SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 1 TO PARENT GUARANTY
AMENDMENT NO. 1 (this "AMENDMENT"), dated as of January 15, 2001, to
the First Amended and Restated Parent Guaranty, dated as of November 7, 2000, by
and among SALEM COMMUNICATIONS CORPORATION, a Delaware corporation (the
"GUARANTOR"), SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware corporation
(the "BORROWER"), and THE BANK OF NEW YORK (the "ADMINISTRATIVE AGENT"), in its
capacity as administrative agent for the Lenders under the Credit Agreement and
the Rate Protection Lenders as defined therein (the "PARENT GUARANTY").
RECITALS
I. Except as otherwise provided herein, capitalized terms used
herein which are not defined herein shall have the meanings set forth in the
Parent Guaranty.
II. The Guarantor has requested that the Administrative Agent amend
the Parent Guaranty upon the terms and conditions contained herein, and the
Administrative Agent is willing to do so.
Accordingly, in consideration of the covenants, conditions and
agreements hereinafter set forth, and for other good and valuable consideration,
the receipt and adequacy of which are hereby acknowledged, and pursuant to
Section 13(g) of the Parent Guaranty and Section 11.1 of the Credit Agreement,
the parties hereto agree as follows:
1. Section 1 of the Parent Guaranty shall be amended by adding the
following defined terms in the appropriate alphabetical order:
"KALC DEPOSIT ARRANGEMENT": the deposit of the proceeds
received from the KALC Sale with the Exchange Agent pursuant to an
intermediary agreement in all respects satisfactory to the
Administrative Agent in connection with the qualification of the KALC
Sale as a like-kind exchange under Section 1031 of the Code.
"KALC EXCHANGE AGENT": BNY or such other intermediary
satisfactory to the Administrative Agent.
2. Section 5(c) of the Parent Guaranty shall be amended and
restated in its entirety to read as follows:
(c) LEGAL EXISTENCE. Except as provided in Section 7.3 of
the Credit Agreement, maintain, and cause each Subsidiary to maintain,
its
corporate or other existence, and maintain, and cause each Subsidiary
to maintain, its good standing in the jurisdiction of its incorporation
or organization and in each other jurisdiction in which the failure so
to do could reasonably be expected to have a Material Adverse Effect.
3. Section 6(g) of the Parent Guaranty shall be amended and
restated in its entirety to read as follows:
(g) SALE OF PROPERTY. Sell, exchange, lease, transfer or
otherwise dispose of any Property to any Person, or permit any
Subsidiary so to do, except (i) as permitted in Section 8.7 of the
Credit Agreement, (ii) as permitted by Section 6(e) and (iii)
Acquisition Corp. may consummate the KALC Sale, PROVIDED that,
immediately upon receipt of any Net Sale Proceeds or any Liquidated
Damages Amount (as defined in the KALC Purchase Agreement) (to the
extent received in cash) from the KALC Sale (provided that, to the
extent that such KALC Sale Net Sale Proceeds have been deposited with
the KALC Exchange Agent in accordance with the KALC Deposit
Arrangement, such Net Sales Proceeds shall not be deemed received in
cash until the KALC Exchange Agent shall have released such Net Sales
Proceeds to the Guarantor or any of its Subsidiaries), Acquisition
Corp. shall immediately transfer (by way of a dividend or an advance)
such Net Sale Proceeds thereof and Liquidated Damages Amount (as
defined in the KALC Purchase Agreement) to the Guarantor in an
aggregate amount not less than the original principal amount of the
KALC Intercompany Loan or the KALC Borrower Dividend, as applicable,
upon receipt of which the Guarantor shall immediately repay the KALC
Intercompany Loan or make a capital contribution or advance to the
Borrower, as applicable, in an amount equal to the Net Sale Proceeds or
Liquidated Damages received until the KALC Intercompany Loan is repaid
in full or until the aggregate amount of such capital contributions and
advances shall equal the KALC Borrower Dividend, as applicable.
4. Paragraphs 1-3 of this Amendment shall not become effective
until:
(a) the Administrative Agent shall have received counterparts
of this Amendment duly executed by the Guarantor, the Borrower and the
Administrative Agent; and
(b) Amendment No. 1, dated as of the date hereof, to the
Credit Agreement shall have become effective.
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5. In all other respects the Parent Guaranty shall remain in full
force and effect.
6. In order to induce the Administrative Agent to execute and
deliver this Amendment (and the Required Lenders to consent thereto), the
Guarantor and the Borrower each (a) certifies that, immediately after giving
effect to this Amendment, all representations and warranties contained in the
Loan Documents to which it is a party shall be true and correct in all respects
with the same effect as though such representations and warranties had been made
on the date hereof, except as the context otherwise requires or as otherwise
permitted by the Loan Documents or this Amendment, (b) certifies that,
immediately after giving effect to this Amendment, no Default or Event of
Default shall exist under the Loan Documents, as amended, and (c) agrees to pay
all of the reasonable fees and disbursements of counsel to the Administrative
Agent incurred in connection with the preparation, negotiation and closing of
this Amendment.
7. Each of the Guarantor and the Borrower (a) reaffirms and admits
the validity, enforceability and continuing effect of all Loan Documents to
which it is a party, and its obligations thereunder, and (b) agrees and admits
that as of the date hereof it has no valid defenses to or offsets against any of
its obligations to any Credit Party under any Loan Document to which it is a
party.
8. This Amendment may be executed in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same document. It shall not be necessary in making proof
of this Amendment to produce or account for more than one counterpart signed by
the party to be charged.
9. This Amendment shall be governed by, and construed and
interpreted in accordance with, the laws of the State of New York, without
regard to principles of conflict of laws.
10. The parties have caused this Amendment to be duly executed as
of the date first written above.
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 1 TO PARENT GUARANTY
SALEM COMMUNICATIONS CORPORATION
By:
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SALEM COMMUNICATIONS HOLDING
CORPORATION
By:
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Title:
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SALEM COMMUNICATIONS CORPORATION
AMENDMENT NO. 1 TO PARENT GUARANTY
THE BANK OF NEW YORK,
as Administrative Agent
By:
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