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EXHIBIT 4.08
SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
AMENDMENT NO. 2 AND CONSENT NO. 2 (this "Amendment"), dated as of
January 22, 1999, to the Credit Agreement, dated as of September 25, 1997, by
and among SALEM COMMUNICATIONS CORPORATION, a California corporation (the
"Borrower"), THE BANK OF NEW YORK, as administrative agent for the Lenders
thereunder (in such capacity, the "Administrative Agent"), BANK OF AMERICA
NT&SA, as documentation agent, and the Lenders party thereto, as amended by
Amendment No. 1 and Consent No. 1, dated as of August 5, 1998 (the "Credit
Agreement").
RECITALS
I. Except as otherwise provided herein, capitalized terms used herein
which are not defined herein shall have the meanings set forth in the Credit
Agreement.
II. The Borrower has requested the consent of the Administrative Agent
for the acquisition by (i) OnePlace, Ltd. (a wholly-owned Subsidiary) of
substantially all of the assets of OnePlace, LLC for $6,000,000 plus 50% of the
investment banking fee up to a maximum of $150,000 (the "OnePlace Acquisition"),
(ii) the Borrower of 100% of the outstanding stock of CCM Communications, Inc.
for $2,000,000 (the "CCM Acquisition") and (iii) a newly created wholly-owned
Subsidiary ("Newco NavPress") of substantially all of the assets of NavPress
Software Inc. for approximately $550,000 (the "NavPress Acquisition").
III. The Borrower has requested that, in connection with such
Acquisitions, the leverage covenant be amended.
In consideration of the covenants, conditions and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and pursuant to Section 11.1 of the
Credit Agreement, the Borrower and the Administrative Agent agree as follows:
1. Notwithstanding anything to the contrary contained in the first
paragraph of Section 8.3 of the Credit Agreement, the Administrative Agent
consents to the following:
(a) the OnePlace Acquisition, provided that (i) the consideration
therefor given by the Borrower and the Subsidiaries in the aggregate shall in no
event exceed $6,000,000 plus 50% of the investment banking fee up to a maximum
of $150,000, and (ii) in all other respects, the OnePlace Acquisition is
consummated in accordance with the terms of the Loan Documents including,
without limitation, the last paragraph of Section 8.3, and OnePlace, Ltd. shall
become a party to the Subsidiary Guaranty and execute and deliver all documents
(including, without limitation, UCC
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financing statements) that the Administrative Agent shall reasonably require in
connection therewith;
(b) the CCM Acquisition, provided that (i) the consideration
therefor given by the Borrower and the Subsidiaries in the aggregate shall in no
event exceed $2,000,000, and (ii) in all other respects, the CCM Acquisition is
consummated in accordance with the terms of the Loan Documents including,
without limitation, the last paragraph of Section 8.3; and
(c) the NavPress Acquisition provided that (i) the consideration
therefor given by the Borrower and the Subsidiaries in the aggregate shall in no
event exceed approximately $550,000, and (ii) in all other respects, the
NavPress Acquisition is consummated in accordance with the terms of the Loan
Documents including, without limitation, the last paragraph of Section 8.3, and
Newco NavPress shall become a party to the Subsidiary Guaranty and execute and
deliver all documents (including, without limitation, UCC financing statements)
that the Administrative Agent shall reasonably require in connection therewith.
2. Section 1.1 of the Credit Agreement is amended by amending and
restating in its entirety the definition of "Amendment Effective Date" to read
as follows:
"Amendment No. 1 Effective Date": the "Amendment Effective Date" as
defined in Amendment No. 1 and Consent No. 1, dated as of August 5,
1998.
3. Section 1.1 of the Credit Agreement is amended by amending and
restating in its entirety paragraph (a) of the definition of "Applicable Margin"
to read as follows:
(a) subject to paragraph (b) of this definition, at all times during the
applicable periods set forth below, (i) with respect to the unpaid
principal amount of the ABR Loans, the percentage set forth below under
the heading "Alternate Base Rate Margin" next to the applicable period
and (ii) with respect to the unpaid principal amount of the Eurodollar
Loans, the percentage set forth below under the heading "Eurodollar Rate
Margin" next to the applicable period:
Alternate Base Eurodollar
Period Rate Margin Rate Margin
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when the Total Leverage Ratio is
equal to or greater than 6.50:1.00 2.250% 3.500%
when the Total Leverage Ratio is
equal to or greater than 6.00:1.00
but less than 6.50:1.00 1.750% 3.000%
when the Total Leverage Ratio is
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equal to or greater than 5.50:1.00
but less than 6.00:1.00 1.250% 2.500%
when the Total Leverage Ratio is
equal to or greater than 5.00:1.00
but less than 5.50:1.00 1.000% 2.250%
when the Total Leverage Ratio is
equal to or greater than 4.50:1.00
but less than 5.00:1.00 0.500% 1.750%
when the Total Leverage Ratio is
equal to or greater than 4.00:1.00
but less than 4.50:1.00 0.250% 1.500%
when the Total Leverage Ratio is
equal to or greater than 3.50:1.00
but less than 4.00:1.00 0.000% 1.250%
when the Total Leverage Ratio is less
than 3.50:1.00 0.000% 1.000%
4. Section 1.1 of the Credit Agreement is amended by adding the
following new definitions of "Amendment No. 2 Effective Date" and "Newco
NavPress"):
"Amendment No. 2 Effective Date": the "Amendment Effective Date" as
defined in Amendment No. 2 and Consent No. 2, dated as of January 22,
1999.
"Newco NavPress": the wholly-owned Subsidiary created to acquire
substantially all of the assets of NavPress Software Inc.
5. Section 6.1 of the Credit Agreement is amended and restated in its
entirety to read as follows:
6.1 Total Leverage Ratio.
Maintain at all times a Total Leverage Ratio not greater than the
applicable ratio set forth below opposite the applicable period set
forth below:
Periods Ratio
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Effective Date through June 29, 1998 7.00:1.00
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June 30, 1998 to but excluding
Amendment No. 1 Effective Date 6.25:1.00
Amendment No. 1 Effective Date to but
excluding Amendment No. 2 Effective Date 6.75:1.00
Amendment No. 2 Effective Date
through June 29, 1999 7.00:1.00
June 30, 1999 through September 29, 1999 6.75:1.00
September 30, 1999 through
December 30, 1999 6.00:1.00
6. Section 6.3 of the Credit Agreement is amended to change each
reference to "Amendment Effective Date" contained therein to "Amendment No. 1
Effective Date".
7. Section 8.1 of the Credit Agreement is amended to amend and restate
clause (iv) thereof in its entirety to read as follows:
(iv) intercompany Indebtedness between the Borrower and its
Subsidiaries, provided that intercompany Indebtedness of the following
Subsidiaries: OnePlace, Ltd., CCM Communications, Inc. and Newco
NavPress to the Borrower (excluding intercompany Indebtedness incurred
by OnePlace, Ltd. to finance the purchase price of substantially all of
the assets of OnePlace, LLC and intercompany Indebtedness incurred by
Newco NavPress to finance the purchase price of substantially all of the
assets of NavPress Software Inc.) shall not at any time exceed
$1,000,000 in the aggregate for all such Subsidiaries; and
8. Sections 1 - 7 of this Amendment shall not become effective until the
date (the "Amendment Effective Date") that the Administrative Agent shall have
received (i) this Amendment executed by the Required Lenders, the Borrower and
the Subsidiary Guarantors and (ii) a certificate of the Secretary or Assistant
Secretary of each of the Borrower and the Subsidiary Guarantors attaching a true
and complete copy of the resolutions of its Board of Directors or other action
(in form and substance reasonably satisfactory to the Administrative Agent)
authorizing this Amendment and setting forth the incumbency of its officer(s)
authorized to execute and deliver this Amendment (including signature
specimens).
9. In all other respects the Credit Agreement and other Loan Documents
shall remain in full force and effect.
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10. In order to induce the Administrative Agent to execute this
Amendment and the Lenders to consent hereto, the Borrower and the Subsidiary
Guarantors each (a) certifies that, immediately before and after giving effect
to this Amendment, all representations and warranties contained in the Loan
Documents to which it is a party shall be true and correct in all respects, (b)
certifies that, immediately before and after giving effect to this Amendment, no
Default or Event of Default shall exist under the Loan Documents, and (c) agrees
to pay the reasonable fees and disbursements of counsel to the Administrative
Agent incurred in connection with the preparation, negotiation and closing of
this Amendment.
11. Each of the Borrower and the Subsidiary Guarantors (a) reaffirms and
admits the validity, enforceability and continuation of all Loan Documents to
which it is a party, and its obligations thereunder, and (b) agrees and admits
that as of the date hereof it has no valid defenses to or offsets against any of
its obligations to the Administrative Agent, the Documentation Agent, the Issuer
or any of the Lenders under the Loan Documents to which it is a party.
12. This Amendment may be executed in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same document. It shall not be necessary in making proof
of this Amendment to produce or account for more than one counterpart signed by
the party to be changed.
13. This Amendment shall be governed by, and construed and interpreted
in accordance with, the laws of the State of New York, without regard to
principles of conflict of laws.
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
The parties have caused this Amendment to be duly executed as of the
date first written above.
SALEM COMMUNICATIONS CORPORATION
By: /s/ DIRK GASTALDO
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Name: Dirk Gastaldo
Title: VP/CFO
THE BANK OF NEW YORK
As Administrative Agent
By:
Name:
Title:
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
The parties have caused this Amendment to be duly executed as of the
date first written above.
SALEM COMMUNICATIONS CORPORATION
By:
Name:
Title:
THE BANK OF NEW YORK
As Administrative Agent
By: /s/ STEPHEN M. NETTLER
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Name: Stephen M. Nettler
Title: Assistant Vice President
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY, INC.
INLAND RADIO, INC.
INSPIRATION MEDIA OF TEXAS, INC.
INSPIRATION MEDIA, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING
COMPANY, INC.
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
SALEM COMMUNICATIONS CORPORATION,
A DELAWARE CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF CALIFORNIA, INC.
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO REPRESENTATIVES, INC.
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
By: /s/ ERIC H. HALVORSON
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Name: Eric H. Halvorson
Title: Vice President
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
THE BANK OF NEW YORK
By: /s/ STEPHEN M. NETTLER
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Name: Stephen M. Nettler
Title: Assistant Vice President
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
BANK OF AMERICA NT & SA
By: /s/ JOHN J. SULLIVAN
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Name: John J. Sullivan
Title: Vice President
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
BANKBOSTON, N.A.
By: /s/ JENNIFER BURAS
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Name: Jennifer Buras
Title: Director
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
FLEET BANK, NA.
By: /s/ WILLIAM WEISS
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Name: William Weiss
Title: Assistant Vice President
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 2 AND CONSENT NO. 2
UNION BANK OF CALIFORNIA, N.A
By: /s/ LENA M. BRYANT
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Name: Lena M. Bryant
Title: Assistant Vice President
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