registration form, which on the
date it is declared effective by the SEC shall comply as to form in all material respects with the requirements
of the applicable form and include all financial statements required by the SEC to be filed therewith or
incorporated by reference therein, with respect to a registered offer (the "Exchange Offer") to exchange any and
all of the Registrable Notes for a like aggregate principal amount of notes of the Company, guaranteed on a
senior subordinated basis by the Guarantors, that are substantially identical in all material respects to the
Notes (the "Exchange Notes"), except that (i) the Exchange Notes shall have been registered pursuant to an
effective registration statement under the Securities Act and shall contain no restrictive legend thereon, and
(ii)interest thereon shall accrue from the last date on which interest was paid on the Notes or, if no such
interest has been paid, from the Issue Date, and that are entitled to the benefits of the Indenture or a trust
indenture that is identical to the Indenture (other than such changes to the Indenture or any such identical
trust indenture as are necessary to comply with the TIA) and that, in either case, has been qualified under the
TIA. The Exchange Offer shall comply with all applicable tender offer rules and regulations under the Exchange
Act and other applicable law. The Issuers shall (x)use their best efforts to cause the Exchange Registration
Statement to be declared effective under the Securities Act on or before the Effectiveness Date; (y)keep the
Exchange Offer open for at least 30 days (or longer if required by applicable law) after the date that notice of
the Exchange Offer is mailed to Holders; and (z)complete the Exchange Offer on or prior to the 35th day
following the date on which the Exchange Registration Statement is declared effective by the SEC and in no event
later than the 175th day following the Issue Date. If, after the Exchange Registration Statement is initially
declared effective by the SEC, the Exchange Offer or the issuance of the Exchange Notes thereunder is prevented
or materially delayed by any stop order, injunction or other order or requirement of the SEC or any other
governmental agency or court, the Exchange Registration Statement shall be deemed not to have become effective
for purposes of this Agreement.
Each Holder who participates in the Exchange Offer will be required to represent in writing (i)
that any Exchange Notes received by it will be acquired in the ordinary course of its business, (ii) that at the
time of the commencement of the Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution (within the meaning of the Securities Act) of the Exchange Notes in
violation of the Securities Act and (iii) that such Holder is not an "affiliate" of the Company or the Guarantors
within the meaning of Rule 405 under the Securities Act, (iv) if such Holder is not a broker-dealer, that it is
not engaged in, and does not intend to engage in, the distribution of Exchange Notes and (v) if such Holder is a
Participating Broker-Dealer that will receive Exchange Notes for its own account in exchange for Notes that were
acquired as a result of market-making or other trading activities, that it will deliver a prospectus in
connection with any resale of such Exchange Notes.
Upon consummation of the Exchange Offer in accordance with this Section2, the provisions of
this Agreement shall continue to apply, mutatis mutandis, solely with respect to Registrable Securities that are
Private Exchange Notes, Exchange Notes as to which Section2(c)(iv) is applicable and Exchange Notes held by
Participating Broker-Dealers, and the Issuers shall have no further obligation to register Registrable Securities
(other than Private Exchange Notes and Exchange Notes as to which clause2(c)(iv) applies) pursuant to Section3.
(b) The Issuers shall include within the Prospectus contained in the Exchange Registration Statement a
section entitled "Plan of Distribution," reasonably acceptable to the Initial Purchasers, that shall contain a
summary statement of the positions taken or policies made by the staff of the SEC with respect to the potential
"underwriter" status of any broker-dealer that is the "beneficial owner" (as defined in Rule13d-3 under the
Exchange Act) of Exchange Notes received by such broker-dealer in the Exchange Offer (a "Participating
Broker-Dealer"), whether such positions or policies have been publicly disseminated by the staff of the SEC or
such positions or policies represent the prevailing views of the staff of the SEC. Such "Plan of Distribution"
section shall also expressly permit, to the extent permitted by applicable policies and regulations of the SEC,
the use of the Prospectus by all Persons subject to the prospectus delivery requirements of the Securities Act,
including, to the extent permitted by applicable policies and regulations of the SEC, all Participating
Broker-Dealers, and include a statement describing the means by which Participating Broker-Dealers may resell the
Exchange Notes in compliance with the Securities Act.
The Issuers shall use their best efforts to keep the Exchange Offer Registration Statement
effective and to amend and supplement the Prospectus contained therein in order to permit such Prospectus to be
lawfully delivered by all Persons subject to the prospectus delivery requirements of the Securities Act for such
period of time as is necessary to comply with applicable law in connection with any resale of the Exchange Notes,
provided, that such period does not exceed one year (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial Purchasers hold any Notes acquired
by them that have the status of an unsold allotment in the initial distribution, the Issuers upon the request of
the Initial Purchasers shall simultaneously with the delivery of the Exchange Notes issue and deliver to the
Initial Purchasers, in exchange (the "Private Exchange") for such Notes held by any such Holder, a like principal
amount of notes (the "Private Exchange Notes") of the Issuers, guaranteed by the Guarantors, that are identical
to the Exchange Notes except for the placement of a restrictive legend on such Private Exchange Notes. The
Private Exchange Notes shall be issued pursuant to the same indenture as the Exchange Notes and bear the same
CUSIP number as the Exchange Notes.
In connection with the Exchange Offer, the Issuers shall:
(1) mail, or cause to be mailed, to each Holder a copy of the Prospectus forming part of the Exchange
Registration Statement, together with an appropriate letter of transmittal and related documents,
stating, in addition to such other disclosures as are required by applicable law:
(i) that the Exchange Offer is being made pursuant to this Agreement and that all
Registrable Securities validly tendered will be accepted for exchange;
(ii) the dates of acceptance for exchange (which shall be a period of at least 30
days from the date such notice is mailed (or longer if required by applicable law));
(iii) that any Registrable Security not tendered will remain outstanding and
continue to accrue interest, but will not retain any rights under this Agreement;
(iv) that a Holder electing to have Registrable Securities exchanged pursuant to
the Exchange Offer will be required to surrender such Registrable Securities, together with the
enclosed letters of transmittal, to the institution and at the address specified in the notice
prior to the close of business on the last date of acceptance for exchange; and
(v) that a Holder will be entitled to withdraw such Holder's election, not later
than the close of business on the last Business Day on which the Exchange Offer shall remain
open, by sending to the institution and at the address specified in the notice a telegram,
telex, facsimile transmission or letter setting forth the name of such Holder, the principal
amount of Registrable Securities delivered for exchange and a statement that such Holder is
withdrawing its election to have such Registrable Securities exchanged;
(2) utilize the services of a depositary for the Exchange Offer with an address in the Borough of Manhattan,
The City of New York;
(3) permit Holders to withdraw tendered Notes at any time prior to the close of business, New York time, on
the last Business Day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable laws.
As soon as practicable after the close of the Exchange Offer and the Private Exchange, if any,
the Issuers shall:
(1) accept for exchange all Registrable Securities validly tendered and not validly withdrawn pursuant to
the Exchange Offer and the Private Exchange, if any;
(2) deliver to the Trustee for cancellation all Registrable Securities so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each Holder of Notes, Exchange Notes or
Private Exchange Notes, as the case may be, equal in principal amount to the Registrable Securities of
such Holder so accepted for exchange.
The Exchange Offer and the Private Exchange shall not be subject to any conditions, other than
that the Exchange Offer or Private Exchange, as the case may be, does not violate applicable law or any
applicable interpretation of the staff of the SEC.
The Exchange Notes and the Private Exchange Notes shall be issued under (i)the Indenture or
(ii)an indenture identical to the Indenture and that, in either case, has been qualified under the TIA or is
exempt from such qualification and shall provide that the Exchange Notes shall not be subject to the transfer
restrictions set forth in the Indenture. The Indenture or such indenture shall provide that the Exchange Notes,
the Private Exchange Notes and the Notes shall vote and consent together on all matters as one class and that
none of the Exchange Notes, the Private Exchange Notes or the Notes will have the right to vote or consent as a
separate class on any matter.
(c) If, (i)because of any change in law or in currently prevailing interpretations of the staff of the SEC,
the Issuers are not permitted to effect the Exchange Offer, (ii)the Exchange Offer is not completed on or prior
to the 175th day after the Issue Date, (iii)any holder of Private Exchange Notes so requests after the
consummation of the Private Exchange or (iv)in the case of any Holder that participates in the Exchange Offer,
such Holder does not receive Exchange Notes on the date of the exchange that may be sold without restriction
under state and federal securities laws (other than due solely to the status of such Holder as an affiliate of
the Issuers under Rule405) and such Holder so requests, then in the case of each of clauses (i) to and including
(iv) of this sentence, the Issuers shall (x) promptly, but in any event no later than 5 Business Days after any
of the events listed in clauses (i) through (iv) of this sentence, deliver to the Holders and the Trustee written
notice thereof (the "Shelf Notice") and (y) as promptly as practicable, file a Shelf Registration pursuant to
Section3 hereof.
3. Shelf Registration
If at any time a Shelf Notice is delivered as contemplated by Section2(c) hereof, then:
(a) Shelf Registration. The Issuers shall file with the SEC, a Registration Statement for an offering to be
made on a continuous basis pursuant to Rule 415 covering all of the Registrable Notes (the "Shelf
Registration"). The Issuers shall file with the SEC the Shelf Registration on or prior to the Filing Date. The
Shelf Registration shall be on the appropriate form which shall (y) be available for the sale of the Registrable
Securities by the selling Holders thereof in the manner or manners designated by them (including, without
limitation, one or more underwritten offerings) and (z) on the date it is declared effective by the SEC comply as
to form in all material respects with the requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith or incorporated by reference therein. The Issuers shall not
permit any securities other than the Registrable Securities to be included in the Shelf Registration. No Holder
of Registrable Securities may include any of its Registrable Securities in any Shelf Registration Statement
pursuant to this Agreement unless and until such Holder furnishes to the Company in writing, within 15 Business
Days after receipt of a request therefor, such information as the Company may reasonably request for use in
connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus included therein. Each
Holder as to which any Shelf Registration Statement is being effected agrees to furnish promptly to the Company
all information to be disclosed in order to make the information previously furnished to the Company by such
Holder not materially misleading.
The Issuers shall use their best efforts to cause the Shelf Registration to be declared
effective under the Securities Act on or prior to the Effectiveness Date and to keep the Shelf Registration
continuously effective under the Securities Act until the date that is two years from the Issue Date (the
"Effectiveness Period"), or such shorter period ending when all Registrable Securities covered by the Shelf
Registration have been sold in the manner set forth and as contemplated in the Shelf Registration; provided,
however, that the Effectiveness Period in respect of the Shelf Registration shall be extended to the extent
required to permit dealers to comply with the applicable prospectus delivery requirements of Rule 174 under the
Securities Act and as otherwise provided therein.
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases to be effective for any reason at any time
during the Effectiveness Period (other than because of the sale of all of the securities registered thereunder),
the Issuers shall use their best efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof.
(c) Supplements and Amendments. The Issuers shall promptly supplement and amend the Shelf Registration if
required by the rules, regulations or instructions applicable to the registration form used for such Shelf
Registration, if required by the Securities Act or if reasonably requested by the Holders of a majority in
aggregate principal amount of the Registrable Securities covered by such Registration Statement or if reasonably
requested by any underwriter of such Registrable Securities.
4. Additional Interest
(a) The Issuers and the Initial Purchasers agree that the Holders of Registrable Securities will suffer
damages if the Issuers fail to fulfill their obligations to Holders of Registrable Securities under Section 2 or
Section3 hereof and that it would not be feasible to ascertain the extent of such damages with precision.
Accordingly, the Issuers, jointly and severally, agree to pay Additional Interest on the Notes ("Additional
Interest") under the circumstances and to the extent set forth below (each of which shall be given independent
effect):
(i) if (A)neither the Exchange Registration Statement nor the Shelf Registration has been filed with the
SEC on or prior to 75 days after the Issue Date or (B)notwithstanding that the Issuers have consummated
or will consummate the Exchange Offer, the Issuers are required to file a Shelf Registration and such
Shelf Registration is not filed on or prior to the Filing Date applicable thereto, then, commencing on
the day after any such lapsed Filing Date, Additional Interest shall accrue on the principal amount of
the Notes over and above the stated interest at a rate of 0.50% per annum for the first 90days
immediately following each such lapsed Filing Date, and such Additional Interest rate shall increase by
an additional 0.50% per annum at the beginning of each subsequent 90-day period; or
(ii) if (A)neither the Exchange Registration Statement nor the Shelf Registration is declared effective by
the SEC on or prior to 145 days after the Issue Date or (B)notwithstanding that the Issuers have
consummated or will consummate the Exchange Offer, the Issuers are required to file a Shelf Registration
and such Shelf Registration is not declared effective by the SEC on or prior to the Effectiveness Date
in respect of such Shelf Registration, then, commencing on the day after either such Effectiveness Date,
Additional Interest shall accrue on the principal amount of the Notes over and above the stated interest
at a rate of 0.50% per annum for the first 90 days immediately following the day after such
Effectiveness Date, and such Additional Interest rate shall increase by an additional 0.50% per annum at
the beginning of each subsequent 90-day period; or
(iii) if (A)the Issuers have not exchanged Exchange Notes for all Notes validly tendered in accordance with
the terms of the Exchange Offer on or prior to the 175th day after the Issue Date or (B)if applicable,
a Shelf Registration has been declared effective and such Shelf Registration ceases to be effective at
any time during the Effectiveness Period (other than after such time as all Notes have been disposed of
hereunder), then Additional Interest shall accrue on the principal amount of the Notes over and above
the stated interest at a rate of 0.50% per annum for the first 90days commencing on (x) the 176th day
after the Issue Date, in the case of (A)above, or (y)the day such Shelf Registration ceases to be
effective in the case of (B)above, and such Additional Interest rate shall increase by an additional
0.50% per annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Notes may not accrue under more than one of the
clauses (a)(i) through (a)(iii) of this Section 4 at any one time and at no time shall the aggregate amount of
Additional Interest accruing exceed 2.00% per annum; provided, further, however, that (1)upon the filing of the
applicable Exchange Registration Statement or the Shelf Registration as required hereunder (in the case of
clause(i) of this Section4), (2)upon the effectiveness of the Exchange Registration Statement or the Shelf
Registration as required hereunder (in the case of clause(ii) of this Section4), or (3)upon the exchange of the
applicable Exchange Notes for all Notes tendered (in the case of clause(iii)(A) of this Section4), or upon the
effectiveness of the Shelf Registration which had ceased to remain effective (in the case of clause(iii)(B) of
this Section4), Additional Interest on the Notes in respect of which such events relate as a result of such
clause (or the relevant subclause thereof), as the case may be, shall cease to accrue.
(b) The Issuers shall notify the Trustee within five Business Days after each and every date on which an
event occurs in respect of which Additional Interest is required to be paid (an "Event Date"). Any amounts of
Additional Interest due pursuant to (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be payable in cash
semi-annually on each interest payment date for the Registrable Securities (to the Holders of record entitled to
such interest payment), commencing with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined on the basis of a 360-day year
comprised of twelve 30-day months.
5. Underwritten Registrations
If any of the Registrable Securities covered by any Shelf Registration or the Exchange
Registration Statement are to be sold in an Underwritten Offering, the investment banker or investment bankers
and manager or managers that will manage the offering will be selected by the Holders of a majority in aggregate
principal amount of the Registrable Securities included in such offering and reasonably acceptable to the Issuers.
No Holder of Registrable Securities may participate in any underwritten registration hereunder
unless such Holder (a)agrees to sell such Holder's Registrable Securities on the basis provided in any
underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements and
(b)completes and executes all reasonable and customary questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents in connection with such underwriting arrangements.
6. Registration Procedures
In connection with the filing of any Registration Statement, the Issuers shall:
(a) Prepare and file with the SEC prior to the applicable Filing Date a Registration Statement or
Registration Statements as prescribed by Section 2 or 3 hereof, and use their respective best efforts to cause
each such Registration Statement to become effective and remain effective as provided herein; provided, however,
that if (1)such filing is pursuant to Section3 hereof, or (2)a Prospectus contained in the Exchange
Registration Statement filed pursuant to Section2 hereof is required to be delivered under the Securities Act by
any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period relating thereto,
before filing any Registration Statement or Prospectus or any amendments or supplements thereto, the Issuers
shall furnish to, with respect to clause (1) above and only if so requested with respect to clause (2) above, the
Holders of the Registrable Securities included in such Registration Statement (with respect to a Registration
Statement filed pursuant to Section3 hereof) or each such Participating Broker-Dealer (with respect to any such
Registration Statement), as the case may be, their counsel and the managing underwriters, if any, and afford such
Person, an opportunity to review, copies of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to be filed (in each case at least three
Business Days prior to such filing). The Issuers shall not file any Registration Statement or Prospectus or any
amendments or supplements thereto in respect of which the Holders must be afforded an opportunity to review prior
to the filing of such document, if the Holders of a majority in aggregate principal amount of the Registrable
Securities covered by such Registration Statement, their counsel or the managing underwriters, if any, shall
reasonably object. The Issuers shall furnish to each Initial Purchaser and counsel to the Initial Purchasers a
copy of each Registration Statement, Prospectus and any amendments or supplements thereto in each case a
reasonable time prior to any filing thereof with the SEC, and afford the Initial Purchasers and counsel to the
Initial Purchasers an opportunity to review any such documents proposed to be filed (at least three Business Days
prior to such filing).
(b) Prepare and file with the SEC such amendments and post-effective amendments to each Shelf Registration
or Exchange Registration Statement, as the case may be, as may be necessary to keep such Shelf Registration or
Exchange Registration Statement continuously effective for the Effectiveness Period or the Applicable Period,
respectively; cause the related Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule424 (or any similar provisions then in force) under the Securities Act;
and comply with the provisions of the Securities Act, the Exchange Act and the rules and regulations of the SEC
promulgated thereunder applicable to each of them with respect to the disposition of all Registrable Securities
covered by such Registration Statement as so amended or in such Prospectus as so supplemented and with respect to
the subsequent resale of any securities being sold by a Participating Broker-Dealer covered by any such
Prospectus. The Issuers shall be deemed not to have used their respective best efforts to keep a Registration
Statement effective during the Effectiveness Period or the Applicable Period, as the case may be, if any Issuer
takes any action that would result in selling Holders of the Registrable Securities covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being able to sell such Registrable Notes or such
Exchange Notes during that period, unless such action is required by applicable law or by any governmental
authority or unless the Issuers comply with this Agreement, including without limitation, the provisions of
paragraph 6(k) hereof and the last paragraph of this Section 6.
(c) If (1)a Shelf Registration is filed pursuant to Section 3 hereof, or (2)a Prospectus contained in the
Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period
relating thereto from whom any Issuer has received written notice that it will be a Participating Broker-Dealer
in the Exchange Offer, notify the selling Holders of Registrable Securities (with respect to a Registration
Statement filed pursuant to Section3 hereof), or each such Participating Broker-Dealer (with respect to any such
Registration Statement), as the case may be, their counsel and the managing underwriters, if any, promptly (but
in any event within two Business Days after becoming aware thereof), and confirm such notice in writing, (i)when
a Prospectus or any Prospectus supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has become effective under the Securities
Act (including in such notice a written statement that any Holder may, upon request, obtain, without charge, one
conformed copy of such Registration Statement or post-effective amendment including financial statements and
schedules, but excluding documents incorporated or deemed to be incorporated by reference and exhibits), (ii)of
the issuance by the SEC or any state securities authority of any stop order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of any preliminary prospectus or the
initiation of any proceedings for that purpose, (iii)of the receipt by any Issuer of any notification with
respect to the suspension of the qualification or exemption from qualification of a Registration Statement or any
of the Registrable Securities or the Exchange Notes to be sold by any Participating Broker-Dealer for offer or
sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose, (iv)of the
happening of any event, the existence of any condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and (v)of the Issuers' determination that a post-effective amendment
to a Registration Statement would be appropriate.
(d) Use their respective best efforts to prevent the issuance of any order suspending the effectiveness of a
Registration Statement or of any order preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the Registrable Securities or the Exchange Notes to be
sold by any Participating Broker-Dealer, for sale in any jurisdiction, and, if any such order is issued, to use
its best efforts to obtain the withdrawal of any such order at the earliest possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 and if requested during the Effectiveness Period
by the managing underwriter or underwriters (if any), the Holders of a majority in aggregate principal amount of
the Registrable Securities being sold in connection with an underwritten offering or any Participating
Broker-Dealer, (i)promptly incorporate in a prospectus supplement or post-effective amendment such information
as the managing underwriter or underwriters, if any, such Holders, any Participating Broker-Dealer or counsel for
any of them reasonably request to be included therein, (ii)make all required filings of such prospectus
supplement or such post-effective amendment as soon as practicable after the Issuers receive notification of the
matters to be incorporated in such prospectus supplement or post-effective amendment and (iii)supplement or make
amendments to such Registration Statement.
(f) If (1)a Shelf Registration is filed pursuant to Section 3 hereof, or (2)a Prospectus contained in the
Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
furnish to each selling Holder of Registrable Securities who so requests, (with respect to a Registration
Statement filed pursuant to Section3 hereof) and to each such Participating Broker-Dealer who so requests (with
respect to any such Registration Statement) and to their respective counsel and each managing underwriter, if
any, without charge, one conformed copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and schedules, and, if requested, all documents
incorporated or deemed to be incorporated therein by reference and all exhibits.
(g) If (1)a Shelf Registration is filed pursuant to Section 3 hereof, or (2)a Prospectus contained in the
Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Securities during the Applicable
Period, deliver to each selling Holder of Registrable Securities (with respect to a Registration Statement filed
pursuant to Section3 hereof), or each such Participating Broker-Dealer (with respect to any such Registration
Statement), as the case may be, their respective counsel, and the underwriters, if any, without charge, as many
copies of each Prospectus (including each form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such Persons may reasonably request; and, subject
to the last paragraph of this Section6, each Issuer hereby consents to the use of such Prospectus and each
amendment or supplement thereto by each of the selling Holders of Registrable Securities or each such
Participating Broker-Dealer, as the case may be, and the underwriters or agents, if any, and dealers, if any, in
connection with the offering and sale of the Registrable Securities covered by, or the sale by Participating
Broker-Dealers of the Exchange Notes pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Securities or Exchange Notes or any delivery of a Prospectus
contained in the Exchange Registration Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use their respective best efforts to register or qualify, and to cooperate
with the selling Holders of Registrable Securities or each such Participating Broker-Dealer, as the case may be,
the managing underwriter or underwriters, if any, and their respective counsel in connection with the
registration or qualification (or exemption from such registration or qualification) of such Registrable
Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions within the United
States as any selling Holder, Participating Broker-Dealer, or the managing underwriter or underwriters reasonably
request in writing; provided, however, that where Exchange Notes held by Participating Broker-Dealers or
Registrable Securities are offered other than through an underwritten offering, the Issuers agree to cause their
counsel to perform Blue Sky investigations and file registrations and qualifications required to be filed
pursuant to this Section6(h), keep each such registration or qualification (or exemption therefrom) effective
during the period such Registration Statement is required to be kept effective and do any and all other acts or
things reasonably necessary or advisable to enable the disposition in such jurisdictions of the Exchange Notes
held by Participating Broker-Dealers or the Registrable Securities covered by the applicable Registration
Statement; provided, however, that no Issuer shall be required to (A)qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but for this Section 6(h), (B)take any action
that would subject it to general service of process in any such jurisdiction where it is not then so subject or
(C)subject itself to taxation in excess of a nominal dollar amount in any such jurisdiction where it is not then
so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof, cooperate with the selling Holders of
Registrable Securities and the managing underwriter or underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold, which certificates shall not bear
any restrictive legends and shall be in a form eligible for deposit with The Depository Trust Company ("DTC");
and enable such Registrable Securities to be in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or selling Holders of Registrable Securities may reasonably request.
(j) Use their respective best efforts to cause the Registrable Securities covered by the Registration
Statement to be registered with or approved by such other governmental agencies or authorities as may be
reasonably necessary to enable the seller or sellers thereof or the underwriter or underwriters, if any, to
consummate the disposition of such Registrable Securities, except as may be required solely as a consequence of
the nature of such selling Holder's business, in which case the Issuers will cooperate in all reasonable respects
with the filing of such Registration Statement and the granting of such approvals..
(k) If (1)a Shelf Registration is filed pursuant to Section 3 hereof, or (2)a Prospectus contained in the
Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
upon the occurrence of any event contemplated by paragraph6(c)(iv) or 6(c)(v) hereof, as promptly as practicable
prepare and (subject to Section6(a) hereof) file with the SEC, at the joint and several expense of each of the
Issuers, a supplement or post-effective amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated therein by reference, or file any other
required document so that, as thereafter delivered to the purchasers of the Registrable Securities being sold
thereunder (with respect to a Registration Statement filed pursuant to Section3 hereof) or to the purchasers of
the Exchange Notes to whom such Prospectus will be delivered by a Participating Broker-Dealer (with respect to
any such Registration Statement), any such Registration Statement or Prospectus or any document incorporated or
deemed to be incorporated therein by reference will not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(l) Use their respective best efforts to cause the Registrable Securities covered by a Registration
Statement or the Exchange Notes, as the case may be, to be rated with the appropriate rating agencies.
(m) Prior to the effective date of any Registration Statement relating to the Registrable Securities, (i)
provide the Trustee with printed certificates for the Registrable Securities covered by such Registration
Statement in a form eligible for deposit with DTC and (ii) provide a CUSIP number(s) for the Registrable
Securities or the Exchange Notes, as the case may be.
(n) Cooperate with each selling Holder of Registrable Securities covered by any Registration Statement and
each underwriter, if any, participating in the disposition of such Registrable Securities and their respective
counsel in connection with any filings required to be made with the National Association of Securities Dealers,
Inc. (the "NASD").
(o) In the event a Shelf Registration is filed in connection with any Underwritten Offering of Registrable
Securities, and if requested by Holders of a majority in aggregate principal amount of Registrable Securities
covered by such Registration Statement, enter into an underwriting agreement in form, scope and substance as is
customary in underwritten offerings of debt securities similar to the Notes, and take all such other actions as
are reasonably requested by the managing underwriter or underwriters in order to expedite or facilitate the
registration or the disposition of such Registrable Securities, and, in such connection, (i) make such
representations and warranties to the underwriters and the Holders of such Registrable Securities, with respect
to the business of the Issuers and their respective subsidiaries, and the Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated by reference therein, in each case, in form,
substance and scope as are customarily made by issuers to underwriters in underwritten offerings of securities
similar to the Notes, and confirm the same if and when requested; (ii) obtain opinions of counsel to the Issuers
and updates thereof in form, scope and substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to each selling Holder and the underwriters covering the matters customarily covered in
opinions requested in underwritten offerings of debt securities similar to the Notes and such other matters as
may be reasonably requested by underwriters; (iii) obtain "cold comfort" letters and updates thereof in form and
substance reasonably satisfactory to the managing underwriter or underwriters from the independent certified
public accountants of the Issuers (and, if necessary, any other independent certified public accountants of any
subsidiary of the Issuers or business acquired by the Issuers for which financial statements and financial data
are, or are required to be, included in the Registration Statement), addressed to each of the underwriters, such
letters to be in customary form and covering matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt securities similar to the Notes; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification provisions and procedures no less favorable
than those set forth in Section 8 (or such other less favorable provisions and procedures acceptable to Holders
of a majority in aggregate principal amount of Registrable Securities covered by such Registration Statement and
the managing underwriter or underwriters or agents) with respect to all parties to be indemnified pursuant to
said Section. The above shall be done at each closing under such underwriting agreement, or as and to the extent
required thereunder.
(p) If (1)a Shelf Registration is filed pursuant to Section 3 hereof, or (2)a Prospectus contained in the
Exchange Registration Statement filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange Notes during the Applicable Period,
make available for inspection by any selling Holder of such Registrable Notes being sold (with respect to a
Registration Statement filed pursuant to Section 3 hereof), or each such Participating Broker-Dealer, as the case
may be, any underwriter participating in any such disposition of Registrable Securities, if any, and any attorney
or accountant or other agent retained by any such selling Holder or each such Participating Broker-Dealer (with
respect to any Registration Statement), as the case may be, or underwriter (collectively, the "Inspectors") at
the offices where normally kept, during reasonable business hours, all financial and other records, pertinent
corporate documents and properties of the Issuers and their subsidiaries, and cause the officers, directors and
employees of the Issuers and their subsidiaries to supply all information, in each case reasonably requested by
any such Inspector in connection with such Registration Statement.
(q) Provide an indenture trustee for the Registrable Securities or the Exchange Notes, as the case may be,
and cause the Indenture or the trust indenture provided for in Section2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the first Registration Statement relating to the
Registrable Securities; and in connection therewith, cooperate with the trustee under any such indenture and the
selling Holders of the Registrable Securities to effect such changes to the Indenture or such indenture, as the
case may be, as may be required for the Indenture or such indenture, as the case may be, to be so qualified in
accordance with the terms of the TIA; and execute, and use its reasonable best efforts to cause such trustee to
execute, all documents as may be required to effect such changes, and all other forms and documents required to
be filed with the SEC to enable such indenture to be so qualified in a timely manner.
(r) Comply with all applicable rules and regulations of the SEC and make generally available to its
securityholders earnings statements satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no later than 45 days after the end of any
fiscal quarter (or 90 days after the end of any 12-month period if such period is a fiscal year) (i) commencing
at the end of any fiscal quarter in which Registrable Securities are sold to underwriters in a firm commitment or
best efforts Underwritten Offering and (ii) if not sold to underwriters in such an offering, commencing on the
first day of the first fiscal quarter of the Company after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(s) If an Exchange Offer Registration is to be consummated, upon delivery of the Registrable Securities by
such selling Holders to the Issuers (or to such other Person as directed by the Issuers) in exchange for the
Exchange Notes, the Issuers shall mark, or caused to be marked, on such Registrable Securities that such
Registrable Securities are being cancelled in exchange for the Exchange Notes; in no event shall such Registrable
Securities be marked as paid or otherwise satisfied.
(t) Use its reasonable best efforts to take all other steps reasonably necessary to effect the registration
of the Exchange Notes and/or Registrable Securities covered by a Registration Statement contemplated hereby.
The Issuers may require each selling Holder of Registrable Securities as to which any
registration is being effect to furnish to the Issuers such information regarding such seller and the
distribution of such Registrable Securities as the Issuers may, from time to time, reasonably request in writing
and to otherwise cooperate in the preparation of the Registration Statement. The Issuers may exclude from such
registration the Registrable Securities of any seller who fails to furnish such information within a reasonable
time after receiving such request. If the identity of a seller of Registrable Securities is to be disclosed in a
Registration Statement, such selling Holder shall be permitted to include all information regarding such seller
as it shall reasonably request. At any time during the effectiveness of any Registration Statement with respect
to the Registrable Securities, if any selling Holder becomes aware of any change materially affecting the
accuracy of the information provided by such selling Holder in writing with respect to itself and contained in
the Registration Statement or related Prospectus, such Holder will notify the Issuers of such change.
Each Holder of Registrable Notes and each Participating Broker-Dealer agrees by its acquisition
of such Registrable Notes or Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be,
that, upon receipt of any notice from the Issuers of the happening of any event of the kind described in Section
6(c)(ii), 6(c)(iii), 6(c)(iv) or 6(c)(v) hereof, such Person will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus or Exchange Notes to be sold by such
Holder or Participating Broker-Dealer, as the case may be, until such Holder's or Participating Broker-Dealer's
receipt of the copies of the supplemented or amended Prospectus contemplated by Section6(k) hereof, or until it
is advised in writing (the "Advice") by the Issuers that the use of the applicable Prospectus may be resumed. In
the event that the Issuers shall give any such notice, each of the Effectiveness Period and the Applicable Period
shall be extended by the number of days during such periods from and including the date of the giving of such
notice to and including the date when each seller of Registrable Notes covered by such Registration Statement or
Exchange Notes to be sold by such Participating Broker-Dealer, as the case may be, shall have received (x)the
copies of the supplemented or amended Prospectus contemplated by Section6(k) hereof or (y)the Advice.
7. Registration Expenses
(a) All fees and expenses, other than underwriting discounts and commissions, incident to the performance of
or compliance with this Agreement by the Issuers shall be borne by the Issuers, jointly and severally, whether or
not the Exchange Registration Statement or any Shelf Registration is filed or becomes effective or the Exchange
Offer is consummated, including, without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the NASD in connection with an Underwritten
Offering and (B) fees and expenses of compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of counsel in connection with Blue Sky qualifications of the
Registrable Securities or Exchange Notes and determination of the eligibility of the Registrable Securities or
Exchange Notes for investment), (ii) all printing expenses (including, without limitation, expenses of printing
certificates for Registrable Securities or Exchange Notes in a form eligible for deposit with DTC and of printing
prospectuses and any amendments or supplements thereto and other documents relating to the performance of and
compliance with this agreement), (iii) messenger, telephone and delivery expenses, (iv) reasonable fees and
disbursements of counsel for the Issuers and, in connection with a Shelf Registration, reasonable fees and
disbursements of counsel for the sellers of Registrable Securities, (v) reasonable fees and disbursements of the
Trustee and its counsel, (vi) fees and disbursements of all independent certified public accountants referred to
in Section 6(o)(iii) (including, without limitation, the expenses of any special audit and "cold comfort" letters
required by or incidental to such performance), (vii) the fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering pursuant to Rule 2720 of the Conduct
Rules of the NASD, (viii) rating agency fees, (ix) Securities Act liability insurance, if the Issuers desire such
insurance, (x) fees and expenses of all other Persons retained by the Issuers, (xi) internal expenses of the
Issuers (including, without limitation, all salaries and expenses of officers and employees of the Issuers
performing legal or accounting duties), (xii) the expense of any annual audit and (xiii) the fees and expenses
incurred in connection with the listing of the securities to be registered on any securities exchange.
(b) In connection with any Shelf Registration hereunder or any amendment thereto, the Issuers shall
reimburse the Holders of the Registrable Securities being registered in such registration for the reasonable fees
and disbursements of not more than one counsel (together with appropriate local counsel) chosen by the Holders of
a majority in aggregate principal amount of the Registrable Securities to be included in such Registration
Statement and other reasonable out-of-pocket expenses of the Holders of Registrable Securities incurred in
connection with the registration of the Registrable Securities.
8. Indemnification
(a) The Issuers, jointly and severally, agree to indemnify and hold harmless each Holder of Registrable
Securities covered by a Registration Statement, and each Participating Broker-Dealer selling Exchange Notes
during the Applicable Period, the officers, directors, employees and agents of each such Person, and each Person,
if any, who controls any such Person within the meaning of either Section 15 of the Securities Act or Section 20
of the Exchange Act (each, a "Participant"), from and against any and all losses, claims, damages, judgments,
liabilities and expenses (including, without limitation, the reasonable legal fees and other expenses actually
incurred in connection with defending or investigating any suit, action or proceeding or any claim asserted)
caused by, arising out of or based upon any untrue statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment thereto) or any Prospectus (or any amendment or
supplement thereto), or any preliminary prospectus, or caused by, arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to make the
statements therein, in the case of the Prospectus, in the light of the circumstances under which they were made,
not misleading, except insofar as such losses, claims, damages or liabilities are caused by, arise out of or are
based upon any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in
conformity with information relating to any Participant furnished to the Issuers in writing by such Participant
expressly for use therein; provided that the Issuers will not be liable if such untrue statement or omission or
alleged untrue statement or omission was contained or made in any preliminary prospectus and corrected in the
final Prospectus or any amendment or supplement thereto and any such loss, liability, claim, damage or expense
suffered or incurred by the Participants resulted from any action, claim or suit by any person who purchased
Registrable Securities or Exchange Notes which are the subject thereof from such Participant and it is
established by a court of competent jurisdiction by final and non-appealable judgment that such Participant failed
to deliver or provide a copy of the final Prospectus (as amended or supplemented) to such person with or prior to
the confirmation of the sale of such Registrable Securities or Exchange Notes sold to such person if required by
applicable law and such loss, liability, claim, damage or expense resulted from the fact that there was not sent
or given to such person at or prior to the written confirmation of the sale of such Registrable Securities or
Exchange Notes to such person a copy of the final Prospectus, unless such failure to deliver or provide a copy of
the Prospectus (as amended or supplemented) was a result of noncompliance by the Issuers with Section 6 of this
Agreement.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold harmless the Issuers, their
respective directors, their respective officers who sign the Registration Statement and their respective
employees and agents and each Person who controls the Issuers within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act to the same extent as the foregoing indemnity from the Issuers to each
Participant, but only with reference to information relating to such Holder furnished to the Issuers in writing
by such Holder expressly for use in any Registration Statement or Prospectus, any amendment or supplement
thereto, or any preliminary prospectus. The liability of any Holder under this paragraph shall in no event
exceed the proceeds received by such Holder from sales of Registrable Securities or Exchange Notes giving rise to
such obligations.
(c) If any suit, action, proceeding (including any governmental or regulatory investigation), claim or
demand shall be brought or asserted against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified Person") shall promptly notify the Persons
against whom such indemnity may be sought (the "Indemnifying Persons") in writing, and the Indemnifying Persons,
upon request of the Indemnified Person, shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others the Indemnifying Persons may reasonably designate in such
proceeding and shall pay the reasonable fees and expenses actually incurred by such counsel related to such
proceeding; provided, however, that the failure to so notify the Indemnifying Persons shall not relieve any of
them of any obligation or liability which any of them may have hereunder or otherwise except to the extent it is
materially prejudiced by such failure. In any such proceeding, any Indemnified Person shall have the right to
retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified
Person unless (i)the Indemnifying Persons and the Indemnified Person shall have mutually agreed to the contrary,
(ii)the Indemnifying Persons shall have failed within a reasonable period of time to retain counsel reasonably
satisfactory to the Indemnified Person or (iii)the named parties in any such proceeding (including any impleaded
parties) include both any Indemnifying Person and the Indemnified Person or any affiliate thereof and
representation of both parties by the same counsel would be inappropriate due to actual or potential conflicting
interests between them. It is understood that, unless there exists a conflict among Indemnified Persons, the
Indemnifying Persons shall not, in connection with such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general allegations, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that
all such reasonable fees and expenses shall be reimbursed as they are incurred. Any such separate firm for the
Participants and such control Persons of Participants shall be designated in writing by Participants who sold a
majority in interest of Registrable Securities and Exchange Notes sold by all such Participants and any such
separate firm for the Issuers, their directors, their officers and such control Persons of the Issuers shall be
designated in writing by the Issuers and shall be reasonably acceptable to the Holders.
The Indemnifying Persons shall not be liable for any settlement of any proceeding effected
without their prior written consent (which consent shall not be unreasonably withheld or delayed), but if settled
with such consent or if there be a final non-appealable judgment for the plaintiff for which the Indemnified
Person is entitled to indemnification pursuant to this Agreement, each of the Indemnifying Persons agrees to
indemnify and hold harmless each Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have
requested an Indemnifying Person to reimburse the Indemnified Person for fees and expenses actually incurred by
counsel as contemplated by the third sentence of the foregoing paragraph, the Indemnifying Person agrees that it
shall be liable for any settlement of any proceeding effected without its written consent if (i)such settlement
is entered into more than 30days after receipt by such Indemnifying Person of the aforesaid request and
(ii)such Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement, provided, however, that the Indemnifying Person shall not be liable for any
settlement effected without its consent pursuant to this sentence if the Indemnifying Person is contesting, in
good faith, the request for reimbursement. No Indemnifying Person shall, without the prior written consent of
the Indemnified Persons (which consent shall not be unreasonably withheld or delayed), effect any settlement or
compromise of any pending or threatened proceeding in respect of which any Indemnified Person is or could have
been a party, or indemnity could have been sought hereunder by such Indemnified Person, unless such settlement
(A)includes an unconditional written release of such Indemnified Person, in form and substance reasonably
satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such
proceeding and (B) does not include any statement as to an admission of fault, culpability or failure to act by
or on behalf of such Indemnified Person.
(d) If the indemnification provided for in clauses (a) and (b) of this Section8 is for any reason
unavailable to, or insufficient to hold harmless (other than by reason of the exceptions provided in those
Sections), an Indemnified Person in respect of any losses, claims, damages or liabilities referred to therein,
then each Indemnifying Person under such paragraphs, in lieu of indemnifying such Indemnified Person thereunder
and in order to provide for just and equitable contribution, shall contribute to the amount paid or payable by
such Indemnified Person as a result of such losses, claims, damages or liabilities in such proportion as is
appropriate to reflect (i) the relative benefits received by the Indemnifying Person or Persons on the one hand
and the Indemnified Person or Persons on the other from the offering of the Securities or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not only such relative benefits but also
the relative fault of the Indemnifying Person or Persons on the one hand and the Indemnified Person or Persons on
the other in connection with the statements or omissions or alleged statements or omissions that resulted in such
losses, claims, damages or liabilities (or actions in respect thereof) as well as any other relevant equitable
considerations. The relative fault of the parties shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Issuers on the one hand or such Holder or such other
Indemnified Person, as the case may be, on the other, the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission, and any other equitable
considerations appropriate under the circumstances. The Holder's respective obligations to contribute pursuant
to this Section 8(d) are several in proportion to the respective principle amount of Registrable Securities of
such Holder that are registered pursuant to a Registration Statement.
(e) The parties agree that it would not be just and equitable if contribution pursuant to this Section 8
were determined by pro rata allocation (even if the Holders were treated as one entity for such purpose) or by
any other method of allocation that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages, judgments, liabilities and expenses referred to in the immediately preceding paragraph shall be
deemed to include, subject to the limitations set forth above, any reasonable legal or other expenses actually
incurred by such Indemnified Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, in no event shall a Holder be required to contribute any amount
in excess of the amount by which proceeds received by such Holder from sales of Registrable Securities or
Exchange Notes, as the case may be, exceeds the amount of any damages that such Holder has otherwise been
required to pay or has paid by reason of such untrue or alleged untrue statement or omission or alleged omission.
No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation.
(f) Any losses, claims, damages, liabilities or expenses for which an Indemnified Person is entitled to
indemnification or contribution under this Section 8 shall be paid by the Indemnifying Persons to the Indemnified
Person as such losses, claims, damages, liabilities or expenses are incurred. The indemnity and contribution
agreements contained in this Section 8 and the representations and warranties of the Issuers set forth in this
Agreement shall remain operative and in full force and effect, regardless of (i)any investigation made by or on
behalf of any Participant or any Person who controls a Participant, the Issuers and their directors, officers,
employees or agents or any Person controlling the Issuers, (ii)any termination of this Agreement, (iii)
acceptance of any Exchange Notes or Private Exchange Notes and (iv) any sale of Registrable Securities pursuant
to a Registration Statement.
(g) The indemnity and contribution agreements contained in this Section 8 will be in addition to any
liability which the Indemnifying Persons may otherwise have to the Indemnified Persons referred to above, and
shall not limit any rights or remedies which may otherwise be available to any Indemnified party at law or in
equity.
9. Rule 144 and 144A
The Issuers covenant that, so long as Registrable Securities remain outstanding, they will file
the reports required to be filed by them under the Securities Act and the Exchange Act and the rules and
regulations adopted by the SEC thereunder in a timely manner and, if at any time the Issuers are not required to
file such reports, the Issuers will, upon the request of any Holder of Registrable Securities, make publicly
available annual reports and such information, documents and other reports of the type specified in Sections 13
and 15(d) of the Exchange Act. The Issuers further covenant, for so long as any Registrable Securities remain
outstanding, to make available to any Holder or beneficial owner of Registrable Securities in connection with any
sale thereof and any prospective purchaser of such Registrable Securities from such Holder or beneficial owner,
the information required by Rule 144A(d)(4) under the Securities Act in order to permit resales of such
Registrable Securities pursuant to Rule 144A.
10. Miscellaneous
(a) No Inconsistent Agreements. No Issuer has entered, as of the date hereof, into any agreement with
respect to any of its securities that is inconsistent with the rights granted to the Holders of Registrable
Securities in this Agreement or otherwise conflicts with the provisions hereof. No Issuer has entered into any
agreement with respect to any of its securities which will grant to any Person piggyback rights with respect to a
Registration Statement required to be filed by the Issuers pursuant to this Agreement.
(b) Adjustments Affecting Registrable Securities. None of the Issuers shall, directly or indirectly, take
any action with respect to the Registrable Securities that would adversely affect the ability of the Holders of
Registrable Securities to include such Registrable Securities in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement, including the provisions of this sentence,
may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof
may not be given, unless the Issuers have obtained the written consent of (A)Holders of at least a majority of
the then outstanding aggregate principal amount of Registrable Securities and (B)in circumstances that would
adversely affect the Participating Broker-Dealers, the Participating Broker-Dealers holding not less than a
majority in aggregate principal amount of the Exchange Notes held by all Participating Broker-Dealers; provided,
however, that Section8 and this Section10(c) may not be amended, modified or supplemented without the prior
written consent of each Holder and each Participating Broker-Dealer (including any Person who was a Holder or
Participating Broker-Dealer of Registrable Notes or Exchange Notes, as the case may be, disposed of pursuant to
any Registration Statement) affected by any such amendment, modification or supplement. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates
exclusively to the rights of Holders of Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect, impair, limit or compromise the rights of
other Holders of Registrable Securities may be given by Holders of at least a majority in aggregate principal
amount of the Registrable Securities being sold by such Holders pursuant to such Registration Statement; provided
that the provisions of this sentence may not be amended, modified or supplemented except in accordance with the
provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including without limitation any notices or other
communications to the Trustee) provided for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, next-day air courier or telecopier:
(i) if to a Holder of the Registrable Securities or any Participating Broker-Dealer, at the most current
address of such Holder or participating Broker-Dealer, as the case may be, set forth on the records of
the registrar under the Indenture.
(ii) if to the Issuers as follows:
c/o Salem Communications Holding Corporation
4880 Santa Rosa Road
Camarillo, California 93012
Facsimile: (805) 384-4505.
Attention: General Counsel
with copies to:
Gibson, Dunn & Crutcher, LLP
4 Park Plaza
Suite 1800
Irvine, California 92614
Facsimile No.: (949) 451-4220
Attention: Thomas D. Magill, Esq.
All such notices and communications shall be deemed to have been duly given: when delivered by
hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed;
one Business Day after being timely delivered to a next-day air courier; and when receipt is acknowledged by the
addressee, if telecopied.
Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the trustee under the Indenture at the address specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors
and assigns of each of the parties hereto, the Holders and the Participating Broker-Dealers, provided that
nothing herein shall be deemed to permit any assignment, transfer or other disposition of Registrable Securities
in violation of the terms of the Indenture.
(f) Counterparts. This Agreement may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE JURISDICTION OF THE COURTS OF
THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be
affected, impaired or invalidated, and the parties hereto shall use their reasonable best efforts to find and
employ an alternative means to achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
(j) Joint and Several Obligations. Each of the obligations of the Issuers under this Agreement shall be
joint and several obligations of each of them.
(k) Securities Held by the Issuers or Their Affiliates. Whenever the consent or approval of Holders of a
specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Issuers
or their affiliates (as such term is defined in Rule 405 under the Securities Act) shall not be counted in
determining whether such consent or approval was given by the Holders of such required percentage.
(l) Third-Party Beneficiaries. Holders of Registrable Securities and Participating Broker-Dealers are
intended third party-beneficiaries of this Agreement, and this Agreement may be enforced by such Persons.
(m) Entire Agreement. This Agreement, together with the Purchase Agreement and the Indenture, is intended
by the parties as a final and exclusive statement of the agreement and understanding of the parties hereto is
respect of the subject matter contained herein and therein and any and all prior oral or written agreements,
representations, or warranties, contracts, understandings, correspondence, conversations and memoranda between
the Holders on the one hand and the Issuers on the other, or between or among any agents, representatives,
parents, subsidiaries, affiliates, predecessors in interest or successors in interest with respect to the subject
matter hereof and thereof are merged herein and replaced hereby.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.
SALEM COMMUNICATIONS HOLDING CORPORATION
| | | | |
| | | | |
| | By: | /s/ Jonathan L. Block | |
| | |
| |
| | Name: | Jonathan L. Block | |
| | Title: | Vice President, General Counsel and Secretary | |
SALEM COMMUNICATIONS CORPORATION
| | | | |
| | | | |
| | By: | /s/ Jonathan L. Block | |
| | |
| |
| | Name: | Jonathan L. Block | |
| | Title: | Vice President, General Counsel and Secretary | |
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INLAND RADIO, INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
OASIS RADIO, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
as Guarantors
| | | | |
| | | | |
| | By: | /s/ Jonathan L. Block | |
| | |
| |
| | Name: | Jonathan L. Block | |
| | Title: | Vice President and Secretary | |
INITIAL PURCHSERS:
DEUTSCHE BANC ALEX. BROWN INC.
J.P. MORGAN SECURITIES INC.
BEAR, STEARNS & CO. INC.
BNY CAPITAL MARKETS, INC.
CREDIT SUISSE FIRST BOSTON CORPORATION
FLEET SECURITIES, INC.
JEFFERIES & COMPANY, INC.
By: DEUTSCHE BANC ALEX. BROWN INC.
Acting on behalf of itself and
the several Initial Purchasers named above.
| | | | |
| | | | |
| | By: | /s/ Daniel B. Graves | |
| | |
| |
| | Name: | Daniel B. Graves | |
| | Title: | Managing Director | |
| | | | |
| | | | |
| | By: | /s/ Carl A. Mayer, III | |
| | |
| |
| | Name: | Carl A. Mayer, III | |
| | Title: | Managing Director | |
EXHIBIT 10.01.02
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of July 1, 2001, by and between Edward G.
Atsinger III, an individual ("Executive"), and Salem Communications Holding Corporation, a Delaware corporation
(the "Company").
RECITALS
WHEREAS, the Executive and the Company (as successor to its parent, Salem Communications Corporation, a
Delaware corporation ("Parent")) are parties to the Employment Agreement, dated August 1, 1997 (the "Old
Employment Agreement") which had been renewed through July 31, 2001;
WHEREAS, the Executive and the Company wish to terminate the Old Employment Agreement, effective as of
midnight on June 30, 2001;
WHEREAS, the Company desires to employ Executive in the capacity of President and Chief Executive
Officer of the Company on the terms and conditions set forth herein; and
WHEREAS, Executive desires to serve in such capacity on behalf of the Company and to provide to the
Company the services described herein on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and conditions set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Executive and the Company hereby agree as follows:
1. Employment By The Company And Term.
(a) Full Time and Best Efforts. Subject to the terms set forth herein, the Company agrees
to employ Executive as President and Chief Executive Officer and Executive hereby accepts such employment. As
President and Chief Executive Officer, Executive shall have responsibility for the day-to-day operations of the
Company and shall have the authority, functions, duties, powers and responsibilities for Executive's corporate
offices and positions which are set forth in the Company's bylaws from time to time in effect and such other
authority, functions, duties, powers and responsibilities as the Board of Directors of the Company (the "Board")
may from time to time prescribe or delegate to Executive, in all cases to be consistent with Executive's
corporate offices and positions. During the term of his employment with the Company, Executive will apply, on a
full-time basis, all of his skill and experience to the performance of his duties in such employment and will
not, without the prior consent of the Board, devote substantial amounts of time to outside business activities.
The performance of Employee's duties shall be in Camarillo, California, subject to reasonable travel as the
performance of his duties in the business may require. Notwithstanding the foregoing, Executive may devote a
reasonable amount of his time to civic, community, charitable or passive investment activities.
(b) Company Policies. The employment relationship between the parties shall be governed
by the general employment policies and practices of the Company, except that when the terms of this Agreement
differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall
control.
(c) Term. The initial term of the employment of Executive under this Agreement shall
begin as of July 1, 2001 for an initial term ending on June 30, 2004 (such three-year period, the "Initial
Term"), subject to the provisions for termination set forth herein and renewal as provided in Section 1(d) below.
(d) Renewal. Unless the Company or Executive shall have given the other party hereto
notice (any such notice to be given in accordance with Section 10(a) hereof) that this Agreement shall not be
renewed at least 90 days prior to the end of the Initial Term, the term of this Agreement shall be automatically
extended for a period of one year (each such one-year period, an "Extended Term"), such procedure to be followed
in each such successive period. Each Extended Term shall continue to be subject to the provisions for
termination set forth herein.
2. Compensation And Benefits.
(a) Cash Salary. Executive shall receive for services to be rendered hereunder an annual
base salary of Five Hundred Thirty Thousand Dollars ($530,000) (the "Base Salary"). Effective January 1, 2002,
the Base Salary shall be increased to Seven Hundred Thousand Dollars ($700,000).
(b) Participation in Benefit Plans. During the term hereof, Executive shall be entitled
to participate in any group insurance, hospitalization, medical, dental, health and accident, disability or
similar plan or program of the Company now existing or established hereafter to the extent that he is eligible
under the general provisions thereof. The Company may, in its sole discretion and from time to time, amend,
eliminate or establish additional benefit programs as it deems appropriate. Executive shall also participate in
all fringe benefits offered by the Company to any of its Executives.
3. Bonuses.
(a) Signing Bonus. On the date this Agreement is executed by the Executive and the
Company, as first written above, the Executive shall receive a signing bonus of Three Hundred Thousand Dollars
($300,000) in cash. In the event that Executive's employment is terminated during the Initial Term for any
reason, Executive shall forfeit and be obligated to return a percentage of the cash portion of the signing bonus
equal to the number of full months remaining in the Initial Term after the Termination Date, as defined in
Section 4 below, divided by 36.
(b) Annual Bonus. In addition to the other compensation of Executive as set forth herein,
and subject to the provisions of Section 4 hereof, Executive shall be eligible for an annual merit bonus in an
amount to be determined at the discretion of the Board of Directors of the Company, which bonus may be paid in
cash, options or a combination thereof. In 2001, Executive's annual merit bonus shall be based upon the Company
achieving after-tax cash flow in 2001 of $1.01.
4. Termination Of Employment.
The date on which Executive's employment by the Company ceases, under any of the following
circumstances, shall be defined herein as the "Termination Date."
(a) Termination For Cause.
(i) Termination; Payment of Accrued Salary. The Board may terminate Executive's
employment with the Company at any time for cause, immediately upon notice to Executive of the circumstances
leading to such termination for cause. In the event that Executive's employment is terminated for cause,
Executive shall receive payment for all accrued salary through the Termination Date, which in this event shall be
the date upon which notice of termination is given. The Company shall have no further obligation to pay severance
of any kind nor to make any payment in lieu of notice.
(ii) Definition of Cause. "Cause" means the occurrence or existence of any of the
following with respect to Executive, as determined by a majority of the disinterested directors of the Board: (A)
a material breach by Executive of any of his obligations hereunder which remains uncured after the lapse of 30
days following the date that the Company has given Executive notice thereof, provided, however, that the failure
by the Company to achieve performance targets shall not, in and of itself, constitute a material breach under
this Section 4(a)(ii)(A); (B) any misappropriation, embezzlement, intentional fraud or similar conduct involving
the Company or any person or entity directly or indirectly controlling, controlled by or under direct or indirect
common control with the Company (an "Affiliate"); (C) the conviction or the plea of nolo contendere or the
equivalent in respect of any felony or a crime involving moral turpitude; or (D) the repeated non-prescription
use of any controlled substance or the repeated use of alcohol or any other non-controlled substance which, in
any case described in this clause (D), the Board reasonably determines renders the Executive unfit to serve in
his capacity as an officer or employee of the Company or its Affiliates.
(b) Termination by Executive. Executive shall have the right, at his election, to
terminate his employment with the Company by notice to the Company to that effect (i) if the Company shall have
failed to substantially perform a material condition or covenant of this Agreement ("Company's Material Breach")
or (ii) if the Company materially reduces or diminishes Executive's powers and responsibilities hereunder;
provided, however, that a termination under clauses (i) and (ii) of this Section 4(b) will not be effective until
Executive shall have given notice to the Company specifying the claimed breach and, provided such breach is
curable, Company fails to correct the claimed breach within 30 days after the receipt of the applicable notice or
such longer term as may be reasonably required by the Company due to the nature of the claimed breach (but within
10 days if the failure to perform is a failure to pay monies when due under the terms of this Agreement).
(c) Termination Upon Disability. The Company may terminate Executive's employment in the
event Executive suffers a disability that renders Executive unable to perform the essential functions of his
position, even with reasonable accommodation, for 180 days within any 270 day period and fails to return to work
within 10 days of notice by the Company of intention to terminate. After the Termination Date, which in this
event shall be the date upon which notice of termination is given, no further compensation will be payable under
this Agreement except that Executive shall receive the accrued portion of any salary and bonus through the
Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a
bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan plus
severance equal to 100% of his then Base Salary for 15 months without offset for any disability payments
Executive may receive, payable in equal monthly installments.
(d) Termination Without Cause; Failure to Renew.
(i) Termination Payments. In the event that, during the Initial Term, Executive's
employment is terminated by the Company other than pursuant to Section 4(a) or 4(c), or by Executive pursuant to
Section 4(b), the Company shall pay Executive as severance an amount equal to his then Base Salary for the longer
of six months or the remainder of the Initial Term, less standard withholdings for tax and social security
purposes, payable in equal installments over six consecutive months, or, if longer, the number of months
remaining in the Initial Term, commencing immediately following termination, in monthly pro rata payments
commencing as of the Termination Date, plus the accrued portion of any bonus through the Termination Date, less
standard withholdings for tax and social security purposes, payable, in the case of a bonus, upon such date or
over such period of time which is in accordance with the applicable bonus plan. In the event that during an
Extended Term Executive's employment is terminated by the Company other than pursuant to Section 4(a) or 4(c), or
by Executive pursuant to Section 4(b), or if the Company shall fail to renew the term of this Agreement at the
expiration of the Initial Term (including any renewal term thereof), the Company shall pay Executive as severance
an amount equal to three months of his then Base Salary, less standard withholdings for tax and social security
purposes, payable in equal installments over three consecutive months commencing immediately following
termination or failure to renew in monthly pro rata payments commencing as of the Termination Date, plus the
accrued portion of any bonus through the Termination Date, less standard withholdings for tax and social security
purposes, payable, in the case of a bonus, upon such date or over such period of time which is in accordance with
the applicable bonus plan.
(e) Benefits Upon Termination. All benefits provided under Section 2(b) hereof shall be
extended at the Executive's cost, to the extent permitted by the Company's insurance policies and benefit plans,
for six months after Executive's Termination Date, except (a) as required by law (e.g. COBRA health insurance
continuation election) or (b) in the event of a termination by the Company pursuant to Section 4(a).
(f) Termination Upon Death. If Executive dies prior to the expiration of the Initial Term
or any Extended Term of this Agreement, the Company shall (i) continue coverage of Executive's dependents (if
any) under all applicable benefit plans or programs of the type listed above in Section 2(b) herein for a period
of 12 months, and (ii) pay to Executive's estate the accrued portion of any salary and bonus through the
Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a
bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan.
(g) No Offset. Executive shall have no duty to mitigate any of his damages or losses and,
except as provided in Section 3(a) hereof, the Company shall not be entitled to reduce or offset any payments
owed to Executive hereunder for any reason.
5. Right Of First Refusal On Corporate Opportunities.
During the term of employment under this Agreement, Executive agrees that he will, prior to
exploiting a Corporate Opportunity (hereafter defined) for his own account, offer the Company a right of first
refusal with respect to such Corporate Opportunity. For purposes of this Section 5, "Corporate Opportunity"
shall mean any business opportunity that is in the same or a related business as any of the businesses in which
the Company or any of its Affiliates is involved. The determination as to whether a business opportunity
constitutes a Corporate Opportunity shall be made by a majority of the disinterested members of the Board, and
their determination shall be based on an evaluation of (i) the extent to which the opportunity is within the
Company's or any of its Affiliates' existing lines of business or its existing plans to expand; (ii) the extent
to which the opportunity supplements the Company's or any of its Affiliates' existing lines of activity or
complements the Company's or any of its Affiliates' existing methods of service; (iii) whether the Company has
available resources that can be utilized in connection with the opportunity; (iv) whether the Company is legally
or contractually barred from utilizing the opportunity; (v) the extent to which utilization of the opportunity by
Executive would create conflicts of interest with the Company or any of its Affiliates; and (vi) any other
factors the disinterested Board members deem appropriate under the circumstances.
6. Proprietary Information Obligations.
During the term of employment under this Agreement, Executive will have access to and become
acquainted with the Company's confidential and proprietary information, including but not limited to information
or plans regarding the Company's customer relationships, personnel, or sales, marketing, and financial operations
and methods; and other compilations of information, records, and specifications (collectively "Proprietary
Information"). Executive shall not disclose any of the Company's Proprietary Information directly or indirectly,
or use it in any way, either during the term of this Agreement or at any time thereafter, except as required in
the course of his employment for the Company or as authorized in writing by the Company. All files, records,
documents, computer-recorded information and similar items relating to the business of the Company, whether
prepared by Executive or otherwise coming into his possession, shall remain the exclusive property of the Company
and shall not be removed from the premises of the Company under any circumstances whatsoever without the prior
written consent of the Company, except when (and only for the period) necessary to carry out Executive's duties
hereunder, and if removed shall be immediately returned to the Company upon any termination of his employment and
no copies thereof shall be kept by Executive; provided, however, that Executive shall be entitled to retain
documents reasonably related to his prior interest as a shareholder.
7. Noninterference.
While employed by the Company, Executive agrees not to interfere with the business of the
Company by directly or indirectly soliciting, attempting to solicit, inducing, or otherwise causing any employee
of the Company or any of its Affiliates to terminate his or her employment in order to become an employee,
consultant or independent contractor to or for any other employer.
8. Noncompetition.
Executive agrees that during the term of this Agreement and for a period of two years
thereafter, he will not, without the prior consent of the Company, directly or indirectly, have an interest in,
be employed by, be connected with, or have an interest in, as an employee, consultant, officer, director,
partner, stockholder or joint venturer, in any person or entity owning, managing, controlling, operating or
otherwise participating or assisting in any business that is in competition with the business of the Company or
any of its Affiliates (i) during the term of this Agreement, in any location, and (ii) for the two-year period
following the termination of this Agreement, in any province, state or jurisdiction in which the Company or any
of its Affiliates was conducting business at the date of termination of Executive's employment and continues to
do so thereafter; provided, however, that the foregoing shall not prevent Executive from being a stockholder of
less than one percent of the issued and outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an interdealer quotation system by the
National Association of Securities Dealers, Inc.
9. Remedies.
Executive acknowledges that a breach or threatened breach by Executive of any the provisions of
Sections 5, 6, 7 or 8 will result in the Company and its shareholders suffering irreparable harm which cannot be
calculated or fully or adequately compensated by recovery of damages alone. Accordingly, Executive agrees that
the Company shall be entitled to interim, interlocutory and permanent injunctive relief, specific performance and
other equitable remedies, in addition to any other relief to which the Company may become entitled should there
be such a breach or threatened breach.
10. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in writing and shall be deemed
effective upon the earlier of (i) personal delivery (including personal delivery by telecopy or telex), (ii) on
the first day after mailing by overnight courier, or (iii) on the third day after mailing by first class mail, to
the recipient at the address indicated below:
To the Company:
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Vice President, General Counsel and Secretary
Telephone: (805) 987-0400, Ext. 1106
Facsimile: (805) 384-4505
To Executive:
Edward G. Atsinger III
4880 Santa Rose Road, Suite 300
Camarillo, CA 93012
Telephone: (805) 987-0400, Ext. 1104
Facsimile: (805) 987-6072
or to such other address or to the attention of such other person as the recipient party will have specified by
prior written notice to the sending party.
(b) Severability. If any provision of this Agreement is determined to be invalid or
unenforceable by a court of competent jurisdiction from which no further appeal lies or is taken, that provision
shall be deemed to be severed herefrom, and all remaining provisions of this Agreement shall not be affected
thereby and shall remain valid and enforceable.
(c) Entire Agreement. This document constitutes the final, complete, and exclusive
embodiment of the entire agreement and understanding between the parties related to the subject matter hereof and
supersedes and preempts any prior or contemporaneous understandings, agreements, or representations by or between
the parties, written or oral. Without limiting the generality of the foregoing, except as provided in this
Agreement, all understandings and agreements, written or oral, relating to the employment of Executive by the
Company or the payment of any compensation or the provision of any benefit in connection therewith or otherwise,
are hereby terminated and shall be of no further force and effect.
(d) Counterparts. This Agreement may be executed in separate counterparts, any one of
which need not contain signatures of more than one party, but all of which taken together will constitute one and
the same agreement.
(e) Successors and Assigns. This Agreement is intended to bind and inure to the benefit
of and be enforceable by Executive and the Company, and their respective successors and assigns, except that
Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without
the prior written consent of the Company.
(f) Amendments. No amendments or other modifications to this Agreement may be made except
by a writing signed by both parties. No amendment or waiver of this Agreement requires the consent of any
individual, partnership, corporation or other entity not a party to this Agreement. Nothing in this Agreement,
express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this
Agreement.
(g) Attorneys' Fees. If any legal proceeding is necessary to enforce or interpret the
terms of this Agreement, or to recover damages for breach therefore, the prevailing party shall be entitled to
reasonable attorney's fees, as well as costs and disbursements, in addition to other relief to which he or it may
be entitled.
(h) Choice of Law. All questions concerning the construction, validity and interpretation
of this Agreement will be governed by the internal law, and not the law of conflicts, of the State of California.
(i) Arbitration. The parties expressly agree that in the event of any dispute,
controversy or claim by any party concerning this Agreement, the prevailing party shall be entitled to a
reimbursement of its reasonable attorneys' fees and costs from the other party to the proceeding. Any dispute,
controversy or claim arising hereunder or in any way related to this Agreement shall be resolved by arbitration
in the City of Los Angeles pursuant to the rules of the American Arbitration Association. The Arbitrator's
decision shall be final and binding on both parties. The parties intend this arbitration provision to be valid,
enforceable, irrevocable and construed as broadly as possible. The Arbitrator shall have full authority to award
all legal and equitable relief, including, without limitation, injunctive relief, to the same extent as a court
of competent jurisdiction; provided, however, that the Arbitrator shall have no authority to award damages for
emotional distress or punitive damages. Judgment upon the award rendered by the Arbitrator may be entered by any
court having jurisdiction thereof. The parties agree that in the event of a breach or threatened breach by any
part of any one of more of the covenants set forth in this Agreement, the other party would not have any adequate
remedy at law. Accordingly, in the event of any such breach or threatened breach, such other party may, in
addition to the other remedies which may be available to it, seek in arbitration to enjoin the breaching party
from such breach or threatened breach.
IN WITNESS WHEREOF, the parties have executed this agreement effective as of the date first
written above.
"EXECUTIVE"
| | | | |
| | | | |
| | | /s/ Edward G. Atsinger III | |
| | |
| |
| | | Edward G. Atsinger III | |
| | | | |
"COMPANY"
SALEM COMMUNICATIONS HOLDING CORPORATION
| | �� | | |
| | | | |
| | | /s/ Jonathan L. Block | |
| | |
| |
| | | Jonathan L. Block | |
| | | Vice President, General Counsel and Secretary | |
EXHIBIT 10.02.01
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of July 1, 2001, by and between Stuart W.
Epperson, an individual ("Executive"), and Salem Communications Holding Corporation, a Delaware corporation (the
"Company").
RECITALS
WHEREAS, the Executive and the Company (as successor to its parent, Salem Communications Corporation, a
Delaware corporation ("Parent")) are parties to the Employment Agreement, dated August 1, 1997 (the "Old
Employment Agreement") which had been renewed through July 31, 2001;
WHEREAS, the Executive and the Company wish to terminate the Old Employment Agreement, effective as of
midnight on June 30, 2001;
WHEREAS, the Company desires to employ Executive in the capacity of Chairman of the Company on the terms
and conditions set forth herein; and
WHEREAS, Executive desires to serve in such capacity on behalf of the Company and to provide to the
Company the services described herein on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals, the terms and conditions set forth herein,
and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
Executive and the Company hereby agree as follows:
1. Employment By The Company And Term.
(a) Full Time and Best Efforts. Subject to the terms set forth herein, the Company agrees
to employ Executive as Chairman and Executive hereby accepts such employment. Executive shall have the
authority, functions, duties, powers and responsibilities for Executive's corporate offices and positions which
are set forth in the Company's bylaws from time to time in effect and such other authority, functions, duties,
powers and responsibilities as the Board of Directors of the Company (the "Board") may from time to time
prescribe or delegate to Executive, in all cases to be consistent with Executive's corporate offices and
positions. During the term of his employment with the Company, Executive will apply, on a full-time basis, all
of his skill and experience to the performance of his duties in such employment and will not, without the prior
consent of the Board, devote substantial amounts of time to outside business activities. The performance of
Employee's duties shall be in Winston-Salem, North Carolina, subject to such reasonable travel as the performance
of his duties in the business may require. Notwithstanding the foregoing, Executive may devote a reasonable
amount of his time to civic, community, charitable or passive investment activities.
(b) Company Policies. The employment relationship between the parties shall be governed
by the general employment policies and practices of the Company, except that when the terms of this Agreement
differ from or are in conflict with the Company's general employment policies or practices, this Agreement shall
control.
(c) Term. The initial term of the employment of Executive under this Agreement shall
begin as of July 1, 2001 for an initial term ending on June 30, 2004 (such three-year period, the "Initial
Term"), subject to the provisions for termination set forth herein and renewal as provided in Section 1(d) below.
(d) Renewal. Unless the Company or Executive shall have given the other party hereto
notice (any such notice to be given in accordance with Section 10(a) hereof) that this Agreement shall not be
renewed at least 90 days prior to the end of the Initial Term, the term of this Agreement shall be automatically
extended for a period of one year (each such one-year period, an "Extended Term"), such procedure to be followed
in each such successive period. Each Extended Term shall continue to be subject to the provisions for
termination set forth herein.
2. Compensation And Benefits.
(a) Cash Salary. Executive shall receive for services to be rendered hereunder an annual
base salary of Five Hundred Thirty Thousand Dollars ($530,000) (the "Base Salary"). Effective January 1, 2002,
the Base Salary shall be increased to Seven Hundred Thousand Dollars ($700,000).
(b) Participation in Benefit Plans. During the term hereof, Executive shall be entitled
to participate in any group insurance, hospitalization, medical, dental, health and accident, disability or
similar plan or program of the Company now existing or established hereafter to the extent that he is eligible
under the general provisions thereof. The Company may, in its sole discretion and from time to time, amend,
eliminate or establish additional benefit programs as it deems appropriate. Executive shall also participate in
all fringe benefits offered by the Company to any of its Executives.
3. Bonuses.
(a) Signing Bonus. On the date this Agreement is executed by the Executive and the
Company, as first written above, the Executive shall receive a signing bonus of Two Hundred Thousand Dollars
($200,000) in cash. In the event that Executive's employment is terminated during the Initial Term for any
reason, Executive shall forfeit and be obligated to return a percentage of the cash portion of the signing bonus
equal to the number of full months remaining in the Initial Term after the Termination Date, as defined in
Section 4 below, divided by 36.
(b) Annual Bonus. In addition to the other compensation of Executive as set forth herein,
and subject to the provisions of Section 4 hereof, Executive shall be eligible for an annual merit bonus in an
amount to be determined at the discretion of the Board of Directors of the Company, which bonus may be paid in
cash, options or a combination thereof.
4. Termination Of Employment.
The date on which Executive's employment by the Company ceases, under any of the following
circumstances, shall be defined herein as the "Termination Date."
(a) Termination For Cause.
(i) Termination; Payment of Accrued Salary. The Board may terminate Executive's
employment with the Company at any time for cause, immediately upon notice to Executive of the circumstances
leading to such termination for cause. In the event that Executive's employment is terminated for cause,
Executive shall receive payment for all accrued salary through the Termination Date, which in this event shall be
the date upon which notice of termination is given. The Company shall have no further obligation to pay severance
of any kind nor to make any payment in lieu of notice.
(ii) Definition of Cause. "Cause" means the occurrence or existence of any of the
following with respect to Executive, as determined by a majority of the disinterested directors of the Board: (A)
a material breach by Executive of any of his obligations hereunder which remains uncured after the lapse of 30
days following the date that the Company has given Executive notice thereof, provided, however, that the failure
by the Company to achieve performance targets shall not, in and of itself, constitute a material breach under
this Section 4(a)(ii)(A); (B) any misappropriation, embezzlement, intentional fraud or similar conduct involving
the Company or any person or entity directly or indirectly controlling, controlled by or under direct or indirect
common control with the Company (an "Affiliate"); (C) the conviction or the plea of nolo contendere or the
equivalent in respect of any felony or a crime involving moral turpitude; or (D) the repeated non-prescription
use of any controlled substance or the repeated use of alcohol or any other non-controlled substance which, in
any case described in this clause (D), the Board reasonably determines renders the Executive unfit to serve in
his capacity as an officer or employee of the Company or its Affiliates.
(b) Termination by Executive. Executive shall have the right, at his election, to
terminate his employment with the Company by notice to the Company to that effect (i) if the Company shall have
failed to substantially perform a material condition or covenant of this Agreement ("Company's Material Breach")
or (ii) if the Company materially reduces or diminishes Executive's powers and responsibilities hereunder;
provided, however, that a termination under clauses (i) and (ii) of this Section 4(b) will not be effective until
Executive shall have given notice to the Company specifying the claimed breach and, provided such breach is
curable, Company fails to correct the claimed breach within 30 days after the receipt of the applicable notice or
such longer term as may be reasonably required by the Company due to the nature of the claimed breach (but within
10 days if the failure to perform is a failure to pay monies when due under the terms of this Agreement).
(c) Termination Upon Disability. The Company may terminate Executive's employment in the
event Executive suffers a disability that renders Executive unable to perform the essential functions of his
position, even with reasonable accommodation, for 180 days within any 270 day period and fails to return to work
within 10 days of notice by the Company of intention to terminate. After the Termination Date, which in this
event shall be the date upon which notice of termination is given, no further compensation will be payable under
this Agreement except that Executive shall receive the accrued portion of any salary and bonus through the
Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a
bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan plus
severance equal to 100% of his then Base Salary for 15 months without offset for any disability payments
Executive may receive, payable in equal monthly installments.
(d) Termination Without Cause; Failure to Renew.
(i) Termination Payments. In the event that, during the Initial Term, Executive's
employment is terminated by the Company other than pursuant to Section 4(a) or 4(c), or by Executive pursuant to
Section 4(b), the Company shall pay Executive as severance an amount equal to his then Base Salary for the longer
of six months or the remainder of the Initial Term, less standard withholdings for tax and social security
purposes, payable in equal installments over six consecutive months, or, if longer, the number of months
remaining in the Initial Term, commencing immediately following termination, in monthly pro rata payments
commencing as of the Termination Date, plus the accrued portion of any bonus through the Termination Date, less
standard withholdings for tax and social security purposes, payable, in the case of a bonus, upon such date or
over such period of time which is in accordance with the applicable bonus plan. In the event that during an
Extended Term Executive's employment is terminated by the Company other than pursuant to Section 4(a) or 4(c), or
by Executive pursuant to Section 4(b), or if the Company shall fail to renew the term of this Agreement at the
expiration of the Initial Term (including any renewal term thereof), the Company shall pay Executive as severance
an amount equal to three months of his then Base Salary, less standard withholdings for tax and social security
purposes, payable in equal installments over three consecutive months commencing immediately following
termination or failure to renew in monthly pro rata payments commencing as of the Termination Date, plus the
accrued portion of any bonus through the Termination Date, less standard withholdings for tax and social security
purposes, payable, in the case of a bonus, upon such date or over such period of time which is in accordance with
the applicable bonus plan.
(e) Benefits Upon Termination. All benefits provided under Section 2(b) hereof shall be
extended at the Executive's cost, to the extent permitted by the Company's insurance policies and benefit plans,
for six months after Executive's Termination Date, except (a) as required by law (e.g. COBRA health insurance
continuation election) or (b) in the event of a termination by the Company pursuant to Section 4(a).
(f) Termination Upon Death. If Executive dies prior to the expiration of the Initial Term
or any Extended Term of this Agreement, the Company shall (i) continue coverage of Executive's dependents (if
any) under all applicable benefit plans or programs of the type listed above in Section 2(b) herein for a period
of 12 months, and (ii) pay to Executive's estate the accrued portion of any salary and bonus through the
Termination Date, less standard withholdings for tax and social security purposes, payable, in the case of a
bonus, upon such date or over such period of time which is in accordance with the applicable bonus plan.
(g) No Offset. Executive shall have no duty to mitigate any of his damages or losses and,
except as provided in Section 3(a) hereof, the Company shall not be entitled to reduce or offset any payments
owed to Executive hereunder for any reason.
5. Right Of First Refusal On Corporate Opportunities.
During the term of employment under this Agreement, Executive agrees that he will, prior to
exploiting a Corporate Opportunity (hereafter defined) for his own account, offer the Company a right of first
refusal with respect to such Corporate Opportunity. For purposes of this Section 5, "Corporate Opportunity"
shall mean any business opportunity that is in the same or a related business as any of the businesses in which
the Company or any of its Affiliates is involved. The determination as to whether a business opportunity
constitutes a Corporate Opportunity shall be made by a majority of the disinterested members of the Board, and
their determination shall be based on an evaluation of (i) the extent to which the opportunity is within the
Company's or any of its Affiliates' existing lines of business or its existing plans to expand; (ii) the extent
to which the opportunity supplements the Company's or any of its Affiliates' existing lines of activity or
complements the Company's or any of its Affiliates' existing methods of service; (iii) whether the Company has
available resources that can be utilized in connection with the opportunity; (iv) whether the Company is legally
or contractually barred from utilizing the opportunity; (v) the extent to which utilization of the opportunity by
Executive would create conflicts of interest with the Company or any of its Affiliates; and (vi) any other
factors the disinterested Board members deem appropriate under the circumstances.
6. Proprietary Information Obligations.
During the term of employment under this Agreement, Executive will have access to and become
acquainted with the Company's confidential and proprietary information, including but not limited to information
or plans regarding the Company's customer relationships, personnel, or sales, marketing, and financial operations
and methods; and other compilations of information, records, and specifications (collectively "Proprietary
Information"). Executive shall not disclose any of the Company's Proprietary Information directly or indirectly,
or use it in any way, either during the term of this Agreement or at any time thereafter, except as required in
the course of his employment for the Company or as authorized in writing by the Company. All files, records,
documents, computer-recorded information and similar items relating to the business of the Company, whether
prepared by Executive or otherwise coming into his possession, shall remain the exclusive property of the Company
and shall not be removed from the premises of the Company under any circumstances whatsoever without the prior
written consent of the Company, except when (and only for the period) necessary to carry out Executive's duties
hereunder, and if removed shall be immediately returned to the Company upon any termination of his employment and
no copies thereof shall be kept by Executive; provided, however, that Executive shall be entitled to retain
documents reasonably related to his prior interest as a shareholder.
7. Noninterference.
While employed by the Company, Executive agrees not to interfere with the business of the
Company by directly or indirectly soliciting, attempting to solicit, inducing, or otherwise causing any employee
of the Company or any of its Affiliates to terminate his or her employment in order to become an employee,
consultant or independent contractor to or for any other employer.
8. Noncompetition.
Executive agrees that during the term of this Agreement and for a period of two years
thereafter, he will not, without the prior consent of the Company, directly or indirectly, have an interest in,
be employed by, be connected with, or have an interest in, as an employee, consultant, officer, director,
partner, stockholder or joint venturer, in any person or entity owning, managing, controlling, operating or
otherwise participating or assisting in any business that is in competition with the business of the Company or
any of its Affiliates (i) during the term of this Agreement, in any location, and (ii) for the two-year period
following the termination of this Agreement, in any province, state or jurisdiction in which the Company or any
of its Affiliates was conducting business at the date of termination of Executive's employment and continues to
do so thereafter; provided, however, that the foregoing shall not prevent Executive from being a stockholder of
less than one percent of the issued and outstanding securities of any class of a corporation listed on a national
securities exchange or designated as national market system securities on an interdealer quotation system by the
National Association of Securities Dealers, Inc.
9. Remedies.
Executive acknowledges that a breach or threatened breach by Executive of any the provisions of
Sections 5, 6, 7 or 8 will result in the Company and its shareholders suffering irreparable harm which cannot be
calculated or fully or adequately compensated by recovery of damages alone. Accordingly, Executive agrees that
the Company shall be entitled to interim, interlocutory and permanent injunctive relief, specific performance and
other equitable remedies, in addition to any other relief to which the Company may become entitled should there
be such a breach or threatened breach.
10. Miscellaneous.
(a) Notices. Any notices provided hereunder must be in writing and shall be deemed
effective upon the earlier of (i) personal delivery (including personal delivery by telecopy or telex), (ii) on
the first day after mailing by overnight courier, or (iii) on the third day after mailing by first class mail, to
the recipient at the address indicated below:
To the Company:
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
Attention: Jonathan L. Block, Vice President, General Counsel and Secretary
Telephone: (805) 987-0400, Ext. 1106
Facsimile: (805) 384-4505
To Executive:
Stuart W. Epperson
3780 Will Scarlet Road
Winston-Salem, North Carolina 27104
Telephone: (336) 765-7438
Facsimile: (336) 768-4147
or to such other address or to the attention of such other person as the recipient party will have specified by
prior written notice to the sending party.
(b) Severability. If any provision of this Agreement is determined to be invalid or
unenforceable by a court of competent jurisdiction from which no further appeal lies or is taken, that provision
shall be deemed to be severed herefrom, and all remaining provisions of this Agreement shall not be affected
thereby and shall remain valid and enforceable.
(c) Entire Agreement. This document constitutes the final, complete, and exclusive
embodiment of the entire agreement and understanding between the parties related to the subject matter hereof and
supersedes and preempts any prior or contemporaneous understandings, agreements, or representations by or between
the parties, written or oral. Without limiting the generality of the foregoing, except as provided in this
Agreement, all understandings and agreements, written or oral, relating to the employment of Executive by the
Company or the payment of any compensation or the provision of any benefit in connection therewith or otherwise,
are hereby terminated and shall be of no further force and effect.
(d) Counterparts. This Agreement may be executed in separate counterparts, any one of
which need not contain signatures of more than one party, but all of which taken together will constitute one and
the same agreement.
(e) Successors and Assigns. This Agreement is intended to bind and inure to the benefit
of and be enforceable by Executive and the Company, and their respective successors and assigns, except that
Executive may not assign any of his duties hereunder and he may not assign any of his rights hereunder without
the prior written consent of the Company.
(f) Amendments. No amendments or other modifications to this Agreement may be made except
by a writing signed by both parties. No amendment or waiver of this Agreement requires the consent of any
individual, partnership, corporation or other entity not a party to this Agreement. Nothing in this Agreement,
express or implied, is intended to confer upon any third person any rights or remedies under or by reason of this
Agreement.
(g) Attorneys' Fees. If any legal proceeding is necessary to enforce or interpret the
terms of this Agreement, or to recover damages for breach therefore, the prevailing party shall be entitled to
reasonable attorney's fees, as well as costs and disbursements, in addition to other relief to which he or it may
be entitled.
(h) Choice of Law. All questions concerning the construction, validity and interpretation
of this Agreement will be governed by the internal law, and not the law of conflicts, of the State of California.
(i) Arbitration. The parties expressly agree that in the event of any dispute,
controversy or claim by any party concerning this Agreement, the prevailing party shall be entitled to a
reimbursement of its reasonable attorneys' fees and costs from the other party to the proceeding. Any dispute,
controversy or claim arising hereunder or in any way related to this Agreement shall be resolved by arbitration
in the City of Los Angeles pursuant to the rules of the American Arbitration Association. The Arbitrator's
decision shall be final and binding on both parties. The parties intend this arbitration provision to be valid,
enforceable, irrevocable and construed as broadly as possible. The Arbitrator shall have full authority to award
all legal and equitable relief, including, without limitation, injunctive relief, to the same extent as a court
of competent jurisdiction; provided, however, that the Arbitrator shall have no authority to award damages for
emotional distress or punitive damages. Judgment upon the award rendered by the Arbitrator may be entered by any
court having jurisdiction thereof. The parties agree that in the event of a breach or threatened breach by any
part of any one of more of the covenants set forth in this Agreement, the other party would not have any adequate
remedy at law. Accordingly, in the event of any such breach or threatened breach, such other party may, in
addition to the other remedies which may be available to it, seek in arbitration to enjoin the breaching party
from such breach or threatened breach.
IN WITNESS WHEREOF, the parties have executed this agreement effective as of the date first
written above.
"EXECUTIVE"
| | | | |
| | | | |
| | | /s/ Stuart W. Epperson | |
| | |
| |
| | | Stuart W. Epperson | |
| | | | |
"COMPANY"
SALEM COMMUNICATIONS HOLDING CORPORATION
| | | | |
| | | | |
| | | /s/ Jonathan L. Block | |
| | |
| |
| | | Jonathan L. Block | |
| | | Vice President, General Counsel and Secretary | |
