EXHIBIT 4.1
SALEM COMMUNICATIONS HOLDING CORPORATION, a Delaware corporation, as Issuer,
SALEM COMMUNICATIONS CORPORATION
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.,
as Guarantors,
and
THE BANK OF NEW YORK, as Trustee
_________________
INDENTURE
Dated as of December 23, 2002
_________________
$100,000,000
7 3/4% Senior Subordinated Notes due 2010
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION ....................................................... 2
Section 1.01 Definitions ..................................................................................... 2
Section 1.02 Other Definitions ............................................................................... 17
Section 1.03 Compliance Certificates and Opinions ............................................................ 18
Section 1.04 Form of Documents Delivered to Trustee .......................................................... 18
Section 1.05 Acts of Holders ................................................................................. 19
Section 1.06 Notices, etc., to Trustee, the Company and any Guarantor ........................................ 20
Section 1.07 Notice to Holders: Waiver ...................................................................... 20
Section 1.08 Conflict with Trust Indenture Act ............................................................... 20
Section 1.09 Effect of Headings and Table of Contents ........................................................ 20
Section 1.10 Successors and Assigns .......................................................................... 21
Section 1.11 Separability Clause ............................................................................. 21
Section 1.12 Benefits of Indenture ........................................................................... 21
Section 1.13 Governing Law ................................................................................... 21
Section 1.14 Legal Holidays .................................................................................. 21
Section 1.15 Schedules and Exhibits .......................................................................... 21
Section 1.16 Counterparts .................................................................................... 21
ARTICLE II SECURITY FORMS ............................................................................................... 21
Section 2.01 Forms Generally ................................................................................. 21
Section 2.02 Form of Face of Security ........................................................................ 23
Section 2.03 Form of Reverse of Securities ................................................................... 27
Section 2.04 Additional Provisions Required in Global Security ............................................... 39
Section 2.05 Form of Trustee's Certificate of Authentication ................................................. 39
Section 2.06 Form of Guarantee of Each of the Guarantors ..................................................... 39
ARTICLE III THE SECURITIES .............................................................................................. 41
Section 3.01 Title and Terms ................................................................................. 41
Section 3.02 Denominations ................................................................................... 41
Section 3.03 Execution, Authentication, Delivery and Dating .................................................. 41
Section 3.04 Temporary Securities ............................................................................ 42
Section 3.05 Global Securities ............................................................................... 43
Section 3.06 Registration, Registration of Transfer and Exchange ............................................. 44
Section 3.07 Special Transfer Provisions ..................................................................... 45
Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities ................................................ 47
Section 3.09 Payment of Interest; Interest Rights Preserved .................................................. 48
Section 3.10 Persons Deemed Owners ........................................................................... 49
Section 3.11 Cancellation .................................................................................... 49
Section 3.12 Computation of Interest ......................................................................... 49
Section 3.13 CUSIP Numbers ................................................................................... 49
ARTICLE IV DEFEASANCE AND COVENANT DEFEASANCE ........................................................................... 49
Section 4.01 Company's Option to Effect Defeasance or Covenant Defeasance .................................... 49
Section 4.02 Defeasance and Discharge ........................................................................ 49
Section 4.03 Covenant Defeasance ............................................................................. 50
Section 4.04 Conditions to Defeasance or Covenant Defeasance ................................................. 50
Section 4.05 Deposited Money and U.S. Government Obligations to Be Held in Trust; Other Miscellaneous
Provisions ...................................................................................... 52
Section 4.06 Reinstatement ................................................................................... 52
ARTICLE V REMEDIES ...................................................................................................... 53
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Section 5.01 Events of Default ............................................................................... 53
Section 5.02 Acceleration of Maturity; Rescission and Annulment .............................................. 54
Section 5.03 Collection of Indebtedness and Suits for Enforcement by Trustee ................................. 55
Section 5.04 Trustee May File Proofs of Claim ................................................................ 55
Section 5.05 Trustee May Enforce Claims without Possession of Securities ..................................... 56
Section 5.06 Application of Money Collected .................................................................. 56
Section 5.07 Limitation on Suits ............................................................................. 56
Section 5.08 Unconditional Right of Holders to Receive Principal, Premium and Interest ....................... 57
Section 5.09 Restoration of Rights and Remedies .............................................................. 57
Section 5.10 Rights and Remedies Cumulative .................................................................. 57
Section 5.11 Delay or Omission Not Waiver .................................................................... 57
Section 5.12 Control by Holders .............................................................................. 58
Section 5.13 Waiver of Past Defaults ......................................................................... 58
Section 5.14 Undertaking for Costs ........................................................................... 58
Section 5.15 Waiver of Stay, Extension or Usury Laws ......................................................... 58
ARTICLE VI THE TRUSTEE .................................................................................................. 59
Section 6.01 Notice of Defaults .............................................................................. 59
Section 6.02 Certain Rights and Duties of Trustee ............................................................ 59
Section 6.03 Trustee Not Responsible for Recitals, Dispositions of Securities or Application of Proceeds
Thereof ......................................................................................... 60
Section 6.04 Trustee and Agents May Hold Securities; Collections; etc ........................................ 60
Section 6.05 Money Held in Trust ............................................................................. 60
Section 6.06 Compensation and Indemnification of Trustee and Its Prior Claim ................................. 60
Section 6.07 Conflicting Interests ........................................................................... 61
Section 6.08 Corporate Trustee Required, Eligibility ......................................................... 61
Section 6.09 Resignation and Removal: Appointment of Successor Trustee ...................................... 61
Section 6.10 Acceptance of Appointment by Successor .......................................................... 62
Section 6.11 Merger, Conversion, Consolidation or Succession to Business ..................................... 63
Section 6.12 Preferential Collection of Claims Against Company ............................................... 63
ARTICLE VII HOLDERS' LISTS AND REPORTS BY TRUSTEE ....................................................................... 63
Section 7.01 Company to Furnish Trustee with Names and Addresses of Holders .................................. 63
Section 7.02 Disclosure of Names and Addresses of Holders .................................................... 64
Section 7.03 Reports by Trustee .............................................................................. 64
Section 7.04 Reports by Company and Guarantors ............................................................... 64
ARTICLE VIII CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE ...................................................... 65
Section 8.01 Company or Any Guarantor May Consolidate, etc., Only on Certain Terms ........................... 65
Section 8.02 Successor Substituted ........................................................................... 66
ARTICLE IX SUPPLEMENTAL INDENTURES ...................................................................................... 66
Section 9.01 Supplemental Indentures and Agreements without Consent of Holders ............................... 66
Section 9.02 Supplemental Indentures and Agreements with Consent of Holders .................................. 67
Section 9.03 Execution of Supplemental Indentures and Agreements ............................................. 68
Section 9.04 Effect of Supplemental Indentures ............................................................... 68
Section 9.05 Conformity with Trust Indenture Act ............................................................. 68
Section 9.06 Reference in Securities to Supplemental Indentures .............................................. 68
Section 9.07 Effect on Senior Indebtedness ................................................................... 68
ARTICLE X COVENANTS ..................................................................................................... 69
Section 10.01 Payment of Principal, Premium and Interest ..................................................... 69
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Section 10.02 Maintenance of Office or Agency ................................................................ 69
Section 10.03 Money for Security Payments to Be Held in Trust ................................................ 69
Section 10.04 Corporate Existence ............................................................................ 70
Section 10.05 Payment of Taxes and Other Claims .............................................................. 70
Section 10.06 Maintenance of Properties ...................................................................... 71
Section 10.07 Insurance ...................................................................................... 71
Section 10.08 Limitation on Indebtedness ..................................................................... 71
Section 10.09 Limitation on Restricted Payments .............................................................. 73
Section 10.10 Limitation on Transactions with Affiliates ..................................................... 74
Section 10.11 Limitation on Senior Subordinated Indebtedness ................................................. 75
Section 10.12 Limitation on Liens ............................................................................ 75
Section 10.13 Limitation on Sale of Assets ................................................................... 76
Section 10.14 Limitation on Issuances of Guarantees of and Pledges for Indebtedness .......................... 78
Section 10.15 Restriction on Transfer of Assets .............................................................. 79
Section 10.16 Purchase of Securities upon a Change of Control ................................................ 79
Section 10.17 Limitation on Subsidiary Equity Interests ...................................................... 82
Section 10.18 Limitation on Dividends and Other Payment Restrictions Affecting Subsidiaries .................. 82
Section 10.19 Limitation on Unrestricted Subsidiaries ........................................................ 82
Section 10.20 Provision of Financial Statements .............................................................. 83
Section 10.21 Statement by Officers as to Default ............................................................ 83
Section 10.22 Waiver of Certain Covenants .................................................................... 83
Section 10.23 Limitation on Asset Swaps ...................................................................... 84
ARTICLE XI REDEMPTION OF SECURITIES ..................................................................................... 84
Section 11.01 Rights of Redemption ........................................................................... 84
Section 11.02 Applicability of Article ....................................................................... 84
Section 11.03 Election to Redeem; Notice to Trustee .......................................................... 84
Section 11.04 Selection by Trustee of Securities to Be Redeemed .............................................. 84
Section 11.05 Notice of Redemption ........................................................................... 85
Section 11.06 Deposit of Redemption Price .................................................................... 85
Section 11.07 Securities Payable on Redemption Date .......................................................... 85
Section 11.08 Securities Redeemed or Purchased in Part ....................................................... 86
ARTICLE XII SUBORDINATION OF SECURITIES ................................................................................. 86
Section 12.01 Securities Subordinate to Senior Indebtedness .................................................. 86
Section 12.02 Payment Over of Proceeds Upon Dissolution, etc ................................................. 86
Section 12.03 Suspension of Payment When Senior Indebtedness in Default ...................................... 87
Section 12.04 Payment Permitted if No Default ................................................................ 88
Section 12.05 Subrogation to Rights of Holders of Senior Indebtedness ........................................ 88
Section 12.06 Provisions Solely to Define Relative Rights .................................................... 88
Section 12.07 Trustee to Effectuate Subordination ............................................................ 89
Section 12.08 No Waiver of Subordination Provisions .......................................................... 89
Section 12.09 Notice to Trustee .............................................................................. 89
Section 12.10 Reliance on Judicial Order or Certificate of Liquidating Agent ................................. 90
Section 12.11 Rights of Trustee as a Holder of Senior Indebtedness Preservation of Trustee's Rights .......... 90
Section 12.12 Article Applicable to Paying Agents ............................................................ 90
Section 12.13 No Suspension of Remedies ...................................................................... 90
Section 12.14 Trustee's Relation to Senior Indebtedness ...................................................... 91
ARTICLE XIII SATISFACTION AND DISCHARGE ................................................................................. 91
Section 13.01 Satisfaction and Discharge of Indenture ........................................................ 91
Section 13.02 Application of Trust Money ..................................................................... 92
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ARTICLE XIV GUARANTEE ................................................................................................... 92
Section 14.01 Guarantors' Guarantee .......................................................................... 92
Section 14.02 Continuing Guarantee; No Right of Set-Off; Independent Obligation .............................. 92
Section 14.03 Guarantee Absolute ............................................................................. 93
Section 14.04 Right to Demand Full Performance ............................................................... 94
Section 14.05 Waivers. 94
Section 14.06 The Guarantors Remain Obligated in Event the Company Is No Longer Obligated to Discharge
Indenture Obligations .......................................................................... 95
Section 14.07 Fraudulent Conveyance; Subrogation ............................................................. 95
Section 14.08 Guarantee Is in Addition to Other Security ..................................................... 95
Section 14.09 Release of Security Interests .................................................................. 95
Section 14.10 No Bar to Further Actions ...................................................................... 96
Section 14.11 Failure to Exercise Rights Shall Not Operate as a Waiver; No Suspension of Remedies ............ 96
Section 14.12 Trustee's Duties, Notice to Trustee ............................................................ 96
Section 14.13 Successors and Assigns ......................................................................... 96
Section 14.14 Release of Guarantee ........................................................................... 96
Section 14.15 Execution of Guarantee ......................................................................... 97
Section 14.16 Guarantee Subordinate to Guarantor Senior Indebtedness ......................................... 97
Section 14.17 Payment Over of Proceeds Upon Dissolution of the Guarantor, etc ................................ 97
Section 14.18 Default on Guarantor Senior Indebtedness ....................................................... 98
Section 14.19 Payment Permitted by Each of the Guarantors if No Default ...................................... 98
Section 14.20 Subrogation to Rights of Holders of Guarantor Senior Indebtedness .............................. 98
Section 14.21 Provisions Solely to Define Relative Rights .................................................... 99
Section 14.22 Trustee to Effectuate Subordination ............................................................ 99
Section 14.23 No Waiver of Subordination Provisions .......................................................... 99
Section 14.24 Notice to Trustee by Each of the Guarantors .................................................... 100
Section 14.25 Reliance on Judicial Order or Certificate of Liquidating Agent ................................. 100
Section 14.26 Rights of Trustee as a Holder of Guarantor Senior Indebtedness; Preservation of Trustee's
Rights ......................................................................................... 100
Section 14.27 Article Applicable to Paying Agents ............................................................ 101
Section 14.28 No Suspension of Remedies ...................................................................... 101
Section 14.29 Trustee's Relation to Guarantor Senior Indebtedness ............................................ 101
Section 14.30 Limitation on Guarantee ........................................................................ 101
SCHEDULE I Existing Indebtedness of Salem Communications Holding Corporation and its Restricted
Subsidiaries
EXHIBIT A Form of Restricted Securities Transfer Certificate (General)
EXHIBIT B Form of Restricted Securities Transfer Certificate (Non-U.S. Persons)
EXHIBIT C Form of Intercompany Note
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CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
- ----------- -----------------
3.10(a)(1)..................................................................... 6.08
(a)(2)................................................................ 6.08
(a)(3)................................................................ N.A.
(a)(4)................................................................ N.A.
(b).................................................................. 1.06; 6.07; 6.08; 6.09; 7.03
(c)................................................................... N.A.
3.11(a)........................................................................ 6.12
(b)................................................................... 6.12
(c)................................................................... N.A.
3.12(a)........................................................................ 7.01
(b)................................................................... 7.02
(c)................................................................... 7.02
3.13(a)........................................................................ 7.03
(b)(1)................................................................ N.A.
(b)(2)................................................................ 7.03
(c)................................................................... 1.07; 7.03
(d)................................................................... 7.03
3.14(a)........................................................................ 1.06; 10.20
(b)................................................................... N.A.
(c)(1)................................................................ 1.03
(c)(2)................................................................ 1.03
(c)(3)................................................................ N.A.
(d)................................................................... N.A.
(e)................................................................... 1.03
(f)................................................................... N.A.
3.15(a)........................................................................ 6.02(a)
(b)................................................................... 1.07; 6.01
(c)................................................................... 6.02(k)
(d)................................................................... 6.02(e)
(e)................................................................... 5.14
* The Cross-Reference Table is not part of the Indenture
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3.16(a)(last sentence).......................................................... 1.01 (definition of "Outstanding")
(a)(1)................................................................. 5.12
(a)(2)................................................................. N.A.
(b).................................................................... 5.08
(c).................................................................... 1.05
3.17(a)(1)...................................................................... 5.03
(a)(2)................................................................. 5.04
(b).................................................................... 10.03
3.18(a)......................................................................... 1.08
N.A. means not applicable.
vi
INDENTURE, dated as of December 23, 2002, among SALEM COMMUNICATIONS
HOLDING CORPORATION, a Delaware corporation (as further defined below, the
"Company"), SALEM COMMUNICATIONS CORPORATION, a Delaware corporation (as further
defined below, "Parent"), ATEP RADIO, INC., a California corporation, BISON
MEDIA, INC., a Colorado corporation, CARON BROADCASTING, INC., an Ohio
corporation, CCM COMMUNICATIONS, INC., a Tennessee corporation, COMMON GROUND
BROADCASTING, INC., an Oregon corporation, GOLDEN GATE BROADCASTING COMPANY
INC., a California corporation, INSPIRATION MEDIA, INC., a Washington
corporation, INSPIRATION MEDIA OF PENNSYLVANIA, LP, a Delaware limited
partnership, INSPIRATION MEDIA OF TEXAS, LLC, a Texas limited liability company,
KINGDOM DIRECT, INC., a California corporation, NEW ENGLAND CONTINENTAL MEDIA,
INC., a Massachusetts corporation, NEW INSPIRATION BROADCASTING COMPANY, INC., a
California corporation, ONEPLACE, LLC, a Delaware limited liability company,
PENNSYLVANIA MEDIA ASSOCIATES, INC., a Pennsylvania corporation, RADIO 1210,
INC., a California corporation, REACH SATELLITE NETWORK, INC., a Tennessee
corporation, SALEM COMMUNICATIONS ACQUISITION CORPORATION, a Delaware
corporation, SALEM MEDIA CORPORATION, a New York corporation, SALEM MEDIA OF
COLORADO, INC., a Colorado corporation, SALEM MEDIA OF GEORGIA, INC., a Delaware
corporation, SALEM MEDIA OF HAWAII, INC., a Delaware corporation, SALEM MEDIA OF
ILLINOIS, LLC, a Delaware limited liability company, SALEM MEDIA OF KENTUCKY,
INC., a Kentucky corporation, SALEM MEDIA OF OHIO, INC., an Ohio corporation,
SALEM MEDIA OF NEW YORK, LLC, a Delaware limited liability company, SALEM MEDIA
OF OREGON, INC., an Oregon corporation, SALEM MEDIA OF PENNSYLVANIA, INC., a
Pennsylvania corporation, SALEM MEDIA OF TEXAS, INC., a Texas corporation, SALEM
MEDIA OF VIRGINIA, INC., a Virginia corporation, SALEM MUSIC NETWORK, INC., a
Texas corporation, SALEM RADIO NETWORK INCORPORATED, a Delaware corporation,
SALEM RADIO OPERATIONS, LLC, a Delaware limited liability company, SALEM RADIO
OPERATIONS - PENNSYLVANIA, INC., a Delaware corporation, SALEM RADIO PROPERTIES,
INC., Delaware corporation, SALEM RADIO REPRESENTATIVES, INC., a Texas
corporation, SCA LICENSE CORPORATION, a Delaware corporation, SOUTH TEXAS
BROADCASTING, INC., a Texas corporation, SRN NEWS NETWORK, INC., a Texas
corporation, and VISTA BROADCASTING, INC., a California corporation,
(collectively with Parent, the "Guarantors"), and THE BANK OF NEW YORK, a New
York banking corporation, as trustee (the "Trustee").
RECITALS
The Company has duly authorized the issuance of 7 3/4% Senior Subordinated
Notes due 2010, of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture and the Securities.
Each Guarantor has duly authorized the issuance of a guarantee (the
"Guarantees") of the Securities, of substantially the tenor hereinafter set
forth, and to provide therefor, each Guarantor has duly authorized the execution
and delivery of this Indenture and the Guarantee.
This Indenture is subject to, and shall be governed by, the provisions of
the Trust Indenture Act that are required to be part of and to govern indentures
qualified under the Trust Indenture Act.
All acts and things necessary have been done to make (i) the Securities,
when executed by the Company and authenticated and delivered hereunder and duly
issued by the Company, the valid obligations of the Company, (ii) the
Guarantees, when executed by each of the Guarantors and delivered hereunder, the
valid obligation of each of the Guarantors and (iii) this Indenture a valid and
legally binding agreement of the Company and each of the Guarantors in
accordance with the terms of this Indenture.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 1.01 Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to them
in this Article, and include the plural as well as the singular;
(b) all other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the meanings
assigned to them in accordance with GAAP;
(d) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision; and
(e) all references to $, US$, dollars or United States dollars shall refer
to the lawful currency of the United States of America.
"Accredited Investor" means an institutional "accredited investor" within
the meaning of Rule 501 (a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person or the
date the acquired Person becomes a Subsidiary.
"Additional Securities" means any Securities issued under this Indenture
in addition to the Original Securities (other than any Securities issued
pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06, 10.13, 10.16 or
11.08).
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interests or
any officer or director of any such Person or other Person or, with respect to
any natural Person, any person having a relationship with such Person or other
Person by blood, marriage or adoption not more remote than first cousin or (iii)
any other Person 10% or more of the voting Equity Interests of which are
beneficially owned or held directly or indirectly by such specified person. For
the purposes of this definition, "control" when used with respect to any
specified Person means the power to direct the management and policies of such
Person directly or indirectly, whether through ownership of voting securities,
by contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Asset Sale" means any sale, issuance, conveyance, transfer, lease or
other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary of the Company (other than
directors' qualifying shares and, to the extent required by local ownership laws
in foreign countries, shares owned by foreign shareholders); (ii) all or
substantially all of the properties and assets of any division or line of
business of the Company or its Restricted Subsidiaries; or (iii) any other
properties or assets of the Company or any of its Restricted Subsidiaries, other
than in the ordinary course of business. For the purposes of
2
this definition, the term "Asset Sale" shall not include any transfer of
properties and assets (A) that is governed by Section 8.01(a) or Section 10.23,
(B) that is by the Company to any Wholly Owned Restricted Subsidiary of the
Company, or by any Restricted Subsidiary of the Company to the Company or any
Wholly Owned Restricted Subsidiary of the Company, in accordance with the terms
of this Indenture, (C) that aggregates not more than $1,000,000 in gross
proceeds or (D) any Restricted Payments permitted under Section 10.09 or any
Permitted Investment.
"Agent Member" means any member of, or participant in, the Depositary.
"Asset Swap" means an Asset Sale by the Company or any Restricted
Subsidiary of the Company in exchange for properties or assets that will be used
in the business of the Company and its Restricted Subsidiaries existing on the
date of this Indenture or reasonably related thereto.
"Average Life to Stated Maturity" means, as of the date of determination
with respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the products of (a) the number of years from the date of determination to the
date or dates of each successive scheduled principal payment of such
Indebtedness multiplied by (b) the amount of each such principal payment by (ii)
the sum of all such principal payments.
"Bank Credit Agreement" means the Fourth Amended and Restated Credit
Agreement, dated as of June 15, 2001, among the Company, the lenders named
therein and The Bank of New York, as administrative agent, as such agreement may
be amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing). For all purposes under this Indenture, "Bank Credit Agreement" shall
include any amendments, renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplements or any other modifications that
increase the principal amount of the Indebtedness or the commitments to lend
thereunder and have been made in compliance with Section 10.08; provided that,
for purposes of the definition of "Permitted Indebtedness," no such increase may
result in the principal amount of Indebtedness of the Company under the Bank
Credit Agreement that is permitted to be incurred pursuant to Section
10.08(b)(i) to exceed the amount specified in Section 10.08(b)(i).
"Bankruptcy Law" means Title 11, United States Bankruptcy Code of 1978, as
amended, or any similar United States federal or state law relating to
bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization or
relief of debtors or any amendment to, succession to or change in any such law.
"Board of Directors" means the board of directors of the Company or any
Guarantor, as the case may be, or any duly authorized committee of such board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company or any Guarantor, as the case may be,
to have been duly adopted by the Board of Directors of such entity and to be in
full force and effect on the date of such certification, and delivered to the
Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York, the
State of California or the city in which the Corporate Trust Office is located
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means, with respect to any Person, any
obligation of such Person and its Restricted Subsidiaries on a Consolidated
basis under any capital lease of real or personal property which, in accordance
with GAAP, has been recorded as a capitalized lease obligation.
"Cash Equivalents" means, (i) any evidence of Indebtedness with a maturity
of one year or less from the date of acquisition issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of one year or less from the date of acquisition
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) commercial paper with a maturity of one year or
3
less from the date of acquisition issued by a corporation that is not an
Affiliate of the Company organized under the laws of any state of the United
States or the District of Columbia and rated A1 (or higher) according to S&P or
P-1 (or higher) according to Moody's or at least an equivalent rating category
of another nationally recognized securities rating agency: (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000; and (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
"Change of Control" means the occurrence of any of the following events:
(i) any "Person" or "Group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than Permitted Holders, is or becomes the
"Beneficial Owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 40% of the total outstanding Voting Stock of the Company or Parent,
provided that the Permitted Holders "Beneficially Own" (as so defined) a lesser
percentage of such Voting Stock than such other Person and do not have the right
or ability by voting power, contract or otherwise to elect or designate for
election a majority of the board of directors of the Company or Parent, as the
case may be; (ii) during any period of two consecutive years, individuals who at
the beginning of such period constituted the board of directors of the Company
or Parent (together with any new directors whose election to such board of
directors or whose nomination for election by the shareholders of the Company or
Parent, as the case may be, was approved by a vote of 66% of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of such board of directors then in office;
(iii) the Company or Parent consolidates with or merges with or into any Person
or conveys, transfers or leases all or substantially all of its assets to any
Person, or any corporation consolidates with or merges into or with the Company
or Parent, in any such event pursuant to a transaction in which the outstanding
Voting Stock of the Company or Parent, as the case may be, is changed into or
exchanged for cash, securities or other property, other than any such
transaction in which the outstanding Voting Stock of the Company or Parent, as
the case may be, is not changed or exchanged at all (except to the extent
necessary to reflect a change in the jurisdiction of incorporation of the
Company or Parent, as the case may be) or in which (A) the outstanding Voting
Stock of the Company or Parent, as the case may be, is changed into or exchanged
for (x) Voting Stock of the surviving corporation which is not Disqualified
Equity Interests or (y) cash, securities and other property (other than Equity
Interests of the surviving corporation) in an amount which could be paid by the
Company as a Restricted Payment in accordance with Section 10.09 (and such
amount shall be treated as a Restricted Payment subject to the provisions of
Section 10.09) and (B) no "Person" or "Group" other than Permitted Holders owns
immediately after such transaction directly or indirectly, more than the greater
of (1) 40% of the total outstanding Voting Stock of the surviving corporation
and (2) the percentage of the outstanding Voting Stock of the surviving
corporation owned, directly or indirectly, by Permitted Holders immediately
after such transaction; or (iv) the Company or Parent is liquidated or dissolved
or adopts a plan of liquidation or dissolution other than (in the case of the
Company) in a transaction which complies with the provisions described under
Article Eight.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Exchange Act, or if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Company" means Salem Communications Holding Corporation, a corporation
incorporated under the laws of Delaware, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless
4
of vice presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated Interest Expense" means, with respect to any Person for any
period, without duplication, the sum of (a) the interest expense of such Person
and its Consolidated Restricted Subsidiaries for such period, on a Consolidated
basis, including, without limitation, (i) amortization of debt discount, (ii)
the net cost under Interest Rate Agreements (including amortization of
discounts), (iii) the interest portion of any deferred payment obligation and
(iv) accrued interest, plus (b) the interest component of the Capital Lease
Obligations paid, accrued and/or scheduled to be paid or accrued by such Person
during such period, and all capitalized interest of such Person and its
Consolidated Restricted Subsidiaries, in each case as determined in accordance
with GAAP consistently applied.
"Consolidated Net Income" means, with respect to any Person for any
period, the Consolidated net income (or loss) of such Person and its
Consolidated Restricted Subsidiaries for such period as determined in accordance
with GAAP consistently applied, adjusted, to the extent included in calculating
such net income (or loss), by excluding, without duplication, (i) all
extraordinary gains but not losses (less all fees and expenses relating
thereto), (ii) the portion of net income (or loss) of such Person and its
Consolidated Restricted Subsidiaries allocable to interests in unconsolidated
Persons or Unrestricted Subsidiaries, except to the extent of the amount of
dividends or distributions actually paid to such Person or its Consolidated
Restricted Subsidiaries by such other Person during such period, (iii) net
income (or loss) of any other Person combined with such Person or any of its
Restricted Subsidiaries on a "pooling of interests" basis attributable to any
period prior to the date of combination, (iv) any gain or loss, net of taxes,
realized upon the termination of any employee pension benefit plan, (v) net
gains but not losses (less all fees and expenses relating thereto) in respect of
dispositions of assets other than in the ordinary course of business, or (vi)
the net income of any Restricted Subsidiary of such Person to the extent that
the declaration of dividends or similar distributions by such Restricted
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to such
Restricted Subsidiary or its shareholders.
"Consolidated Net Worth" means the Consolidated equity of the holders of
Equity Interests (excluding Disqualified Equity Interests) of the Company and
its Restricted Subsidiaries, as determined in accordance with GAAP consistently
applied.
"Consolidation" means, with respect to any Person, the consolidation of
the accounts of such Person and each of its subsidiaries (other than any
Unrestricted Subsidiaries) if and to the extent the accounts of such Person and
each of its subsidiaries (other than any Unrestricted Subsidiaries) would
normally be consolidated with those of such Person, all in accordance with GAAP
consistently applied. The term "Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the office of the Trustee or an affiliate
or agent thereof at which at any particular time the corporate trust business
for the purposes of this Indenture shall be principally administered, which
office at the date of execution of this Indenture is located at The Bank of New
York, 101 Barclay Street, 21 W, New York, New York 10286, Attention: Corporate
Trust Administration.
"Cumulative Consolidated Interest Expense" means, as of any date of
determination, Consolidated Interest Expense of (x) Parent from September 25,
1997 to but not including the Succession Date and (y) the Company from and
including the Succession Date to the end of the Company's most recently ended
full fiscal quarter prior to such date, taken as a single accounting period.
"Cumulative Operating Cash Flow" means, as of any date of determination,
Operating Cash Flow of (x) Parent from September 25, 1997 to but not including
the Succession Date and (y) the Company from and including the Succession Date
to the end of the Company's most recently ended full fiscal quarter prior to
such date, taken as a single accounting period.
"Debt to Operating Cash Flow Ratio" means, as of any date of
determination, the ratio of (a) the aggregate principal amount of all
outstanding Indebtedness of the Company and its Restricted Subsidiaries as of
such date on a Consolidated basis plus the aggregate liquidation preference or
redemption amount of all Disqualified Equity Interests of the Company (excluding
any such Disqualified Equity Interests held by the Company or a Wholly
5
Owned Restricted Subsidiary of the Company), to (b) Operating Cash Flow of the
Company and its Restricted Subsidiaries on a Consolidated basis for the four
most recent full quarters ending immediately prior to such date, determined on a
pro forma basis (and after giving pro forma effect to: (i) the incurrence of
such Indebtedness and (if applicable) the application of the net proceeds
therefrom, including to refinance other Indebtedness, as if such Indebtedness
was incurred, and the application of such proceeds occurred, at the beginning of
such four-quarter period; (ii) the incurrence, repayment or retirement of any
other Indebtedness by the Company and its Restricted Subsidiaries since the
first day of such four-quarter period as if such Indebtedness was incurred,
repaid or retired at the beginning of such four-quarter period (except that, in
making such computation, the amount of Indebtedness under any revolving credit
facility shall be computed based upon the average balance of such Indebtedness
at the end of each month during such four-quarter period); (iii) in the case of
Acquired Indebtedness, the related acquisition, as if such acquisition had
occurred at the beginning of such four-quarter period; and (iv) any acquisition
or disposition by the Company and its Restricted Subsidiaries of any company or
any business or any assets out of the ordinary course of business, or any
related repayment of Indebtedness, in each case since the first day of such
four-quarter period, assuming such acquisition, disposition or repayment had
been consummated on the first day of such four-quarter period).
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"Depositary" means, with respect to the Securities issued in the form of
Global Securities, if any, The Depository Trust Company, a New York limited
purpose corporation, its nominees and successors, in each case registered as a
"clearing agency" under the Exchange Act and maintaining a book-entry system
that qualifies for treatment as "registered form" under Section 163(f) of the
Code.
"Designated Guarantor Senior Indebtedness" means (i) all Guarantor Senior
Indebtedness which guarantees Indebtedness under the Bank Credit Agreement and
(ii) any other Guarantor Senior Indebtedness which is incurred pursuant to an
agreement (or series of related agreements) simultaneously entered into
providing for indebtedness, or commitments to lend, of at least $25,000,000 at
the time of determination and is specifically designated in the instrument
evidencing such Guarantor Senior Indebtedness or the agreement under which such
Guarantor Senior Indebtedness arises as "Designated Guarantor Senior
Indebtedness" by the Guarantor which is the obligor under such Guarantor Senior
Indebtedness.
"Designated Senior Indebtedness" means (i) all Senior Indebtedness
outstanding under the Bank Credit Agreement and (ii) any other Senior
Indebtedness which is incurred pursuant to an agreement (or series of related
agreements) simultaneously entered into providing for indebtedness, or
commitments to lend, of at least $25,000,000 at the time of determination and is
specifically designated in the instrument evidencing such Senior Indebtedness or
the agreement under which such Senior Indebtedness arises as "Designated Senior
Indebtedness" by the Company.
"Disqualified Equity Interests" means any Equity Interests that, either by
their terms or by the terms of any security into which they are convertible or
exchangeable or otherwise, are or upon the happening of an event or passage of
time would be required to be redeemed prior to any Stated Maturity of the
principal of the Securities or are redeemable at the option of the holder
thereof at any time prior to any such Stated Maturity, or are convertible into
or exchangeable for debt securities at any time prior to any such Stated
Maturity at the option of the holder thereof.
"Equity Interest" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) corporate stock or other equity
participations, including partnership interests, whether general or limited, and
limited liability company interests of such Person, including any Preferred
Equity Interests.
"Event of Default" has the meaning specified in Article Five.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
thereto, and the rules, regulations and forms promulgated thereunder, all as the
same shall be amended from time to time.
6
"Exchange Offer" means an exchange offer by the Company of Series B
Additional Securities for Series A Additional Securities to be effected pursuant
to a Registration Rights Agreement.
"Exchange Offer Registration Statement" means a registration statement
under the Securities Act with respect to an Exchange Offer contemplated by a
Registration Rights Agreement.
"Existing Indentures" means the Existing 9 1/2% Notes Indenture and the
Existing 9% Notes Indenture.
"Existing 9% Notes Indenture" means the Indenture, dated as of June 25,
2001, by and among the Company, the guarantors party thereto and The Bank of New
York as trustee, pursuant to which the Existing 9% Notes were issued.
"Existing 9 1/2% Notes Indenture" means the Indenture, dated as of
September 25, 1997, among Salem Communications Corporation, a California
corporation, the guarantors party thereto and The Bank of New York as trustee,
as supplemented by Supplemental Indenture No. 1, dated as of March 31, 1999, by
and between Salem Communications Corporation, a California corporation, Parent,
the guarantors party thereto and The Bank of New York as trustee, by
Supplemental Indenture No. 2, dated as of August 24, 2000, by and among Parent,
the Company, the guarantors party thereto and The Bank of New York as trustee,
by Supplemental Indenture No. 3, dated as of March 9, 2001, by and among the
Company, the guarantors party thereto and The Bank of New York as trustee, and
by Supplemental Indenture No. 4, dated as of June 25, 2001, by and among the
Company, the guarantors party thereto and The Bank of New York as trustee,
pursuant to which the Existing 9 1/2% Notes were issued.
"Existing Notes" means the Existing 9 1/2% Notes and the Existing 9%
Notes.
"Existing 9% Notes" means the 9% Senior Subordinated Notes due July 1,
2011 of the Company issued pursuant to the Existing 9% Notes Indenture and
outstanding as of the date of this Indenture.
"Existing 9 1/2% Notes" means the 9 1/2% Senior Subordinated Notes due
October 1, 2007 of the Company (as successor issuer to Parent) issued pursuant
to the Existing 9 1/2% Notes Indenture and outstanding as of the date of this
Indenture.
"Existing Notes Guarantee" means any of the guarantees by Parent or any of
its Subsidiaries of the obligations of the Company and any other obligor under
the Existing Indentures or under the Existing Notes, pursuant to a guarantee
given in accordance with the applicable Existing Indenture.
"Fair Market Value" means, with respect to any asset or property, the sale
value that would be obtained in an arm's-length transaction between an informed
and willing seller under no compulsion to sell and an informed and willing buyer
under no compulsion to buy.
"GAAP" means generally accepted accounting principles in the United
States, consistently applied, which are in effect on the date of this Indenture.
"Guarantee" means the guarantee by any Guarantor of the Company's
Indenture Obligations pursuant to a guarantee given in accordance with this
Indenture, including, without limitation, the Guarantees by the Guarantors
included in Article Fourteen of this Indenture and any Guarantee delivered
pursuant to Section 10.14.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (iii) to supply funds to, or in any other
manner invest in, the debtor (including any agreement to pay for property or
services without requiring that such property be received or such services be
rendered), (iv) to maintain working capital or equity capital of the debtor, or
otherwise to maintain the net worth, solvency or other financial condition of
the debtor or (v) otherwise to assure a
7
creditor against loss; provided that the term "Guarantee" shall not include
endorsements for collection or deposit, in either case in the ordinary course of
business.
"Guarantor" means each Person listed as a guarantor in this Indenture or
any other guarantor of the Indenture Obligations.
"Guarantor Senior Indebtedness" means the principal of, premium, if any,
and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy laws
whether or not allowable as a claim in such proceeding) on any Indebtedness of
any Guarantor (other than as otherwise provided in this definition), whether
outstanding on the date of this Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or contingent, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to any Guarantor. Without
limiting the generality of the foregoing, "Guarantor Senior Indebtedness" shall
include (i) the principal of, premium, if any, and interest (including interest
accruing after the filing of a petition initiating any proceeding under any
state, federal or foreign bankruptcy law whether or not allowable as a claim in
such proceeding) and all other obligations of every nature of any Guarantor from
time to time owed to the lenders (or their agent) under the Bank Credit
Agreement; provided, however, that any Indebtedness under any refinancing,
refunding, or replacement of the Bank Credit Agreement shall not constitute
Guarantor Senior Indebtedness to the extent that the Indebtedness thereunder is
by its express terms subordinate to any other Indebtedness of any Guarantor and
(ii) Indebtedness under Interest Rate Agreements. Notwithstanding the foregoing,
"Guarantor Senior Indebtedness" shall not include (i) Indebtedness evidenced by
the Guarantees or the Existing Notes Guarantees, (ii) Indebtedness that is
subordinate or junior in right of payment, by contract or otherwise, to any
Indebtedness of any Guarantor, (iii) Indebtedness which when incurred and
without respect to any election under Section 1111(b) of Title 11 United States
Code, is without recourse to any Guarantor, (iv) Indebtedness which is
represented by Disqualified Equity Interests, (v) any liability for foreign,
federal, state, local or other taxes owed or owing by any Guarantor to the
extent such liability constitutes Indebtedness, (vi) Indebtedness of any
Guarantor to a Subsidiary or any other Affiliate of the Company or any of such
Affiliate's subsidiaries, (vii) that portion of any Indebtedness which at the
time of issuance is issued in violation of this Indenture (but, for purposes of
this clause (vii), no such Indebtedness shall be deemed to be issued in
violation of this Indenture if the holders of such obligation or their
representative shall have received an officers' certificate of the Company to
the effect that the incurrence of such Indebtedness does not (or, in the case of
revolving credit indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Indenture), (viii) Indebtedness
evidenced by any guarantee of any Subordinated Indebtedness or Pari Passu
Indebtedness, and (ix) Indebtedness owed by any Guarantor for compensation to
employees or for services rendered by employees.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services, excluding any trade payables and other
accrued current liabilities arising in the ordinary course of business, but
including, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Equity Interests of such Person, or any warrants, rights or
options to acquire such Equity Interests, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Disqualified Equity Interests valued
at the greater of their voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends, and
8
(ix) any amendment, supplement, modification, deferral, renewal, extension,
refunding or refinancing of any liability of the types referred to in clauses
(i) through (viii) above. The amount of Indebtedness of any Person at any date
shall be, without duplication, the principal amount that would be shown on a
balance sheet of such Person prepared as of such date in accordance with GAAP
and the maximum determinable liability of any Guaranteed Debt referred to in
clause (vii) above at such date; provided, however, that the amount outstanding
at any time of any Indebtedness issued with original issue discount shall be
deemed to be the face amount of such Indebtedness less the remaining unamortized
portion of the original issue discount of such Indebtedness at such time as
determined in conformity with GAAP. The Indebtedness of the Company and its
Restricted Subsidiaries shall not include any Indebtedness of Unrestricted
Subsidiaries so long as such Indebtedness is non-recourse to the Company and its
Restricted Subsidiaries. For purposes hereof, the "maximum fixed repurchase
price" of any Disqualified Equity Interests which do not have a fixed repurchase
price shall be calculated in accordance with the terms of such Disqualified
Equity Interests as if such Disqualified Equity Interests were purchased on any
date on which Indebtedness shall be required to be determined pursuant to this
Indenture, and if such price is based upon, or measured by, the Fair Market
Value of such Disqualified Equity Interests, such Fair Market Value to be
determined in good faith by the Board of Directors of the issuer of such
Disqualified Equity Interests.
"Indenture Obligations" means the obligations of the Company and any other
obligor under this Indenture or under the Securities, including any Guarantor,
to pay principal, premium, if any, and interest when due and payable, and all
other amounts due or to become due under or in connection with this Indenture,
the Securities and the performance of all other obligations to the Trustee and
the Holders under this Indenture and the Securities, according to the terms
hereof and thereof
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of Parent, the Company or any
Subsidiary of Parent or the Company) is an employee, insider, associate or
Affiliate of Parent, the Company or a Subsidiary of Parent or the Company or has
held any such position during the previous five years or (ii) who is a director,
an employee, insider, associate or Affiliate of another party to the transaction
in question.
"Interest Payment Date" means the Stated Maturity of an installment of
interest on the Securities.
"Interest Rate Agreements" means one or more of the following agreements
which shall be entered into by one or more financial institutions: interest rate
protection agreements (including, without limitation, interest rate swaps, caps,
floors, collars and similar agreements) and/or other types of interest rate
hedging agreements from time to time.
"Investments" means, with respect to any Person, directly or indirectly,
any advance, loan (including guarantees), or other extension of credit or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase, acquisition or ownership by such Person of any Equity
Interests, bonds, notes, debentures or other securities issued or owned by any
other Person and all other items that would be classified as investments on a
balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or otherwise),
privilege, security interest, hypothecation or other encumbrance upon or with
respect to any property of any kind (including any conditional sale or other
title retention agreement, any leases in the nature thereof, and any agreement
to give any security interest), real or personal, movable or immovable, now
owned or hereafter acquired.
"Maturity" means, when used with respect to any Security, the date on
which the principal of such Security becomes due and payable as provided in the
Security or as provided in this Indenture, whether at Stated Maturity, the
purchase date, or the redemption date and whether by declaration of
acceleration, Offer in respect of Excess Proceeds, Change of Control, call for
redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor rating
agency.
9
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any
Person, the proceeds thereof in the form of cash or Temporary Cash Investments
including payments in respect of deferred payment obligations when received in
the form of, or stock or other assets when disposed of for, cash or Temporary
Cash Investments (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary of the Company)
net of (i) brokerage commissions and other reasonable fees and expenses
(including fees and expenses of counsel and investment bankers) related to such
Asset Sale, (ii) provisions for all taxes payable as a result of such Asset
Sale, (iii) payments made to retire Indebtedness where payment of such
Indebtedness is secured by the assets or properties the subject of such Asset
Sale or would cause a required repayment under the Bank Credit Agreement, (iv)
amounts required to be paid to any Person (other than the Company or any
Restricted Subsidiary of the Company) owning a beneficial interest in the assets
subject to the Asset Sale and (v) appropriate amounts to be provided by the
Company or any Restricted Subsidiary of the Company, as the case may be, as a
reserve, in accordance with GAAP, against any liabilities associated with such
Asset Sale and retained by the Company or any Restricted Subsidiary of the
Company, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an Officers'
Certificate delivered to the Trustee and (b) with respect to any issuance or
sale of Equity Interests by any Person, or debt securities or Equity Interests
of such Person that have been converted into or exchanged for Equity Interests,
as referred to under Section 10.09, the proceeds of such issuance or sale in the
form of cash or Temporary Cash Investments, including payments in respect of
deferred payment obligations when received in the form of, or stock or other
assets when disposed for, cash or Temporary Cash Investments (except to the
extent that such obligations are financed or sold with recourse to such Person
or any Restricted Subsidiary of such Person), net of attorney's fees,
accountant's fees and brokerage, consultation, underwriting and other fees and
expenses actually incurred in connection with such issuance or sale and net of
taxes paid or payable as a result thereof.
"Nonpayment Default" means any event (other than a Payment Default) the
occurrence of which entitles one or more Persons to accelerate the maturity of
any Designated Senior Indebtedness.
"Non-U.S. Person" has the meaning given to it by Regulation S under the
Securities Act.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, Vice Chairman, the President or a Vice President (regardless of vice
presidential designation), and by the Treasurer, an Assistant Treasurer, the
Secretary or an Assistant Secretary, of the Company or any Guarantor, as the
case may be, and delivered to the Trustee.
"Operating Cash Flow" means, with respect to any Person for any period,
the Consolidated Net Income of such Person and its Restricted Subsidiaries for
such period, plus (a) extraordinary net losses and net losses on sales of assets
outside the ordinary course of business during such period, to the extent such
losses were deducted in computing Consolidated Net Income, plus (b) provision
for taxes based on income or profits, to the extent such provision for taxes was
included in computing such Consolidated Net Income, and any provision for taxes
utilized in computing the net losses under clause (a) hereof, plus (c)
Consolidated Interest Expense of such Person and its Restricted Subsidiaries for
such period, plus (d) depreciation, amortization and all other non-cash charges,
to the extent such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income (including amortization of
goodwill and other intangibles).
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company or any of the Guarantors, unless an Opinion of
Independent Counsel is required pursuant to the terms of this Indenture.
"Opinion of Independent Counsel" means a written opinion of counsel issued
by someone who is not an employee or consultant of the Company or any Guarantor.
"Original Securities" means the Company's 7 3/4% Senior Subordinated Notes
due 2010, issued on the date hereof pursuant to this Indenture under an
effective Registration Statement (and any Securities issued in respect thereof
pursuant to Sections 3.03, 3.04, 3.05, 3.06, 3.08, 9.06, 10.13, 10.16 or 11.08).
"Outstanding" when used with respect to Securities means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
10
(a) Securities theretofore cancelled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for which payment or redemption money
in the necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company or any Affiliate thereof) in trust or set
aside and segregated in trust by the Company or such Affiliate (if the Company
or such Affiliate shall act as the Paying Agent) for the Holders; provided that
if such Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor reasonably satisfactory
to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 4.02 and 4.03,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities have
been authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the Trustee
proof reasonably satisfactory to it that such Securities are held by a bona fide
purchaser in whose hands the Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company, any Guarantor, or any other obligor upon the Securities or any
Affiliate of the Company, any Guarantor, or such other obligor shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Securities that a
Responsible Officer of the Trustee actually knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the reasonable
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company, any Guarantor or any other
obligor upon the Securities or any Affiliate of the Company, any Guarantor or
such other obligor.
"Parent" means Salem Communications Corporation, a Delaware corporation,
the parent of the Company, and any successor Person succeeding to the direct or
indirect ownership of the Company.
"Parent Equity Sale Proceeds" means the aggregate amount of Net Cash
Proceeds received by Parent after September 25, 1997 to but not including the
Succession Date from capital contributions (other than from any of its
Subsidiaries) or from the issuance or sale (other than to any of its
Subsidiaries) of its Qualified Equity Interests (except, in each case, to the
extent such proceeds were used to purchase, redeem or otherwise retire Equity
Interests of Parent or subordinated indebtedness of Parent).
"Parent Subsidiary Guarantor" means any Subsidiary of Parent that is a
Guarantor of the Securities other than a Restricted Subsidiary Guarantor.
"Pari Passu Indebtedness" means the Existing Notes or any Existing Notes
Guarantee, as the case may be, and any other Indebtedness of the Company or any
Guarantor that is pari passu in right of payment to the Securities or any
Guarantee, as the case may be.
"Paying Agent" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"Payment Default" means any default in the payment of principal of,
premium, if any, or interest, on any Designated Senior Indebtedness.
"Permitted Guarantor Junior Securities" means (so long as the effect of
any exclusion employing this definition is not to cause any Guarantee to be
treated in any case or proceeding or similar event described in clause (a), (b)
or (c) of Section 14.17 as part of the same class of claims as the Guarantor
Senior Indebtedness or any class of claims pari passu with, or senior to, the
Guarantor Senior Indebtedness) for any payment or distribution, debt or equity
securities of any Guarantor or any successor corporation provided for by a plan
of reorganization or readjustment that are subordinated to any Guarantee at
least to the same extent that the Guarantee is subordinated to the payment of
all Guarantor Senior Indebtedness then outstanding; provided that (1) if a new
corporation results
11
from such reorganization or readjustment, such corporation assumes any Guarantor
Senior Indebtedness not paid in full in cash or Cash Equivalents in connection
with such reorganization or readjustment and (2) the rights of the holders of
such Guarantor Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment.
"Permitted Holders" means as of the date of determination (i) any of
Stuart W. Epperson and Edward G. Atsinger III; (ii) family members or the
relatives of the Persons described in clause (i); (iii) any trusts created for
the benefit of the Persons described in clauses (i), (ii) or (iv) or any trust
for the benefit of any such trust; or (iv) in the event of the incompetence or
death of any of the Persons described in clauses (i) and (ii), such Person's
estate, executor, administrator, committee or other personal representative or
beneficiaries, in each case who at any particular date shall beneficially own or
have the right to acquire, directly or indirectly, Equity Interests of the
Company.
"Permitted Indebtedness" has the meaning specified in Section 10.08.
"Permitted Investments" means any of the following: (i) Temporary Cash
Investments; (ii) Investments by the Company or any of its Restricted
Subsidiaries in a Restricted Subsidiary Guarantor and Investments by any
Restricted Subsidiary in the Company; (iii) Investments by the Company or any of
its Restricted Subsidiaries in another Person, if as a result of such Investment
(A) such other Person becomes a Restricted Subsidiary of the Company that is or
would be a Guarantor or (B) such other Person is merged or consolidated with or
into, or transfers or conveys all or substantially all of its assets to, the
Company or a Restricted Subsidiary of the Company that is or would be a
Guarantor; (iv) promissory notes received as a result of Asset Sales permitted
under Section 10.13; (v) Investments in existence on the date of this Indenture;
(vi) direct or indirect loans to employees, or to a trustee for the benefit of
such employees, of the Company or any of its Restricted Subsidiaries in an
aggregate amount outstanding at any time not exceeding $1,000,000; (vii)
Permitted Non-Commercial Educational Station Investments; provided that
immediately after giving effect to any such Investment, the Company could incur
$1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to
the restrictions under Section 10.08; (viii) Interest Rate Agreements entered
into in the ordinary course of business of the Company or a Restricted
Subsidiary of the Company and incurred in compliance with Section 10.08; and
(ix) other Investments that do not exceed $5,000,000 at any one time
outstanding.
"Permitted Noncommercial Educational Station Investment" means a loan made
by the Company or a Restricted Subsidiary of the Company to a non-profit entity,
the proceeds of which are used to acquire assets used in the operation of a
radio station; provided that so long as any such Investment remains outstanding
(i) such loan shall be evidenced by a promissory note and shall not be
subordinated to any other Indebtedness of such non-profit entity; (ii) at least
40% of the board seats (or other comparable governing body) of such non-profit
entity shall be held by executive officers of the Company; and (iii) a technical
and professional services agreement shall be in full force and effect between
such non-profit entity and the Company pursuant to which the Company shall be
compensated for providing engineering, accounting, legal and other assistance in
connection with the operation of the station licensed to such non-profit entity
(which agreement shall contain customary terms and conditions for technical and
professional services agreements in the radio broadcasting industry generally).
"Permitted Junior Securities" means (so long as the effect of any
exclusion employing this definition is not to cause the Securities to be treated
in any case or proceeding or similar event described in clause (a), (b) or (c)
of Section 12.02 as part of the same class of claims as the Senior Indebtedness
or any class of claims pari passu with, or senior to, the Senior Indebtedness)
for any payment or distribution, debt or equity securities of the Company or any
successor corporation provided for by a plan of reorganization or readjustment
that are subordinated to the Securities at least to the same extent that the
Securities are subordinated to the payment of all Senior Indebtedness then
outstanding; provided that (1) if a new corporation results from such
reorganization or readjustment, such corporation assumes any Senior Indebtedness
not paid in full in cash or Cash Equivalents in connection with such
reorganization or readjustment and (2) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment.
"Permitted Subsidiary Indebtedness" means:
12
(i) Indebtedness of any Restricted Subsidiary Guarantor under Capital
Lease Obligations incurred in the ordinary course of business; and
(ii) Indebtedness of any Restricted Subsidiary Guarantor (a) issued to
finance or refinance the purchase or construction of any assets of such
Restricted Subsidiary Guarantor or (b) secured by a Lien on any assets of such
Restricted Subsidiary Guarantor where the lender's sole recourse is to the
assets so encumbered, in either case (x) to the extent the purchase or
construction prices for such assets are or should be included in "property and
equipment" in accordance with GAAP and (y) if the purchase or construction of
such assets is not part of any acquisition of a Person or business unit.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, jointstock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.08 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Equity Interest" means, as applied to the Equity Interest of
any Person, an Equity Interest of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Equity Interests of any other class of such
Person.
"Prospectus" means the prospectus included in a Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including any such prospectus
supplement with respect to the terms of the offering of any portion of the
Securities covered by a Registration Statement, and by all other amendments and
supplements to such prospectus, including post-effective amendments, and in each
case including all material incorporated by reference therein.
"Public Equity Offering" means, with respect to any Person, an
underwritten public offering by such Person of some or all of its Equity
Interests (other than Disqualified Equity Interests), the net proceeds of which
(after deducting any underwriting discounts and commissions) (x) to the Company
or (y) received by the Company as a capital contribution from Parent, as the
case may be, exceed $10,000,000.
"Qualified Equity Interests" of any Person means any and all Equity
Interests of such Person other than Disqualified Equity Interests.
"Redemption Date" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price" when used with respect to any Security to be redeemed
pursuant to any provision in this Indenture means the price at which it is to be
redeemed pursuant to this Indenture.
"Registered Additional Securities" means any Securities, including any
Series B Additional Securities, issued under this Indenture under an effective
Registration Statement, in addition to the Original Securities (other than
Securities issued pursuant to Section 3.03, 3.04, 3.05, 3.06, 3.08, 9.06, 10.13,
10.16 or 11.08).
"Registration Rights Agreement" means any registration rights agreement
among the Company, the guarantors named therein and the initial purchasers named
therein with respect to any Series A Additional Securities.
"Registration Statement" means any registration statement of the Company,
and all amendments and supplements thereto, including post-effective amendments,
in each case including the Prospectus contained therein,
13
all exhibits thereto and all material incorporated by reference therein, which
covers the Original Securities or any Registered Additional Securities.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the 15th day (whether or not a Business Day) next preceding such
Interest Payment Date.
"Regulation S" means Regulation S promulgated under the Securities Act.
"Resale Restriction Termination Date" means, with respect to any Series A
Additional Security, the date that is two years (or such other period as may
hereafter be provided under Rule 144(k) under the Securities Act or any
successor provision thereto as permitting the resale by non-affiliates of
restricted securities (as such term is defined in Rule 144(a)(3) under the
Securities Act) without restriction) after the later of the original issue date
in respect of such Security and the last date on which the Company or any
Affiliate of the Company was the owner of such Security (or any Predecessor
Security thereto).
"Responsible Officer" when used with respect to the Trustee means any
officer assigned to the Corporate Trust Office or the agent of the Trustee
appointed hereunder, including any vice president, assistant vice president,
assistant secretary, or any other officer or assistant officer of the Trustee or
the agent of the Trustee appointed hereunder to whom any corporate trust matter
is referred because of his or her knowledge of and familiarity with the
particular subject.
"Restricted Securities Transfer Certificate" means a certificate
substantially in the form set forth in Exhibit A.
"Restricted Security" means each Security required pursuant to Section
2.02(c) to bear a Restricted Securities Legend.
"Restricted Subsidiary" of a Person means any Subsidiary of such Person
other than an Unrestricted Subsidiary.
"Restricted Subsidiary Guarantor" means any Guarantor of the Securities
that is a Restricted Subsidiary of the Company.
"Rule 144" means Rule 144 promulgated under the Securities Act.
"Rule 144A" means Rule 144A promulgated under the Securities Act.
"Rule 144A Information" shall be such information with respect to the
Company and the Guarantors as is specified pursuant to Rule 144A(d)(4) under the
Securities Act (or any successor provision thereto).
"Sale And Leaseback Transaction" means any transaction or series of
related transactions pursuant to which the Company or a Restricted Subsidiary of
the Company sells or transfers any property or asset in connection with the
leasing, or the resale against installment payments, of such property or asset
to the seller or transferor.
"S&P" means Standard & Poor's Ratings Service, a division of the McGraw
Hill Companies, or any successor rating agency.
"Securities" means the Original Securities and any Additional Securities.
"Securities Act" means the Securities Act of 1933, or any successor
thereto, and the rules, regulations and forms promulgated thereunder, all as the
same shall be amended from time to time.
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition initiating
any proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) on any Indebtedness of the Company
(other than as otherwise provided
14
in this definition), whether outstanding on the date of this Indenture or
thereafter created, incurred or assumed, and whether at any time owing, actually
or on a contingent basis, unless, in the case of any particular Indebtedness,
the instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to the Securities. Without limiting the generality of the
foregoing, "Senior Indebtedness" shall include (i) the principal of, premium, if
any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy law
whether or not allowable as a claim in such proceeding) and all other
obligations of every nature of the Company from time to time owed to the lenders
(or their agent) under the Bank Credit Agreement; provided, however, that any
Indebtedness under any refinancing, refunding or replacement of the Bank Credit
Agreement shall not constitute Senior Indebtedness to the extent that the
Indebtedness thereunder is by its express terms subordinated in right of payment
to any other Indebtedness of the Company, and (ii) Indebtedness under Interest
Rate Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Securities or the Existing Notes, (ii)
Indebtedness that is subordinate or junior in right of payment, by contract or
otherwise, to any Indebtedness of the Company, (iii) Indebtedness which when
incurred and without respect to any election under Section 1111(b) of Title 11
United States Code, is without recourse to the Company, (iv) Indebtedness which
is represented by Disqualified Equity Interests, (v) any liability for foreign,
federal, state, local or other taxes owed or owing by the Company to the extent
such liability constitutes Indebtedness, (vi) Indebtedness of the Company to a
Subsidiary or any other Affiliate of the Company or any of such Affiliate's
subsidiaries, (vii) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture (but, for purposes of this
clause (vii), no such Indebtedness shall be deemed to be issued in violation of
this Indenture if the holders of such obligation or their representative shall
have received an officers' certificate of the Company to the effect that the
incurrence of such Indebtedness does not (or, in the case of revolving credit
indebtedness, that the incurrence of the entire committed amount thereof at the
date on which the initial borrowing thereunder is made would not) violate such
provisions of this Indenture), (viii) Indebtedness evidenced by a guarantee of
any Subordinated Indebtedness or Pari Passu Indebtedness and (ix) Indebtedness
owed by the Company for compensation to employees or for services rendered by
employees.
"Series A Additional Securities" means Additional Securities issued in an
offering not registered under the Securities Act (and any Securities issued in
respect thereof pursuant to Sections 3.03, 3.04, 3.05, 3.06, 3.07, 3.08, 9.06,
10.13, 10.16 or 11.08).
"Series B Additional Securities" means any Additional Securities issued in
an Exchange Offer for Series A Additional Securities and containing terms
substantially identical to any Series A Additional Securities (except that (i)
such Series B Additional Securities shall not contain terms with respect to
transfer restrictions and shall be registered under the Securities Act and (ii)
certain provisions relating to an increase in the stated rate of interest
thereon shall be eliminated).
"Shelf Registration Statement" means a "shelf" registration statement of
the Company pursuant to a Registration Rights Agreement, which covers all or a
portion of the Registrable Securities (as defined in such Registration Rights
Agreement) on an appropriate form under Rule 415 under the Securities Act, or
any similar rule that may be adopted by the Commission, and all amendments and
supplements to such registration statement, including post-effective amendments,
in each case including the Prospectus contained therein, all exhibits thereto
and all material incorporated by reference therein.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.09.
"Stated Maturity" means, when used with respect to any Indebtedness or any
installment of interest thereon, the date specified in such Indebtedness as the
fixed date on which the principal of such Indebtedness or such installment of
interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor subordinated in right of payment to the Securities or any Guarantee,
as the case may be.
"Subsidiary" means, with respect to any Person, any corporation, limited
liability company, partnership, joint venture, association or other business
entity a majority of the equity ownership or the Voting Stock of which is
15
at the time owned, directly or indirectly, by such Person or by one or more
other Subsidiaries of such Person, or by such Person and one or more of its
other Subsidiaries.
"Succession Date" means August 24, 2000, the date that the Company became
the successor obligor to Parent with respect to the Existing 9 1/2% Notes
pursuant to the Existing 9 1/2% Notes Indenture.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security. For the purposes of this definition, any Security
authenticated and delivered under Section 3.08 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
America; (ii) any certificate of deposit, maturing not more than one year after
the date of acquisition, issued by, or time deposit of, a commercial banking
institution (including the Trustee) that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P; (iii) commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Company, but including the Trustee) organized and
existing under the laws of the United States of America with a rating, at the
time as of which any investment therein is made, of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P; (iv) any money market deposit
accounts issued or offered by a domestic commercial bank having capital and
surplus in excess of $500,000,000; (v) marketable direct obligations issued by
any state of the United States or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either S&P or Moody's; (vi) repurchase
obligations with a term of not more than 31 days for underlying securities of
the types described in clause (i) above entered into with any bank meeting the
qualifications specified in clause (ii) above; and (vii) investments in money
market funds which invest substantially all their assets in securities of the
types described in clauses (i) through (vi) above.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph
of this instrument, until a successor trustee shall have become such pursuant to
the applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor trustee.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company that at
the time of determination shall be an Unrestricted Subsidiary (as designated by
the Board of Directors of the Company, as provided below) and (ii) any
Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the Company
may designate any Subsidiary of the Company (including any newly acquired or
newly formed Subsidiary) to be an Unrestricted Subsidiary if all of the
following conditions apply: (a) such Subsidiary is not liable, directly or
indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness and (b) any Investment in such Subsidiary made as a result of
designating such Subsidiary an Unrestricted Subsidiary shall not violate the
provisions of Section 10.19. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a board
resolution giving effect to such designation and an officers' certificate
certifying that such designation complies with the foregoing conditions. The
Board of Directors of the Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary; provided that immediately after giving effect to such
designation, the Company could incur $1.00 of additional Indebtedness (other
than Permitted Indebtedness) pursuant to the restrictions under Section
10.08(a).
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary
means Indebtedness of such Unrestricted Subsidiary (i) as to which neither the
Company nor any Restricted Subsidiary is directly or indirectly liable (by
virtue of the Company or any such Restricted Subsidiary being the primary
obligor on, guarantor of, or otherwise liable in any respect to, such
Indebtedness), except Guaranteed Debt of the Company or any Restricted
Subsidiary to any Affiliate, in which case (unless the incurrence of such
Guaranteed Debt resulted in a Restricted
16
Payment at the time of incurrence) the Company shall be deemed to have made a
Restricted Payment equal to the principal amount of any such Indebtedness to the
extent guaranteed at the time such Affiliate is designated an Unrestricted
Subsidiary and (ii) which, upon the occurrence of a default with respect
thereto, does not result in, or permit any holder of any Indebtedness of the
Company or any Restricted Subsidiary to declare, a default on such Indebtedness
of the Company or any Restricted Subsidiary or cause the payment thereof to be
accelerated or payable prior to its Stated Maturity.
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).
"Wholly Owned Restricted Subsidiary" means, with respect to any Person, a
Restricted Subsidiary of such Person all the Equity Interests of which are owned
by such Person or another Wholly Owned Restricted Subsidiary of such Person. As
of the date of this Indenture, the Wholly Owned Restricted Subsidiaries of the
Company will consist of all of the Company's Subsidiaries.
Section 1.02 Other Definitions.
Defined
Term in Section
- ---- ----------
"Act"............................................................ 1.05
"Additional Interest"............................................ 2.02
"Agent Members"................................................. 3.05
"Change of Control Offer"........................................ 10.16
"Change of Control Purchase Date"................................ 10.16
"Change of Control Purchase Notice".............................. 10.16
"Change of Control Purchase Price"............................... 10.16
"Covenant Defeasance"............................................ 4.03
"Defaulted Interest"............................................. 3.09
"Defeasance"..................................................... 4.02
"Defeasance Redemption Date"..................................... 4.04
"Defeased Securities"............................................ 4.01
"Deficiency"..................................................... 10.13
"Excess Proceeds"................................................ 10.13
"Guarantor Senior Representative"................................ 14.24
"Global Security"................................................ 2.01
"Initial Blockage Period"........................................ 12.03
"Offer".......................................................... 10.13
"Offer Date"..................................................... 10.13
"Offered Price".................................................. 10.13
"Offshore Series A Global Security".............................. 2.01
"Offshore Series A Physical Security"............................ 2.01
"Pari Passu Debt Amount"......................................... 10.13
"Pari Passu Offer"............................................... 10.13
"Payment Blockage Period"........................................ 12.03
"Permitted Indebtedness"......................................... 10.08
"Permitted Payments"............................................. 10.09
"Physical Security".............................................. 2.01
"QIB"............................................................ 2.03
"Registered Global Security"..................................... 2.01
"Restricted Payment"............................................. 10.09
"Restricted Securities Legend"................................... 2.02
"Required Filing Dates".......................................... 10.20
"Security Amount"................................................ 10.13
17
"Security Register".............................................. 3.06
"Security Registrar"............................................. 3.06
"Senior Representative".......................................... 12.03
"Series A Global Securities"..................................... 2.01
"Series A Physical Securities"................................... 2.01
"Series B Registered Global Securities".......................... 2.01
"Surviving Entity"............................................... 8.01
"U.S. Government Obligations".................................... 4.04
"U.S. Series A Global Security".................................. 2.01
"U.S. Series A Physical Security"................................ 2.01
Section 1.03 Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company, any Guarantor and any
other obligor on the Securities shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent, if any, provided for in this
Indenture (including any covenants compliance with which constitutes a condition
precedent) relating to the proposed action have been complied with and an
Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that, in the case
of any such application or request as to which the furnishing of such documents,
certificates and/or opinions is specifically required by any provision of this
Indenture relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or Opinion of Counsel with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(a) a statement that each individual signing such certificate or opinion
has read such covenant or condition and the definitions herein relating thereto;
(b) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of each such individual, he or she
has made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.04 Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company, any Guarantor or
other obligor of the Securities may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows that the certificate or opinion or representations
with respect to the matters upon which the certificate or opinion is based are
erroneous. Any such certificate or opinion may be based, insofar as it relates
to factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Company, any Guarantor or other obligor of the
Securities stating that the information with respect to such factual matters is
in the possession of the Company, any Guarantor or other obligor of the
Securities, unless such counsel knows that the certificate or opinion or
representations with respect to such matters are erroneous. Opinions of Counsel
required to be delivered to the Trustee may have qualifications customary for
opinions of the type required and counsel
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delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
If any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 1.05 Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders may
be embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly appointed in writing;
and, except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
if made in the manner provided in this Section. The fact and date of the
execution by any person of any such instrument or writing or the authority of
the person executing the same may also be proved in any other manner which the
Trustee deems sufficient in accordance with such reasonable rules as the Trustee
may determine.
(b) The ownership of Securities shall be proved by the Security Register.
(c) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Security shall bind every future Holder of
the same Security or the Holder of every Security issued upon the transfer
thereof or in exchange therefor or in lieu thereof, in respect of anything done,
suffered or omitted to be done by the Trustee, any Paying Agent or the Company
or any Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to a Board Resolution, fix in advance a record
date for the determination of such Holders entitled to give such request,
demand, authorization, direction, notice, consent, waiver or other Act, but the
Company shall have no obligation to do so. Notwithstanding Trust Indenture Act
Section 3.16(c), any such record date shall be the record date specified in or
pursuant to such Board Resolution, which shall be a date not more than 30 days
prior to the first solicitation of Holders generally in connection therewith and
no later than the date such solicitation is completed.
In the absence of any such record date fixed by the Company, regardless as
to whether a solicitation of the Holders is occurring on behalf of the Company
or any Holder, the Trustee may, at its option, fix in advance a record date for
the determination of such Holders entitled to give such request, demand,
authorization, direction, notice, consent, waiver or other Act, but the Trustee
shall have no obligation to do so. Any such record date shall be a date not more
than 30 days prior to the first solicitation of Holders generally in connection
therewith and no later than a date such solicitation is completed.
If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other Act may be given before or after
such record date, but only the Holders of record at the close of business on
such record date shall be deemed to be Holders for purposes of determining
whether Holders of the requisite proportion of Securities then Outstanding have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other Act, and for this purpose the
Securities then Outstanding shall be computed as of such record date; provided
that no such request, demand, authorization, direction, notice, consent, waiver
or other Act by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not later
than six months after the record date.
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Section 1.06 Notices, etc., to Trustee, the Company and any Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver or
Act of Holders or other document provided or permitted by this Indenture to be
made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or any
other obligor of the Securities or a Senior Representative or holder of Senior
Indebtedness shall be sufficient for every purpose hereunder if in writing
(which may be by facsimile) and mailed, first-class postage prepaid, or
delivered by recognized overnight courier, to or with the Trustee at the
Corporate Trust Office, Attention: Corporate Trust Division, or at any other
address previously furnished in writing to the Holders, the Company, any
Guarantor, any other obligor of the Securities or a Senior Representative or
holder of Senior Indebtedness by the Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose
(except as provided in Section 5.01(c)) hereunder if in writing and mailed,
first-class postage prepaid, or delivered by recognized overnight courier, to
the Company or such Guarantor addressed to it at Salem Communications Holding
Corporation, 4880 Santa Rosa Road, Suite 300, Camarillo, California 93012,
Attention: President, or at any other address previously furnished in writing to
the Trustee by the Company;
Section 1.07 Notice to Holders: Waiver.
If this Indenture provides for notice to Holders of any event, such notice
shall be sufficiently given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to each Holder affected by such event, at such Holder's
address as it appears in the Security Register, not later than the latest date,
and not earlier than the earliest date, prescribed for the giving of such
notice. In any case in which notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Any notice when mailed to a Holder in the aforesaid manner shall
be conclusively deemed to have been received by such Holder whether or not
actually received by such Holder. If this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to receive
such notice, either before or after the event, and such waiver shall be the
equivalent of such notice. Waivers of notice by Holders shall be filed with the
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason
of any other cause, it shall be impracticable to mail notice of any event as
required by any provision of this Indenture, then any method of giving such
notice as shall be reasonably satisfactory to the Trustee shall be deemed to be
a sufficient giving of such notice.
Section 1.08 Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any provision
of the Trust Indenture Act or another provision which is required or deemed to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, the provision or requirement of the Trust Indenture Act shall control. If
any provision of this Indenture modifies or excludes any provision of the Trust
Indenture Act that may be so modified or excluded, the latter provision shall be
deemed to apply to this Indenture as so modified or to be excluded, as the case
may be. In each case that this Indenture refers to a provision of the Trust
Indenture Act, the portion of such provision required to be incorporated herein
in order for this Indenture to be qualified under the Trust Indenture Act is so
incorporated by reference in and made a part of this Indenture.
Section 1.09 Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
20
Section 1.10 Successors and Assigns.
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 1.11 Separability Clause.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 1.12 Benefits of Indenture.
Nothing in this Indenture or in the Securities or the Guarantees, express
or implied, shall give to any Person (other than the parties hereto and their
successors hereunder, any Paying Agent, the Holders and the holders of Senior
Indebtedness or Guarantor Senior Indebtedness to the extent specified in this
Indenture) any benefit or any legal or equitable right, remedy or claim under
this Indenture.
Section 1.13 Governing Law.
THIS INDENTURE AND THE SECURITIES AND THE GUARANTEES SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 1.14 Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest or
principal or premium. if any, need not be made on such date, but may be made on
the next succeeding Business Day with the same force and effect as if made on
the Interest Payment Date or Redemption Date, or at the Stated Maturity and no
interest shall accrue with respect to such payment for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case may
be, to the next succeeding Business Day.
Section 1.15 Schedules and Exhibits.
All schedules and exhibits attached hereto are by this reference made a
part hereof with the same effect as if herein set forth in full.
Section 1.16 Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
ARTICLE II
SECURITY FORMS
Section 2.01 Forms Generally.
The Securities, the Guarantees set forth on the Securities and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange, any organizational document or
governing instrument or applicable law or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. Any portion of the text of any Security may be set
forth on the reverse thereof, with an appropriate reference thereto on the face
of the Security.
21
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 Original Securities shall be sold under an effective Registration
Statement and, unless the Company otherwise notifies the Trustee in writing, be
issued in the form of one or more permanent global Securities in substantially
the form set forth in this Article (each, a "Registered Global Security"),
deposited with the Trustee, as custodian for the Depositary or its nominee, duly
executed by the Company and authenticated by the Trustee as hereinafter
provided. The aggregate principal amount of a Registered Global Security may
from time to time be increased or decreased by adjustments made on the records
of the Trustee, as custodian for the Depositary or its nominee, as hereinafter
provided.
Any Series A Additional Securities offered and sold in reliance on Section
4(2) and Rule 144A under the Securities Act shall, unless the Company otherwise
notifies the Trustee in writing, be issued in the form of one or more permanent
global Securities in substantially the form set forth in this Article (each, a
"U.S. Series A Global Security"), deposited with the Trustee, as custodian for
the Depositary or its nominee, duly executed by the Company and authenticated by
the Trustee as hereinafter provided. The aggregate principal amount of a U.S.
Series A Global Security may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the Depositary
or its nominee, as hereinafter provided.
Any Series A Additional Securities offered and sold in offshore
transactions in reliance on Regulation S under the Securities Act shall be
issued in the form of one or more permanent global Securities in substantially
the form set forth in this Article (each, an "Offshore Series A Global
Security"), deposited with the Trustee, as custodian for the Depositary or its
nominee, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount of an Offshore Series A
Global Security may from time to time be increased or decreased by adjustments
made in the records of the Trustee, as custodian for the Depositary or its
nominee, as hereinafter provided.
Subject to the limitations set forth in Sections 3.05, 3.06 and 3.07,
Series A Additional Securities issued in certificated form pursuant to Sections
3.05, 3.06 and 3.07 in exchange for or upon transfer of beneficial interests (x)
in a U.S. Series A Global Security shall be in the form of permanent
certificated Securities substantially in the form set forth in this Article and
shall contain the Restricted Securities Legend as set forth in Section 2.02(c)
(the "U.S. Series A Physical Securities") or (y) in an Offshore Series A Global
Security, after the expiration of the 40-day distribution compliance period set
forth in Regulation S with respect to such Offshore Series A Global Security,
shall be in the form of permanent certificated Securities substantially in the
form set forth in this Article and shall not contain the Restricted Securities
Legend (the "Offshore Series A Physical Securities"), respectively, as
hereinafter provided.
The U.S. Series A Global Securities and the Offshore Series A Global
Securities are sometimes collectively referred to as the "Series A Global
Securities." The U.S. Series A Physical Securities and the Offshore Series A
Physical Securities are sometimes collectively herein referred to as the "Series
A Physical Securities."
Series B Additional Securities shall be issued substantially in the form
set forth in this Article and, subject to Section 3.05, shall be in the form of
one or more permanent global Securities without the Restricted Securities Legend
(the "Series B Registered Global Securities"). The Series A Global Securities,
the Registered Global Securities and the Series B Registered Global Securities
are sometimes collectively referred to as the "Global Securities" and each
global Security comprising the Global Securities is sometimes referred to as a
"Global Security." Any Security issued in certificated form in exchange for or
upon transfer of beneficial interests in a Global Security shall be in the form
of permanent certificated Securities substantially in the form set forth in this
Article and shall contain any legends required by this Article (a "Physical
Security").
The terms and provisions contained in the form of Securities set forth in
Sections 2.02 through 2.05 shall constitute, and are expressly made, a part of
this Indenture and, to the extent applicable, the Company, the Guarantors and
the Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
22
Section 2.02 Form of Face of Security.
(a) The form of the face of any Original Security authenticated and
delivered hereunder shall be substantially as follows:
SALEM COMMUNICATIONS HOLDING CORPORATION
7 3/4% SENIOR SUBORDINATED NOTE DUE 2010
No. _________ $ _______________
CUSIP:
Salem Communications Holding Corporation, a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to ________________ or registered assigns, the principal sum of _________ United
States dollars ($___________) on December 15, 2010, at the office or agency of
the Company referred to below, and to pay interest thereon from December 23,
2002, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on June 15 and December 15 of each year,
commencing June 15, 2003, at the rate of 7 3/4% 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 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 June 1 or December 1 (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 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 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 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 Securities may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of the principal of, premium, if any, and interest on this
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 this Security is 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 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 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 Security shall
not be entitled to any benefit under the Indenture, or be valid or obligatory
for any purpose.
23
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated: Salem Communications Holding Corporation
By:
-------------------------------------
Attest:
-----------------------------
Secretary
(b) The form of the face of any Registered Additional Security
authenticated and delivered hereunder shall be in substantially the form set
forth in Section 2.02(a) hereof, with such modifications and changes, if any, to
reflect the terms of such Registered Additional Security.
(c) The form of the face of any Series A Additional Security authenticated
and delivered hereunder shall be substantially as follows, with such
modifications and changes, if any, to reflect the terms of such Series A
Additional Security:
Unless and until (i) a Series A Additional Security is sold under an
effective Registration Statement, (ii) a Series A Additional Security is
exchanged for a Series B Additional Security in connection with an Exchange
Offer or (iii) the legend requirement is otherwise terminated in accordance with
Section 3.06 or Section 3.07(d), then each Series A Additional Security shall
bear the legend set forth below (the "Restricted Securities Legend") on the face
thereof:
SALEM COMMUNICATIONS HOLDING CORPORATION
7 3/4% SENIOR SUBORDINATED NOTE DUE 2010, SERIES A
[IF THE SECURITY IS A RESTRICTED SECURITY INSERT:] THIS SECURITY HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR
TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS EXCEPT AS SET FORTH BELOW. BY
ITS ACQUISITION HEREOF, THE HOLDER (1) AGREES THAT IT WILL NOT WITHIN TWO YEARS
AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THIS
SECURITY EXCEPT (A) TO SALEM COMMUNICATIONS HOLDING CORPORATION ("SALEM
HOLDING") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT, (C)
INSIDE THE UNITED STATES TO AN ACCREDITED INVESTOR (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"))
THAT, PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A
U.S. BROKER-DEALER) TO THE TRUSTEE FOR THE SECURITY A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER
OF THIS SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR
THIS SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER THE SECURITIES ACT (IF AVAILABLE), (F) IN ACCORDANCE WITH ANOTHER
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF SALEM HOLDING SO REQUESTS), OR (G) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (2) AGREES THAT IT
WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THIS SECURITY WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY, IF
THE PROPOSED TRANSFER IS PURSUANT TO CLAUSE C, D, E OR F ABOVE,
24
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE TRUSTEE AND SALEM
HOLDING SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS EITHER OF
THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT.
No. $ ___________________
CUSIP:
Salem Communications Holding Corporation, a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to _____________ or registered assigns, the principal sum of _________ United
States dollars ($___________) on December 15, 2010, at the office or agency of
the Company referred to below, and to pay interest thereon from December 23,
2002, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on June 15 and December 15 of each year,
commencing June 15, 2003, at the rate of 7 3/4% per annum, plus Additional
Interest (as defined below), if any, 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 A Additional 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 June 1 or December 1 (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 Additional
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 Additional 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 Additional 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 Additional 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 Additional Security is entitled to the
benefits of the Registration Rights Agreement, dated as of ______________, among
the Company, the Guarantors and the initial purchasers party thereto (the
"Registration Rights Agreement"), pursuant to which, subject to the terms and
conditions thereof, the Company is obligated, among other things, to consummate
the Exchange Offer pursuant to which the Holder of this Series A Additional
Security shall have the right to exchange this Series A Additional Security for
7 3/4% Senior Subordinated Notes due 2010, Series B (herein called the "Series B
Additional Securities") in like principal amount as provided therein. The Series
A Additional Securities and the Series B Additional Securities are together
referred to as the "Securities." The Series A Additional Securities rank pari
passu in right of payment with the Series B Additional Securities.
Additional interest ("Additional Interest") will be assessed on the Series
A Securities as follows:
(i) if (A) neither the Exchange Offer Registration Statement nor the Shelf
Registration Statement has been filed with the Commission on or prior to __ days
after the date of the Indenture or (B) notwithstanding that the Company and the
Guarantors have consummated or will consummate the Exchange Offer, the Company
and the Guarantors are required to file a Shelf Registration Statement and such
Shelf Registration Statement is not filed on or prior to the date required by
the Registration Rights Agreement, then, commencing on the day after any such
lapsed filing date, Additional Interest shall accrue on the principal amount of
the Series A Additional Securities over
25
and above the stated interest at a rate of _____% per annum for the first 90
days immediately following each such lapsed filing date, and such Additional
Interest rate shall increase by an additional _____% per annum at the beginning
of each subsequent 90-day period; or
(ii) if (A) neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is declared effective by the Commission on or prior
to ___ days after the date of the Indenture or (B) notwithstanding that the
Company and the Guarantors have consummated or will consummate the Exchange
Offer, the Company and the Guarantors are required to file a Shelf Registration
Statement and such Shelf Registration Statement is not declared effective by the
Commission on or prior to the date required by the Registration Rights Agreement
in respect of such Shelf Registration, then, commencing on the day after either
such required effectiveness date, Additional Interest shall accrue on the
principal amount of the Series A Securities over and above the stated interest
at a rate of _____% per annum for the first 90 days immediately following the
day after such required effectiveness date, and such Additional Interest rate
shall increase by an additional _____% per annum at the beginning of each
subsequent 90-day period; or
(iii) if (A) the Company and the Guarantors have not exchanged Series B
Additional Securities for all Series A Additional Securities validly tendered in
accordance with the terms of the Exchange Offer on or prior to the _____ day
after the date of the Indenture or (B) if applicable, a Shelf Registration
Statement has been declared effective and such Shelf Registration Statement
ceases to be effective at any time prior to the second anniversary of the date
of the Indenture (other than after such time as all Securities have been
disposed of thereunder), then Additional Interest shall accrue on the principal
amount of the Series A Additional Securities over and above the stated interest
at a rate of _____% per annum for the first 90 days commencing on (x) the _____
day after the date of the Indenture, in the case of (A) above, or (y) the day
such Shelf Registration Statement ceases to be effective in the case of (B)
above, and such Additional Interest rate shall increase by an additional _____%
per annum at the beginning of each such subsequent 90-day period;
provided, however, that the Additional Interest rate on the Securities may not
accrue under more than one of the clauses (i) through (iii) above at any one
time and at no time shall the aggregate amount of Additional Interest accruing
exceed _____% per annum; provided, further, however, that (1) upon the filing of
the applicable Exchange Registration Statement or the Shelf Registration (in the
case of clause (i) above), (2) upon the effectiveness of the Exchange
Registration Statement or the Shelf Registration (in the case of clause (ii)
above), or (3) upon the exchange of the applicable Series B Additional
Securities for all Series A Additional Securities tendered (in the case of
clause (iii)(A) above), or upon the effectiveness of the Shelf Registration
which had ceased to remain effective (in the case of clause (iii)(B) above),
Additional Interest on the Securities in respect of which such events relate as
a result of such clause (or the relevant subclause thereof), as the case may be,
shall cease to accrue.
Any Additional Interest due pursuant to clause (i), (ii) or (iii) above
will be payable in cash on the Interest Payment Dates related to the Series A
Additional Securities. Additional Interest shall be computed on the basis of a
360-day year of twelve 30-day months.
Payment of the principal of, premium, if any, and interest on this Series
A Additional 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 Additional 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
Additional 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 Additional 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.
26
All references in this Series A Additional Security or in the Indenture to
accrued and unpaid interest shall be deemed to include, to the extent
applicable, a reference to Additional Interest.
Unless the certificate of authentication hereon has been duly executed by
the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature, this Series A
Additional Security shall not be entitled to any benefit under the Indenture, or
be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers.
Dated: SALEM COMMUNICATIONS HOLDING CORPORATION
By:
--------------------------------------
Attest:
------------------------------
Secretary
Section 2.03 Form of Reverse of Securities.
(a) The form of the reverse of the Original Securities shall be
substantially as follows:
SALEM COMMUNICATIONS HOLDING CORPORATION
7 3/4% SENIOR SUBORDINATED NOTE DUE 2010
This Security is one of a duly authorized issue of Securities of the
Company designated as its 7 3/4% Senior Subordinated Notes due 2010, (herein
called the "Securities"), which may be issued under an indenture (herein called
the "Indenture"), dated as of December 23, 2002, among the Company, the
Guarantors and The Bank of New York, as trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities and the
Guarantees are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on the Securities and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness, whether Outstanding on the
date of the Indenture or thereafter, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose; provided, however, that, subject to Section
4.06 of the Indenture, the Indebtedness evidenced by this Security shall cease
to be so subordinate and subject in right of payment upon any defeasance of this
Security referred to in clause (a) or (b) of the preceding paragraph. This
Security is not senior in right of payment to the Existing Notes.
The Securities are subject to redemption at any time on or after December
15, 2007, 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 December 15 of the years indicated below:
27
Redemption
Year Price
- ---- -----
2007............................................. 103.875%
2008............................................. 101.938%
2009 and thereafter.............................. 100.000%
in each case together with accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on relevant record
dates to receive interest due on an interest payment date). If less than all of
the Securities are to be redeemed, the Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
In addition, at any time on or prior to December 15, 2005, the Company may
redeem up to 35% of the aggregate principal amount of Securities with the net
proceeds of a Public Equity Offering of the Company at a Redemption Price equal
to 109% of the aggregate principal amount thereof, together with accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on relevant record dates to receive interest due on an interest
payment date); provided that at least 65% of the aggregate principal amount of
the Securities issued under the Indenture remains outstanding immediately after
the occurrence of such redemption, and such redemption must occur within 60 days
of the date of the closing of such Public Equity Offering. If less than all of
the Securities are to be redeemed, the Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
If a Change of Control shall occur at any time, then each Holder shall
have the right to require the Company to purchase such Holder's Securities in
whole or in part in integral multiples of $1,000, at a purchase price in cash in
an amount equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase.
Under certain circumstances, in the event the Net Cash Proceeds received
by the Company or a Restricted Subsidiary of the Company from any Asset Sale,
which proceeds are not used to prepay Senior Indebtedness or invested in
properties or assets used in the businesses of the Company, exceed $5,000,000
the Company will be required to apply such proceeds to the repayment of the
Securities and certain Indebtedness ranking pari passu to the Securities.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities of record as of the close of business on the relevant
record date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the date of redemption.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
If this Security is a Global Security, except as described below, it is
not exchangeable for a Security or Securities in certificated form. The
Securities will be delivered in certificated form if (i) the Depositary ceases
to be registered as a clearing agency under the Exchange Act or is no longer
willing or able to provide securities depository services with respect to the
Securities, (ii) the Company so determines or (iii) there shall have occurred an
Event of Default or an event which, with the giving of notice or lapse of time
or both, would constitute an Event of Default with respect to the Securities
represented by such Global Security and such Event of Default or event continues
for a period of 90 days. Upon any such issuance, the Trustee is required to
register such certificated Security in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof) identified
by the Depositary. If this Security is in certificated form, the Holder hereof
may transfer or exchange this Security in accordance with the Indenture and
subject to the limitations set forth therein.
28
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Guarantees at any time by the Company, the Guarantors and the Trustee with
the consent of the Holders of a specified percentage in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Guarantees and
certain past Defaults under the Indenture and the Guarantees and their
consequences. Any such consent or waiver by or on behalf of the Holder of this
Security shall be conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor upon the Securities (in the event such other
obligor is obligated to make payments in respect of the Securities), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
The Securities, if issued in certificated form, are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes (subject to provisions with respect to record
dates for the payment of interest), whether or not this Security is overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
29
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to:
_____________________________________
(Insert assignee's legal name)
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________ to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:______________________________
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:________________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
30
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.13 or 10.16 of the Indenture, check the appropriate box
below:
|_| Section 10.13 |_| Section 10.16
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 10.13 or Section 10.16 of the Indenture, state the
amount you elect to have purchased:
$ _______________________
Date:____________________
Your Signature: ____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _______________________________________________
Signature Guarantee*: _______________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
31
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY [IF THE
SECURITY IS A GLOBAL SECURITY]
The following exchanges of a part of this Global Security for an interest
in another Global Security or for a certificated Security, or exchanges of a
certificated Security or a part of another Global Security for an interest in
this Global Security, have been made:
Principal
Amount
Amount of Amount of of this Global
decrease in increase in Security
Principal Amount Principal Amount following such Signature of authorized
Date of of this Global of this Global decrease officer of Trustee or
Exchange Security Security (or increase) Security Registrar
-------- -------- -------- ------------- ------------------
32
(b) The form of the reverse of any Registered Additional Securities shall
be in substantially the form set forth in Section 2.03(a) hereof, with such
modifications and changes, if any, to reflect the terms of such Registered
Additional Securities.
(c) The form of the reverse of the Series A Additional Securities shall be
substantially as follows, with such modifications and changes, if any, to
reflect the terms of such Series A Additional Securities:
SALEM COMMUNICATIONS HOLDING CORPORATION
7 3/4% SENIOR SUBORDINATED NOTE DUE 2010, SERIES A
This Security is one of a duly authorized issue of Securities of the
Company designated as its 7 3/4% Senior Subordinated Notes due 2010, Series A
(herein called the "Securities"), which may be issued under an indenture (herein
called the "Indenture"), dated as of December 23, 2002, among the Company, the
Guarantors and The Bank of New York, as trustee (herein called the "Trustee,"
which term includes any successor trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights, duties, obligations
and immunities thereunder of the Company, the Guarantors, the Trustee and the
Holders of the Securities, and of the terms upon which the Securities and the
Guarantees are, and are to be, authenticated and delivered.
The Indenture contains provisions for defeasance at any time of (a) the
entire Indebtedness on the Securities and (b) certain restrictive covenants and
related Defaults and Events of Default, in each case upon compliance with
certain conditions set forth therein.
The Indebtedness evidenced by the Securities is, to the extent and in the
manner provided in the Indenture, subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness, whether Outstanding on the
date of the Indenture or thereafter, and this Security is issued subject to such
provisions. Each Holder of this Security, by accepting the same, (a) agrees to
and shall be bound by such provisions, (b) authorizes and directs the Trustee on
his behalf to take such action as may be necessary or appropriate to effectuate
the subordination as provided in the Indenture and (c) appoints the Trustee his
attorney-in-fact for such purpose; provided, however, that, subject to Section
4.06 of the Indenture, the Indebtedness evidenced by this Security shall cease
to be so subordinate and subject in right of payment upon any defeasance of this
Security referred to in clause (a) or (b) of the preceding paragraph. This
Security is not senior in right of payment to the Existing Notes.
The Securities are subject to redemption at any time on or after December
15, 2007, 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 December 15 of the years indicated below:
Redemption
Year Price
- ---- -----
2007............................................. 103.875%
2008............................................. 101.938%
2009 and thereafter.............................. 100.000%
in each case together with accrued and unpaid interest, if any, to the
Redemption Date (subject to the right of Holders of record on relevant record
dates to receive interest due on an interest payment date). If less than all of
the Securities are to be redeemed, the Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
In addition, at any time on or prior to December 15, 2005, the Company may
redeem up to 35% of the aggregate principal amount of Securities with the net
proceeds of a Public Equity Offering of the Company at a Redemption Price equal
to 109% of the aggregate principal amount thereof, together with accrued and
unpaid interest, if any, to the Redemption Date (subject to the right of Holders
of record on relevant record dates to receive interest due on an interest
payment date); provided that at least 65% of the aggregate principal amount of
the
33
Securities issued under the Indenture remains outstanding immediately after the
occurrence of such redemption, and such redemption must occur within 60 days of
the date of the closing of such Public Equity Offering. If less than all of the
Securities are to be redeemed, the Trustee shall select the Securities or
portions thereof to be redeemed pro rata, by lot or by any other method the
Trustee shall deem fair and reasonable.
If a Change of Control shall occur at any time, then each Holder shall
have the right to require the Company to purchase such Holder's Securities in
whole or in part in integral multiples of $1,000, at a purchase price in cash in
an amount equal to 101% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase.
Under certain circumstances, in the event the Net Cash Proceeds received
by the Company or a Restricted Subsidiary of the Company from any Asset Sale,
which proceeds are not used to prepay Senior Indebtedness or invested in
properties or assets used in the businesses of the Company, exceed $5,000,000
the Company will be required to apply such proceeds to the repayment of the
Securities and certain Indebtedness ranking pari passu to the Securities.
In the case of any redemption of Securities, interest installments whose
Stated Maturity is on or prior to the Redemption Date will be payable to the
Holders of such Securities of record as of the close of business on the relevant
record date referred to on the face hereof. Securities (or portions thereof) for
whose redemption and payment provision is made in accordance with the Indenture
shall cease to bear interest from and after the date of redemption.
In the event of redemption of this Security in part only, a new Security
or Securities for the unredeemed portion hereof shall be issued in the name of
the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal amount
of all the Securities may be declared due and payable in the manner and with the
effect provided in the Indenture.
If this Security is a Series A Global Security, except as described below,
it is not exchangeable for a Security or Securities in certificated form. The
Securities will be delivered in certificated form if (i) the Depositary ceases
to be registered as a clearing agency under the Exchange Act or is no longer
willing or able to provide securities depository services with respect to the
Securities, (ii) the Company so determines or (iii) there shall have occurred an
Event of Default or an event which, with the giving of notice or lapse of time
or both, would constitute an Event of Default with respect to the Securities
represented by such Global Security and such Event of Default or event continues
for a period of 90 days. Upon any such issuance, the Trustee is required to
register such certificated Security in the name of, and cause the same to be
delivered to, such Person or Persons (or the nominee of any thereof) identified
by the Depositary. All such certificated Securities would be required to include
the Restricted Securities Legend, except as otherwise set forth in the
Indenture. If this Security is in certificated form, the Holder hereof may
transfer or exchange this Security in accordance with the Indenture and subject
to the limitations set forth therein.
At any time when the Company is not subject to Sections 13 or 15(d) of the
Exchange Act, upon the written request of a Holder of a Security, the Company
will promptly furnish or cause to be furnished Rule 144A Information to such
Holder or to a prospective purchaser of such Security who such Holder informs
the Company is reasonably believed to be a "qualified institutional buyer"
within the meaning of Rule 144A under the Securities Act (a "QIB"), as the case
may be, in order to permit compliance by such Holder with Rule 144A under the
Securities Act.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Guarantees at any time by the Company, the Guarantors and the Trustee with
the consent of the Holders of a specified percentage in aggregate principal
amount of the Securities at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Securities at the time Outstanding, on behalf of the
Holders of all the Securities, to waive compliance by the Company and the
Guarantors with certain provisions of the Indenture and the Guarantees and
certain past Defaults under the Indenture
34
and the Guarantees and their consequences. Any such consent or waiver by or on
behalf of the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent or waiver is made upon this
Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, any
Guarantor or any other obligor upon the Securities (in the event such other
obligor is obligated to make payments in respect of the Securities), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Security at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
The Securities, if issued in certificated form, are issuable only in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof. As provided in the Indenture and subject to certain
limitations therein set forth, the Securities are exchangeable for a like
aggregate principal amount of Securities of a different authorized denomination,
as requested by the Holder surrendering the same.
No service charge shall be made for any registration of transfer or
exchange or redemption of Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to and at the time of due presentment of this Security for
registration of transfer, the Company, the Trustee and any agent of the Company
or the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes (subject to provisions with respect to record
dates for the payment of interest), whether or not this Security is overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK.
All terms used in this Security which are defined in the Indenture and not
otherwise defined herein shall have the meanings assigned to them in the
Indenture.
35
ASSIGNMENT FORM
To assign this Security, fill in the form below:
(I) or (we) assign and transfer this Security to:
_____________________________________
(Insert assignee's legal name)
________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint __________________________________________________ to
transfer this Security on the books of the Company. The agent may substitute
another to act for him.
Date:______________________________
Your Signature:_____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Signature Guarantee*:________________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
36
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 10.13 or 10.16 of the Indenture, check the appropriate box
below:
|_| Section 10.13 |_| Section 10.16
If you want to elect to have only part of the Security purchased by the
Company pursuant to Section 10.13 or Section 10.16 of the Indenture, state the
amount you elect to have purchased:
$ _______________________
Date:____________________
Your Signature: ____________________________________________________
(Sign exactly as your name appears on the face of this Note)
Tax Identification No.: _______________________________________________
Signature Guarantee*: _______________________________________________
* Participant in a recognized Signature Guarantee Medallion Program (or other
signature guarantor acceptable to the Trustee).
37
SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL SECURITY [IF THE
SECURITY IS A GLOBAL SECURITY]
The following exchanges of a part of this Global Security for an
interest in another Global Security or for a certificated Security, or exchanges
of a certificated Security or a part of another Global Security for an interest
in this Global Security, have been made:
Principal
Amount
Amount of Amount of of this Global
decrease in increase in Security
Principal Amount Principal Amount following such Signature of authorized
Date of of this Global of this Global decrease officer of Trustee or
Exchange Security Security (or increase) Security Registrar
-------- -------- -------- ------------- ------------------
38
Section 2.04 Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall, in addition to the provisions
contained in Sections 2.02 and 2.03, bear a legend in substantially the
following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE TRANSFERRED
EXCEPT AS A WHOLE BY THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
[IF THE DEPOSITORY TRUST COMPANY IS ACTING AS THE DEPOSITARY, INSERT:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME
AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Section 2.05 Form of Trustee's Certificate of Authentication.
The Trustee's certificate of authentication shall be included on the
Securities and shall be substantially in the form as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
This is one of the Securities referred to in the within-mentioned
Indenture.
The Bank of New York,
as Trustee
Dated:
By:
------------------------
Authorized Signatory
Section 2.06 Form of Guarantee of Each of the Guarantors.
The form of Guarantee shall be set forth on the Securities substantially
as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Security the payment of
principal of, premium, if any, and interest on this Security in the amounts and
at the time when due and interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security and Article Fourteen of the Indenture.
These Guarantees will not become effective until the Trustee duly executes the
39
certificate of authentication on this Security. The Indebtedness evidenced by
these Guarantees is, to the extent and in the manner provided in the Indenture,
subordinate and subject in right of payment to the prior payment in full of all
Guarantor Senior Indebtedness (as defined in the Indenture), whether Outstanding
on the date of the Indenture or thereafter, and these Guarantees are issued
subject to such provisions.
SALEM COMMUNICATIONS CORPORATION
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
Attest ____________________ By _________________________________
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ARTICLE III
THE SECURITIES
Section 3.01 Title and Terms.
Unless otherwise provided in a supplemental indenture with respect to any
Additional Securities: (i) the Securities shall be known and designated as the
"7 3/4% Senior Subordinated Notes due 2010" of the Company, and (ii) the Stated
Maturity of the Securities shall be December 15, 2010, and interest on the
Securities shall accrue at the rate of 7 3/4% per annum plus Additional
Interest, if any, from the date of issuance of the Securities or from the most
recent Interest Payment Date to which interest has been paid or duly provided
for, payable semiannually on June 15 and December 15 in each year, commencing
June 15, 2003, until the principal thereof is paid or duly provided for.
Unless otherwise specified herein, the Original Securities, any Registered
Additional Securities (including any Series B Additional Securities) and any
Series A Additional Securities will be treated as one class and are together
referred to as the "Securities." The Original Securities, the Registered
Additional Securities (including any Series B Additional Securities) and the
Series A Additional Securities rank pari passu in right of payment with each
other.
Unless otherwise specified in a supplemental indenture with respect to any
Additional Securities, any Additional Securities issued pursuant to this
Indenture shall vote as a class with other Securities issued pursuant to this
Indenture, and otherwise be treated as Securities for purposes of this
Indenture. Any issuance of Additional Securities shall be subject to Section
10.08.
The principal of, premium, if any, and interest on the Securities shall be
payable at the office or agency of the Company maintained for such purpose;
provided, however, that at the option of the Company interest may be paid by
check mailed to addresses of the Persons entitled thereto as such addresses
shall appear on the Security Register. If any of the Securities are held by the
Depositary, payments of interest may be made by wire transfer to the Depositary.
The Trustee is hereby initially designated as the Paying Agent under this
Indenture.
The Securities shall be redeemable as provided in Article Eleven.
At the election of the Company, the entire Indebtedness on the Securities
or certain of the Company's obligations and covenants and certain Events of
Default thereunder may be defeased as provided in Article Four.
The Securities shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve.
The Securities are entitled to the benefits of the Guarantees by each
Guarantor.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited.
Section 3.02 Denominations.
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
Section 3.03 Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by one of its
Chairman of the Board, its President or one of its Vice Presidents attested by
its Secretary or one of its Assistant Secretaries.
41
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices on the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Securities executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Securities; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery (i) Original Securities
for original issue in the aggregate amount of $100,000,000 and (ii) Additional
Securities (including any Series B Additional Securities) from time to time for
original issue in aggregate principal amount specified by the Company, and not
otherwise. Such Company Order shall specify the amount of Securities to be
authenticated and the date on which the Securities are to be authenticated,
whether such Securities are to be Original Securities or Additional Securities
and whether the Securities are to be issued as one or more Global Securities and
such other information as the Company may include or the Trustee may reasonably
require.
Each Security shall be dated the date of its authentication. No Security
shall be entitled to any benefit under this Indenture or be valid or obligatory
for any purpose unless there appears on such Security a certificate of
authentication substantially in the form provided for herein duly executed by
the Trustee by manual signature of an authorized officer, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that such
Security has been duly authenticated and delivered hereunder.
In case the Company or any Guarantor, pursuant to Article Eight, shall be
consolidated, merged with or into any other Person or shall sell, assign,
convey, transfer or lease substantially all of its properties and assets to any
Person, and the successor Person resulting from such consolidation, or surviving
such merger, or into which the Company or such Guarantor shall have been merged,
or the Person which shall have received a sale, assignment, conveyance, transfer
or lease as aforesaid, shall have executed an indenture supplemental hereto with
the Trustee pursuant to Article Eight, any of the Securities authenticated or
delivered prior to such consolidation, merger, sale, assignment, conveyance,
transfer or lease may, from time to time, at the request of the successor
Person, be exchanged for other Securities executed in the name of the successor
Person with such changes in phraseology and form as may be appropriate, but
otherwise in substance of like tenor as the Securities surrendered for such
exchange and of like principal amount; and the Trustee, upon Company Request of
the successor Person, shall authenticate and deliver Securities as specified in
such request for the purpose of such exchange. If Securities shall at any time
be authenticated and delivered in any new name of a successor Person pursuant to
this Section in exchange or substitution for or upon registration of transfer of
any Securities, such successor Person, at the option of the Holders but without
expense to them, shall provide for the exchange of all Securities at the time
Outstanding for Securities authenticated and delivered in such new name.
The Trustee may appoint an authenticating agent acceptable to the Company
to authenticate Securities on behalf of the Trustee. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Security Registrar or Paying
Agent to deal with the Company and its Affiliates.
Section 3.04 Temporary Securities.
Pending the preparation of definitive Securities, the Company may execute,
and upon Company Order, the Trustee shall authenticate and make available for
delivery, temporary Securities which are printed, lithographed, typewritten or
otherwise produced, in any authorized denomination, substantially of the tenor
of the definitive Securities in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as conclusively evidenced by
their execution of such Securities.
After the preparation of definitive Securities, the temporary Securities
shall be exchangeable for definitive Securities upon surrender of the temporary
Securities at the office or agency of the Company designated for such purpose
pursuant to Section 10.02, without charge to the Holder. Upon surrender for
cancellation of any one or
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more temporary Securities the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of authorized denominations. Until so
exchanged the temporary Securities shall in all respects be entitled to the same
benefits under this Indenture as definitive Securities.
Section 3.05 Global Securities.
(a) A Global Security shall, if the Depositary permits, (i) be registered
in the name of the Depositary for such Global Security or the nominee of such
Depositary, (ii) be deposited with, or on behalf of, the Depositary and (iii)
bear legends as set forth in Sections 2.02(c) and 2.04, as applicable; provided,
however, that the Securities are eligible to be in the form of a Global
Security.
Transfers of any Restricted Security made to an Accredited Investor in
accordance with an exemption from the registration requirements of the
Securities Act or transfers made in accordance with another exemption from the
registration requirements of the Securities Act (other than a transfer made in
accordance with Rule 144A, Rule 144 or Regulation S that complies with all other
applicable requirements of this Indenture) shall be made only in certificated
form and not as a beneficial interest in a Global Security.
Members of, or participants in, the Depositary ("Agent Members") shall
have no rights under this Indenture with respect to any Global Security held on
their behalf by the Depositary, or the Trustee as its custodian, or under the
Global Security, and the Depositary may be treated by the Company, the Trustee
and any agent of the Company or the Trustee as the absolute owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Company, the Trustee or any agent of the Company from
giving effect to any written certification, proxy or other authorization
furnished by the Depositary or shall impair, as between the Depositary and its
Agent Members, the operation of customary practices governing the exercise of
the rights of a holder of any Security.
(b) Transfers of a Global Security shall be limited to transfers of such
Global Security in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Global Security
may be transferred in accordance with the rules and procedures of the Depositary
and the provisions of Section 3.07. Under the circumstances described in this
clause (b), beneficial owners shall obtain Physical Securities in exchange for
their beneficial interests in a Global Security in accordance with the
Depositary's and the Securities Registrar's procedures. In connection with the
execution, authentication and delivery of such Physical Securities, the Security
Registrar shall reflect on its books and records a decrease in the principal
amount of the relevant Global Security equal to the principal amount of such
Physical Securities and the Company shall execute and the Trustee shall
authenticate and make available for delivery one or more Physical Securities
having an equal aggregate principal amount. The Securities will be delivered in
certificated form to all beneficial owners in exchange for their beneficial
interests in the Global Securities if (i) the Depositary ceases to be registered
as a clearing agency under the Exchange Act or is not willing or no longer
willing or able to provide securities depository services with respect to the
Securities, (ii) the Company so determines or (iii) there shall have occurred an
Event of Default or an event which, with the giving of notice or lapse of time
or both, would constitute an Event of Default with respect to the Securities
represented by such Global Security and such Event of Default or event continues
for a period of 90 days.
(c) In connection with any transfer of a portion of the beneficial
interest in a Global Security to beneficial owners who are required to hold
Physical Securities pursuant to this Section 3.05 or Section 3.07, the Security
Registrar shall reflect on its books and records the date and a decrease in the
principal amount of the relevant Global Security in an amount equal to the
principal amount of the beneficial interest in such Global Security to be
transferred, and the Company shall execute, and the Trustee shall authenticate
and make available for delivery, one or more Physical Securities of like tenor
and amount.
(d) In connection with the transfer of an entire Global Security to
beneficial owners pursuant to subsection (b) of this Section, such Global
Security shall be deemed to be surrendered to the Trustee for cancellation, and
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the applicable Global Security, an equal
aggregate principal amount of Physical Securities (U. S. Series A Physical
Securities, in the case
43
of any U.S. Series A Global Security, or Offshore Series A Physical Securities,
in the case of any Offshore Series A Global Security) of authorized
denominations.
(e) Any Physical Security delivered in exchange for an interest in a
Global Security that is a Restricted Security pursuant to subsection (c) or
subsection (d) of this Section shall, except as otherwise provided by Section
2.01, Section 3.06 and paragraph (d) of Section 3.07, bear the Restricted
Securities Legend.
(f) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
(g) Prior to the expiration of the 40-day distribution compliance period
set forth in Regulation S, beneficial interests in an Offshore Series A Global
Security may be held only through the Euroclear System or Clearstream Banking,
S.A. unless transferred to a QIB in accordance with Section 3.07(b).
Section 3.06 Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee, or such other office as the Trustee may designate, a register (the
register maintained in such office and in any other office or agency designated
pursuant to Section 10.02 being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as the Security
Registrar may prescribe, the Company shall provide for the registration of
Securities and of transfers of Securities. The Trustee or an agent thereof or of
the Company shall initially be the "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at the office
or agency of the Company designated pursuant to Section 10.02, the Company shall
execute, and the Trustee shall authenticate and make available for delivery, in
the name of the designated transferee or transferees, one or more new Securities
of any authorized denomination or denominations, of a like aggregate principal
amount.
Furthermore, any Holder of a Global Security shall, by acceptance of such
Global Security, agree that transfers of beneficial interest in such Global
Security may be effected only through a book entry system maintained by the
Holder of such Global Security (or its agent), and that ownership of a
beneficial interest in the Securities shall be required to be reflected in a
book entry.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities of the same series which the Holder making the exchange
is entitled to receive; provided that no exchange of Series A Additional
Securities for Series B Additional Securities shall occur until an Exchange
Offer Registration Statement with respect to the relevant Series A Additional
Securities shall have been declared effective by the Commission and that the
Series A Additional Securities exchanged for the Series B Additional 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
44
or exchange of Securities, other than exchanges pursuant to Section 3.03, 3.04,
3.05, 3.06, 3.07, 3.08, 9.06, 10.13, 10.16 or 11.08 not involving any transfer.
The Company shall not be required (a) to issue, register the transfer of
or exchange any Security during a period beginning at the opening of business
(i) 15 days before the date of selection of Securities for redemption under
Section 11.04 and ending at the close of business on the day of such selection
or (ii) 15 days before an Interest Payment Date and ending on the close of
business on the Interest Payment Date, or (b) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except the
unredeemed portion of Securities being redeemed in part.
Every Restricted Security shall be subject to the restrictions on transfer
provided in the legend required to be set forth on the face of each Restricted
Security pursuant to Section 2.02(c) and to the restrictions set forth in
Section 3.05, this Section 3.06 and Section 3.07, and the Holder of each
Restricted Security, by such Holder's acceptance thereof (or interest therein),
agrees to be bound by such restrictions on transfer. The restrictions imposed by
this Section 3.06 upon the transferability of any particular Restricted Security
shall cease and terminate on (a) the Resale Restriction Termination Date with
respect to such Security or (b) (if earlier) if and when such Restricted
Security has been sold pursuant to a Registration Statement or (subject to
Section 3.07(d)(ii)) transferred pursuant to Rule 144 (or any successor
provision), unless the Holder thereof is an affiliate of the Company within the
meaning of Rule 144 (or such successor provision). Any Restricted Security as to
which such restrictions on transfer shall have expired in accordance with their
terms or shall have terminated may, upon surrender of such Restricted Security
for exchange to the Security Registrar in accordance with the provision of this
Section 3.06 (accompanied, in the event that such restrictions on transfer have
terminated pursuant to Rule 144 (or any successor provision), by an Opinion of
Counsel satisfactory to the Company and the Trustee, to the effect that the
transfer of such Restricted Security has been made in compliance with Rule 144
(or any such successor provision)), be exchanged for a new Security, of like
tenor and aggregate principal amount, which shall not bear the Restricted
Securities Legend. The Company shall inform the Trustee of the effective date of
any Registration Statement registering any Securities under the Securities Act
no later than two Business Days after such effective date.
Except as provided in the preceding paragraph and in Sections 3.05 and
3.07, any Security authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, any Global Security, whether pursuant to this
Section, Section 3.04, 3.08, 9.06 or 11.08 or otherwise, shall also be a Global
Security and bear the legends specified in Section 2.02(c) (if such Security is
a Restricted Security) and Section 2.04.
Section 3.07 Special Transfer Provisions.
Unless and until (i) a Security is sold under an effective Registration
Statement, (ii) a Security that is a Restricted Security is exchanged for a
Series B Additional Security in connection with an Exchange Offer or (iii) the
restrictions on transfer with respect to a Security imposed by Section 3.06 have
ceased and terminated in accordance with Section 3.06 or the Restricted
Securities Legend has been removed from a Security pursuant to 3.07(d), the
following provisions shall apply:
(a) Transfers to Non-QIB Institutional Accredited Investors. The following
provisions shall apply with respect to the registration of any proposed transfer
of a Security to an Accredited Investor which is not a QIB:
(i) The Security Registrar shall register the transfer of any
Security if it complies with all other applicable requirements of this
Indenture and if (x) the requested transfer is after the relevant Resale
Restriction Termination Date with respect to such Security or (y) the
proposed transferor has delivered to the Company and the Security
Registrar a certificate substantially in the form of Annex A and the
proposed transferee has delivered to the Company and the Security
Registrar a certificate substantially in the form set forth in Annex I
attached to Exhibit A, together with written legal opinions or other
information as the Trustee or the Company reasonably may request.
(ii) If the proposed transferor is or is acting through an Agent
Member holding a beneficial interest in a Global Security, upon receipt by
the Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depositary's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and a decrease in
45
the principal amount of the relevant Global Security in an amount equal to
the principal amount of the beneficial interest in the relevant Global
Security to be transferred, and the Company shall execute, and the Trustee
shall authenticate and make available for delivery, one or more Physical
Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with respect
to the registration of any proposed transfer of a Security to a QIB:
(i) If the Security to be transferred consists of a Physical
Security or consists of a beneficial interest in a Global Security that
after the transfer is to be evidenced by a beneficial interest in a
different Global Security, the Security Registrar shall register the
transfer if it complies with all other applicable requirements of this
Indenture and if such transfer is being made by a proposed transferor who
has advised the Company and the Security Registrar in writing pursuant to
Exhibit A, that the sale has been made in compliance with the provisions
of Rule 144A to a transferee who has advised the Company and the Security
Registrar in a writing signed by one of its executive officers in the form
required by Rule 144A, that it is purchasing the Security for its own
account or an account with respect to which it exercises sole investment
discretion and that it, or the person on whose behalf it is acting with
respect to any such account, is a QIB within the meaning of Rule 144A, and
is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Company
as it has requested pursuant to Rule 144A or has determined not to request
such information and that it is aware that the transferor is relying upon
its foregoing representations in order to claim the exemption from
registration provided by Rule 144A.
(ii) If the proposed transferee is or is acting through an Agent
Member, and the Security to be transferred consists of a Physical Security
that after the transfer is to be evidenced by an interest in a Global
Security or consists of a beneficial interest in a Global Security that
after the transfer is to be evidenced by an interest in a different Global
Security, upon receipt by the Security Registrar of instructions given in
accordance with the Depositary's and the Security Registrar's procedures
therefor, the Security Registrar shall reflect on its books and records
the date and an increase in the principal amount of the transferee Global
Security in an amount equal to the principal amount of the Physical
Security to be transferred or such beneficial interest in such transferor
Global Security to be transferred, and the Trustee shall cancel the
Physical Security so transferred or reflect on its books and records the
date and a decrease in the principal amount of such transferor Global
Security, as the case may be.
(c) Transfers to Non-U.S. Persons. The following provisions shall apply
with respect to the registration of any proposed transfer of a Security to a
Non-U.S. Person:
(i) The Security Registrar shall register the transfer of any
Security if it complies with all other applicable requirements of this
Indenture and if (x) the requested transfer is after the relevant Resale
Restriction Termination Date with respect to such Security or (y), if the
Security to be transferred consists of a Physical Security or consists of
a beneficial interest in a Global Security that after the transfer is to
be evidenced by an interest in a different Global Security, the proposed
transferor has delivered to the Security Registrar a certificate
substantially in the form of Exhibit B, together with written legal
opinions or other information as the Trustee or the Company reasonably may
request.
(ii) If the proposed transferor is or is acting through an Agent
Member holding a beneficial interest in a Global Security, upon receipt by
the Security Registrar of (x) the documents, if any, required by paragraph
(i) and (y) instructions given in accordance with the Depositary's and the
Security Registrar's procedures therefor, the Security Registrar shall
reflect on its books and records the date and (if the transfer does not
involve a transfer of a Physical Security) a decrease in the principal
amount of the relevant Global Security to be in an amount equal to the
principal amount of the beneficial interest in the relevant Global
Security to be transferred, and (ii) either (A) if the proposed transferee
is or is acting through an Agent Member holding a beneficial interest in a
Global Security, the Trustee shall reflect on its books and records the
date and an increase in the principal amount of such Global Security in an
amount equal to the principal amount of the beneficial interest being so
transferred or (B) otherwise the Company shall execute, and the
46
Trustee shall authenticate and make available for delivery, one or more
Physical Securities of like tenor and amount.
(d) Restricted Securities Legend. Upon the registration of transfer,
exchange or replacement of Securities not bearing the Restricted Securities
Legend, the Security Registrar shall deliver Securities that do not bear the
Restricted Securities Legend. Upon the registration of transfer, exchange or
replacement of Securities bearing the Restricted Securities Legend, the Security
Registrar shall deliver only Securities that bear the Restricted Securities
Legend, unless (i) the requested transfer, exchange or replacement occurs after
the relevant Resale Restriction Termination Date with respect to such
Securities, (ii) upon the request of the Company after there is delivered to the
Security Registrar an Opinion of Counsel reasonably satisfactory to the Company
and the Trustee to the effect that neither such legend nor the related
restrictions on transfer are required in order to maintain compliance with the
Securities Act, (iii) with respect to Offshore Series A Global Securities or
Offshore Series A Physical Securities only, with the agreement of the Company
after the expiration of the 40-day distribution compliance period set forth in
Regulation S with respect to such Securities or (iv) such Securities are sold or
exchanged pursuant to an effective registration statement under the Securities
Act.
(e) Transfers of Beneficial Interests in the Same Global Security. A
beneficial interest in any Global Security that is a Restricted Security may be
transferred to a Person who takes delivery thereof in the form of a beneficial
interest in the same Global Security in accordance with the transfer
restrictions set forth in the Restricted Securities Legend thereon and the rules
and procedures of the Depositary, and no other written orders, instructions or
certificates shall be required in connection therewith.
(f) Other Transfers. The Security Registrar shall effect and register,
upon a written request by the Company to do so, a transfer not otherwise
permitted by this Section 3.07, such registration to be done in accordance with
the otherwise applicable provisions of Section 3.06 and this Section 3.07, upon
the furnishing by the proposed transferor or transferee of an Opinion of Counsel
reasonably satisfactory to the Company and the Trustee to the effect that, and
such other certifications (including, without limitation, a certificate in
substantially the form of Exhibit A in the case of a transfer pursuant to Rule
144) or information as the Company and the Trustee may require to confirm that,
the proposed transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act.
(g) General. By its acceptance of any Security bearing the Restricted
Securities Legend, each Holder of such a Security acknowledges the restrictions
on transfer of such Security set forth in this Indenture and in the Restricted
Securities Legend and agrees that it will transfer such Security only as
provided in this Indenture.
The Security Registrar shall retain copies of all letters, notices and
other written communications received pursuant to Section 3.06 or this Section
3.07. The Company shall have the right to inspect and make copies of all such
letters, notices or other written communications at any reasonable time upon the
giving of reasonable written notice to the Security Registrar.
Section 3.08 Mutilated, Destroyed, Lost and Stolen Securities.
If (a) any mutilated Security is surrendered to the Trustee, or (b) the
Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, and there is delivered to the
Company, each Guarantor and the Trustee, such security or indemnity, in each
case, as may be required by them to save each of them harmless, then, in the
absence of notice to the Company, any Guarantor or the Trustee that such
Security has been acquired by a bona fide purchaser, the Company shall execute
and upon its written request the Trustee shall authenticate and make available
for delivery, in exchange for any such mutilated Security or in lieu of any such
destroyed, lost or stolen Security, a replacement Security of like tenor and
principal amount, bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a replacement Security, pay such Security.
47
Upon the issuance of any replacement Securities under this Section, the
Company may require the payment of a sum sufficient to pay all documentary,
stamp or similar issue or transfer taxes or other governmental charges that may
be imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith.
Every replacement Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company and the Guarantors, whether or not the
destroyed, lost or stolen Security shall be at any time enforceable by anyone,
and shall be entitled to all benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
Section 3.09 Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the Person in whose
name that Security is registered at the close of business on the Regular Record
Date for such interest.
Any interest on any Security which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date and interest on such
defaulted interest at the then applicable interest rate borne by the Securities,
to the extent lawful (such defaulted interest and interest thereon herein
collectively called "Defaulted Interest") shall forthwith cease to be payable to
the Holder on the Regular Record Date; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in Subsection (a) or
(b) below:
(a) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities are registered at the close
of business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company shall
notify the Trustee in writing of the amount of Defaulted Interest proposed
to be paid on each Security and the date (not less than 30 days after such
notice) of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the
date of the proposed payment, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this Subsection section provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after the receipt by the
Trustee of the notice of the proposed payment. The Trustee shall promptly
notify the Company in writing of such Special Record Date. In the name and
at the expense of the Company, the Trustee shall cause notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each Holder at his
address as it appears in the Security Register, not less than 10 days
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor having been so
mailed, such Defaulted Interest shall be paid to the Persons in whose
names the Securities are registered on such Special Record Date and shall
no longer be payable pursuant to the following Subsection (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after written notice given
by the Company to the Trustee of the proposed payment pursuant to this
Subsection, such payment shall be deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
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Section 3.10 Persons Deemed Owners.
The Company, any Guarantor, the Trustee and any agent of the Company, any
Guarantor or the Trustee may treat the Person in whose name any Security is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 3.09) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary. No holder of any beneficial interest in any Global Security held on
its behalf by a Depositary shall have any rights under this Indenture with
respect to such Global Security, and such Depositary may be treated by the
Company, any Guarantor, the Trustee and any agent of the Company, any Guarantor
or the Trustee as the owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, any
Guarantor, the Trustee or any agent of the Company, any Guarantor or the Trustee
from giving effect to any written certification, proxy or other authorization
furnished by the Depositary or impair, as between the Depositary and such
holders of beneficial interests, the operation of customary practices governing
the exercise of the rights of the Depositary (or its nominee) as Holder of any
Security.
Section 3.11 Cancellation.
All Securities surrendered for payment, purchase, redemption, registration
of transfer or exchange shall be delivered to the Trustee and, if not already
cancelled, shall be promptly cancelled by it. The Company and any Guarantor may
at any time deliver to the Trustee for cancellation any Securities previously
authenticated and delivered hereunder which the Company or such Guarantor may
have acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be returned to the Company. The Trustee shall provide the
Company a list of all Securities that have been cancelled from time to time as
requested by the Company.
Section 3.12 Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months.
Section 3.13 CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE IV
DEFEASANCE AND COVENANT DEFEASANCE
Section 4.01 Company's Option to Effect Defeasance or Covenant Defeasance.
The Company may, at its option by Board Resolution, at any time, with
respect to the Securities, elect to have either Section 4.02 or Section 4.03 be
applied to all of the Outstanding Securities (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 4.02 Defeasance and Discharge.
Upon the Company's exercise under Section 4.01 of the option applicable to
this Section 4.02, the Company, each of the Guarantors and any other obligor
upon the Securities, if any, shall be deemed to have been discharged from its
obligations with respect to the Defeased Securities on the date the conditions
set forth below are
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satisfied (hereinafter, "Defeasance"). For this purpose, such defeasance means
that the Company, the Guarantors and any other obligor upon the Securities,
shall be deemed to have paid and discharged the entire Indebtedness represented
by the Defeased Securities, which shall thereafter be deemed to be "Outstanding"
only for the purposes of Section 4.05 and the other Sections of this Indenture
referred to in (a) and (b) below, and to have satisfied all its other
obligations under such Securities and this Indenture insofar as such Securities
are concerned (and the Trustee, at the expense of the Company, and, upon written
request, shall execute proper instruments acknowledging the same), except for
the following which shall survive until otherwise terminated or discharged
hereunder: (a) the rights of Holders of Defeased Securities to receive, solely
from the trust fund described in Section 4.04 and as more fully set forth in
such Section, payments in respect of the principal of, premium, if any, and
interest on such Securities and pay all other Indenture Obligations when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 3.04, 3.05, 3.06, 3.08, 10.02 and 10.03, (c) the
rights, powers, trusts, duties and immunities of the Trustee hereunder,
including, without limitation, the Trustee's rights under Section 6.06, and (d)
this Article Four. Subject to compliance with this Article Four, the Company may
exercise its option under this Section 4.02 notwithstanding the prior exercise
of its option under Section 4.03 with respect to the Securities.
Section 4.03 Covenant Defeasance.
Upon the Company's exercise under Section 4.01 of the option applicable to
this Section 4.03, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Sections
10.06 through 10.19 inclusive, and the provisions of Article Twelve and Sections
14.16 through 14.29 shall not apply, with respect to the Defeased Securities on
and after the date the conditions set forth below are satisfied (hereinafter,
"Covenant Defeasance"), and the Defeased Securities shall thereafter be deemed
to be not "Outstanding" for the purposes of any direction, waiver, consent or
declaration or Act of Holders (and the consequences of any thereof) in
connection with such covenants and the provisions of Article Twelve and Sections
14.16 through 14.29, but shall continue to be deemed "Outstanding" for all other
purposes hereunder. For this purpose, such covenant defeasance means that, with
respect to the Defeased Securities, the Company and each Guarantor may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section or Article, whether directly or
indirectly, by reason of any reference elsewhere herein to any such Section or
Article or by reason of any reference in any such Section or Article to any
other provision herein or in any other document and such omission to comply
shall not constitute a Default or an Event of Default under Section 5.01(c), (d)
or (g), but, except as specified above, the remainder of this Indenture and such
Defeased Securities shall be unaffected thereby.
Section 4.04 Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section
4.02 or Section 4.03 to the Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.08 who shall agree to comply with the provisions of this
Article Four applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of such Securities, (a)
United States dollars in an amount, or (b) U.S. Government Obligations
which through the scheduled payment of principal and interest in respect
thereof in accordance with their terms will provide, not later than one
day before the due date of any payment, money in an amount, or (c) a
combination thereof, sufficient, in the opinion of a nationally recognized
firm of independent public accountants or a nationally recognized
investment banking firm expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied
by the Trustee (or other qualifying trustee) to pay and discharge the
principal of, premium, if any, and interest on the Defeased Securities on
the Stated Maturity of such principal or installment of principal or
interest (or on any date after December 15, 2007 (such date being referred
to as the "Defeasance Redemption Date"), if when exercising under Section
4.01 either its option applicable to Section 4.02 or its option applicable
to Section 4.03, the Company shall have delivered to the Trustee an
irrevocable notice to redeem all of the Outstanding Securities on the
Defeasance Redemption Date) and pay all other Indenture Obligations;
provided that the Trustee shall have been irrevocably instructed to apply
such United States dollars or the proceeds of such
50
U.S. Government Obligations to said payments with respect to the
Securities; and provided further, that the United States dollars or U.S.
Government Obligations deposited shall not be subject to the rights of the
holders of Senior Indebtedness or Guarantor Senior Indebtedness pursuant
to the provisions of Articles Twelve and Fourteen. For this purpose, "U.S.
Government Obligations" means securities that are (i) direct obligations
of the United States of America for the timely payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United
States of America the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United States of
America, which, in either case, are not callable or redeemable at the
option of the issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities Act), as
custodian with respect to any such U.S. Government Obligation or a
specific payment of principal of or interest on any such U.S. Government
Obligation held by such custodian for the account of the holder of such
depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received by the
custodian in respect of the U.S. Government Obligation or the specific
payment of principal of or interest on the U.S. Government Obligation
evidenced by such depository receipt.
(2) In the case of an election under Section 4.02, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the
United States stating that (A) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (B) since the
date of this Indenture, there has been a change in the applicable federal
income tax law, in either case to the effect that, and based thereon such
Opinion of Independent Counsel in the United States shall confirm that,
the holders of the Outstanding Securities will not recognize income, gain
or loss for federal income tax purposes as a result of such defeasance and
will be subject to federal income tax on the same amounts, in the same
manner and at the same times as would have been the case if such
defeasance had not occurred.
(3) In the case of an election under Section 4.03, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the
United States to the effect that the holders of the Outstanding Securities
will not recognize income, gain or loss for federal income tax purposes as
a result of such covenant defeasance and will be subject to federal income
tax on the same amounts, in the same manner and at the same times as would
have been the case if such covenant defeasance had not occurred.
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as subsections 5.01(h)
and (i) are concerned, at any time during the period ending on the 91st
day after the date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the
Trustee for the Securities to have a conflicting interest with respect to
any securities of the Company or any Guarantor.
(6) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a Default under, this Indenture or
any other material agreement or instrument to which the Company or any
Guarantor is a party or by which it is bound.
(7) The Company shall have delivered to the Trustee an Opinion of
Independent Counsel to the effect that (A) the trust funds will not be
subject to any rights of holders of Senior Indebtedness or Guarantor
Senior Indebtedness, including, without limitation, those arising under
this Indenture and (B) after the 91st day following the deposit, the trust
funds will not be subject to the effect of any applicable bankruptcy,
insolvency, reorganization or similar laws affecting creditors' rights
generally.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with the
intent of preferring the holders of the Securities or any Guarantee over
the other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others.
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(9) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on
the Securities and of all other Indenture Obligations on the date of such
deposit or at any time ending on the 91st day after the date of such
deposit.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 4.02 or the covenant defeasance under Section 4.03 (as the case
may be) have been complied with as contemplated by this Section 4.04.
Opinions of Counsel or Opinions of Independent Counsel required to be
delivered under this Section may have qualifications customary for opinions of
the type required and counsel delivering such opinions may rely on certificates
of the Company or government or other officials customary for opinions of the
type required, including certificates certifying as to matters of fact,
including that various financial covenants have been complied with.
Section 4.05 Deposited Money and U.S. Government Obligations to Be Held in
Trust; Other Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee as permitted
under Section 4.04 (collectively, for purposes of this Section 4.05, the
"Trustee") pursuant to Section 4.04 in respect of the Defeased Securities shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 4.04 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the Trustee
shall deliver or pay to the Company from time to time upon Company Request any
United States dollars or U.S. Government Obligations held by it as provided in
Section 4.04 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
Section 4.06 Reinstatement.
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 4.02 or 4.03,
as the case may be, by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, then the Company's and each Guarantor's obligations under this
Indenture and the Securities and the provisions of Articles Twelve and Fourteen
hereof shall be revived and reinstated as though no deposit had occurred
pursuant to Section 4.02 or 4.03, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such United States dollars or
U.S. Government Obligations in accordance with Section 4.02 or 4.03, as the case
may be; provided, however, that if the Company makes any payment to the Trustee
or Paying Agent of principal of, premium, if any, or interest on any Security
following the reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the Securities and the
Company shall be subrogated to the rights of the Holders of such Securities to
receive such payment from the money held by the Trustee or Paying Agent.
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ARTICLE V
REMEDIES
Section 5.01 Events of Default.
"Event Of Default," wherever used herein, means any one of the following
events which has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be occasioned by the provisions of Article
Twelve or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on any
Security (including any Additional Interest) when it becomes due and payable,
and such default shall continue for a period of 30 days;
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or Parent or any other Guarantor under this
Indenture (other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in clause (a) or (b) or in clause
(ii), (iii) or (iv) of this clause (c)) and such default or breach shall
continue for a period of 30 days after written notice has been given, by
certified mail, (y) to the Company by the Trustee or (z) to the Company and the
Trustee by the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities; (ii) there shall be a default in the performance or
breach of the provisions of Article Eight; (iii) the Company shall have failed
to make or consummate an Offer in accordance with the provisions of Section
10.13; or (iv) the Company shall have failed to make or consummate a Change of
Control Offer in accordance with the provisions of Section 10.16;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary of the Company then has outstanding Indebtedness in excess
of $5,000,000 in the aggregate and, if not already matured at its final maturity
in accordance with its terms, such Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in
writing by any Guarantor or the Company not to be, in full force and effect,
enforceable in accordance with its terms, except to the extent contemplated by
this Indenture and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money in
excess of $5,000,000 either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument) shall be entered
against the Company, any Guarantor, or any Restricted Subsidiary of the Company
or any of their respective properties and shall not be discharged and either (a)
any creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (b) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $5,000,000 in aggregate principal
amount of Indebtedness of the Company, any Guarantor or any Restricted
Subsidiary of the Company after a default under such Indebtedness shall notify
the Trustee of the intended sale or disposition of any assets of the Company,
any Guarantor or any Restricted Subsidiary of the Company that have been pledged
to or for the benefit of such holder or holders to secure such Indebtedness or
shall commence proceedings, or take any action (including by way of set-off), to
retain in satisfaction of such Indebtedness or to collect on, seize, dispose of
or apply in satisfaction of Indebtedness, assets of the Company or any
Restricted Subsidiary of the Company (including funds on deposit or held
pursuant to lock-box and other similar arrangements);
(h) there shall have been the entry by a court of competent jurisdiction
of (i) a decree or order for relief in respect of the Company, any Guarantor or
any Restricted Subsidiary of the Company in an involuntary case or proceeding
under any applicable Bankruptcy Law or (ii) a decree or order adjudging the
Company, any Guarantor
53
or any Restricted Subsidiary of the Company bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
Company, any Guarantor or any Restricted Subsidiary of the Company under any
applicable federal or state law, or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator (or other similar official) of the
Company, any Guarantor or any Restricted Subsidiary of the Company or of any
substantial part of their respective properties, or ordering the winding up or
liquidation of their affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be unstayed
and in effect, for a period of 60 consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary of the
Company commences a voluntary case or proceeding under any applicable Bankruptcy
Law or any other case or proceeding to be adjudicated bankrupt or insolvent,
(ii) the Company, any Guarantor or any Restricted Subsidiary of the Company
consents to the entry of a decree or order for relief in respect of the Company,
any Guarantor or such Restricted Subsidiary in an involuntary case or proceeding
under any applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (iii) the Company, any Guarantor or
any Restricted Subsidiary of the Company files a petition or answer or consent
seeking reorganization or relief under any applicable federal or state law, (iv)
the Company, any Guarantor or any Restricted Subsidiary of the Company (1)
consents to the filing of such petition or the appointment of, or taking
possession by, a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official, of the Company, any Guarantor or such
Restricted Subsidiary or of any substantial part of its respective properties,
(2) makes an assignment for the benefit of creditors or (3) admits in writing
its inability to pay its debts generally as they become due, or (v) the Company,
any Guarantor or any Restricted Subsidiary of the Company takes any corporate
action in furtherance of any such actions in this paragraph (i).
The Company shall deliver to the Trustee within five days after the
occurrence thereof, written notice, in the form of an Officers' Certificate, of
any Default, its status and what action the Company is taking or proposes to
take with respect thereto. Unless the Corporate Trust Office of the Trustee has
received written notice of an Event of Default of the nature described in this
Section, the Trustee shall not be deemed to have knowledge of such Event of
Default for the purposes of Article Five or for any other purpose.
Section 5.02 Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Sections 5.01(h) and (i)), shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Securities
Outstanding may, and the Trustee at the request of the Holders of not less than
25% in aggregate principal amount of the Securities Outstanding shall, declare
all unpaid principal of, premium, if any, and accrued interest on all the
Securities to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by the Holders of the Securities); provided
that so long as the Bank Credit Agreement is in effect, such declaration shall
not become effective until the earlier of (a) five Business Days after receipt
of such notice of acceleration from the Holders or the Trustee by the agent
under the Bank Credit Agreement or (b) acceleration of the Indebtedness under
the Bank Credit Agreement. Thereupon the Trustee may, at its discretion, proceed
to protect and enforce the rights of the Holders of the Securities by
appropriate judicial proceedings. If an Event of Default specified in clause (h)
or (i) of Section 5.01 occurs and is continuing, then all the Securities shall
ipso facto become and be immediately due and payable, in an amount equal to the
principal amount of the Securities, together with accrued and unpaid interest,
if any, to the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any Holder. The Trustee
or, if notice of acceleration is given by the Holders, the Holders shall give
notice to the agent under the Bank Credit Agreement of any such acceleration.
After such declaration of acceleration, but before a judgment or decree
for payment of the money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in aggregate principal amount
of the Securities Outstanding, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum sufficient to
pay:
(i) all sums paid or advanced by the Trustee under this Indenture
and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel,
54
(ii) all overdue interest on all Securities,
(iii) the principal of and premium, if any, on any Securities which
have become due otherwise than by such declaration of acceleration and
interest thereon at a rate borne by the Securities, and
(iv) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate borne by the Securities; and
(b) all Events of Default, other than the nonpayment of principal of the
Securities which have become due solely by such declaration of acceleration,
have been cured or waived as provided in Section 5.13. No such rescission shall
affect any subsequent Default or impair any right consequent thereon provided in
Section 5.13.
Section 5.03 Collection of Indebtedness and Suits for Enforcement by
Trustee.
The Company and each Guarantor covenant that if:
(a) default is made in the payment of any interest (including any
Additional 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 institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree, and may enforce the same against the Company or any Guarantor or
any other obligor upon the Securities and collect the moneys adjudged or decreed
to be payable in the manner provided by law out of the property of the Company
or any Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in its
discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Guarantees by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 5.12.
Section 5.04 Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee (irrespective of whether the principal
of the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Trustee shall have made
any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
55
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel) and of the Holders allowed in such judicial proceeding, and
(b) subject to Articles Twelve and Fourteen, to collect and receive any
moneys, securities or other property payable or deliverable upon any conversion
or exchange of Securities or upon any such claims and to distribute the same;
and any custodian, in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.06.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
Section 5.05 Trustee May Enforce Claims without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name and
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
Section 5.06 Application of Money Collected.
Any money collected by the Trustee pursuant to this Article or otherwise
on behalf of the Holders or the Trustee pursuant to this Article or through any
proceeding or any arrangement or restructuring in anticipation or in lieu of any
proceeding contemplated by this Article shall be applied, subject to applicable
law, in the following order, at the date or dates fixed by the Trustee and, in
case of the distribution of such money on account of principal, premium, if any,
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section 6.06;
SECOND: Subject to Articles Twelve and Fourteen, to the payment of the
amounts then due and unpaid upon the Securities for principal, premium, if any,
and interest, and of all other Indenture Obligations in respect of which or for
the benefit of which such money has been collected, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal, premium, if any, and interest and all other Indenture
Obligations; and
THIRD: Subject to Articles Twelve and Fourteen, the balance, if any, to
the Company, provided that all sums due and owing to the Holders and the Trustee
have been paid in full as required by this Indenture.
Section 5.07 Limitation on Suits.
No Holder of any Securities shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder, unless
(a) such Holder has previously given written notice to the Trustee of a
continuing Event of Default;
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(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
trustee hereunder;
(c) such Holder or Holders have offered to the Trustee an indemnity
satisfactory to the Trustee against the costs, expenses and liabilities to be
incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request and
offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been given to
the Trustee during such 60-day period by the Holders of a majority in principal
amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture or any Guarantee to affect, disturb or prejudice the rights of
any other Holders, or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner provided in this Indenture or any Guarantee and for the equal and ratable
benefit of all the Holders.
Section 5.08 Unconditional Right of Holders to Receive Principal, Premium
and Interest.
Notwithstanding any other provision in this Indenture, but subject to
Articles Twelve and Fourteen, the Holder of any Security shall have the right on
the terms stated herein, which is absolute and unconditional, to receive payment
of the principal of, premium, if any, and (subject to Section 3.09) interest on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption or repurchase, on the Redemption Date or
repurchase date) and to institute suit for the enforcement of any such payment,
and such rights shall not be impaired without the consent of such Holder,
subject to Articles Twelve and Fourteen.
Section 5.09 Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture or the Guarantees and such proceeding has
been discontinued or abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such case the Company, each
of the Guarantors, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 5.10 Rights and Remedies Cumulative.
No right or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.11 Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
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Section 5.12 Control by Holders.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided that:
(a) such direction shall not be in conflict with any rule of law or with
this Indenture or any Guarantee or expose the Trustee to personal liability; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 5.13 Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount of
the Outstanding Securities may on behalf of the Holders of all the Securities
waive any past Default hereunder and its consequences, except a Default:
(a) in the payment of the principal of, premium, if any, or interest
(including Additional Interest, if any) on any Security (unless such Default has
been cured and a sum sufficient to pay all matured installments of interest and
principal due otherwise than by acceleration and any Additional Interest has
been deposited with the Trustee); or
(b) in respect of a covenant or a provision hereof which under Article
Nine cannot be modified or amended without the consent of Holders of each
Outstanding Security.
Upon any such waiver, such Default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of this Indenture; but no such waiver shall extend to any subsequent or other
Default or impair any right consequent thereon.
Section 5.14 Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities,
or to any suit instituted by any Holder for the enforcement of the payment of
the principal of, premium, if any, or interest on any Security on or after the
respective Stated Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
Section 5.15 Waiver of Stay, Extension or Usury Laws.
Each of the Company and any Guarantor covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or plead, or in any
manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities contemplated herein or in the Securities or any other
Indenture Obligations or which may affect the covenants or the performance of
this Indenture; and each of the Company and any Guarantor (to the extent that it
may lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE VI
THE TRUSTEE
Section 6.01 Notice of Defaults.
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder actually known to a
Responsible Officer of the Trustee, unless such Default shall have been cured or
waived; provided, however, that, except in the case of a Default in the payment
of the principal of, premium, if any, or interest on any Security, the Trustee
shall be protected in withholding such notice if and so long as a trust
committee of Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders.
Section 6.02 Certain Rights and Duties of Trustee.
Subject to the provisions of Trust Indenture Act Sections 3.15(a) through
3.15(d):
(a) the Trustee may conclusively rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of Indebtedness or other paper or document (whether in its
original or facsimile form) believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) the Trustee may consult with counsel of its choice and any written
advice of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon in accordance with such
advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee security or indemnity satisfactory to the Trustee against the
costs, expenses and liabilities which might be incurred therein or thereby in
compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document;
provided, that the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney at the expense of the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation.
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) no provision of this Indenture shall require the Trustee to expend or
risk its own funds or otherwise incur any financial liability in the performance
of any of its duties hereunder, or in the exercise of any of its rights or
powers;
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(i) the Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree in writing with the Company, except as
otherwise provided herein;
(j) money held in trust by the Trustee need not be segregated from other
funds except to the extent required by law, except as otherwise provided herein;
(k) if an Event of Default has occurred and is continuing, in accordance
with Trust Indenture Act Section 3.15(c), the Trustee shall exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of his or her own affairs; and
(l) in the event that the Trustee receives notice pursuant to Section
12.03(b)(2), the Trustee shall use commercially reasonable efforts to provide a
copy of such notice to the Company promptly upon such receipt.
Section 6.03 Trustee Not Responsible for Recitals, Dispositions of
Securities or Application of Proceeds Thereof.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities, except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Securities and perform
its obligations hereunder and that the statements made by it in any Statement of
Eligibility and Qualification on Form T-I supplied to the Company are true and
accurate subject to the qualifications set forth therein. The Trustee shall not
be accountable for the use or application by the Company of Securities or the
proceeds thereof.
Section 6.04 Trustee and Agents May Hold Securities; Collections; etc.
The Trustee (or any affiliate), any Paying Agent, Security Registrar or
any agent of the Company, in its individual or any other capacity, may purchase
or otherwise become the owner or pledgee of Securities, with the same rights it
would have if it were not the Trustee, Paying Agent, Security Registrar or other
agent and, subject to Trust Indenture Act Sections 3.10 and 3.11, may otherwise
deal with the Company and receive, collect, hold and retain collections from the
Company with the same rights it would have if it were not the Trustee, Paying
Agent, Security Registrar or such other agent.
Section 6.05 Money Held in Trust.
All moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in Temporary Cash
Investments in accordance with the written directions of the Company. The
Trustee shall not be liable for any losses incurred in connection with any
investments made in accordance with this Section 6.05, unless the Trustee acted
with gross negligence or in bad faith. With respect to any losses on investments
made under this Section 6.05, the Company is liable for the full extent of any
such loss.
Section 6.06 Compensation and Indemnification of Trustee and Its Prior
Claim.
The Company covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, such compensation for all services
rendered by it hereunder (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) set forth in
writing, and the Company covenants and agrees to pay or reimburse the Trustee
and each predecessor Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by or on behalf of it in accordance
with any of the provisions of this Indenture (including the reasonable
compensation and the expenses and disbursements of its counsel and of all agents
and other persons not regularly in its employ) except any such expense,
disbursement or advance shall be determined to have been caused by its own
negligence or misconduct. The Company also
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covenants to indemnify the Trustee and each predecessor Trustee for, and to hold
it harmless against, any loss, liability, tax, assessment or other governmental
charge (other than taxes applicable to the Trustee's compensation hereunder) or
expense incurred without negligence or bad faith on such Trustee's part, arising
out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and such Trustee's duties hereunder, including
enforcement of this Indenture and also including any liability which the Trustee
may incur as a result of failure to withhold, pay or report any tax, assessment
or other governmental charge, and the costs and expenses of defending itself
against or investigating any claim of liability (whether asserted by any Holder,
the Company or any other Person) in connection with the exercise or performance
of any of its powers or duties under this Indenture. The obligations of the
Company under this Section to compensate and indemnify the Trustee and each
predecessor Trustee and to pay or reimburse the Trustee and each predecessor
Trustee for expenses, disbursements and advances shall constitute an additional
obligation hereunder and shall survive the satisfaction and discharge of this
Indenture.
All payments and reimbursements pursuant to this Section 6.06 shall be
made with interest at the rate borne by the Securities.
As security for the performance of the obligations of the Company under
this Section 6.06, the Trustee shall have a Lien prior to the Securities upon
all property and funds held or collected by the Trustee, except funds held in
trust for the payment of principal of (and premium, if any) or interest on
particular Securities. The Trustee's right to receive payment of any amounts due
under this Section 6.06 shall not be subordinate to any other liability or
indebtedness of the Company (even though the Securities may be so subordinate),
and the Securities shall be subordinate to the Trustee's right to receive such
payment.
Section 6.07 Conflicting Interests.
The Trustee shall comply with the provisions of Section 3.10(b) of the
Trust Indenture Act.
Section 6.08 Corporate Trustee Required, Eligibility.
There shall at all times be a Trustee hereunder which shall be eligible to
act as trustee under Trust Indenture Act Section 3.10(a)(1) and which shall have
a combined capital and surplus of at least $50,000,000, to the extent there is
an institution eligible and willing to serve. The Trustee shall be a participant
in the Depository Trust Company and FAST distribution systems. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of federal, state, territorial or District of Columbia
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Corporate Trust Office shall initially be located at The Bank of
New York, 101 Barclay Street, 21 W, New York, New York 10286.
Section 6.09 Resignation and Removal: Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 6.10.
(b) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument executed by authority of the Board of Directors of
the Company, a copy of which shall be delivered to the resigning Trustee and a
copy to the successor trustee. If an instrument of acceptance by a successor
trustee shall not have been delivered to the Trustee within 30 days after the
giving of such notice of resignation, the resigning Trustee may, or any Holder
who has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all others similarly situated, petition at the expense of
the Company any court of competent jurisdiction for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper, appoint a successor trustee.
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(c) The Trustee may be removed at any time by an Act of the Holders of not
less than a majority in aggregate principal amount of the Outstanding
Securities, delivered to the Trustee and to the Company. If the Trustee is so
removed by an Act of Holders, then any Holder of a Security who has been a bona
fide Holder of a Security for at least six months, on behalf of such Holder and
all others similarly situated, or the removed Trustee may petition at the
expense of the Company a court of competent jurisdiction for appointment of a
successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of Trust
Indenture Act Section 3.10(b) after written request therefor by the
Company or by any Holder who has been a bona fide Holder of a Security for
at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.08 and
shall fail to resign after written request therefor by the Company or by
any Holder who has been a bona fide Holder of a Security for at least six
months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 5.14, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of such Holder
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor trustee. Such
court may thereupon, after such notice, if any, as it may deem proper and
prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, the Company,
by a Board Resolution, shall promptly appoint a successor trustee. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor trustee
and supersede the successor trustee appointed by the Company. If no successor
trustee shall have been so appointed by the Company or the Holders of the
Securities and accepted appointment in the manner hereinafter provided, the
Holder of any Security who has been a bona fide Holder for at least six months
may, subject to Section 5.14, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor trustee.
(f) The Company shall give notice of each resignation and each removal of
the Trustee and each appointment of a successor trustee by mailing written
notice of such event by first-class mail, postage prepaid, to the Holders of
Securities as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor trustee and the address of its
Corporate Trust Office or agent hereunder.
Section 6.10 Acceptance of Appointment by Successor.
Every successor trustee appointed hereunder shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such successor trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee as if originally named as Trustee hereunder; but,
nevertheless, on the written request of the Company or the successor trustee,
upon payment of its charges then unpaid, such retiring Trustee shall, pay over
to the successor trustee all moneys at the time held by it hereunder and shall
execute and deliver an instrument transferring to such successor trustee all
such rights, powers, duties and obligations. Upon request of any such successor
trustee, the Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any Trustee ceasing to act shall, nevertheless, retain a prior claim
upon all property or funds held or
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collected by such Trustee or such successor trustee to secure any amounts then
due such Trustee pursuant to the provisions of Section 6.06.
No successor trustee with respect to the Securities shall accept
appointment as provided in this Section 6.10 unless at the time of such
acceptance such successor trustee shall be eligible to act as trustee under the
provisions of Trust Indenture Act Section 3.10(a) and this Article Sixth and
shall have a combined capital and surplus of at least $50,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 6.08.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.10, the Company shall give notice thereof to the Holders of the
Securities, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
6.09. If the Company fails to give such notice within 10 days after acceptance
of appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 6.11 Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be eligible under Trust Indenture Act Section
3.10(a) and this Article Sixth and shall have a combined capital and surplus of
at least $50,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 6.08 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities shall have been
authenticated but not delivered, any such successor to the Trustee may adopt the
certificate of authentication of any predecessor Trustee and deliver such
Securities so authenticated; and, in case at that time any of the Securities
shall not have been authenticated, any successor to the Trustee may authenticate
such Securities either in the name of any predecessor hereunder or in the name
of the successor trustee; and in all such cases such certificate shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have; provided that the right to adopt
the certificate of authentication of any predecessor Trustee or to authenticate
Securities in the name of any predecessor Trustee shall apply only to its
successor or successors by merger, conversion or consolidation.
Section 6.12 Preferential Collection of Claims Against Company.
If and when the Trustee shall be or become a creditor of the Company (or
other obligor under the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor). A Trustee who has resigned or been
removed shall be subject to the Trust Indenture Act Section 3.11(a) to the
extent indicated therein.
ARTICLE VII
HOLDERS' LISTS AND REPORTS BY TRUSTEE
Section 7.01 Company to Furnish Trustee with Names and Addresses of
Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semiannually, not more than 15 days after each Regular Record Date, a
list, in such form as the Trustee may reasonably require, of the names and
addresses of the Holders as of such Regular Record Date; and
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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 7.02 Disclosure of Names and Addresses of Holders.
Every Holder of Securities, by receiving and holding the same, agrees with
the Company and the Trustee that neither the Company nor the Trustee nor any
agent of either of them shall be held accountable by reason of the disclosure of
any information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 3.12, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 3.12.
Section 7.03 Reports by Trustee.
Within 60 days after May 15 of each year commencing with the first May 15
after the first issuance of Securities, the Trustee shall transmit by mail to
all Holders, as their names and addresses appear in the Security Register, as
provided in Trust Indenture Act Section 3.13(c), a brief report dated as of such
May 15 in accordance with and to the extent required by Trust Indenture Act
Section 3.13(a). The Trustee shall also comply with Trust Indenture Act Section
3.13(b).
Commencing at the time this Indenture is qualified under the Trustee
Indenture Act, a copy of each report at the time of its mailing to Holders,
shall be filed with the Commission and each stock exchange on which the
Securities are listed.
Section 7.04 Reports by Company and Guarantors.
The Company and any Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of the
Exchange Act in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules and
regulations;
(b) file with the Trustee and the Commission, in accordance with the rules
and regulations prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the Company or
any Guarantor, as the case may be, with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations;
and
(c) transmit or cause to be transmitted by mail to all Holders, as their
names and addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
Trust Indenture Act Section 3.13(c), such summaries of any information,
documents and reports required to by filed by the Company or any Guarantor, as
the case may be, pursuant to Subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
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determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officer's Certificates).
ARTICLE VIII
CONSOLIDATION, MERGER,
CONVEYANCE, TRANSFER OR LEASE
Section 8.01 Company or Any Guarantor May Consolidate, etc., Only on
Certain Terms.
(a) The Company shall not, in a single transaction or through a series of
related transactions, consolidate with or merge with or into any other Person or
sell, assign, convey, transfer or lease or otherwise dispose of all or
substantially all of its properties and assets to any Person or group of
affiliated Persons, or permit any of its Subsidiaries to enter into any such
transaction or transactions if such transaction or transactions, in the
aggregate, would result in a sale, assignment, conveyance, transfer, lease or
disposition of all or substantially all of the properties and assets of the
Company and its Subsidiaries on a Consolidated basis to any other Person or
group of affiliated Persons, unless at the time and after giving effect thereto:
(i) either (1) the Company shall be the continuing corporation, or
(2) the Person (if other than the Company) formed by such consolidation or
into which the Company is merged or the Person which acquires by sale,
assignment, conveyance, transfer, lease or disposition of all or
substantially all of the properties and assets of the Company and its
Subsidiaries on a Consolidated basis (the "Surviving Entity") shall be a
corporation duly organized and validly existing under the laws of the
United States of America, any state thereof or the District of Columbia
and such Person assumes, by a supplemental indenture in a form reasonably
satisfactory to the Trustee, all the obligations of the Company under the
Securities and this Indenture, and this Indenture shall remain in full
force and effect;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing;
(iii) immediately after giving effect to such transaction on a pro
forma basis, the Consolidated Net Worth of the Company (or the Surviving
Entity if the Company is not the continuing obligor under this Indenture)
is equal to or greater than the Consolidated Net Worth of the Company
immediately prior to such transaction;
(iv) immediately before and immediately after giving effect to such
transaction on a pro forma basis (on the assumption that the transaction
occurred on the first day of the four-quarter period immediately prior to
the consummation of such transaction with the appropriate adjustments with
respect to the transaction being included in such pro forma calculation),
the Company (or the Surviving Entity if the Company is not the continuing
obligor under this Indenture) could incur $1.00 of additional Indebtedness
under Section 10.08 (other than Permitted Indebtedness);
(v) each Guarantor, if any, unless it is the other party to the
transactions described above, shall have by supplemental indenture
confirmed that its Guarantee shall apply to such Person's obligations
under this Indenture and the Securities;
(vi) if any of the property or assets of the Company or any of its
Subsidiaries would thereupon become subject to any Lien, the provisions of
Section 10.12 are complied with; and
(vii) the Company or the Surviving Entity shall have delivered, or
caused to be delivered, to the Trustee, in form and substance reasonably
satisfactory to the Trustee, an Officers' Certificate and an Opinion of
Counsel, each to the effect that such consolidation, merger, transfer,
sale, assignment, conveyance, lease or other transaction and the
supplemental indenture in respect thereto comply with the provisions of
this Indenture and that all conditions precedent herein provided for
relating to such transaction have been complied with.
65
(b) Each Guarantor (including Parent) shall not, and the Company and
Parent shall not permit a Restricted Subsidiary Guarantor or a Parent Subsidiary
Guarantor, as the case may be, to, in a single transaction or through a series
of related transactions merge or consolidate with or into any other corporation
(other than the Company or any other Guarantor) or other entity, or sell,
assign, convey, transfer, lease or otherwise dispose of all or substantially all
of its properties and assets on a Consolidated basis to any entity (other than
the Company or any other Guarantor) unless at the time and after giving effect
thereto:
(i) either (1) such Guarantor shall be the continuing corporation or
(2) the entity (if other than such Guarantor) formed by such consolidation
or into which such Guarantor is merged or the entity which acquires by
sale, assignment, conveyance, transfer, lease or disposition the
properties and assets of such Guarantor shall be a corporation duly
organized and validly existing under the laws of the United States, any
state thereof or the District of Columbia and shall expressly assume by a
supplemental indenture, executed and delivered to the Trustee, in a form
reasonably satisfactory to the Trustee, all the obligations of such
Guarantor under its Guarantee and this Indenture;
(ii) immediately before and immediately after giving effect to such
transaction, no Default or Event of Default shall have occurred and be
continuing; and
(iii) such Guarantor shall have delivered to the Trustee, in form
and substance reasonably satisfactory to the Trustee, an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, sale, assignment, conveyance, transfer, lease or
disposition and such supplemental indenture comply with this Indenture,
and thereafter all obligations of the predecessor shall terminate.
The provisions of this Section 8.01(b) shall not apply to any transaction
(including any Asset Sale made in accordance with Section 10.13) with respect to
any Guarantor if the Guarantee of such Guarantor is released in connection with
such transaction in accordance with Section 10.14(d).
Section 8.02 Successor Substituted.
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 8.01, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture, the
Securities and/or such Guarantee, as the case may be, with the same effect as if
such successor had been named as the Company or such Guarantor, as the case may
be, herein, in the Securities and/or in such Guarantee, as the case may be. When
a successor assumes all the obligations of its predecessor under this Indenture,
the Securities or a Guarantee, as the case may be, the predecessor shall be
released from those obligations; provided that in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal and
interest on the Securities or a Guarantee, as the case may be.
ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures and Agreements without Consent of
Holders.
Without the consent of any Holders, the Company and the Guarantors, when
authorized by a Board Resolution, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental hereto or agreements or
other instruments with respect to any Guarantee, in form and substance
satisfactory to the Trustee, for any of the following purposes:
(a) to evidence the succession of another Person to the Company, any
Guarantor or any other obligor upon the Securities, and the assumption by any
such successor of the covenants of the Company or such Guarantor
66
or obligor herein and in the Securities and in any Guarantee, in each case in
compliance with the provisions of this Indenture;
(b) to add to the covenants of the Company, any Guarantor or any other
obligor upon the Securities for the benefit of the Holders, or to surrender any
right or power herein conferred upon the Company, any Guarantor or any other
obligor upon the Securities, as applicable, herein, in the Securities or in any
Guarantee;
(c) to cure any ambiguity, to correct or supplement any provision herein
which may be defective or inconsistent with any other provision herein or in any
Guarantee, or to make any other provisions with respect to matters or questions
arising under this Indenture, the Securities or any Guarantee; provided that, in
each case, such provisions shall not adversely affect the interests of the
Holders;
(d) to comply with the requirements of the Commission in order to effect
or maintain the qualification of this Indenture under the Trust Indenture Act,
as contemplated by Section 9.05 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section 10.14;
(f) to evidence and provide the acceptance of the appointment of a
successor trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security interest in favor
of the Trustee for the benefit of the Holders as additional security for the
payment and performance of the Indenture Obligations, in any property or assets,
including any which are required to be mortgaged, pledged or hypothecated, or in
which a security interest is required to be granted to the Trustee pursuant to
this Indenture or otherwise; or
(h) to provide for uncertificated Securities in place of or in addition to
certificated Securities; or
(i) to provide for or confirm the issuance of Additional Securities.
Section 9.02 Supplemental Indentures and Agreements with Consent of
Holders.
With the consent of the Holders of not less than a majority in aggregate
principal amount of the Outstanding Securities, by Act of said Holders delivered
to the Company, each Guarantor, and the Trustee, the Company and the Guarantors,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto or agreements or other instruments
with respect to any Guarantee, in form and substance satisfactory to the
Trustee, for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of modifying in any
manner the rights of the Holders under this Indenture, the Securities or any
Guarantee; provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding Security
affected thereby:
(a) change the Stated Maturity of the principal of, or any installment of
interest on, any Security, or reduce the principal amount thereof or the rate of
interest thereon or any premium payable upon the redemption thereof, or change
the coin or currency in which the principal of any Security or any premium or
the interest thereon is payable, or impair the right to institute suit for the
enforcement of any such payment after the Stated Maturity thereof (or, in the
case of redemption, on or after the Redemption Date);
(b) amend, change or modify the obligation of the Company to make and
consummate an Offer with respect to any Asset Sale or Asset Sales in accordance
with Section 10.13 or the obligation of the Company to make and consummate a
Change of Control Offer in the event of a Change of Control in accordance with
Section 10.16, including amending, changing or modifying any definitions with
respect thereto;
(c) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver of
compliance with provisions of this Indenture or defaults hereunder and their
consequences provided for in this Indenture or with respect to any Guarantee;
67
(d) modify any of the provisions of this Section or Sections 5.13 or
10.22, except to increase the percentage in principal amount of the Outstanding
Securities the consent of whose Holders is required for any such actions or to
provide that other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Security affected thereby;
(e) except as otherwise permitted under Article Eight, consent to the
assignment or transfer by the Company or any Guarantor of any of its rights and
obligations under this Indenture; or
(f) amend or modify any of the provisions of this Indenture relating to
the subordination of the Securities or any Guarantee in any manner adverse to
the Holders of the Securities or any Guarantee.
Upon the written request of the Company and each Guarantor, accompanied by
a copy of a Board Resolution authorizing the execution of any such supplemental
indenture or Guarantee, and upon the filing with the Trustee of evidence of the
consent of Holders as aforesaid, the Trustee shall, subject to Section 9.03,
join with the Company and each Guarantor in the execution of such supplemental
indenture or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 9.03 Execution of Supplemental Indentures and Agreements.
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 3.15(a)
through 315(d) and Section 6.02 hereof) shall be fully protected in relying
upon, an Opinion of Counsel and an Officers' Certificate stating that the
execution of such supplemental indenture, agreement or instrument is authorized
or permitted by this Indenture. The Trustee may, but shall not be obligated to,
enter into any such supplemental indenture, agreement or instrument which
affects the Trustee's own rights, duties or immunities under this Indenture, any
Guarantee or otherwise.
Section 9.04 Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
Section 9.05 Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 9.06 Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities so modified as to conform, in the opinion of the Trustee and the
Board of Directors, to any such supplemental indenture may be prepared and
executed by the Company and each Guarantor and authenticated and delivered by
the Trustee in exchange for Outstanding Securities.
Section 9.07 Effect on Senior Indebtedness.
No supplemental indenture shall adversely affect the rights under Articles
Twelve and Fourteen, or any definitions or provisions related thereto, or the
Guarantees of any holder of Senior Indebtedness or Guarantor Senior
68
Indebtedness unless the requisite holders of each issue of Senior Indebtedness
or Guarantor Senior Indebtedness affected thereby shall have consented to such
supplemental indenture.
ARTICLE X
COVENANTS
Section 10.01 Payment of Principal, Premium and Interest.
Subject to the provisions of Articles Twelve and Fourteen, the Company
will duly and punctually pay the principal of, premium, if any, and interest on
the Securities in accordance with the terms of the Securities and this
Indenture.
Section 10.02 Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may be
presented or surrendered for payment. The Company also will maintain an office
or agency where Securities may be surrendered for registration of transfer,
redemption or exchange and where notices and demands to or upon the Company in
respect of the Securities and this Indenture may be served. The Company will
give prompt written notice to the Trustee of the location and any change in the
location of any such offices or agencies. If at any time the Company shall fail
to maintain any such required offices or agencies or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the office of the agent of the Trustee
described above and the Company hereby appoints such agent as its agent to
receive all such presentations, surrenders, notices and demands.
The Company may from time to time designate one or more other offices or
agencies where the Securities may be presented or surrendered for any or all
such purposes, and may from time to time rescind such designation. The Company
will give prompt written notice to the Trustee of any such designation or
rescission and any change in the location of any such office or agency.
Section 10.03 Money for Security Payments to Be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on
or before 10:00 a.m. each due date of the principal of, premium, if any, or
interest on any of the Securities, segregate and hold in trust for the benefit
of the Holders entitled thereto a sum sufficient to pay the principal, premium,
if any, or interest so becoming due until such sums shall be paid to such
Persons or otherwise disposed of as herein provided, and will promptly notify
the Trustee of its action or failure so to act.
If the Company is not acting as Paying Agent, the Company will, before
each due date of the principal of, premium, if any, or interest on any
Securities, deposit with a Paying Agent a sum in same day funds sufficient to
pay the principal, premium, if any, or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such principal, premium
or interest, and (unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of such action or any failure so to act.
If the Company is not acting as Paying Agent, the Company will cause each
Paying Agent other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal of, premium,
if any, or interest on Securities in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or otherwise
disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company or any Guarantor
(or any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest;
69
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities or the property of the Company or of such other
obligor or their creditors, the Trustee shall serve as the Paying Agent.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of, premium, if any, or
interest on any Security and remaining unclaimed for two years after such
principal and premium, if any, or interest has become due and payable shall
promptly be paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in The New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of such
money then remaining will promptly be repaid to the Company.
Section 10.04 Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect, the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary of the Company; provided, however, that the Company
shall not be required to preserve any such right or franchise or the corporate
existence of any such Subsidiary if the Board of Directors of the Company shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Company and its Subsidiaries as a whole and that the loss
thereof could not reasonably be expected to have a material adverse effect on
the ability of the Company to perform its obligations hereunder; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary of the Company or any of its assets in compliance
with the terms of this Indenture.
Section 10.05 Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, on or
before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary of the Company shown to be due on any return of the Company or any
Subsidiary of the Company or otherwise assessed or upon the income, profits or
property of the Company or any Subsidiary of the Company if failure to pay or
discharge the same could reasonably be expected to have a material adverse
effect on the ability of the Company or any Guarantor to perform its obligations
hereunder and (b) all lawful claims for labor, materials and supplies, which, if
unpaid, would by law become a Lien upon the property of the Company or any
Subsidiary of the Company, except for any Lien permitted to be incurred under
Section 10.12 if failure to pay or discharge the same could reasonably be
expected to have a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations hereunder; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate proceedings properly
instituted and diligently conducted and in respect
70
of which appropriate reserves (in the good faith judgment of management of the
Company) are being maintained in accordance with GAAP.
Section 10.06 Maintenance of Properties.
The Company will cause all material properties owned by the Company or any
Subsidiary of the Company or used or held for use in the conduct of its business
or the business of any Subsidiary to be maintained and kept in good condition,
repair and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be consistent with sound business practice and necessary so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times; provided, however, that nothing in this
Section shall prevent the Company from discontinuing the maintenance of any of
such properties if such discontinuance is, in the judgment of the Company,
desirable in the conduct of its business or the business of any Subsidiary of
the Company and not reasonably expected to have a material adverse effect on the
ability of the Company to perform its obligations hereunder.
Section 10.07 Insurance.
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
Section 10.08 Limitation on Indebtedness.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create, incur, assume or directly or indirectly guarantee or in
any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Indebtedness), except that the Company may
incur Indebtedness and a Restricted Subsidiary Guarantor may incur Permitted
Subsidiary Indebtedness if, in each case, the Debt to Operating Cash Flow Ratio
of the Company and its Restricted Subsidiaries at the time of the incurrence of
such Indebtedness, after giving pro forma effect thereto, is 7.0:1 or less.
(b) The foregoing limitation will not apply to the incurrence of any of
the following (collectively, "Permitted Indebtedness"):
(i) Indebtedness of the Company incurred pursuant to the Bank Credit
Agreement in an aggregate principal amount which, when taken together with
the amount of all Indebtedness incurred by the Company pursuant to this
clause (i) and then outstanding, does not exceed $75,000,000;
(ii) Indebtedness of the Company pursuant to the Securities (other
than Additional Securities issued pursuant to this Indenture) and
Indebtedness of any Restricted Subsidiary Guarantor pursuant to a
Guarantee;
(iii) Indebtedness of any Restricted Subsidiary Guarantor consisting
of a guarantee of the Company's Indebtedness under the Bank Credit
Agreement;
(iv) Indebtedness of the Company or any of its Restricted
Subsidiaries outstanding on the date of this Indenture and listed on
Schedule I hereto;
(v) Indebtedness of the Company owing to a Restricted Subsidiary of
the Company; provided that any Indebtedness of the Company owing to a
Restricted Subsidiary of the Company that is not a Guarantor is made
pursuant to an intercompany note in the form attached to this Indenture as
Exhibit A 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
71
Subsidiary of the Company or a pledge to or for the benefit of the lenders
under the Bank Credit Agreement) shall be deemed to be an incurrence of
such Indebtedness by the obligor not permitted by this clause (v);
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary of the
Company owing to the Company or another Wholly Owned Restricted Subsidiary
of the Company; provided that, with respect to Indebtedness owing to a
Wholly Owned Restricted Subsidiary of the Company that is not a Guarantor,
(x) any such Indebtedness is made pursuant to an intercompany note in the
form attached to this Indenture as Exhibit A and (y) any such Indebtedness
shall be subordinated in right of payment from and after such time as the
obligations under the Guarantee, if any, by such Wholly Owned Restricted
Subsidiary shall become due and payable to the payment and performance of
such Wholly Owned Restricted Subsidiary's obligations under its Guarantee;
provided further that (a) any disposition, pledge or transfer of any such
Indebtedness to a Person (other than a disposition, pledge or transfer to
the Company or a Wholly Owned Restricted Subsidiary of the Company or
pledge to or for the benefit of the lenders under the Bank Credit
Agreement) shall be deemed to be an incurrence of such Indebtedness by the
obligor not permitted by this clause (vi) and (b) any transaction pursuant
to which any Wholly Owned Restricted Subsidiary of the Company, which has
Indebtedness owing to the Company or any other Wholly Owned Restricted
Subsidiary of the Company, ceases to be a Wholly Owned Restricted
Subsidiary of the Company shall be deemed to be the incurrence of
Indebtedness by such Wholly Owned Restricted Subsidiary that is not
permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance
with the provisions of Section 10.14;
(viii) obligations of the Company entered into in the ordinary
course of business pursuant to Interest Rate Agreements in respect of
Indebtedness of the Company as long as such obligations at the time
incurred do not exceed the aggregate principal amount of such Indebtedness
then outstanding or in good faith anticipated to be outstanding within 90
days of such incurrence;
(ix) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any
Indebtedness described in clauses (ii), (iii), (iv) and (v) above,
including any successive refinancings so long as the aggregate principal
amount of Indebtedness represented thereby is not increased by such
refinancing (except, in the case of Guarantees under clause (iii), which
Guarantees do not exceed the aggregate principal amount of the Bank Credit
Agreement) plus the lesser of (I) the stated amount of any premium or
other payment required to be paid in connection with such a refinancing
pursuant to the terms of the Indebtedness being refinanced or (II) the
amount of premium or other payment actually paid at such time to refinance
the Indebtedness, plus, in either case, the amount of expenses of the
Company incurred in connection with such refinancing and, in the case of
Pari Passu Indebtedness or Subordinated Indebtedness, such refinancing
does not reduce the Average Life to Stated Maturity or the Stated Maturity
of such Indebtedness;
(x) the guarantee by the Company or any Restricted Subsidiary
Guarantor of Indebtedness of the Company or a Restricted Subsidiary of the
Company that was permitted to be incurred pursuant to another provision of
this 10.08; and
(xi) Indebtedness of the Company in addition to that described in
clauses (i) through (x) above, and any renewals, extensions,
substitutions, refinancings, or replacements of such Indebtedness, so long
as the aggregate principal amount of all such Indebtedness shall not
exceed $5,000,000.
For purposes of determining compliance with this Section 10.08, in the
event that an item of Indebtedness meets the criteria of more than one of the
categories of Permitted Indebtedness described in clauses (i) through (xi) above
or is entitled to be incurred pursuant to Section 10.08(a), the Company shall,
in its sole discretion, classify (or later reclassify) such item of Indebtedness
in any manner that complies with this Section 10.08. Accrual of interest,
accretion or amortization of original issue discount and the payment of interest
in the form of additional Indebtedness will not be deemed to be an incurrence of
Indebtedness for purposes of this Section 10.08.
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Section 10.09 Limitation on Restricted Payments.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to
holders of, any of the Company's Equity Interests (other than dividends or
distributions payable solely in its Qualified Equity Interests);
(ii) purchase, redeem or otherwise acquire or retire for value,
directly or indirectly, any Equity Interest of the Company or any
Affiliate thereof (except Equity Interests held by the Company or any of
its Wholly Owned Restricted Subsidiaries);
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund or maturity, any Subordinated Indebtedness of the
Company or such Restricted Subsidiary;
(iv) declare or pay any dividend or distribution on any Equity
Interests of any Subsidiary to any Person (other than the Company or any
of its Wholly Owned Restricted Subsidiaries);
(v) incur, create or assume any guarantee of Indebtedness of any
Affiliate (other than a Wholly Owned Restricted Subsidiary of the
Company); or
(vi) make any Investment in any Person (other than any Permitted
Investments);
(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution): (1) no Default or Event of Default shall have
occurred and be continuing and such Restricted Payment shall not be an event
which is, or after notice or lapse of time or both, would be, an "event of
default" under the terms of any Indebtedness of the Company or its Restricted
Subsidiaries; and (2) the aggregate amount of all such Restricted Payments
declared or made (x) by Parent after September 25, 1997 to but not including the
Succession Date (references to the "Company" in the foregoing clauses (i)
through (vi) being deemed to refer to Parent for purposes of calculating the
amount of such payments declared or made during such period by Parent) and (y)
by the Company from and including the Succession Date, does not exceed the sum
of:
(A) an amount equal to Cumulative Operating Cash Flow less 1.4 times
Cumulative Consolidated Interest Expense and
(B) the aggregate amount of (x) Parent Equity Sale Proceeds plus (y)
the aggregate amount of Net Cash Proceeds received by the Company after
the Succession Date from capital contributions (other than from a
Subsidiary) or from the issuance or sale (other than to any of its
Subsidiaries) of its Qualified Equity Interests (except, in each case, to
the extent such proceeds are used to purchase, redeem or otherwise retire
Equity Interests or Subordinated Indebtedness as set forth below).
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through
(v) below, so long as there is no Default or Event of Default continuing, the
foregoing provisions shall not prohibit the following actions (clauses (i)
through (v) being referred to as "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would be
permitted by the provisions of paragraph (a) of this Section and such
payment shall be deemed to have been paid on such date of declaration for
purposes of the calculation required by paragraph (a) of this Section;
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(ii) any transaction with an officer or director of the Company
entered into in the ordinary course of business (including compensation or
employee benefit arrangements with any officer or director of the
Company);
(iii) the repurchase, redemption, or other acquisition or retirement
of any Equity Interests of the Company in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege
pursuant to which cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of, a substantially
concurrent issuance and sale for cash (other than to a Subsidiary) of
other Qualified Equity Interests of the Company; provided that the Net
Cash Proceeds from the issuance of such Qualified Equity Interests are
excluded from clause (2)(B) of paragraph (a) of this Section;
(iv) any repurchase, redemption, defeasance, retirement, refinancing
or acquisition for value or payment of principal of any Subordinated
Indebtedness in exchange for, or out of the Net Cash Proceeds of, a
substantially concurrent issuance and sale for cash (other than to any
Subsidiary of the Company) of any Qualified Equity Interests of the
Company, provided that the Net Cash Proceeds from the issuance of such
shares of Qualified Equity Interests are excluded from clause (2)(B) of
paragraph (a) of this Section; and
(v) the repurchase, redemption, defeasance, retirement, refinancing
or acquisition for value or payment of principal of any Subordinated
Indebtedness (other than Disqualified Equity Interests) (a "refinancing")
through the issuance of new Subordinated Indebtedness of the Company, as
the case may be, provided that any such new Indebtedness (1) shall be in a
principal amount that does not exceed the principal amount so refinanced
or, if such Subordinated Indebtedness provides for an amount less than the
principal amount thereof to be due and payable upon a declaration or
acceleration thereof, then such lesser amount as of the date of
determination), plus the lesser of (I) the stated amount of any premium,
interest or other payment required to be paid in connection with such a
refinancing pursuant to the terms of the Indebtedness being refinanced or
(II) the amount of premium, interest or other payment actually paid at
such time to refinance the Indebtedness, plus, in either case, the amount
of expenses of the Company incurred in connection with such refinancing;
(2) has an Average Life to Stated Maturity greater than the remaining
Average Life to Stated Maturity of the Securities; (3) has a Stated
Maturity for its final scheduled principal payment later than the Stated
Maturity for the final scheduled principal payment of the Securities; and
(4) is expressly subordinated in right of payment to the Securities at
least to the same extent as the Indebtedness to be refinanced.
Section 10.10 Limitation on Transactions with Affiliates.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company (other than the Company or a Wholly Owned Restricted
Subsidiary of the Company) unless (a) such transaction or series of transactions
is in writing on terms that are no less favorable to the Company or such
Restricted Subsidiary, as the case may be, than would be available in a
comparable transaction in arm's length dealings with an unrelated third party
and (b)(i) with respect to any transaction or series of transactions involving
aggregate payments in excess of $1,000,000, the Company delivers an Officers'
Certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (a) above and such transaction or series of
related transactions has been approved by a majority of the members of the Board
of Directors of the Company (and approved by a majority of Independent Directors
or, in the event there is only one Independent Director, by such Independent
Director) and (ii) with respect to any transaction or series of transactions
involving aggregate payments in excess of $5,000,000, an opinion as to the
fairness to the Company or such Restricted Subsidiary from a financial point of
view issued by an investment banking firm of national standing. Notwithstanding
the foregoing, this provision will not apply to (A) any transaction with an
officer or director of the Company entered into in the ordinary course of
business (including compensation or employee benefit arrangements with any
officer or director of the Company), (B) any transaction entered into by the
Company or one of its Wholly Owned Restricted Subsidiaries with a Wholly Owned
Restricted Subsidiary of the Company, (C) transactions in existence on the date
of this Indenture and any renewal, replacement or extension thereof on
substantially similar terms and (D) any Permitted Payment.
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Section 10.11 Limitation on Senior Subordinated Indebtedness.
The Company and Parent shall not, and shall not permit any Restricted
Subsidiary Guarantor or any Parent Subsidiary Guarantor, as the case may be, to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise in
any manner become directly or indirectly liable for or with respect to or
otherwise permit to exist any Indebtedness that is subordinated in right of
payment, by contract or otherwise, to any Indebtedness of the Company, Parent,
or such Guarantor, as the case may be, unless such Indebtedness is also pari
passu with the Securities or the Guarantee of such Guarantor, or subordinate in
right of payment to the Securities or such Guarantee to at least the same extent
as the Securities or such Guarantee are subordinate in right of payment to
Senior Indebtedness or Guarantor Senior Indebtedness, as the case may be, as set
forth in this Indenture.
Section 10.12 Limitation on Liens.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create, incur, affirm or suffer to
exist any Lien of any kind upon any of its property or assets (including any
intercompany notes), now owned or acquired after the date of this Indenture, or
any income or profits therefrom, except if the Securities are directly secured
equally and ratably with (or prior to in the case of Liens with respect to
Subordinated Indebtedness) the obligation or liability secured by such Lien,
excluding, however, from the operation of the foregoing any of the following:
(a) any Lien existing as of the date of this Indenture;
(b) any Lien arising by reason of (i) any judgment, decree or order of any
court, so long as such Lien is adequately bonded and any appropriate legal
proceedings which may have been duly initiated for the review of such judgment,
decree or order shall not have been finally terminated or the period within
which such proceedings may be initiated shall not have expired; (ii) taxes,
assessments or other governmental charges not yet delinquent or which are being
contested in good faith; (iii) security for payment of workers' compensation or
other insurance; (iv) good faith deposits in connection with tenders, leases and
contracts (other than contracts for the payment of money); (v) zoning
restrictions, easements, licenses, reservations, provisions, covenants,
conditions, waivers, restrictions on the use of property or minor irregularities
of title (and with respect to leasehold interests, mortgages, obligations, liens
and other encumbrances incurred, created, assumed or permitted to exist and
arising by, through or under a landlord or owner of the leased property, with or
without consent of the lessee), none of which materially impairs the use of any
parcel of property material to the operation of the business of the Company or
any of its Subsidiaries or the value of such property for the purpose of such
business; (vi) deposits to secure public or statutory obligations, or in lieu of
surety or appeal bonds; (vii) certain surveys, exceptions, title defects,
encumbrances, easements, reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph or telephone lines and other similar
purposes or zoning or other restrictions as to the use of real property not
interfering with the ordinary conduct of the business of the Company or any of
its Subsidiaries; or (viii) operation of law in favor of mechanics, materialmen,
laborers, employees or suppliers, incurred in the ordinary course of business
for sums which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection thereof;
(c) any Lien now or hereafter existing on property of the Company or any
of its Restricted Subsidiaries securing Senior Indebtedness or Guarantor Senior
Indebtedness, in each case which Indebtedness is permitted under the provisions
of Section 10.08 and provided that the provisions of Section 10.14 are complied
with;
(d) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with or in contemplation of) the incurrence of such
Indebtedness by the Company or any of its Subsidiaries, in each case which
Indebtedness is permitted under the provisions of Section 10.08; provided that
any such Lien only extends to the assets that were subject to such Lien securing
such Acquired Indebtedness prior to the related transaction by the Company or
its Subsidiaries;
(e) any Lien securing Permitted Subsidiary Indebtedness; and
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(f) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clauses (a) through (e) so long as
the amount of security is not increased thereby.
Section 10.13 Limitation on Sale of Assets.
(a) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, consummate an Asset Sale unless (i) at
least 80% of the consideration from such Asset Sale is received in cash,
provided that (x) the amount of liabilities (excluding any contingent
liabilities) assumed by the transferee or (y) any notes or other obligations
received by the Company or such Restricted Subsidiary and converted into cash
within 90 days following the receipt thereof shall be deemed to be "cash," and
(ii) the Company or such Restricted Subsidiary receives consideration at the
time of such Asset Sale at least equal to the Fair Market Value of the shares or
assets sold (other than in the case of an involuntary Asset Sale, as determined
by the Board of Directors of the Company and evidenced in a Board Resolution).
(b) If all or a portion of the Net Cash Proceeds of any Asset Sale are not
required to be applied to repay permanently any Senior Indebtedness then
outstanding as required by the terms thereof, or the Company determines not to
apply such Net Cash Proceeds to the permanent prepayment of such Senior
Indebtedness or if no such Senior Indebtedness is then outstanding, then the
Company may, within 12 months of the Asset Sale, invest the Net Cash Proceeds in
properties and assets that (as determined by the Board of Directors) replace the
properties and assets that were the subject of the Asset Sale or in properties
and assets that will be used in the businesses of the Company or its Restricted
Subsidiaries existing on the date of this Indenture or reasonably related
thereto. The amount of such Net Cash Proceeds neither used to permanently repay
or prepay Senior Indebtedness nor used or invested as set forth in this
paragraph constitutes "Excess Proceeds."
(c) When the aggregate amount of Excess Proceeds equals $5,000,000 or
more, the Company shall apply the Excess Proceeds to the repayment of the
Securities and any Pari Passu Indebtedness required to be repurchased under the
instrument governing such Pari Passu Indebtedness as follows: (1) the Company
shall make an offer to purchase (an "Offer") from all Holders of the Securities
in accordance with the procedures set forth in this Indenture in the maximum
principal amount (expressed as a multiple of $1,000) of Securities that may be
purchased out of an amount (the "Security Amount") equal to the product of such
Excess Proceeds (less any amounts used to pay reasonable fees and expenses
connected with such Offer and any Pari Passu Offer) multiplied by a fraction,
the numerator of which is the outstanding principal amount of the Securities,
and the denominator of which is the sum of the outstanding principal amount of
the Securities and such Pari Passu Indebtedness (subject to proration in the
event such amount is less than the aggregate Offered Price of all Securities
tendered) and (2) to the extent required by such Pari Passu Indebtedness to
permanently reduce the principal amount of such Pari Passu Indebtedness, the
Company shall make an offer to purchase or otherwise repurchase or redeem Pari
Passu Indebtedness (a "Pari Passu Offer") in an amount (the "Pari Passu Debt
Amount") equal to the excess of the Excess Proceeds (less any amounts used to
pay reasonable fees and expenses connected with such Offer and any Pari Passu
Offer) over the Security Amount; provided that in no event shall the Pari Passu
Debt Amount exceed the principal amount of such Pari Passu Indebtedness plus the
amount of any premium required to be paid to repurchase such Pari Passu
Indebtedness. The offer price shall be payable in cash in an amount equal to
100% of the principal amount of the Securities plus accrued and unpaid interest,
if any, to the date (the "Offer Date") such Offer is consummated (the "Offered
Price"), in accordance with the procedures set forth in this Indenture. To the
extent that the aggregate Offered Price of the Securities tendered pursuant to
the Offer is less than the Security Amount relating thereto or the aggregate
amount of Pari Passu Indebtedness that is purchased is less than the Pari Passu
Debt Amount (the amount of such shortfall, if any, constituting a "Deficiency"),
the Company shall use such Deficiency in the business of the Company and its
Restricted Subsidiaries. Upon completion of the purchase of all the Securities
tendered pursuant to an Offer and repurchase of the Pari Passu Indebtedness
pursuant to a Pari Passu Offer, the amount of Excess Proceeds, if any, shall be
reset at zero.
(d) Pending the final application of any Net Cash Proceeds, the Company
may temporarily reduce revolving credit borrowings or otherwise invest such Net
Cash Proceeds in any manner that is not prohibited by this Indenture.
(e) If the Company becomes obligated to make an Offer pursuant to clause
(c) above, the Securities shall be purchased by the Company, at the option of
the Holder thereof, in whole or in part, in integral multiples of
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$1,000, on a date that is not earlier than 45 days and not later than 60 days
from the date the notice is given to Holders, subject to proration in the event
the Security Amount is less than the aggregate Offered Price of all Securities
tendered.
(f) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer. To the extent that the
provisions of any securities laws or regulations conflict with the provisions of
the covenant described hereunder, the Company shall comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations under this Section 10.13 by virtue thereof.
(g) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any restriction
(other than restrictions existing under (i) Indebtedness as in effect on the
date of this Indenture and listed on Schedule I hereto as such Indebtedness may
be refinanced from time to time, provided that such restrictions are no less
favorable to the Holders of the Securities than those existing on the date of
this Indenture or (ii) any Senior Indebtedness and any Guarantor Senior
Indebtedness) that would materially impair the ability of the Company to make an
Offer to purchase the Securities or, if such Offer is made, to pay for the
Securities tendered for purchase.
(h) Subject to paragraph (f) above, within 30 days after the date on which
the amount of Excess Proceeds equals or exceeds $5,000,000, the Company shall
send or cause to be sent by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Securities, at his address appearing in the Security
Register, a notice stating or including:
(1) that the Holder has the right to require the Company to
repurchase, subject to proration, such Holder's Securities at the Offered
Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to have its
Securities purchased in accordance with paragraph (c) of this Section; and
(4) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company (or
Parent, as the case may be pursuant to Section 10.20), the most recent
subsequently filed Quarterly Report on Form 10-Q and any Current Report on
Form 8-K of the Company (or Parent, as the case may be pursuant to Section
10.20) filed subsequent to such Quarterly Report, other than Current
Reports describing Asset Sales otherwise described in the offering
materials (or corresponding successor reports) (or in the event neither
the Company nor Parent is required to prepare any of the foregoing forms,
the comparable information required pursuant to Section 10.20), (ii) a
description of material developments in the Company's business subsequent
to the date of the latest of such Reports, (iii) if material, appropriate
pro forma financial information, and (iv) such other information. if any,
concerning the business of the Company which the Company in good faith
believes will enable such Holders to make an informed investment decision.
(i) Holders electing to have Securities purchased hereunder will be
required to surrender such Securities at the address specified in the notice at
least three Business Days prior to the Offer Date. Holders will be entitled to
withdraw their election to have their Securities purchased pursuant to this
Section 10.13 if the Company receives, not later than three Business Days prior
to the Offer Date, a facsimile transmission or letter setting forth (1) the name
of the Holder, (2) the certificate number of the Security in respect of which
such notice of withdrawal is being submitted, (3) the principal amount of the
Security (which shall be $1,000 or an integral multiple thereof) delivered for
purchase by the Holder as to which his election is to be withdrawn, (4) a
statement that such Holder is withdrawing his election to have such principal
amount of such Security purchased, and (5) the principal amount, if any, of such
Security (which shall be $1,000 or an integral multiple thereof) that remains
subject to the original notice of the Offer and that has been or will be
delivered for purchase by the Company.
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(j) The Company shall (i) not later than the Offer Date, accept for
payment Securities or portions thereof tendered pursuant to the Offer, (ii) not
later than 10:00 a.m. (New York City time) on the Offer Date, deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 10.03) an amount of
money in same day funds (or New York Clearing House funds if such deposit is
made prior to the Offer Date) sufficient to pay the aggregate Offered Price of
all the Securities or portions thereof that are to be purchased on that date and
(iii) not later than the Offer Date, deliver to the Paying Agent (if other than
the Company) an Officers' Certificate stating the Securities or portions thereof
accepted for payment by the Company.
Subject to applicable escheat laws, as provided in the Securities, the
Trustee and the Paying Agent shall return to the Company any cash that remains
unclaimed, together with interest, if any, thereon, held by them for the payment
of the Offered Price; provided, however, that (x) to the extent that the
aggregate amount of cash deposited by the Company with the Trustee in respect of
an Offer exceeds the aggregate Offered Price of the Securities or portions
thereof to be purchased, the Trustee shall hold such excess for the Company and
(y) unless otherwise directed by the Company in writing, promptly after the
Business Day following the Offer Date the Trustee shall return any such excess
to the Company together with interest or dividends, if any, thereon.
(k) Securities to be purchased shall, on the Offer Date, become due and
payable at the Offered Price and from and after such date (unless the Company
shall default in the payment of the Offered Price) such Securities shall cease
to bear interest. Such Offered Price shall be paid to such Holder promptly
following the later of the Offer Date and the time of delivery of such Security
to the relevant Paying Agent at the office of such Paying Agent by the Holder
thereof in the manner required. Upon surrender of any such Security for purchase
in accordance with the foregoing provisions, such Security shall be paid by the
Company at the Offered Price; provided, however, that installments of interest
whose Stated Maturity is on or prior to the Offer Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 3.09; provided, further, that Securities to be purchased
are subject to proration in the event the Excess Proceeds are less than the
aggregate Offered Price of all Securities tendered for purchase, with such
adjustments as may be appropriate by the Trustee so that only Securities in
denominations of $1,000 or integral multiples thereof, shall be purchased. If
any Security tendered for purchase shall not be so paid upon surrender thereof
by deposit of funds with the Trustee or a Paying Agent in accordance with
paragraph (j) above, the principal thereof shall, until paid, bear interest from
the Offer Date at the rate borne by such Security. Any Security that is to be
purchased only in part shall be surrendered to a Paying Agent at the office of
such Paying Agent (with, if the Company, the Security Registrar or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Security Registrar or the Trustee duly
executed by, the Holder thereof or such Holder's attorney duly authorized in
writing), and the Company shall execute and the Trustee shall authenticate and
deliver to the Holder of such Security, without service charge, one or more new
Securities of any authorized denomination as requested by such Holder in an
aggregate principal amount equal to, and in exchange for, the portion of the
principal amount of the Security so surrendered that is not purchased.
Section 10.14 Limitation on Issuances of Guarantees of and Pledges for
Indebtedness.
(a) The Company shall not permit any of its Restricted Subsidiaries, other
than the Restricted Subsidiary Guarantors, directly or indirectly, to secure the
payment of any Senior Indebtedness of the Company and the Company will not, and
will not permit any of its Restricted Subsidiaries to, pledge any intercompany
notes representing obligations of any of its Restricted Subsidiaries (other than
the Restricted Subsidiary Guarantors) to secure the payment of any Senior
Indebtedness unless in each case such Restricted Subsidiary simultaneously
executes and delivers a supplemental indenture to this Indenture providing for a
guarantee of payment of the Securities by such Restricted Subsidiary, which
guarantee shall be on the same terms as the guarantee of the Senior Indebtedness
(if a guarantee of Senior Indebtedness is granted by such Restricted Subsidiary)
except that the guarantee of the Securities need not be secured and shall be
subordinated to the claims against such Restricted Subsidiary in respect of
Senior Indebtedness to the same extent as the Securities are subordinated to
Senior Indebtedness of the Company under this Indenture.
(b) The Company shall not permit any of its Restricted Subsidiaries, other
than the Restricted Subsidiary Guarantors, directly or indirectly, to guarantee,
assume or in any other manner become liable with respect to any Indebtedness of
the Company (other than guarantees in existence on the date of this Indenture)
unless
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such Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to this Indenture providing for a guarantee of the Securities on the
same terms as the guarantee of such Indebtedness except that, if the Securities
are subordinated in right of payment to such Indebtedness, the guarantee under
the supplemental indenture shall be subordinated to the guarantee of such
Indebtedness to the same extent as the Securities are subordinated to such
Indebtedness under this Indenture.
(c) Parent will not, and will not permit any of its Subsidiaries (other
than the Company and the Company's Restricted Subsidiaries, which shall be
subject to the foregoing clauses (a) and (b)), other than the Parent Subsidiary
Guarantors, directly or indirectly, to guarantee, assume or in any other manner
become liable with respect to any Indebtedness of the Company (other than
guarantees in existence on the date of this Indenture) unless Parent or such
Subsidiary, as the case may be, simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a guarantee of the
Securities on the same terms as the guarantee of such Indebtedness, except that
if the Securities are subordinated in right of payment to such Indebtedness, the
guarantee under the supplemental indenture shall be subordinated to the
guarantee of such Indebtedness to the same extent as the Securities are
subordinated to such Indebtedness under this Indenture.
(d) Any Guarantee by any Restricted Subsidiary Guarantor or by any Parent
Subsidiary Guarantor shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of Parent, of all of the Company's or Parent's, as the case may be,
direct or indirect Equity Interest in, or all or substantially all the assets
of, such Restricted Subsidiary Guarantor or such Parent Subsidiary Guarantor, as
the case may be, which is in compliance with this Indenture or (ii) the release
by the holders of the Indebtedness of the Company described in clauses (a), (b)
and (c) above of their security interest or their guarantee by such Restricted
Subsidiary Guarantor or by such Parent Subsidiary Guarantor, as the case may be,
including any deemed release upon payment in full of all obligations under such
Indebtedness, at a time when (A) no other Indebtedness of the Company has been
secured or guaranteed by such Restricted Subsidiary Guarantor or such Parent
Subsidiary Guarantor, as the case may be, or (B) the holders of all such other
Indebtedness which is secured or guaranteed by such Restricted Subsidiary
Guarantor or such Parent Subsidiary Guarantor, as the case may be, also release
their security interest in, or guarantee by, such Restricted Subsidiary
Guarantor or such Parent Subsidiary Guarantor (including any deemed release upon
payment in full of all obligations under such Indebtedness).
Section 10.15 Restriction on Transfer of Assets.
The Company and the Restricted Subsidiary Guarantors shall not sell,
convey, transfer or otherwise dispose of their respective assets or property to
any of the Company's Restricted Subsidiaries (other than any Restricted
Subsidiary Guarantor), except for sales, conveyances, transfers or other
dispositions made in the ordinary course of business. For purposes of this
provision, any sale, conveyance, transfer, lease or other disposition of
property or assets, having a Fair Market Value in excess of (a) $1,000,000 for
any sale, conveyance, transfer, lease or disposition or series of related sales,
conveyances, transfers, leases and dispositions and (b) $5,000,000 in the
aggregate for all such sales, conveyances, transfers, leases or dispositions in
any fiscal year of the Company shall not be considered "in the ordinary course
of business"; provided that sales by the Company of block program time and spot
advertising shall not be deemed not to be "in the ordinary course of business"
solely because of the dollar value of such sales.
Section 10.16 Purchase of Securities upon a Change of Control.
(a) If a Change of Control shall occur at any time, then each Holder of
Securities shall have the right to require that the Company purchase such
Holder's Securities in whole or in part in integral multiples of $1,000, at a
purchase price (the "Change of Control Purchase Price") in cash in an amount
equal to 101% of the principal amount of such Securities, plus accrued and
unpaid interest, if any, to the date of purchase (the "Change of Control
Purchase Date"), pursuant to the offer described in Subsection (c) of this
Section (the "Change of Control Offer") and in accordance with the procedures
set forth in Subsections (b), (c), (d) and (e) of this Section.
(b) Within 30 days following any Change of Control, the Company shall
notify the Trustee thereof and give written notice (a "Change of Control
Purchase Notice") of such Change of Control to each Holder by first-class mail,
postage prepaid, at his address appearing in the Security Register stating or
including:
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(1) that a Change of Control has occurred, the date of such event,
and that such Holder has the right to require the Company to repurchase
such Holder's Securities at the Change of Control Purchase Price;
(2) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical income, cash flow and capitalization after giving effect
to such Change of Control);
(3) (i) the most recently filed Annual Report on Form 10-K
(including audited consolidated financial statements) of the Company (or
Parent, as the case may be pursuant to Section 10.20), the most recent
subsequently filed Quarterly Report on Form 10-Q, as applicable, and any
Current Report on Form 8-K of the Company (or Parent, as the case may be
pursuant to Section 10.20) filed subsequent to such Quarterly Report (or
in the event neither the Company nor Parent is required to prepare any of
the foregoing Forms, the comparable information required pursuant to
Section 10.20), (ii) a description of material developments in the
Company's business subsequent to the date of the latest of such reports
and (iii) such other information, if any, concerning the business of the
Company that the Company in good faith believes will enable such Holders
to make an informed investment decision;
(4) that the Change of Control Offer is being made pursuant to this
Section 10.16(a) and that all Securities property tendered pursuant to the
Change of Control Offer will be accepted for payment at the Change of
Control Purchase Price;
(5) the Change of Control Purchase Date which shall be a Business
Day no earlier than 30 days nor later than 60 days from the date such
notice is mailed, or such later date as is necessary to comply with
requirements under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and the offices or
agencies referred to in Section 10.02;
(8) that Securities must be surrendered on or prior to the Change of
Control Purchase Date to the Paying Agent at the office of the Paying
Agent or to an office or agency referred to in Section 10.02 to collect
payment;
(9) that the Change of Control Purchase Price for any Security which
has been properly tendered and not withdrawn will be paid promptly
following the Change of Control Offer Purchase Date;
(10) the procedures for withdrawing a tender of Securities and
Change of Control Purchase Notice;
(11) that any Security not tendered will continue to accrue
interest; and
(12) that, unless the Company defaults in the payment of the Change
of Control Purchase Price, any Security accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the
Change of Control Purchase Date.
(c) Upon receipt by the Company of the proper tender of Securities, the
Holder of the Security in respect of which such proper tender was made shall
(unless the tender of such Security is properly withdrawn) thereafter be
entitled to receive solely the Change of Control Purchase Price with respect to
such Security. Upon surrender of any such Security for purchase in accordance
with the foregoing provisions, such Security shall be paid by the Company at the
Change of Control Purchase Price; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Change of Control Purchase
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 3.09. If any Security
tendered for purchase shall not be so paid upon
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surrender thereof, the principal thereof (and premium, if any, thereon) shall,
until paid, bear interest from the Change of Control Purchase Date at the rate
borne by such Security. Holders electing to have Securities purchased will be
required to surrender such Securities to the Paying Agent at the address
specified in the Change of Control Purchase Notice at least two Business Days
prior to the Change of Control Purchase Date. Any Security that is to be
purchased only in part shall be surrendered to a Paying Agent at the office of
such Paying Agent (with, if the Company, the Security Registrar or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Security Registrar or the Trustee, as the
case may be, duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute and the Trustee shall
authenticate and deliver to the Holder of such Security, without service charge,
one or more new Securities of any authorized denomination as requested by such
Holder in an aggregate principal amount equal to, and in exchange for, the
portion of the principal amount of the Security so surrendered that is not
purchased.
(d) The Company shall (i) not later than the Change of Control Purchase
Date, accept for payment Securities or portions thereof tendered pursuant to the
Change of Control Offer, (ii) not later than 10:00 a.m. (New York City time) on
the Change of Control Purchase Date, deposit with the Paying Agent an amount of
cash sufficient to pay the aggregate Change of Control Purchase Price of all the
Securities or portions thereof which are to be purchased as of the Change of
Control Purchase Date and (iii) not later than the Change of Control Purchase
Date, deliver to the Paying Agent an Officers' Certificate stating the
Securities or portions thereof accepted for payment by the Company. The Paying
Agent shall promptly mail or deliver to Holders of Securities so accepted
payment in an amount equal to the Change of Control Purchase Price of the
Securities purchased from each such Holder, and the Company shall execute and
the Trustee shall promptly authenticate and mail or make available for delivery
to such Holders a new Security equal in principal amount to any unpurchased
portion of the Security surrendered. Any Securities not so accepted shall be
promptly returned by the Paying Agent at the Company's expense to the Holder
thereof. The Company will publicly announce the results of the Change of Control
Offer on the Change of Control Purchase Date. For purposes of this Section
10.16, the Company shall choose a Paying Agent which shall not be the Company.
(e) A Change of Control Purchase Notice may be withdrawn before or after
delivery by the Holder to the Paying Agent at the office of the Paying Agent of
the Security to which such Change of Control Purchase Notice relates, by means
of a written notice of withdrawal delivered by the Holder to the Paying Agent at
the office of the Paying Agent or to the office or agency referred to in Section
10.02 to which the related Change of Control Purchase Notice was delivered not
later than three Business Days prior to the Change of Control Purchase Date
specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Security in respect of which such
notice of withdrawal is being submitted;
(3) the principal amount of the Security (which shall be $1,000 or
an integral multiple thereof) delivered for purchase by the Holder as to
which such notice of withdrawal is being submitted; and
(4) the principal amount, if any, of such Security (which shall be
$1,000 or an integral multiple thereof) that remains subject to the
original Change of Control Purchase Notice and that has been or will be
delivered for purchase by the Company.
(f) Subject to applicable escheat laws, the Trustee and the Paying Agent
shall return to the Company any cash that remains unclaimed, together with
interest or dividends, if any, thereon, held by them for the payment of the
Change of Control Purchase Price; provided, however, that (x) to the extent that
the aggregate amount of cash deposited by the Company pursuant to clause (ii) of
paragraph (d) above exceeds the aggregate Change of Control Purchase Price of
the Securities or portions thereof to be purchased, then the Trustee shall hold
such excess for the Company and (y) unless otherwise directed by the Company in
writing, promptly after the Business Day following the Change of Control
Purchase Date the Trustee shall return any such excess to the Company together
with interest, if any, thereon.
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(g) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with a Change of Control Offer. To the extent
that the provisions of any securities laws or regulations conflict with the
provisions of the covenant described hereunder, the Company shall comply with
the applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section 10.16 by virtue thereof.
(h) The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any restriction
(other than restrictions existing under Indebtedness as in effect on the date of
this Indenture) that would materially impair the ability of the Company to make
a Change of Control Offer to purchase the Securities or, if such Change of
Control Offer is made, to pay for the Securities tendered for purchase.
Section 10.17 Limitation on Subsidiary Equity Interests.
The Company shall not permit any of its Restricted Subsidiaries to issue
any Equity Interests, except for (a) Equity Interests issued to and held by the
Company or a Wholly Owned Restricted Subsidiary of the Company, and (b) Equity
Interests issued by a Person prior to the time (A) such Person becomes a
Restricted Subsidiary of the Company, (B) such Person merges with or into a
Restricted Subsidiary of the Company or (C) a Restricted Subsidiary of the
Company merges with or into such Person; provided, that such Equity Interests
were not issued or incurred by such Person in anticipation of the type of
transaction contemplated by subclause (A), (B) or (C).
Section 10.18 Limitation on Dividends and Other Payment Restrictions
Affecting Subsidiaries.
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay dividends or make any other
distribution on its Equity Interests, (ii) pay any Indebtedness owed to the
Company or a Restricted Subsidiary of the Company, (iii) make any Investment in
the Company or a Restricted Subsidiary of the Company or (iv) transfer any of
its properties or assets to the Company or any Restricted Subsidiary of the
Company, except (a) any encumbrance or restriction pursuant to an agreement in
effect on the date of this Indenture; (b) any encumbrance or restriction, with
respect to a Restricted Subsidiary of the Company that is not a Subsidiary of
the Company on the date of this Indenture, in existence at the time such Person
becomes a Restricted Subsidiary of the Company and not incurred in connection
with, or in contemplation of, such Person becoming a Restricted Subsidiary; (c)
any encumbrance or restriction existing under any agreement that extends,
renews, refinances or replaces the agreements containing the encumbrances or
restrictions in the foregoing clauses (a) and (b), or in this clause (c),
provided that the terms and conditions of any such encumbrances or restrictions
are not materially less favorable to the Holders of the Securities than those
under or pursuant to the agreement evidencing the Indebtedness so extended,
renewed, refinanced or replaced or are not more restrictive than those set forth
in this Indenture; (d) any encumbrance or restriction created pursuant to an
asset sale agreement, stock sale agreement or similar instrument pursuant to
which an Asset Sale permitted under Section 10.13 is to be consummated, so long
as such restriction or encumbrance shall be effective only for a period from the
execution and delivery of such agreement or instrument through a termination
date not later than 270 days after such execution and delivery; (e) any such
encumbrance or restriction consisting of customary contractual non-assignment
provisions in a contract entered into in the ordinary course of business, to the
extent such provisions restrict the transfer of rights, duties or obligations
under such contract; (f) in the case of clause (iv) above, restrictions
contained in security agreements or mortgages securing Indebtedness of a
Restricted Subsidiary permitted to be incurred pursuant to Section 10.08 to the
extent such restrictions restrict the transfer of the property subject to such
security agreements or mortgages; and (g) any restriction imposed by applicable
law.
Section 10.19 Limitation on Unrestricted Subsidiaries.
The Company shall not make, and shall not permit any of its Restricted
Subsidiaries to make, any Investments in Unrestricted Subsidiaries if, at the
time thereof, the aggregate amount of such Investments would exceed the amount
of Restricted Payments then permitted to be made pursuant to Section 10.09. Any
Investments in Unrestricted Subsidiaries permitted to be made pursuant to this
covenant (i) will be treated as the payment of a Restricted Payment in
calculating the amount of Restricted Payments made by the Company and (ii) may
be made in cash or property.
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Section 10.20 Provision of Financial Statements.
Whether or not the Company is subject to Section 13(a) or 15(d) of the
Exchange Act, file with the Commission the annual reports, quarterly reports,
information and other documents which the Company would have been required to
file with the Commission pursuant to such Sections 13(a) or 15(d) if the Company
were so subject, such documents to be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject. The
Company will be deemed to have satisfied such requirements if Parent files and
provides reports, information and documents of the types otherwise so required
within the applicable time periods and the Company is not required to file such
reports, documents and information separately under the applicable rules and
regulations of the Commission (after giving effect to any exemptive relief)
because of the filings made by Parent as long as Parent's quarterly and annual
reports contain (x) separate audited annual and unaudited quarterly, as the case
may be, consolidated financial statements for the Company and its Subsidiaries
or (y) consolidating financial information which includes separate audited
annual and unaudited quarterly, as the case may be, condensed consolidated
financial information for the Company and its Subsidiaries. The Company will
also in any event (x) within 15 days of each Required Filing Date (i) transmit
by mail to all Holders, as their names and addresses appear in the Security
Register, without cost to such Holders, and (ii) file with the Trustee copies of
the annual reports, quarterly reports, information and other documents which the
Company would have been required to file with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act if the Company were subject to such Sections
(unless such documents are filed by Parent as provided above and such documents
are then so mailed to the Holders and filed with the Trustee), (y) if filing
such documents by the Company (or Parent, as the case may be) with the
Commission is not permitted under the Exchange Act, promptly upon written
request and payment of the reasonable cost of duplication and delivery, supply
copies of such documents to any prospective Holder at the Company's cost, and
(z) otherwise comply with Section 3.14(a) of the Trust Indenture Act. In
addition, if the Company has any Unrestricted Subsidiary at such time, it shall
also file with the Trustee, and provide to the Holders, on the same quarterly
basis, all quarterly and annual financial statements (which statements may be
unaudited) as would be required by Forms 10-Q and 10-K if such Subsidiary were
not an Unrestricted Subsidiaries.
Section 10.21 Statement by Officers as to Default.
(a) The Company will deliver to the Trustee, on or before a date not more
than 60 days after the end of each fiscal quarter and not more than 120 days
after the end of each fiscal year of the Company ending after the date hereof, a
written statement signed by two executive officers of the Company, one of whom
shall be the principal executive officer, principal financial officer or
principal accounting officer or the Company, stating whether or not, after a
review of the activities of the Company during such year or such quarter and of
the Company's performance under this Indenture, to the best knowledge, based on
such review, of the signers thereof, the Company has fulfilled all its
obligations and is in compliance with all conditions and covenants under this
Indenture throughout such year or quarter, as the case may be, and, if there has
been a Default specifying each Default and the nature and status thereof.
(b) When any Default or Event of Default has occurred and is continuing,
or if the Trustee or any Holder or the trustee for or the holder of any other
evidence of Indebtedness of the Company or any Subsidiary gives any notice or
takes any other action with respect to a claimed default (other than with
respect to Indebtedness in the principal amount of less than $5,000,000), the
Company shall deliver to the Trustee by registered or certified mail or by
telegram, overnight courier or facsimile transmission followed by hard copy an
Officers' Certificate specifying such Default, Event of Default, notice or other
action within five Business Days of its occurrence.
Section 10.22 Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.06 through 10.12, 10.14, 10.15
and 10.17 through 10.20, if, before or after the time for such compliance, the
Holders of not less than a majority in aggregate principal amount of the
Securities at the time Outstanding shall, by Act of such Holders, waive such
compliance in such instance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such covenant or
condition shall remain in full force and effect.
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Section 10.23 Limitation on Asset Swaps.
The Company will not, and will not permit any of its Restricted
Subsidiaries to, engage in Asset Swaps, unless: (i) at the time of entering into
such Asset Swap, and immediately after giving effect to such Asset Swap, no
Default or Event of Default shall have occurred and be continuing or would occur
as a consequence thereof; and (ii) the Company or such Restricted Subsidiary
receives consideration at the time of such Asset Swap at least equal to the Fair
Market Value of the properties or assets exchanged as determined in writing by a
nationally recognized investment banking or appraisal firm.
ARTICLE XI
REDEMPTION OF SECURITIES
Section 11.01 Rights of Redemption.
(a) The Securities may be redeemed at the election of the Company, in
whole or in part, at any time on or after December 15, 2007, 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 December 15, 2005, the Company may redeem
up to 35% of the aggregate principal amount of Securities with the net proceeds
of a Public Equity Offering of the Company subject to the conditions, and at the
Redemption Price, specified in the form of Security, together with accrued and
unpaid interest, if any, to the Redemption Date.
Section 11.02 Applicability of Article.
Redemption of Securities at the election of the Company or otherwise, as
permitted or required by any provision of this Indenture, shall be made in
accordance with such provision and this Article.
Section 11.03 Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to Section
11.01 shall be evidenced by a Company Order and an Officers' Certificate. In
case of any redemption at the election of the Company, the Company shall, not
less than 30 nor more than 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice period shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date and of the principal
amount of Securities to be redeemed.
Section 11.04 Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities or portions thereof to be redeemed shall be selected not more than 60
days and not less than 30 days prior to the Redemption Date by the Trustee from
the Outstanding Securities not previously called for redemption, pro rata, by
lot or such other method as the Trustee shall deem fair and reasonable, and the
amounts to be redeemed may be equal to $1,000 or any integral multiple thereof.
The Trustee shall promptly notify the Company and the Security Registrar
in writing of the Securities selected for redemption and, in the case of any
Securities selected for partial redemption, the principal amount thereof to be
redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to redemption of Securities shall relate, in the case of
any Security redeemed or to be redeemed only in part, to the portion of the
principal amount of such Security which has been or is to be redeemed.
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Section 11.05 Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price;
(c) if less than all Outstanding Securities are to be redeemed, the
identification of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the principal amount
of such Security to be redeemed and that after the Redemption Date upon
surrender of such Security, a new Security or Securities in the aggregate
principal amount equal to the unredeemed portion thereof will be issued;
(e) that Securities called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will become due and
payable upon each such Security or portion thereof, and that (unless the Company
shall default in payment of the Redemption Price) interest thereon shall cease
to accrue on and after said date;
(g) the place or places where such Securities are to be surrendered for
payment of the Redemption Price; and
(h) the CUSIP number, if any, relating to such Securities.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's written request, by
the Trustee in the name and at the expense of the Company.
The notice, if mailed in the manner herein provided, shall be conclusively
presumed to have been given whether or not the Holder receives such notice. In
any case, failure to give such notice to any Holder of any Security designated
for redemption as a whole or in part, or any defect in any such notice, shall
not affect the validity of the proceedings for the redemption of any other
Security.
Section 11.06 Deposit of Redemption Price.
On or prior to 10:00 a.m. (New York time) on any Redemption Date, the
Company shall deposit with the Trustee or with a Paying Agent (or, if the
Company is acting as its own Paying Agent, segregate and hold in trust as
provided in Section 10.03) an amount of money in same day funds sufficient to
pay the Redemption Price of and (except if the Redemption Date shall be an
Interest Payment Date) accrued interest on, all the Securities or portions
thereof which are to be redeemed on that date. When the Redemption Date falls on
an Interest Payment Date, payments of interest due on such date are to be paid
as provided hereunder as if no such redemption were occurring.
Section 11.07 Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price together with accrued interest to
the Redemption
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Date; provided, however, that installments of interest whose Stated Maturity is
on or prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 3.09.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal and premium, if any, shall, until paid,
bear interest from the Redemption Date at the rate borne by such Security.
Section 11.08 Securities Redeemed or Purchased in Part.
Any Security which is to be redeemed or purchased only in part shall be
surrendered to the Paying Agent at the office or agency maintained for such
purpose pursuant to Section 10.02 (with, if the Company, the Security Registrar
or the Trustee so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company, the Security Registrar or the
Trustee duly executed by, the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and make available delivery to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination as
requested by such Holder in aggregate principal amount equal to, and in exchange
for, the unredeemed portion of the principal of the Security so surrendered that
is not redeemed or purchased.
ARTICLE XII
SUBORDINATION OF SECURITIES
Section 12.01 Securities Subordinate to Senior Indebtedness.
The Company covenants and agrees, and each Holder of a Security, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Securities and the payment of the principal of, premium, if any, and
interest on each and all of the Securities and all other Indenture Obligations
are hereby expressly made subordinate and subject in right of payment as
provided in this Article to the prior payment in full, in cash or Cash
Equivalents or in any other form as acceptable to the holders of Senior
Indebtedness, of all Senior Indebtedness.
This Article Twelve shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
The Securities shall not be senior in right of payment to the Existing
Notes and shall be pari passu in right of payment with the Existing Notes.
Section 12.02 Payment Over of Proceeds Upon Dissolution, etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or in any other form as acceptable
to the holders of Senior Indebtedness, of all amounts due on or in respect of
all Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character (excluding
Permitted Junior Securities) on account of the principal of, premium, if any, or
interest on the Securities or any other Indenture Obligations; and
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(2) any payment or distribution of assets of the Company of any kind or
character, whether in cash, property or securities (excluding Permitted Junior
Securities), by set-off or otherwise, to which the Holders or the Trustee would
be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or Cash Equivalents or in any
other form as acceptable to the Holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of principal, premium, if
any, and interest on the Securities or any other Indenture Obligations before
all Senior Indebtedness is paid in full, then and in such event such payment or
distribution (excluding Permitted Junior Securities) shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or distribution of
assets of the Company for application to the payment of all Senior Indebtedness
remaining unpaid, to the extent necessary to pay all Senior Indebtedness in full
in cash or Cash Equivalents or in any other form as acceptable to the holders of
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company with
or into, another Person or the liquidation or dissolution of the Company
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of the Company's properties or assets to another Person
upon the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshaling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, comply with the conditions set forth in
Article Eight.
Section 12.03 Suspension of Payment When Senior Indebtedness in Default.
(a) Unless Section 12.02 shall be applicable, upon the occurrence of a
Payment Default, no payment (other than any payments previously made pursuant to
the provisions described in Article Four) or distribution of any assets of the
Company, of any, kind or character (excluding Permitted Junior Securities) shall
be made by the Company on account of principal of, premium, if any, or interest
on, the Securities or any other Indenture Obligations or on account of the
purchase, redemption, defeasance (whether under Section 4.02 or 4.03) or other
acquisition of or in respect of the Securities unless and until such Payment
Default shall have been cured or waived or shall have ceased to exist or the
Designated Senior Indebtedness with respect to which such Payment Default shall
have occurred shall have been discharged or paid in full in cash or Cash
Equivalents or in any other form as acceptable to the Holders of such Designated
Senior Indebtedness, after which the Company shall resume making any and all
required payments in respect of the Securities, including any missed payments.
(b) Unless Section 12.02 shall be applicable, upon (1) the occurrence
of a Nonpayment Default and (2) receipt by the Trustee from the representative
of the holders of Designated Senior Indebtedness (a "Senior Representative") of
written notice of such occurrence, no payment (other than any payments
previously made pursuant to the provisions described in Article Four) or
distribution of any assets of the Company of any kind or character (excluding
Permitted Junior Securities) shall be made by the Company on account of any
principal of, premium, if any, or interest on, the Securities or any other
Indenture Obligations or on account of the purchase, redemption, defeasance or
other acquisition of or in respect of Securities for a period ("Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice unless
and until the earliest of (subject to any blockage of payments that may then or
thereafter be in effect under subsection (a) of this Section 12.03) (x) 179 days
having elapsed since receipt of such written notice by the Trustee (provided
such Designated Senior Indebtedness as to which notice was given shall
theretofore have not been accelerated), (y) the date such
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Nonpayment Default (and all Non-payment Defaults as to which notice is also
given after such period is initiated) shall have been cured or waived or shall
have ceased to exist or the Designated Senior Indebtedness related thereto shall
have been discharged or paid in full in cash or Cash Equivalents or in any other
form as acceptable to the Holders of Designated Senior Indebtedness, or (z) the
date on which such Payment Blockage Period (and all Nonpayment Defaults as to
which notice is given after such Payment Blockage Period is initiated) shall
have been terminated by written notice to the Trustee from the Senior
Representative, after which, in each such case, the Company shall resume making
any and all required payments in respect of the Securities, including any missed
payments. Notwithstanding any other provision of this Indenture, in no event
shall a Payment Blockage Period extend beyond 179 days from the date of the
receipt by the Company or the Trustee of the notice referred to in clause (2) of
this paragraph (b) (the "Initial Blockage Period"). Any number of notices of
Non-payment Defaults may be given during the Initial Blockage Period; provided
that during any 365 day consecutive period only one Payment Blockage Period
during which payment of principal of, or interest on, the Securities may not be
made may commence and the duration of the Payment Blockage Period may not exceed
179 days. No Non-payment Default with respect to Designated Senior Indebtedness
which existed or was continuing on the date of the commencement of any Payment
Blockage Period will be, or can be, made the basis for the commencement of a
second Payment Blockage Period, whether or not within a period of 365
consecutive days, unless such default shall have been cured or waived for a
period of not less than 90 consecutive days.
(c) In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to a Senior Representative of the holders
of the Designated Senior Indebtedness or as a court of competent jurisdiction
shall direct.
Section 12.04 Payment Permitted if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any
other Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 12.02 or under the conditions
described in Section 12.03, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 12.05 Subrogation to Rights of Holders of Senior Indebtedness.
Subject to the payment in full of all Senior Indebtedness in cash or Cash
Equivalents or in any other form as acceptable to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Holders or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
Section 12.06 Provisions Solely to Define Relative Rights.
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding,
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dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 12.02, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or deliverable to the Trustee or such Holder, or (2) under the
conditions specified in Section 12.03, to prevent any payment prohibited by such
Section or enforce their rights pursuant to Section 12.03(c).
Section 12.07 Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding up, liquidation or reorganization of the
Company whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
Indebtedness of the Company owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
Section 12.08 No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Senior Indebtedness to
enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act by any such holder, or by any non compliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof any such holder may have or be otherwise
charged with.
(b) Without limiting the generality of Subsection (a) of this Section and
notwithstanding any other provision contained herein, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person, provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities in accordance with
the provisions set forth in Article Five or to pursue any rights or remedies
under this Indenture or under applicable laws if the taking of such action does
not otherwise violate the terms of this Article.
Section 12.09 Notice to Trustee.
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or other Indenture Obligations.
Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from a Senior Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security or other Indenture Obligations),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or
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condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and the Company by a Person representing himself
to be a Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor) to establish that such notice has been given by a
Senior Representative or a holder of Senior Indebtedness (or a trustee,
fiduciary or agent therefor); provided, however, that failure to give such
notice to the Company shall not affect in any way the ability of the Trustee to
rely on such notice. In the event that the Trustee determines in good faith that
further evidence is required with respect to the right of any Person as a holder
of Senior Indebtedness to participate in any payment or distribution pursuant to
this Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior Indebtedness
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article, and if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Section 12.10 Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article, provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of this Article.
Section 12.11 Rights of Trustee as a Holder of Senior Indebtedness
Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Senior Indebtedness which may at
any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
Section 12.12 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture. The term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 12.11 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 12.13 No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee or
the Holders of Securities to take any action to accelerate the maturity of the
Securities pursuant to Article Five and as set forth in this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the holders, from time to time, of Senior
Indebtedness to receive the cash, property, or securities receivable upon the
exercise of such rights or remedies.
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Section 12.14 Trustee's Relation to Senior Indebtedness.
With respect to the holders of Senior Indebtedness. the Trustee undertakes
to perform or to observe only such of its covenants and obligations as are
specifically, set forth in this Article, and no implied covenants or obligations
with respect to the holders of Senior Indebtedness shall be read into this
Article against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness and the Trustee shall not
be liable to any holder of Senior Indebtedness if it shall mistakenly in the
absence of gross negligence or willful misconduct pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE XIII
SATISFACTION AND DISCHARGE
Section 13.01 Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to surviving
rights of registration of transfer or exchange of Securities herein, rights to
payment, including any Additional Interest, and rights to replacement of stolen,
lost or mutilated Securities expressly provided for) and the Trustee, on demand
of and at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture, when
(a) either:
(1) all the Securities theretofore authenticated and delivered (other than
(i) Securities which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 3.08 or (ii) all Securities for whose
payment United States dollars have theretofore been deposited in trust or
segregated and held in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.03) have been delivered
to the Trustee for cancellation; or
(2) all such Securities not theretofore delivered to the Trustee for
cancellation (x) have become due and payable, (y) will become due and payable at
their Stated Maturity within one year, or (z) are to be called for redemption
within one year under arrangements satisfactory to the Trustee for the giving of
notice of redemption by the Trustee in the name, and at the expense, of the
Company, and the Company or any Guarantor, in the case of (2)(x), (y) or (z)
above, has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for that purpose an amount in United States dollars
sufficient to pay and discharge the entire Indebtedness on the Securities not
theretofore delivered to the Trustee for cancellation, for the principal of,
premium, if any, and accrued interest at such Stated Maturity or Redemption
Date;
(b) the Company or any Guarantor has paid or caused to be paid all other
sums payable hereunder by the Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel stating that (i) all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may have
qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 6.06 and, if United
States dollars shall have been deposited with the Trustee pursuant to
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subclause (2) of Subsection (a) of this Section. the obligations of the Trustee
under Section 13.02 and the last paragraph of Section 10.03 shall survive such
satisfaction and discharge.
Section 13.02 Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.03, all
United States dollars deposited with the Trustee pursuant to Section 13.01 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities and this Indenture, to the payment, either directly or through any
Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal of,
premium, if any, and interest on the Securities for whose payment such United
States dollars have been deposited with the Trustee.
ARTICLE XIV
GUARANTEE
Section 14.01 Guarantors' Guarantee.
For value received, each of the Guarantors, in accordance with this
Article Fourteen, hereby absolutely, unconditionally and irrevocably guarantees,
jointly and severally, to the Trustee and the Holders, as if the Guarantors were
the principal debtor, the punctual payment and performance when due of all
Indenture Obligations (which for purposes of this Guarantee shall also be deemed
to include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 14.02 Continuing Guarantee; No Right of Set-Off; Independent
Obligation.
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including those set forth in Article Eight.
Without limiting the generality of the foregoing, each of the Guarantors'
liability shall extend to all amounts which constitute part of the Indenture
Obligations and would be owed by the Company under this Indenture and the
Securities but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
(b) Each Guarantor, jointly and severally, hereby guarantees that the
Indenture Obligations will be paid to the Trustee without set-off or
counterclaim or other reduction whatsoever (whether for taxes, withholding or
otherwise) in lawful currency of the United States of America.
(c) Each Guarantor, jointly and severally, guarantees that the Indenture
Obligations shall be paid strictly in accordance with their terms regardless of
any law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the holders of the Securities.
(d) Each Guarantor's liability to pay or perform or cause the performance
of the Indenture Obligations under this Guarantee shall arise forthwith after
demand for payment or performance by the Trustee has been given to the
Guarantors in the manner prescribed in Section 1.06 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or
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promise made by any Person relative thereto which is not embodied herein; and it
is specifically acknowledged and agreed that this Guarantee has been delivered
by each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
Section 14.03 Guarantee Absolute.
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by, and each Guarantor hereby expressly
waives to the fullest extent permitted by law any defense by reason of:
(a) any defect or lack of validity or enforceability in respect of any
Indebtedness or other obligation of the Company or any other Person under this
Indenture or the Securities, or any agreement or instrument relating to any of
the foregoing;
(b) any grants of time, renewals, extensions, indulgences, releases,
discharges or modifications which the Trustee or the Holders may extend to, or
make with, the Company, any Guarantor or any other Person, or any change in the
time, manner or place of payment of, or in any other term of, all or any of the
Indenture Obligations, or any other amendment or waiver of, or any consent to or
departure from, this Indenture or the Securities, including any increase or
decrease in the Indenture Obligations;
(c) the taking of security from the Company, any Guarantor or any other
Person, and the release, discharge or alteration of, or other dealing with, such
security;
(d) the occurrence of any change in the laws, rules, regulations or
ordinances of any jurisdiction by any present or future action of any
governmental authority or court amending, varying, reducing or otherwise
affecting, or purporting to amend, vary, reduce or otherwise affect, any of the
Indenture Obligations and the obligations of any Guarantor hereunder;
(e) the abstention from taking security from the Company, any, Guarantor
or any other Person or from perfecting, continuing to keep perfected or taking
advantage of any security;
(f) any loss, diminution of value or lack of enforceability of any
security received from the Company, any Guarantor or any other Person, and
including any other guarantees received by the Trustee:
(g) any other dealings with the Company, any Guarantor or any other
Person, or with any security;
(h) the Trustee's or the Holders' acceptance of compositions from the
Company or any Guarantor;
(i) the application by the Holders or the Trustee of all monies at any
time and from time to time received from the Company, any Guarantor or any other
Person on account of any indebtedness and liabilities owing by the Company or
any Guarantor to the Trustee or the Holders, in such manner as the Trustee or
the Holders deems best and the changing of such application in whole or in part
and at any time or from time to time, or any manner of application of
collateral, if any, or proceeds thereof, to all or any of the Indenture
Obligations, or the manner of sale of any such collateral;
(j) the release or discharge of the Company or any Guarantor of the
Securities or of any Person liable directly as surety or otherwise by operation
of law or otherwise for the Securities, other than an express release in writing
given by the Trustee, on behalf of the Holders, of the liability and obligations
of any Guarantor hereunder;
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(k) any change in the name, business, capital structure or governing
instrument of the Company or any Guarantor or any refinancing or restructuring
of any of the Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business or any part
thereof;
(m) subject to Section 14.14, any merger or consolidation, arrangement or
reorganization of the Company, any Guarantor, any Person resulting from the
merger or consolidation of the Company or any Guarantor with any other Person or
any other successor to such Person or merged or consolidated Person or any other
change in the corporate existence, structure or ownership of the Company or any
Guarantor;
(n) the insolvency, bankruptcy, liquidation, windingup, dissolution,
receivership or distribution of the assets of the Company or its assets or any
resulting discharge of any obligations of the Company (whether voluntary or
involuntary) or of any Guarantor or the loss of corporate existence;
(o) subject to Section 14.14, any arrangement or plan of reorganization
affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of limitations) that
might otherwise constitute a defense available to, or discharge of, the Company
or any Guarantor;
(q) any modification, compromise, settlement or release by the Trustee, or
by operation of law or otherwise, of the Indenture Obligations or the liability
of the Company or any other obligor under the Securities, in whole or in part,
and any refusal of payment by the Trustee, in whole or in part, from any other
obligor or other guarantor in connection with any of the Indenture Obligations,
whether or not with notice to, or further assent by, or any reservation of
rights against, each of the Guarantors;
(r) the illegality, invalidity or unenforceability of all or any part of
the Indenture Obligations, the Indenture or the Securities; or
(s) any law that provides that the obligation of a surety or guarantor
must neither be larger in amount nor more burdensome than that of the principal
or which reduces a surety's or guarantor's obligation in proportion to the
principal obligation.
Section 14.04 Right to Demand Full Performance.
In the event of any demand for payment or performance by the Trustee from
any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all payments in respect thereof until the
Indenture Obligations have been paid in full, and the Guarantors shall continue
to be jointly and severally liable hereunder for any balance which may be owing
to the Trustee or the Holders by the Company under this Indenture and the
Securities. The retention by the Trustee or the Holders of any security, prior
to the realization by the Trustee or the Holders of its rights to such security
upon foreclosure thereon, shall not, as between the Trustee and any Guarantor,
be considered as a purchase of such security, or as payment, satisfaction or
reduction of the Indenture Obligations due to the Trustee or the Holders by the
Company or any part thereof.
Section 14.05 Waivers.
(a) Each Guarantor hereby expressly waives (to the extent permitted by
law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations. Each
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained and consents to
and approves the same. Each Guarantor hereby expressly waives (to the extent
permitted by law) diligence, presentment, protest and demand for payment.
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(b) Without prejudice to any of the rights or recourses which the Trustee
or the Holders may have against the Company, each Guarantor hereby expressly
waives (to the extent permitted by law) any right to require the Trustee or the
Holders to:
(i) initiate or exhaust any rights, remedies or recourse against the
Company, any Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the Company
or any other Person held by the Trustee or the Holders; or
(iii) initiate or exhaust any other remedy which the Trustee or the
Holders may have in law or equity;
before requiring or becoming entitled to demand payment from such Guarantor
under this Guarantee.
Section 14.06 The Guarantors Remain Obligated in Event the Company Is No
Longer Obligated to Discharge Indenture Obligations.
It is the express intention of the Trustee and the Guarantors that if for
any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all Indenture Obligations owing to the Trustee or the Holders by the
Company have been discharged, or such earlier time as Section 4.02 shall apply
to the Securities and the Guarantors shall be responsible for the payment
thereof to the Trustee or the Holders upon demand.
Section 14.07 Fraudulent Conveyance; Subrogation.
(a) Any term or provision of this Guarantee to the contrary
notwithstanding, the aggregate amount of the Indenture Obligations guaranteed
hereunder shall be reduced to the extent necessary to prevent this Guarantee
from violating or becoming voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer or similar laws affecting the rights of
creditors generally.
(b) Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such right arising under federal bankruptcy law) or
otherwise by reason of any payment by it pursuant to the provisions of this
Article Fourteen. The Guarantor further agrees that, to the extent that the
waiver of, or agreement not to exercise, any such rights, remedies, powers or
privileges is found by a court of competent jurisdiction to be void or voidable
for any reason, any such rights, remedies, powers or privileges the Guarantor
may have shall be junior and subordinate to the rights, remedies, powers and
privileges of the Holders against the Guarantor under this Guarantee.
Section 14.08 Guarantee Is in Addition to Other Security.
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
Section 14.09 Release of Security Interests.
Without limiting the generality of the foregoing and except as otherwise
provided in this Indenture, each Guarantor hereby consents and agrees, to the
fullest extent permitted by applicable law, that the rights of the Trustee
95
hereunder, and the liability of the Guarantors hereunder, shall not be affected
by any releases for any purpose of any collateral, if any, from the Liens and
security interests created by any collateral document and that this Guarantee
shall continue to be effective or be reinstated, as the case may be, if at any
time any payment of any of the Indenture Obligations is rescinded or must
otherwise be returned by the Trustee upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made.
Section 14.10 No Bar to Further Actions.
Except as provided by law, no action or proceeding brought or instituted
under Article Fourteen and this Guarantee and no recovery or judgment in
pursuance thereof shall be a bar or defense to any further action or proceeding
which may be brought under Article Fourteen and this Guarantee by reason of any
further default or defaults under Article Fourteen and this Guarantee or in the
payment of any of the Indenture Obligations owing by the Company.
Section 14.11 Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies.
(a) No failure to exercise and no delay in exercising, on the part of the
Trustee or the Holders, any right, power, privilege or remedy under this Article
Fourteen and this Guarantee shall operate as a waiver thereof, nor shall any
single or partial exercise of any rights, power, privilege or remedy preclude
any other or further exercise thereof, or the exercise of any other rights,
powers, privileges or remedies. The rights and remedies herein provided for are
cumulative and not exclusive of any rights or remedies provided in law or
equity.
(b) Nothing contained in this Article Fourteen shall limit the right of
the Trustee or the Holders to take any action to accelerate the maturity of the
Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 14.12 Trustee's Duties, Notice to Trustee.
Any provision in this Article Fourteen or elsewhere in this Indenture
allowing the Trustee to request any information or to take any action authorized
by, or on behalf of any Guarantor, shall be permissive and shall not be
obligatory on the Trustee except as the Holders may direct in accordance with
the provisions of this Indenture or the failure of the Trustee to request any
such information or to take any such action arises from the Trustee's negligence
or willful misconduct.
Section 14.13 Successors and Assigns.
All terms, agreements and conditions of this Article Fourteen shall extend
to and be binding upon each Guarantor and its successors and permitted assigns
and shall enure to the benefit of and may be enforced by the Trustee and its
successors and assigns, provided, however, that the Guarantors may not assign
any of their rights or obligations hereunder other than in accordance with
Article Eight.
Section 14.14 Release of Guarantee.
Concurrently with the payment in full of all of the Indenture Obligations,
the Guarantors shall be released from and relieved of their obligations under
this Article Fourteen. Upon the delivery by the Company to the Trustee of an
Officer's Certificate and an Opinion of Counsel to the effect that the
transaction giving rise to the release of this Guarantee was made by the Company
in accordance with the provisions of this Indenture and the Securities, the
Trustee shall execute any documents reasonably required in order to evidence the
release of the Guarantors from their obligations under this Guarantee. If any of
the Indenture Obligations are revived and reinstated after the termination of
this Guarantee, then all of the obligations of the Guarantors under this
Guarantee shall be revived and reinstated as if this Guarantee had not been
terminated until such time as the Indenture Obligations are paid in full, and
each Guarantor shall enter into an amendment to this Guarantee, reasonably
satisfactory to the Trustee, evidencing such revival and reinstatement.
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This Guarantee shall terminate with respect to each Guarantor and shall be
automatically and unconditionally released and discharged as provided in Section
10.14(d).
Section 14.15 Execution of Guarantee.
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 2.06, to be endorsed on
each Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by its Chairman of the Board, its
President, or one of its Vice Presidents and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Section 14.16 Guarantee Subordinate to Guarantor Senior Indebtedness.
Each Guarantor covenants and agrees, and each Holder of a Guarantee, by
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article, the Indebtedness represented
by the Guarantees is hereby made subordinate and subject in right of payment as
provided in this Article to the prior payment in full, in cash or Cash
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness, of all Guarantor Senior Indebtedness; provided, however,
that the Indebtedness represented by this Guarantee in all respects shall rank
equally with, or prior to, all existing and future Indebtedness of such
Guarantor that is expressly subordinated to such Guarantor's Guarantor Senior
Indebtedness. This Guarantee shall not be senior in right of payment to the
Existing Notes Guarantees.
This Article Fourteen shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Guarantor Senior Indebtedness, and such provisions are made for the benefit of
the holders of Guarantor Senior Indebtedness; and such holders are made obligees
hereunder and they or each of them may enforce such provisions.
With respect to the relative rights of Holders and holders of Senior
Indebtedness and Guarantor Senior Indebtedness and for the purpose of Section
14.07(a), each Holder of a Security by his acceptance thereof acknowledges that
all Senior Indebtedness and any guarantee by a Guarantor of such Senior
Indebtedness shall be deemed to have been incurred prior to the incurrence by
such Guarantor of its liability under its Guarantee.
Section 14.17 Payment Over of Proceeds Upon Dissolution of the Guarantor,
etc.
In the event of (a) any insolvency or bankruptcy case or proceeding, or
any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to any Guarantor or to its
creditors, as such, or to its assets, or (b) any liquidation, dissolution or
other winding up of any Guarantor, whether voluntary or involuntary and whether
or not involving insolvency or bankruptcy, or (c) any assignment for the benefit
of creditors or any other marshaling of assets or liabilities of any Guarantor,
then and in any such event:
(1) the holders of Guarantor Senior Indebtedness shall be entitled
to receive payment in full in cash or Cash Equivalents or in any other
form as acceptable to the holders of Guarantor Senior Indebtedness of all
amounts due on or in respect of all Guarantor Senior Indebtedness, before
the Holders of the Securities are entitled to receive any payment or
distribution of any kind or character (excluding Permitted Guarantor
Junior Securities) on account of the Guarantee of such Guarantor;
(2) any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities (excluding
Permitted Guarantor Junior Securities), by setoff or otherwise, to which
the Holders or the Trustee would be entitled but for the provisions of
this Article shall be paid by the liquidating trustee or agent or other
Person making such payment or distribution. whether a trustee in
bankruptcy, a receiver or liquidating trustee or otherwise, directly to
the holders of Guarantor Senior Indebtedness or their representative or
representatives or to the trustee or trustees under any indenture under
which any instruments evidencing any of such Guarantor Senior Indebtedness
may have been issued, ratably according to the segregated amounts
remaining unpaid on account of the Senior Guarantor Indebtedness held or
represented by each, to the extent necessary to make payment in full in
cash or Cash
97
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness of all Guarantor Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Guarantor Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security shall have
received any payment or distribution of assets of any Guarantor of any
kind or character, whether in cash, property or securities, in respect of
the Guarantee of such Guarantor before all Guarantor Senior Indebtedness
is paid in full, then and in such event such payment or distribution
(excluding Permitted Guarantor Junior Securities) shall be paid over or
delivered forthwith to the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee, agent or other person making payment or
distribution of assets of such Guarantor for application to the payment of
all Guarantor Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Guarantor Senior Indebtedness in full in cash or Cash
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness after giving effect to any concurrent payment or
distribution to or for the holders of Guarantor Senior Indebtedness.
The consolidation of any Guarantor with, or the merger of any Guarantor
with or into, another Person or the liquidation or dissolution of any Guarantor
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of such Guarantor's properties or assets to another
Person upon the terms and conditions set forth in Article Eight shall not be
deemed a dissolution, winding up, liquidation, reorganization, assignment for
the benefit of creditors or marshaling of assets and liabilities of such
Guarantor for the purposes of this Section if the Person formed by such
consolidation or the surviving entity of such merger or the Person which
acquires by sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of such Guarantor's properties and assets, as the case
may be, shall, as a part of such consolidation, merger, sale, assignment,
conveyance, transfer, lease or other disposal comply with the conditions set
forth in Article Eight.
Section 14.18 Default on Guarantor Senior Indebtedness.
(a) Upon the maturity of any Guarantor Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other amounts due in connection therewith shall first be paid in full or such
payment duly provided for before any payment is made by any of the Guarantors or
any Person acting on behalf of any of the Guarantors in respect of the Guarantee
of such Guarantor.
(b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by any Guarantor in respect of its Guarantee
during the period in which Section 14.17 shall be applicable, during any
suspension of payments in effect under Section 12.03(a) of this Indenture or
during any Payment Blockage Period in effect under Section 12.03(b) of this
Indenture.
(c) In the event that, notwithstanding the foregoing, any Guarantor shall
make any payment to the Trustee or the Holder of its Guarantee prohibited by the
foregoing provisions of this Section, then and in such event such payment shall
be paid over and delivered forthwith to the Guarantor Senior Representative or
as a court of competent jurisdiction shall direct.
Section 14.19 Payment Permitted by Each of the Guarantors if No Default.
Nothing contained in this Article, elsewhere in this Indenture or in any
of the Securities shall prevent any Guarantor, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of such Guarantor referred to in Section 14.17 or under the
conditions described in Section 14.18, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
Section 14.20 Subrogation to Rights of Holders of Guarantor Senior
Indebtedness.
Subject to the payment in full of all Guarantor Senior Indebtedness in
cash or Cash Equivalents or in any other form acceptable to the holders of
Guarantor Senior Indebtedness, the Holders of the Securities shall be subrogated
to the rights of the holders of such Guarantor Senior Indebtedness to receive
payments and distributions
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of cash, property and securities applicable to the Guarantor Senior Indebtedness
until the principal of, premium, if any, and interest on the Securities shall be
paid in full. For purposes of such subrogation, no payments or distributions to
the holders of Guarantor Senior Indebtedness of any cash, property or securities
to which the Holders of the Securities or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Guarantor Senior Indebtedness by
Holders of the Securities or the Trustee, shall, as among any Guarantor, its
creditors other than holders of Guarantor Senior Indebtedness, and the Holders
of the Securities, be deemed to be a payment or distribution by such Guarantor
to or on account of the Guarantor Senior Indebtedness.
Section 14.21 Provisions Solely to Define Relative Rights.
The provisions of Sections 14.16 through 14.29 of this Indenture are
intended solely, for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Guarantor Senior
Indebtedness on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall (a) impair, as
among any Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of the Securities, the obligation of such
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against each of the Guarantors of the Holders
of the Securities and creditors of each of the Guarantors other than the holders
of Guarantor Senior Indebtedness; or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Guarantor Senior Indebtedness (1) in any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Guarantors referred to in Section 14.17, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 14.18, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 14.18(c).
Section 14.22 Trustee to Effectuate Subordination.
Each Holder of a Security by his acceptance thereof authorizes and directs
the Trustee on his behalf to take such action as may be necessary or appropriate
to effectuate the subordination provided in this Article and appoints the
Trustee his attorney-in-fact for any and all such purposes, including, in the
event of any dissolution, winding-up, liquidation or reorganization of any
Guarantor whether in bankruptcy, insolvency, receivership proceedings, or
otherwise, the timely filing of a claim for the unpaid balance of the
Indebtedness of any Guarantor owing to such Holder in the form required in such
proceedings and the causing of such claim to be approved.
Section 14.23 No Waiver of Subordination Provisions.
(a) No right of any present or future holder of any Guarantor Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by, any act or failure to act by any such holder, or by any
non-compliance by any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section and
notwithstanding any other provision contained herein, the holders of Guarantor
Senior Indebtedness may at any time and from time to time, without the consent
of or notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Guarantor Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Guarantor Senior Indebtedness or any instrument evidencing the same or any
agreement under which Guarantor Senior Indebtedness is outstanding; (2) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Guarantor Senior Indebtedness; (3) release any Person liable
in any manner for the collection or payment of Guarantor Senior Indebtedness;
and (4) exercise or refrain from exercising any rights against any of the
Guarantors and any other Person; provided, however, that in no event shall any
such
99
actions limit the right of the Holders of the Securities to take any action to
accelerate the maturity of the Securities in accordance with the provisions set
forth in Article 5 or to pursue any rights or remedies under this Indenture or
under applicable laws if the taking of such action does not otherwise violate
the terms of this Article.
Section 14.24 Notice to Trustee by Each of the Guarantors.
(a) Each Guarantor shall give prompt written notice to the Trustee of any
fact known to such Guarantor which would prohibit the making of any payment to
or by the Trustee in respect of the Guarantee. Notwithstanding the provisions of
this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from any
Guarantor or a holder of Guarantor Senior Indebtedness or from a Guarantor
Senior Representative or any trustee, fiduciary or agent therefor; and, prior to
the receipt of any such written notice, the Trustee shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section prior to
the date upon which by the terms hereof any money may become payable for any
purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security or any other Indenture
Obligations), then, anything herein contained to the contrary notwithstanding
but without limiting the rights and remedies of the holders of Guarantor Senior
Indebtedness or any trustee, fiduciary or agent thereof, the Trustee shall have
full power and authority to receive such money and to apply the same to the
purpose for which such money was received and shall not be affected by any
notice to the contrary which may be received by it after such date; nor shall
the Trustee be charged with knowledge of the curing of any such default or the
elimination of the act or condition preventing any such payment unless and until
the Trustee shall have received an Officers' Certificate to such effect.
(b) The Trustee shall be entitled to rely on the delivery to it of a
written notice to the Trustee and each Guarantor by a Person representing
himself to be a representative of one or more holders of Designated Guarantor
Senior Indebtedness (a "Guarantor Senior Representative") or a holder of
Guarantor Senior Indebtedness (or a trustee, fiduciary or agent therefor) to
establish that such notice has been given by a Guarantor Senior Representative
or a holder of Guarantor Senior Indebtedness (or a trustee, fiduciary or agent
therefor); provided, however, that failure to give such notice to the Company
shall not affect in any way the ability of the Trustee to rely on such notice.
In the event that the Trustee determines in good faith that further evidence is
required with respect to the right of any Person as a holder of Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Guarantor Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article, and if such evidence is not furnished,
the Trustee may defer any payment to such Person pending judicial determination
as to the right of such Person to receive such payment.
Section 14.25 Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of any Guarantor referred to in
this Article, the Trustee and the Holders of the Securities shall be entitled to
rely upon any order or decree entered by any court of competent jurisdiction in
which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Guarantor Senior Indebtedness
and other Indebtedness of such Guarantor, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article; provided that the foregoing shall apply only if such
court has been fully apprised of the provisions of this Article.
Section 14.26 Rights of Trustee as a Holder of Guarantor Senior
Indebtedness; Preservation of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article with respect to any Guarantor Senior Indebtedness
which may at any time be held by it, to the same extent as any other holder of
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Guarantor Senior Indebtedness, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article shall apply
to claims of, or payments to, the Trustee under or pursuant to Section 6.06.
Section 14.27 Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee, provided,
however, that Sections 14.14, 14.24 and 14.26 shall not apply to the Company or
any Affiliate of the Company if it or such Affiliate acts as Paying Agent.
Section 14.28 No Suspension of Remedies.
Nothing contained in this Article shall limit the right of the Trustee or
the Holders of Securities to take any action to accelerate the maturity of the
Securities pursuant to the provisions described under Article Five and as set
forth in this Indenture or to pursue any rights or remedies hereunder or under
applicable law, subject to the rights, if any, under this Article of the
holders, from time to time, of Guarantor Senior Indebtedness to receive the
cash, property or securities receivable upon the exercise of such rights or
remedies.
Section 14.29 Trustee's Relation to Guarantor Senior Indebtedness.
With respect to the holders of Guarantor Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Guarantor Senior Indebtedness shall
be read into this Article against the Trustee. The Trustee shall not be deemed
to owe any fiduciary duty to the holders of Guarantor Senior Indebtedness and
the Trustee shall not be liable to any holder of Guarantor Senior Indebtedness
if it shall mistakenly in the absence of gross negligence or willful misconduct
pay over or deliver to Holders, the Company or any other Person moneys or assets
to which any holder of Guarantor Senior Indebtedness shall be entitled by virtue
of this Article or otherwise.
Section 14.30 Limitation on Guarantee.
In any proceeding involving any state corporate law or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Guarantor under its Guarantee
would otherwise, be held or determined to be void, invalid or unenforceable or
if the claims of the Holders in respect of such obligations would be
subordinated to the claims of any other creditors other than creditors under
Senior Indebtedness on account of the Guarantor's liability under its Guarantee,
then, notwithstanding any other provision of this Guarantee to the contrary, the
amount of such liability shall, without any further action by the Guarantor, the
Holders or any other Person, be automatically limited and reduced to the highest
amount that is valid and enforceable and not subordinated to the claims of other
creditors as determined in such action or proceeding.
If an officer whose signature is on this Indenture no longer holds that
office at the time the Trustee authenticates a Security on which a Guarantee is
endorsed, such Guarantee shall be valid nevertheless.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
SALEM COMMUNICATIONS HOLDING
CORPORATION, a Delaware corporation, as issuer
By: /s/ David A. R. Evans
------------------------------------------
Name: David A.R. Evans
Title: Senior Vice President and
Chief Financial Officer
Attest
/s/ Jonathan L. Block
---------------------
Secretary
SALEM COMMUNICATIONS CORPORATION
ATEP RADIO, INC.
BISON MEDIA, INC.
CARON BROADCASTING, INC.
CCM COMMUNICATIONS, INC.
COMMON GROUND BROADCASTING, INC.
GOLDEN GATE BROADCASTING COMPANY INC.
INSPIRATION MEDIA, INC.
INSPIRATION MEDIA OF PENNSYLVANIA, LP
INSPIRATION MEDIA OF TEXAS, LLC
KINGDOM DIRECT, INC.
NEW ENGLAND CONTINENTAL MEDIA, INC.
NEW INSPIRATION BROADCASTING COMPANY, INC.
ONEPLACE, LLC
PENNSYLVANIA MEDIA ASSOCIATES, INC.
RADIO 1210, INC.
REACH SATELLITE NETWORK, INC.
SALEM COMMUNICATIONS ACQUISITION CORPORATION
SALEM MEDIA CORPORATION
SALEM MEDIA OF COLORADO, INC.
SALEM MEDIA OF GEORGIA, INC.
SALEM MEDIA OF HAWAII, INC.
SALEM MEDIA OF ILLINOIS, LLC
SALEM MEDIA OF KENTUCKY, INC.
SALEM MEDIA OF NEW YORK, LLC
SALEM MEDIA OF OHIO, INC.
SALEM MEDIA OF OREGON, INC.
SALEM MEDIA OF PENNSYLVANIA, INC.
SALEM MEDIA OF TEXAS, INC.
SALEM MEDIA OF VIRGINIA, INC.
SALEM MUSIC NETWORK, INC.
SALEM RADIO NETWORK INCORPORATED
SALEM RADIO OPERATIONS, LLC
SALEM RADIO OPERATIONS - PENNSYLVANIA, INC.
SALEM RADIO PROPERTIES, INC.
SALEM RADIO REPRESENTATIVES, INC.
SCA LICENSE CORPORATION
SOUTH TEXAS BROADCASTING, INC.
SRN NEWS NETWORK, INC.
VISTA BROADCASTING, INC.
as Guarantors
By: /s/ David A. R. Evans
-----------------------------------
Name: David A.R. Evans
Title: Senior Vice President and
Chief Financial Officer
THE BANK OF NEW YORK, as Trustee
By: /s/ STACEY B. POINDEXTER
----------------------------
Name: Stacey B. Poindexter
Title: Assistant Treasurer
SCHEDULE I
EXISTING INDEBTEDNESS OF SALEM COMMUNICATIONS HOLDING CORPORATION
AND ITS RESTRICTED SUBSIDIARIES
9 1/2% Senior Subordinated Notes due 2007 and the guarantees thereof pursuant to
the Existing 9 1/2% Notes Indenture as in effect on the date hereof.
9% Senior Subordinated Notes due 2011 and the guarantees thereof pursuant to the
Existing 9% Notes Indenture as in effect on the date hereof.
Exhibit A
[Form Of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (GENERAL)
(For transfers pursuant to Section 3.07(a) or (b)
of the Indenture referred to below)
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 7 3/4% Senior Subordinated Notes Due 2010 (the "Securities")
Reference is made to the Indenture, dated as of December 23, 2002 (the
"Indenture"), among Salem Communications Holding Corporation, a Delaware
corporation, the guarantors party thereto and The Bank of New York, as trustee.
Terms used herein and defined in the Indenture, Rule 144A or Rule 144 under the
U.S. Securities Act of 1933 (the "Securities Act") are used herein as so
defined.
This certificate relates to $____________ aggregate principal amount of
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).____________________________
CERTIFICATE No(s).______________________
CURRENTLY IN BOOKENTRY FORM: Yes | | No | | (check one)
The person in whose name this certificate is executed below (the
"Undersigned") hereby certifies that either (i) such person is the sole
beneficial owner of the Specified Securities or (ii) such person is acting on
behalf of all the beneficial owners of the Specified Securities and is duly
authorized by them to do so. Such beneficial owner or owners are referred to
herein collectively as the "Owner". If the Specified Securities are represented
by a Global Security, they are held through a Depositary (except in the name of
the "The Depository Trust Company") or an Agent Member in the name of the
Undersigned, as or on behalf of the Owner. If the Specified Securities are not
represented by a Global Security, they are registered in the name of the
Undersigned, as or on behalf of the Owner.
The Owner has requested that the Specified Securities be transferred to a
person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement under the Securities Act, it is being effected in accordance with Rule
144A or Rule 144 or pursuant to an exemption from the registration requirements
of the Securities Act other than Rule 144A, Rule 144 or Regulation S under the
Securities Act and in any case in compliance with all applicable securities laws
of the states of the United States. Accordingly, the Owner hereby further
certifies that:
(1) Rule 144A Transfers. If the transfer is being effected in accordance with
Rule 144A:
(A) the Specified Securities are being transferred to a person that the
Owner and any person acting on its behalf reasonably believe is a
"qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
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(B) the Owner and any person acting on its behalf have taken reasonable
steps to ensure that the Transferee is aware that the Owner may be
relying on Rule 144A in connection with the transfer; and
(2) Rule 144 Transfers. If the transfer is being effected pursuant to Rule
144:
(A) the transfer is occurring after a holding period of at least one
year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the date the Specified Securities were acquired from
the Company or from an affiliate (as such term is defined in Rule
144) of the Company, whichever is later, and is being effected in
accordance with the applicable amount, manner of sale and notice
requirements of paragraphs (e), (f) and (h) of Rule 144; or
(B) the transfer is occurring after a holding period by the Owner of at
least two years has elapsed since the date the Specified Securities
were acquired from the Company or from an affiliate (as such term is
defined in Rule 144) of the Company, whichever is later, and the
Owner is not, and during the preceding three months has not been, an
affiliate of the Company;
(3) Transfers to Accredited Investors. If the transfer is being made to an
Accredited Investor:
(A) the transfer is being effected to an institutional Accredited
Investor and pursuant to an exemption from the registration
requirements of the Securities Act other than Rule 144A, Rule 144 or
Regulation S under the Securities Act, and the transferor has not
engaged in any general solicitation within the meaning of Regulation
D under the Securities Act and the transfer complies with the
transfer restrictions applicable to a Restricted Security and the
requirements of the exemption claimed, which certification is
supported by a certificate executed by the transferee in the form of
Annex I attached hereto.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
Dated:_________________________ ____________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:____________________________________
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
Signature Guarantee: _____________________
(Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Security Registrar,
which requirements include membership or
participation in the Security Transfer Agent
Medallion Program ("STAMP") or such other
"signature guarantee program" as may be
determined by the Security Registrar in
addition to, or in substitution for, STAMP,
all in accordance with the Securities
Exchange Act of 1934, as amended)
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Annex I
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Salem Communications Holding Corporation
4880 Santa Rosa Road, Suite 300
Camarillo, California 93012
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 7 3/4% Senior Subordinated Notes due 2010
Reference is hereby made to the Indenture, dated as of December 23, 2002
(the "Indenture"), among Salem Communications Holding Corporation (the
"Company"), the guarantors party thereto (the "Guarantors") and The Bank of New
York, as trustee. Capitalized terms used but not defined herein shall have the
meanings given to them in the Indenture.
In connection with our proposed purchase of $____________ aggregate
principal amount of:
(a) | | a beneficial interest in a Series A Global Security, or
(b) | | a Series A Physical Security,
we confirm that:
We understand that any subsequent transfer of the Securities or any
interest therein is subject to certain restrictions and conditions set forth in
the Indenture and the undersigned agrees to be bound by, and not to resell,
pledge or otherwise transfer the Securities or any interest therein except in
compliance with, such restrictions and conditions and the United States
Securities Act of 1933, as amended (the "Securities Act").
We understand that the offer and sale of the Securities have not been
registered under the Securities Act, and that the Securities and any interest
therein may not be offered or sold except as permitted in the following
sentence. We agree, on our own behalf and on behalf of any accounts for which we
are acting as hereinafter stated, that if we should sell the Securities or any
interest therein, we will do so only (A) to the Company or any subsidiary
thereof, (B) inside the United States to a "qualified institutional buyer" in
compliance with Rule 144A under the Securities Act, (C) inside the United States
to an institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to
you and to the Company a signed letter substantially in the form of this letter
to the effect that such transfer is in compliance with the Securities Act, (D)
outside the United States in an offshore transaction in compliance with Rule 904
of Regulation S under the Securities Act (if available), (E) pursuant an
exemption from registration provided by of Rule 144 under the Securities Act (if
available), (F) in accordance with another exemption from the registration
requirements of the Securities Act (and based upon an opinion of counsel if the
Company so requests) or (G) pursuant to an effective registration statement
under the Securities Act, and we further agree to provide to any person
purchasing the Series A Physical Security or beneficial interest in a Series A
Global Security from us in a transaction meeting the requirements of clauses (A)
through (E) of this paragraph a notice advising such purchaser that resales
thereof are restricted as stated herein.
We understand that, on any proposed resale of the Securities or beneficial
interest therein, we will be required to furnish to you such certifications,
legal opinions and other information as you may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. We further
understand that the Securities purchased by us will be in certificated form and
will bear a legend to the foregoing effect.
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We are an institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Securities, and we
and any accounts for which we are acting are each able to bear the economic risk
of our or its investment.
We are acquiring the Securities or beneficial interest therein purchased
by us for our own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise sole
investment discretion.
You and the Guarantors are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy to any interested party
in any administrative or legal proceedings or official inquiry with respect to
the matters covered hereby.
_____________________________________________
[Insert Name of Transferor]
By ________________________________________
Name:
Title:
Dated:______________________________________
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Exhibit B
[Form of Restricted Securities Transfer Certificate]
RESTRICTED SECURITIES TRANSFER CERTIFICATE (NON-U.S. PERSONS)
(For transfers pursuant to Section 3.07(c) of the Indenture referred to below)
The Bank of New York,
as Securities Registrar
101 Barclay Street, 21 W,
New York, New York 10286
Re: 7 3/4% Senior Subordinated Notes Due 2010 (the "Securities")
Reference is made to the Indenture, dated as of December 23, 2002 (the
"Indenture"), among Salem Communications Holding Corporation, a Delaware
corporation, the guarantors party thereto and The Bank of New York, as trustee.
Terms used herein and defined in Regulations S under the U.S. Securities Act of
1933 (the "Securities Act") are used herein as so defined.
In connection with our proposed sale of ________ aggregate principal
amount of the Securities, we confirm that such sale has been affected pursuant
to and in accordance with Regulation S under the U.S. Securities Act of 1933, as
amended (the "Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a U.S. person or to
a person in United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the United
States, or (b) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither we nor
any person acting on our behalf knows that the transaction has been pre
arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United States
in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act;
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities; and
(6) if the transfer is being made prior to the expiration of the
40-day distribution compliance period set forth in Regulation S, the
interest transferred shall be held immediately thereafter through the
Euroclear System or Clearstream Banking, S.A.
This certificate and the statements contained herein are made for your benefit
and the benefit of the Company.
Dated:_________________________ ____________________________________________
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:____________________________________
Name:
Title:
B-1
(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)
B-2
Exhibit C
INTERCOMPANY NOTE
____________ __, ____
Evidences of all loans or advances ("Loans") hereunder shall be reflected
on the grid attached hereto. FOR VALUE RECEIVED, _____________, a _____________
corporation (the "Maker"), HEREBY PROMISES TO PAY ON DEMAND to the order of
_____________ (the "Holder") the principal sum of the aggregate unpaid principal
amount of all Loans (plus accrued interest thereon) at any time and from time to
time made hereunder which has not been previously paid.
All capitalized terms used herein that are defined in, or by reference in,
the Indenture among Salem Communications Holding Corporation, a Delaware
corporation (the "Company"), the guarantors party thereto and The Bank of New
York, as trustee, dated as of December 23, 2002 (the "Indenture"), have the
meanings assigned to such terms therein, or by reference therein, unless
otherwise defined.
ARTICLE I
TERMS OF INTERCOMPANY NOTE
Section 1.01 Note Forgiveness. Unless the Maker of the Loan hereunder is
either of the Company or any Guarantor, the Holder may not forgive any amounts
owing under this intercompany note.
Section 1.02 Interest, Prepayment. (a) The interest rate ("Interest Rate")
on the Loans shall be a rate per annum equal to the interest rate on the
Securities.
(b) The interest, if any, payable on each of the Loans shall accrue from
the date such Loan is made and, subject to Section 2.01, shall be payable upon
demand of the Holder.
(c) If the principal or accrued interest, if any, of the Loans is not paid
on the date demand is made, interest on the unpaid principal and interest will
accrue at a rate equal to the Interest Rate, if any, plus 100 basis points per
annum from maturity until the principal and interest on such Loans are fully
paid.
(d) Subject to Section 2.01, any amounts hereunder may be prepaid at any
time by the Maker.
Section 1.03 Subordination. All loans made to either of the Company or any
Guarantor shall be subordinated in right of payment to the payment and
performance of the obligations of the Company and any Subsidiary under the
Indenture, the Securities, the Guarantees or any other Indebtedness ranking
senior to or pari passu with the Securities, or any Guarantees, including,
without limitation, any Indebtedness incurred under the Bank Credit Agreement.
ARTICLE II
EVENTS OF DEFAULT
Section 2.01. Events of Default. If after the date of issuance of this
Loan (i) an Event of Default has occurred under the Indenture, (ii) an "Event of
Default" (as defined) has occurred under the Bank Credit Agreement, or any
refinancing of the Bank Credit Agreement or (iii) an "event of default" (as
defined) on any other Indebtedness of the Company or any Guarantor then (x) in
the event of the Maker is not either one of the Company or a Guarantor, all
amounts owing under the Loans hereunder shall be immediately due and payable to
the Holder, and (y) in the event the Maker is either the Company or, the amounts
owing under the Loans hereunder shall not be due and payable unless the Maker is
a Guarantor and the Holder is the Company; provided, however, that if such Event
of Default or event of default has been waived, cured or rescinded, such amounts
shall no longer be due and payable in the case of clause (x), and such amounts
may be payable in the case of clause (y). If the Holder is a Subsidiary, then
the Holder hereby agrees that if it receives any payments or distributions on
any Loan from the
C-1
Company or a Guarantor which is not payable pursuant to clause (y) of the prior
sentence after any Event of Default or event or default described in clauses
(i), (ii) or (iii) above has occurred, is continuing and has not been waived,
cured or rescinded, it will pay over and deliver forthwith to the Company or
such Guarantor, as the case may be, all such payments and distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any provision of
this intercompany note, or consent to depart herefrom is permitted at any time
for any reason, except with the consent of the holders of not less than a
majority in aggregate principal amount of the Outstanding Securities.
Section 3.02 Assignment. No party to this Agreement may assign, in whole
or in part, any of its rights and obligations under this intercompany note,
except to its legal successor in interest.
Section 3.03 Third Party Beneficiaries. The holders of the Securities or
any other Indebtedness ranking pari passu with or senior to, the Securities or
any Guarantees, including without limitation, any Indebtedness incurred under
the Bank Credit Agreement, shall be third party beneficiaries to this
intercompany note and shall have the right to enforce this intercompany note
against the Company or any of their Subsidiaries.
Section 3.04 Headings. Article and Section headings in this intercompany
note are included for convenience of reference only and shall not constitute a
part of this intercompany note for any other purpose.
Section 3.05 Entire Agreement. This intercompany note sets forth the
entire agreement or the parties with respect to its subject matter and
supersedes all previous understandings, written or oral, in respect thereof.
Section 3.06 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 3.07 Waivers. The Maker hereby waives presentment, demand for
payment, notice of protest and all other demands and notices in connection with
the delivery, acceptance, performance or enforcement hereof.
By:_______________________________
Name:
Title:
C-2
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
Amount of Maturity of Amount Unpaid
Borrowing/ Borrowing/ Principal Paid Principal Notation
Date Principal Principal or Prepaid Balance Made By
---- --------- --------- ---------- ------- -------
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