EXHIBIT 4.01
SALEM COMMUNICATIONS CORPORATION, a California corporation, as Issuer.
ATEP RADIO, INC.,
BELTWAY MEDIA PARTNERS,
BISON MEDIA, INC.,
CARON BROADCASTING, INC.,
COMMON GROUND BROADCASTING, INC.,
GOLDEN GATE BROADCASTING COMPANY, INC.,
INLAND RADIO, INC.,
INSPIRATION MEDIA, INC.,
INSPIRATION MEDIA OF TEXAS, INC.,
NEW ENGLAND CONTINENTAL MEDIA, INC.,
NEW INSPIRATION BROADCASTING COMPANY, INC.,
OASIS RADIO, 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 LOUISIANA, INC.,
SALEM MEDIA OF OHIO, INC.,
SALEM MEDIA OF OREGON, INC.,
SALEM MEDIA OF PENNSYLVANIA, 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.,
as Guarantors
and
THE BANK OF NEW YORK, as Trustee
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INDENTURE
Dated as of September 25, 1997
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$150,000,000
9.5% Senior Subordinated Notes due 2007
CROSS-REFERENCE TABLE*
---------------------
Trust Indenture
Act Section Indenture Section
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310(a)(1)..................... 608
(a)(2)..................... 608
(a)(3)..................... N.A.
(a)(4)..................... N.A.
(b)........................ 106; 607; 608; 609; 703
(c)........................ N.A.
311(a)........................ 612
(b)........................ 612
(c)........................ N.A.
312(a)........................ 701
(b)........................ 702
(c)........................ 702
313(a)........................ 703
(b)(1)..................... N.A.
(b)(2)..................... 703
(c)........................ 107; 703
(d)........................ 703
314(a)........................ 106; 1020
(b)........................ N.A.
(c)(1)..................... 103
(c)(2)..................... 103
(c)(3)..................... N.A.
(d)........................ N.A.
(e)........................ 103
(f)........................ N.A.
315(a)........................ 602(a)
(b)........................ 107; 601
(c)........................ 602(k)
(d)........................ 602(e)
(e)........................ 514
316(a)(last sentence)......... 101 (definition of
"Outstanding")
(a)(1)..................... 512
(a)(2)..................... N.A.
(b)........................ 508
(c)........................ 105
317(a)(1)..................... 503
(a)(2)..................... 504
(b)........................ 1003
318(a)........................ 108
N.A. means not applicable.
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*This Cross-Reference Table is not part of the Indenture.
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION............................. 2
Section 101. Definitions.................................................. 2
Section 102. Other Definitions............................................ 20
Section 103. Compliance Certificates and Opinions......................... 20
Section 104. Form of Documents Delivered to Trustee....................... 21
Section 105. Acts of Holders.............................................. 22
Section 106. Notices, etc., to Trustee, the Company and any
Guarantor.................................................... 23
Section 107. Notice to Holders: Waiver.................................... 23
Section 108. Conflict with Trust Indenture Act............................ 24
Section 109. Effect of Headings and Table of Contents..................... 24
Section 110. Successors and Assigns....................................... 24
Section 111. Separability Clause.......................................... 24
Section 112. Benefits of Indenture........................................ 24
Section 113. Governing Law................................................ 24
Section 114. Legal Holidays............................................... 25
Section 115. Schedules and Exhibits....................................... 25
Section 116. Counterparts................................................. 25
ARTICLE II SECURITY FORMS..................................................................... 25
Section 201. Forms Generally.............................................. 25
Section 202. Form of Face of Security..................................... 26
Section 203. Form of Reverse of Securities................................ 32
Section 204. Additional Provisions Required in Global Security............ 39
Section 205. Form of Trustee's Certificate of Authentication.............. 40
Section 206. Form of Guarantee of Each of the Guarantors.................. 40
ARTICLE III THE SECURITIES.................................................................... 43
Section 301. Title and Terms.............................................. 43
Section 302. Denominations................................................ 43
Section 303. Execution, Authentication, Delivery and Dating............... 44
Section 304. Temporary Securities......................................... 45
Section 305. Global Securities............................................ 45
Section 306. Registration, Registration of Transfer and Exchange.......... 46
Section 307. Special Transfer Provisions.................................. 48
Section 308. Mutilated, Destroyed, Lost and Stolen Securities............. 50
Section 309. Payment of Interest; Interest Rights Preserved............... 51
Section 310. Persons Deemed Owners........................................ 52
Section 311. Cancellation................................................. 52
Section 312. Computation of Interest...................................... 53
Section 313. CUSIP Numbers................................................ 53
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ARTICLE IV DEFEASANCE AND COVENANT DEFEASANCE.................................................. 53
Section 401. Company's Option to Effect Defeasance or Covenant
Defeasance.................................................... 53
Section 402. Defeasance and Discharge...................................... 53
Section 403. Covenant Defeasance........................................... 54
Section 404. Conditions to Defeasance or
Covenant Defeasance........................................... 54
Section 405. Deposited Money and U.S. Government Obligations to
Be Held in Trust; Other Miscellaneous Provisions.............. 56
Section 406. Reinstatement................................................. 57
ARTICLE V REMEDIES............................................................................. 57
Section 501. Events of Default............................................. 57
Section 502. Acceleration of Maturity; Rescission and Annulment............ 59
Section 503. Collection of Indebtedness and Suits for Enforcement
by Trustee.................................................... 60
Section 504. Trustee May File Proofs of Claim.............................. 61
Section 505. Trustee May Enforce Claims without Possession of
Securities.................................................... 62
Section 506. Application of Money Collected................................ 62
Section 507. Limitation on Suits........................................... 62
Section 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.......................................... 63
Section 509. Restoration of Rights and Remedies............................ 63
Section 510. Rights and Remedies Cumulative................................ 63
Section 511. Delay or Omission Not Waiver.................................. 64
Section 512. Control by Holders............................................ 64
Section 513. Waiver of Past Defaults....................................... 64
Section 514. Undertaking for Costs......................................... 64
Section 515. Waiver of Stay, Extension or Usury Laws....................... 65
ARTICLE VI THE TRUSTEE......................................................................... 65
Section 601. Notice of Defaults............................................ 65
Section 602. Certain Rights and Duties of Trustee.......................... 65
Section 603. Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof................. 67
Section 604. Trustee and Agents May Hold Securities; Collections;
etc........................................................... 67
Section 605. Money Held in Trust........................................... 67
Section 606. Compensation and Indemnification of Trustee and Its
Prior Claim................................................... 67
Section 607. Conflicting Interests......................................... 68
Section 608. Corporate Trustee Required,................................... 68
Section 609. Resignation and Removal: Appointment of Successor
Trustee....................................................... 69
Section 610. Acceptance of Appointment by Successor........................ 70
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Section 611. Merger, Conversion, Consolidation or Succession to
Business..................................................... 71
Section 612. Preferential Collection of Claims Against Company............ 71
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE............................................. 71
Section 701. Company to Furnish Trustee with Names and
Addresses of Holders......................................... 71
Section 702. Disclosure of Names and Addresses of Holders................. 72
Section 703. Reports by Trustee........................................... 72
Section 704. Reports by Company and Guarantors............................ 72
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE............................. 73
Section 801. Company or Any Guarantor May Consolidate, etc.,
Only on Certain Terms........................................ 73
Section 802. Successor Substituted........................................ 75
ARTICLE IX SUPPLEMENTAL INDENTURES............................................................ 75
Section 901. Supplemental Indentures and Agreements without
Consent of Holders........................................... 75
Section 902. Supplemental Indentures and Agreements with Consent
of Holders................................................... 76
Section 903. Execution of Supplemental Indentures and Agreements.......... 77
Section 904. Effect of Supplemental Indentures............................ 77
Section 905. Conformity with Trust Indenture Act.......................... 78
Section 906. Reference in Securities to Supplemental Indentures........... 78
Section 907. Effect on Senior Indebtedness................................ 78
ARTICLE X COVENANTS........................................................................... 78
Section 1001. Payment of Principal, Premium and Interest................... 78
Section 1002. Maintenance of Office or Agency.............................. 78
Section 1003. Money for Security Payments to Be Held in Trust.............. 79
Section 1004. Corporate Existence.......................................... 80
Section 1005. Payment of Taxes and Other Claims............................ 80
Section 1006. Maintenance of Properties.................................... 81
Section 1007. Insurance.................................................... 81
Section 1008. Limitation on Indebtedness................................... 81
Section 1009. Limitation on Restricted Payments............................ 83
Section 1010. Limitation on Transactions with Affiliates................... 85
Section 1011. Limitation on Senior Subordinated Indebtedness............... 85
Section 1012. Limitation on Liens.......................................... 86
Section 1013. Limitation on Sale of Assets................................. 87
Section 1014. Limitation on Issuances of Guarantees of and Pledges
for Indebtedness............................................. 90
Section 1015. Restriction on Transfer of Assets............................ 91
Section 1016. Purchase of Securities upon a Change of Control.............. 91
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Section 1017. Limitation on Subsidiary Equity Interests..................... 95
Section 1018. Limitation on Dividends and Other Payment
Restrictions Affecting Subsidiaries........................... 95
Section 1019. Limitation on Unrestricted Subsidiaries....................... 95
Section 1020. Provision of Financial Statements............................. 96
Section 1021. Statement by Officers as to Default........................... 96
Section 1022. Waiver of Certain Covenants................................... 96
Section 1023. Limitation on Asset Swaps..................................... 97
ARTICLE XI REDEMPTION OF SECURITIES............................................................ 97
Section 1101. Rights of Redemption.......................................... 97
Section 1102. Applicability of Article...................................... 97
Section 1103. Election to Redeem; Notice to Trustee......................... 97
Section 1104. Selection by Trustee of Securities to Be Redeemed............. 98
Section 1105. Notice of Redemption.......................................... 98
Section 1106. Deposit of Redemption Price................................... 99
Section 1107. Securities Payable on Redemption Date......................... 99
Section 1108. Securities Redeemed or Purchased in Part...................... 99
ARTICLE XII SUBORDINATION OF SECURITIES........................................................100
Section 1201. Securities Subordinate to Senior Indebtedness.................100
Section 1202. Payment Over of Proceeds Upon Dissolution, etc................100
Section 1203. Suspension of Payment When Senior Indebtedness in
Default.......................................................101
Section 1204. Payment Permitted if No Default...............................102
Section 1205. Subrogation to Rights of Holders of Senior
Indebtedness..................................................103
Section 1206. Provisions Solely to Define Relative Rights...................103
Section 1207. Trustee to Effectuate Subordination...........................103
Section 1208. No Waiver of Subordination Provisions.........................104
Section 1209. Notice to Trustee.............................................104
Section 1210. Reliance on Judicial Order or Certificate of Liquidating
Agent.........................................................105
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness
Preservation of Trustee's Rights..............................105
Section 1212. Article Applicable to Paying Agents...........................105
Section 1213. No Suspension of Remedies.....................................106
Section 1214. Trustee's Relation to Senior Indebtedness.....................106
ARTICLE XIII SATISFACTION AND DISCHARGE........................................................106
Section 1301. Satisfaction and Discharge of Indenture.......................106
Section 1302. Application of Trust Money....................................107
ARTICLE XIV GUARANTEE..........................................................................107
Section 1401. Guarantors' Guarantee.........................................107
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Section 1402. Continuing Guarantee; No Right of Set-Off;
Independent Obligation....................................... 108
Section 1403. Guarantee Absolute........................................... 109
Section 1404. Right to Demand Full Performance............................. 111
Section 1405. Waivers...................................................... 111
Section 1406. The Guarantors Remain Obligated in Event the
Company Is No Longer Obligated to Discharge
Indenture Obligations........................................ 112
Section 1407. Fraudulent Conveyance; Subrogation........................... 112
Section 1408. Guarantee Is in Addition to Other Security................... 112
Section 1409. Release of Security Interests................................ 112
Section 1410. No Bar to Further Actions.................................... 113
Section 1411. Failure to Exercise Rights Shall Not Operate as a
Waiver; No Suspension of Remedies............................ 113
Section 1412. Trustee's Duties, Notice to Trustee.......................... 113
Section 1413. Successors and Assigns....................................... 113
Section 1414. Release of Guarantee......................................... 113
Section 1415. Execution of Guarantee....................................... 114
Section 1416. Guarantee Subordinate to Guarantor Senior
Indebtedness................................................. 114
Section 1417. Payment Over of Proceeds Upon Dissolution of the
Guarantor, etc............................................... 115
Section 1418. Default on Guarantor Senior.................................. 116
Section 1419. Payment Permitted by Each of the Guarantors if No
Default...................................................... 116
Section 1420. Subrogation to Rights of Holders of Guarantor Senior
Indebtedness................................................. 116
Section 1421. Provisions Solely to Define Relative Rights.................. 117
Section 1422. Trustee to Effectuate Subordination.......................... 117
Section 1423. No Waiver of Subordination Provisions........................ 117
Section 1424. Notice to Trustee by Each of the Guarantors.................. 118
Section 1425. Reliance on Judicial Order or Certificate of Liquidating
Agent........................................................ 119
Section 1426. Rights of Trustee as a Holder of Guarantor Senior
Indebtedness; Preservation of Trustee's Rights............... 119
Section 1427. Article Applicable to Paying Agents.......................... 119
Section 1428. No Suspension of Remedies.................................... 119
Section 1429. Trustee's Relation to Guarantor Senior Indebtedness.......... 120
Section 1430. Limitation on Guarantee...................................... 120
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SCHEDULE I Existing Indebtedness of Salem Communications Corporation and its
Restricted Subsidiaries
SCHEDULE II Existing Liens
SCHEDULE III Existing Encumbrances and Restrictions
EXHIBIT A Form of Restricted Securities Transfer Certificate (General)
EXHIBIT B Form of Intercompany Note
EXHIBIT C Form of Restricted Securities Transfer Certificate (Non-U.S.
Persons)
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INDENTURE, dated as of September 25, 1997, among SALEM COMMUNICATIONS
CORPORATION, a California corporation (the "COMPANY"), ATEP RADIO, INC., a
California corporation, BELTWAY MEDIA PARTNERS, a Virginia partnership, BISON
MEDIA, INC., a California corporation, CARON BROADCASTING, INC., an Ohio
corporation, COMMON GROUND BROADCASTING, INC., an Oregon corporation, GOLDEN
GATE BROAD CASTING COMPANY, INC., a California corporation, INLAND RADIO, INC.,
a California corporation, INSPIRATION MEDIA, INC., a Washington corporation,
INSPIRATION MEDIA OF TEXAS, INC., a Texas corporation, NEW ENGLAND CONTINENTAL
MEDIA, INC., a Massa chusetts corporation, NEW INSPIRATION BROADCASTING COMPANY,
INC., a California corporation, OASIS RADIO, INC., a California corporation,
PENNSYLVANIA MEDIA ASSOCIATES, INC., a Pennsylvania corporation, RADIO 1210,
INC., a California corporation, SALEM COMMUNICATIONS CORPORATION, a Delaware
corporation, SALEM MEDIA COR PORATION, a New York corporation, SALEM MEDIA OF
CALIFORNIA, INC., a California corporation, SALEM MEDIA OF COLORADO, INC., a
Colorado corporation, SALEM MEDIA OF LOUISIANA, INC., a Louisiana corporation
SALEM MEDIA OF OHIO, INC., an Ohio corporation, SALEM MEDIA OF OREGON, INC., an
Oregon corporation, SALEM MEDIA OF PENNSYL VANIA, INC., a Pennsylvania
corporation, SALEM MEDIA OF TEXAS, INC., a Texas corporation, SALEM MUSIC
NETWORK, INC., a Texas corporation, SALEM RADIO NETWORK INCOR PORATED, a
Delaware corporation, SALEM RADIO REPRESENTATIVES, INC., a Texas corporation,
SRN NEWS NETWORK, INC., a Texas corporation, SOUTH TEXAS BROADCAS TING, INC., a
Texas corporation, and VISTA BROADCASTING, INC., a California corporation
(collectively, the "GUARANTORS"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "TRUSTEE").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of 9.5%
Senior Subordinated Notes due 2007, Series A (the "INITIAL SECURITIES" or the
"SERIES A SECURITIES"), and an issue of 9.5% Senior Subordinated Notes due 2007,
Series B (the "SERIES B SECURITIES" and, together with the Series A Securities,
the "SECURITIES") 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
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 101. 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.
"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
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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; (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 Restricted Subsidiary, 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
801(a) or Section 1023, (B) that is by the Company to any Wholly Owned
Restricted Subsidiary, or by any Restricted Subsidiary to the Company or any
Wholly Owned Restricted Subsidiary in accordance with the terms of this
Indenture or (C) that aggregates not more than $1,000,000 in gross proceeds.
"AGENT MEMBER" means any member of, or participant in, the Depositary.
"ASSET SWAP" means an Asset Sale by the Company or any Restricted
Subsidiary 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 Credit Agreement, dated as of
September 25, 1997, among the Company, the lenders named therein, The Bank of
New York, as administrative agent and Bank of America NT&SA, as documentation
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
1008; provided that, for purposes of the definition of "PERMITTED INDEBTEDNESS,"
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no such increase may result in the principal amount of Indebtedness of the
Company under the Bank Credit Agreement exceeding the amount permitted by
Section 1008(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,
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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 any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real
or personal property that, 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 A-1 (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, provided that the
--------
Permitted Holders "BENEFICIALLY OWN" (as so defined) a lesser
-4-
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; (ii) during any
period of two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Company (together with any new
directors whose election to such Board or whose nomination for election by the
shareholders of the Company, 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 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,
in any such event pursuant to a transaction in which the outstanding Voting
Stock of the Company 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 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 in which (A) the outstanding Voting Stock of the Company 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 1009 (and
such amount shall be treated as a Restricted Payment subject to the provisions
described under Sec tion 1009) 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 is
liquidated or dissolved or adopts a plan of liquidation or dissolution other
than 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 Corporation, a corporation
incorporated under the laws of California, 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, without duplication, for any
period, the sum of (a) the interest expense of the Company 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
-5-
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 the Company during such period, and all
capitalized interest of the Company and its Consolidated Restricted
Subsidiaries, in each case as determined in accordance with GAAP consistently
applied.
"CONSOLIDATED NET INCOME" means, for any period, the Consolidated net
income (or loss) of the Company 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 the Company 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 the Company
or its Consolidated Restricted Subsidiaries by such other Person during such
period, (iii) net income (or loss) of any Person combined with the Company 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 to the extent
that the declaration of dividends or similar distributions by that 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 that
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 from the date of this Indenture 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 from the date of this Indenture to the end of
the Company's most recently ended full fiscal quarter prior to such date, taken
as a single accounting period.
-6-
"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 fiscal 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 or disposition 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.
-7-
"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
any 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 the exchange offer by the Company of Series B
Securities for Series A Securities to be effected pursuant to Section 2(a) of
the Registration Rights Agreement.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the registration
statement under the Securities Act contemplated by Section 2(a) of the
Registration Rights Agreement.
"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."
"GLOBAL SECURITY" means a Security in book-entry form in the form
prescribed in Sections 202 through 205 evidencing all or part of the Securities,
issued to the Depositary or its nominee and registered in the name of the
Depositary or such nominee.
"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 1014.
"GUARANTEED DEBT" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section 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
-8-
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
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"GUARANTEE" shall not include endorsements for collection or deposit, in either
case in the ordinary course of business.
"GUARANTOR" means the Subsidiaries listed as guarantors in this
Indenture or any other guarantor of the Indenture Obligations.
"GUARANTOR SENIOR INDEBTEDNESS" is defined as 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 Guarantee. 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,
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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, (ii)
Indebtedness that is subordinate or junior in right of payment to any
Indebtedness of any Guarantor, (iii) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of Title 11 of the 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) Indebtedness evidenced by any guarantee of any
Subordinated Indebtedness or Pari Passu Indebtedness, (viii) that portion of any
Indebtedness which at the time of issuance is issued in violation of this
Indenture 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
-9-
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.
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 the 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 the Company or any Subsidiary)
is an employee, insider, associate or Affiliate of the Company or a Subsidiary
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 Furman Selz LLC, Smith Barney Inc.,
BancBoston Securities Inc. and BNY Capital Markets, Inc. as initial purchasers
of the Securities.
-10-
"INITIAL SECURITIES" has the meaning specified in the Recitals.
"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 or assets 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" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity, the Offer 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) 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) 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, 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, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to
-11-
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, or debt securities or Equity Interests that have been converted into
or exchanged for Equity Interests, as referred to under Section 1009, 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 the Company or any Restricted Subsidiary), 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.
"NON-PAYMENT 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, for any period, the Consolidated Net
Income of the Company 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 the Company 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, any of the Guarantors or the Trustee, unless an Opinion
of Independent Counsel is required pursuant to the terms of this Indenture, and
who shall be acceptable to the Trustee.
"OPINION OF INDEPENDENT COUNSEL" means a written opinion of counsel
issued someone who is not an employee or consultant of the Company or any
Guarantor and who shall be acceptable to the Trustee.
"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;
-12-
(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 402 and 403,
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
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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.
"PARI PASSU INDEBTEDNESS" means any Indebtedness of the Company or any
Guarantor that is pari passu in right of payment to the Securities or any
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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 1417 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
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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
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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
-13-
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 1008.
"PERMITTED INVESTMENTS" means (i) Temporary Cash Investments; (ii)
Investments by the Company or any of its Restricted Subsidiaries in a Guarantor
and Investments by any Restricted Subsidiary in the Company; (iii) Investments
by the Company or any Restricted Subsidiary in another Person, if as a result of
such Investment (A) such Person becomes a Restricted Subsidiary 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 that is or would be a Guarantor; (iv) promissory
notes received as a result of Asset Sales permitted under Section 1013; (v)
Investments in assets owned or used in the ordinary course of business; (vi)
Investments in existence on the date of this Indenture; (vii) 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; (viii) 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
1008; and (ix) other Investments that do not exceed $5,000,000 at any one time
outstanding.
"PERMITTED NON-COMMERCIAL EDUCATIONAL STATION INVESTMENT" means a loan
made by the Company or a Restricted Subsidiary 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 1202 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
-14-
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 Guarantor under Capital Lease Obligations
incurred in the ordinary course of business; and
(ii) Indebtedness of any Guarantor (a) issued to finance or refinance
the purchase or construction of any assets of such Guarantor or (b) secured by a
Lien on any assets of such 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, joint-stock 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 308 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", as applied to the Equity Interest of any
Person, means 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) exceed $10,000,000.
-15-
"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 the Registration Rights
Agreement, dated as of the date of this Indenture, among the Company, the
Guarantors and the Initial Purchasers.
"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 the Registration Rights Agreement, 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.
"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 LEGEND" means a legend substantially in the
form of the legend required in the form of Security set forth in Section 202 to
be placed upon a Restricted Security.
"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
306 to bear a Restricted Securities Legend.
"RESTRICTED SUBSIDIARY" means a Subsidiary of the Company other than
an Unrestricted Subsidiary.
"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
sells or transfers any property
-16-
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" has the meaning specified in the Recitals.
"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
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 subordinate 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, (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 of the 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, (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, (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" has the meaning specified in the Recitals.
"SERIES B SECURITIES" has the meaning specified in the Recitals.
"SHELF REGISTRATION STATEMENT" means a "SHELF" registration statement
of the Company pursuant to Section 2(b) of the Registration Rights Agreement,
which covers all or a portion of the Registrable Securities (as defined in the
Registration Rights Agreement) on an appropriate form
-17-
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 309.
"STATED MATURITY" when used with respect to any Indebtedness or any
installment of interest thereon, means 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.
"SUBSIDIARY" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"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 308 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, 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 and (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"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.
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"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 1019. 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 1008.
"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 a Restricted Subsidiary all
the Equity Interests of which are owned by the Company or another Wholly Owned
Restricted Subsidiary.
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Section 102. Other Definitions.
-----------------
Defined in
Term Section
- -------------------------------------- ----------
"ACT" 105
"CHANGE OF CONTROL OFFER" 1016
"CHANGE OF CONTROL PURCHASE DATE" 1016
"CHANGE OF CONTROL PURCHASE NOTICE" 1016
"CHANGE OF CONTROL PURCHASE PRICE" 1016
"COVENANT DEFEASANCE" 403
"DEFAULTED INTEREST" 309
"DEFEASANCE" 402
"DEFEASANCE REDEMPTION DATE" 404
"DEFEASED SECURITIES" 401
"DEFICIENCY" 1013
"EXCESS PROCEEDS" 1013
"GOLDEN GATE" 1009
"GUARANTOR SENIOR REPRESENTATIVE" 1424
"INITIAL BLOCKAGE PERIOD" 1203
"OFFER" 1013
"OFFER DATE" 1013
"OFFERED PRICE" 1013
"NEW INSPIRATION" 1009
"PARI PASSU DEBT AMOUNT" 1013
"PARI PASSU OFFER" 1013
"PAYMENT BLOCKAGE PERIOD" 1203
"PENALTY AMOUNTS" 202
"PERMITTED INDEBTEDNESS" 1008
"PERMITTED PAYMENTS" 1009
"PHYSICAL SECURITIES" 305
"PRESCRIBED TIME PERIOD" 202
"QIB" 203
"RESTRICTED PAYMENT" 1009
"REQUIRED FILING DATES" 1020
"SECURITY AMOUNT" 1013
"SECURITY REGISTER" 306
"SECURITY REGISTRAR" 306
"SENIOR REPRESENTATIVE" 1203
"SURVIVING ENTITY" 801
"U.S. GOVERNMENT OBLIGATIONS" 404
Section 103. 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
-20-
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 104. 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.
-21-
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 105. 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 316(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
-22-
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 106. 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 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 501(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
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 107. 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
-23-
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 108. 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 109. 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 110. 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 111. 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 112. 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) any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 113. 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 (WITHOUT
GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
-24-
Section 114. 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 115. 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 116. 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 201. Forms Generally.
---------------
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.
The terms and provisions contained in the form of Securities set forth
in Sections 202 through 205 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.
-25-
Section 202. 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 (A)(i) a Series A Security is sold under an effective
Registration Statement or (ii) a Series A Security is exchanged for a Series B
Security in connection with an effective Registration Statement, in each case
pursuant to the Registration Rights Agreement or (B) the legend requirement is
otherwise terminated in accordance with Section 306, then each Series A Security
shall bear the legend set forth below (the "RESTRICTED SECURITIES LEGEND") on
the face thereof:
Salem Communications Corporation
--------------------------
9.5% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
[IF THE SECURITY IS A RESTRICTED SECURITY, INSERT -- THIS SECURITY HAS NOT BEEN
REGISTERED UNDER SECTION 5 OF THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD TO, OR FOR THE
ACCOUNT OR BENEFIT OF ANY PERSONS EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION
HEREOF, THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1), (2), (3) OR
(7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT
WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR
OTHERWISE TRANSFER THIS SECURITY, EXCEPT (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 THAT, PRIOR TO SUCH TRANSFER, FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS (THE FORM OF WHICH
LETTER CAN BE OBTAINED FROM THE TRUSTEE OR REGISTRAR), (D) OUTSIDE THE UNITED
STATES IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES THAT
IT WILL DELIVER 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 THE SECURITY, IF
THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER
MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND THE COMPANY SUCH
CERTIFICATIONS, WRITTEN LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
-26-
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" AND "UNITED STATES" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S
UNDER THE SECURITIES ACT. EACH PURCHASER OF THIS SECURITY MAY BE RELYING ON THE
EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY
RULE 144A THEREUNDER.
No. _____________ $ ______________________
Salem Communications Corporation, a California 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 October 1, 2007, at the office or agency of the
Company referred to below, and to pay interest thereon from September 25, 1997,
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on April 1 and October 1 of each year,
commencing April 1, 1998 at the rate of 9.5% per annum, plus Penalty Amounts, 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 March 15 or September 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 September 25, 1997, among the
Company, the Guarantors and the Initial Purchasers, 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
9.5% Senior Subordinated Notes due 2007, 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.
-27-
Additional amounts ("PENALTY AMOUNTS") will be assessed on the Series
A Securities as follows:
(i)(A) if an Exchange Offer Registration Statement (or, in the event
of a change in applicable law or due to current interpretations by the
Commission, the Company and the Guarantors are not permitted to effect the
Exchange Offer, a Shelf Registration Statement), is not filed within 75 days
following the Closing Date, (B) in the event that within 30 days after
commencement of the Exchange Offer, any Holder shall notify the Company that
such Holder (x) is prohibited by applicable law or Commission policy from
participating in the Exchange Offer, (y) may not resell Exchange Securities (as
defined in the Registration Rights Agreement) acquired by it in the Exchange
Offer to the public without delivering a prospectus and that the prospectus
contained in the Exchange Offer Registration Statement is not appropriate or
available for such resales by such Holder or (z) is a broker-dealer and holds
Series A Securities acquired directly from the Company or any Guarantor or an
"AFFILIATE" of the Company or any Guarantor and a Shelf Registration Statement
is not filed within 75 days after such notice or (C) upon the request of an
Initial Purchaser, a Shelf Registration Statement is not filed within 75 days
after such request, then commencing on either the 76th day after the Closing
Date or the expiration of either of the 75-day time periods set forth in clauses
(B) or (C) above (either, a "PRESCRIBED TIME PERIOD"), as the case may be,
Penalty Amounts shall be accrued on the Series A Securities over and above the
stated payment rates thereon at a rate of 0.25% per annum for the first 90 days
immediately following either the 76th day after the Closing Date or the
expiration of the applicable Prescribed Time Period, as the case may be, such
Penalty Amounts rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period;
(ii) if an Exchange Offer Registration Statement or a Shelf
Registration Statement is filed pursuant to clause (i) above and is not declared
effective within either 150 days following the Closing Date or 75 days following
the expiration of the applicable Prescribed Time Period, as the case may be,
then commencing on the 151st day after the Closing Date or the 76th day
following the expiration of the applicable Prescribed Time Period, as the case
may be, Penalty Amounts shall be accrued on the Series A Securities over and
above the accrued stated payment rates thereon at a rate of 0.25% per annum for
the first 90 days immediately following the 151st day after the Closing Date or
the 76th day after the expiration of the Prescribed Time Period, as the case may
be, such Penalty Amounts rate increasing by an additional 0.25% per annum at the
beginning of each subsequent 90-day period; and
(iii) if either (A) the Company and the Guarantors have not exchanged
the Exchange Securities (as defined in the Registration Rights Agreement) for
all of the Series A Securities validly tendered in accordance with the terms of
the Exchange Offer on or prior to 180 days after the Closing Date, or (B) if
applicable, a Shelf Registration Statement has been declared effective and such
Shelf Registration Statement ceases to be effective prior to two years from its
original effective date or such shorter period that will terminate when all of
the Series A Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement, then, subject to certain
exceptions, Penalty Amounts shall be accrued on the Series A Securities over and
above the stated payment rates at a rate of 0.25% per annum for the first 90
days immediately following the (x) 181st day after the Closing Date in the case
of (A) above or (y) the day such Shelf Registration Statement ceases to be
effective in the case of (B) above, such Penalty Amounts rate increasing by an
additional 0.25% per annum at the beginning of each subsequent 90-day period;
-28-
provided, however, that the Penalty Amounts rate on the Series A Securities may
- -------- -------
not exceed 1.0% per annum; and provided, further that (1) upon the filing of the
-------- -------
Exchange Offer Registration Statement or a Shelf Registration Statement (in the
case of (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or a Shelf Registration Statement (in the case of (ii)
above), or (3) upon the exchange of Exchange Securities for all Series A
Securities tendered in the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement which had ceased to remain effective prior to two years
from its original effective date (in the case of (iii) above), Penalty Amounts
as a result of such clause (i), (ii) or (iii) shall cease to accrue.
Any Penalty Amounts due pursuant to clause (i), (ii) or (iii) above
will be payable in cash on the Interest Payment Date related to the Series A
Securities. The Penalty Amounts will be determined by multiplying the
applicable Penalty Amounts rate by the principal amount of the Series A
Securities, multiplied by a fraction, the numerator of which is the number of
days such Penalty Amounts rate was applicable during such period, and the
denominator of which is 360.
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 Penalty Amounts.
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.
-29-
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: Salem Communications 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 Corporation
--------------------------
9.5% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
No. ____________________ $ __________________
Salem Communications Corporation, a California 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 October 1, 2007, at the office or agency of the
Company referred to below, and to pay interest thereon from September 25, 1997,
or from the most recent Interest Payment Date to which interest has been paid or
duly provided for, semiannually on April 1 and October 1, of each year,
commencing April 1, 1998 at the rate of 9.5% 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 March 15 or September 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
-30-
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 9.5% Senior Subordinated Notes due 2007, 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 Penalty Amounts 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.
-31-
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
Dated: Salem Communications Corporation
By: __________________________
Attest:
- -------------------------------
Secretary
Section 203. Form of Reverse of Securities.
-----------------------------
(a) The form of the reverse of the Series A Securities shall be
substantially as follows:
Salem Communications Corporation
--------------------------
9.5% SENIOR SUBORDINATED NOTE DUE 2007, SERIES A
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9.5% Senior Subordinated Notes due 2007, Series A
(herein called the "SECURITIES"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $150,000,000,
which may be issued under an indenture (herein called the "INDENTURE"), dated as
of September 25, 1997, 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 or
noncompliance 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)
-32-
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 406 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.
The Securities are subject to redemption at any time on or after
October 1, 2002, 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 October 1 of the years indicated below:
Redemption
Year Price
-------------------------------- -----------
2002.................. 104.75%
2003.................. 103.17
2004.................. 101.59
2005 and thereafter... 100.00
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 October 1, 2000, the Company
may redeem up to $50,000,000 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 109.50% 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 not less than $100,000,000 aggregate
--------
principal amount of the Securities remain outstanding immediately after the
occurrence of such redemption. If less than all of the Notes 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 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.
---- -----
-33-
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 in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Security is a Restricted Security in certificated form, then
as provided in the Indenture and subject to certain limitations therein set
forth, the Holder, provided it is a "qualified institutional buyer" within the
meaning of Rule 144A under the Securities Act (a "QIB"), may exchange this
Security for an interest in a Global Security by instructing the Trustee (by
completing the Restricted Securities Transfer Certificate in the form in Exhibit
A to the Indenture) to arrange for such Security to be represented by a
beneficial interest in a Global Security in accordance with the customary
procedures of the Depositary, unless the Company has elected not to issue a
Global Security.
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 and (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).
All such certificated Securities would be required to include the Restricted
Securities Legend.
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
-34-
who such Holder informs the Company is reasonably believed to be 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 (WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF).
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.
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(b) The form of the reverse of the Series B Securities shall be
substantially as follows:
SALEM COMMUNICATIONS CORPORATION
------------------------
9.5% SENIOR SUBORDINATED NOTE DUE 2007, SERIES B
This Security is one of a duly authorized issue of Securities of the
Company designated as its 9.5% Senior Subordinated Notes due 2007, Series B
(herein called the "SECURITIES"), limited (except as otherwise provided in the
Indenture referred to below) in aggregate principal amount to $150,000,000,
which may be issued under an indenture (herein called the "INDENTURE"), dated as
of September 25, 1997, 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 or
noncompliance 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 406 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.
The Securities are subject to redemption at any time on or after
October 1, 2002, 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
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redemption prices (expressed as a percentage of the principal amount), if
redeemed during the 12-month period beginning October 1 of the years indicated
below:
Redemption
Year Price
---- ----------
2002.................. 104.75%
2003.................. 103.17
2004.................. 101.59
2005 and thereafter... 100.00
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 October 1, 2000, the Company
may redeem up to $50,000,000 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 109.50% 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 not less than $100,000,000 aggregate
--------
principal amount of the Securities remains outstanding immediately after the
occurrence of such redemption. If less than all of the Notes 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 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.
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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 in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office or agency
of the Company maintained for such purpose, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Securities, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
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 and (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).
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.
-38-
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 (WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF).
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.
Section 204. Additional Provisions Required in Global Security.
-------------------------------------------------
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 202 and 203, 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
-39-
WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
Section 205. 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: September 25, 1997 By:____________________________
Authorized Signatory
Section 206. 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
-40-
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.,
COMMON GROUND BROADCASTING, INC.,
GOLDEN GATE BROADCASTING COMPANY, INC.,
INLAND RADIO, INC.,
INSPIRATION MEDIA, INC.,
INSPIRATION MEDIA OF TEXAS, INC.,
NEW ENGLAND CONTINENTAL MEDIA, INC.,
NEW INSPIRATION BROADCASTING COMPANY, INC.,
OASIS RADIO, 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 LOUISIANA, INC.,
SALEM MEDIA OF OHIO, INC.,
SALEM MEDIA OF OREGON, INC.,
SALEM MEDIA OF PENNSYLVANIA, 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., and
VISTA BROADCASTING, INC.,
Attest ____________________ By _________________________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
-41-
BELTWAY MEDIA PARTNERS,
By: Salem Communication Corporation, its general
partner
Attest ____________________ By _________________________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
By: Golden Gate Broadcasting Company, Inc., its general
partner
Attest ____________________ By _________________________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
By: New Inspirations Broadcasting Company, Inc., its
general partner
Attest ____________________ By _________________________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
-42-
ARTICLE III
-----------
THE SECURITIES
--------------
Section 301. Title and Terms.
---------------
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $150,000,000 in
principal amount of Securities, except for Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of,
other Securities pursuant to Section 303, 304, 305, 306, 307, 308, 906, 1013,
1016 or 1108.
The Securities shall be known and designated as the "9.5% Senior
Subordinated Notes due 2007", in the case of either Series A or Series B, of the
Company. The Stated Maturity of the Securities shall be October 1, 2007, and
the Securities shall each bear interest at the rate of 9.5% plus Penalty
Amounts, if any, from September 25, 1997 or from the most recent Interest
Payment Date to which interest has been paid, as the case may be, payable
semiannually on October 1 and April 1, in each year, commencing April 1, 1998,
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.
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.
Section 302. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof
-43-
Section 303. 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 deliver such
Securities as provided in this Indenture and not otherwise.
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
-44-
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with the Company and its Affiliates.
Section 304. 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 1002, 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 305. Global Securities.
-----------------
With respect to transfers by QIBS, 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 202(a)
and 204; provided, however, the Securities are eligible to be in the form of a
-------- -------
Global Security.
Transfers made to Accredited Investors or Non-U.S. Persons 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.
(a) Transfers of the 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 307. Under the circumstances
described in this clause (a) above, and in clause (b) below, beneficial owners
shall obtain physical securities in the
-45-
form set forth in Sections 202, 203, 204 (if applicable) and 205 ("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 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 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.
(b) In connection with any transfer of a portion of the beneficial
interest in a Global Security pursuant to subsection (b) of this Section to
beneficial owners who are required to hold Physical Securities, the Security
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of a Global Security in an amount equal to the principal amount
of the beneficial interest in the 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.
(c) In connection with the transfer of the entire Global Security to
beneficial owners pursuant to subsection (b) of this Section, a 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 owner identified by the Depositary in exchange for its beneficial
interest in a Global Security, an equal aggregate principal amount of Physical
Securities of authorized denominations.
(d) Any Physical Security delivered in exchange for an interest in
Global Securities pursuant to subsection (c) or subsection (d) of this Section
shall, except as otherwise provided by paragraph (a)(i)(x) and paragraph (c) of
Section 307, bear the Restricted Securities Legend.
(e) 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.
Section 306. 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 1002 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.
-46-
Upon surrender for registration of transfer of any Security at the
office or agency of the Company designated pursuant to Section 1002, 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
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 303, 304, 305, 306, 307, 308, 906, 1013, 1016 or
1108 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 1104 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 202(a), and
-47-
the restrictions set forth in this Section 306, 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 306 upon the transferability
of any particular Restricted Security shall cease and terminate on (a) the later
of two years from their date of issuance or two years after the last date on
which the Company or any Affiliate of the Company was the owner of such
Restricted Security (or any predecessor of such Restricted Security) or (b) (if
earlier) if and when such Restricted Security has been sold pursuant to an
effective registration statement under the Securities Act or transferred
pursuant to Rule 144 or under the Securities Act (or any successor provision),
unless the Holder thereof is an affiliate of the Company within the meaning of
Rule 144 (or such successor provisions). 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 306 (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 the Securities under the Securities
Act no later than two Business Days after such effective date.
Except as provided in the preceding paragraph, 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 304, 308, 906 or 1108 or otherwise, shall also be a Global Security and
bear the legend specified in Section 202(a).
Section 307. Special Transfer Provisions.
---------------------------
Unless and until (i) a Security is sold under an effective
Registration Statement, or (ii) a Security is exchanged for a Series B Security
in connection with the Exchange Offer, in each case pursuant to the Registration
Rights Agreement, 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 an Initial Security to an "ACCREDITED INVESTOR" which is
not a QIB:
(i) The Security Registrar shall register the transfer of any
Initial Security whether or not such Initial Security bears the
Restricted Securities Legend, if (x) the requested transfer is at
least two years after the original issue date of the Initial
Securities to a Person who is not an affiliate (as defined in Rule
144) of the Company (or subsequent transfer date by any such
affiliate) or (y) the proposed transferee has delivered to the
Security Registrar a certificate substantially in the form set forth
in Exhibit A.
(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the Global Security, upon receipt by the
Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance
-48-
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 Global
Security in an amount equal to the principal amount of the beneficial
interest in the Global Security 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 an Initial Security to a
QIB:
(i) If the Security to be transferred consists of Physical
Securities, the Security Registrar shall register the transfer 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 the 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 Initial 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 an Agent Member, and the
Initial Security to be transferred consists of Physical Securities,
upon receipt by the Securities 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
Global Security in an amount equal to the principal amount of the
Physical Securities, to be transferred, and the Trustee shall cancel
the Physical Security so transferred.
(c) Transfers to Non-U.S. Persons. The following provisions shall
-----------------------------
apply with respect to the registration of any proposed transfer of an Initial
Security to a Non-U.S. Person:
(i) The Security Registrar shall register the transfer of any
Initial Security whether or not such Initial Security bears the
Restricted Securities Legend, if (x) the requested transfer is at
least two years after the original issue date of the Initial
Securities to a Person who is not an affiliate (as defined in Rule
144) of the Company (or subsequent transfer date by any such
affiliate) or (y) in the case of a transfer to a Non-U.S. Person
(including a QIB), the proposed transferor has delivered to the
Security Registrar, a certificate substantially in the form of Exhibit
C, together with written legal opinions or other information as the
Trustee or the Company reasonably may request.
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(ii) If the proposed transferor is an Agent Member holding a
beneficial interest in the 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 Global Security in an amount equal to the
principal amount of the beneficial interest in the Global Security
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) 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 either (i) the circumstances contemplated by paragraph (a)(i)(x)
of this Section 307 exist or (ii) 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 provisions of the Securities
Act.
(e) 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 306 or this Section
307. 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 308. 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.
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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 309. 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
-51-
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 310. 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 309) 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 311. 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
-52-
the Company a list of all Securities that have been cancelled from time to time
as requested by the Company.
Section 312. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 313. 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.
ARTICLE IV
----------
DEFEASANCE AND COVENANT DEFEASANCE
----------------------------------
Section 401. 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 402 or Section 403 be
applied to all of the Outstanding Securities (the "DEFEASED SECURITIES"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 402, 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 405 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
404 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 304, 305, 306, 308, 1002
and 1003, (c) the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under
-53-
Section 606, and (d) this Article Four. Subject to compliance with this Article
Four, the Company may exercise its option under this Section 402 notwithstanding
the prior exercise of its option under Section 403 with respect to the
Securities.
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Sections
1006 through 1019 inclusive, and the provisions of Article Twelve and Sections
1416 through 1429 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
1416 through 1429, 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 501(c), (d)
or (g), but, except as specified above, the remainder of this Indenture and such
Defeased Securities shall be unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions to application of either Section
402 or Section 403 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 608 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
October 1, 2002 (such date being referred to as the "DEFEASANCE REDEMPTION
DATE"), if when exercising under Section 401 either its option applicable to
Section 402 or its option applicable to Section 403, 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
-54-
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 402, 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 403, 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 501(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.
-55-
(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 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with as contemplated by this Section 404.
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 405. 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 1003, 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 404 (collectively, for purposes of this Section 405, the
"TRUSTEE") pursuant to Section 404 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 404 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.
-56-
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 404 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 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, 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 402
or 403, 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 402 or 403, 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 501. 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 Penalty Amounts) 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 any 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
-57-
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 1013; or (iv) the Company
shall have failed to make or consummate a Change of Control Offer in accordance
with the provisions of Section 1016;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary 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 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 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 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 (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 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 bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company, any Guarantor or any Restricted Subsidiary 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 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
commences a voluntary case or proceeding under any applicable Bankruptcy Law or
any other case or proceeding to
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be adjudicated bankrupt or insolvent, (ii) the Company, any Guarantor or any
Restricted Subsidiary 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 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 (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 takes any corporate action in
furtherance 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 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default (other than an Event of Default specified in
Sections 501(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 501 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
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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 non-payment of principal of
the Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 513.
Section 503. 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 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
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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 512.
Section 504. 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 606.
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.
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Section 505. 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 506. 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
606;
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 Person or Persons entitled thereto, including 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 507. 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;
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(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 508. 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 309) 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 509. 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 510. 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.
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Section 511. 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 512. 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 513. 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 Penalty Amounts) 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 Penalty Amounts 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 514. 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,
against any party litigant in such suit, having due regard to
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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 515. 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 601. 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 602. Certain Rights and Duties of Trustee.
------------------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(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
believed by it to be genuine and to have been signed or presented by the proper
party or parties;
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(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;
(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 315(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
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(l) in the event that the Trustee receives notice pursuant to Section
-------
1203(b)(2), the Trustee shall use commercially reasonably efforts to provide a
- ----------
copy of such notice to the Company promptly upon such receipt.
Section 603. 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 604. 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 310 and
311, 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 605. 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 605, unless the Trustee acted
with gross negligence or in bad faith. With respect to any losses on
investments made under this Section 605, the Company is liable for the full
extent of any such loss.
Section 606. 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
-67-
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 as may arise from its 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 606 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 606, 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 606 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 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 608. 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 310(a)(1) and which
shall have a combined capital and surplus of at least $250,000,000, 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.
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Section 609. 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 610.
(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 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 may, on behalf of such Holder
and all others similarly situated, petition 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 310(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 608 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 514, 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.
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(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 514, 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 610. 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 606.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 610 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 310(a) and this Article Sixth and
shall have a combined capital and surplus of at least $250,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 608.
Upon acceptance of appointment by any successor trustee as provided in
this Section 610, 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
609. If the Company fails
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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 611. 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
310(a) and this Article Sixth and shall have a combined capital and surplus of
at least $250,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 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 612. 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 311(a) to the extent
indicated therein.
ARTICLE VII
-----------
HOLDERS' LISTS AND REPORTS BY TRUSTEE
-------------------------------------
Section 701. 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
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(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 702. 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 312, 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 312.
Section 703. 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 313(c), a brief report dated as of such
May 15 in accordance with and to the extent required by Trust Indenture Act
Section 313(a). The Trustee shall also comply with Trust Indenture Act Section
313(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 704. 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
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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 313(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.
ARTICLE VIII
------------
CONSOLIDATION, MERGER,
----------------------
CONVEYANCE, TRANSFER OR LEASE
-----------------------------
Section 801. 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;
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(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 1008 (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 1012 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 shall not, and the Company shall not permit a
Guarantor 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,
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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 801(b) shall not apply to any transaction
(including any Asset Sale made in accordance with Section 1013) with respect to
any Guarantor if the Guarantee of such Guarantor is released in connection with
such transaction in accordance with Section 1014(c).
Section 802. 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 801, 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 901. 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
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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 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 1014;
(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.
Section 902. 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, each
Guarantor (if a party thereto), 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 1013 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 1016, including amending, changing or modifying any definitions with
respect thereto;
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(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 or
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 513 or
1022, 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 903, 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 903. 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 315(a)
through 315(d) and Section 602 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 904. 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.
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Section 905. 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 906. 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 907. 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 1001. 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 1002. 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.
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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 1003. 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.
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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 1004. 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; 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 or any of its assets in compliance with the terms of
this Indenture.
Section 1005. 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 shown to be due on any return of the Company or any Subsidiary or
otherwise assessed or upon the income, profits or property of the Company or any
Subsidiary 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, except for any Lien permitted to be
incurred under Section 1012 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
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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 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Subsidiary 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 and
not reasonably expected to have a material adverse effect on the ability of the
Company to perform its obligations hereunder.
Section 1007. 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 1008. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary 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 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 7:1 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 under the Bank Credit Agreement in
an aggregate principal amount at any one time outstanding not to exceed
$75,000,000;
(ii) Indebtedness of the Company pursuant to the Securities and
Indebtedness of any Guarantor pursuant to a Guarantee;
(iii) Indebtedness of any Guarantor consisting of a guarantee of
the Company's Indebtedness under the Bank Credit Agreement;
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(iv) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of this Indenture and listed on Schedule I hereto;
(v) Indebtedness of the Company owing to a Restricted Subsidiary;
provided that any Indebtedness of the Company owing to a Restricted Subsidiary
- --------
that is not a Guarantor is made pursuant to an intercompany note in the form
attached to this Indenture as Exhibit B 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 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 owing
to the Company or another Wholly Owned Restricted Subsidiary; provided that,
--------
with respect to Indebtedness owing to a Wholly Owned Subsidiary that is not a
Guarantor, (1) any such Indebtedness is made pursuant to an intercompany note in
the form attached to this Indenture as Exhibit B and (2) 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 (1) 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 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 (2) any
transaction pursuant to which any Wholly Owned Restricted Subsidiary, which has
Indebtedness owing to the Company or any other Wholly Owned Restricted
Subsidiary, ceases to be a Wholly Owned Restricted Subsidiary 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 1014;
(viii) obligations of the Company entered into in the ordinary
course of business pursuant to Interest Rate Agreements designed to protect the
Company against fluctuations in interest rates 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, 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
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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; and
(x) Indebtedness of the Company in addition to that described in
clauses (i) through (ix) 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.
Section 1009. Limitation on Restricted Payments.
---------------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary 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 a Wholly Owned
Restricted Subsidiary);
(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;
(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 after the date of this Indenture does not exceed the
sum of:
(A) an amount equal to the Company's Cumulative Operating Cash
Flow less 1.4 times the Company's Cumulative Consolidated Interest Expense; and
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(B) the aggregate Net Cash Proceeds received after the date of
this Indenture by the Company 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 (vi) 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 (vi) 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;
(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
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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; and
(vi) the payment prior to maturity of Indebtedness outstanding on the
date of the Indenture evidenced by those certain Promissory Notes dated March 1,
1994 by the Company to New Inspiration Broadcasting Company, Inc. ("NEW
INSPIRATION") and by the Company to Golden Gate Broadcasting Company, Inc.
("GOLDEN GATE") in each case, in connection with the payment prior to maturity
(which payment shall also be permitted under this clause (vi)) of Indebtedness
outstanding on the date of the Indenture evidenced by those certain Promissory
Notes dated August 12, 1997 by Golden Gate to Mr. Atsinger and Mr. Epperson in
the principal amount, in each case, of $1,230,000 and by New Inspiration to Mr.
Atsinger and Mrs. Epperson in the principal amount, in each case, of $2,116,000.
Section 1010. 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) 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 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, and (C) transactions in existence on the date of this
Indenture and any renewal, replacement or extension thereof on substantially
similar terms.
Section 1011. Limitation on Senior Subordinated Indebtedness.
----------------------------------------------
The Company shall not, and shall not permit any Guarantor 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 subordinate in right of payment, by
contract or otherwise, to any Indebtedness of the Company or such Guarantor, as
the case may be, unless such Indebtedness is also pari passu with the Securities
---- -----
or the Guarantee of such
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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 1012. Limitation on Liens.
-------------------
The Company shall not, and shall not permit any Restricted Subsidiary 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 and listed on
Schedule II hereto;
(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 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, 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 Subsidiary 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 1008 and provided that the provisions of Section 1014 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 Subsidiary, in each case which Indebtedness
is permitted under the provisions of Section 1008;
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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 1013. 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 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: (a) 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 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 (b) 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 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
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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) Whenever the Excess Proceeds received by the Company exceed
$5,000,000, such Excess Proceeds shall be set aside by the Company in a separate
account pending (i) deposit with the Depositary or a Paying Agent of the amount
required to purchase the Securities or Pari Passu Indebtedness tendered in an
Offer or a Pari Passu Offer, (ii) delivery by the Company of the Offered Price
to the Holders of the Securities or Pari Passu Indebtedness tendered in an Offer
or a Pari Passu Offer and (iii) application, as set forth above, of Excess
Proceeds in the business of the Company and its Restricted Subsidiaries. Such
Excess Proceeds may be invested in Temporary Cash Investments, provided that the
--------
maturity date of any such investment made after the amount of Excess Proceeds
exceeds $5,000,000 shall not be later than the Offer Date. The Company shall be
entitled to any interest or dividends accrued, earned or paid on such Temporary
Cash Investments; provided that the Company shall not withdraw such interest
--------
from the separate account if an Event of Default has occurred and is continuing.
(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, or such later date as may be
necessary for the Company to comply with the requirements under the Exchange
Act, 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.
(g) The Company shall not, and shall not permit any Restricted
Subsidiary 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 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
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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,
the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company 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 the Company is not required to
prepare any of the foregoing forms, the comparable information
required pursuant to Section 1020), (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 1013 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 1003) 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.
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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
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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 309; 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 1014. Limitation on Issuances of Guarantees of and Pledges
----------------------------------------------------
for Indebtedness.
----------------
(a) The Company shall not permit any Restricted Subsidiary, other than
the 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
Restricted Subsidiary to, pledge any intercompany notes representing obligations
of any Restricted Subsidiary (other than the 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 any
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
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same extent as the Securities are subordinated to Senior Indebtedness of the
Company under this Indenture.
(b) The Company shall not permit any Restricted Subsidiary, other than
the 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) Each guarantee created pursuant to the provisions described in the
foregoing paragraph is referred to as a "GUARANTEE" and the issuer of each such
Guarantee is referred to as a "GUARANTOR." Notwithstanding the foregoing, any
Guarantee by a Restricted Subsidiary of the Securities shall provide by its
terms that it shall be automatically and unconditionally released and discharged
upon (i) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Company's Equity Interest in, or all or substantially all
the assets of, such Restricted Subsidiary, which is in compliance with this
Indenture or (ii) (with respect to any Guarantees created after the date of this
Indenture) the release by the holders of the Indebtedness of the Company
described in clauses (a) and (b) above of their security interest or their
guarantee by such Restricted Subsidiary (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, as the case may be, or (B) the holders of all such other
Indebtedness which is secured or guaranteed by such Restricted Subsidiary also
release their security interest in, or guarantee by, such Restricted Subsidiary
(including any deemed release upon payment in full of all obligations under such
Indebtedness).
Section 1015. Restriction on Transfer of Assets.
---------------------------------
The Company and the 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 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 1016. 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
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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, the
most recent subsequently filed Quarterly Report on Form 10-Q, as applicable,
and any Current Report on Form 8-K of the Company filed subsequent to such
Quarterly Report (or in the event the Company is not required to prepare any
of the foregoing Forms, the comparable information required to be prepared
by the Company and any Guarantor pursuant to Section 1020), (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 1016(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 1002;
(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 1002 to collect
payment;
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(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 309. 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
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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 1016, 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 1002 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.
(h) The Company shall not, and shall not permit any Subsidiary 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.
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Section 1017. Limitation on Subsidiary Equity Interests.
-----------------------------------------
The Company shall not permit any Restricted Subsidiary of the Company
to issue any Equity Interests, except for (a) Equity Interests issued to and
held by the Company or a Wholly Owned Restricted Subsidiary, and (b) Equity
Interests issued by a Person prior to the time (A) such Person becomes a
Restricted Subsidiary, (B) such Person merges with or into a Restricted
Subsidiary or (C) a Restricted Subsidiary 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 1018. 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, except (a)
any encumbrance or restriction pursuant to an agreement in effect on the date of
this Indenture and listed on Schedule III hereto; (b) any encumbrance or
restriction, with respect to a Restricted Subsidiary 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; and (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 1013 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.
Section 1019. 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 1009. 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.
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Section 1020. 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 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, (y) if filing such documents by the Company 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 314(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 1021. 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 1022. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 1006 through 1012, 1014, 1015 and
1017 through 1020, if, before or after the time for such compliance, the Holders
of not less than a majority in aggregate principal
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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 1023. Limitation on Asset Swaps.
-------------------------
The Company will not, and will not permit any Restricted Subsidiary
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 1101. 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 October 1, 2002, 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 October 1, 2000, the Company may redeem
up to $50,000,000 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 1102. 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 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Company Order and an Officers' Certificate.
In case of any redemption at the elec tion of the Company, the Company shall,
not less than 45 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.
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Section 1104. 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 1105. 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
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(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 1106. 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 1003) 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 1107. 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 309.
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 1108. 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 1002 (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
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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 1201. 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.
Section 1202. 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
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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 1203. Suspension of Payment When Senior Indebtedness in
-------------------------------------------------
Default.
-------
(a) Unless Section 1202 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 402 or 403) 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.
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(b) Unless Section 1202 shall be applicable, upon (1) the occurrence
of a Non-payment 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 1203) (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 Non-payment 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 Non-payment 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 1204. 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 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
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Section 1205. 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 1206. 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 1202, 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 1203, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 1203(c).
Section 1207. 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.
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Section 1208. 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 1209. 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.
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(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 1210. 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 1211. 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 606.
Section 1212. 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 1211 shall not apply to the Company or any Affiliate of
- -------
the Company if it or such Affiliate acts as Paying Agent.
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Section 1213. 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 1214. 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 1301. 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 Penalty Amounts, 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 308 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 1003) 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
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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 606 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 1302 and the last paragraph of Section 1003 shall survive.
Section 1302. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1301 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 1401. 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
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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 1402. 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 106 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.
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Section 1403. 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;
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(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 1414, 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, winding-up, 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 1414, 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 Notes; or
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(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 1404. 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 dividends or other 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 1405. 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.
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Section 1406. 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 402 shall apply to
the Securities and the Guarantors shall be responsible for the payment thereof
to the Trustee or the Holders upon demand.
Section 1407. 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 1408. 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 1409. 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
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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 1410. 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 1411. 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 1412. 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 1413. 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 1414. 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
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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 1014(c).
Section 1415. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 206, 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 1416. 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 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
1407(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.
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Section 1417. 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 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 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
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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 1418. 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 1417 shall be applicable, during any
suspension of payments in effect under Section 1203(a) of this Indenture or
during any Payment Blockage Period in effect under Section 1203(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 1419. 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 1417 or under the
conditions described in Section 1418, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 1420. 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
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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 1421. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of Sections 1416 through 1429 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 1417, 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 1418, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 1418(c).
Section 1422. 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 1423. 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
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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 1424. 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
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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 1425. 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 1426. 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 606.
Section 1427. 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 1414, 1424 and 1426 shall not apply to the Company or any
- -------
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 1428. 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.
-119-
Section 1429. 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 1430. 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.
********
-120-
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 CORPORATION, a California
corporation, as issuer
Attest /s/ Jonathan L. Block By: /s/ Edward G. Atsinger
_____________________ ______________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
ATEP RADIO, INC.,
BISON MEDIA, INC.,
CARON BROADCASTING, INC.,
COMMON GROUND BROADCASTING, INC.,
GOLDEN GATE BROADCASTING COMPANY, INC.,
INLAND RADIO, INC.,
INSPIRATION MEDIA, INC.,
INSPIRATION MEDIA OF TEXAS, INC.,
NEW ENGLAND CONTINENTAL MEDIA, INC.,
NEW INSPIRATION BROADCASTING COMPANY, INC.,
OASIS RADIO, 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 LOUISIANA, INC.,
SALEM MEDIA OF OHIO, INC.,
SALEM MEDIA OF OREGON, INC.,
SALEM MEDIA OF PENNSYLVANIA, 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., and
VISTA BROADCASTING, INC.
as Guarantors
Attest /s/ Jonathan L. Block By: /s/ Edward G. Atsinger
_____________________ ______________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
-121-
BELTWAY MEDIA PARTNERS, a California
corporation, as a Guarantor
By: Salem Communication Corporation, its general
partner
Attest /s/ Jonathan L. Block By: /s/ Edward G. Atsinger
_____________________ ______________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
By: Golden Gate Broadcasting Company, Inc.,
its general partner
Attest /s/ Jonathan L. Block By: /s/ Edward G. Atsinger
_____________________ ______________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
By: New Inspirations Broadcasting Company, Inc.,
its general partner
Attest /s/ Jonathan L. Block By: /s/ Edward G. Atsinger
_____________________ ______________________
Jonathan L. Block Edward G. Atsinger, III
Secretary President and Chief Executive Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ MaryBeth A. Lewicki
______________________________
MaryBeth A. Lewicki
Assistant Vice President
-122-
STATE OF CALIFORNIA )
COUNTY OF VENTURA ) ss.:
CITY OF CAMARILLO )
On the 30th day of September, 1997, before me, V. Lynne Yeaman, Notary Public,
personally came Edward G. Atsinger, III and Jonathan L. Block to me to be the
person whose names are subscribed to the within instrument as President, Chief
Executive Officer and Secretary, respectively; and Salem Communications
Corporation, a Cali fornia corporation, ATEP Radio, Inc., Bison Media, Inc.,
Caron Broadcasting, Inc., Common Ground Broadcasting, Inc., Golden Gate
Broadcasting Company, Inc., Inland Radio, Inc., Inspiration Media, Inc.,
Inspiration Media of Texas, Inc., New England Continental Media, Inc., New
Inspiration Broadcasting Company, Inc., Oasis Radio, 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 Louisiana, Inc., Salem Media of Ohio,
Inc., Salem Media of Oregon, Inc., Salem Media of Pennsylvania, 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., the corporations described in
and which executed the foregoing instrument; and that he signed his name thereto
pursuant to authority of the Boards of Directors of such corporations.
(NOTARIAL
SEAL)
WITNESS my hand and official seal.
/s/ V. Lynne Yeaman
_____________________________
SCHEDULE I
EXISTING INDEBTEDNESS OF SALEM COMMUNICATIONS CORPORATION
AND RESTRICTED SUBSIDIARIES
(i) Promissory Note dated March 1, 1994 by the Company to New Inspiration (with
respect to the amounts owed by New Inspiration in items (iv) and (vi) below);
(ii) Promissory Note dated March 1, 1994 by the Company to Golden Gate (with
respect to the amounts owed by Golden Gate in items (iii) and (v) below);
(iii) Promissory Note dated August 12, 1997 by Golden Gate to Mr. Epperson in
the aggregate principal amount of $1,230,000;
(iv) Promissory Note dated August 12, 1997 by New Inspiration to Mrs. Epperson
in the aggregate principal amount of $2,116,000;
(v) Promissory Note dated August 12, 1997 by Golden Gate to Mr. Atsinger in the
aggregate principal amount of $1,230,000; and
(vi) Promissory Note dated August 12, 1997 by New Inspiration to Mr. Atsinger in
the aggregate principal amount of $2,116,000.
SCHEDULE II
EXISTING LIENS
Liens created pursuant to each of the Borrower Security Agreement and
the Subsidiary Guaranty (each as defined in the Bank Credit Agreement).
SCHEDULE III
EXISTING ENCUMBRANCES AND RESTRICTIONS
Encumbrances and restrictions created pursuant to each of the Bank
Credit Agreement, the Borrower Security Agreement and the Subsidiary Guaranty
(each as defined in the Bank Credit Agreement).
EXHIBIT A
---------
[Form of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (GENERAL)
(For transfers pursuant to Section 307(a) 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: 9.5% Senior Subordinated Notes Due 2007 (the "SECURITIES")
Reference is made to the Indenture, dated as of September 25, 1997 (the
"INDENTURE"), among Salem Communications Corporation, a California 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 BOOK-ENTRY 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
A-1
Rule 144 under the Securities Act and 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 two years
(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;
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:
A-2
(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-3
EXHIBIT B
---------
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 Corporation, a California corporation
(the "COMPANY"), the guarantors party thereto and The Bank of New York, as
trustee, dated as of September 25, 1997 (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.
B-1
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.
B-2
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
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.
By:_______________________________
Name:
Title:
B-3
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
-------------------------------------------------
Amount of Maturity Amount Unpaid
Borrowing/ of Principal Paid Principal Notation
Principal Borrowing/ or Prepaid Balance Made by
Date ----------- Principal --------------- ---------- --------
- ------- -----------
B-4
EXHIBIT C
---------
[Form of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (NON-U.S. PERSONS)
(For transfers pursuant to Section 307(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: 9.5% Senior Subordinated Notes Due 2007 (the "SECURITIES")
Reference is made to the Indenture, dated as of September 25, 1997 (the
"INDENTURE"), among Salem Communications Corporation, a California 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 Notes, 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 Notes 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 off-shore 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; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Notes.
C-1
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)
C-2