SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Date of Report (Date of earliest Commission File Number 0-26076
event reported) December 11, 1997
SINCLAIR BROADCAST GROUP, INC.
(Exact name of registrant)
Maryland 52-1494660
(State of organization) (I.R.S. Employer Identification Number)
2000 West 41st Street
Baltimore, Maryland 21211
(Address of principal executive offices and zip code)
(410) 467-5005
(Registrant's telephone Number)
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ITEM 5. OTHER EVENTS
On September 16, 1997, the Securities and Exchange Commission (the
"Commission") declared effective a Registration Statement (File No. 333-12257)
on Form S-3 (the "Registration Statement") filed by Sinclair Broadcast Group,
Inc. (the "Company") relating to the public offering, pursuant to Rule 415 under
the Securities Act of 1933, as amended, of up to an aggregate of $1,000,000,000
in securities of the Company.
On December 11, 1997, the Company entered into an underwriting
agreement relating to the sale of $250,000,000 aggregate principal amount of 8
3/4% Senior Subordinated Notes due 2007 (the "Notes"). On December 12, 1997, the
Company filed with the Commission (i) a Prospectus dated December 12, 1997 (the
"Prospectus") forming a part of the Registration Statement and (ii) a supplement
dated December 12, 1997 (the "Prospectus Supplement") to the Prospectus relating
to the issuance and sale of Notes. In connection with the filing of the
Prospectus Supplement with the Commission, the Company is filing certain
exhibits as part of this Current Report on Form 8-K. See "Item 7. Financial
Statements and Exhibits."
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed with this report on Form 8-K:
1.1 Underwriting Agreement dated as of December 11, 1997 by and among
the Company, the Guarantors named therein and the several
Underwriters named therein
4.1 Form of Senior Subordinated Indenture among the Company and the
First Union National Bank, as Trustee
4.2 Form of First Supplemental Indenture among the Company, the
Guarantors named therein and First Union National Bank, as
Trustee, including Form of Note
5.1 Opinion of Wilmer, Cutler & Pickering
5.2 Opinion of Thomas & Libowitz, P.A.
23.1 Consent of Wilmer, Cutler & Pickering (included as part of
Exhibit 5.1)
23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit
5.2)
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
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Name: David B. Amy
Title: Chief Financial Officer
Dated: December 16, 1997
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EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT
1.1 Underwriting Agreement dated as of December 11, 1997 by and among
the Company, the Guarantors named therein and the several
Underwriters named therein
4.1 Form of Senior Subordinated Indenture among the Company and the
First Union National Bank, or Trustee
4.2 Form of First Supplemental Indenture among the Company, the
Guarantors named therein and First Union National Bank, as
trustee, including Form of Note
5.1 Opinion of Wilmer, Cutler & Pickering
5.2 Opinion of Thomas & Libowitz, P.A.
23.1 Consent of Wilmer, Cutler & Pickering (included as part of
Exhibit 5.1)
23.2 Consent of Thomas & Libowitz, P.A. (included as part of Exhibit
5.2)
$250,000,000
SINCLAIR BROADCAST GROUP, INC.
8 3/4% Senior Subordinated Notes due 2007
UNDERWRITING AGREEMENT
December 11, 1997
SALOMON SMITH BARNEY
SALOMON BROTHERS, INC.
CHASE SECURITIES INC.
c/o SALOMON BROTHERS INC
Seven World Trade Center
New York, New York 10048
Dear Sirs:
Sinclair Broadcast Group, Inc., a Maryland corporation (the "Company"),
proposes, upon the terms and conditions set forth herein, to issue and sell
$250,000,000 aggregate principal amount of its 8 3/4% Senior Subordinated Notes
due 2007 (the "Notes"), to Salomon Brothers Inc and Chase Securities Inc. (the
"Underwriters"). The Notes will (i) have the terms and provisions which are set
forth in the description of the terms of the Notes attached hereto as Exhibit A
and such other terms as are customary, and (ii) be issued pursuant to the
provisions of an Indenture, to be dated as of December 17, 1997 (the "Base
Indenture"), between the Company and First Union National Bank, as Trustee (the
"Trustee"), and a First Supplemental Indenture, to be dated as of December 17,
1997 (the "Supplemental Indenture" and, together with the Base Indenture, the
"Indenture"), among the Company, the Guarantors (as defined below) and the
Trustee. The Notes will be guaranteed by Chesapeake Television, Inc., a Maryland
corporation, Chesapeake Television Licensee, Inc., a Delaware corporation,
FSF-TV, Inc., a North Carolina corporation, KABB Licensee, Inc., a Delaware
corporation, KDNL Licensee, Inc., a Delaware corporation, KSMO, Inc., a Maryland
corporation, KSMO Licensee, Inc., a Delaware corporation, KUPN Licensee, Inc., a
Maryland corporation, SCI-Indiana Licensee, Inc., a Delaware corporation,
SCI-Sacramento Licensee, Inc., a Delaware corporation, Sinclair Communications,
Inc., a Maryland corporation, Sinclair Radio of Albuquerque, Inc., a Maryland
corporation, Sinclair Radio of Albuquerque Licensee, Inc., a Delaware
corporation, Sinclair Radio of Buffalo, Inc., a Maryland corporation, Sinclair
Radio of Buffalo Licensee, Inc., a Delaware corporation, Sinclair Radio of
Greenville, Inc., a Maryland corporation, Sinclair Radio of Greenville Licensee,
Inc., a Delaware corporation, Sinclair Radio of Los Angeles, Inc., a Maryland
corporation, Sinclair Radio of Los Angeles Licensee, Inc., a Delaware
corporation, Sinclair Radio of Memphis, Inc., a Maryland corporation, Sinclair
Radio of Memphis Licensee, Inc., a Delaware corporation, Sinclair Radio of
Nashville, Inc., a Maryland corporation, Sinclair Radio of Nashville Licensee,
Inc., a Delaware corporation, Sinclair Radio of New Orleans, Inc., a Maryland
corporation, Sinclair Radio of New Orleans Licensee, Inc., a Delaware
corporation, Sinclair Radio of St. Louis, Inc., a Maryland
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corporation, Sinclair Radio of St. Louis Licensee, Inc., a Delaware corporation,
Sinclair Radio of Wilkes-Barre, Inc., a Maryland corporation, Sinclair Radio of
Wilkes-Barre Licensee, Inc., a Delaware corporation, Superior Communications of
Kentucky, Inc., a Delaware corporation, Superior Communications of Oklahoma,
Inc., an OK corporation, Superior KY License Corp., a Delaware corporation,
Superior OK License Corp., a Delaware corporation, Tuscaloosa Broadcasting,
Inc., a Maryland corporation, WCGV, Inc., a Maryland corporation, WCGV Licensee,
Inc., a Delaware corporation, WDBB, Inc., a Maryland corporation, WLFL, Inc., a
Maryland corporation, WLFL Licensee, Inc., a Delaware corporation, WLOS
Licensee, Inc., a Delaware corporation, WPGH, Inc., a Maryland corporation, WPGH
Licensee, Inc., a Maryland corporation, WSMH, Inc., a Maryland corporation, WSMH
Licensee, Inc., a Delaware corporation, WSTR, Inc., a Maryland corporation, WSTR
Licensee, Inc., a Maryland corporation, WSYX, Inc., a Maryland corporation,
WTTE, Channel 28, Inc., a Maryland corporation, WTTE, Channel 28 Licensee, Inc.,
a Maryland corporation, WTTO, Inc., a Maryland corporation, WTTO Licensee, Inc.,
a Delaware corporation, WTVZ, Inc., a Maryland corporation, WTVZ Licensee, Inc.,
a Maryland corporation, WYZZ, Inc., a Maryland corporation, and WYZZ Licensee,
Inc., a Delaware corporation(each a "Guarantor" and collectively the
"Guarantors"), on a senior subordinated basis pursuant to a guarantee included
within the Indenture and the Notes (the "Guarantees").
The Company and the Guarantors wish to confirm as follows their
agreement with the Underwriters in connection with the purchase of the Notes by
the Underwriters.
1. Registration Statement and Prospectus. The Company has prepared and
filed with the Commission in accordance with the provisions of the Securities
Act of 1933, as amended (the "Act"), a registration statement on Form S-3 under
the Act (the "registration statement"), including a prospectus and a prospectus
supplement, subject to completion, relating to the Notes. The term "Registration
Statement" as used in this Agreement means the registration statement (including
all financial schedules and exhibits), as amended at the time it becomes
effective, or, if the registration statement became effective prior to the
execution of this Agreement, as supplemented or amended prior to the execution
of this Agreement and shall include in any such case the information, if any,
deemed to be a part of such registration statement pursuant to Rule 430A(b)
under the Act. If it is contemplated, at the time this Agreement is executed,
that a post-effective amendment to the registration statement will be filed and
must be declared effective before the offering of the Notes may commence, the
term "Registration Statement" as used in this Agreement means the registration
statement as amended by said post-effective amendment and including the
information, if any, deemed to be a part thereof pursuant to Rule 430A(b), under
the Act. If the Company files a registration statement to register a portion of
the Notes pursuant to Rule 462(b) under the Act (the "Rule 462(b) Registration
Statement"), then after such filing the term "Registration Statement" in this
Agreement shall be deemed to include the Rule 462(b) Registration Statement at
the time it became effective. The term "Prospectus" as used in this Agreement
means the prospectus, including any prospectus supplement relating to the
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offering of the Notes, in the forms included in the Registration Statement, or,
if the prospectus included in the Registration Statement omits information in
reliance on Rule 430A under the Act and such information is included in
prospectuses filed with the Commission pursuant to Rule 424(b) under the Act,
the term "Prospectus" as used in this Agreement means the prospectus in the form
included in the Registration Statement as supplemented by the addition of the
Rule 430A information contained in the prospectuses filed with the Commission
pursuant to Rule 424(b). The term "Prepricing Prospectus" as used in this
Agreement means the prospectus (including any preliminary prospectus supplement
relating to the offering of the Notes) subject to completion in the form
included in the Registration Statement at the time of the filing of any
preliminary prospectus supplement as part of the Registration Statement with the
Commission, and as such prospectus shall have been amended from time to time
prior to the date of the Prospectus. Any reference in this Agreement to the
registration statement, the Registration Statement, any Prepricing Prospectus or
the Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the Act,
as of the date of the registration statement, the Registration Statement, such
Prepricing Prospectus or the Prospectus, as the case may be, and any reference
to any amendment or Prepricing Prospectus or the Prospectus shall be deemed to
refer to and include any documents filed after such date under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which, upon filing, are
incorporated by reference therein, as required by paragraph (b) of Item 12 of
Form S-3. As used herein, the term "Incorporated Documents" means the documents
which at the time are incorporated by reference in the registration statement,
the Registration Statement, any Prepricing Prospectus, the Prospectus, or any
amendment or supplement thereto; "Rules and Regulations" means the rules and
regulations adopted by the Commission under either the Act or the Exchange Act,
as applicable; and "Person" means any individual, partnership, joint venture,
corporation, limited liability company, trust, unincorporated organization or
government or department or agency thereof.
2. Agreements to Sell and Purchase. The Company hereby agrees, subject
to all the terms and conditions set forth herein, to issue and sell to each
Underwriter and, upon the basis of the representations, warranties and
agreements of the Company and the Guarantors herein contained and subject to all
the terms and conditions set forth herein, each Underwriter agrees, severally
and not jointly, to purchase from the Company, at a purchase price of 99.608% of
the principal amount thereof, the principal amount of Notes set forth opposite
the name of such Underwriter in Schedule I hereto and the Guarantors hereby
agree to issue the Guarantees.
3. Terms of Public Offering. The Company has been advised by you that
the Underwriters propose to make a public offering of their respective portions
of the Notes as soon after the Registration Statement and this Agreement have
become effective as in your judgment is advisable and initially to offer the
Notes upon the terms set forth in the Prospectus.
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4. Delivery of the Notes and Payment Therefor. Delivery to the
Underwriters of and payment for the Notes shall be made at the office of Salomon
Brothers Inc, Seven World Trade Center, New York, NY 10048, at 9:00 A.M., New
York City time, on December 17, 1997 (the "Closing Date"). The place of closing
for the Notes and the Closing Date may be varied by agreement between you and
the Company.
The Notes, including the Guarantees, will be delivered to the
Underwriters against payment of the purchase price therefor in immediately
available funds. The Notes will be evidenced by a single global security in
definitive form (the "Global Debenture") and/or by additional definitive
securities, and will be registered, in the case of the Global Debenture, in the
name of Cede & Co. as nominee of The Depository Trust Company ("DTC"), and in
the other cases, in such names and in such denominations as you shall request by
written notice (it being understood that a facsimile transmission shall be
deemed written notice) prior to 9:30 A.M., New York City time, on the second
business day preceding the Closing Date. The Notes to be delivered to the
Underwriters shall be made available to the Underwriters in New York City for
inspection and packaging not later than 9:30 A.M., New York City time, on the
business day next preceding the Closing Date.
5. Agreements of the Company and the Guarantors. Each of the Company
and the Guarantors, jointly and severally, agrees with the several Underwriters
as follows:
(a) If, at the time this Agreement is executed and delivered, it is
necessary for the Registration Statement or a post-effective amendment thereto
to be declared effective before the offering of the Notes may commence, the
Company will endeavor to cause the Registration Statement or such post-effective
amendment to become effective as soon as possible and will advise you promptly
and, if requested by you, will confirm such advice in writing, when the
Registration Statement or such post-effective amendment has become effective.
(b) The Company will advise you promptly and, if requested by you,
will confirm such advice in writing: (i) of any request by the Commission for
amendment of or a supplement to the Registration Statement, any Prepricing
Prospectus or the Prospectus or for additional information; (ii) of the issuance
by the Commission of any stop order suspending the effectiveness of the
Registration Statement or of the suspension of qualification of the Notes for
offering or sale in any jurisdiction or the initiation of any proceeding for
such purpose; and (iii) within the period of time referred to in paragraph (f)
below, of any change in the Company's condition (financial or otherwise),
business, prospects, properties, net worth or results of operations, or of the
happening of any event, including the filing of any information, documents or
reports pursuant to the Exchange Act, which makes any statement of a material
fact made in the Registration Statement or the Prospectus (as then amended or
supplemented) untrue or which requires the making of any additions to or changes
in the Registration Statement or the Prospectus (as then amended or
supplemented) in order to state a material fact required by the Act or the Rules
and Regulations thereunder to be stated therein or necessary in order to make
the
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statements therein not misleading, or of the necessity to amend or supplement
the Prospectus (as then amended or supplemented) to comply with the Act or any
other law. If at any time the Commission shall issue any stop order suspending
the effectiveness of the Registration Statement, the Company will make every
reasonable effort to obtain the withdrawal of such order at the earliest
possible time.
(c) The Company will furnish to you, without charge (i) three
signed copies of the Registration Statement as originally filed with the
Commission and of each amendment thereto, including financial statements and all
exhibits thereto, (ii) such number of conformed copies of the Registration
Statement as originally filed and of each amendment thereto, but without
exhibits, as you may reasonably request, (iii) such number of copies of the
Incorporated Documents, without exhibits, as you may request, and (iv) three
copies of the exhibits to the Incorporated Documents.
(d) So long as, in the opinion of counsel for the Underwriters, a
Prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, the Company will not (i) file any amendment to the
Registration Statement, make any amendment or supplement to the Prospectus or
file any document which, upon filing becomes an Incorporated Document, of which
you shall not previously have been advised or to which you shall reasonably
object after being so advised or (ii) file any information, documents or reports
pursuant to the Exchange Act without delivering a copy of such information,
documents or reports to the Underwriters prior to such filing.
(e) Prior to the execution and delivery of this Agreement, the
Company has delivered to you, without charge, in such quantities as you have
reasonably requested, copies of the Prepricing Prospectus. The Company consents
to the use, in accordance with the provisions of the Act and with the securities
or blue sky laws of the jurisdictions in which the Notes are offered, by the
Underwriters and by dealers, prior to the date of the Prospectus, of the
Prepricing Prospectus so furnished by the Company.
(f) As soon after the execution and delivery of this Agreement as
possible and thereafter from time to time for such period as in the opinion of
counsel for the Underwriters a Prospectus is required by the Act to be delivered
in connection with sales by any Underwriter or dealer, the Company will
expeditiously deliver to each Underwriter and each dealer, without charge, as
many copies of the Prospectus (and of any amendment or supplement thereto) as
you may reasonably request. The Company consents to the use of the Prospectus
(and of any amendment or supplement thereto), in accordance with the provisions
of the Act and with the securities or blue sky laws of the jurisdictions in
which the Notes are offered, by the Underwriters and by all dealers to whom
Notes may be sold, both in connection with the offering and sale of the Notes
and for such period of time thereafter as the Prospectus is required by the Act
to be delivered in connection with sales by any Underwriter or dealer. If during
such period of time any event shall occur that in the judgment of the Company or
in the opinion of counsel for the Underwriters is required to be set forth in
the Prospectus (as then amended or supplemented) or should be set forth therein
in order to make the statements therein, in
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the light of the circumstances under which they were made, not misleading, or if
it is necessary to supplement or amend the Prospectus (or to file under the
Exchange Act any document which, upon filing, becomes an Incorporated Document)
to comply with the Act or any other law, the Company will forthwith prepare and,
subject to the provisions of paragraph (d) above, file with the Commission an
appropriate supplement or amendment thereto or file an Incorporated Document,
and will expeditiously furnish to the Underwriters and dealers a reasonable
number of copies thereof. In the event that the Company and the Underwriters
agree that the Prospectus should be amended or supplemented, the Company, if
requested by you, will promptly issue a press release announcing or disclosing
the matters to be covered by the proposed amendment or supplement.
(g) The Company will cooperate with you and with counsel for the
Underwriters in connection with the registration or qualification of the Notes
for offering and sale by the Underwriters and by dealers under the securities or
blue sky laws of such jurisdictions as you may reasonably designate and will
file such consents to service of process or other documents necessary or
appropriate in order to effect such registration or qualification; provided that
in no event shall the Company be obligated to qualify to do business in any
jurisdiction where it is not now so qualified or to take any action which would
subject it to service of process in suits, other than those arising out of the
offering or sale of the Notes, in any jurisdiction where it is not now so
subject or subject itself to taxation in any jurisdiction in which it is not now
subject.
(h) The Company and the Guarantors will make generally available to
their security holders an earnings statement of the Company and the Guarantors,
which need not be audited, covering a twelve-month period commencing after the
effective date of the Registration Statement and ending not later than fifteen
months thereafter, as soon as practicable after the end of such period, which
earnings statement shall satisfy the provisions of Section 11(a) of the Act and
the Rules and Regulations (including, at the option of the Company, Rule 158).
(i) So long as any of the Notes are outstanding, the Company and
the Guarantors will furnish to you (i) as soon as available, a copy of each
report of the Company and the Guarantors mailed to stockholders or filed with
any stock exchange or regulatory body and (ii) from time to time such other
information concerning the Company or any of the Guarantors as you may
reasonably request.
(j) If this Agreement shall terminate or shall be terminated after
execution and delivery pursuant to any provisions hereof (otherwise than
pursuant to the second paragraph of Section 10 hereof or by notice given by you
terminating this Agreement pursuant to Section 10 or Section 11 hereof) or if
this Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company or any of the Guarantors to comply with the
terms or fulfill any of the conditions of this Agreement, the Company and the
Guarantors, jointly and severally,
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agree to reimburse the Underwriters for all out-of-pocket expenses (including
fees and expenses of counsel for the Underwriters) incurred by you in connection
herewith.
(k) The Company will apply the net proceeds from the sale of the
Notes substantially in accordance with the description set forth in the
Prospectus.
(l) If Rule 430A of the Act is employed, the Company will timely
file the Prospectus in the proper manner pursuant to Rule 424(b) under the Act
and will advise you of the time and manner of such filing.
(m) The Company or the Guarantors will not without the prior
consent of Salomon Brothers Inc on behalf of the Underwriters prior to the
expiration of 150 days after the date of the Prospectus directly or indirectly
issue, offer to sell, sell, grant any option for the sale of, or otherwise
dispose of any debt securities (other than (a) any debt under the Company's
existing bank credit agreement or (b) the Notes).
(n) Except as stated in this Agreement and in the Prepricing
Prospectus and Prospectus, neither the Company nor any Guarantor has taken, nor
will it take, directly or indirectly, any action designed to or that might
reasonably be expected to cause or result in stabilization or manipulation of
the price of the Notes to facilitate the sale or resale of the Notes.
6. Representations and Warranties of the Company and the Guarantors.
Each of the Company and the Guarantors, jointly and severally, represents and
warrants to each Underwriter that:
(a) Each Prepricing Prospectus included as part of the Registration
Statement as originally filed or as part of any amendment or supplement thereto,
or filed pursuant to Rule 424 under the Act, complied when so filed in all
material respects with the provisions of the Act. The Commission has not issued
any order preventing or suspending the use of any Prepricing Prospectus.
(b) The Company and the Guarantors and the transactions
contemplated by this Agreement meet the requirements for using Form S-3 under
the Act. The Registration Statement in the form in which it became or becomes
effective, and also in such form as it may be when any post-effective amendment
thereto shall become effective, and the Prospectus and any supplement or
amendment thereto when filed with the Commission under Rule 424(b) under the
Act, complied or will comply in all material respects with the provisions of the
Act and did not or will not at any such times contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; except that this
representation and warranty does not apply to statements in or omissions from
the Registration Statement or the Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by or on behalf
of any Underwriter through you expressly for use therein.
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(c) The Incorporated Documents heretofore filed, when they were
filed (or, if any amendment with respect to any such document was filed, when
such amendment was filed), conformed in all material respects with the
requirements of the Exchange Act and the rules and regulations thereunder, any
further Incorporated Documents so filed will, when they are filed, conform in
all material respects with the requirements of the Exchange Act and the rules
and regulations thereunder; no such document when it was filed (or, if an
amendment with respect to any such document was filed, when such amendment was
filed), contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein not misleading; and no such further document, when it is
filed, will contain an untrue statement of a material fact or will omit to state
a material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
(d) The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Maryland with full corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and the Prospectus, and is
duly registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or the conduct of
its business requires such registration or qualification, except where the
failure so to register or qualify would not have a material adverse effect on
the condition (financial or other), business, properties, net worth or results
of operations of the Company and the Subsidiaries (as hereinafter defined) taken
as a whole (a "Material Adverse Effect").
(e) All of the Company's subsidiaries (collectively, the
"Subsidiaries") are listed on Exhibit B hereto. Each Subsidiary is a corporation
or a trust duly organized, validly existing and in good standing in the
jurisdiction of its incorporation or organization, as the case may be, with full
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Registration Statement and the
Prospectus, and is duly registered and qualified to conduct its business and is
in good standing in each jurisdiction or place where the nature of its
properties or the conduct of its business requires such registration or
qualification, except where the failure so to register or qualify does not have
a Material Adverse Effect; all the outstanding shares of capital stock or other
ownership interests of each of the Subsidiaries have been duly authorized and
validly issued, are fully paid and nonassessable, and are owned by the Company
directly, or indirectly through one of the other Subsidiaries, free and clear of
any lien, adverse claim, security interest, equity or other encumbrance, except
as described in the Prospectus.
(f) The Company has full legal right, power and authority to enter
into this Agreement, the Base Indenture and the Supplemental Indenture and to
issue, sell and deliver the Notes to be sold by it to the Underwriters as
provided herein and therein. The Guarantors have full legal right, power and
authority to enter into this Agreement and the Supplemental Indenture and to
issue, sell and deliver the Guarantees to be sold by them to
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the Underwriters as provided herein and therein. No consent, approval,
authorization, order, registration or qualification of or with any court or
governmental agency or body is required for the execution, delivery or
performance of this Agreement, the Indenture, the Notes and the Guarantees by
the Company or any Guarantor, as the case may be, or the consummation by the
Company or any Guarantor, as the case may be, of the transactions contemplated
hereby and thereby, except such as may be required under the Act, the Exchange
Act and state securities or blue sky laws or by the National Association of
Securities Dealers, Inc. (the "NASD"). The execution, delivery and performance
of this Agreement, the Base Indenture and the Supplemental Indenture, the Notes
and the Guarantees by the Company and the Guarantors, as the case may be, and
the consummation by the Company or any Guarantor, as the case may be, of the
transactions contemplated hereby and thereby does not and will not conflict with
or result in a breach or violation by the Company or any Guarantor, as the case
may be, of any of the terms or provisions of, constitute a default by the
Company or any Guarantor, as the case may be, under, or result in the creation
or imposition of any lien, charge, security interest or encumbrance upon any of
the assets of the Company or any Guarantor, as the case may be, pursuant to the
terms of any (A) indenture, mortgage, deed of trust, loan agreement, lease or
other agreement or instrument to which the Company or any of the Subsidiaries,
as the case may be, is a party or to which any of them or any of their
respective properties is subject, (B) the charter or bylaws or other
organizational document of the Company or any Guarantor, as the case may be, or
(C) any statute, judgment, decree, order, rule or regulation of any court or
governmental agency or body applicable to the Company or any of the Subsidiaries
or any of their respective properties.
(g) The execution and delivery of, and the performance by the
Company of its obligations under, this Agreement has been duly and validly
authorized by all necessary corporate action on the part of the Company and each
Guarantor, and this Agreement has been duly executed and delivered by the
Company and each Guarantor. The execution and delivery of the Base Indenture
have been duly authorized by all necessary corporate action of the Company and
the Base Indenture has been duly qualified under the Trust Indenture Act of
1939, as amended (the "1939 Act"), and, when executed and delivered by the
Company and assuming due authorization, execution and delivery by the Trustee,
will be the legal, valid and binding agreement of the Company, enforceable
against the Company in accordance with its terms, subject to applicable
bankruptcy, insolvency and similar laws affecting creditors' rights generally,
and subject as to enforceability, to general principles of equity. The execution
and delivery of the Supplemental Indenture has been duly authorized by all
necessary corporate action of the Company and each Guarantor and the
Supplemental Indenture has been duly qualified under the 1939 Act and, when
executed and delivered by the Company and each Guarantor and assuming due
authorization, execution
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and delivery by the Trustee, will be the legal, valid and binding agreement of
the Company and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, subject to applicable bankruptcy,
insolvency and similar laws affecting creditors' rights generally, and subject,
as to enforceability, to general principles of equity. The issuance, execution
and delivery of the Notes have been duly authorized by all necessary corporate
action of the Company and the Notes, when executed, issued and delivered by the
Company and authenticated by the Trustee, will be the legal, valid, binding and
enforceable obligations of the Company, entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity. The issuance, execution and delivery of the
Guarantees have been duly authorized by all necessary corporate action of each
Guarantor and the Guarantees, when executed, issued and delivered by each
Guarantor and authenticated by the Trustee, will be the legal, valid, binding
and enforceable obligations of the Guarantors, entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity. The Notes, the Guarantees and the Indenture will
conform to the description thereof in the Prospectus.
(h) All the outstanding shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and non-assessable and
are free of any preemptive or similar rights, except as described in the
Prospectus.
(i) Except as described or referred to in the Prospectus, there is
not pending or, to the knowledge of the Company or the Guarantors, threatened,
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries is a party, or to which the property of the Company or
any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the Company or
any of the Subsidiaries would individually or in the aggregate result in a
Material Adverse Effect or might materially adversely affect the consummation of
the transactions contemplated by this Agreement; and all pending legal or
governmental proceedings to which the Company or any of the Subsidiaries is a
party or that affect any of their respective properties, that are not described
in the Prospectus or the Incorporated Documents, including ordinary routine
litigation incidental to the business, would not, if determined adversely to the
Company or any of the Subsidiaries, individually or in the aggregate, result in
a Material Adverse Effect.
(j) Neither the Company nor any of the Subsidiaries is in violation
of its certificate or articles of incorporation or bylaws, or other
organizational documents, or of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any of the
Subsidiaries or of any decree of any court or governmental agency or body having
jurisdiction over the Company or any of the Subsidiaries, or in default in any
material respect in the performance of any obligation, agreement or condition
contained in any bond, debenture, note or any other evidence of indebtedness or
in any agreement, indenture, lease or other instrument to which the Company or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound and no condition or state of facts exists,
with which the passage of time or the giving of notice or both would constitute
such a default, except in each case where such violation or default would not,
singly or in the aggregate, have a Material Adverse Effect.
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(k) There are no agreements, contracts, indentures, leases or other
instruments that are required to be described in the Registration Statement or
the Prospectus or to be filed as an exhibit to the Registration Statement that
are not described or filed as required by the Act.
(l) The accountants, Arthur Andersen LLP, Ernst & Young LLP, KPMG
Peat Marwick LLP and Price Waterhouse LLP, who have certified or shall certify
the financial statements included in or incorporated by reference in the
Registration Statement and the Prospectus (or any amendment or supplement
thereto), are independent public accountants as required by the Act.
(m) The consolidated financial statements, together with the
related schedules and notes included in or incorporated by reference in the
Registration Statement and the Prospectus as of the date thereof, as of the date
hereof, and as of the Closing Date present or will present fairly the
consolidated financial position, results of operations and changes in financial
position of the entities purported to be shown thereby at the dates and for the
periods indicated and have been prepared in accordance with generally accepted
accounting principles ("GAAP") applied on a consistent basis, except as
otherwise stated therein. The selected financial data and summary financial data
included in or incorporated by reference in the Registration Statement and the
Prospectus present fairly the information shown therein as of the date thereof,
as of the date hereof, and as of the Closing Date and have been compiled on a
basis consistent with that of the audited consolidated financial statements
included in or incorporated by reference in the Registration Statement and the
Prospectus. The pro forma financial statements and other pro forma financial
information included in or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein in
accordance with the adjustments and assumptions described therein as of the date
thereof, as of the date hereof, and as of the Closing Date, have been prepared
in accordance with the Commission's rules and guidelines with respect to pro
forma financial statements, have been properly compiled on the pro forma basis
described therein and in the opinion of the Company and the Guarantors, the
assumptions used in the preparation thereof are reasonable and the adjustments
used therein are appropriate to give effect to the transactions or circumstances
referred to therein.
(n) Except as disclosed in the Registration Statement and the
Prospectus (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectus (or any amendment or supplement thereto), neither
the Company nor any of the Subsidiaries has incurred any liability or
obligation, direct or contingent, or entered into any transaction, not in the
ordinary course of business, that is material to the Company and the
Subsidiaries taken as a whole, and there has not been any change in the capital
stock, or material increase in the short-term debt or long-term debt, of the
Company or any of the Subsidiaries, or any material adverse change, or any
development involving or which may reasonably be expected to involve, a
prospective material adverse change, in the condition
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(financial or other), business, net worth or results of operations of the
Company and the Subsidiaries taken as a whole.
(o) Each of the Company and the Subsidiaries has good and
marketable title to all property (real and personal) described in the Prospectus
as being owned by it, free and clear of all liens, claims, security interests or
other encumbrances, except such as are described in the Registration Statement
and the Prospectus or with such exceptions as are not material and do not
interfere with the use made and proposed to be made of such properties by the
Company and the Subsidiaries and could not reasonably be expected individually
or in the aggregate to result in a Material Adverse Effect; and all of the
leases and subleases material to the business of the Company and the
Subsidiaries taken as a whole, and under which the Company or any of the
Subsidiaries holds properties whether or not described in the Registration
Statement and the Prospectus, are in full force and effect and neither the
Company nor any of the Subsidiaries has any notice of any claim of any sort that
has been asserted by anyone adverse to the rights of the Company or any of the
Subsidiaries under any of the leases or subleases mentioned above, or affecting
or questioning the rights of the Company or any of the Subsidiaries to the
continued possession of the leased or subleased premises under any such lease or
sublease, which claim could reasonably be expected individually or in the
aggregate to result in a Material Adverse Effect.
(p) Each of the Company and the Subsidiaries owns or possesses, or
can acquire on reasonable terms, adequate patents, patent rights, licenses,
inventions, copyrights, trademarks, service marks, trade names and know-how
(including trade secrets and other patentable and/or unpatentable proprietary or
confidential information or procedures) (collectively, "intellectual property")
necessary to carry on its business as presently operated by it, except where the
failure to own or possess or have the ability to acquire any such intellectual
property would not individually or in the aggregate result in a Material Adverse
Effect; and none of the Company or any of the Subsidiaries has received any
notice or is otherwise aware of any infringement of or conflict with asserted
rights of others with respect to any intellectual property or of any facts which
would render any intellectual property invalid or inadequate to protect the
interest of the Company or any of the Subsidiaries therein and which
infringement or conflict could reasonably be expected in the aggregate to result
in a Material Adverse Effect.
(q) The Company has not distributed and, prior to the later to
occur of (i) the Closing Date and (ii) completion of the distribution of the
Notes, will not distribute any offering material in connection with the offering
and sale of the Notes other than the Registration Statement, the Prepricing
Prospectus, the Prospectus or other materials, if any, permitted by the Act.
None of the Company or any of the Subsidiaries has taken, or will take, directly
or indirectly, any action designed to, or that might reasonably be expected to,
cause or result in stabilization or manipulation of the price of the Notes.
(r) Except as described in or contemplated by the Prospectus, each
of the Company and the Subsidiaries owns or possesses all governmental licenses,
permits,
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certificates, consents, orders, approvals and other authorizations necessary to
own its properties and to conduct its business in the manner described in the
Prospectus, except where the failure to own or possess such licenses, permits,
certificates, consents, orders, approvals and other authorizations
(collectively, "Material Licenses") would not individually or in the aggregate
result in a Material Adverse Effect; all of the Material Licenses are valid and
in full force and effect; and no event, including receipt of notice of
proceedings relating to revocation or modification of any Material License, has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or result in any other material impairment of the rights
of any holder of any such Material License, subject in each case to such
qualifications as may be set forth in the Prospectus.
(s) The Company and its Subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurances that (i)
transactions are executed in accordance with management's general or specific
authorization; (ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (iii) access to assets is
permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.
(t) To the best of the Company's and the Guarantors' knowledge,
neither the Company nor any of its Subsidiaries nor any employee or agent of the
Company or any Subsidiary has made any payment of funds of the Company or any
Subsidiary or received or retained any funds in violation of any law, rule or
regulation, which payment, receipt or retention of funds is of a character
required to be disclosed in the Prospectus.
(u) Except as disclosed in the Prospectus, all United States
federal income tax returns of the Company and the Subsidiaries required by law
to be filed have been filed (taking into account extensions granted by the
applicable federal governmental agency) and all taxes shown by such returns or
otherwise assessed, which are due and payable, have been paid, except for such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided and except for such taxes the payment of which would
not individually or in the
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aggregate result in a Material Adverse Effect. All other corporate franchise and
income tax returns of the Company and the Subsidiaries required to be filed
pursuant to applicable foreign, state or local law have been filed except
insofar as the failure to file such returns would not individually or in the
aggregate result in a Material Adverse Effect, and all taxes shown on such
returns or otherwise assessed which are due and payable have been paid, except
for such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided and except for such taxes the payment of
which would not individually or in the aggregate result in a Material Adverse
Effect.
(v) Except for rights which have been waived, no holder of any
security of the Company or any Subsidiary has any right to require registration
of any debt or equity security of the Company because of consummation of the
transactions contemplated by this Agreement or otherwise. Except as described or
incorporated by reference in or contemplated by the Prospectus, there are no
outstanding options, warrants or other rights calling for the issuance of, and
there are no commitments, plans or arrangements to issue any debt or equity
security of the Company or any security convertible into or exchangeable or
exercisable for any debt or equity security of the Company.
(w) Each of the Company and the Subsidiaries is not now, and after
sale of the Notes as contemplated hereunder and application of the net proceeds
from such sale as described in the Prospectus under the caption "Use of
Proceeds" will not be, an "investment company" within the meaning of the
Investment Company Act of 1940, as amended (the "1940 Act").
(x) The Company has filed in a timely manner each document or
report required to be filed by it pursuant to the Exchange Act and the rules and
regulations thereunder; each such document or report (including any financial
statements) and any amendment thereto at the time it was filed conformed to the
requirements of the Exchange Act and the rules and regulations thereunder; and
none of such documents or reports contained an untrue statement of any material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(y) Except as described in the Prospectus, the Company and the
Subsidiaries comply in all material respects with all Environmental Laws (as
defined below), except to the extent that failure to comply with such
Environmental Laws would not individually or in the aggregate result in a
Material Adverse Effect. To the knowledge of the Company or any Guarantor, none
of the Company or any of the Subsidiaries is the subject of any pending or, to
the knowledge of the Company or any Guarantor, threatened federal, state or
local investigation evaluating whether any remedial action by the Company or any
of the Subsidiaries is needed to respond to a release of any Hazardous Materials
(as defined below) into the environment, resulting from the Company's or any of
the Subsidiaries' business operations or ownership or possession of any of their
properties or assets or is in contravention of any Environmental Law that could
reasonably be expected individually or in the aggregate to result in a Material
Adverse Effect. None of the Company or any of the Subsidiaries have received any
notice or claim, nor are there pending or, to the knowledge of the Company or
any Guarantor, threatened lawsuits against them, with respect to violations of
an Environmental Law or in connection with any release of any Hazardous Material
into the environment that could reasonably be expected in the aggregate to
result in a Material Adverse Effect. As used herein, "Environmental Laws" means
any federal, state or local law or regulation applicable to the Company's or any
of the Subsidiaries' business operation or ownership or possession of any of
their properties or assets relating to
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environmental matters, and "Hazardous Materials" means those substances that are
regulated by or form the basis of liability under any Environmental Laws.
(z) No labor problem exists with the employees of the Company or
any of the Subsidiaries or, to the knowledge of the Company or any Guarantor, is
imminent that, in either case, could reasonably be expected individually or in
the aggregate to result in a Material Adverse Effect.
(aa) The Company and each of the Subsidiaries maintain insurance of
the types and in the amounts that are reasonable for the businesses operated by
them, including, but not limited to, insurance covering real and personal
property owned or leased by the Company and the Subsidiaries against theft,
damage, destruction, acts of vandalism, liability and malpractice, all of which
insurance is in full force and effect.
(bb) The Company and each of the Subsidiaries is in compliance
with, and each such entity has not received any notice of any outstanding
violation of, all laws, regulations, ordinances and rules applicable to it and
its operations, except, in either case, where any failure by the Company or any
of the Subsidiaries to comply with any such law, regulation, ordinance or rule
would not individually or in the aggregate result in a Material Adverse Effect.
(cc) There are no business relationships or related-party
transactions of the nature described in Item 404 of Regulation S-K involving the
Company or any of its Subsidiaries and any person described in such Item that
are required to be disclosed in the Prospectus and which have not been so
disclosed.
(dd) To the best of the Company's and each Guarantor's knowledge,
each of Baltimore (WNUV-TV) Licensee, Inc. as the licensee of WNUV-TV,
Baltimore, Maryland; WVTV Licensee, Inc. as the licensee of WVTV(TV), Milwaukee,
Wisconsin; WPTT, Inc. as the licensee of WPTT(TV), Pittsburgh, Pennsylvania;
Raleigh (WRDC-TV) Licensee, Inc. as the licensee of WRDC(TV), Durham, North
Carolina; River City License Partnership as the licensee of WTTV(TV),
Bloomington, Indiana and WTTK(TV), Kokomo, Indiana; Anderson (WFBC-TV) Licensee,
Inc. as the licensee of WFBC-TV, Anderson, South Carolina; San Antonio (KRRT-TV)
Licensee, Inc. as the licensee of KRRT(TV), Kerrville, Texas; Tiab
Communications Corporation as the licensee of WILT(AM), Mt. Pocono,
Pennsylvania; WDBB-TV, Inc. as the licensee of WDBB(TV), Tuscaloosa, Alabama;
and Birmingham (WABM-TV) Licensee, Inc. as the licensee of WABM(TV), Birmingham,
Alabama; Emro Communications, Inc. as the licensee of WKXP(FM), Benton,
Pennsylvania; and Phase II Broadcasting, Inc. as the licensee of WLTS-FM,
Slidell, Louisiana and WTKL(FM), New Orleans, Louisiana (each individually an
"LMA Station" and together the "LMA Stations") owns or possesses all
governmental licenses, permits, certificates, consents, orders,
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approvals and other authorizations necessary to own its properties
(collectively, the "LMA Material Licenses"), and to conduct its business in the
manner described in the Prospectus, except where the failure to own or possess
such licenses, permits, certificates, consents, orders, approvals and other
authorizations would not individually or in the aggregate result in any Material
Adverse Effect; all of the LMA Material Licenses are valid and in full force and
effect; and no event, including receipt of notice of proceedings relating to
revocation or modification of any LMA Material License, has occurred which
allows, or after notice or lapse of time would allow, revocation or termination
thereof or result in any other material impairment of the rights of any holder
of any such permit, subject in each case to such qualifications as may be set
forth in the Prospectus; and, except as described in the Prospectus, none of
such permits contains any restriction that is materially burdensome to the LMA
Station or the Company and the Subsidiaries; and there is in full force and
effect with each LMA Station a contract, enforceable in accordance with its
terms against the Company and against the LMA Station pursuant to which the
Company provides programming services to the LMA Station as described or except
as described in the Incorporated Documents.
(ee) The execution and delivery of the Heritage Acquisition
Agreements (as defined in the Prospectus), the agreements (the "Lakeland
Acquisition Agreements") relating to the Lakeland Acquisition (as defined in the
Prospectus) and the agreements (the "Max Media Acquisition Agreements") relating
to the Max Media Acquisition (as defined in the Prospectus) by the Company have
been duly authorized by all necessary corporate action. The Heritage Acquisition
Agreements, the Lakeland Acquisition Agreements and the Max Media Acquisition
Agreements have been duly executed and delivered by the Company and after
execution and delivery by the other parties thereto are the legal, valid,
binding and enforceable obligations of the parties thereto. There have been no
amendments to the Heritage Acquisition Agreements, the Lakeland Acquisition
Agreements or the Max Media Acquisition Agreements subsequent to the date
thereof.
(ff) Neither the issuance, sale or delivery of the Notes and the
Guarantees nor the application of the proceeds thereof by the Company as set
forth in the Prospectus will violate Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board of
Governors.
(gg) Each of the Company and the Guarantors is, and immediately
after the Closing Date will be, Solvent. As used herein, the term "Solvent"
means, with respect to any such entity on a particular date, that on such date
(A) the fair market value of the assets of such entity is greater than the
amount that will be required to pay the probable liabilities of such entity on
its debts as they become absolute and matured, (B) such entity is able to
realize upon its assets and pay its debts and other liabilities, including
contingent obligations, as they mature and (C) such entity does not have
unreasonably small capital to carry out such entities' business as now
conducted, taking into account such entities' projected capital requirements and
availability.
(hh) None of the issuance, offer, sale or delivery of the Notes,
the execution, delivery or performance of this Agreement or the Indenture by the
Company or the consummation by the Company of the transactions contemplated
hereby or thereby (i) requires any consent, approval, authorization or other
order of, or registration or filing
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with, any court, regulatory body, administrative agency or other governmental
body, agency or official (except such as may be required under the Act or such
as may be required under state securities or blue sky laws of various
jurisdictions), or conflicts or will conflict with or constitutes or will
constitute a breach of, or a default under, the certificate or articles of
incorporation or bylaws, or other organizational documents, of the Company or
any of the Subsidiaries or (ii) conflicts or will conflict with or constitutes
or will constitute a breach of, or a default under, in any material respect, any
material agreement, indenture, lease or other instrument to which the Company or
any of the Subsidiaries is a party or by which any of them or any of their
respective properties may be bound, or violates or will violate in any material
respect any statute, law, regulation or filing or judgment, injunction, order or
decree applicable to the Company or any of the Subsidiaries or any of their
respective properties, or will result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of the
Subsidiaries pursuant to the terms of any agreement or instrument to which any
of them is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject.
7. Indemnification and Contribution. (a) Each of the Company and the
Guarantors jointly and severally agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act from and
against any and all losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) arising out of or based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, the Prepricing Prospectus or the Prospectus or in any
amendment or supplement thereto, or arising out of or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages, liabilities or expenses arise out of or are based
upon any untrue statement or omission or alleged untrue statement or omission
which has been made therein or omitted therefrom in reliance upon and in
conformity with the information furnished in writing to the Company by or on
behalf of any Underwriter expressly for use in connection therewith; provided,
however, that the indemnification contained in this paragraph (a) with respect
to any Prepricing Prospectus shall not inure to the benefit of any Underwriter
(or to the benefit of any person controlling such Underwriter) on account of any
such loss, claim, damage, liability or expense arising from the sale of the
Notes by such Underwriter to any person if a copy of the Prospectus shall not
have been delivered or sent to such person within the time required by the Act
and the regulations thereunder, and the untrue statement or alleged untrue
statement or omission or alleged omission of a material fact contained in such
Prepricing Prospectus was corrected in the Prospectus, provided that the Company
has delivered the Prospectus to the Underwriters in requisite quantity on a
timely basis to permit such delivery or sending. The foregoing indemnity
agreement shall
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be in addition to any liability which the Company or any of the Guarantors may
otherwise have.
(b) If any action, suit or proceeding shall be brought against any
Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company or any Guarantor, such Underwriter
or such controlling person shall promptly notify the parties against whom
indemnification is being sought (the "indemnifying parties"), and such
indemnifying parties shall assume the defense thereof, including the employment
of counsel and payment of all fees and expenses. Such Underwriter or any such
controlling person shall have the right to employ separate counsel in any such
action, suit or proceeding and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such Underwriter or
such controlling person unless (i) the indemnifying parties have agreed in
writing to pay such fees and expenses, (ii) the indemnifying parties have failed
to assume the defense and employ counsel or (iii) the named parties to any such
action, suit or proceeding (including any impleaded parties) include both such
Underwriter or such controlling person and the indemnifying parties and such
Underwriter or such controlling person shall have been advised by its counsel
that representation of such indemnified party and any indemnifying party by the
same counsel would be inappropriate under applicable standards of professional
conduct (whether or not such representation by the same counsel has been
proposed) due to actual or potential differing interests between them (in which
case the indemnifying party shall not have the right to assume the defense of
such action, suit or proceeding on behalf of such Underwriter or such
controlling person). It is understood, however, that the indemnifying parties
shall, in connection with any one such action, suit or proceeding or separate
but substantially similar or related actions, suits or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of only one separate firm of
attorneys (in addition to any local counsel) at any time for all such
Underwriters and controlling persons not having actual or potential differing
interests with you or among themselves, which firm shall be designated in
writing by Salomon Brothers Inc, and that all such reasonable fees and expenses
shall be reimbursed as they are incurred. The indemnifying parties shall not be
liable for any settlement of any such action, suit or proceeding effected
without their written consent, but if settled with such written consent, or if
there be a final judgment for the plaintiff in any such action, suit or
proceeding, the indemnifying parties agree to indemnify and hold harmless any
Underwriter, to the extent provided in paragraph (a) above, and any such
controlling person from and against any loss, claim, damage, liability or
expense by reason of such settlement or judgment.
(c) Each Underwriter severally agrees to indemnify and hold
harmless the Company and the Guarantors, their respective directors, their
respective officers who sign the Registration Statement, and any person who
controls the Company or any of the Guarantors within the meaning of Section 15
of the Act or Section 20(a) of the Exchange Act to the same extent as the
foregoing indemnity from the Company and the Guarantors to each Underwriter, but
only with respect to information relating to such Underwriter
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furnished in writing by or on behalf of such Underwriter expressly for use in
the Registration Statement, the Prospectus or any Prepricing Prospectus, or any
amendment or supplement thereto. If any action, suit or proceeding shall be
brought against the Company or any of the Guarantors, any of their respective
directors, any of their respective officers who sign the Registration Statement
and any person who controls the Company or any of the Guarantors within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, or any
such controlling person based on the Registration Statement, the Prospectus or
any Prepricing Prospectus, or any amendment or supplement thereto, and in
respect of which indemnity may be sought against any Underwriter pursuant to
this paragraph (c), such Underwriter shall have the rights and duties given to
the Company and the Guarantors by paragraph (b) above (except that if the
Company or any Guarantor, as the case may be, shall have assumed the defense
thereof such Underwriter shall not be required to do so, but may employ separate
counsel therein and participate in the defense thereof, but the fees and
expenses of such counsel shall be at such Underwriter's expense), and the
Company and the Guarantors, their respective directors, any of their respective
officers who sign the Registration Statement and any person who controls the
Company or any of the Guarantors within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, shall have the rights and duties given to the
Underwriters by paragraph (b) above. The foregoing indemnity agreement shall be
in addition to any liability which the Underwriters may otherwise have.
(d) If the indemnification provided for in this Section 7 is
unavailable to an indemnified party under paragraph (a) or (c) hereof in respect
of any losses, claims, damages, liabilities or expenses referred to therein,
then an indemnifying party, in lieu of indemnifying such indemnified party,
shall contribute to the amount paid or payable by such indemnified party as a
result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Guarantors on the one hand and the Underwriters on the other
hand from the offering of the Notes or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company and the Guarantors on the one
hand and the Underwriters on the other hand in connection with the statements or
omissions that resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
benefits received by the Company and the Guarantors on the one hand and the
Underwriters on the other hand shall be deemed to be in the same proportion as
the total net proceeds from the offering of the Notes (before deducting
expenses) received by the Company and the Guarantors bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The relative
fault of the Company and the Guarantors on the one hand and the Underwriters on
the other hand shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company and the Guarantors on the one hand or by the Underwriters on the other
hand and the
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parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The Company, the Guarantors and the Underwriters agree that
it would not be just and equitable if contribution pursuant to this Section 7
were determined by a pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in paragraph (d)
above. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities and expenses referred to in paragraph (d)
above shall be deemed to include, subject to the limitations set forth above,
any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 7, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total fees received (and not reimbursed to the Company) by such Underwriter with
respect to the Notes underwritten by it and distributed to the public exceeds
the amount of any damages which such Underwriter has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute pursuant to this Section 7 are several in proportion
to the respective numbers of Notes set forth opposite their names in Schedule I
hereto.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement (i) includes an unconditional
release of such indemnified party from all liability on claims that are the
subject matter of such action, suit or proceeding and (ii) does not include a
statement as to, or an admission of, fault, culpability or a failure to act by
or on behalf of any indemnified party.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 7 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 7 and the
representations and warranties of the Company and the Guarantors set forth in
this Agreement shall remain operative and in full force and effect, regardless
of (i) any investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company or any Guarantor, their directors or
officers or any person controlling the Company or any Guarantor, (ii) acceptance
of any Notes and payment therefor hereunder and (iii) any termination of this
Agreement. A successor to any Underwriter or any person controlling any
Underwriter, or to the Company or any Guarantor, their respective directors or
officers, or any person controlling the Company or
20
<PAGE>
any Guarantor shall be entitled to the benefits of the indemnity, contribution
and reimbursement agreements contained in this Section 7.
8. Conditions of Underwriters' Obligations. The obligations of the
Underwriters to purchase the Notes hereunder are subject to the following
conditions:
(a) If, at the time this Agreement is executed and delivered, it
is necessary for the Registration Statement or a post-effective amendment
thereto to be declared effective before the offering of the Notes may commence,
the Registration Statement or such post-effective amendment shall have become
effective not later than 5:30 P.M., New York City time, on the date hereof, or
at such later date and time as shall be consented to in writing by you, and all
filings, if any, required by Rules 424 and 430A under the Act shall have been
timely made; no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Company or any Underwriter,
threatened by the Commission, and any request of the Commission for additional
information (to be included in the Registration Statement or the Prospectus or
otherwise) shall have been complied with to your satisfaction.
(b) Subsequent to the effective date of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting the condition (financial or other),
business, properties, net worth or results of operations of the Company or the
Subsidiaries not contemplated by the Prospectus, which in the opinion of the
Underwriters, would materially, adversely affect the market for the Notes, or
(ii) any event or development relating to or involving the Company or any
Guarantor or any officer or director of the Company or any Guarantor which makes
any statement made in the Prospectus untrue or which, in the opinion of the
Company and its counsel or the Underwriters and their counsel, requires the
making of any addition to or change in the Prospectus in order to state a
material fact required by the Act or any other law to be stated therein or
necessary in order to make the statements therein not misleading, if amending or
supplementing the Prospectus to reflect such event or development would, in the
opinion of the Underwriters, materially adversely affect the market for the
Notes.
(c) The Underwriters shall have received on the Closing Date, an
opinion of Thomas & Libowitz, P.A., counsel for the Company and the Guarantors,
dated the Closing Date and addressed to the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and is duly
qualified to transact business as a foreign corporation in good standing under
the laws of each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such
21
<PAGE>
qualification except where the failure to so qualify would not have a material
adverse effect upon its business taken as a whole;
(ii) All of the outstanding shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
non-assessable and were not issued in violation of any preemptive or similar
rights of stockholders of the Company arising under the corporation laws of the
State of Maryland, under the charter or bylaws of the Company or, to the best of
such counsel's knowledge, under any agreement to which the Company is a party;
(iii) Each of the Subsidiaries has been duly incorporated and
is validly existing as a corporation or trust in good standing under the laws of
its respective jurisdiction of incorporation or organization, as the case may
be, with full power and authority (corporate or other) to own its properties and
conduct its business as described in the Prospectus, and is duly qualified to
transact business as a foreign corporation or trust in good standing under the
laws of each jurisdiction where the ownership or leasing of its properties or
the conduct of its business requires such qualification; and all of the
outstanding shares of capital stock or other ownership interests of each of the
Subsidiaries have been duly authorized and validly issued, are fully paid and
non-assessable and were not issued in violation of any preemptive or similar
rights of stockholders of such Subsidiary arising under the laws of its
respective jurisdiction of incorporation, its charter or bylaws or other
organizational documents or, to the best of such counsel's knowledge, under any
agreement to which such Subsidiary is a party, and all of the outstanding shares
of capital stock or other ownership interests of each of the Subsidiaries are
owned beneficially by the Company free and clear of all liens, encumbrances,
equities and claims except as described in the Prospectus;
(iv) To the best knowledge of such counsel, except as
described or referred to in the Prospectus, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries is a party, or to which the property of the Company or
any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body which, if determined adversely to the Company or any
of the Subsidiaries, would individually or in the aggregate result in any
material adverse change in the business, financial position, net worth, results
of operations or prospects, or materially adversely affect the properties and
assets collectively of the Company and the Subsidiaries taken as a whole or
might materially adversely affect the consummation of the transactions
contemplated by the Registration Statement; and all pending legal or
governmental proceedings to which the Company or any of the Subsidiaries is a
party or that affect any of their respective properties that are not described
in the Prospectus, including ordinary routine litigation incidental to the
business, are considered in the aggregate not to result in a material adverse
change in the business, financial position, net worth, results of operation or
prospects, or materially adversely affect the properties and assets collectively
of the Company and the Subsidiaries taken as a whole;
22
<PAGE>
(v) The execution, delivery and performance of this
Agreement, the Indenture, the Notes and the Guarantees by the Company and the
Guarantors and the consummation of the transactions contemplated hereby and
thereby and compliance by the Company and the Guarantors with the terms hereof
and thereof does not and will not conflict with or result in a breach or
violation by the Company or any Guarantor, as the case may be, of any of the
terms or provisions of, constitute a default by the Company or any Guarantor, as
the case may be, under, or result in the creation or imposition of any lien,
charge, security interest or encumbrance upon any of the assets of the Company
or any Guarantor, as the case may be, pursuant to the terms of (a) any material
indenture, mortgage, deed of trust, loan or credit agreement, bond, debenture,
note, lease or other agreement or instrument to which the Company or any of the
Subsidiaries, as the case may be, is a party or to which any of them or any of
their respective properties is subject; (b) the charter or bylaws or other
organizational documents of the Company or any Guarantor, as the case may be; or
(c) any statute, rule or regulation or, to the best of such counsel's knowledge,
any judgment, decree or order of any court or governmental agency or court or
body applicable to the Company or any of the Subsidiaries or any of their
respective properties;
(vi) Neither the Company nor any of the Subsidiaries is in
violation of its respective certificate or articles of incorporation or bylaws,
or other organizational documents, or to the knowledge of such counsel after
reasonable inquiry, is in default in the performance of any material obligation,
agreement or condition contained in any bond, debenture, note or other evidence
of indebtedness, except as may be disclosed in the Prospectus;
(vii) Except for rights which have been waived, there is no
holder of any Notes or any other security of the Company or any Subsidiary or
any other person who has the right, contractual or otherwise, to cause the
Company to sell or otherwise issue to them, or to permit them to underwrite the
sale of, the Notes or the right to have any other securities of the Company
included in the registration statement or the right, as a result of the filing
of the registration statement, to require registration under the Act of any
Notes or any other securities of the Company or any Subsidiary;
(viii) The Company and the Guarantors have full legal right,
power and authority to enter into this Agreement and the Indenture and to issue,
sell and deliver the Notes and the Guarantees to be sold by them to the
Underwriters as provided herein, and this Agreement and the Indenture have been
duly authorized, executed and delivered by the Company and each of the
Guarantors; and
(ix) The execution and delivery of the Heritage Acquisition
Agreements, the Lakeland Acquisition Agreements and the Max Media Acquisition
Agreements by the Company have been duly authorized by all necessary corporate
action, and the Heritage Acquisition Agreements, the Lakeland Acquisition
Agreements and the Max Media Acquisition Agreements have been duly executed and
delivered by the Company and after execution and delivery by the other parties
thereto are the legal, valid,
23
<PAGE>
binding and enforceable obligations of the Company. To the best knowledge of
such counsel, there have been no amendments to the Heritage Acquisition
Agreements, the Lakeland Acquisition Agreements or the Max Media Acquisition
Agreements subsequent to the date thereof.
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in or incorporated by reference in the
Registration Statement or the Prospectus (including the Incorporated Documents)
and such counsel is not passing upon and does not assume any responsibility
therefor. In the course of the preparation by the Company and the Subsidiaries
of the Registration Statement and the Prospectus (including the Incorporated
Documents), such counsel has participated in discussions with representatives of
the Underwriters and those of the Company and the Subsidiaries and their
independent accountants, in which the business and affairs of the Company and
the Subsidiaries and the contents of the Registration Statement and the
Prospectus (including the Incorporated Documents) were discussed. Based upon the
information such counsel gained in the course of such counsel's representation
of the Company and the Subsidiaries in connection with their preparation of the
Registration Statement and the Prospectus and such counsel's participation in
the discussions referred to above, such counsel has no reason to believe that
(i) as of its effective date, the Registration Statement (including the Rule
430A Information, if applicable, and any amendment thereto) or any of the
Incorporated Documents contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus, or any
amendment or supplement thereto, at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Date, contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel need
express no opinion, however, as to the financial statements, including the notes
and schedules thereto, or any other financial data included in the Registration
Statement, the Prospectus or the Incorporated Documents.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States and the law of the State of Maryland, upon the opinions of counsel
satisfactory to the Underwriters. Such counsel may also state that, insofar as
such opinion involves factual matters, they have relied, to the extent they deem
proper, upon certificates of officers or other appropriate representatives of
the Company and the Subsidiaries and certificates of public officials.
Furthermore, such counsel may insofar as the opinion relates to any laws other
than the laws of the United States of America and the State of Maryland assume,
without any independent investigation, that such laws are identical to the laws
of the United States of America and the State of Maryland.
24
<PAGE>
(d) The Underwriters shall have received on the Closing Date, an
opinion of Wilmer, Cutler & Pickering, securities counsel for the Company, dated
the Closing Date and addressed to the Underwriters, to the effect that:
(i) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with full power and authority (corporate and other) to own its
properties and conduct its business as described in the Prospectus, and is duly
qualified to transact business as a foreign corporation in good standing under
the laws of each jurisdiction where the ownership or leasing of its properties
or the conduct of its business requires such qualification except where the
failure to so qualify would not have a material adverse effect upon its business
taken as a whole;
(ii) No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body is required
for the execution, delivery or performance of this Agreement, the Base
Indenture, the Supplemental Indenture, the Notes and the Guarantees by the
Company or any of the Guarantors, as the case may be, or the consummation by the
Company or any of the Guarantors, as the case may be, of the transactions
contemplated by this Agreement, the Base Indenture, the Supplemental Indenture,
the Notes and the Guarantees, except (a) such as have been obtained under the
Act and the Exchange Act and (b) such as may be required under state securities
or blue sky laws in connection with the purchase and distribution of the Notes
by the Underwriters or as may be required by the NASD, as to each of which in
clause (b) such counsel expresses no opinion. The execution, delivery and
performance of this Agreement, the Base Indenture, the Supplemental Indenture,
the Notes and the Guarantees by the Company and the Guarantors, as the case may
be, and the consummation by the Company and the Guarantors, as the case may be,
of the transactions contemplated hereby and thereby (including, without
limitation, the transactions described in the Prospectus under the caption "Use
of Proceeds") and compliance by the Company and the Guarantors with the terms of
the foregoing does not and will not conflict with or result in a breach or
violation by the Company or any of the Guarantors, as the case may be, of any of
the terms or provisions of, constitute a default by the Company or any of the
Guarantors, as the case may be, under, or result in the creation or imposition
of any lien, charge, security interest or encumbrance upon any of the assets of
the Company or any of the Guarantors, as the case may be, pursuant to the terms
of, any (x) material indenture, mortgage, deed of trust, loan or credit
agreement, bond, debenture, note, lease or other agreement or instrument to
which the Company or any of the Subsidiaries, as the case may be, is a party or
to which any of them or any of their respective properties is subject, (y) the
charter, bylaws or other organizational documents of the Company or any of the
Subsidiaries, as the case may be, or (z) any statute, rule or regulation or, to
the best of such counsel's knowledge, any judgment, decree or order of any court
or governmental agency or court or body applicable to the Company or any of the
Subsidiaries or any of their respective properties;
25
<PAGE>
(iii) The execution and delivery of the Base Indenture has
been duly authorized by all necessary corporate action of the Company, and the
Base Indenture has been duly qualified under the 1939 Act and has been duly
executed and delivered by the Company, and, assuming due authorization,
execution and delivery by the Trustee, is a legal, valid and binding agreement
of the Company, enforceable against the Company in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally, and subject, as to enforceability, to general
principles of equity. The execution and delivery of the Supplemental Indenture
has been duly authorized by all necessary corporate action of the Company and
each Guarantor, and the Supplemental Indenture has been duly qualified under the
1939 Act and has been duly executed and delivered by the Company and each
Guarantor, and, assuming due authorization, execution and delivery by the
Trustee, is a legal, valid and binding agreement of the Company and each
Guarantor, enforceable against the Company and each Guarantor in accordance with
its terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally, and subject, as to enforceability, to
general principles of equity. The issuance, execution and delivery of the Notes
have been duly authorized by all necessary corporate action of the Company, and
the Notes have been duly issued, executed and delivered by the Company, and,
assuming due authentication by the Trustee, are the legal, valid, binding and
enforceable obligations of the Company, entitled to the benefits of the
Indenture, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity. The issuance, execution and delivery of the
Guarantees have been duly authorized by all necessary corporate action of each
Guarantor, and, assuming due authentication by the Trustee, are the legal,
valid, binding and enforceable obligations of the Guarantors, entitled to the
benefits of the Indenture, subject to applicable bankruptcy, insolvency and
similar laws affecting creditors' rights generally and subject, as to
enforceability, to general principles of equity. The execution and delivery of
this Agreement by the Company and the Guarantors have been duly authorized by
all necessary corporate action, and this Agreement has been duly executed and
delivered by the Company and the Guarantors. The Notes, the Guarantees and the
Indenture conform to the descriptions thereof in the Prospectus;
(iv) To the best knowledge of such counsel, except as
described or referred to in the Prospectus, there is not pending or threatened
any action, suit, proceeding, inquiry or investigation, to which the Company or
any of the Subsidiaries is a party, or to which the property of the Company or
any of the Subsidiaries is subject, before or brought by any court or
governmental agency or body, which, if determined adversely to the Company or
any of the Subsidiaries, would individually or in the aggregate result in any
material adverse change in the business, financial position, net worth, results
of operations or prospects, or materially adversely affect the properties or
assets, of the Company and the Subsidiaries taken as a whole or might materially
adversely affect the consummation of the transactions contemplated by the
Prospectus; and all pending legal or governmental proceedings to which the
Company or any of the Subsidiaries is a party or that affect any of their
respective properties that are not
26
<PAGE>
described in the Prospectus, including ordinary routine litigation incidental to
the business, are, considered in the aggregate not to result in a material
adverse change in the business, financial position, net worth, results of
operations or prospects, or materially adversely affect the properties or
assets, of the Company and the Subsidiaries taken as a whole;
(v) The descriptions in the Registration Statement and
Prospectus of statutes, legal and governmental proceedings, and contracts and
other documents present fairly in all material respects the information required
to be shown; and such counsel does not know of any statutes or regulations or
any pending or threatened legal or governmental proceedings required to be
described in the Prospectus which are not described as required, nor of any
contracts or documents of a character required to be described in the
Registration Statement or the Prospectus or to be filed as exhibits to the
Registration Statement which are not described or filed as required. Such
counsel need express no opinion as to the description of any statute, regulation
or proceedings with respect to the regulation of the Company and the
Subsidiaries by the Federal Communications Commission;
(vi) The authorized and outstanding capital stock of the
Company is as set forth under the caption "Capitalization" in the Prospectus;
and the authorized capital stock of the Company conforms in all material
respects as to legal matters to the description thereof contained in the
Prospectus under the caption "Description of Capital Stock;"
(vii) To the best knowledge of such counsel, all the shares
of capital stock of the Company have been duly authorized and validly issued,
are fully paid and non-assessable and are free of any preemptive or similar
rights except as described in the Prospectus;
(viii) The Registration Statement and the Prospectus and any
supplements or amendments thereto as of their respective dates of filing with
the Commission, comply as to form in all material respects to the requirements
of the Act as applicable to registration statements on Form S-3, except that
such counsel, however, need express no opinion as to the financial statements,
schedules and other financial data included in the Registration Statement or the
Prospectus;
(ix) The Registration Statement has become effective under
the Act, any required filing of the Prospectus or any supplement thereto has
been made with the Commission pursuant to Rule 424(b), in the manner and within
the time period required by Rule 424(b), and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or are threatened, pending or contemplated under the Act;
27
<PAGE>
(x) As of the date and time hereof and after application of
the net proceeds of sale of the Notes as described in the Prospectus, the
Company and each of the Subsidiaries, is not and will not be an "investment
company" and is not and will not be controlled by an investment company of as
the term "investment company" is defined under the Investment Company Act of
1940, as amended (the "1940 Act");
(xi) Neither the issuance, sale or delivery of the Notes and
the Guarantees, nor the application of the proceeds thereof by the Company as
set forth in the Prospectus will violate Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System or any other regulation of such Board
of Governors; and
(xii) All Incorporated Documents, when they were filed with
the Commission, complied as to form in all material respects with the
requirements of the Exchange Act; and such counsel has no reason to believe that
any of such documents, when they were so filed, contained an untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made when such documents were so filed, not misleading (except for the financial
statements, schedules or other financial data contained in any such document as
to which counsel need express no opinion).
In addition, such opinion shall state that such counsel has not
independently verified the accuracy, completeness or fairness of the statements
made or the information contained in the Registration Statement or the
Prospectus (including the Incorporated Documents) and, except with respect to
the descriptions referred to in paragraphs (v) and (vi) above, such counsel is
not passing upon and does not assume any responsibility therefor. In the course
of the preparation by the Company and the Guarantors of the Registration
Statement and the Prospectus (including the Incorporated Documents), such
counsel has participated in discussions with representatives of the Underwriters
and those of the Company and the Guarantors and their independent accountants,
in which the business and affairs of the Company and the Subsidiaries and the
contents of the Registration Statement and the Prospectus (including the
Incorporated Documents) were discussed. Based upon the information such counsel
gained in the course of such counsel's representation of the Company and the
Subsidiaries in connection with their preparation of the Registration Statement
and the Prospectus and such counsel's participation in the discussions referred
to above, nothing has come to such counsel's attention that leads them to
believe that (i) as of its effective date, the Registration Statement (including
the Rule 430A Information, if applicable, and any amendment thereto) or any of
the Incorporated Documents contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or (ii) the Prospectus, or any
amendment or supplement thereto, at the time the Prospectus was issued, at the
time any such amended or supplemented prospectus was issued or at the Closing
Date, contains any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading. Such counsel need
express no opinion, however, as to the financial
28
<PAGE>
statements, including the notes and schedules thereto, or any other financial
information included in the Registration Statement, the Prospectus or the
Incorporated Documents.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States, the law of the State of New York, the law of the State of Maryland and
the General Corporation Law of the State of Delaware, upon the opinions of
counsel satisfactory to the Underwriters. Such counsel may also state that,
insofar as such opinion involves factual matters, they have relied, to the
extent they deem proper, upon certificates of officers or other appropriate
representatives of the Company and the Subsidiaries and certificates of public
officials.
(e) The Underwriters shall have received an Opinion, dated the
Closing Date of Fisher, Wayland, Cooper, Leader & Zaragoza, L.L.P., regulatory
counsel for the Company, in form and substance satisfactory to the Underwriters
to the effect that:
(i) Except for such Federal Communications Commission (the
"FCC") approvals that have already been obtained, which approvals, to such
counsel's knowledge, are in full force and effect, no FCC approval,
authorization, consent or license is required under the Communications Act of
1934, as amended, and the rules and regulations promulgated thereunder (the
"Communications Laws") for the consummation of the transactions contemplated by
this Agreement, the Indenture, the Notes and the Guarantees and the issuance and
sale under this Agreement by the Company and the Guarantors of the Notes and the
Guarantees. The execution, delivery and performance in accordance with the terms
of this Agreement, the Indenture, the Notes and the Guarantees by the Company
and the Guarantors, as the case may be, will not violate the Communications
Laws. It should be noted that, under the Communications Laws, FCC approval is
required prior to the transfer of control of the Company or any of the
Subsidiaries which hold broadcast licenses or the assignment of any FCC licenses
or authorizations or prior to the exercise of any voting rights or management
authority over the Company or any of the Subsidiaries which hold broadcast
licenses to the extent that such exercise constitutes a transfer of control of
the Company or any of such Subsidiaries or an assignment of any FCC licenses or
authorizations.
(ii) The following Subsidiaries are the licensees of the
respective stations as identified below, and, except as disclosed in the
Prospectus, are authorized to own and operate their respective stations:
<TABLE>
<CAPTION>
Subsidiary Station
- ---------- -------
<S> <C>
Chesapeake Television WBFF(TV)
Licensee, Inc. Baltimore, MD
WTTE, Channel 28 Licensee, WTTE(TV)
Inc. Columbus, OH
</TABLE>
29
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
WPGH Licensee, Inc. WPGH-TV
Pittsburgh, PA
WCGV Licensee, Inc. WCGV-TV
Milwaukee, Wisconsin
WTTO Licensee, Inc. WTTO(TV)
Birmingham, Alabama
WLFL Licensee, Inc. WLFL(TV)
Raleigh, North Carolina
WTVZ Licensee, Inc. WTVZ-TV
Norfolk, Virginia
WSTR Licensee, Inc. WSTR-TV
Cincinnati, Ohio
KSMO Licensee, Inc. KSMO-TV
Kansas City, MO
WYZZ Licensee Inc. WYZZ(TV)
Bloomington, Illinois
Superior OK License Corp. KOCB(TV)
Oklahoma City, OK
Superior KY License Corp. WDKY-TV
Danville, KY
WSMH Licensee, Inc. WSMH(TV)
Flint, MI
KOVR Licensee, Inc. KOVR(TV)
Stockton, CA
KDSM Licensee, Inc. KDSM-TV
Des Moines, IA
KDNL Licensee, Inc. KDNL-TV
St. Louis, MO
KUPN Licensee, Inc. KUPN(TV)
Las Vegas, NV
KABB Licensee, Inc. KABB(TV)
San Antonio, TX
WLOS Licensee, Inc. WLOS(TV)
Asheville, NC
30
<PAGE>
Sinclair Radio of Los Angeles Licensee, Inc. KBLA(AM)
Santa Monica, CA
Sinclair Radio of New Orleans Licensee, Inc. WWL(AM), New Orleans, Louisiana
WSMB(AM), New Orleans, Louisiana
WLMG(FM), New Orleans, Louisiana
KMEZ(FM), Belle Chasse, Louisiana
Sinclair Radio of Buffalo Licensee, Inc. WBEN(AM), Buffalo, New York
WWKB(AM), Buffalo, New York
WMJQ(FM), Buffalo, New York
WKSE(FM), Niagara Falls, New York
WGR(AM), Buffalo, New York
WWWS (AM), Buffalo, New York
Sinclair Radio of Memphis Licensee, Inc. WJCE(AM), Memphis, Tennessee
WRVR-FM, Memphis, Tennessee
WOGY-FM, Germantown, Tennessee
Sinclair Radio of Nashville Licensee, Inc. WLAC(AM), Nashville, Tennessee
WLAC-FM, Nashville, Tennessee
WJZC(FM), Russellville, Kentucky
Sinclair Radio of Wilkes-Barre Licensee, Inc. WGBI(AM), Scranton, Pennsylvania
WILK(AM), Wilkes-Barre, Pennsylvania
WGGY(FM), Scranton, Pennsylvania
WKRZ(FM), Wilkes-Barre, Pennsylvania
WILP(AM), West Hazelton, Pennsylvania
WWFH(FM), Freeland, Pennsylvania
WKRF(FM), Tobyhanna, Pennsylvania
WWSH(FM), Pittston, Pennsylvania
Sinclair Radio of St. Louis Licensee, Inc. WVRV(FM), East St. Louis, Illinois
KPNT(FM), St. Genevieve, Missouri
</TABLE>
To such counsel's knowledge, all of the licenses held by the subsidiaries
identified in this paragraph (ii) necessary to operate their respective stations
(the "FCC Material Licenses") are valid and in full force and effect. The
stations identified in this paragraph (ii) are collectively referred to as the
"Stations."
(iii) To the best of such counsel's knowledge, Baltimore
(WNUV-TV) Licensee, Inc. is the licensee of WNUV-TV, Baltimore, Maryland; WVTV
Licensee, Inc. is the licensee of WVTV(TV), Milwaukee, Wisconsin; WPTT, Inc. is
the licensee of WPTT(TV), Pittsburgh, Pennsylvania; Raleigh (WRDC-TV) Licensee,
Inc. is the licensee of WRDC(TV), Durham, North Carolina; River City License
Partnership is the licensee of WTTV(TV), Bloomington, Indiana and WTTK(TV),
Kokomo, Indiana; Anderson (WFBC-TV) Licensee, Inc. is the licensee of WFBC-TV,
Anderson, South Carolina; San Antonio (KRRT-TV) Licensee, Inc. is the licensee
of KRRT(TV), Kerrville, Texas; Tiab
31
<PAGE>
Communications Corporation is the licensee of WILT(AM), Mt. Pocono,
Pennsylvania; WDBB-TV, Inc. is the licensee of WDBB(TV), Tuscaloosa, Alabama;
Birmingham (WABM-TV) Licensee, Inc., is the licensee of WABM(TV), Birmingham,
Alabama; Emro Communications, Inc. is the licensee of WKXP(FM), Benton,
Pennsylvania; and Phase II Broadcasting, Inc. is the licensee of WLTS-FM,
Slidell, Louisiana and WTKL(FM), New Orleans, Louisiana. To the best of such
counsel's knowledge, Baltimore (WNUV-TV) Licensee, Inc., WVTV Licensee, Inc.,
WPTT, Inc., Raleigh (WRDC-TV) Licensee, Inc., River City License Partnership,
Anderson (WFBC-TV) Licensee, Inc., San Antonio (KRRT-TV) Licensee, Inc., Tiab
Communications Corporation, WDBB-TV, Inc., and Birmingham (WABM-TV) Licensee,
Inc., (collectively the "LMA Station Licensees"), except as disclosed in the
Prospectus, are authorized to own and operate their respective LMA stations
identified in this Paragraph (iii) (each individually a "LMA Station" and
collectively the "LMA Stations". To such counsel's knowledge, the licenses held
by the LMA Station Licensees to own and operate their respective LMA Stations
are valid and in full force and effect.
(iv) Except as set forth in the Prospectus, to such counsel's
knowledge, there are no proceedings pending or threatened in writing under the
Communications Laws that are specifically directed against the Company, the
Subsidiaries, or the Stations before or by the FCC or any court having
jurisdiction over matters arising under the Communications Laws, relating to any
invalidity, revocation, or modification of any FCC Material Licenses, wherein an
unfavorable ruling, decision, or finding would materially and adversely change
the financial condition, business or properties of the Company and the
Subsidiaries individually or taken as a whole. To such counsel's knowledge,
based solely upon such counsel's examination of records available for public
inspection at the FCC in Washington, D.C., the Stations are operating in
compliance with their FCC Material Licenses, except possibly for noncompliance
that would not have a material adverse effect on the financial condition,
business or properties of the Company and the Subsidiaries individually or taken
as a whole.
(v) The statements in the Prospectus under the captions (a)
"RISK FACTORS--Competition" "--Impact of New Technologies," "--Governmental
Regulations; Necessity of Maintaining FCC Licenses," "--Multiple Ownership Rules
and Effect on LMAs," and "--LMAs - Rights of Preemption and Termination" and (b)
"BUSINESS OF SINCLAIR-- Federal Regulation of Television and Radio Broadcasting"
insofar as such statements constitute a summary of material Communications Laws
and material proceedings, fairly and in all material respects present the
information contained under such captions in light of the circumstances in which
such statements are made, and to the extent they constitute matters of law and
legal conclusions under the Communications Laws, fairly and in all material
respects accurately present the information contained under such captions in
light of the circumstances in which such statements are made.
Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem proper, upon
certificates of officers or other
32
<PAGE>
appropriate representatives of the Company and the Subsidiaries and certificates
of public officials.
(f) The Underwriters shall have received on the Closing Date an
opinion of Fried, Frank, Harris, Shriver & Jacobson, counsel for the
Underwriters, dated the Closing Date and addressed to the Underwriters, with
respect to the matters agreed upon. In addition, such opinion shall also state
the following: In the course of the preparation by the Company and the
Guarantors of the Registration Statement and the Prospectus, such counsel
participated in conferences with certain of the officers and representatives of,
and the independent public accountants for, the Company and the Guarantors, at
which the Registration Statement and the Prospectus were discussed. Between the
date of effectiveness of the Registration Statement and the time of delivery of
such opinion, such counsel attended additional conferences with certain of the
officers and representatives of the Company and the Guarantors, at which the
contents of the Prospectus were discussed to a limited extent. Given the
limitations inherent in the independent verification of factual matters and the
character of determinations involved in the registration process, such counsel
is not passing upon or assuming any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement or the Prospectus and has not made any independent check or
verification thereof. Subject to the foregoing and on the basis of the
information gained in the performance of the services referred to above,
including information obtained from officers and other representatives of, and
the independent public accountants for, the Company and the Guarantors, no facts
have come to such counsel's attention that cause such counsel to believe that
the Registration Statement, as of its effective date, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus as of its effective date contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein in light of
the circumstances under which they were made not misleading. Also, subject to
the foregoing, no facts have come to such counsel's attention in the course of
proceedings described in the second sentence of this paragraph that cause such
counsel to believe that the Prospectus, at the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading. Such counsel express no
view or belief, however, with respect to financial statements, notes or
schedules thereto or other financial information included in or omitted from the
Registration Statement or Prospectus.
In giving such opinion, such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the federal law of the United
States, the law of the State of New York, and the General Corporation Law of the
State of Delaware, upon the opinions of counsel satisfactory to the
Underwriters. Such counsel may also state that, insofar as such opinion involves
factual matters, they have relied, to the extent they deem
33
<PAGE>
proper, upon certificates of officers or other appropriate representatives of
the Company and the Subsidiaries and certificates of public officials.
(g) The Underwriters shall have received letters addressed to the
Underwriters and dated the date hereof and the Closing Date from Arthur Andersen
LLP, Ernst & Young LLP, KPMG Peat Marwick and Price Waterhouse LLP, independent
certified public accountants, substantially in the forms heretofore approved by
you.
(h) At the Closing Date, the Underwriters shall have received a
certificate of the Chief Financial Officer of the Company as to certain agreed
upon financial matters.
(i) At the Closing Date, the Underwriters shall have received a
certificate of the Chief Financial Officer of the Company and the Subsidiaries
to the effect that each of the Company and the Subsidiaries is, and immediately
after the Closing Date will be, Solvent (as such term is defined herein in
Section 6(gg)).
(j) (i) No stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been taken or, to the knowledge of the Company, shall be
contemplated by the Commission at or prior to the Closing Date; (ii) there shall
not have been any change in the capital stock of the Company nor any material
increase in the short-term or long-term debt of the Company (other than in the
ordinary course of business) from that set forth or contemplated in the
Registration Statement or the Prospectus (or any amendment or supplement
thereto); (iii) there shall not have been, since the respective dates as of
which information is given in the Registration Statement and the Prospectus (or
any amendment or supplement thereto), except as may otherwise be stated in the
Registration Statement and Prospectus (or any amendment or supplement thereto),
any material adverse change in the condition (financial or other), business,
prospects, properties, net worth or results of operations of the Company and the
Subsidiaries taken as a whole; (iv) the Company and the Subsidiaries shall not
have any liabilities or obligations, direct or contingent (whether or not in the
ordinary course of business), that are material to the Company and the
Subsidiaries, taken as a whole, other than those reflected in the Registration
Statement or the Prospectus (or any amendment or supplement thereto); and (v)
all the representations and warranties of the Company contained in this
Agreement shall be true and correct on and as of the date hereof and on and as
of the Closing Date as if made on and as of the Closing Date, and you shall have
received a certificate, dated the Closing Date and signed by the chief executive
officer and the chief financial officer of the Company (or such other officers
as are acceptable to you), to the effect set forth in this Section 8(j) and in
Sections 8(k) and 8(m) hereof.
(k) The Company shall not have failed at or prior to the
Closing Date to have performed or complied with any of its agreements contained
in this Agreement and required to be performed or complied with by it hereunder
at or prior to the Closing Date.
34
<PAGE>
(l) There shall not have been any announcement by any "nationally
recognized statistical rating organization," as defined for purposes of Rule
436(g) under the Act, that (i) it is downgrading its rating assigned to any
class of securities of the Company or any of its Subsidiaries, or (ii) it is
reviewing its ratings assigned to any class of securities of the Company with a
view to possible downgrading, or with negative implications, or direction not
determined.
(m) The Company and the Guarantors shall have furnished or caused
to be furnished to the Underwriters such further certificates and documents as
the Underwriters shall have requested.
All such opinions, certificates, letters and other documents will be in
compliance with the provisions hereof only if they are reasonably satisfactory
in form and substance to you and your counsel.
Any certificate or document signed by any officer of the Company and
delivered to the Underwriters, or to counsel for the Underwriters, shall be
deemed a representation and warranty by the Company to each Underwriter as to
the statements made therein.
9. Expenses. Each of the Company and the Guarantors jointly and
severally agree to pay the following costs and expenses and all other costs and
expenses incident to the performance by it of its obligations hereunder: (i) the
preparation, printing or reproduction, and filing with the Commission of the
Registration Statement (including financial statements and exhibits thereto),
the Prepricing Prospectus, the Prospectus, and each amendment or supplement to
any of them, this Agreement, the Notes and the Indenture; (ii) the printing (or
reproduction) and delivery (including postage, air freight charges and charges
for counting and packaging) of such copies of the Registration Statement, the
Prepricing Prospectus, the Prospectus, and all amendments or supplements to any
of them as may be reasonably requested for use in connection with the offering
and sale of the Notes; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Notes, including any stamp taxes in
connection with the original issuance and sale of the Notes; (iv) the printing
(or reproduction) and delivery of this Agreement, the preliminary and
supplemental Blue Sky Memoranda and all other agreements or documents printed
(or reproduced) and delivered in connection with the offering of the Notes; (v)
the lodging, meals and expenses incurred by or on behalf of the Company's
officers in connection with presentations to prospective purchasers of the
Notes; (vi) the registration or qualification of the Notes for offer and sale
under the securities or blue sky laws of the several states as provided in
Section 5(g) hereof (including the reasonable fees, expenses and disbursements
of counsel for the Underwriters relating to the preparation, printing or
reproduction, and delivery of the preliminary and supplemental Blue Sky
Memoranda and such registration and qualification); and (vii) the fees and
expenses of the Company's accountants and the fees and expenses of counsel
(including local and special counsel) for the Company and the Guarantors.
35
<PAGE>
10. Effective Date of Agreement. This Agreement shall become effective:
(i) upon the execution and delivery hereof by the parties hereto; or (ii) if, at
the time this Agreement is executed and delivered, it is necessary for the
registration statement or a post-effective amendment thereto to be declared
effective before the offering of the Notes may commence, when notification of
the effectiveness of the Registration Statement or such post-effective amendment
has been released by the Commission. Until such time as this Agreement shall
have become effective, it may be terminated by the Company, by notifying the
Underwriters, or may be terminated by the Underwriters, by notifying the
Company.
11. Termination of Agreement. This Agreement shall be subject to
termination in the absolute discretion of the Underwriters, without liability on
the part of any Underwriter to the Company or any Guarantor, if prior to the
Closing Date, as the case may be, (i) trading in securities generally on the New
York Stock Exchange, American Stock Exchange or the Nasdaq National Market shall
have been suspended or materially limited, (ii) trading in the Class A Common
Stock on the Nasdaq National Market shall have been suspended or materially
limited, (iii) a general moratorium on commercial banking activities in New York
or Maryland shall have been declared by either federal or state authorities, or
(iv) there shall have occurred any outbreak or escalation of hostilities or
other international or domestic calamity, crisis or change in political,
financial or economic conditions, the effect of which on the financial markets
of the United States is such as to make it, in your judgment, impracticable or
inadvisable to commence or continue the offering of the Notes at the offering
price to the public set forth on the cover page of the Prospectus or to enforce
contracts for the resale of the Notes by the Underwriters. Notice of such
termination may be given to the Company by fax, telegram, telecopy or telephone
and shall be subsequently confirmed by letter.
12. Information Furnished by the Underwriters. The statements set forth
in the last paragraph on the cover page, the stabilization legend on the inside
cover page, and the statements in the third and sixth paragraphs under the
caption "Underwriting" in any Prepricing Prospectus and in the Prospectus
constitute the only information furnished by or on behalf of the Underwriters
through you as such information is referred to in Sections 6(b) and 7 hereof.
13. Miscellaneous. Except as otherwise provided in Sections 5, 10 and
11 hereof, notice given pursuant to any provision of this Agreement shall be in
writing and shall be delivered (i) if to the Company or any Guarantor, at the
office of the Company at 2000 West 41st Street, Baltimore, Maryland 21211,
Attention: David D. Smith, President, with a copy to Sinclair Communications,
Inc. 2000 West 41st Street, Baltimore, MD 21211, Attention: General Counsel and
a copy to Thomas & Libowitz, P.A., 100 Light Street, Suite 1100, Baltimore,
Maryland 21202, Attention: Steven A. Thomas, Esq., with a copy to Wilmer, Cutler
& Pickering, 2445 M Street, Washington, D.C. 20037, Attention: John B. Watkins,
Esq.; or (ii) if to the Underwriters, c/o Salomon Brothers Inc, Seven World
Trade Center, New York, New York 10048, Attention: Manager, Investment Banking
Division, with a copy to Fried, Frank, Harris, Shriver &
36
<PAGE>
Jacobson, One New York Plaza, New York, New York 10004, Attention: Valerie Ford
Jacob, Esq.
This Agreement has been and is made solely for the benefit of the
Underwriters, the Company, its Guarantors, their directors and officers, and the
other controlling persons referred to in Section 7 hereof and their respective
successors and assigns, to the extent provided herein, and no other person shall
acquire or have any right under or by virtue of this Agreement. Neither the term
"successor" nor the term "successors and assigns" as used in this Agreement
shall include a purchaser from any Underwriter of any of the Notes in his status
as such purchaser.
14. APPLICABLE LAW; COUNTERPARTS. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WITHIN THE STATE OF NEW YORK AND WITHOUT
REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF.
This Agreement may be signed in various counterparts which together
constitute one and the same instrument. If signed in counterparts, this
Agreement shall not become effective unless at least one counterpart hereof
shall have been executed and delivered on behalf of each party hereto.
37
<PAGE>
Please confirm that the foregoing correctly sets forth the agreement
between the Company, the Guarantors and the several Underwriters.
Very truly yours,
SINCLAIR BROADCAST GROUP, INC.
By: /s/ David B. Amy
Name: David B. Amy
Title: Chief Financial Officer
GUARANTORS:
CHESAPEAKE TELEVISION, INC.
CHESAPEAKE TELEVISION LICENSEE
FSF-TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KSMO, INC.
KSMO LICENSEE, INC.
KUPN LICENSEE, INC.
SCI-INDIANA LICENSEE, INC.
SCI-SACRAMENTO LICENSEE, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF ALBUQUERQUE LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF BUFFALO LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF GREENVILLE LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC.
SINCLAIR RADIO OF LOS ANGELES LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS, INC.
SINCLAIR RADIO OF MEMPHIS LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NASHVILLE LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF NEW ORLEANS LICENSEE, INC.
SINCLAIR RADIO OF ST. LOUIS, INC.
SINCLAIR RADIO OF ST. LOUIS LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE, INC.
SINCLAIR RADIO OF WILKES-BARRE LICENSEE, INC.
SUPERIOR COMMUNICATIONS OF KENTUCKY, INC.
SUPERIOR COMMUNICATIONS OF OKLAHOMA, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
TUSCALOOSA BROADCASTING, INC.
WCGV, INC.
38
<PAGE>
WCGV LICENSEE, INC.
WDBB, INC.
WLFL, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSMH LICENSEE, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WSYX, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTTO LICENSEE, INC.
WTVZ, INC.
WTVZ LICENSEE, INC.
WYZZ, INC.
WYZZ LICENSEE, INC.
By: /s/ David B. Amy
----------------------------
Name: David B. Amy
Title: Secretary
SALOMON BROTHERS INC
CHASE SECURITIES INC.
By: SALOMON BROTHERS INC
By: /s/ Michael E. Anderson
------------------------
Name: Michael E. Anderson
Title: Managing Director
39
<PAGE>
SCHEDULE I
SINCLAIR BROADCAST GROUP, INC.
Underwriter Principal Amount of Notes
Salomon Brothers Inc $187,500,000
Chase Securities Inc. $ 62,500,000
-----------------------
Total: $250,000,000
-----
<PAGE>
EXHIBIT A
DESCRIPTION OF THE NOTES
The following description of the particular terms of the Notes supplements,
and to the extent inconsistent therewith, replaces, the description of the
general terms and provisions set forth in the Prospectus, to which description
reference is hereby made. See "Description of Debt Securities" in the
accompanying Prospectus. The Notes will constitute Subordinated Debt Securities
as described in the Prospectus.
The Notes offered hereby will be issued under an Indenture (the "Base
Indenture") to be entered into among the Company and First Union National Bank,
as trustee (the "Trustee"), as supplemented by the First Supplemental Indenture
thereto to be entered into among the Company, the Guarantors and the Trustee
(the "Supplemental Indenture" and, together with the Base Indenture, the
"Indenture"). The following summary of the material provisions of the Indenture
does not purport to be complete, and where reference is made to particular
provisions of the Indenture, such provisions, including the definitions of
certain terms, are qualified in their entirety by reference to all of the
provisions of the Indenture and those terms made a part of the Indenture by
reference to the Trust Indenture Act. For definitions of certain capitalized
terms used in the following summary, see "Certain Definitions." Section
references herein are to the Indenture. A form of the Base Indenture has been
filed as an exhibit to the registration statement of which this Prospectus
Supplement is a part and the Base Indenture and the form of Supplemental
Indenture will be filed as an exhibit to a report incorporated by reference
herein prior to the issuance of the Notes.
GENERAL
The Notes will mature on December 15, 2007, will be limited to $250,000,000
aggregate principal amount, and will be unsecured senior subordinated
obligations of the Company. Each Note will bear interest at 8 3/4% per annum
from its date of issuance or from the most recent interest payment date to which
interest has been paid, payable semiannually on June 15 and December 15 each
year, commencing June 15, 1998, to the Person in whose name the Note (or any
predecessor Note) is registered at the close of business on the June 1 or
December 1 next preceding such interest payment date.
Payment of the Notes is guaranteed by the Guarantors, jointly and
severally, on a senior subordinated basis. The Guarantors are comprised of all
of the Subsidiaries of the Company other than Cresap Enterprises, Inc., KDSM,
Inc., KDSM Licensee, Inc. and the Trust. The Guarantors represented
approximately 97.9% of total tangible assets as of September 30, 1997 and 98.3%
of pro forma broadcast cash flow (giving effect to the 1996 Acquisitions, the
HYTOPS Issuance, the July Debt Issuance, the Heritage Acquisition, the Preferred
Stock Offering, the Common Stock Offering, the completion of the Tender Offer
and the Offering and the application of the net proceeds thereof as set forth in
"Use of Proceeds") and 85.3% of income before provision or benefit for income
taxes for the year ended December 31, 1996 of the Company in each case on a
consolidated basis. See "Guarantees."
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes will be exchangeable and transferable, at the office or agency of
the Company maintained for such purposes (which initially will be the Trustee);
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Person entitled thereto as shown on the security
register. The Notes will be issued only in fully registered form without
coupons, in denominations of $1,000 and any integral multiple thereof. (Section
302) See "-- Book-Entry Securities; The Depository Trust Company; Delivery and
Form." No service charge will be made for any registration of transfer, exchange
or redemption of Notes, except in certain circumstances for any tax or other
governmental charge that may be imposed in connection therewith. (Section 306)
<PAGE>
OPTIONAL REDEMPTION
The Notes will be subject to redemption at any time on or after December
15, 2002, at the option of the Company, in whole or in part, on not less than 30
nor more than 60 days' prior notice by first-class mail in amounts of $1,000 or
an integral multiple thereof at the following redemption prices (expressed as
percentages of the principal amount), if redeemed during the 12-month period
beginning December 15 of the years indicated below:
<TABLE>
<CAPTION>
REDEMPTION
YEAR PRICE
- ---------------- -------------
<S> <C>
2002 104.375%
2003 102.917
2004 101.458
</TABLE>
and thereafter at 100% of the principal amount, 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).
In addition, at any time on or prior to December 15, 2000, the Company may
redeem up to 25% of the original principal amount of Notes with the net proceeds
of a Public Equity Offering of the Company at 108.75% of the aggregate principal
amount, 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 Notes are to be redeemed, the Trustee shall select
the Notes or portions thereof to be redeemed pro rata, by lot or by any other
method the Trustee shall deem fair and reasonable. (Sections 1101, 1105 and
1107)
SINKING FUND
There will be no sinking fund.
SUBORDINATION
The payment of the principal of, premium, if any, and interest on, the
Notes will be subordinated in right of payment, as set forth in the Indenture,
to the prior 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 Notes will be senior subordinated indebtedness of the Company
ranking pari passu with all other existing and future senior subordinated
indebtedness of the Company and senior to all existing and future Subordinated
Indebtedness of the Company. (Section 1201)
During the continuance of any default in the payment of any Designated
Senior Indebtedness no payment (other than payments previously made pursuant to
the provisions described under "-- Defeasance or Covenant Defeasance of
Indenture") or distribution of any assets of the Company of any kind or
character (excluding certain permitted equity interests or subordinated
securities) shall be made on account of the principal of, premium, if any, or
interest on, the Notes or on account of the purchase, redemption, defeasance or
other acquisition of, the Notes unless and until such default has been cured,
waived or has ceased to exist or such Designated Senior Indebtedness shall have
been discharged or paid in full in cash or cash equivalents or in any other form
as acceptable to the holders of Senior Indebtedness after which the Company
shall resume making any and all required payments in respect of the Notes,
including any missed payments.
During the continuance of any non-payment default with respect to any
Designated Senior Indebtedness pursuant to which the maturity thereof may be
accelerated (a "Non-payment Default") and after the receipt by the Trustee from
a representative of the holder of any Designated Senior Indebtedness of a
written notice of such Non-payment Default, no payment (other than payments
previously made pursuant to the provisions described under "-- Defeasance or
Covenant Defeasance of Indenture") or distribution of any assets of the Company
of any kind or character (excluding certain permitted equity
<PAGE>
or subordinated securities) may be made by the Company on account of the
principal of, premium, if any, or interest on, the Notes or on account of the
purchase, redemption, defeasance or other acquisition of, the Notes for the
period specified below (the "Payment Blockage Period").
The Payment Blockage Period shall commence upon the receipt of notice of
the Non-payment Default by the Trustee and the Company from a representative of
the holder of any Designated Senior Indebtedness and shall end on the earliest
of (i) the first date on which more than 179 days shall have elapsed since the
receipt of such written notice (provided such Designated Senior Indebtedness as
to which notice was given shall not theretofore have been accelerated), (ii) the
date on which such Non-payment Default (and all Non-payment Defaults as to which
notice is given after such Payment Blockage Period is initiated) are cured,
waived or ceased to exist or on which such Designated Senior Indebtedness is
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 (iii) the date on
which such Payment Blockage Period (and all Non-payment Defaults as to which
notice is given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company or the Trustee from the
representatives of holders of Designated Senior Indebtedness initiating such
Payment Blockage Period, after which, in the case of clauses (i), (ii) and
(iii), the Company shall promptly resume making any and all required payments in
respect of the Notes, including any missed payments. In no event will a Payment
Blockage Period extend beyond 179 days from the date of the receipt by the
Company or the Trustee of the notice initiating such Payment Blockage Period
(such 179-day period referred to as the "Initial Period"). Any number of notices
of Non-payment Defaults may be given during the Initial Period; provided that
during any 365-day consecutive period only one Payment Blockage Period during
which payment of principal of, or interest on, the Notes 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 has been cured or waived for a period of
not less than 90 consecutive days. (Section 1203)
If the Company fails to make any payment on the Notes when due or within
any applicable grace period, whether or not on account of the payment blockage
provisions referred to above, such failure would constitute an Event of Default
under the Indenture and would enable the holders of the Notes to accelerate the
maturity thereof. See "-- Events of Default."
The Indenture provides that in the event of 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
its assets, or any liquidation, dissolution or other winding up of the Company,
whether voluntary or involuntary and whether or not involving insolvency or
bankruptcy, or any assignment for the benefit of creditors or any other
marshalling of assets or liabilities of the Company, all Senior Indebtedness
must be paid in full in cash or cash equivalents or in any other manner
acceptable to the holders of Senior Indebtedness, or provision made for such
payment, before any payment or distribution (excluding distributions of certain
permitted equity or subordinated securities) is made on account of the principal
of, premium, if any, or interest on the Notes. (Section 1202)
By reason of such subordination, in the event of liquidation or insolvency,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the Notes, and funds which would be otherwise
payable to the holders of the Notes will be paid to the holders of the Senior
Indebtedness to the extent necessary to pay the Senior Indebtedness in full in
cash or cash equivalents or in any other manner acceptable to the holders of
Senior Indebtedness, and the Company may be unable to meet its obligations fully
with respect to the Notes.
Each Guarantee of a Guarantor will be an unsecured senior subordinated
obligation of such Guarantor, ranking pari passu with, or senior in right of
payment to, all other existing and future Indebtedness of such Guarantor that is
expressly subordinated to Guarantor Senior Indebtedness. The Indebtedness
evidenced by the Guarantees will be subordinated to Guarantor Senior
Indebtedness to the same extent as the Notes are subordinated to Senior
Indebtedness and during any period when payment on the Notes is blocked by
Designated Senior Indebtedness, payment on the Guarantees is similarly blocked.
<PAGE>
"Senior Indebtedness" is defined as the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition initiating
any proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) on any Indebtedness of the Company
(other than as otherwise provided in this definition), whether outstanding on
the date of the 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 the Notes. 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 subordinate to any other Indebtedness of the Company, (ii) Indebtedness
outstanding under the Founders' Notes and (iii) Indebtedness under Interest Rate
Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Notes, (ii) Indebtedness that is
subordinate or junior in right of payment 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, (vi) Indebtedness of the Company to the extent
such liability constitutes Indebtedness 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 the
Indenture, (viii) Indebtedness owed by the Company for compensation to employees
or for services and (ix) Indebtedness outstanding under the Minority Note.
"Guarantor Senior Indebtedness" is defined as the principal of, premium, if
any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy laws
whether or not allowable as a claim in such proceeding) on any Indebtedness of
any Guarantor (other than as otherwise provided in this definition), whether
outstanding on the date of the Indenture or thereafter created, incurred or
assumed, and whether at any time owing, actually or contingent, unless, in the
case of any particular Indebtedness, the instrument creating or evidencing the
same or pursuant to which the same is outstanding expressly provides that such
Indebtedness shall not be senior in right of payment to any Guarantee. Without
limiting the generality of the foregoing, "Guarantor Senior Indebtedness" shall
include (i) the principal of, premium, if any, and interest (including interest
accruing after the filing of a petition initiating any proceeding under any
state, federal or foreign bankruptcy law whether or not allowable as a claim in
such proceeding) and all other obligations of every nature of any Guarantor from
time to time owed to the lenders (or their agent) under the Bank Credit
Agreement; provided, however, 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,
(ii) Indebtedness evidenced by any guarantee of the Founders' Notes and (iii)
Indebtedness under Interest Rate Agreements. Notwithstanding the foregoing,
"Guarantor Senior Indebtedness" shall not include (i) Indebtedness evidenced by
the Guarantees, (ii) Indebtedness that is subordinate or junior in right of
payment to any Indebtedness of any Guarantor, (iii) Indebtedness which when
incurred and without respect to any election under Section 1111(b) of Title 11
of the United States Code, is without recourse to any Guarantor, (iv)
Indebtedness which is represented by Disqualified Equity Interests, (v) any
liability for foreign, federal, state, local or other taxes owed or owing by any
Guarantor to the extent such liability constitutes Indebtedness, (vi)
Indebtedness of any Guarantor to a Subsidiary or any other Affiliate of the
Company or any of such Affiliate's subsidiaries, (vii) Indebtedness evidenced by
any guarantee of any Subordinated Indebtedness or Pari Passu Indebtedness,
(viii) that portion of any Indebtedness which at the time of issuance is issued
in violation of the Indenture, (ix) Indebtedness owed by any Guarantor for
compensation to employees or for services and (x) any guarantee of the Minority
Note.
<PAGE>
"Designated Senior Indebtedness" is defined as (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.
As of September 30, 1997, on a pro forma basis, after giving effect to the
Heritage Acquisition, the completion of the Tender Offer and the Offering and
the application of the net proceeds thereof as set forth in "Use of Proceeds,"
the aggregate amount of Senior Indebtedness that would have ranked senior in
right of payment to the Notes would have been $704.4 million, and the aggregate
amount of indebtedness that is pari passu in right of payment with the Notes
would have been $500 million. See "Risk Factors -- Subordination of the
Subordinated Debt Guarantees and the Related Guarantees; Asset Encumbrances" in
the accompanying Prospectus. The Company's and its Subsidiaries' ability to
incur additional Indebtedness is restricted as set forth under "Certain
Covenants -- Limitation on Indebtedness." Any Indebtedness which can be incurred
may constitute additional Senior Indebtedness or Guarantor Senior Indebtedness.
GUARANTEES
The Guarantors will, jointly and severally, unconditionally guarantee the
due and punctual payment of principal of, premium, if any, and interest on, the
Notes. Such Guarantees will be subordinated to the Guarantor Senior
Indebtedness. See "-- Subordination." As of September 30, 1997, on a pro forma
basis, after giving effect to the Heritage Acquisition, the completion of the
Tender Offer and the Offering and the application of the net proceeds thereof as
set forth in "Use of Proceeds," the aggregate amount of Guarantor Senior
Indebtedness that would have ranked senior in right of payment to the Guarantees
would have been $704.4 million (including $697.7 million of outstanding
indebtedness representing guarantees of Senior Indebtedness). In addition, under
certain circumstances described under "-- Certain Covenants -- Limitation on
Issuances of Guarantees of and Pledges for Indebtedness," the Company is
required to cause the execution and delivery of additional Guarantees by
Restricted Subsidiaries. (Section 1014)
In addition, upon any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's Equity Interest in, or all or
substantially all of the assets of, any Guarantor, which is in compliance with
the Indenture, such Guarantor shall be released from all its obligations under
its Guarantee.
The Guarantors consist of all of the Company's existing Subsidiaries other
than Cresap Enterprises, Inc., KDSM, Inc., KDSM Licensee Inc. and the Trust
which are: Chesapeake Television, Inc., a Maryland corporation, Chesapeake
Television Licensee, Inc., a Delaware corporation, FSF-TV, Inc., a North
Carolina corporation, KABB Licensee, Inc., a Delaware corporation, KDNL
Licensee, Inc., a Delaware corporation, KSMO, Inc., a Maryland corporation, KSMO
Licensee, Inc., a Delaware corporation, KUPN Licensee, Inc., a Maryland
corporation, SCI-Indiana Licensee, Inc., a Delaware corporation, SCI-Sacramento
Licensee, Inc., a Delaware corporation, Sinclair Communications, Inc., a
Maryland corporation, Sinclair Radio of Albuquerque, Inc., a Maryland
corporation, Sinclair Radio of Albuquerque Licensee, Inc., a Delaware
corporation, Sinclair Radio of Buffalo, Inc., a Maryland corporation, Sinclair
Radio of Buffalo Licensee, Inc., a Delaware corporation, Sinclair Radio of
Greenville, Inc., a Maryland corporation, Sinclair Radio of Greenville Licensee,
Inc., a Delaware corporation, Sinclair Radio of Los Angeles, Inc., a Maryland
corporation, Sinclair Radio of Los Angeles Licensee, Inc., a Delaware
corporation, Sinclair Radio of Memphis, Inc., a Maryland corporation, Sinclair
Radio of Memphis Licensee, Inc., a Delaware corporation, Sinclair Radio of
Nashville, Inc., a Maryland corporation, Sinclair Radio of Nashville Licensee,
Inc., a Delaware corporation, Sinclair Radio of New Orleans, Inc., a Maryland
corporation, Sinclair Radio of New Orleans Licensee, Inc., a Delaware
corporation, Sinclair Radio of St. Louis, Inc., a Maryland corporation, Sinclair
Radio of St. Louis Licensee, Inc., a Delaware corporation, Sinclair Radio of
Wilkes-Barre, Inc., a Maryland corporation, Sinclair Radio of Wilkes- Barre
Licensee, Inc., a Delaware corporation, Superior Communications of Kentucky,
Inc., a Delaware
<PAGE>
corporation, Superior Communications of Oklahoma, Inc., an Oklahoma corporation,
Superior KY License Corp., a Delaware corporation, Superior OK License Corp., a
Delaware corporation, Tuscaloosa Broadcasting, Inc., a Maryland corporation,
WCGV, Inc., a Maryland corporation, WCGV Licensee, Inc., a Delaware corporation,
WDBB, Inc., a Maryland corporation, WLFL, Inc., a Maryland corporation, WLFL
Licensee, Inc., a Delaware corporation, WLOS Licensee, Inc., a Delaware
corporation, WPGH, Inc., a Maryland corporation, WPGH Licensee, Inc., a Maryland
corporation, WSMH, Inc., a Maryland corporation, WSMH Licensee, Inc., a Delaware
corporation, WSTR, Inc., a Maryland corporation, WSTR Licensee, Inc., a Maryland
corporation, WSYX, Inc., a Maryland corporation, WTTE, Channel 28, Inc., a
Maryland corporation, WTTE, Channel 28 Licensee, Inc., a Maryland corporation,
WTTO, Inc., a Maryland corporation, WTTO Licensee, Inc., a Delaware corporation,
WTVZ, Inc., a Maryland corporation, WTVZ Licensee, Inc., a Maryland corporation,
WYZZ, Inc., a Maryland corporation, and WYZZ Licensee, Inc., a Delaware
corporation.
CERTAIN COVENANTS
The Indenture contains, among others, the following covenants:
Limitation on Indebtedness. The Company will not, and will not permit any
Restricted Subsidiary to, create, incur, assume or directly or indirectly
guarantee or in any other manner become directly or indirectly liable for
("incur") any Indebtedness (including Acquired Indebtedness), except that the
Company may incur Indebtedness and a Guarantor may incur Permitted Subsidiary
Indebtedness if, in each case, the Debt to Operating Cash Flow Ratio of the
Company and its Restricted Subsidiaries at the time of the incurrence of such
Indebtedness, after giving pro forma effect thereto, is 7:1 or less.
The foregoing limitation will not apply to the incurrence of any of the
following (collectively, "Permitted Indebtedness"):
(i) Indebtedness of the Company under the Bank Credit Agreement in an
aggregate principal amount at any one time outstanding not to exceed $50.0
million under any revolving credit facility thereunder;
(ii) Indebtedness of the Company pursuant to the Notes and Indebtedness
of any Guarantor pursuant to a Guarantee;
(iii) Indebtedness of any Guarantor consisting of a guarantee of the
Company's Indebtedness under the Bank Credit Agreement;
(iv) Indebtedness of the Company or any Restricted Subsidiary outstanding
on the date of the Supplemental Indenture and listed on a schedule thereto;
(v) Indebtedness of the Company owing to a Restricted Subsidiary;
provided that any Indebtedness of the Company owing to a Restricted
Subsidiary that is not a Guarantor is made pursuant to an intercompany note
in the form attached to the Supplemental Indenture and is subordinated in
right of payment from and after such time as the Notes shall become due and
payable (whether at Stated Maturity, acceleration or otherwise) to the
payment and performance of the Company's obligations under the Notes;
provided, further, that any disposition, pledge or transfer of any such
Indebtedness to a Person (other than a disposition, pledge or transfer to a
Wholly Owned Restricted Subsidiary or a pledge to or for the benefit of the
lenders under the Bank Credit Agreement) shall be deemed to be an incurrence
of such Indebtedness by the obligor not permitted by this clause (v);
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary owing to the
Company or another Wholly Owned Restricted Subsidiary; provided that, with
respect to Indebtedness owing to a Wholly Owned Subsidiary that is not a
Guarantor, (x) any such Indebtedness is made pursuant to an intercompany note
in the form attached to the Supplemental Indenture and (y) any such
Indebtedness shall be subordinated in right of payment from and after such
time as the obligations under the Guarantee 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
<PAGE>
to a Person (other than a disposition, pledge or transfer to the Company or a
Wholly Owned Restricted Subsidiary or pledge to or for the benefit of the
lenders under the Bank Credit Agreement) shall be deemed to be an incurrence
of such Indebtedness by the obligor not permitted by this clause (vi) and (b)
any transaction pursuant to which any Wholly Owned Restricted Subsidiary,
which has Indebtedness owing to the Company or any other Wholly Owned
Restricted Subsidiary, ceases to be a Wholly Owned Restricted Subsidiary
shall be deemed to be the incurrence of Indebtedness by such Wholly Owned
Restricted Subsidiary that is not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in accordance with the
provisions of " -- Limitation on Issuances of Guarantees of and Pledges for
Indebtedness";
(viii) obligations of the Company entered into in the ordinary course of
business pursuant to Interest Rate Agreements designed to protect the Company
against fluctuations in interest rates in respect of Indebtedness of the
Company as long as such obligations at the time incurred do not exceed the
aggregate principal amount of such Indebtedness then outstanding or in good
faith anticipated to be outstanding within 90 days of such occurrence;
(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 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 or Subordinated Indebtedness, such refinancing does
not reduce the Average Life to Stated Maturity or the Stated Maturity of such
Indebtedness; and
(x) Indebtedness of the Company in addition to that described in clauses
(i) through (ix) above, and any renewals, extensions, substitutions,
refinancings, or replacements of such Indebtedness, so long as the aggregate
principal amount of all such Indebtedness shall not exceed $25,000,000.
(Section 1008)
Limitation on Restricted Payments. (a) The Company will not, and will not
permit any Restricted Subsidiary to, directly or indirectly:
(i) declare or pay any dividend on, or make any distribution to holders
of, any of the Company's Equity Interests (other than dividends or
distributions payable solely in its Qualified Equity Interests);
(ii) purchase, redeem or otherwise acquire or retire for value, directly
or indirectly, any Equity Interest of the Company or any Affiliate thereof
(except Equity Interests held by the Company or a Wholly Owned Restricted
Subsidiary);
(iii) make any principal payment on, or repurchase, redeem, defease,
retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Equity Interests
of any Subsidiary to any Person (other than the Company or any of its Wholly
Owned Restricted Subsidiaries);
(v) incur, create or assume any guarantee of Indebtedness of any
Affiliate (other than a Wholly Owned Restricted Subsidiary of the Company);
or
(vi) make any Investment in any Person (other than any Permitted
Investments)
(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board
<PAGE>
resolution), (1) no Default or Event of Default shall have occurred and be
continuing and such Restricted Payment shall not be an event which is, or after
notice or lapse of time or both, would be, an "event of default" under the terms
of any Indebtedness of the Company or its Restricted Subsidiaries; and (2) the
aggregate amount of all such Restricted Payments declared or made after the date
of the Indenture does not exceed the sum of:
(A) an amount equal to the Company's Cumulative Operating Cash Flow
less 1.4 times the Company's Cumulative Consolidated Interest Expense;
(B) the aggregate Net Cash Proceeds received after December 9, 1993 by
the Company from capital contributions (other than from a Subsidiary) or
from the issuance or sale (other than to any of its Subsidiaries) of its
Qualified Equity Interests (except, in each case, to the extent such
proceeds are used to purchase, redeem or otherwise retire Equity
Interests or Subordinated Indebtedness as set forth below); and
(C) to the extent that any Investment constituting a Restricted
Payment (including an Investment in an Unrestricted Subsidiary) that was
made after the date of the Supplemental Indenture is sold or is otherwise
liquidated or repaid, 100% of the amount (to the extent not included in
Cumulative Operating Cash Flow) equal to the Net Cash Proceeds or Fair
Market Value of marketable securities received with respect to such
Investment (less the cost of the disposition of such Investment and net
of taxes).
(b) Notwithstanding the foregoing, and in the case of clauses (ii) through
(v) below, so long as there is no Default or Event of Default continuing, the
foregoing provisions shall not prohibit the following actions (clauses (i)
through (v) being referred to as "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date of
declaration thereof, if at such date of declaration such payment would be
permitted by the provisions of paragraph (a) of this Section and such payment
shall be deemed to have been paid on such date of declaration for purposes of
the calculation required by paragraph (a) of this Section;
(ii) any transaction with an officer or director of the Company entered
into in the ordinary course of business (including compensation or employee
benefit arrangements with any officer or director of the Company);
(iii) the repurchase, redemption, or other acquisition or retirement of
any Equity Interests of the Company in exchange for (including any such
exchange pursuant to the exercise of a conversion right or privilege in
connection therewith cash is paid in lieu of the issuance of fractional
shares or scrip), or out of the Net Cash Proceeds of, a substantially
concurrent issue 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 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 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
<PAGE>
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 Notes; (3) has a Stated
Maturity for its final scheduled principal payment later than the Stated
Maturity for the final scheduled principal payment of the Notes; and (4) is
expressly subordinated in right of payment to the Notes at least to the same
extent as the Indebtedness to be refinanced. (Section 1009)
Limitation on Transactions with Affiliates. The Company will not, and will
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into or suffer to exist any transaction or series of related transactions
(including, without limitation, the sale, purchase, exchange or lease of assets,
property or services) with any Affiliate of the Company (other than the Company
or a Wholly Owned Restricted Subsidiary) unless (a) such transaction or series
of transactions is in writing on terms that are no less favorable to the Company
or such Restricted Subsidiary, as the case may be, than would be available in a
comparable transaction in arm's-length dealings with an unrelated third party
and (b) (i) with respect to any transaction or series of transactions involving
aggregate payments in excess of $1,000,000, the Company delivers an officers'
certificate to the Trustee certifying that such transaction or series of related
transactions complies with clause (a) above and such transaction or series of
related transactions has been approved by a majority of the members of the Board
of Directors of the Company (and approved by a majority of Independent Directors
or, in the event there is only one Independent Director, by such Independent
Director) and (ii) with respect to any transaction or series of transactions
involving aggregate payments in excess of $5,000,000, an opinion as to the
fairness to the Company or such Restricted Subsidiary from a financial point of
view issued by an investment banking 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, and (C) transactions in existence on the
date of the Supplemental Indenture. (Section 1010)
Limitation on Senior Subordinated Indebtedness. The Company will not, and
will not permit any Guarantor to, directly or indirectly, create, incur, issue,
assume, guarantee or otherwise in any manner become directly or indirectly
liable for or with respect to or otherwise permit to exist any Indebtedness that
is subordinate in right of payment to any Indebtedness of the Company or such
Guarantor, as the case may be, unless such Indebtedness is also pari passu with
the Notes or the Guarantee of such Guarantor, or subordinate in right of payment
to the Notes or such Guarantee to at least the same extent as the Notes 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 the
Indenture. (Section 1011)
Limitation on Liens. The Company will not, and will not permit any
Restricted Subsidiary to, directly or indirectly, create, incur, affirm or
suffer to exist any Lien of any kind upon any of its property or assets
(including any intercompany notes), now owned or acquired after the date of the
Supplemental Indenture, or any income or profits therefrom, except if the Notes
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 the Supplemental Indenture and
listed on a schedule thereto;
(b) any Lien arising by reason of (1) 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; (2) taxes not
yet delinquent or which are being contested in good faith; (3) security for
payment of workers' compensation or other insurance; (4) good faith deposits in
connection with tenders, leases, contracts (other than contracts for
<PAGE>
the payment of money); (5) zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the
lessee), none of which materially impairs the use of any parcel of property
material to the operation of the business of the Company or any Subsidiary or
the value of such property for the purpose of such business; (6) deposits to
secure public or statutory obligations, or in lieu of surety or appeal bonds;
(7) surveys, exceptions, title defects, encumbrances, 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 (8) 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 "-- Limitation on Indebtedness" and provided that the provisions described
under "-- Limitation on Issuances of Guarantees of and Pledges for Indebtedness"
are complied with;
(d) any Lien securing Acquired Indebtedness created prior to (and not
created in connection with, or in contemplation of) the incurrence of such
Indebtedness by the Company or any Subsidiary, in each case which Indebtedness
is permitted under the provisions of "-- Limitation on Indebtedness"; provided
that any such Lien only extends to the assets that were subject to such Lien
securing such Acquired Indebtedness prior to the related transaction by the
Company or its Subsidiaries;
(e) any Lien securing Permitted Subsidiary Indebtedness; and
(f) any extension, renewal, refinancing or replacement, in whole or in
part, of any Lien described in the foregoing clauses (a) through (e) so long as
the amount of security is not increased thereby. (Section 1012)
Limitation on Sale of Assets. (a) The Company will not, and will 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
(exclusive of assumed Senior Indebtedness to which the Company and its
Restricted Subsidiaries have received a full and unconditional release from such
liability in connection with such Asset Sale) is received in cash and (ii) the
Company or such Restricted Subsidiary receives consideration at the time of such
Asset Sale at least equal to the Fair Market Value of the shares or assets sold
(other than in the case of an involuntary Asset Sale, as determined by the Board
of Directors of the Company and evidenced in a Board resolution or in connection
with an Asset Swap as determined in writing by a nationally recognized
investment banking or appraisal firm); provided, however, that in the event the
Company or any Restricted Subsidiary engages in an Asset Sale with any third
party and receives in consideration therefor, or simultaneously with such Asset
Sale enters into, a Local Marketing Agreement with such third party or any
affiliate thereof, the Fair Market Value of such Local Marketing Agreement (as
determined in writing by a nationally recognized investment banking or appraisal
firm) shall be deemed cash and considered when determining whether such Asset
Sale complies with the foregoing clauses (i) and (ii). Notwithstanding the
foregoing, clause (i) of the preceding sentence shall not be applicable to any
Asset Swap.
(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
<PAGE>
existing on the date of the 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 Notes and
any Pari Passu Indebtedness required to be repurchased under the instrument
governing such Pari Passu Indebtedness as follows: (a) the Company shall make an
offer to purchase (an "Offer") from all holders of the Notes in accordance with
the procedures set forth in the Indenture in the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased out of an
amount (the "Note Amount") equal to the product of such Excess Proceeds
multiplied by a fraction, the numerator of which is the outstanding principal
amount of the Notes, and the denominator of which is the sum of the outstanding
principal amount of the Notes and such Pari Passu Indebtedness (subject to
proration in the event such amount is less than the aggregate Offered Price of
all Notes tendered) and (b) to the extent required by such Pari Passu
Indebtedness to permanently reduce the principal amount of such Pari Passu
Indebtedness, the Company shall make an offer to purchase or otherwise
repurchase or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in an amount
(the "Pari Passu Debt Amount") equal to the excess of the Excess Proceeds over
the Note 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 Notes 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 the Indenture. To the extent that the aggregate
Offered Price of the Notes tendered pursuant to the Offer is less than the Note
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 Notes tendered pursuant to an Offer and
repurchase of the Pari Passu Indebtedness pursuant to a Pari Passu Offer, the
amount of Excess Proceeds, if any, shall be reset at zero.
(d) Whenever the Excess Proceeds received by the Company exceed $5,000,000,
such Excess Proceeds shall be set aside by the Company in a separate account
pending (i) deposit with the depositary or a paying agent of the amount required
to purchase the Notes or Pari Passu Indebtedness tendered in an Offer or a Pari
Passu Offer, (ii) delivery by the Company of the Offered Price to the holders of
the Notes or Pari Passu Indebtedness tendered in an Offer or a Pari Passu Offer
and (iii) application, as set forth above, of Excess Proceeds in the business of
the Company and its Restricted Subsidiaries. Such Excess Proceeds may be
invested in Temporary Cash Investments, provided that the maturity date of any
such investment made after the amount of Excess Proceeds exceeds $5,000,000
shall not be later than the Offer Date. The Company shall be entitled to any
interest or dividends accrued, earned or paid on such Temporary Cash
Investments, provided that the Company shall not withdraw such interest from the
separate account if an Event of Default has occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant to clause
(c) above, the Notes shall be purchased by the Company, at the option of the
holder thereof, in whole or in part in integral multiples of $1,000, on a date
that is not earlier than 45 days and not later than 60 days from the date the
notice is given to holders, or such later date as may be necessary for the
Company to comply with the requirements under the Exchange Act, subject to
proration in the event the Note Amount is less than the aggregate Offered Price
of all Notes tendered.
(f) The Company shall comply with the applicable tender offer rules,
including Rule 14e-1 under the Exchange Act, and any other applicable securities
laws or regulations in connection with an Offer.
(g) The Company will not, and will not permit any Restricted Subsidiary to,
create or permit to exist or become effective any restriction (other than
restrictions existing under (i) Indebtedness as in effect on the date of the
Supplemental Indenture and listed on a schedule thereto as such Indebtedness may
be refinanced from time to time, provided that such restrictions are no less
favorable to the holders
<PAGE>
of the Notes than those existing on the date of the 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 Notes or, if such
Offer is made, to pay for the Notes tendered for purchase.
(Section 1013)
Limitation on Issuances of Guarantees of and Pledges for Indebtedness. (a)
The Company will not permit any Restricted Subsidiary, other than the
Guarantors, directly or indirectly, to secure the payment of any Senior
Indebtedness of the Company and the Company will not, and will not permit any
Restricted Subsidiary to, pledge any intercompany notes representing obligations
of any Restricted Subsidiary (other than the Guarantors) to secure the payment
of any Senior Indebtedness unless in each case such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to the Indenture
providing for a guarantee of payment of the Notes by such Restricted Subsidiary,
which guarantee shall be on the same terms as the guarantee of the Senior
Indebtedness (if a guarantee of Senior Indebtedness is granted by any such
Restricted Subsidiary) except that the guarantee of the Notes 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 Notes are
subordinated to Senior Indebtedness of the Company under the Indenture.
(b) The Company will not permit any Restricted Subsidiary, other than the
Guarantors, directly or indirectly, to guarantee, assume or in any other manner
become liable with respect to any Indebtedness of the Company (other than
guarantees in existence on the date of the Supplemental Indenture) unless such
Restricted Subsidiary simultaneously executes and delivers a supplemental
indenture to the Indenture providing for a guarantee of the Notes on the same
terms as the guarantee of such Indebtedness except that if the Notes 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 Notes are subordinated to such
Indebtedness under the Indenture.
(c) Each guarantee created pursuant to the provisions described in the
foregoing paragraph is referred to as a "Guarantee" and the issuer of each such
Guarantee is referred to as a "Guarantor." Notwithstanding the foregoing, any
Guarantee by a Restricted Subsidiary of the Notes shall provide by its terms
that it shall be automatically and unconditionally released and discharged upon
(i) any sale, exchange or transfer, to any Person not an Affiliate of the
Company, of all of the Company's Equity Interest in, or all or substantially all
the assets of, such Restricted Subsidiary, which is in compliance with the
Indenture or (ii) (with respect to any Guarantees created after the date of the
Supplemental Indenture) the release by the holders of the Indebtedness of the
Company described in clauses (a) and (b) above of their security interest or
their guarantee by such Restricted Subsidiary (including any deemed release upon
payment in full of all obligations under such Indebtedness), at a time when (A)
no other Indebtedness of the Company has been secured or guaranteed by such
Restricted Subsidiary, as the case may be, or (B) the holders of all such other
Indebtedness which is secured or guaranteed by such Restricted Subsidiary also
release their security interest in, or guarantee by, such Restricted Subsidiary
(including any deemed release upon payment in full of all obligations under such
Indebtedness). (Section 1014)
Restriction on Transfer of Assets. The Company and the Guarantors will not
sell, convey, transfer or otherwise dispose of their respective assets or
property to any of the Company's Restricted Subsidiaries (other than any
Guarantor), except for sales, conveyances, transfers or other dispositions made
in the ordinary course of business and except for capital contributions to any
Restricted Subsidiary, the only material assets of which are broadcast licenses.
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, leases 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." (Section 1015)
Purchase of Notes Upon a Change of Control. If a Change of Control shall
occur at any time, then each holder of Notes shall have the right to require
that the Company purchase such holder's Notes in whole or in part in integral
multiples of $1,000, at a purchase price (the "Change of Control Purchase
<PAGE>
Price") in cash in an amount equal to 101% of the principal amount of such
Notes, plus accrued and unpaid interest, if any, to the date of purchase (the
"Change of Control Purchase Date"), pursuant to the offer described below (the
"Change of Control Offer") and the other procedures set forth in the Indenture.
Within 30 days following any Change of Control, the Company shall notify
the Trustee thereof and give written notice of such Change of Control to each
holder of Notes, by first-class mail, postage prepaid, at his address appearing
in the security register, stating, among other things, the purchase price and
that the purchase date 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; that any Note not
tendered will continue to accrue interest; that, unless the Company defaults in
the payment of the purchase price, any Notes accepted for payment pursuant to
the Change of Control Offer shall cease to accrue interest after the Change of
Control Purchase Date; and certain other procedures that a holder of Notes must
follow to accept a Change of Control Offer or to withdraw such acceptance.
If a Change of Control Offer is made, there can be no assurance that the
Company will have available funds sufficient to pay the Change of Control
Purchase Price for all of the Notes that might be delivered by holders of the
Notes seeking to accept the Change of Control Offer. A Change of Control will
also result in an event of default under the Bank Credit Agreement and could
result in the acceleration of all indebtedness under the Bank Credit Agreement.
See "Description of Indebtedness -- Bank Credit Agreement." Moreover, the Bank
Credit Agreement prohibits the repurchase of the Notes by the Company. The
failure of the Company to make or consummate the Change of Control Offer or pay
the Change of Control Purchase Price when due will result in an Event of Default
under the Indenture.
The term "all or substantially all" as used in the definition of "Change of
Control" has not been interpreted under New York law (which is the governing law
of the Indenture) to represent a specific quantitative test. As a consequence,
in the event the holders of the Notes elected to exercise their rights under the
Indenture and the Company elected to contest such election, there could be no
assurance as to how a court interpreting New York law would interpret the
phrase.
The existence of a holder's right to require the Company to repurchase such
holder's Notes upon a Change of Control may deter a third party from acquiring
the Company in a transaction which constitutes a Change of Control.
"Change of Control" means the occurrence of either of the following events:
(i) any "person" or "group" (as such terms are used in Sections 13(d) and 14(d)
of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 40% of the total outstanding Voting Stock of the Company, provided that the
Permitted Holders "beneficially own" (as so defined) a lesser percentage of such
Voting Stock than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors of the Company (together with any new directors whose
election to such Board or whose nomination for election by the shareholders of
the Company, was approved by a vote of at least 66 2/3% of the directors then
still in office who were either directors at the beginning of such period or
whose election or nomination for election was previously so approved) cease for
any reason to constitute a majority of such Board of Directors then in office;
(iii) the Company consolidates with or merges with or into any Person or
conveys, transfers or leases all or substantially all of its assets to any
Person, or any corporation consolidates with or merges into or with the Company,
in any such event pursuant to a transaction in which the outstanding Voting
Stock of the Company is changed into or exchanged for cash, securities or other
property, other than any such transaction where the outstanding Voting Stock of
the Company is not changed or exchanged at all (except to the extent necessary
to reflect a change in the jurisdiction of incorporation of the Company) or
where (A) the outstanding Voting Stock of the
<PAGE>
Company is changed into or exchanged for (x) Voting Stock of the surviving
corporation which is not Disqualified Equity Interests or (y) cash, securities
and other property (other than Equity Interests of the surviving corporation) in
an amount which could be paid by the Company as a Restricted Payment as
described under "-- Limitation on Restricted Payments" (and such amount shall be
treated as a Restricted Payment subject to the provisions in the Indenture
described under "-- Limitation on Restricted Payments") and (B) no "person" or
"group" other than Permitted Holders owns immediately after such transaction,
directly or indirectly, more than the greater of (1) 40% of the total
outstanding Voting Stock of the surviving corporation and (2) the percentage of
the outstanding Voting Stock of the surviving corporation owned, directly or
indirectly, by Permitted Holders immediately after such transaction; or (iv) the
Company is liquidated or dissolved or adopts a plan of liquidation or
dissolution other than in a transaction which complies with the provisions
described under "-- Consolidation, Merger, Sale of Assets."
"Permitted Holders" means as of the date of determination (i) any of David
D. Smith, Frederick G. Smith, J. Duncan Smith and Robert E. Smith; (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.
The provisions of the Indenture will not afford holders of Notes the right
to require the Company to repurchase the Notes in the event of a highly
leveraged transaction or certain transactions with the Company's management or
its affiliates, including a reorganization, restructuring, merger or similar
transaction (including, in certain circumstances, an acquisition of the Company
by management or its Affiliates) involving the Company that may adversely affect
holders of the Notes, if such transaction is not a transaction defined as a
Change of Control. A transaction involving the Company's management or its
Affiliates, or a transaction involving a recapitalization of the Company, will
result in a Change of Control if it is the type of transaction specified by such
definition.
The Company will 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. (Section 1016)
Limitation on Subsidiary Equity Interests. The Company will not permit any
Restricted Subsidiary of the Company to issue any Equity Interests, except for
(i) Equity Interests issued to and held by the Company or a Wholly Owned
Restricted Subsidiary, and (ii) Equity Interests issued by a Person prior to the
time (A) such Person becomes a Restricted Subsidiary, (B) such Person merges
with or into a Restricted Subsidiary or (C) a Restricted Subsidiary merges with
or into such Person; provided that such Equity Interests were not issued or
incurred by such Person in anticipation of the type of transaction contemplated
by subclause (A), (B) or (C). (Section 1017)
Limitation on Dividends and Other Payment Restrictions Affecting
Subsidiaries. The Company will not, and will not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay dividends or make any other
distribution on its Equity Interests, (ii) pay any Indebtedness owed to the
Company or a Restricted Subsidiary of the Company, (iii) make any Investment in
the Company or a Restricted Subsidiary of the Company or (iv) transfer any of
its properties or assets to the Company or any Restricted Subsidiary, except (a)
any encumbrance or restriction pursuant to an agreement in effect on the date of
the Supplemental Indenture and listed on a schedule thereto; (b) any encumbrance
or restriction, with respect to a Restricted Subsidiary that is not a Subsidiary
of the Company on the date of the 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
<PAGE>
conditions of any such encumbrances or restrictions are not materially less
favorable to the holders of the Notes 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 the Indenture; and
(d) any encumbrance or restriction created pursuant to an asset sale agreement,
stock sale agreement or similar instrument pursuant to which on Asset Sale
permitted under "-- Limitation on Sale of Assets" is to be consummated, so long
as such restriction or encumbrance shall be effective only for a period from the
execution and delivery of such agreement or instrument through a termination
date not later than 270 days after such execution and delivery.
(Section 1018)
Limitation on Unrestricted Subsidiaries. The Company will not make, and
will 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 the "-- Limitation on Restricted Payments" covenant. Any
Investments in Unrestricted Subsidiaries permitted to be made pursuant to this
covenant (i) will be treated as the payment of a Restricted Payment in
calculating the amount of Restricted Payments made by the Company and (ii) may
be made in cash or property. (Section 1019)
Provision of Financial Statements. The Indenture provides that, whether or
not the Company is subject to Section 13(a) or 15(d) of the Exchange Act, the
Company will, to the extent permitted under the Exchange Act, file with the
Commission the annual reports, quarterly reports and other documents which the
Company would have been required to file with the Commission pursuant to such
Section 13(a) or 15(d) if the Company were so subject, such documents to be
filed with the Commission on or prior to the respective dates (the "Required
Filing Dates") by which the Company would have been required so to file such
documents if the Company were so subject. The Company will also in any event (x)
within 15 days of each Required Filing Date (i) transmit by mail to all holders,
as their names and addresses appear in the Note register, without cost to such
holders and (ii) file with the Trustee copies of the annual reports, quarterly
reports 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 and (y) if filing such documents by
the Company with the Commission is not permitted under the Exchange Act,
promptly upon written request and payment of the reasonable cost of duplication
and delivery, supply copies of such documents to any prospective holder at the
Company's cost. (Section 1020)
Additional Covenants. The Indenture also contains covenants with respect to
the following matters: (i) payment of principal, premium and interest; (ii)
maintenance of an office or agency; (iii) arrangements regarding the handling of
money held in trust; (iv) maintenance of corporate existence; (v) payment of
taxes and other claims; (vi) maintenance of properties; and (vii) maintenance of
insurance.
CONSOLIDATION, MERGER, SALE OF ASSETS
The Company shall not, in a single transaction or a series of related
transactions, consolidate with or merge with or into any other Person or sell,
assign, convey, transfer, 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 Notes and the
Indenture, and the Indenture shall remain in full force and effect; (ii)
immediately before and immedi-
<PAGE>
ately 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 the
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 the Indenture) could incur $1.00 of additional
Indebtedness under the provisions of "-- Certain Covenants -- Limitation on
Indebtedness" (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 the Indenture and the Notes; (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 "-- Certain Covenants -- Limitation on Liens" 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, lease or other transaction and the supplemental indenture in respect
thereto comply with the provisions of the Indenture and that all conditions
precedent provided for in the Indenture relating to such transaction have been
complied with.
Each Guarantor will not, and the Company will not permit a Guarantor to, in
a single transaction or 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 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 the Notes and the
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 the Indenture, and thereafter all obligations
of the predecessor shall terminate. The provisions of this paragraph shall not
apply to any transaction (including an Asset Sale made in accordance with "--
Certain Covenants -- Limitation on Sale of Assets") with respect to any
Guarantor if the Guarantee of such Guarantor is released in connection with such
transaction in accordance with paragraph (c) of "-- Certain Covenants --
Limitation on Issuances of Guarantees of and Pledges for Indebtedness." (Section
801)
In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraphs in
which the Company or any Guarantor is not the continuing corporation, the
successor Person formed or remaining 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, and the Company or such Guarantor, as the case may be, would be
discharged from its obligations under the Indenture, the Notes or its Guarantee,
as the case may be. (Section 802)
<PAGE>
EVENTS OF DEFAULT
An Event of Default will occur under the Indenture if:
(i) there shall be a default in the payment of any interest on any Note
when it becomes due and payable, and such default shall continue for a period
of 30 days;
(ii) there shall be a default in the payment of the principal of (or
premium, if any, on) any Note at its Maturity (upon acceleration, optional or
mandatory redemption, required repurchase or otherwise);
(iii) (a) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under the Indenture
(other than a default in the performance, or breach, of a covenant or
agreement which is specifically dealt with in clause (i) or (ii) or in clause
(b), (c) or (d) of this clause (iii)) and such default or breach shall
continue for a period of 30 days after written notice has been given, by
certified mail, (x) to the Company by the Trustee or (y) to the Company and
the Trustee by the holders of at least 25% in aggregate principal amount of
the outstanding Notes; (b) there shall be a default in the performance or
breach of the provisions described in "-- Consolidation, Merger, Sale of
Assets"; (c) the Company shall have failed to make or consummate an Offer in
accordance with the provisions of "-- Certain Covenants -- Limitation on Sale
of Assets"; or (d) the Company shall have failed to make or consummate a
Change of Control Offer in accordance with the provisions of "-- Certain
Covenants -- Purchase of Notes Upon a Change of Control;"
(iv) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary then has outstanding Indebtedness in excess of
$5,000,000 in the aggregate and, if not already matured at its final maturity
in accordance with its terms, such Indebtedness shall have been accelerated;
(v) 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 the Indenture and any such Guarantee;
(vi) one or more judgments, orders or decrees for the payment of money in
excess of $5,000,000, either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument) shall be entered
against the Company, any Guarantor or any Restricted Subsidiary or any of
their respective properties and shall not be discharged and either (a) any
creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (b) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(vii) any holder or holders of at least $5,000,000 in aggregate principal
amount of Indebtedness of the Company, any Guarantor or any Restricted
Subsidiary after a default under such Indebtedness shall notify the Trustee
of the intended sale or disposition of any assets of the Company, any
Guarantor or any Restricted Subsidiary that have been pledged to or for the
benefit of such holder or holders to secure such Indebtedness or shall
commence proceedings, or take any action (including by way of set-off), to
retain in satisfaction of such Indebtedness or to collect on, seize, dispose
of or apply in satisfaction of Indebtedness, assets of the Company or any
Restricted Subsidiary (including funds on deposit or held pursuant to
lock-box and other similar arrangements);
(viii) there shall have been the entry by a court of competent
jurisdiction of (a) a decree or order for relief in respect of the Company,
any Guarantor or any Restricted Subsidiary in an involuntary case or
proceeding under any applicable Bankruptcy Law or (b) a decree or order
adjudging the Company, any Guarantor or any Restricted Subsidiary bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company, any Guarantor or any Restricted Subsidiary
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company, any Guarantor or any Restricted Subsidiary or of
any substantial part of their respective properties, or ordering the winding
up or liquidation of their affairs, and any such decree or order for relief
shall continue to be in effect, or any such other decree or order shall be
unstayed and in effect, for a period of 60 consecutive days; or
<PAGE>
(ix) (a) the Company, any Guarantor or any Restricted Subsidiary
commences a voluntary case or proceeding under any applicable Bankruptcy Law
or any other case or proceeding to be adjudicated bankrupt or insolvent, (b)
the Company, any Guarantor or any Restricted Subsidiary consents to the entry
of a decree or order for relief in respect of the Company, any Guarantor or
such Restricted Subsidiary in an involuntary case or proceeding under any
applicable Bankruptcy Law or to the commencement of any bankruptcy or
insolvency case or proceeding against it, (c) the Company, any Guarantor or
any Restricted Subsidiary files a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (d) the
Company, any Guarantor or any Restricted Subsidiary (x) 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 their respective property, (y) makes an
assignment for the benefit of creditors or (z) admits in writing its
inability to pay its debts generally as they become due or (e) the Company,
any Guarantor or any Restricted Subsidiary takes any corporate action in
furtherance of any such actions in this paragraph (ix). (Section 501)
If an Event of Default (other than as specified in clauses (viii) and (ix)
of the prior paragraph) shall occur and be continuing, the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes
outstanding may, and the Trustee at the request of such holders shall, declare
all unpaid principal of, premium, if any, and accrued interest on, all the Notes
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 Notes); 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 Notes by appropriate judicial proceeding.
If an Event of Default specified in clause (viii) or (ix) of the prior paragraph
occurs and is continuing, then all the Notes shall ipso facto become and be
immediately due and payable, in an amount equal to the principal amount of the
Notes, together with accrued and unpaid interest, if any, to the date the Notes
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 of the Notes, the holders of the Notes shall give notice to the agent
under the Bank Credit Agreement of such acceleration.
After a declaration of acceleration, but before a judgment or decree for
payment of the money due has been obtained by the Trustee, the holders of a
majority in aggregate principal amount of Notes outstanding, by written notice
to the Company and the Trustee, may rescind and annul such declaration 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 the Indenture and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, (ii) all overdue interest on all Notes, (iii) the principal of and
premium, if any, on any Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at a rate borne by the Notes
and (iv) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes; and (b) all Events of Default,
other than the non-payment of principal of the Notes which have become due
solely by such declaration of acceleration, have been cured or waived. (Section
502)
The holders of not less than a majority in aggregate principal amount of
the Notes outstanding may on behalf of the holders of all the Notes waive any
past default under the Indenture and its consequences, except a default in the
payment of the principal of, premium, if any, or interest on any Note, or in
respect of a covenant or provision which under the Indenture cannot be modified
or amended without the consent of the holder of each Note outstanding. (Section
513)
The Company is also required to notify the Trustee within five business
days of the occurrence of any Default. (Section 501) The Company is required to
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, a written statement as to compliance with the Indenture, including whether
or not any default has occurred. (Section 1021) The Trustee is under no
obligation to exercise any of the rights or powers
<PAGE>
vested in it by the Indenture at the request or direction of any of the holders
of the Notes unless such holders offer to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities which
might be incurred thereby. (Section 602)
The Trust Indenture Act contains limitations on the rights of the Trustee,
should it become a creditor of the Company or any Guarantor, to obtain payment
of claims in certain cases or to realize on certain property received by it in
respect of any such claims, as security or otherwise. The Trustee is permitted
to engage in other transactions, provided that if it acquires any conflicting
interest it must eliminate such conflict upon the occurrence of an Event of
Default or else resign.
DEFEASANCE OR COVENANT DEFEASANCE OF INDENTURE
The Company may, at its option, at any time, elect to have the obligations
of the Company, each of the Guarantors and any other obligor upon the Notes
discharged with respect to the outstanding Notes ("defeasance"). Such defeasance
means that the Company, each of the Guarantors and any other obligor under the
Indenture shall be deemed to have paid and discharged the entire indebtedness
represented by the outstanding Notes, except for (i) the rights of holders of
outstanding Notes to receive payments in respect of the principal of, premium,
if any, and interest on such Notes when such payments are due, (ii) the
Company's obligations with respect to the Notes concerning issuing temporary
Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes, and
the maintenance of an office or agency for payment and money for security
payments held in trust, (iii) the rights, powers, trusts, duties and immunities
of the Trustee, and (iv) the defeasance provisions of the Indenture. In
addition, the Company may, at its option and at any time, elect to have the
obligations of the Company and any Guarantor released with respect to certain
covenants that are described in the Indenture ("covenant defeasance") and any
omission to comply with such obligations shall not constitute a Default or an
Event of Default with respect to the Notes. In the event covenant defeasance
occurs, certain events (not including non-payment, enforceability of any
Guarantee, bankruptcy and insolvency events) described under "-- Events of
Default" will no longer constitute an Event of Default with respect to the
Notes. (Sections 401, 402 and 403)
In order to exercise either defeasance or covenant defeasance, (i) the
Company must irrevocably deposit with the Trustee, in trust, for the benefit of
the holders of the Notes, cash in United States dollars, U.S. Government
Obligations (as defined in the Indenture), or a combination thereof, in such
amounts as will be 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 the principal of, premium, if any, and interest on the
outstanding Notes on the Stated Maturity of such principal or installment of
principal or interest (or on any date after December 15, 2002 (such date being
referred to as the "Defeasance Redemption Date"), if when exercising either
defeasance or covenant defeasance, the Company has delivered to the Trustee an
irrevocable notice to redeem all of the outstanding Notes on the Defeasance
Redemption Date); (ii) in the case of defeasance, 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 the 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 Notes 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; (iii) in the case of covenant defeasance, 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 Notes 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; (iv) no Default or Event of
Default shall have occurred and be continuing on the date of such deposit or
insofar as clause (vii) or (viii) under the first paragraph under "-- Events of
Default" are concerned, at any time during the period ending on the 91st day
after the date of deposit; (v) such defeasance or covenant defeasance shall not
cause the
<PAGE>
Trustee for the Notes to have a conflicting interest with respect to any
securities of the Company or any Guarantor; (vi) such defeasance or covenant
defeasance shall not result in a breach or violation of, or constitute a Default
under, the Indenture or any other material agreement or instrument to which the
Company or any Guarantor is a party or by which it is bound; (vii) 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 the 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; (viii) 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 Notes 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; (ix) 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 Notes on the date of such deposit or at any time ending on the
91st day after the date of such deposit; and (x) 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 or the covenant defeasance, as the case may be, have been
complied with. (Section 404)
SATISFACTION AND DISCHARGE
THE INDENTURE WILL CEASE TO BE OF FURTHER EFFECT (EXCEPT AS TO SURVIVING
RIGHTS OF REGISTRATION OF TRANSFER or exchange of Notes, as expressly provided
for in the Indenture) as to all outstanding Notes when (a) either (i) all the
Notes theretofore authenticated and delivered (except lost, stolen or destroyed
Notes which have been replaced or paid) have been delivered to the Trustee for
cancellation or (ii) all Notes not theretofore delivered to the Trustee for
cancellation (x) have become due and payable, or (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 has irrevocably deposited or caused to
be deposited with the Trustee funds in an amount sufficient to pay and discharge
the entire indebtedness on the Notes not theretofore delivered to the Trustee
for cancellation, including 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 under the Indenture relating to
the Notes 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 under the Indenture relating to the satisfaction and
discharge of the Indenture relating to the Notes have been complied with and
(ii) such satisfaction and discharge will not result in a breach or violation
of, or constitute a default under, the Indenture relating to the Notes 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. (Section 1301)
Modifications and Amendments
Modifications and amendments of the Indenture relating to the Notes may be
made by the Company, any Guarantor and the Trustee with the consent of the
holders of not less than a majority in aggregate principal amount of the
outstanding Notes; provided, however, that no such modification or amendment
may, without the consent of the holder of each outstanding Note affected
thereby: (i) change the Stated Maturity of the principal of, or any installment
of interest on, any Note 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 Note 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) (other than provisions
relating to the covenants set forth under "-- Certain Covenants -- Limitation on
Sale of Assets); (ii) amend, change or modify 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 "-- Certain Covenants -- Purchase of Notes Upon a
Change of Control," including amending, changing or modifying any
<PAGE>
definitions with respect thereto; (iii) reduce the percentage in principal
amount of outstanding Notes, the consent of whose holders is required for any
supplemental indenture, or the consent of whose holders is required for any
waiver or compliance with certain provisions of the Indenture or certain
defaults or with respect to any Guarantee; (iv) modify any of the provisions
relating to supplemental indentures requiring the consent of holders or relating
to the waiver of past defaults or relating to the waiver of certain covenants,
except to increase the percentage of outstanding Notes required for such actions
or to provide that certain other provisions of the Indenture relating to the
Notes cannot be modified or waived without the consent of the holder of each
Note affected thereby; (v) except as otherwise permitted under "--
Consolidation, Merger, Sale of Assets," consent to the assignment or transfer by
the Company or any Guarantor of any of its rights and obligations under the
Indenture; or (vi) amend or modify any of the provisions of the Indenture
relating to the subordination of the Notes or any Guarantee in any manner
adverse to the holders of the Notes or any Guarantee; provided further, that no
such modification or amendment may, without the consent of the holders of 66
2/3% of the outstanding Notes affected thereby, 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 "-- Certain Covenants -- Limitation
on Sale of Assets" including amending, changing or modifying any definitions
with respect thereto. (Section 902)
The holders of a majority in aggregate principal amount of the Notes
outstanding may waive compliance with certain restrictive covenants and
provisions of the Indenture relating to the Notes. (Section 1022)
GOVERNING LAW
The Indenture, the Notes and the Guarantees will be governed by, and
construed in accordance with, the laws of the State of New York, without giving
effect to the conflicts of law principles thereof.
PAYMENT AND PAYING AGENT
Payments in respect of the Notes shall be made to The Depository Trust
Company ("DTC"), which shall credit the relevant accounts at DTC on the
applicable payment dates or, if the Notes are not held by DTC, such payments
shall be made at the office or agency of the Paying Agent maintained for such
purpose, or at the option of the Company, by check mailed to the address of the
holder entitled thereto as such address shall appear on the Notes Register. The
Paying Agent shall initially be First Union National Bank. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Company. In the event that First Union National Bank chooses no longer to be the
Paying Agent, the Company shall appoint a successor (which shall be a bank or
trust company) acceptable to the Company to act as Paying Agent.
BOOK-ENTRY SECURITIES; THE DEPOSITORY TRUST COMPANY; DELIVERY AND FORM
DTC will act as notes depositary for the Notes.
Except as described in the next paragraph, the Notes initially will be
represented by a Global Note. The Global Note will be deposited on the date of
initial issuance with, or on behalf of DTC and registered in the name of Cede &
Co. (DTC's nominee).
The laws of certain jurisdictions require that certain purchasers of
securities take physical delivery of securities in definitive form. Such laws
may impair the ability to own, transfer or pledge beneficial interests in the
Global Note as represented by a global certificate.
DTC has informed the Company that it is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the New York Uniform Commercial
Code, and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement of
securities transactions among Participants through electronic com-
<PAGE>
puterized book-entry changes in Participants' accounts, thereby eliminating the
need for physical movement of securities certificates. Direct Participants
include securities brokers and dealers (including the Underwriters), banks,
trust companies, clearing corporations and certain other organizations ("Direct
Participants"). DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc. and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks and trust
companies that clear through or maintain a custodial relationship with a Direct
Participant, either directly or indirectly ("Indirect Participants"). The rules
applicable to DTC and its Participants are on file with the Commission.
Exchanges of Notes that are represented by a Global Note within the DTC
system must be made by or through Direct Participants, which will receive a
credit for the Notes on DTC's records. The ownership interest of each actual
owner of each Note ("Beneficial Owner") is in turn to be recorded on the Direct
Participants and Indirect Participants' records. Beneficial Owners will not
receive written confirmation from DTC of their holdings, but Beneficial Owners
are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
Participants or Indirect Participants through which the Beneficial Owners hold
Notes. Transfers of ownership interests in the Notes are to be accomplished by
entries made on the books of Participants acting on behalf of Beneficial Owners.
Beneficial Owners will not receive certificates representing their ownership
interests in Notes, except as described below.
DTC will have no knowledge of the actual Beneficial Owners of the Notes;
DTC's records will reflect only the identity of the Direct Participants to whose
accounts such Notes will be credited, which may or may not be the Beneficial
Owners. The Participants will be responsible for keeping account of their
holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to Direct
Participants, by Direct Participants to Indirect Participants, and by Direct
Participants and Indirect Participants to Beneficial Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the Notes are
being redeemed, DTC will reduce the amount of the interest of each Direct
Participant in such Notes in accordance with its procedures.
Although voting with respect to the Notes is limited in those cases where a
vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to Notes. Under its usual procedures, DTC would mail an Omnibus Proxy to
the Company as soon as possible after the record date. The Omnibus Proxy assigns
Cede & Co.'s consenting or voting rights to those Direct Participants to whose
accounts the Notes are credited on the record date (identified in a listing
attached to the Omnibus Proxy).
Distribution payments on the Notes will be made by the Company to DTC.
DTC's practice is to credit Direct Participants' accounts on the relevant
payment date in accordance with their respective holdings shown on DTC's records
unless DTC has reason to believe that it will not receive payments on such
payment date. Payments by Participants to Beneficial Owners will be governed by
standing instructions and customary practices and will be the responsibility of
each such Participant and not of DTC or any Trustee, subject to any statutory or
regulatory requirements as may be in effect from time to time. Payment of
distributions to DTC is the responsibility of the Company, disbursement of such
payments to Direct Participants is the responsibility of DTC, and disbursement
of such payments to the Beneficial Owners is the responsibility of Direct and
Indirect Participants.
Except as provided herein, a Beneficial Owner of an interest in a Global
Note will not be entitled to receive physical delivery of Notes. Accordingly,
each Beneficial Owner must rely on the procedures of DTC to exercise any rights
under the Notes.
DTC may discontinue providing its services as securities depository with
respect to the Notes at any time by giving reasonable notice to the Company.
Under such circumstances, in the event that a successor securities depositary is
not obtained, Certificated Securities representing the Notes will be printed
<PAGE>
and delivered. If an Event of Default occurs under the Indenture or if the
Company decides to discontinue use of the system of book-entry transfers through
DTC (or a successor depositary), Certificated Securities representing the Notes
will be printed and delivered.
The Notes will be delivered in certificated form if (i) DTC 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 Notes,
(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 the lapse of time or
both, would constitute an Event of Default with respect to the Notes represented
by such Global Note and such Event of Default or event continues for a period of
90 days.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources the Company believe to be reliable. Neither the
Company nor any Trustee has any responsibility for the accuracy of such
information or performance by DTC or its Participants of their respective
obligations as described herein or under the rules and procedures governing
their respective operations.
REGISTRAR AND TRANSFER AGENT
First Union National Bank will act as registrar and transfer agent for the
Notes (the "Notes Registrar").
As described under "-- Book-Entry Securities; The Depository Trust Company;
Delivery and Form," so long as the Notes are in book-entry form, registration of
transfers and exchanges of Notes will be made through Direct Participants and
Indirect Participants in DTC. If physical certificates representing the Notes
are issued, registration of transfers and exchanges of Notes will be effected
without charge by or on behalf of the Company, but, in the case of a transfer,
upon payment (with the giving of such indemnity as the Company may require) in
respect of any tax or other governmental charges which may be imposed in
relation to it.
The Company will not be required to register or cause to be registered any
transfer of Notes during a period beginning 15 days prior to the mailing of
notice of redemption of Notes and ending on the day of such mailing.
CERTAIN DEFINITIONS
"Acquired Indebtedness" means Indebtedness of a Person (i) existing at the
time such Person becomes a Subsidiary or (ii) assumed in connection with the
acquisition of assets from such Person, in each case, other than Indebtedness
incurred in connection with, or in contemplation of, such Person becoming a
Subsidiary or such acquisition. Acquired Indebtedness shall be deemed to be
incurred on the date of the related acquisition of assets from any Person or the
date the acquired Person becomes a Subsidiary.
"Affiliate" means, with respect to any specified Person, (i) any other
Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person, (ii) any other Person that
owns, directly or indirectly, 5% or more of such Person's Equity Interests or
any officer or director of any such Person or other Person or, with respect to
any natural Person, any person having a relationship with such Person or other
Person by blood, marriage or 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
<PAGE>
any Restricted Subsidiary; (ii) all or substantially all of the properties and
assets of any division or line of business of the Company or its Restricted
Subsidiaries; or (iii) any other properties or assets of the Company or any
Restricted Subsidiary, other than in the ordinary course of business. For the
purposes of this definition, the term "Asset Sale" shall not include any
transfer of properties and assets (A) that is governed by the provisions
described under "-- Consolidation, Merger, Sale of Assets," (B) that is by the
Company to any Wholly Owned Restricted Subsidiary, or by any Restricted
Subsidiary to the Company or any Wholly Owned Restricted Subsidiary in
accordance with the terms of the Indenture or (C) that aggregates not more than
$1,000,000 in gross proceeds.
"Asset Swap" means an Asset Sale by the Company or any Restricted
Subsidiary in exchange for properties or assets that will be used in the
business of the Company and its Restricted Subsidiaries existing on the date of
the 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 Third Amended and Restated Credit
Agreement, dated as of May 20, 1997, between Sinclair, the subsidiaries of
Sinclair identified on the signature pages thereof under the caption "SUBSIDIARY
GUARANTORS," the lenders named therein and The Chase Manhattan Bank, as agent,
as amended and as such agreement may be further 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 the 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 "-- Certain Covenants -- Limitation on Indebtedness;" provided
that, for purposes of the definition of "Permitted Indebtedness" set forth in
"-- Certain Covenants -- Limitation on Indebtedness," no such increase may
result in the principal amount of Indebtedness of the Company under the Bank
Credit Agreement exceeding the amount permitted by clause (i) of the definition
of "Permitted Indebtedness."
"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.
"Capital Lease Obligation" means any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real
or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"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 the 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 Sinclair Broadcast Group, Inc., a corporation incorporated
under the laws of the State of Maryland, until a successor Person shall have
become such pursuant to the applicable provisions of the Indenture, and
thereafter "Company" shall mean such successor Person.
"Consolidated Interest Expense" means, without duplication, for any period,
the sum of (a) the interest expense of the Company and its Consolidated
Restricted Subsidiaries for such period, on a Consolidated basis, including,
without limitation, (i) amortization of debt discount, (ii) the net cost under
interest rate contracts (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
<PAGE>
Obligations paid, accrued and/or scheduled to be paid or accrued by the Company
during such period, and all capitalized interest of the Company and its
Consolidated Restricted Subsidiaries, in each case as determined in accordance
with GAAP consistently applied.
"Consolidated Net Income (Loss)" means, for any period, the Consolidated
net income (or loss) of the Company and its Consolidated Restricted Subsidiaries
for such period as determined in accordance with GAAP consistently applied,
adjusted, to the extent included in calculating such net income (or loss), by
excluding, without duplication, (i) all extraordinary gains but not losses (less
all fees and expenses relating thereto), (ii) the portion of net income (or
loss) of the Company and its Consolidated Restricted Subsidiaries allocable to
interests in unconsolidated Persons or Unrestricted Subsidiaries, except to the
extent of the amount of dividends or distributions actually paid to the Company
or its Consolidated Restricted Subsidiaries by such other Person during such
period, (iii) net income (or loss) of any Person combined with the Company or
any of its Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iv) any gain or
loss, net of taxes, realized upon the termination of any employee pension
benefit plan, (v) net gains but not losses (less all fees and expenses relating
thereto) in respect of dispositions of assets other than in the ordinary course
of business, or (vi) the net income of any Restricted Subsidiary to the extent
that the declaration of dividends or similar distributions by that Restricted
Subsidiary of that income is not at the time permitted, directly or indirectly,
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its shareholders.
"Consolidated Net Worth" means the Consolidated equity of the holders of
Equity Interests (excluding Disqualified Equity Interests) of the Company and
its Restricted Subsidiaries, as determined in accordance with GAAP consistently
applied.
"Consolidation" means, with respect to any Person, the consolidation of the
accounts of such Person and each of its subsidiaries (other than any
Unrestricted Subsidiaries) if and to the extent the accounts of such Person and
each of its subsidiaries (other than any Unrestricted Subsidiaries) would
normally be consolidated with those of such Person, all in accordance with GAAP
consistently applied. The term "Consolidated" shall have a similar meaning.
"Cumulative Consolidated Interest Expense" means, as of any date of
determination, Consolidated Interest Expense from September 30, 1993 to the end
of the Company's most recently ended full fiscal quarter prior to such date,
taken as a single accounting period.
"Cumulative Operating Cash Flow" means, as of any date of determination,
Operating Cash Flow from September 30, 1993 to the end of the Company's most
recently ended full fiscal quarter prior to such date, taken as a single
accounting period.
"Debt to Operating Cash Flow Ratio" means, as of any date of determination,
the ratio of (a) the aggregate principal amount of all outstanding Indebtedness
of the Company and its Restricted Subsidiaries as of such date on a Consolidated
basis plus the aggregate liquidation preference or redemption amount of all
Disqualified Equity Interests of the Company (excluding any such Disqualified
Equity Interests held by the Company or a Wholly Owned Restricted Subsidiary of
the Company) to (b) Operating Cash Flow of the Company and its Restricted
Subsidiaries on a Consolidated basis for the four most recent full fiscal
quarters ending immediately prior to such date, determined on a pro forma basis
(and after giving pro forma effect to (i) the incurrence of such Indebtedness
and (if applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred, and the
application of such proceeds occurred, at the beginning of such four-quarter
period; (ii) the incurrence, repayment or retirement of any other Indebtedness
by the Company and its Restricted Subsidiaries since the first day of such
four-quarter period as if such Indebtedness was incurred, repaid or retired at
the beginning of such four-quarter period (except that, in making such
computation, the amount of Indebtedness under any revolving credit facility
shall be computed based upon the average balance of such Indebtedness at the end
of each month during such four-quarter period); (iii) in the case of Acquired
Indebtedness, the related acquisition as if such acquisition had occurred at the
beginning of such four-quarter period; and (iv) any acquisition or disposition
by the
<PAGE>
Company and its Restricted Subsidiaries of any company or any business or any
assets out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such four-quarter period,
assuming such acquisition or disposition had been consummated on the first day
of such four-quarter period).
"Default" means any event which is, or after notice or passage of any time
or both would be, an Event of Default.
"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 Notes 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, of
such Person, including any Preferred Equity Interests.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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.
"Film Contract" means contracts with suppliers that convey the right to
broadcast specified films, videotape motion pictures, syndicated television
programs or sports or other programming.
"Founders' Notes" means the term notes, dated September 30, 1990, made by
the Company to Julian S. Smith and to Carolyn C. Smith pursuant to a stock
redemption agreement, dated June 19, 1990, among the Company, certain of its
Subsidiaries, Julian S. Smith, Carolyn C. Smith, David D. Smith, Frederick G.
Smith, J. Duncan Smith and Robert E. Smith.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of the Indenture.
"Guarantee" means the guarantee by any Guarantor of the Company's Indenture
Obligations pursuant to a guarantee given in accordance with the Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
guaranteed directly or indirectly in any manner by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (i) to pay
or purchase such Indebtedness or to advance or supply funds for the payment or
purchase of such Indebtedness, (ii) to purchase, sell or lease (as lessee or
lessor) property, or to purchase or sell services, primarily for the purpose of
enabling the debtor to make payment of such Indebtedness or to assure the holder
of such Indebtedness against loss, (iii) to supply funds to, or in any other
manner invest in, the debtor (including any agreement to pay for property or
services without requiring that such property be received or such services be
rendered), (iv) to maintain working capital or equity capital of the debtor, or
otherwise to maintain the net worth, solvency or other financial condition of
the debtor or (v) otherwise to assure a creditor against loss; provided that the
term "guarantee" shall not include endorsements for collection or deposit, in
either case in the ordinary course of business.
"Guarantor" means the Subsidiaries listed as guarantors in the Indenture or
any other guarantor of the Indenture Obligations. The Guarantors currently
consist of all the Company's Subsidiaries other than Cresap Enterprises, Inc.,
KDSM, Inc., KDSM Licensee Inc. and the Trust.
"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 includ-
<PAGE>
ing, without limitation, all obligations, contingent or otherwise, of such
Person in connection with any letters of credit issued under letter of credit
facilities, acceptance facilities or other similar facilities and in connection
with any agreement to purchase, redeem, exchange, convert or otherwise acquire
for value any Equity Interests of such Person, or any warrants, rights or
options to acquire such Equity Interests, now or hereafter outstanding, (ii) all
obligations of such Person evidenced by bonds, notes, debentures or other
similar instruments, (iii) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even if the rights and remedies of the seller or lender
under such agreement in the event of default are limited to repossession or sale
of such property), but excluding trade payables arising in the ordinary course
of business, (iv) all obligations under Interest Rate Agreements of such Person,
(v) all Capital Lease Obligations of such Person, (vi) all Indebtedness referred
to in clauses (i) through (v) above of other Persons and all dividends of other
Persons, the payment of which is secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien, upon or with respect to property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Indebtedness, (vii) all
Guaranteed Debt of such Person, (viii) all Disqualified Equity Interests valued
at the greater of their voluntary or involuntary maximum fixed repurchase price
plus accrued and unpaid dividends, and (ix) any amendment, supplement,
modification, deferral, renewal, extension, refunding or refinancing of any
liability of the types referred to in clauses (i) through (viii) above;
provided, however, that the term Indebtedness shall not include any obligations
of the Company and its Restricted Subsidiaries with respect to Film Contracts
entered into in the ordinary course of business. The amount of Indebtedness of
any Person at any date shall be, without duplication, the principal amount that
would be shown on a balance sheet of such Person prepared as of such date in
accordance with GAAP and the maximum determinable liability of any Guaranteed
Debt referred to in clause (vii) above at such date. The Indebtedness of the
Company and its Restricted Subsidiaries shall not include any Indebtedness of
Unrestricted Subsidiaries so long as such Indebtedness is non-recourse to the
Company and the Restricted Subsidiaries. For purposes hereof, the "maximum fixed
repurchase price" of any Disqualified Equity Interests which do not have a fixed
repurchase price shall be calculated in accordance with the terms of such
Disqualified Equity Interests as if such Disqualified Equity Interests were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to the 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 the Indenture or under the Notes, 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 the Indenture, the
Notes and the performance of all other obligations to the Trustee and the
holders under the Indenture and the Notes, according to the terms thereof.
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of the Company or any Subsidiary)
is an employee, insider, associate or Affiliate of the Company or a Subsidiary
or has held any such position during the previous five years or (ii) who is a
director, an employee, insider, associate or Affiliate of another party to the
transaction in question.
"Interest Rate Agreements" means one or more of the following agreements
which shall be entered into from time to time by one or more financial
institutions: interest rate protection agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar agreements)
and any obligations in respect of any Hedging Agreements (as defined in the Bank
Credit Agreement).
"Investments" means, with respect to any Person, directly or indirectly,
any advance, loan (including guarantees), or other extension of credit or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase, acquisition or ownership by such Person of any Equity
Interests, bonds, notes, debentures or other securities or assets issued or
owned by any other Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
<PAGE>
"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.
"Local Marketing Agreement" means a local marketing arrangement, sale
agreement, time brokerage agreement, management agreement or similar arrangement
pursuant to which a Person (i) obtains the right to sell at least a majority of
the advertising inventory of a television station on behalf of a third party,
(ii) purchases at least a majority of the air time of a television station to
exhibit programming and sell advertising time, (iii) manages the selling
operations of a television station with respect to at least a majority of the
advertising inventory of such station, (iv) manages the acquisition of
programming for a television station, (v) acts as a program consultant for a
television station, or (vi) manages the operation of a television station
generally.
"Maturity," when used with respect to any Note, means the date on which the
principal of such Note becomes due and payable as provided in the Note or as
provided in the Indenture, whether at Stated Maturity, the offer date, or the
redemption date and whether by declaration of acceleration, Offer in respect of
excess proceeds, Change of Control, call for redemption or otherwise.
"Minority Note" means the promissory note, dated December 26, 1986, made by
the Company to Frederick M. Himes, B. Stanley Resnick and Edward A. Johnston, as
representatives, pursuant to a stock purchase agreement, dated December 22,
1986, among the Company, Commercial Radio Institute, Inc., Chesapeake
Television, Inc. and certain individuals.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by any Person,
the proceeds thereof in the form of cash or Temporary Cash Investments including
payments in respect of deferred payment obligations when received in the form
of, or stock or other assets when disposed of for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary) net of (i) brokerage
commissions and other reasonable fees and expenses (including fees and expenses
of counsel and investment bankers) related to such Asset Sale, (ii) provisions
for all taxes payable as a result of such Asset Sale, (iii) payments made to
retire Indebtedness where payment of such Indebtedness is secured by the assets
or properties the subject of such Asset Sale, (iv) amounts required to be paid
to any Person (other than the Company or any Restricted Subsidiary) owning a
beneficial interest in the assets subject to the Asset Sale and (v) appropriate
amounts to be provided by the Company or any Restricted Subsidiary, as the case
may be, as a reserve, in accordance with GAAP, against any liabilities
associated with such Asset Sale and retained by the Company or any Restricted
Subsidiary, as the case may be, after such Asset Sale, including, without
limitation, pension and other post-employment benefit liabilities, liabilities
related to environmental matters and liabilities under any indemnification
obligations associated with such Asset Sale, all as reflected in an officers'
certificate delivered to the Trustee and (b) with respect to any issuance or
sale of Equity Interests, or debt securities or Equity Interests that have been
converted into or exchanged for Equity Interests, as referred to under "--
Certain Covenants -- Limitation on Restricted Payments," the proceeds of such
issuance or sale in the form of cash or Temporary Cash Investments, including
payments in respect of deferred payment obligations when received in the form
of, or stock or other assets when disposed for, cash or Temporary Cash
Investments (except to the extent that such obligations are financed or sold
with recourse to the Company or any Restricted Subsidiary), net of attorney's
fees, accountant's fees and brokerage, consultation, underwriting and other fees
and expenses actually incurred in connection with such issuance or sale and net
of taxes paid or payable as a result thereof.
"Operating Cash Flow" means, for any period, the Consolidated Net Income
(Loss) of the Company and its Restricted Subsidiaries for such period, plus (a)
extraordinary net losses and net losses on sales of assets outside the ordinary
course of business during such period, to the extent such losses were deducted
in computing Consolidated Net Income (Loss), 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 (Loss), and any provision for taxes
utilized in computing the net losses under clause (a) hereof, plus (c)
<PAGE>
Consolidated Interest Expense of the Company and its Restricted Subsidiaries for
such period, plus (d) depreciation, amortization and all other non-cash charges,
to the extent such depreciation, amortization and other non-cash charges were
deducted in computing such Consolidated Net Income (Loss) (including
amortization of goodwill and other intangibles, including Film Contracts and
write-downs of Film Contracts), minus (e) any cash payments contractually
required to be made with respect to Film Contracts (to the extent not previously
included in computing such Consolidated Net Income (Loss)).
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Guarantor that is pari passu in right of payment to the Notes or any Guarantees,
as the case may be.
"Permitted Investment" means (i) Investments in any Wholly Owned Restricted
Subsidiary; (ii) Indebtedness of the Company or a Restricted Subsidiary
described under clauses (vi) and (vii) of the definition of "Permitted
Indebtedness" set forth in "-- Certain Covenants -- Limitation on Indebtedness";
(iii) Temporary Cash Investments; (iv) Investments acquired by the Company or
any Restricted Subsidiary in connection with an Asset Sale permitted under "--
Certain Covenants -- Limitation on Sale of Assets," to the extent such
Investments are non-cash proceeds as permitted under such covenant; (v)
guarantees of Indebtedness otherwise permitted by the Indenture; (vi)
Investments in existence on the date of this Indenture; (vii) loans up to an
aggregate of $1,000,000 outstanding at any time to employees pursuant to
benefits available to the employees of the Company or any Restricted Subsidiary
from time to time in the ordinary course of business; (viii) any Investments in
the Securities; (ix) a Guarantee by any Guarantor and any other guarantee given
by a Guarantor of any Indebtedness of the Company in accordance with this
Indenture; (x) Investments by the Company or any Restricted Subsidiary in a
Person, if as a result of such Investment (I) such Person becomes a Restricted
Subsidiary or (II) such Person is merged, consolidated with or into, or
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or a Restricted Subsidiary; and (xi) other Investments that do not
exceed $5,000,000 at any time outstanding.
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of any Guarantor under Capital Lease Obligations
incurred in the ordinary course of business; and
(ii) Indebtedness of any Guarantor (a) issued to finance or refinance the
purchase or construction of any assets of such Guarantor or (b) secured by a
Lien on any assets of such Guarantor where the lender's sole recourse is to
the assets so encumbered, in either case (x) to the extent the purchase or
construction prices for such assets are or should be included in "property
and equipment" in accordance with GAAP and (y) if the purchase or
construction of such assets is not part of any acquisition of a Person or
business unit.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Preferred Equity Interest," as applied to the Equity Interests of any
Person, means an Equity Interest of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such person, over Equity Interests of any other class of such
Person.
"Public Equity Offering" means, with respect to any Person, an underwritten
public offering by such Person of some or all of its Equity Interests (other
than Disqualified Equity Interests), the net proceeds of which (after deducting
any underwriting discounts and commissions) exceed $10,000,000.
"Qualified Equity Interests" of any Person means any and all Equity
Interests of such Person other than Disqualified Equity Interests.
"Restricted Subsidiary" means a Subsidiary of the Company other than an
Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any transaction or series of related
transactions pursuant to which the Company or a Restricted Subsidiary sells or
transfers any property or asset in connection with the leasing, or the resale
against installment payments, of such property or asset to the seller or
transferor.
<PAGE>
"Stated Maturity," when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor subordinated in right of payment to the Notes or any Guarantee, as the
case may be.
"Subsidiary" means any Person a majority of the equity ownership or the
Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"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 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 Investors Service, Inc. ("Moody's") or
any successor rating agency or "A-1" (or higher) according to Standard & Poor's
Rating Group ("S&P") or any successor rating agency, (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) organized and
existing under the laws of the United States of America with a rating, at the
time as of which any investment therein is made, of "P-1" (or higher) according
to Moody's or "A-1" (or higher) according to S&P and (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended.
"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 the "Certain Covenants -- Limitation on Unrestricted Subsidiaries"
covenant. 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 the "Certain Covenants --
Limitation on Indebtedness" covenant. Cresap Enterprises, Inc., KDSM, Inc., KDSM
Licensee, Inc. and the Trust are Unrestricted Subsidiaries.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted Subsidiary means
Indebtedness of such Unrestricted Subsidiary (i) as to which neither the Company
nor any Restricted Subsidiary is directly or indirectly liable (by virtue of the
Company or any such Restricted Subsidiary being the primary obligor on,
guarantor of, or otherwise liable in any respect to, such Indebtedness), except
Guaranteed Debt of the Company or any Restricted Subsidiary to any Affiliate, in
which case (unless the incurrence of such Guaranteed Debt resulted in a
Restricted Payment at the time of incurrence) the Company shall be deemed to
have made a Restricted Payment equal to the principal amount of any such
Indebtedness to the extent guaranteed at the time such Affiliate is designated
an Unrestricted Subsidiary and (ii) which, upon the occurrence of a default with
respect thereto, does not result in, or permit any holder of any Indebtedness of
the Company or any Restricted Subsidiary to declare, a default on such
Indebtedness of the Company or any Restricted Subsidiary or cause the payment
thereof to be accelerated or payable prior to its Stated Maturity.
<PAGE>
"Voting Stock" means stock of the class or classes pursuant to which the
holders thereof have the general voting power under ordinary circumstances to
elect at least a majority of the board of directors, managers or trustees of a
corporation (irrespective of whether or not at the time stock of any other class
or classes shall have or might have voting power by reason of the happening of
any contingency).
"Wholly Owned Restricted Subsidiary" means a Restricted Subsidiary all the
Equity Interest of which is owned by the Company or another Wholly Owned
Restricted Subsidiary. The Wholly Owned Restricted Subsidiaries of the Company
currently consist of all the Company's Subsidiaries other than Cresap
Enterprises, Inc., KDSM, Inc. and KDSM Licensee, Inc.
<PAGE>
EXHIBIT B
SINCLAIR BROADCAST GROUP, INC.
Chesapeake Television, Inc.
Chesapeake Television Licensee, Inc.
Cresap Enterprises, Inc.
FSF-TV, Inc.
KABB Licensee, Inc.
KDNL Licensee, Inc.
KDSM, Inc.
KDSM Licensee, Inc.
KSMO, Inc.
KSMO Licensee, Inc.
KUPN Licensee, Inc.
SCI-Indiana Licensee, Inc.
SCI-Sacramento Licensee, Inc.
Sinclair Capital (Delaware statutory trust)
Sinclair Communications, Inc.
Sinclair Radio of Albuquerque, Inc.
Sinclair Radio of Albuquerque Licensee, Inc.
Sinclair Radio of Buffalo, Inc.
Sinclair Radio of Buffalo Licensee, Inc.
Sinclair Radio of Greenville, Inc.
Sinclair Radio of Greenville Licensee, Inc.
Sinclair Radio of Los Angeles, Inc.
Sinclair Radio of Los Angeles Licensee, Inc.
Sinclair Radio of Memphis, Inc.
Sinclair Radio of Memphis Licensee, Inc.
Sinclair Radio of Nashville, Inc.
Sinclair Radio of Nashville Licensee, Inc.
Sinclair Radio of New Orleans, Inc.
Sinclair Radio of New Orleans Licensee, Inc.
Sinclair Radio of St. Louis, Inc.
Sinclair Radio of St. Louis Licensee, Inc.
Sinclair Radio of Wilkes-Barre, Inc.
Sinclair Radio of Wilkes-Barre Licensee, Inc.
Sinclair Communications of Kentucky, Inc.
Sinclair Communications of Oklahoma, Inc.
Superior KY License Corp.
Superior OK License Corp.
Tuscaloosa Broadcasting, Inc.
<PAGE>
WCGV, Inc.
WCGV Licensee, Inc.
WDBB, Inc.
WLFL, Inc.
WLFL Licensee, Inc.
WLOS Licensee, Inc.
WPGH, Inc.
WPGH Licensee, Inc.
WSMH, Inc.
WSMH Licensee, Inc.
WSTR, Inc.
WSTR Licensee, Inc.
WSYX, Inc.
WTTE, Channel 28, Inc.
WTTE, Channel 28 Licensee, Inc.
WTTO, Inc.
WTTO Licensee, Inc.
WTVZ, Inc.
WTVZ Licensee, Inc.
WYZZ, Inc.
WYZZ Licensee, Inc.
DRAFT
12/15/97
SINCLAIR BROADCAST GROUP, INC., as Issuer,
and
FIRST UNION NATIONAL BANK, as Trustee
SUBORDINATED INDENTURE
Dated as of December 17, 1997
Providing for Issuance of
Subordinated Debt Securities in Series
<PAGE>
TABLE OF CONTENTS
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PARTIES.......................................................................................1
RECITALS......................................................................................1
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION................1
Section 101. Definitions.................................................................1
"Affiliate".................................................................2
"Bank Credit Agreement".....................................................2
"Bankruptcy Law"............................................................2
"Bearer Security"...........................................................3
"Board of Directors"........................................................3
"Board Resolution"..........................................................3
"Business Day"..............................................................3
"Capital Lease Obligation"..................................................3
"Cash Equivalents"..........................................................3
"Code"......................................................................3
"Commission"................................................................4
"Company"...................................................................4
"Company Request" or "Company Order"........................................4
"Consolidated Net Worth"....................................................4
"Corporate Trust Office"....................................................4
"Default"...................................................................4
"Depositary"................................................................4
"Designated Guarantor Senior Indebtedness"..................................4
"Designated Senior Indebtedness"............................................5
"Disqualified Equity Interests".............................................5
"Equity Interest"...........................................................5
"Event of Default"..........................................................5
"Exchange Act"..............................................................5
"Existing Notes"............................................................5
"Fair Market Value".........................................................5
"Film Contract".............................................................5
"Founders' Notes"...........................................................5
"Generally Accepted Accounting Principles" or "GAAP"........................6
"Global Security"...........................................................6
"Guarantee".................................................................6
"Guaranteed Debt"...........................................................6
</TABLE>
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<TABLE>
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"Guarantor".................................................................6
"Guarantor Senior Indebtedness".............................................6
"Holder"....................................................................7
"Indebtedness"..............................................................7
"Indenture".................................................................8
"Indenture Obligations".....................................................9
"Independent Director"......................................................9
"Interest Payment Date".....................................................9
"Interest Rate Agreements"..................................................9
"Investments"...............................................................9
"Lien"......................................................................9
"Maturity"..................................................................9
"Moody's"...................................................................9
"Non-payment Default"......................................................10
"Officers' Certificate"....................................................10
"Opinion of Counsel".......................................................10
"Opinion of Independent Counsel"...........................................10
"Original Issue Discount Security".........................................10
"Outstanding"..............................................................10
"Pari Passu Indebtedness"..................................................11
"Paying Agent".............................................................11
"Payment Default"..........................................................11
"Permitted Guarantor Junior Securities"....................................11
"Permitted Junior Securities"..............................................11
"Person"...................................................................12
"Predecessor Security".....................................................12
"Preferred Equity Interest"................................................12
"Qualified Equity Interests"...............................................12
"Redemption Date"..........................................................12
"Redemption Price".........................................................12
"Regular Record Date"......................................................12
"Responsible Officer"......................................................13
"Restricted Subsidiary"....................................................13
"S&P"......................................................................13
"Securities"...............................................................13
"Securities Act"...........................................................13
"Security Register" and "Security Registrar"...............................13
"Senior Indebtedness"......................................................13
"Special Record Date"......................................................14
"Stated Maturity"..........................................................14
"Subordinated Indebtedness"................................................14
</TABLE>
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"Subsidiary"...............................................................14
"Successor Security".......................................................14
"Temporary Cash Investments"...............................................14
"Trust Indenture Act"......................................................15
"Trustee"..................................................................15
"U.S. Person"..............................................................15
"Unrestricted Subsidiary"..................................................15
"Voting Stock".............................................................15
Section 102. Other Definitions..........................................................15
Section 103. Compliance Certificates and Opinions.......................................16
Section 104. Form of Documents Delivered to Trustee.....................................16
Section 105. Acts of Holders............................................................17
Section 106. Notices, etc., to Trustee, the Company and any Guarantor...................19
Section 107. Notice to Holders; Waiver..................................................19
Section 108. Conflict with Trust Indenture Act..........................................20
Section 109. Effect of Headings and Table of Contents...................................20
Section 110. Successors and Assigns.....................................................20
Section 111. Separability Clause........................................................20
Section 112. Benefits of Indenture......................................................20
Section 113. Governing Law..............................................................20
Section 114. Legal Holidays.............................................................21
Section 115. Schedules and Exhibits.....................................................21
Section 116. Counterparts...............................................................21
ARTICLE TWO SECURITY FORMS........................................................21
Section 201. Forms Generally............................................................21
Section 202. Form of and Provisions Required in Global Security.........................22
Section 203. Form of Trustee's Certificate of Authentication............................23
Section 204. Form of Guarantee of Each of the Guarantors................................23
ARTICLE THREE THE SECURITIES........................................................25
Section 301. Amount Unlimited; Issuable in Series.......................................25
Section 302. Denominations..............................................................29
Section 303. Execution, Authentication, Delivery and Dating.............................30
Section 304. Temporary Securities.......................................................31
Section 305. Global Securities..........................................................32
Section 306. Registration, Registration of Transfer and Exchange........................33
Section 307. Mutilated, Destroyed, Lost and Stolen Securities...........................35
Section 308. [RESERVED].................................................................36
</TABLE>
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Section 309. Payment of Interest; Interest Rights Preserved.............................36
Section 310. Persons Deemed Owners......................................................37
Section 311. Cancellation...............................................................38
Section 312. Computation of Interest....................................................38
Section 313. CUSIP Numbers..............................................................38
ARTICLE FOUR DEFEASANCE AND COVENANT DEFEASANCE....................................39
Section 401. Company's Option to Effect Defeasance or Covenant Defeasance...............39
Section 402. Defeasance and Discharge...................................................39
Section 403. Covenant Defeasance........................................................40
Section 404. Conditions to Defeasance or Covenant Defeasance............................40
Section 405. Deposited Money and U.S. Government Obligations to Be Held in Trust;
Other Miscellaneous Provisions.............................................43
Section 406. Reinstatement..............................................................43
ARTICLE FIVE REMEDIES..............................................................44
Section 501. Events of Default..........................................................44
Section 502. Acceleration of Maturity; Rescission and Annulment.........................46
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee............47
Section 504. Trustee May File Proofs of Claim...........................................48
Section 505. Trustee May Enforce Claims without Possession of Securities................49
Section 506. Application of Money Collected.............................................49
Section 507. Limitation on Suits........................................................50
Section 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest...................................................................51
Section 509. Restoration of Rights and Remedies.........................................51
Section 510. Rights and Remedies Cumulative.............................................51
Section 511. Delay or Omission Not Waiver...............................................51
Section 512. Control by Holders.........................................................52
Section 513. Waiver of Past Defaults....................................................52
Section 514. Undertaking for Costs......................................................52
Section 515. Waiver of Stay, Extension or Usury Laws....................................53
ARTICLE SIX THE TRUSTEE...........................................................53
Section 601. Notice of Defaults.........................................................53
Section 602. Certain Rights of Trustee..................................................53
</TABLE>
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Section 603. Trustee Not Responsible for Recitals, Dispositions of Securities or
Application of Proceeds Thereof............................................55
Section 604. Trustee and Agents May Hold Securities; Collections; etc...................55
Section 605. Money Held in Trust........................................................55
Section 606. Compensation and Indemnification of Trustee and Its Prior Claim............56
Section 607. Conflicting Interests......................................................57
Section 608. Corporate Trustee Required; Eligibility....................................57
Section 609. Resignation and Removal; Appointment of Successor Trustee..................57
Section 610. Acceptance of Appointment by Successor.....................................59
Section 611. Merger, Conversion, Consolidation or Succession to Business................60
Section 612. Preferential Collection of Claims Against Company..........................61
ARTICLE SEVEN HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.....................61
Section 701. Company to Furnish Trustee Names and Addresses of Holders..................61
Section 702. Disclosure of Names and Addresses of Holders...............................62
Section 703. Reports by Trustee.........................................................62
Section 704. Reports by Company and Guarantors..........................................62
ARTICLE EIGHT CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE..................63
Section 801. Company or Any Guarantor May Consolidate, etc., Only on Certain Terms......63
Section 802. Successor Substituted......................................................65
ARTICLE NINE SUPPLEMENTAL INDENTURES...............................................66
Section 901. Supplemental Indentures and Agreements without Consent of Holders..........66
Section 902. Supplemental Indentures and Agreements with Consent of Holders.............67
Section 903. Execution of Supplemental Indentures and Agreements........................68
Section 904. Effect of Supplemental Indentures..........................................69
Section 905. Conformity with Trust Indenture Act........................................69
</TABLE>
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Section 906. Reference in Securities to Supplemental Indentures.........................69
Section 907. Effect on Senior Indebtedness..............................................69
ARTICLE TEN COVENANTS.............................................................69
Section 1001. Payment of Principal, Premium and Interest.................................69
Section 1002. Maintenance of Office or Agency............................................70
Section 1003. Money for Security Payments to Be Held in Trust............................70
Section 1004. Corporate Existence........................................................72
Section 1005. Payment of Taxes and Other Claims..........................................72
Section 1006. Maintenance of Properties..................................................72
Section 1007. Insurance..................................................................73
Section 1008. Statement by Officers as to Default........................................73
Section 1009. Waiver of Certain Covenants................................................74
ARTICLE ELEVEN REDEMPTION OF SECURITIES........................................74
Section 1101. Rights of Redemption.......................................................74
Section 1102. Applicability of Article...................................................74
Section 1103. Election to Redeem; Notice to Trustee......................................74
Section 1104. Selection by Trustee of Securities to Be Redeemed..........................75
Section 1105. Notice of Redemption.......................................................75
Section 1106. Deposit of Redemption Price................................................76
Section 1107. Securities Payable on Redemption Date......................................76
Section 1108. Securities Redeemed or Purchased in Part...................................77
ARTICLE TWELVE SUBORDINATION OF SECURITIES.....................................77
Section 1201. Securities Subordinate to Senior Indebtedness..............................77
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.............................78
Section 1203. Suspension of Payment When Senior Indebtedness in Default..................79
Section 1204. Payment Permitted if No Default............................................81
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness....................81
Section 1206. Provisions Solely to Define Relative Rights................................81
Section 1207. Trustee to Effectuate Subordination........................................82
Section 1208. No Waiver of Subordination Provisions......................................82
Section 1209. Notice to Trustee..........................................................83
Section 1210. Reliance on Judicial Order or Certificate of Liquidating Agent.............84
</TABLE>
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Section 1211. Rights of Trustee as a Holder of Senior Indebtedness; Preservation of
Trustee's Rights...........................................................84
Section 1212. Article Applicable to Paying Agents........................................84
Section 1213. No Suspension of Remedies..................................................84
Section 1214. Trustee's Relation to Senior Indebtedness..................................85
ARTICLE THIRTEEN SATISFACTION AND DISCHARGE......................................85
Section 1301. Satisfaction and Discharge of Indenture....................................85
Section 1302. Application of Trust Money.................................................86
ARTICLE FOURTEEN GUARANTEE.......................................................87
Section 1401. Guarantors' Guarantee......................................................87
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent Obligation..........87
Section 1403. Guarantee Absolute.........................................................88
Section 1404. Right to Demand Full Performance...........................................91
Section 1405. Waivers....................................................................91
Section 1406. The Guarantors Remain Obligated in Event the Company Is No Longer
Obligated to Discharge Indenture Obligations...............................92
Section 1407. Fraudulent Conveyance; Contribution Subrogation............................92
Section 1408. Guarantee Is in Addition to Other Security.................................92
Section 1409. Release of Security Interests..............................................93
Section 1410. No Bar to Further Actions..................................................93
Section 1411. Failure to Exercise Rights Shall Not Operate as a Waiver; No
Suspension of Remedies.....................................................93
Section 1412. Trustee's Duties; Notice to Trustee........................................94
Section 1413. Successors and Assigns.....................................................94
Section 1414. Release of Guarantee.......................................................94
Section 1415. Execution of Guarantee.....................................................95
Section 1416. Guarantee Subordinate to Guarantor Senior Indebtedness.....................95
Section 1417. Payment Over of Proceeds Upon Dissolution of the Guarantor, etc............95
Section 1418. Default on Guarantor Senior Indebtedness...................................97
Section 1419. Payment Permitted by Each of the Guarantors if No Default..................97
Section 1420. Subrogation to Rights of Holders of Guarantor Senior Indebtedness..........98
Section 1421. Provisions Solely to Define Relative Rights................................98
</TABLE>
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Section 1422. Trustee to Effectuate Subordination........................................99
Section 1423. No Waiver of Subordination Provisions......................................99
Section 1424. Notice to Trustee by Each of the Guarantors...............................100
Section 1425. Reliance on Judicial Order or Certificate of Liquidating Agent............101
Section 1426. Rights of Trustee as a Holder of Guarantor Senior Indebtedness;
Preservation of Trustee's Rights..........................................101
Section 1427. Article Applicable to Paying Agents.......................................101
Section 1428. No Suspension of Remedies.................................................102
Section 1429. Trustee's Relation to Guarantor Senior Indebtedness.......................102
TESTIMONIUM
SIGNATURES AND SEALS
ACKNOWLEDGMENTS
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Reconciliationand tie between Trust Indenture Act of 1939, as
amended, and Indenture, dated as of December 17,
1997
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
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<S> <C>
ss. 310 (a)(1) .......................................... 608
(a)(2) .......................................... 608
(b) .......................................... 607, 609
ss. 311 (a) .......................................... 612
ss. 312 (a) .......................................... 701
(b) .......................................... 702
(c) .......................................... 702
ss. 313 (a) .......................................... 703
(c) .......................................... 703, 704
ss. 314 (a) .......................................... 704
(a)(4) .......................................... 1008
(c)(1) .......................................... 103, 104, 404, 1103
(c)(2) .......................................... 103, 104, 404, 1103
(e) .......................................... 103
ss. 315 (a) .......................................... 602, 903
(b) .......................................... 601
(c) .......................................... 602
(d) .......................................... 602
(e) .......................................... 514
ss. 316 (a)(last sentence) .......................................... 101 ("Outstanding")
(a)(1)(A) .......................................... 502, 512
(a)(1)(B) .......................................... 513
(b) .......................................... 508
(c) .......................................... 105
ss. 317 (a)(1) .......................................... 503
(a)(2) .......................................... 504
(b) .......................................... 1003
ss. 318 (a) .......................................... 108
</TABLE>
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Note: This reconciliation and tie shall not, for any purpose, be deemed to
be a part of this Indenture.
<PAGE>
INDENTURE, dated as of December 17, 1997, between SINCLAIR BROADCAST
GROUP, INC., a Maryland corporation (the "Company"), and FIRST UNION NATIONAL
BANK, a national banking association organized under the laws of the United
States of America, as trustee (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its subordinated
debentures, notes or other evidences of indebtedness ("Securities") to be issued
in one or more series as herein provided.
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
of any series, when their terms have been determined in accordance with this
Indenture and 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, if and when executed by each of the Guarantors and
delivered hereunder, the valid obligation of each of the Guarantors and (iii)
this Indenture a valid agreement of the Company and, if applicable, 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 or of any
series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF
GENERAL APPLICATION
Section 101. Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or as set forth pursuant to Section 301 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;
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(b) all other terms used herein which 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.
"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.
"Bank Credit Agreement" means the Third Amended and Restated Credit
Agreement, dated as of May 20, 1997, between the Company, the subsidiaries of
the Company identified on the signature pages thereof under the caption
"SUBSIDIARY GUARANTORS," the lenders named therein and The Chase Manhattan Bank,
as 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.
"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.
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"Bearer Security" means any Security issued hereunder which is payable
to bearer.
"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 Maryland or the city in which the Corporate Trust Office is located
are authorized or obligated by law or executive order to close.
"Capital Lease Obligation" means any obligation of the Company and its
Restricted Subsidiaries on a Consolidated basis under any capital lease of real
or personal property which, in accordance with GAAP, has been recorded as a
capitalized lease obligation.
"Cash Equivalents" means, (i) any evidence of Indebtedness with a
maturity of one year or less from the date of acquisition issued or directly and
fully guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof); (ii) certificates of deposit
or acceptances with a maturity of one year or less from the date of acquisition
of any financial institution that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than
$500,000,000; (iii) commercial paper with a maturity of one year or less from
the date of acquisition issued by a corporation that is not an Affiliate of the
Company organized under the laws of any state of the United States or the
District of Columbia and rated A-1 (or higher) according to S&P or P-1 (or
higher) according to Moody's or at least an equivalent rating category of
another nationally recognized securities rating agency; (iv) any money market
deposit accounts issued or offered by a domestic commercial bank having capital
and surplus in excess of $500,000,000; and (v) repurchase agreements and reverse
repurchase agreements relating to marketable direct obligations issued or
unconditionally guaranteed by the government of the United States of America or
issued by any agency thereof and backed by the full faith and credit of the
United States of America, in each case maturing within one year from the date of
acquisition; provided that the terms of such agreements comply with the
guidelines set forth in the Federal Financial Agreements of Depository
Institutions With Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
"Code" means the Internal Revenue Code of 1986, as amended.
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"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 Sinclair Broadcast Group, Inc., a corporation
incorporated under the laws of Maryland, until a successor Person shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by any one of its Chairman of the Board, its
Vice Chairman, its President or a Vice President (regardless of vice
presidential designation), and by any one of its Treasurer, an Assistant
Treasurer, its Secretary or an Assistant Secretary, and delivered to the
Trustee.
"Consolidated 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.
"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 First
Union National Bank, 901 East Cary Street, 2nd Floor, Richmond, Virginia 23219,
Attention: Patricia Welling.
"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, or any other Person designated
as the Depositary by the Company pursuant to Section 305(b), 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 Senior Indebtedness arises as "Designated Guarantor
- 4 -
<PAGE>
Senior Indebtedness" by the Guarantor which is the obligor under the 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, 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, as amended.
"Existing Notes" means the Company's 10% Senior Subordinated Notes due
2003, the Company's 10% Senior Subordinated Notes due 2005 and the Company's 9%
Senior Subordinated Notes due 2007.
"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.
"Film Contract" means contracts with suppliers that convey the right
to broadcast specified films, videotape motion pictures, syndicated television
programs or sports or other programming.
"Founders' Notes" means the term notes, dated September 30, 1990, made
by the Company to Julian S. Smith and to Carolyn C. Smith pursuant to a stock
redemption
- 5 -
<PAGE>
agreement, dated June 19, 1990, among the Company, certain of its Subsidiaries,
Julian S. Smith, Carolyn C. Smith, David D. Smith, Frederick G. Smith, J. Duncan
Smith and Robert E. Smith.
"Generally Accepted Accounting Principles" or "GAAP" means generally
accepted accounting principles in the United States, consistently applied, which
are in effect on the date of this Indenture.
"Global Security" means a Security of any series in book entry form
evidencing all or part of the Securities of any series, issued to the Depositary
or its nominee and registered in the name of the Depositary or such nominee.
"Guarantee" means, in respect of the Securities of any series, the
guarantee, if any, by any Guarantor, if any, of the Company's Indenture
Obligations pursuant to a guarantee given in accordance with Section 301 of this
Indenture, including, without limitation, the Guarantees by the Guarantors, if
any, included in Article Fourteen of this Indenture.
"Guaranteed Debt" of any Person means, without duplication, all
Indebtedness of any other Person referred to in the definition of Indebtedness
contained in this Section guaranteed directly or indirectly in any manner by
such Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (i) to pay or purchase such Indebtedness or to advance or
supply funds for the payment or purchase of such Indebtedness, (ii) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell services,
primarily for the purpose of enabling the debtor to make payment of such
Indebtedness or to assure the holder of such Indebtedness against loss, (iii) to
supply funds to, or in any other manner invest in, the debtor (including any
agreement to pay for property or services without requiring that such property
be received or such services be rendered), (iv) to maintain working capital or
equity capital of the debtor, or otherwise to maintain the net worth, solvency
or other financial condition of the debtor or (v) otherwise to assure a creditor
against loss; provided that the term "guarantee" shall not include endorsements
for collection or deposit, in either case in the ordinary course of business.
"Guarantor," as of any time, means, in respect of a series of
Securities, a Subsidiary which provides a Guarantee pursuant to Section 301 of
the Indenture or any other guarantor of the Indenture Obligations. Guarantors,
if any, will be listed as signatories to any supplemental indenture of any
series of Securities which provide for Guarantees.
"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
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<PAGE>
in this definition), whether outstanding on the date of this Indenture or
thereafter created, incurred or assumed, and whether at any time owing, actually
or contingent, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to any Guarantee. Without limiting the generality of the
foregoing, "Guarantor Senior Indebtedness" shall include (i) the principal of,
premium, if any, and interest (including interest accruing after the filing of a
petition initiating any proceeding under any state, federal or foreign
bankruptcy law whether or not allowable as a claim in such proceeding) and all
other obligations of every nature of any Guarantor from time to time owed to the
lenders (or their agent) under the Bank Credit Agreement; provided, however,
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, (ii) Indebtedness evidenced by any
guarantee of the Founders' Notes and (iii) Indebtedness under Interest Rate
Agreements. Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall
not include (i) Indebtedness evidenced by the Guarantees, (ii) Indebtedness that
is subordinate or junior in right of payment to any Indebtedness of any
Guarantor, (iii) Indebtedness which when incurred and without respect to any
election under Section 1111(b) of Title 11 of the United States Code, is without
recourse to any Guarantor, (iv) Indebtedness which is represented by
Disqualified Equity Interests, (v) any liability for foreign, federal, state,
local or other taxes owed or owing by any Guarantor to the extent such liability
constitutes Indebtedness, (vi) Indebtedness of any Guarantor to a Subsidiary or
any other Affiliate of the Company or any of such Affiliate's subsidiaries,
(vii) Indebtedness evidenced by any guarantee of any Subordinated Indebtedness
or Pari Passu Indebtedness, (viii) that portion of any Indebtedness which at the
time of issuance is issued in violation of this Indenture and (ix) Indebtedness
owed by any Guarantor for compensation to employees or for services.
"Holder" means a Person in whose name a Security of any series 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
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<PAGE>
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even if
the rights and remedies of the seller or lender under such agreement in the
event of default are limited to repossession or sale of such property), but
excluding trade payables arising in the ordinary course of business, (iv) all
obligations under Interest Rate Agreements of such Person, (v) all Capital Lease
Obligations of such Person, (vi) all Indebtedness referred to in clauses (i)
through (v) above of other Persons and all dividends of other Persons, the
payment of which is secured by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured by) any Lien, upon or
with respect to property (including, without limitation, accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, (vii) all Guaranteed Debt of such
Person, (viii) all Disqualified Equity Interests valued at the greater of their
voluntary or involuntary maximum fixed repurchase price plus accrued and unpaid
dividends, and (ix) any amendment, supplement, modification, deferral, renewal,
extension, refunding or refinancing of any liability of the types referred to in
clauses (i) through (viii) above; provided, however, that the term Indebtedness
shall not include any obligations of the Company and its Restricted Subsidiaries
with respect to Film Contracts entered into in the ordinary course of business.
The amount of Indebtedness of any Person at any date shall be, without
duplication, the principal amount that would be shown on a balance sheet of such
Person prepared as of such date in accordance with GAAP and the maximum
determinable liability of any Guaranteed Debt referred to in clause (vii) above
at such date. The Indebtedness of the Company and its Restricted Subsidiaries
shall not include any Indebtedness of Unrestricted Subsidiaries so long as such
Indebtedness is non-recourse to the Company and the Restricted Subsidiaries. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified Equity
Interests which do not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Equity Interests as if such
Disqualified Equity Interests were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based upon, or measured by, the Fair Market Value of such Disqualified Equity
Interests, such Fair Market Value to be determined in good faith by the Board of
Directors of the issuer of such Disqualified Equity Interests.
"Indenture" means this instrument as originally executed and as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively. The term "Indenture" shall also include the terms of particular
series of Securities established as contemplated by Section 301.
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"Indenture Obligations" means the obligations of the Company and any
other obligor under this Indenture or under the Securities of any series,
including any Guarantor, to pay principal, premium, if any, and interest when
due and payable under the Securities of that series, and all other amounts due
or to become due under or in connection with this Indenture, the Securities of
that series, and the performance of all other obligations to the Trustee and the
Holders under this Indenture and the Securities of that series, according to the
terms hereof and thereof.
"Independent Director" means a director of the Company other than a
director (i) who (apart from being a director of the Company or any Subsidiary)
is an employee, insider, associate or Affiliate of the Company or a Subsidiary
or has held any such position during the previous five years or (ii) who is a
director, an employee, insider, associate or Affiliate of another party to the
transaction in question.
"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 any obligations in
respect of any Hedging Agreement, as defined in the Bank Credit Agreement.
"Investments" means, with respect to any Person, directly or
indirectly, any advance, loan (including guarantees), or other extension of
credit or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase, acquisition or ownership by such Person of any
Equity Interests, bonds, notes, debentures or other securities or assets issued
or owned by any other Person and all other items that would be classified as
investments on a balance sheet prepared in accordance with GAAP.
"Lien" means any mortgage, charge, pledge, lien (statutory or
otherwise), privilege, security interest, hypothecation or other encumbrance
upon or with respect to any property of any kind (including any conditional sale
or other title retention agreement, any leases in the nature thereof, and any
agreement to give any security interest), real or personal, movable or
immovable, now owned or hereafter acquired.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security becomes due and payable as therein provided
or as provided in this Indenture, whether at Stated Maturity, or the Redemption
Date and whether by declaration of acceleration, call for redemption or
otherwise.
"Moody's" means Moody's Investors Service, Inc. or any successor
rating agency.
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"Non-payment Default" means any event (other than a Payment Default)
the occurrence of which entitles one or more Persons to accelerate the maturity
of any Designated Senior Indebtedness.
"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.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company, any of the Guarantors or the Trustee, unless an Opinion
of Independent Counsel is required pursuant to the terms of this Indenture, and
who shall be acceptable to the Trustee.
"Opinion of Independent Counsel" means a written opinion of counsel
issued by someone who is not an employee or consultant of the Company or any
Guarantor and who shall be acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides
for an amount less than the stated principal amount thereof to be due and
payable upon declaration of acceleration of the Maturity thereof pursuant to
Section 301.
"Outstanding" when used with respect to Securities of any series
means, unless otherwise provided pursuant to Section 301, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the Trustee or
any Paying Agent (other than the Company or any Affiliate thereof) in trust or
set aside and segregated in trust by the Company or such Affiliate (if the
Company or such Affiliate shall act as the Paying Agent) for the Holders;
provided that if such Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor reasonably
satisfactory to the Trustee has been made;
(c) Securities, except to the extent provided in Sections 402 and 403,
with respect to which the Company has effected defeasance or covenant defeasance
as provided in Article Four; and
(d) Securities in exchange for or in lieu of which other Securities
have been authenticated and delivered pursuant to this Indenture, other than any
such Securities in
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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 which the Trustee knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
reasonable satisfaction of the Trustee the pledgee's right so to act with
respect to such Securities and that the pledgee is not the Company, any
Guarantor or any other obligor upon the Securities or any Affiliate of the
Company, any Guarantor or such other obligor.
"Pari Passu Indebtedness" means any Indebtedness of the Company or any
Guarantor that is pari passu in right of payment to the Securities or any
Guarantee of any particular series, 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 the Guarantee to be
treated in any case or proceeding or similar event described in clause (a), (b)
or (c) of Section 1417 as part of the same class of claims as the Guarantor
Senior Indebtedness or any class of claims pari passu with, or senior to, the
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 at least to the same
extent that the Guarantee is subordinated to the payment of all Guarantor Senior
Indebtedness then outstanding; provided that (1) if a new corporation results
from such reorganization or readjustment, such corporation assumes any Guarantor
Senior Indebtedness not paid in full in cash or Cash Equivalents in connection
with such reorganization or readjustment and (2) the rights of the holders of
such Guarantor Senior Indebtedness are not, without the consent of such holders,
altered by such reorganization or readjustment.
"Permitted 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
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proceeding or similar event described in clause (a), (b) or (c) of Section 1202
as part of the same class of claims as the Senior Indebtedness or any class of
claims pari passu with, or senior to, the Senior Indebtedness) for any payment
or distribution, debt or equity securities of the Company or any successor
corporation provided for by a plan of reorganization or readjustment that are
subordinated 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.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivisions thereof.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for a mutilated
Security or in lieu of a lost, destroyed or stolen Security shall be deemed to
evidence the same debt as the mutilated, lost, destroyed or stolen Security.
"Preferred Equity Interest," as applied to the Equity Interest of any
Person, means an Equity Interest of any class or classes (however designated)
which is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such person, over Equity Interests of any other class of such
Person.
"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.
"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.
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"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 Subsidiary" means a Subsidiary subject to the covenants or
events of default under the agreements governing other indebtedness of the
Company.
"S&P" means Standard & Poor's Ratings Group, a division of the McGraw
Hill Companies, or any successor rating agency.
"Securities" has the meaning specified in the Recitals.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 306.
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including interest accruing after the filing of a petition initiating
any proceeding under any state, federal or foreign bankruptcy law whether or not
allowable as a claim in such proceeding) on any Indebtedness of the Company
(other than as otherwise provided in this definition), whether outstanding on
the date of this Indenture or thereafter created, incurred or assumed, and
whether at any time owing, actually or 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 the Securities. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall include
the principal of, premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding under any state,
federal or foreign bankruptcy law whether or not allowable as a claim in such
proceeding) and all other obligations of every nature of the Company from time
to time owed to the lenders (or their agent) under the Bank Credit Agreement;
provided, however, that any Indebtedness under any refinancing, refunding or
replacement of the Bank Credit Agreement shall not constitute Senior
Indebtedness to the extent that the Indebtedness thereunder is by its express
terms subordinate to any other Indebtedness of the Company, (ii) Indebtedness
outstanding under the Founders' Notes and (iii) Indebtedness under Interest Rate
Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Securities, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of the Company,
(iii) Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
the
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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 and (viii) Indebtedness owed by the Company for compensation
to employees or for services.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 309.
"Stated Maturity" when used with respect to any Indebtedness or any
installment of interest thereon, means the date specified in such Indebtedness
as the fixed date on which the principal of such Indebtedness or such
installment of interest is due and payable.
"Subordinated Indebtedness" means Indebtedness of the Company or any
Guarantor subordinated in right of payment to Senior Indebtedness or Guarantor
Senior Indebtedness, as the case may be.
"Subsidiary" means any Person a majority of the equity ownership or
the Voting Stock of which is at the time owned, directly or indirectly, by the
Company or by one or more other Subsidiaries, or by the Company and one or more
other Subsidiaries.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security. For the purposes of this definition, any Security
authenticated and delivered under Section 307 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Temporary Cash Investments" means (i) any evidence of Indebtedness,
maturing not more than one year after the date of acquisition, issued by the
United States of America, or an instrumentality or agency thereof and guaranteed
fully as to principal, premium, if any, and interest by the United States of
America, (ii) any certificate of deposit, maturing not more than one year after
the date of acquisition, issued by, or time deposit of, a commercial banking
institution (including the Trustee) that is a member of the Federal Reserve
System and that has combined capital and surplus and undivided profits of not
less than $500,000,000, whose debt has a rating, at the time as of which any
investment therein is made, of "P-1" (or higher) according to Moody's or "A-1"
(or higher) according to S&P, (iii) commercial paper, maturing not more than one
year after the date of acquisition, issued by a corporation (other than an
Affiliate or Subsidiary of the Company) (including the Trustee) organized and
existing under the laws of the United
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<PAGE>
States of America with a rating, at the time as of which any investment therein
is made, of "P-1" (or higher) according to Moody's or "A-1" (or higher)
according to S&P and (iv) any money market deposit accounts issued or offered by
a domestic commercial bank (including the Trustee) having capital and surplus in
excess of $500,000,000.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee and, if at any time, there is more
than one Trustee, "Trustee" as used with respect to the Securities of any series
shall mean the Trustee with respect to the Securities of that series.
"U.S. Person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust, the income of which is subject to United States federal income taxation
regardless of its source.
"Unrestricted Subsidiary," with respect to any series of Securities,
shall have the meaning set forth as provided pursuant to Section 301.
"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).
Section 102. Other Definitions.
-----------------
Defined in
Term Section
---- ----------
"Act" 105
"Agent Members" 305
"Bearer Global Security" 305
"covenant defeasance" 403
"Defaulted Interest" 309
"defeasance" 402
"Defeasance Redemption Date" 404
"Defeased Securities" 401
"Global Security" 202
"Initial Blockage Period" 1203
"Payment Blockage Period" 1203
"Physical Securities" 305
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"Senior Representative" 1203
"Surviving Entity" 801
"U.S. Government Obligations" 404
Section 103. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company, any Guarantor and
any other obligor on the Securities of any series 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 has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has been
complied with; and
(d) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 104. Form of Documents Delivered to Trustee.
--------------------------------------
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
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Any certificate or opinion of an officer of the Company, any Guarantor
or other obligor of the Securities of any series 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 his 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 of any series 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 of that series, unless such counsel
knows that the certificate or opinion or representations with respect to such
matters are erroneous. Opinions of Counsel required to be delivered to the
Trustee may have qualifications customary for opinions of the type required and
counsel delivering such Opinions of Counsel may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 105. Acts of Holders.
---------------
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Holders may be embodied in and evidenced by one or more instruments of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the Company.
Procedures in connection to acts of Holders with respect to Bearer Securities
shall be as provided pursuant to Section 301. 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.
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(b) The ownership of Securities of any series 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 of any series shall bind
every future Holder of the same Security of that series or the Holder of every
Security of that series 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 of Securities of one
or more series any request, demand, authorization, direction, notice, consent,
waiver or other Act, the Company may, at its option, by or pursuant to a Board
Resolution, fix in advance a record date for the determination of such Holders
entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other Act, but the Company shall have no obligation to do so.
Notwithstanding Trust Indenture Act Section 316(c), any such record date shall
be the record date specified in or pursuant to such Board Resolution, which
shall be a date not more than 30 days prior to the first solicitation of Holders
generally in connection therewith and no later than the date such solicitation
is completed.
In the absence of any such record date fixed by the Company,
regardless as to whether a solicitation of the Holders of Securities of one or
more series 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 Securities of one or more series 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 of any series 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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<PAGE>
Section 106. Notices, etc., to Trustee, the Company and any Guarantor.
--------------------------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or any Guarantor or
any other obligor of the Securities or a Senior Representative or holder of
Senior Indebtedness shall be sufficient for every purpose hereunder if in
writing and mailed, first-class postage prepaid, or delivered by recognized
overnight courier, to or with the Trustee at the Corporate Trust Office,
Attention: Corporate Trust Division, or at any other address previously
furnished in writing to the Holders, the Company, any Guarantor, any other
obligor of the Securities or a Senior Representative or holder of Senior
Indebtedness by the Trustee; or
(b) the Company or any Guarantor shall be sufficient for every purpose
(except as provided in Section 501(c)) hereunder or pursuant to Section 301 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 Sinclair
Broadcast Group, Inc., 2000 West 41st Street, Baltimore, Maryland 21211,
Attention: President, or at any other address previously furnished in writing to
the Trustee by the Company;
Section 107. Notice to Holders; Waiver.
-------------------------
Where this Indenture or the Securities of any series provides for
notice to Holders of the Securities of any series 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 his 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 where 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. Where 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. Notices to Holders of Bearer Securities shall be
provided as may be specified pursuant to Section 301.
- 19 -
<PAGE>
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 108. Conflict with Trust Indenture Act.
---------------------------------
If any provision hereof limits, qualifies or conflicts with any
provision of the Trust Indenture Act or another provision which is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
Section 109. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
Section 110. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company and the
Guarantors shall bind their successors and assigns, whether so expressed or not.
Section 111. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities of any
series or in any Guarantees shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
Section 112. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities or the Guarantees,
express or implied, shall give to any Person (other than the parties hereto and
their successors hereunder, any Paying Agent, the Holders and the holders of
Senior Indebtedness or Guarantor Senior Indebtedness) any benefit or any legal
or equitable right, remedy or claim under this Indenture.
Section 113. Governing Law.
-------------
THIS INDENTURE AND THE SECURITIES OF ANY SERIES AND ANY INTEREST
COUPONS APPERTAINING THERETO AND ANY GUARANTEES
- 20 -
<PAGE>
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF).
Section 114. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security of any series shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on the Interest Payment Date or Redemption Date, or at the
Stated Maturity and no interest shall accrue with respect to such payment for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, to the next succeeding Business Day.
Section 115. Schedules and Exhibits.
----------------------
All schedules and exhibits attached hereto are by this reference made
a part hereof with the same effect as if herein set forth in full.
Section 116. Counterparts.
------------
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
ARTICLE TWO
-----------
SECURITY FORMS
--------------
Section 201. Forms Generally.
---------------
The Securities of each series and the Trustee's certificate of
authentication and the interest coupons, if any, to be attached thereto shall be
in substantially such form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case 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 applicable securities
exchange, organizational document, governing instrument or law or as may,
consistently herewith, be determined by the officers executing the Securities of
that series and interest coupons, if any, to be attached thereto, as evidenced
by their execution of the Securities and interest coupons, if any. If temporary
Securities of any
- 21 -
<PAGE>
series are issued as permitted by Section 304, the form thereof also shall be
established as provided in the preceding sentence. If the forms of Securities
and interest coupons, if any, of any series are established by, or by action
taken pursuant to, a Board Resolution, a copy of the Board Resolution together
with an appropriate record of any such action taken pursuant thereto, including
a copy of the approved form of Securities or interest coupons, if any, shall be
delivered to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 for the authentication and delivery of such
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.
Unless otherwise provided pursuant to Section 301, Bearer Securities,
if any, shall have interest coupons attached.
The definitive Securities of any series 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 of that series may be listed, all as determined by the officers
executing such Securities, as evidenced by their execution of such Securities.
Section 202. Form of and Provisions Required in Global Security.
--------------------------------------------------
If Securities of or within a series are issuable in whole or in part
in global form, such Global Securities will be subject to Sections 301, 303, 304
(if applicable), 305 and 306.
Unless otherwise provided pursuant to Section 301, any Global Security
issued hereunder shall 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
- 22 -
<PAGE>
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 203. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, 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.
FIRST UNION NATIONAL BANK,
---------------------------
As Trustee
By:
------------------------
Authorized Signatory
Section 204. Form of Guarantee of Each of the Guarantors.
-------------------------------------------
If a Guarantee is to be endorsed on a Security of any series, the form
of Guarantee shall be set forth on the Securities substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby unconditionally
guarantees, jointly and severally, to the holder of this Security the payment of
principal of, premium, if any, and interest on this Security in the amounts and
at the time when due and interest on the overdue principal and interest, if any,
of this Security, if lawful, and the payment or performance of all other
obligations of the Company under the Indenture or the Securities, to the holder
of this Security and the Trustee, all in accordance with and subject to the
terms and limitations of this Security and Article Fourteen of the Indenture.
These Guarantees will not become effective until the Trustee duly executes the
certificate of authentication on this Security. The Indebtedness evidenced by
these Guarantees is, to
- 23 -
<PAGE>
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.
[LIST OF GUARANTORS]
Attest By
----------------------------- -------------------------
Name: Name:
Title: Title:
- 24 -
<PAGE>
ARTICLE THREE
-------------
THE SECURITIES
--------------
Section 301. Amount Unlimited; Issuable in Series.
------------------------------------
(a) The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited. The Securities
may be issued from time to time in one or more series.
(b) The following matters shall be established with respect to each
series of Securities issued hereunder (i) by a Board Resolution, (ii) by action
taken pursuant to a Board Resolution and (subject to Section 303) set forth, or
determined in the manner provided, in an Officers' Certificate or (iii) in one
or more indentures supplemental hereto:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and delivered
under this Indenture (which limit shall not pertain to Securities
authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities of the series pursuant
to Section 304, 306, 307, 906 or 1108 or any Securities of the series
that, pursuant to Section 303, are deemed never to have been
authenticated and delivered hereunder);
(3) the date or dates on which the principal of and premium, if
any, on the Securities of the series will mature or the method or
methods of determining such date or dates;
(4) the rate or rates (which may be fixed or variable) at which
the Securities of the series shall bear interest, if any, or the
method or methods of calculating such rate or rates;
(5) the date or dates from which such interest, if any, shall
accrue or the method or methods by which such date or dates shall be
determined;
(6) the date or dates on which interest, if any, shall be payable
and the record date or dates therefor, and the basis upon which
interest shall be calculated if other than that of a 360-day year of
twelve 30-day months;
- 25 -
<PAGE>
(7) the place or places where the principal of, premium, if any,
and interest, if any, on Securities of the series shall be payable, or
at which Securities of the series may be surrendered for registration
of transfer and exchange;
(8) the period or periods within which, the price or prices at
which, the currency or currencies if other than in United States
dollars (including currency unit or units) in which, and the other
terms and conditions upon which, Securities of the series may be
redeemed, in whole or in part, at the option of the Company;
(9) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option
of a Holder thereof and the period or periods within which, the price
or prices at which, the currency or currencies (if other than United
States dollars) (including currency unit or units) in which, and the
other terms and conditions upon which, Securities of the series shall
be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(10) the denominations in which Securities of the series are
authorized to be issued;
(11) the currency or currency unit in which such Securities may be
denominated and/or the currency or currencies (including currency unit
or units) in which principal of, premium, if any, and interest, if
any, on such Securities will be payable and whether the Company or the
holders of any such Securities may elect to receive payments in
respect of such Securities in a currency or currency unit other than
that in which such Securities are stated to be payable;
(12) if the amount of payments of principal of, premium, if any,
and interest, if any, on the Securities of the series may be
determined with reference to an index, formula or other method (which
index, formula or method may be based, without limitation, on a
currency or currencies (including currency unit or units) other than
that in which the Securities of the series are denominated or
designated to be payable), the manner in which such amounts will be
determined;
(13) if other than the entire principal amount thereof, the
portion of the principal amount of such Securities of the series which
shall be payable upon declaration of acceleration thereof pursuant to
Section 502 or the method by which such portion shall be determined;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
- 26 -
<PAGE>
(15) any addition to, modifications of or deletion from the Events
of Default set forth in Section 501 or covenants of the Company set
forth in Article 9 pertaining to the Securities of the series;
(16) the circumstances, if any, under which the Company will pay
additional amounts on the Securities of that series held by a Person
who is not a U.S. Person (including any modification of the definition
of such term) in respect of taxes, assessments or similar charges;
(17) whether Securities of the series shall be issuable in
registered or bearer form (with or without interest coupons), or both,
and any restrictions applicable to the offering, sale, transfer or
delivery of Bearer Securities and, if other than as provided in
Section 306, the terms upon which Bearer Securities of a series may be
exchanged for Securities of the same series and vice versa;
(18) the date as of which any Bearer Securities of the series and
any temporary Global Security representing Outstanding Securities of
the series shall be dated, if other than the date of original issuance
of the first Security of the series to be issued;
(19) the forms of the Securities and interest coupons, if any, of
the series;
(20) if other than the Trustee, the identity of the Registrar and
any Paying Agent;
(21) the application, if any, of such means of defeasance or
covenant defeasance as may be specified for such Securities of that
series;
(22) whether such Securities of the series are to be issued in
whole or in part in the form of one or more in temporary or permanent
Global Securities, and, if so, the identity of the Depositary or its
nominee, if any, for such Global Securities, and the circumstances
under which the beneficial owners of interests in any Securities of
the series in global form may exchange such interests for certificated
Securities of that series, to be registered in the names of or to be
held by such beneficial owners or their nominees;
(23) if the Securities of the series may be issued or delivered,
or any installment of principal or interest is payable, only upon
receipt of certain certificates or other documents or satisfaction of
other conditions in addition to those specified in this Indenture, the
form and terms of such certificates, documents or conditions;
(24) if other than as provided in Section 309, the Person to whom
any interest on any Security of the series shall be payable and the
manner in which, or
- 27 -
<PAGE>
the Person to whom, any interest on any Bearer Securities of the
series shall be payable;
(25) any definitions for Securities of that series which are not
to be as set forth in this Indenture, including, without limitation,
the definition of "Unrestricted Subsidiary" to be used for that
series;
(26) the relative degree to which Debt Securities of the series
offered shall be senior to or be subordinated to other series of
Securities, and to other indebtedness of the Company, in right of
payment, whether such other series of Securities and other
indebtedness are outstanding or not;
(27) whether such Debt Securities are Guaranteed and, if so, the
identity of the Guarantors and the terms of such Guarantees (including
whether and the extent to which the Guarantees are subordinated to the
other indebtedness of the Guarantors);
(28) the terms, if any, upon which the Company may be able to
redeem such Debt Securities prior to their maturity including the
dates on which such redemptions may be made and the price at which
such redemptions may be made;
(29) the terms, if any, upon which such Securities of any series
may be converted or exchanged into or for Common Stock, Preferred
Stock or other securities or property of the Company;
(30) any restrictions on the registration, transfer or exchange of
the Securities; and
(31) any other terms not inconsistent with the terms of the
Indenture pertaining to the Securities which may be required by or
advisable under United States laws or regulations or advisable (as
determined by the Company) in connection with the marketing of
Securities of the series.
(c) All provisions set forth in this Indenture shall be applicable to
each series of Debt Securities issued hereunder unless otherwise specified in a
supplemental indenture entered into pursuant to this Section 301, in which case
the provisions of the supplemental indenture shall govern and references herein
to "unless otherwise provided pursuant to Section 301" are not intended to limit
what provisions may be amended pursuant to any supplemental indenture. Subject
to Sections 108, 113 and any controlling provision of the Trust Indenture Act,
in the event of any inconsistency between the terms of this Indenture and the
terms applicable to a series of Securities established in the manner permitted
by this Section 301, the (i) Board Resolution, (ii) Officers' Certificate or
(iii) supplemental indenture setting forth such conflicting term shall prevail.
- 28 -
<PAGE>
(d) All Securities of any one series and interest coupons, if any,
appertaining thereto shall be substantially identical except as to denomination
and except as may otherwise be provided (i) by a Board Resolution, (ii) by
action taken pursuant to a Board Resolution and (subject to Section 303) set
forth, or determined in the manner provided, in the related Officers'
Certificate or (iii) in an indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and, unless otherwise provided, a
series may be reopened, without the consent of the Holders, for issuances of
additional Securities of that series.
(e) If any of the terms of the Securities of any series are
established by action taken pursuant to a Board Resolution, a copy of such Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner for determining,
the terms of the Securities of that series, and an appropriate record of any
action taken pursuant thereto in connection with the issuance of any Securities
of that series shall be delivered to the Trustee prior to the authentication and
delivery thereof.
(f) Unless otherwise provided pursuant to Section 301, payment of the
principal of, premium, if any, and interest on the Securities shall be made at
the office or agency of the Company maintained for that purpose as the Company
may designate pursuant to Section 301, in the United States, 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 at the
option of the Company payment of interest may be made (i) by check mailed to
addresses of the Persons entitled thereto as such addresses shall appear on the
Security Register or (ii) by wire transfer in immediately available funds to an
account specified (not later than one Business Day prior to the applicable
Interest Payment Date) by the Holder thereof. If any of the Securities are held
by the Depository, payments of interest may be made by wire transfer to the
Depository. Procedures with respect to payments in connection with Bearer
Securities shall be established pursuant to Section 301.
Section 302. Denominations.
-------------
Unless otherwise provided pursuant to Section 301, the Securities
shall be issuable only in registered form without coupons and only in
denominations of $1,000 and any integral multiple of $1,000, and Bearer
Securities shall be issued in denominations of $5,000 or any integral multiple
of $5,000. Securities denominated in a foreign currency shall be issuable in
such denominations as are established with respect to such Securities in or
pursuant to this Indenture.
- 29 -
<PAGE>
Section 303. Execution, Authentication, Delivery and Dating.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, the Securities of
any series shall be executed on behalf of the Company by one of its Chairman of
the Board, its President or one of its Vice Presidents attested by its Secretary
or one of its Assistant Secretaries.
Securities and interest coupons, if any, on 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, together with any interest
coupons appertaining thereto, of any series 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 deliver such Securities as provided in this
Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security of any series 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.
Unless otherwise provided pursuant to Section 301, 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
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<PAGE>
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.
The Bearer Securities will be transferable by delivery. Other terms,
conditions and restrictions in connection with Bearer Securities will be as
provided pursuant to Section 301.
The specific terms of the depositary arrangement with respect to any
portion of a series of Securities to be represented by a Global Security will be
as provided pursuant to Section 301.
Section 304. Temporary Securities.
--------------------
Unless otherwise provided pursuant to Section 301, pending the
preparation of definitive Securities of any series, the Company may execute, and
upon Company Order, the Trustee shall authenticate and deliver, temporary
Securities which are printed, lithographed, typewritten or otherwise produced,
in any authorized denomination, substantially of the tenor of the definitive
Securities of any series 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.
Unless otherwise provided pursuant to Section 301, after the
preparation of definitive Securities of any series, the temporary Securities of
any series shall be exchangeable for definitive Securities of that series upon
surrender of the temporary Securities of that series at the office or agency of
the Company designated for such purpose pursuant to Section 1002, without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of definitive Securities of
authorized denominations. Until so exchanged the temporary Securities of any
series shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities of that series.
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<PAGE>
Section 305. Global Securities.
-----------------
(a) Unless otherwise provided pursuant to Section 301, any Global
Security of any series 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 Section 202; provided, that the Securities are
eligible to be in the form of 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.
The Securities of any series may also be issued in whole or in part in
the form of one or more bearer global securities (a "Bearer Global Security")
that will be deposited with a depositary, or with a nominee for such a
depositary, as provided pursuant to Section 301. Any Bearer Global Security may
be issued in temporary or permanent form. The specific terms and procedures,
including the specific terms of the depositary arrangement, with respect to any
portion of a series of Securities to be represented by one or more Bearer Global
Securities will be as provided pursuant to Section 301.
(b) Unless otherwise provided pursuant to Section 301, transfers of
the Global Security of a series 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. Under
the circumstances described in this clause (b) below, beneficial owners shall
obtain physical securities in the form provided pursuant to Section 301
("Physical Securities") in exchange for their beneficial interests in a Global
Security in accordance with the Depositary's and the Securities Registrar's
procedures. In connection with the execution, authentication and delivery of
such Physical Securities, the Security Registrar shall reflect on its books and
records a decrease in the principal amount of the Global Security equal to the
principal amount of such Physical Securities and the Company shall execute and
the Trustee shall authenticate and deliver one or more Physical Securities
having an equal aggregate principal amount. Unless otherwise provided pursuant
to Section 301, the Securities will be delivered in certificated form if (i) the
Depositary ceases to be registered as a clearing agency under the Exchange Act
or is not willing or no longer willing or able to provide securities depository
services with
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<PAGE>
respect to the Securities and a successor depositary is not appointed by the
Company within 90 days and (ii) the Company, in its sole discretion, 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 a Physical Security pursuant to subsection (b)
of this Section to beneficial owners, the Security Registrar shall reflect on
its books and records the date and a decrease in the principal amount of a
Global Security in an amount equal to the principal amount of the beneficial
interest in the Global Security to be transferred, and the Company shall
execute, and the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.
(d) In connection with the transfer of the entire Global Security of
any series to beneficial owners pursuant to subsection (b) of this Section, a
Global Security shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in a Global Security, an equal aggregate principal
amount of Physical Securities of authorized denominations.
(e) The registered holder of a Global Security may grant proxies and
otherwise authorize any person, including Agent Members and Persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Securities.
Section 306. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
Unless otherwise provided pursuant to Section 301, the Company shall
cause to be kept at the Corporate Trust Office of the Trustee, or such other
office as the Trustee may designate, a register (the register maintained in such
office and in any other office or agency designated pursuant to Section 1002
being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as the Security Registrar may prescribe, the
Company shall provide for the registration of Securities of any series and of
transfers of Securities of any series. The Trustee or an agent thereof or of the
Company shall initially be the "Security Registrar" for the purpose of
registering Securities of any series and transfers of Securities of any series
as herein provided.
Procedures with respect to the registration and registration of
transfer and exchange, and other matters related thereto, with respect to Bearer
Securities shall be provided pursuant to Section 301.
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<PAGE>
Unless otherwise provided pursuant to Section 301, upon surrender for
registration of transfer of any Security of any series at the office or agency
of the Company designated pursuant to Section 1002, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Securities of that series 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.
Unless otherwise provided pursuant to Section 301, at the option of
the Holder, Securities of any series may be exchanged for other Securities of
that series of any authorized denomination or denominations, of a like aggregate
principal amount, upon surrender of the Securities of that series to be
exchanged at such office or agency. Whenever any Securities of any series are so
surrendered for exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Securities of that series which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities of any series shall be the valid obligations of the Company,
evidencing the same Indebtedness, and entitled to the same benefits under this
Indenture, as the Securities of the series surrendered upon such registration of
transfer or exchange.
Unless otherwise provided pursuant to Section 301, 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 his 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 of any series, but the Company
may require payment of a sum sufficient to pay all documentary, stamp or similar
issue or transfer taxes or other governmental charges that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Sections 303, 304, 305, 306, 307 and 906, not
involving any transfer.
Unless otherwise provided pursuant to Section 301, the Company shall
not be required (a) to issue, register the transfer of or exchange any Security
of any series during a period beginning at the opening of business (i) 15 days
before the date of selection of Securities of that series for redemption under
Section 1104 and ending at the close of
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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 of that series so selected for
redemption in whole or in part, except the unredeemed portion of Securities of
that series being redeemed in part.
Except as otherwise permitted pursuant to Section 304, any Security of
a series authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, any Global Security, whether pursuant to this
Section, Sections 304, 307, 906 or 1108 or otherwise, shall also be a Global
Security and bear the legend specified in Section 202.
Section 307. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If (a) any mutilated Security of any series 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 of any series,
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 deliver, in exchange for any such mutilated Security or in lieu
of any such destroyed, lost or stolen Security, a replacement Security of that
series of like tenor and principal amount, bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security of any
series has become or is about to become due and payable, the Company in its
discretion may, instead of issuing a replacement Security of that series, pay
such Security.
Upon the issuance of any replacement Securities of that series 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 of a series issued pursuant to this Section
in lieu of any destroyed, lost or stolen Security of that series shall
constitute an original additional contractual obligation of the Company and the
Guarantors, if any, whether or not the destroyed, lost or stolen Security of
that series 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 of the same series duly issued hereunder.
Procedures relating to mutilated, destroyed, lost or stolen Bearer
Securities shall be provided pursuant to Section 301.
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<PAGE>
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 308. [RESERVED]
Section 309. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Unless otherwise provided pursuant to Section 301, interest on any
Security of a series 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 of that series is registered at the close of business on the Regular
Record Date for such interest.
Unless otherwise provided pursuant to Section 301, any interest on any
Security of a series 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 of that
series, 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 of that series
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
of that series and the date (not less than 30 days after such notice)
of the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the aggregate
amount proposed to be paid in respect of such Defaulted Interest or
shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited
to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Subsection provided. Thereupon the
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
Trustee shall fix a Special Record Date for the payment of such
Default Interest as in this Subsection provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 day 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
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<PAGE>
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 of that series 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 of that series 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.
Payment of interest and preservation of interest rights of Bearer
Securities shall be set forth pursuant to Section 301.
Subject to the foregoing provisions of this Section, each Security of
any series delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Security of the same series shall carry the
rights to interest accrued and unpaid, and to accrue, which were carried by such
other Security of the same series.
Section 310. Persons Deemed Owners.
---------------------
Unless otherwise provided pursuant to Section 301, 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 of any series is
registered as the owner of such Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 309) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, any Guarantor, the Trustee nor any agent of
the Company, any Guarantor or the Trustee shall be affected by notice to the
contrary.
Unless otherwise provided as contemplated by Section 301, the Company,
any Guarantor, the Trustee and any agent of the Company, any Guarantor or the
Trustee may treat the bearer of any Bearer Security of any series and the bearer
of any interest coupon as the absolute owner of such Bearer Security or interest
coupon for the purpose of receiving payment thereof or on account thereof and
for all other purposes whatsoever, whether or not such Bearer Security or
interest coupon be overdue, and neither the Company, any Guarantor, the Trustee
nor any agent of the Company, the Guarantor or the Trustee shall be affected by
notice to the contrary.
No holder of any beneficial interest in any Global Security of any
series held on its behalf by a Depositary of that series shall have any rights
under this Indenture with respect to such Global Security of that series, and
such Depositary may be treated by the
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<PAGE>
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 of any series.
Section 311. Cancellation.
------------
All Securities of any series 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 of any series previously authenticated and delivered
hereunder which the Company or such Guarantor may have acquired in any manner
whatsoever, and all Securities of any series so delivered shall be promptly
cancelled by the Trustee. No Securities of any series shall be authenticated in
lieu of or in exchange for any Securities of that series canceled as provided in
this Section, except as expressly permitted by this Indenture. All canceled
Securities of any series held by the Trustee shall be destroyed and
certification of their destruction delivered to the Company unless by a Company
Order the Company shall direct that the canceled Securities of that series be
returned to it. The Trustee shall provide the Company a list of all Securities
of the series that have been canceled from time to time as requested by the
Company.
Section 312. Computation of Interest.
-----------------------
Except as otherwise provided pursuant to Section 301, interest on the
Securities of all series shall be computed on the basis of a 360-day year of
twelve 30-day months.
Section 313. CUSIP Numbers.
-------------
The Company in issuing the Securities of any series 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 of that series 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 of that series, and any such
redemption shall not be affected by any defect in or omission of such numbers.
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<PAGE>
ARTICLE FOUR
------------
DEFEASANCE AND COVENANT DEFEASANCE
----------------------------------
Unless otherwise provided pursuant to Section 301, Securities of any
series shall be subject to the following provisions:
Section 401. Company's Option to Effect Defeasance or Covenant
-------------------------------------------------------
Defeasance.
- ----------
Unless otherwise provided pursuant to Section 301, the Company may, at
its option by Board Resolution, at any time, with respect to the Securities of
any series, elect to have either Section 402 or Section 403 be applied to all of
the Outstanding Securities of any series (the "Defeased Securities"), upon
compliance with the conditions set forth below in this Article Four.
Section 402. Defeasance and Discharge.
------------------------
Unless otherwise provided pursuant to Section 301, upon the Company's
exercise under Section 401 of the option applicable to this Section 402, the
Company, each of the Guarantors, if any, and any other obligor upon the
Securities of any series, if any, shall be deemed to have been discharged from
its obligations with respect to the Defeased Securities on the date the
conditions set forth below are satisfied (hereinafter, "defeasance"). For this
purpose, such defeasance means that the Company, each of the Guarantors, if any,
and any other obligor under the Indenture shall be deemed to have paid and
discharged the entire Indebtedness represented by the Defeased Securities of
that series, which shall thereafter be deemed to be "Outstanding" only for the
purposes of Section 405 and the other Sections of this Indenture referred to in
(a) and (b) below, and to have satisfied all its other obligations under such
Securities and this Indenture insofar as such Securities are concerned (and the
Trustee, at the expense of the Company, and, upon written request, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of Defeased Securities to receive, solely from the trust fund described
in Section 404 and as more fully set forth in such Section, payments in respect
of the principal of, premium, if any, and interest on such Securities when such
payments are due, (b) the Company's obligations with respect to such Defeased
Securities under Sections 304, 305, 306, 1002 and 1003, (c) the rights, powers,
trusts, duties and immunities of the Trustee hereunder, including, without
limitation, the Trustee's rights under Section 606, (d) this Article Four and
(e) if the Security is convertible, the right of the Holder to convert the
Security according to the terms set forth pursuant to Section 301. Subject to
compliance with this Article Four, the Company may exercise its option under
this Section 402 notwithstanding the prior exercise of its option under Section
403 with respect to the Securities of that series.
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<PAGE>
Section 403. Covenant Defeasance.
-------------------
Upon the Company's exercise under Section 401 of the option applicable
to this Section 403, the Company and each Guarantor shall be released from its
obligations under any covenant or provision contained or referred to in Article
Ten (except Section 1002 and 1003) or otherwise set forth in this Indenture and
expressly made subject to this Section 403 pursuant to Section 301, and the
provisions of Article Twelve and, if applicable, Article Fourteen, 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, if applicable, Article Fourteen, but
shall continue to be deemed "Outstanding" for all other purposes hereunder. For
this purpose, such covenant defeasance means that, with respect to the Defeased
Securities, the Company and each Guarantor may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such Section or Article, whether directly or indirectly, by reason of any
reference elsewhere herein to any such Section or Article or by reason of any
reference in any such Section or Article to any other provision herein or in any
other document and such omission to comply shall not constitute a Default or an
Event of Default under Section 501(c), (d) or (g), but, except as specified
above, the remainder of this Indenture and such Defeased Securities shall be
unaffected thereby.
Section 404. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
Unless otherwise provided pursuant to Section 301, the following shall
be the conditions to application of either Section 402 or Section 403 to the
Defeased Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements of
Section 608 who shall agree to comply with the provisions of this Article Four
applicable to it) as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated solely
to, the benefit of the Holders of such Securities, (a) United States dollars in
an amount, or (b) U.S. Government Obligations which through the scheduled
payment of principal and interest in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any payment,
money in an amount, or (c) a combination thereof, sufficient, in the opinion of
a nationally recognized firm of independent public accountants or a nationally
recognized investment banking firm expressed in a written certification thereof
delivered to the Trustee, to pay and discharge and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge the principal of,
premium, if any, and interest on the Defeased Securities on the Stated Maturity
of such principal or installment of principal or interest (or on the "Defeasance
Redemption Date" as defined pursuant to Section 301), if when
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<PAGE>
exercising under Section 401 either its option applicable to Section 402 or its
option applicable to Section 403, the Company shall have delivered to the
Trustee an irrevocable notice to redeem all of the Outstanding Securities of the
applicable series on the Defeasance Redemption Date); provided that the Trustee
shall have been irrevocably instructed to apply such United States dollars or
the proceeds of such U.S. Government Obligations to said payments with respect
to the Securities of that series; and provided, further, that the United States
dollars or U.S. Government Obligations deposited shall not be subject to the
rights of the holders of Senior Indebtedness or Guarantor Senior Indebtedness
pursuant to the provisions of Articles Twelve and Fourteen. For this purpose,
"U.S. Government Obligations" means securities that are (i) direct obligations
of the United States of America for the timely payment of which its full faith
and credit is pledged or (ii) obligations of a Person controlled or supervised
by and acting as an agency or instrumentality of the United States of America
the timely payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depository receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act), as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depository receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depository receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) In the case of an election under Section 402, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States stating that (A) the Company has received from, or there has been
published by, the Internal Revenue Service a ruling or (B) since the date of
this Indenture, there has been a change in the applicable federal income tax
law, in either case to the effect that, and based thereon such Opinion of
Independent Counsel in the United States shall confirm that, the holders of the
Outstanding Securities will not recognize income, gain or loss for federal
income tax purposes as a result of such defeasance and will be subject to
federal income tax on the same amounts, in the same manner and at the same times
as would have been the case if such defeasance had not occurred.
(3) In the case of an election under Section 403, the Company shall
have delivered to the Trustee an Opinion of Independent Counsel in the United
States to the effect that the holders of the Outstanding Securities will not
recognize income, gain or loss for federal income tax purposes as a result of
such covenant defeasance and will be subject to federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
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<PAGE>
(4) No Default or Event of Default shall have occurred and be
continuing on the date of such deposit or insofar as subsections 501(h) and (i)
are concerned, at any time during the period ending on the 91st day after the
date of deposit.
(5) Such defeasance or covenant defeasance shall not cause the Trustee
for the Securities of that series 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 of that series or any Guarantee over
the other creditors of the Company or any Guarantor with the intent of
defeating, hindering, delaying or defrauding creditors of the Company, any
Guarantor or others.
(9) No event or condition shall exist that would prevent the Company
from making payments of the principal of, premium, if any, and interest on the
Securities of that series on the date of such deposit or at any time ending on
the 91st day after the date of such deposit.
(10) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Independent Counsel, each stating that all
conditions precedent provided for relating to either the defeasance under
Section 402 or the covenant defeasance under Section 403 (as the case may be)
have been complied with as contemplated by this Section 404.
Opinions of Counsel or Opinions of Independent Counsel required to be delivered
under this Section may have qualifications customary for opinions of the type
required and counsel delivering such opinions may rely on certificates of the
Company or government or other officials customary for opinions of the type
required, including certificates certifying as to matters of fact, including
that various financial covenants have been complied with.
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<PAGE>
Section 405. Deposited Money and U.S. Government Obligations to Be
--------------------------------------------------------
Held in Trust; Other Miscellaneous Provisions.
- ---------------------------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars and U.S. Government Obligations (including the proceeds
thereof) deposited with the Trustee or other qualifying trustee as permitted
under Section 404 (collectively, for purposes of this Section 405, the
"Trustee") pursuant to Section 404 in respect of the Defeased Securities shall
be held in trust and applied by the Trustee, in accordance with the provisions
of such Securities and this Indenture, to the payment, either directly or
through any Paying Agent (including the Company acting as its own Paying Agent)
as the Trustee may determine, to the Holders of such Securities of all sums due
and to become due thereon in respect of principal, premium, if any, and
interest, but such money need not be segregated from other funds except to the
extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of the Defeased Securities.
Anything in this Article Four to the contrary notwithstanding, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any United States dollars or U.S. Government Obligations held by it as
provided in Section 404 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in excess of the amount thereof which would then
be required to be deposited to effect defeasance or covenant defeasance.
Section 406. Reinstatement.
-------------
If the Trustee or Paying Agent is unable to apply any United States
dollars or U.S. Government Obligations in accordance with Section 402 or 403, as
the case may be, by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, then
the Company's and any Guarantor's obligations under this Indenture and the
Securities of that series and the provisions of Articles Twelve and Fourteen
hereof shall be revived and reinstated as though no deposit had occurred
pursuant to Section 402 or 403, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such United States dollars or
U.S. Government Obligations in accordance with Section 402 or 403, as the case
may be; provided, however, that if the Company makes any payment to the Trustee
or Paying Agent of principal of, premium, if any, or interest on any Security
following the reinstatement of its obligations, the Trustee or Paying Agent
shall promptly pay any such amount to the Holders of the Securities of that
series and the Company shall be
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<PAGE>
subrogated to the rights of the Holders of such Securities of that series to
receive such payment from the money held by the Trustee or Paying Agent.
ARTICLE FIVE
------------
REMEDIES
--------
Section 501. Events of Default.
-----------------
Unless otherwise provided pursuant to Section 301, "Event of Default",
wherever used herein with respect to the Securities of any series, 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 of that series 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 of that series at its Maturity (upon
acceleration, optional or mandatory redemption, required repurchase or
otherwise);
(c) (i) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company or any Guarantor under this Indenture
(other than a default in the performance or breach of a covenant or agreement
which is specifically dealt with in clause (a) or (b) or in clause (ii) 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, (1) 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 of the series; and
(ii) there shall be a default in the performance or breach of the provisions of
Article Eight;
(d) one or more defaults shall have occurred under any agreements,
indentures or instruments under which the Company, any Guarantor or any
Restricted Subsidiary then has outstanding Indebtedness in excess of $5,000,000
in the aggregate and, if not already matured at its final maturity in accordance
with its terms, such Indebtedness shall have been accelerated;
(e) any Guarantee shall for any reason cease to be, or be asserted in
writing by any Guarantor or the Company not to be, in full force and effect, and
enforceable in
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<PAGE>
accordance with its terms, except to the extent contemplated by this Indenture
and any such Guarantee;
(f) one or more judgments, orders or decrees for the payment of money
in excess of $5,000,000 either individually or in the aggregate (net of amounts
covered by insurance, bond, surety or similar instrument), shall be entered
against the Company, any Guarantor, or any Restricted Subsidiary or any of their
respective properties and shall not be discharged and either (a) any creditor
shall have commenced an enforcement proceeding upon such judgment, order or
decree or (b) there shall have been a period of 60 consecutive days during which
a stay of enforcement of such judgment or order, by reason of an appeal or
otherwise, shall not be in effect;
(g) any holder or holders of at least $5,000,000 in aggregate
principal amount of Indebtedness of the Company, any Guarantor, or any
Restricted Subsidiary after a default under such Indebtedness shall notify the
Trustee of the intended sale or disposition of any assets of the Company, any
Guarantor or any Restricted Subsidiary that have been pledged to or for the
benefit of such holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of set-off), to retain in
satisfaction of such Indebtedness or to collect on, seize, dispose of or apply
in satisfaction of Indebtedness, assets of the Company or any Restricted
Subsidiary (including funds on deposit or held pursuant to lock-box and other
similar arrangements);
(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company, any
Guarantor or any Restricted Subsidiary in an involuntary case or proceeding
under any applicable Bankruptcy Law or (ii) a decree or order adjudging the
Company, any Guarantor or any Restricted Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company, any Guarantor or any Restricted Subsidiary under any applicable
federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company, any Guarantor
or any Restricted Subsidiary or of any substantial part of their respective
properties, or ordering the winding up or liquidation of their affairs, and any
such decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of 60
consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary
commences a voluntary case or proceeding under any applicable Bankruptcy Law or
any other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the
Company, any Guarantor or any Restricted Subsidiary consents to the entry of a
decree or order for relief in respect of the Company, any Guarantor or such
Restricted Subsidiary in an involuntary case or proceeding under any applicable
Bankruptcy Law or to the commencement of any bankruptcy or insolvency case or
proceeding against it, (iii) the Company, any Guarantor or any Restricted
Subsidiary files a petition or answer or consent seeking reorganization
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<PAGE>
or relief under any applicable federal or state law, (iv) the Company, any
Guarantor or any Restricted Subsidiary (1) consents to the filing of such
petition or the appointment of, or taking possession by, a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Company, any Guarantor or such Restricted Subsidiary or of any substantial part
of its respective properties, (2) makes an assignment for the benefit of
creditors or (3) admits in writing its inability to pay its debts generally as
they become due, or (v) the Company, any Guarantor or any Restricted Subsidiary
takes any corporate action authorizing any such actions in this paragraph (i).
Unless otherwise provided pursuant to Section 301, the Company shall
deliver to the Trustee within five days after the occurrence thereof, written
notice, in the form of an Officers' Certificate, of any Default, its status and
what action the Company is taking or proposes to take with respect thereto.
Unless the Corporate Trust Office of the Trustee has received written notice of
an Event of Default of the nature described in this Section, the Trustee shall
not be deemed to have knowledge of such Event of Default for the purposes of
Article Five or for any other purpose.
Section 502. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
Unless otherwise provided pursuant to Section 301, if an Event of
Default (other than an Event of Default specified in Sections 501(h) and (i))
shall occur and be continuing, the Trustee or the Holders of not less than 25%
in aggregate principal amount of the Securities Outstanding of the applicable
series may, and the Trustee at the request of the Holders of not less than 25%
in aggregate principal amount of the Securities of the applicable series
Outstanding shall, declare all unpaid principal of, premium, if any, and accrued
interest on, all the Securities of that series 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 of that series); provided that, unless
otherwise provided pursuant to Section 301, 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 of that series by appropriate judicial proceeding. If
an Event of Default specified in clause (h) or (i) of Section 501 occurs and is
continuing, then all the Securities shall ipso facto become and be immediately
due and payable, in an amount equal to the principal amount of the Securities of
that series, 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.
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<PAGE>
Unless otherwise provided pursuant to Section 301, at any time after
such declaration of acceleration has been made 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 of the applicable series, by written notice to the
Company and the Trustee, may rescind and annul such declaration and its
consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under
this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel,
(ii) all overdue interest on all Securities of any
series,
(iii) the principal of and premium, if any, on any
Securities of any series which have become due otherwise than
by such declaration of acceleration and interest thereon at a
rate borne by the Securities, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Securities; and
(b) all Events of Default, other than the non-payment of principal of
the Securities of any series which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 513. Provisions relating to acceleration
of the Maturity of a portion of the principal amount of an Original Issue
Discount Security upon the occurrence of an Event of Default and the
continuation thereof shall be provided pursuant to Section 301.
Section 503. Collection of Indebtedness and Suits for Enforcement by
--------------------------------------------------------
Trustee.
- -------
The Company, as to Securities of any series, and any Guarantor, as to
Securities of any series guaranteed by such Guarantor, covenant that if
(a) default is made in the payment of any interest on any
such 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 such Security at the Stated Maturity thereof,
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<PAGE>
the Company and, if applicable, 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, if applicable, Article 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 of that
series; 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, if applicable, any Guarantor 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, if applicable,
any Guarantor or any other obligor upon the Securities of any series and collect
the moneys adjudged or decreed to be payable in the manner provided by law out
of the property of the Company or, if applicable, any Guarantor or any other
obligor upon the Securities of that series, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture or the Guarantees by such appropriate private or
judicial proceedings as the Trustee shall deem most effectual to protect and
enforce such rights, including, seeking recourse against any Guarantor pursuant
to the terms of any Guarantee, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein or therein, or to enforce any other proper remedy, including,
without limitation, seeking recourse against any Guarantor pursuant to the terms
of a Guarantee, or to enforce any other proper remedy, subject however to
Section 512.
Section 504. Trustee May File Proofs of Claim.
--------------------------------
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series or the property of the Company or
of such other obligor or their creditors, the Trustee (irrespective of whether
the principal of the Securities of that series shall then be due and payable as
therein expressed or by declaration or otherwise and irrespective of whether the
Trustee shall have made any demand on the Company for the payment of overdue
principal or interest) shall be entitled and empowered, by intervention in such
proceeding or otherwise,
(a) to file and prove a claim for the whole amount of
principal, and premium, if any, and interest owing and unpaid in
respect of the Securities of that
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<PAGE>
series 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 Article Twelve and, if applicable, Article
Fourteen, to collect and receive any moneys, securities or other
property payable or deliverable upon any conversion or exchange of
Securities of that series or upon any such claims and to distribute
the same;
and any custodian in any such judicial proceeding is hereby authorized by each
Holder to make such payments to the Trustee and, in the event that the Trustee
shall consent to the making of such payments directly to the Holders, to pay the
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 606.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
of any series 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 505. Trustee May Enforce Claims without Possession of
-------------------------------------------------------
Securities.
- ----------
All rights of action and claims under this Indenture or the Securities
of any series may be prosecuted and enforced by the Trustee without the
possession of any of the Securities of that series 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 of that series in respect of which such judgment has been recovered.
Section 506. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article or
otherwise on behalf of the Holders or the Trustee pursuant to this Article or
through any proceeding or any arrangement or restructuring in anticipation or in
lieu of any proceeding contemplated by this Article shall be applied, subject to
applicable law, in the following order, at the date or dates fixed by the
Trustee and, in case of the distribution of such money on account of principal,
premium, if any, or interest, upon presentation of the Securities of any series
and the notation thereon of the payment if only partially paid and upon
surrender thereof if fully paid:
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<PAGE>
FIRST: To the payment of all amounts due the Trustee under Section
606;
SECOND: Subject to Article Twelve and, if applicable, Article
Fourteen, to the payment of the amounts then due and unpaid upon the Securities
of that series for principal, premium, if any, and interest, 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
THIRD: Subject to Article Twelve and, if applicable, Article Fourteen,
the balance, if any, to the Person or Persons entitled thereto, including the
Company, provided that all sums due and owing to the Holders and the Trustee
have been paid in full as required by this Indenture.
Section 507. Limitation on Suits.
-------------------
No Holder of any Securities of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series 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 of that series;
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 of Securities of that series.
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<PAGE>
Section 508. Unconditional Right of Holders to Receive Principal,
-------------------------------------------------------
Premium and Interest.
- --------------------
Notwithstanding any other provision in this Indenture, but subject to
Article Twelve and, if applicable, Article Fourteen, the Holder of any Security
of any series shall have the right on the terms stated herein, which is absolute
and unconditional, to receive payment of the principal of, premium, if any, and
(subject to Section 309) interest on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or repurchase date) and to institute suit for
the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder, subject to Article Twelve and, if
applicable, Article Fourteen.
Section 509. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture or the Guarantees and such proceeding
has been discontinued or abandoned for any reason, or has been determined
adversely to the Trustee or to such Holder, then and in every such case the
Company, each of the Guarantors, the Trustee and the Holders shall, subject to
any determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
Section 510. Rights and Remedies Cumulative.
------------------------------
No right or remedy herein conferred upon or reserved to the Trustee or
to the Holders is intended to be exclusive of any other right or remedy, and
every right and remedy shall, to the extent permitted by law, be cumulative and
in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
of any series 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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<PAGE>
Section 512. Control by Holders.
------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of a series (or if more than one series is
affected thereby, of all series so affected, voting as a single class) 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 of that series, provided that
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any Guarantee or expose the Trustee to personal
liability; and
(b) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
Section 513. Waiver of Past Defaults.
-----------------------
Unless otherwise provided pursuant to Section 301, the Holders of not
less than a majority in aggregate principal amount of the Outstanding Securities
of any series may on behalf of the Holders of all the Securities of that series
waive any past Default hereunder and its consequences, except a Default
(a) in the payment of the principal of, premium, if any, or interest
on any Security of any series; or
(b) in respect of a covenant or a provision hereof which under Article
Nine cannot be modified or amended without the consent of the holder of each
Outstanding Security of that series.
Upon any such waiver, such Default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
---------------------
All parties to this Indenture agree, and each Holder of any Security
of any series 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 of that
series for any action taken, suffered or omitted by it as Trustee of that
series, the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to 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 of
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<PAGE>
that series, to any suit instituted by any Holder, or group of Holders, of that
series holding in the aggregate more than 10% in principal amount of the
Outstanding Securities of that series, 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 of any series on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption, on or
after the Redemption Date).
Section 515. Waiver of Stay, Extension or Usury Laws.
---------------------------------------
Each of the Company and any Guarantor covenants (to the extent that it
may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law or any usury or other law wherever enacted, now or at any time
hereafter in force, which would prohibit or forgive the Company or any Guarantor
from paying all or any portion of the principal of, premium, if any, or interest
on the Securities of any series 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 of that series,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
ARTICLE SIX
-----------
THE TRUSTEE
-----------
Section 601. Notice of Defaults.
------------------
Within 30 days after the occurrence of any Default, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, notice of such Default hereunder known to 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 of any series, the Trustee shall be protected in
withholding such notice if and so long as a trust committee of Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Holders.
Section 602. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Trust Indenture Act Sections 315(a)
through 315(d):
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice,
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<PAGE>
request, direction, consent, order, bond, debenture, note, other evidence of
Indebtedness or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(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 and any written advice of
such counsel or any Opinion of Counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon in accordance with such advice
or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities which might be incurred therein or thereby
in compliance with such request or direction;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture other than any liabilities
arising out of the negligence of the Trustee;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, approval,
appraisal, bond, debenture, note, coupon, security or other paper or document;
provided, that the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if the Trustee
shall determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Company, personally
or by agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(h) no provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers;
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<PAGE>
(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; and
(k) if a Default or an Event of Default has occurred and is
continuing, 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 its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.
Section 603. Trustee Not Responsible for Recitals, Dispositions of
--------------------------------------------------------
Securities or Application of Proceeds Thereof.
- ---------------------------------------------
The recitals contained herein and in the Securities of each series,
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 of any series, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities of any securities and perform its
obligations hereunder and that the statements made by it in any Statement of
Eligibility and Qualification on Form T-1 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 of any
series or the proceeds thereof.
Section 604. Trustee and Agents May Hold Securities; Collections; etc.
---------------------------------------------------------
The Trustee, any Paying Agent, Security Registrar or any other agent
of the Company, in its individual or any other capacity, may 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 such other agent and, subject to
Trust Indenture Act Sections 310 and 311, may otherwise deal with the Company
and receive, collect, hold and retain collections from the Company with the same
rights it would have if it were not the Trustee, Paying Agent, Security
Registrar or such other agent.
Section 605. Money Held in Trust.
-------------------
All moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
mandatory provisions of law. Except for funds or securities deposited with the
Trustee pursuant to Article Four, the Trustee may invest all moneys received by
the Trustee, until used or applied as herein provided, in
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<PAGE>
Temporary Cash Investments in accordance with the written directions of the
Company. The Trustee shall not be liable for any losses incurred in connection
with any investments made in accordance with this Section 605, unless the
Trustee acted with gross negligence or in bad faith. With respect to any losses
on investments made under this Section 605, the Company is liable for the full
extent of any such loss.
Section 606. Compensation and Indemnification of Trustee and Its Prior
---------------------------------------------------------
Claim.
- -----
The Company covenants and agrees to pay to the Trustee from time to
time, and the Trustee shall be entitled to, such compensation for all services
rendered by it hereunder (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) set forth in a
letter agreement executed by the Company and the Trustee, as such agreement may
be amended or supplemented, 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 as may arise from its negligence or bad faith.
The Company also covenants to indemnify the Trustee and each predecessor Trustee
for, and to hold it harmless against, any loss, liability, tax, assessment or
other governmental charge (other than taxes applicable to the Trustee's
compensation hereunder) or expense incurred without negligence or bad faith on
such Trustee's part, arising out of or in connection with the acceptance or
administration of this Indenture or the trusts hereunder and such Trustee's
duties hereunder, including enforcement of this Indenture and also including any
liability which the Trustee may incur as a result of failure to withhold, pay or
report any tax, assessment or other governmental charge, and the costs and
expenses of defending itself against or investigating any claim of liability
(whether asserted by any Holder, the Company or any other Person) in connection
with the exercise or performance of any of its powers or duties under this
Indenture. The obligations of the Company under this Section to compensate and
indemnify the Trustee and each predecessor Trustee and to pay or reimburse the
Trustee and each predecessor Trustee for expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture.
All payments and reimbursements pursuant to this Section 606 shall be
made with interest at the rate borne by the Securities.
As security for the performance of the obligations of the Company
under this Section 606, the Trustee shall have a Lien prior to the Securities of
any series upon all property and funds held or collected by the Trustee, except
funds held in trust for the payment of principal of (and premium, if any) or
interest on particular Securities. The Trustee's right to receive payment of any
amounts due under this Section 606 shall not be
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subordinate to any other liability or indebtedness of the Company (even though
the Securities of any series may be so subordinate), and the Securities of any
series shall be subordinate to the Trustee's right to receive such payment.
Section 607. Conflicting Interests.
---------------------
The Trustee shall comply with the provisions of Section 310(b) of the
Trust Indenture Act.
Section 608. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Trust Indenture Act Section 310(a)(1) and which
shall have a combined capital and surplus of at least $250,000,000, to the
extent there is an institution eligible and willing to serve. The Trustee shall
be a participant in the Depository Trust Company and FAST distribution systems.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. The Corporate Trust Office shall initially be located at First Union
National Bank, 901 East Cary Street, Richmond, Virginia 23219.
Section 609. Resignation and Removal; Appointment of Successor
-------------------------------------------------------
Trustee.
- -------
(a) No resignation or removal of the Trustee and no appointment of a
successor trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor trustee under Section 610.
(b) The Trustee, or any trustee or trustees hereafter appointed, may
at any time resign by giving written notice thereof to the Company. Upon
receiving such notice of resignation, the Company shall promptly appoint a
successor trustee by written instrument executed by authority of the Board of
Directors of the Company, a copy of which shall be delivered to the resigning
Trustee and a copy to the successor trustee. If an instrument of acceptance by a
successor trustee shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the resigning Trustee may, or
any Holder who has been a bona fide Holder of a Security of the applicable
series for at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper, appoint a successor trustee.
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(c) The Trustee may be removed at any time with respect to the
Securities of any series by an Act of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of that series,
delivered to the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with the provisions of
Trust Indenture Act Section 310(b) after written request therefor by
the Company or by any Holder who has been a bona fide Holder of a
Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 608
and shall fail to resign after written request therefor by the Company
or by any Holder who has been a bona fide Holder of a Security for at
least six months, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed or any public officer shall take
charge or control of the Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation,
then, in any case, (i) the Company by a Board Resolution may remove the Trustee,
or (ii) subject to Section 514, the Holder of any Security who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself 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 be removed or become incapable of acting, or
if a vacancy shall occur in the office of Trustee for any cause, with respect to
the Securities of one or more series, the Company, by a Board Resolution, shall
promptly appoint a successor trustee with respect to the Securities of that or
those series (it being understood that any such successor Trustee may be
appointed with respect to the Securities of one or more or all series and that
at any time there shall be only one Trustee with respect to the Securities of
any particular series). If, within one year after such removal or incapability,
or the occurrence of such vacancy, a successor trustee with respect to the
Securities of any series shall be appointed by Act of the Holders of a majority
in principal amount of the Outstanding Securities of that series 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
with respect to the Securities of that series and to that extent supersede the
successor trustee appointed by the Company. If no successor Trustee with respect
to the Securities of that series shall have been so appointed
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by the Company or the Holders of the Securities of that series and accepted
appointment in the manner hereinafter provided, the Holder of any Security of
such series who has been a bona fide Holder for at least six months may, subject
to Section 514, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of that series.
(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 of the affected series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor trustee
and the address of its Corporate Trust Office or agent hereunder.
Section 610. Acceptance of Appointment by Successor.
--------------------------------------
In case of the appointment hereunder of a successor Trustee with
respect to all Securities, such successor Trustee appointed hereunder shall
execute, acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or removal
of the retiring Trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee as if originally named
as Trustee hereunder; but, nevertheless, on the written request of the Company
or the successor trustee, upon payment of its charges then unpaid, such retiring
Trustee shall, pay over to the successor trustee all moneys at the time held by
it hereunder and shall execute and deliver an instrument transferring to such
successor trustee all such rights, powers, duties and obligations. Upon request
of any such successor trustee, the Company shall execute any and all instruments
for more fully and certainly vesting in and confirming to such successor trustee
all such rights and powers. Any Trustee ceasing to act shall, nevertheless,
retain a prior claim upon all property or funds held or collected by such
Trustee or such successor trustee to secure any amounts then due such Trustee
pursuant to the provisions of Section 606.
In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantors, the retiring Trustee and each successor Trustee with respect to the
Securities of such one or more series shall execute and deliver an indenture
supplemental hereto wherein such successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, such successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
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those series as to which the retiring Trustee is not retiring shall continue to
be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each 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 with respect to the Securities of that or those series
to which the appointment of such successor Trustee relates; but, on request of
the Company, any Guarantor or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities of
that or those series to which the appointment of such successor Trustee relates.
Upon request of any such successor Trustee, the Company and the
Guarantors shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case may
be.
No successor Trustee with respect to the Securities of any series
shall accept appointment as provided in this Section 610 unless at the time of
such acceptance such successor trustee shall be eligible to act as trustee under
the provisions of Trust Indenture Act Section 310(a) and this Article Sixth and
shall have a combined capital and surplus of at least $250,000,000 and have a
Corporate Trust Office or an agent selected in accordance with Section 608.
Upon acceptance of appointment by any successor Trustee with respect
to the Securities of any particular series as provided in this Section 610, the
Company shall give notice thereof to the Holders of the Securities of any series
affected, by mailing such notice to such Holders at their addresses as they
shall appear on the Security Register. If the acceptance of appointment is
substantially contemporaneous with the resignation, then the notice called for
by the preceding sentence may be combined with the notice called for by Section
609. If the Company fails to give such notice within 10 days after acceptance of
appointment by the successor trustee, the successor trustee shall cause such
notice to be given at the expense of the Company.
Section 611. Merger, Conversion, Consolidation or Succession to
-------------------------------------------------------
Business.
- --------
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or
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consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be eligible under Trust Indenture Act Section 310(a) and this
Article Sixth and shall have a combined capital and surplus of at least
$250,000,000 and have a Corporate Trust Office or an agent selected in
accordance with Section 608 without the execution or filing of any paper or any
further act on the part of any of the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series 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 of that series 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 of any series 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 of that
series in the name of any predecessor Trustee shall apply only to its successor
or successors by merger, conversion or consolidation.
Section 612. Preferential Collection of Claims Against Company.
-------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or other obligor under the Securities of any series), the Trustee shall be
subject to the provisions of the Trust Indenture Act regarding the collection of
claims against the Company (or any such other obligor). A Trustee who has
resigned or been removed shall be subject to the Trust Indenture Act Section
311(a) to the extent indicated therein.
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
Section 701. Company to Furnish Trustee Names and Addresses of
-------------------------------------------------------
Holders.
- -------
The Company will furnish or cause to be furnished to the Trustee:
(a) semiannually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the names
and addresses of the Holders as of such Regular Record Date; and
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(b) at such other times as the Trustee may request in writing, within
30 days after receipt by the Company of any such request, a list of similar form
and content as of a date not more than 15 days prior to the time such list is
furnished;
provided, however, that if and so long as the Trustee shall be the Security
Registrar, no such list need be furnished.
Section 702. Disclosure of Names and Addresses of Holders.
--------------------------------------------
Holders may communicate pursuant to Trust Indenture Act Section 312(b)
with other Holders with respect to their rights under this Indenture or the
Securities, and the Trustee shall comply with Trust Indenture Act Section
312(b). The Company, the Trustee, the Security Registrar and any other Person
shall have the protection of Trust Indenture Act Section 312(c). Every Holder of
Securities of any series, by receiving and holding the same, agrees with the
Company and the Trustee that neither the Company nor the Trustee nor any agent
of either of them shall be held accountable by reason of the disclosure of any
information as to the names and addresses of the Holders in accordance with
Trust Indenture Act Section 312, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under Trust Indenture
Act Section 312.
Section 703. Reports by Trustee.
------------------
Within 60 days after May 15 of each year commencing with the first May
15 after the first issuance of Securities of each series, the Trustee shall
transmit by mail to all Holders, as their names and addresses appear in the
Security Register, as provided in Trust Indenture Act Section 313(c), a brief
report dated as of such May 15 in accordance with and to the extent required by
Trust Indenture Act Section 313(a).
Section 704. Reports by Company and Guarantors.
---------------------------------
The Company and any Guarantor shall:
(a) file with the Trustee, within 15 days after the Company or any
Guarantor, as the case may be, is required to file the same with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which the Company or any
Guarantor may be required to file with the Commission pursuant to Section 13 or
Section 15(d) of the Exchange Act; or, if the Company or any Guarantor, as the
case may be, is not required to file information, documents or reports pursuant
to either of said Sections, then it shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such of the supplementary and periodic information,
documents
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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 313(c), such summaries of any information, documents
and reports required to by filed by the Company or any Guarantor, as the case
may be, pursuant to Subsections (a) and (b) of this Section as may be required
by rules and regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
-------------
CONSOLIDATION, MERGER,
----------------------
CONVEYANCE, TRANSFER OR LEASE
-----------------------------
Section 801. Company or Any Guarantor May Consolidate, etc., Only on
---------------------------------------------------------
Certain Terms.
- -------------
Unless otherwise provided pursuant to Section 301:
(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 as an entirety 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
disposal 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
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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 any applicable
provisions of the Indenture limiting incurrence of indebtedness and
established pursuant to Section 301;
(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 the Indenture limiting liens (established pursuant to
Section 301) 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 this Indenture and that all conditions precedent herein
provided for relating to such transaction have been complied with.
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<PAGE>
(b) If any Securities of any series are guaranteed pursuant to Article
Fourteen, each Guarantor, if any, shall not, and the Company shall not permit a
Guarantor to, in a single transaction or through a series of related
transactions merge or consolidate with or into any other corporation (other than
the Company or any other Guarantor) or other entity, or sell, assign, convey,
transfer, lease or otherwise dispose of all or substantially all of its
properties and assets on a Consolidated basis to any entity (other than the
Company or any other Guarantor) unless at the time and after giving effect
thereto:
(i) either (1) such Guarantor shall be the continuing
corporation or (2) the entity (if other than such Guarantor) formed by
such consolidation or into which such Guarantor is merged or the
entity which acquires by sale, assignment, conveyance, transfer, lease
or disposition the properties and assets of such Guarantor shall be a
corporation duly organized and validly existing under the laws of the
United States, any state thereof or the District of Columbia and shall
expressly assume by an indenture supplemental hereto, executed and
delivered to the Trustee, in a form reasonably satisfactory to the
Trustee, all the obligations of such Guarantor under its Guarantees
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.
Section 802. Successor Substituted.
---------------------
Upon any consolidation or merger, or any sale, assignment, conveyance,
transfer, lease or disposition of all or substantially all of the properties and
assets of the Company or any Guarantor in accordance with Section 801, the
successor Person formed by such consolidation or into which the Company or such
Guarantor, as the case may be, is merged or the successor Person to which such
sale, assignment, conveyance, transfer, lease or disposition is made shall
succeed to, and be substituted for, and may exercise every right and power of,
the Company or such Guarantor, as the case may be, under this Indenture, the
Securities of any series 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 of that series 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 of any
series or a Guarantee, as the case may be, the predecessor
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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 of any series or a Guarantee, as the
case may be.
ARTICLE NINE
------------
SUPPLEMENTAL INDENTURES
------------------------
Section 901. Supplemental Indentures and Agreements without Consent of
---------------------------------------------------------
Holders.
- -------
Unless otherwise provided for in Section 301, 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) cause the Indenture to be qualified under the Trust Indenture Act
("TIA") or to add provisions expressly required under the TIA;
(b) evidence the succession of another Person to the Company, any
Guarantor or other obligor upon the Securities and the assumption by any such
successor of the covenants of the Company, any Guarantor or other obligor upon
the Securities under the Indenture and in the Securities of any series;
(c) add to the covenants of the Company, any Guarantor or other
obligor upon the Securities for the benefit of the Holders (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the benefit
of such series ) or an additional Event of Default to all or any series of
Securities, or surrender any right or power conferred upon the Company;
(d) to secure the Securities of any series thereof;
(e) to add to or change any provisions to such extent as necessary to
facilitate the issuance or administration of Securities in bearer form or to
facilitate the issuance or administration of Securities in global form;
(f) to change or eliminate any provision affecting only series of
Securities not yet issued;
(g) to establish the form or terms of Securities and Guarantee, if
any, of any series;
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(h) to evidence and provide for successor Trustees or to add or change
any provisions of such Indenture to such extent as necessary to permit or
facilitate the appointment of a separate Trustee or Trustees for specific series
of Securities;
(i) to permit payment in respect of Securities in bearer form in the
United States to the extent allowed by law;
(j) to make provision with respect to any conversion or exchange
rights of holders not adverse to the holders of any Securities of any series
then outstanding with such conversion or exchange rights which provision
directly effects any such series, including providing for the conversion or
exchange of Securities into Common Stock or Preferred Stock;
(k) cure any ambiguity, correct or supplement any provision which may
be defective or inconsistent with any other provision, or make any other
provisions with respect to matters or questions arising under the Indenture
which shall not be inconsistent with the provisions of the Indenture; provided,
however, that no such modifications or amendment may adversely affect the
interest of holders of Securities of any series then outstanding in any material
respect; or
(l) to add a Guarantor pursuant to the requirements of Article
Fourteen.
Section 902. Supplemental Indentures and Agreements with Consent of
--------------------------------------------------------
Holders.
- -------
Unless otherwise provided pursuant to Section 301, with the consent of
the Holders of not less than a majority in aggregate principal amount of the
Outstanding Securities of all series affected, by Act of said Holders delivered
to the Company, each Guarantor, and the Trustee, the Company and each Guarantor
(if a party thereto), when authorized by a Board Resolution, and the Trustee may
enter into an indenture or indentures supplemental hereto or agreements or other
instruments with respect to any Guarantee in form and substance satisfactory to
the Trustee for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of modifying in
any manner the rights of the Holders under this Indenture, the Securities or any
Guarantee; provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding Security
of all series 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);
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(b) reduce the percentage in principal amount of the Outstanding
Securities of a series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver or compliance with certain provisions of this Indenture or certain
defaults or with respect to any Guarantee;
(c) modify any of the provisions of this Section, Section 513 or
Section 1009, 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 certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Security affected
thereby;
(d) 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
(e) amend or modify any of the provisions of this Indenture relating
to the subordination of the Securities or any Guarantee in any manner adverse to
the Holders of the Securities or any Guarantee.
Upon the written request of the Company and each Guarantor,
accompanied by a copy of a Board Resolution authorizing the execution of any
such supplemental indenture or Guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall, subject
to Section 903, join with the Company and each Guarantor in the execution of
such supplemental indenture or Guarantee.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture or Guarantee
or agreement or instrument relating to any Guarantee, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures and Agreements.
---------------------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture, agreement or instrument permitted by this Article or the
modifications thereby of the trusts created by this Indenture, the Trustee shall
be entitled to receive, and (subject to Trust Indenture Act Section 315(a)
through 315(d) and Section 602 hereof) shall be fully protected in relying upon,
an Opinion of Counsel and an Officers' Certificate stating that the execution of
such supplemental indenture, agreement or instrument is authorized or permitted
by this Indenture. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture, agreement or instrument which affects the
Trustee's own rights, duties or immunities under this Indenture, any Guarantee
or otherwise.
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Section 904. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities of each series theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
Section 906. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of each series 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 of each series 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 of that series.
Section 907. Effect on Senior Indebtedness.
-----------------------------
No supplemental indenture shall adversely affect the rights under
Article Twelve and, if applicable, Article Fourteen, or any definitions or
provisions related thereto, or the Guarantees of any holder of Senior
Indebtedness or Guarantor Senior Indebtedness unless the requisite holders of
each issue of Senior Indebtedness or Guarantor Senior Indebtedness affected
thereby shall have consented to such supplemental indenture.
ARTICLE TEN
-----------
COVENANTS
---------
Section 1001. Payment of Principal, Premium and Interest.
------------------------------------------
Subject to the provisions of Article Twelve and, if applicable,
Article Fourteen, the Company will duly and punctually pay the principal of,
premium, if any, and interest on each series of the Securities in accordance
with the terms of the Securities of each series and this Indenture.
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Section 1002. Maintenance of Office or Agency.
-------------------------------
Unless otherwise provided pursuant to Section 301, the Company will
maintain an office or agency where Securities of each series may be presented or
surrendered for payment. The Company also will maintain an office or agency
where Securities of each series 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 of each series 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 of each series 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.
Procedures with respect to Bearer Securities in connection with the
matters addressed in this Section 1002 shall be set forth pursuant to Section
301.
Unless otherwise provided pursuant to Section 301, the Trustee shall
initially serve as Paying Agent.
Section 1003. Money for Security Payments to Be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent, it will,
on or before each due date of the principal of, premium, if any, or interest on
any of the Securities of any series, 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 of any series, deposit with a Paying Agent or Paying Agents, as the
case may be, 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.
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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 of any series 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 of any series) in the making
of any payment of principal, premium, if any, or interest;
(c) at any time during the continuance of any such Default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects with the
provisions of this Indenture relating to the duties, rights and disabilities of
such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further liability with respect to
such money.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor, including each
Guarantor, upon the Securities of any series 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 of any series 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
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Agent, before being required to make any such repayment, may at the expense of
the Company cause to be published once, in The New York Times and The Wall
Street Journal (national edition), notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such notification or publication, any unclaimed balance of such
money then remaining will promptly be repaid to the Company.
Section 1004. Corporate Existence.
-------------------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect the corporate
existence and related rights and franchises (charter and statutory) of the
Company and each Subsidiary; provided, however, that the Company shall not be
required to preserve any such right or franchise or the corporate existence of
any such Subsidiary if the Board of Directors of the Company shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and its Subsidiaries as a whole and that the loss
thereof would not reasonably be expected to have a material adverse effect on
the ability of the Company to perform its obligations hereunder; and provided,
further, however, that the foregoing shall not prohibit a sale, transfer or
conveyance of a Subsidiary or any of its assets in compliance with the terms of
this Indenture.
Section 1005. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
on or before the date the same shall become due and payable, (a) all taxes,
assessments and governmental charges levied or imposed upon the Company or any
Subsidiary shown to be due on any return of the Company or any Subsidiary or
otherwise assessed or upon the income, profits or property of the Company or any
Subsidiary if failure to pay or discharge the same could reasonably be expected
to have a material adverse effect on the ability of the Company or any
Guarantor, if any, 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; provided, however,
that the Company shall not be required to pay or discharge or cause to be paid
or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of which
appropriate reserves (in the good faith judgment of management of the Company)
are being maintained in accordance with generally accepted accounting principles
consistently applied.
Section 1006. Maintenance of Properties.
-------------------------
The Company will cause all material properties owned by the Company or
any Subsidiary or used or held for use in the conduct of its business or the
business of any
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Subsidiary to be maintained and kept in good condition, repair and working order
(ordinary wear and tear excepted) and supplied with all necessary equipment and
will cause to be made all necessary repairs, renewals, replacements, betterments
and improvements thereof, all as in the judgment of the Company may be
consistent with sound business practice and necessary so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the maintenance of any of such properties if such
discontinuance is, in the judgment of the Company, desirable in the conduct of
its business or the business of any Subsidiary and not reasonably expected to
have a material adverse effect on the ability of the Company to perform its
obligations hereunder.
Section 1007. Insurance.
---------
The Company will at all times keep all of its and its Subsidiaries'
properties which are of an insurable nature insured with insurers, believed by
the Company to be responsible, against loss or damage to the extent that
property of similar character is usually so insured by corporations similarly
situated and owning like properties.
Section 1008. 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 of 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, telex 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.
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Section 1009. Waiver of Certain Covenants.
---------------------------
Unless otherwise provided pursuant to Section 301, the Company or any
Guarantor may, with respect to the Securities of any series, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Sections 301 or 901 for the benefit of the
Holders of any series, if, before or after the time for such compliance, the
Holders of not less than a majority in aggregate principal amount of the
Securities of that series at the time Outstanding shall, by Act of such Holders,
waive such compliance in such instance with such covenant, but no such waiver
shall extend to or affect such covenant 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 shall
remain in full force and effect.
ARTICLE ELEVEN
--------------
REDEMPTION OF SECURITIES
-------------------------
Section 1101. Rights of Redemption.
---------------------
Unless otherwise provided pursuant to Section 301, the Securities of
each series may be redeemed at the election of the Company, in whole or in part,
at any time as specified pursuant to Section 301, subject to the conditions, and
at the Redemption Price, specified in the form of Security of each series
(specified pursuant to Section 301), together with accrued and unpaid interest,
if any, to the Redemption Date.
Section 1102. Applicability of Article.
------------------------
Redemption of Securities of each series at the election of the Company
or otherwise, as permitted or required by any provision of this Indenture, shall
be made in accordance with such provision and this Article.
Section 1103. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities of any series
pursuant to Section 1101 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 45 nor more than 60 days prior to the Redemption
Date fixed by the Company (unless a shorter notice period shall be satisfactory
to the Trustee), notify the Trustee in writing of such Redemption Date and of
the principal amount of Securities of that series to be redeemed.
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Section 1104. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of any series are to be redeemed, the
particular Securities of that series or portions thereof to be redeemed shall be
selected not more 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 of each series selected for redemption
and, in the case of any Securities of that series 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 of any series
(including interest coupons, if any) shall relate, in the case of any Security
of that series (including interest coupons, if any) redeemed or to be redeemed
only in part, to the portion of the principal amount of such Security of that
series (including interest coupons, if any) which has been or is to be redeemed.
Section 1105. Notice of Redemption.
--------------------
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities of the affected series 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 of any series are to be
redeemed, the identification of the particular Securities of that series to be
redeemed;
(d) in the case of a Security of any series 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 of that series, new Security or
Securities of that series in the aggregate principal amount equal to the
unredeemed portion thereof will be issued;
(e) that Securities of any series called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price;
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(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 of any series 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 of any series 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 of any series.
Section 1106. Deposit of Redemption Price.
---------------------------
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money in same day funds sufficient to pay the Redemption Price of and (except if
the Redemption Date shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed on that date. When
the Redemption Date falls on an Interest Payment Date, payments of interest due
on such date are to be paid as provided hereunder as if no such redemption were
occurring.
Section 1107. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities of
the series so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price together with
accrued interest to the Redemption Date; provided, however, that installments of
interest whose Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Securities, or one or more
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Predecessor Securities, registered as such on the relevant Regular Record Dates
according to the terms and the provisions of Section 309.
If any Security of any series 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.
Procedures regarding the treatment of Holders of Bearer Securities
with respect to the matters addressed in this Section 1107 shall be provided
pursuant to Section 301.
Section 1108. Securities Redeemed or Purchased in Part.
----------------------------------------
Any Security of any series which is to be redeemed or purchased only
in part shall be surrendered to the Paying Agent at the office or agency
maintained for such purpose pursuant to Section 1002 (with, if the Company, the
Security Registrar or the Trustee so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company, the Security
Registrar or the Trustee duly executed by, the Holder thereof or such Holder's
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities of that series, 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 of
that series so surrendered that is not redeemed or purchased.
ARTICLE TWELVE
--------------
SUBORDINATION OF SECURITIES
---------------------------
Unless otherwise provided pursuant to Section 301, the following
provisions shall apply to the Securities of any series:
Section 1201. Securities Subordinate to Senior Indebtedness.
Unless otherwise provided pursuant to Section 301, 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 the Indenture 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,
whether outstanding on the date of the Indenture or thereafter incurred.
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This Article Twelve shall constitute a continuing offer to all Persons
who, in reliance upon such provisions, become holders of, or continue to hold
Senior Indebtedness; and such provisions are made for the benefit of the holders
of Senior Indebtedness; and such holders are made obligees hereunder and they or
each of them may enforce such provisions.
Section 1202. Payment Over of Proceeds Upon Dissolution, etc.
-----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its creditors,
as such, or to its assets, or (b) any liquidation, dissolution or other winding
up of the Company, whether voluntary or involuntary and whether or not involving
insolvency or bankruptcy, or (c) any assignment for the benefit of creditors or
any other marshaling of assets or liabilities of the Company, then and in any
such event:
(1) the holders of Senior Indebtedness shall be entitled to receive
payment in full in cash or Cash Equivalents or in any other form as acceptable
to the holders of Senior Indebtedness, of all amounts due on or in respect of
all Senior Indebtedness, before the Holders of the Securities are entitled to
receive any payment or distribution of any kind or character (excluding
Permitted Junior Securities) on account of the principal of, premium, if any, or
interest on the Securities of any series or any other Indenture Obligations; and
(2) any payment or distribution of assets of the Company of any kind
or character, whether in cash, property or securities (excluding Permitted
Junior Securities), by set-off or otherwise, to which the Holders or the Trustee
would be entitled but for the provisions of this Article shall be paid by the
liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior Indebtedness
may have been issued, ratably according to the aggregate amounts remaining
unpaid on account of the Senior Indebtedness held or represented by each, to the
extent necessary to make payment in full in cash or Cash Equivalents or in any
other form as acceptable to the Holders of Senior Indebtedness, of all Senior
Indebtedness remaining unpaid, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness; and
(3) in the event that, notwithstanding the foregoing provisions of
this Section, the Trustee or the Holder of any Security of any series 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 of any series or any other
Indenture Obligations before all Senior Indebtedness is paid in full,
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then and in such event such payment or distribution (excluding Permitted Junior
Securities) shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
person making payment or distribution of assets of the Company for application
to the payment of all Senior Indebtedness remaining unpaid, to the extent
necessary to pay all Senior Indebtedness in full in cash or Cash Equivalents or
in any other form as acceptable to the Holders of Senior Indebtedness, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness.
The consolidation of the Company with, or the merger of the Company
with or into, another Person or the liquidation or dissolution of the Company
following the sale, assignment, conveyance, transfer, lease or other disposal of
all or substantially all of the Company's properties or assets to another Person
upon the terms and conditions set forth in Article Eight shall not be deemed a
dissolution, winding up, liquidation, reorganization, assignment for the benefit
of creditors or marshaling of assets and liabilities of the Company for the
purposes of this Section if the Person formed by such consolidation or the
surviving entity of such merger or the Person which acquires by sale,
assignment, conveyance, transfer, lease or other disposal of all or
substantially all of the Company's properties or assets, as the case may be,
shall, as a part of such consolidation, merger, sale, assignment, conveyance,
transfer, lease or other disposal, comply with the conditions set forth in
Article Eight.
Section 1203. Suspension of Payment When Senior Indebtedness in
------------------------------------------------------
Default.
- -------
(a) Unless Section 1202 shall be applicable, upon the occurrence of a
Payment Default, no payment (other than any payments previously made pursuant to
the provisions described in Article Four) or distribution of any assets of the
Company of any kind or character (excluding Permitted Junior Securities) shall
be made by the Company on account of principal of, premium, if any, or interest
on, the Securities of any series or any other Indenture Obligations or on
account of the purchase, redemption, defeasance (whether under Section 402 or
403) or other acquisition of or in respect of the Securities unless and until
such Payment Default shall have been cured or waived or shall have ceased to
exist or the Designated Senior Indebtedness with respect to which such Payment
Default shall have occurred shall have been discharged or paid in full in cash
or Cash Equivalents or in any other form as acceptable to the Holders of 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 1202 shall be applicable, upon (1) the occurrence
of a Non-payment Default and (2) after receipt by the Trustee and the Company
from a representative of the holder of any 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
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distribution of any assets of the Company of any kind or character (excluding
Permitted Junior Securities) shall be made by the Company on account of any
principal of, premium, if any, or interest on, the Securities or any other
Indenture Obligations or on account of the purchase, redemption, defeasance or
other acquisition of or in respect of Securities for a period ("Payment Blockage
Period") commencing on the date of receipt by the Trustee of such notice unless
and until the earliest of (subject to any blockage of payments that may then or
thereafter be in effect under subsection (a) of this Section 1203) (x) 179 days
having elapsed since receipt of such written notice by the Trustee (provided any
Designated Senior Indebtedness as to which notice was given shall theretofore
have not been accelerated), (y) the date such Non-payment Default and all other
Non-payment Defaults as to which notice is also given after such period is
initiated shall have been cured or waived or shall have ceased to exist or the
Designated Senior Indebtedness related thereto shall have been discharged or
paid in full in cash or Cash Equivalents or in any other form as acceptable to
the Holders of Designated Senior Indebtedness, or (z) the date on which such
Payment Blockage Period (and all Non-payment Defaults as to which notice is
given after such Payment Blockage Period is initiated) shall have been
terminated by written notice to the Company or the Trustee from the
representative of holders of Designated Senior Indebtedness, or the holders of
at least a majority of the Designated Senior Indebtedness, that initiated such
Payment Blockage Period, after which, in each such case, the Company shall
promptly 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.
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Section 1204. Payment Permitted if No Default.
-------------------------------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent the Company, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of the Company referred to in Section 1202 or under the conditions
described in Section 1203, from making payments at any time of principal of,
premium, if any, or interest on the Securities.
Section 1205. Subrogation to Rights of Holders of Senior Indebtedness.
------------------------------------------------------
Subject to the payment in full of all Senior Indebtedness in cash or
Cash Equivalents or in any other form as acceptable to the holders of Senior
Indebtedness, the Holders of the Securities shall be subrogated to the rights of
the holders of such Senior Indebtedness to receive payments and distributions of
cash, property and securities applicable to the Senior Indebtedness until the
principal of, premium, if any, and interest on the Securities shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of Senior Indebtedness of any cash, property or securities to which the
Holders or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, its creditors other than holders of Senior
Indebtedness, and the Holders of the Securities, be deemed to be a payment or
distribution by the Company to or on account of the Senior Indebtedness.
Section 1206. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of this Article are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Indebtedness on the other hand. Nothing contained in
this Article or elsewhere in this Indenture or in the Securities is intended to
or shall (a) impair, as among the Company, its creditors other than holders of
Senior Indebtedness and the Holders of the Securities, the obligation of the
Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against the Company of the Holders of the
Securities and creditors of the Company other than the holders of Senior
Indebtedness; or (c) prevent the Trustee or the Holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
this Indenture, subject to the rights, if any, under this Article of the holders
of Senior Indebtedness (1) in any case, proceeding, dissolution, liquidation or
other winding up, assignment for the benefit of creditors or other marshaling of
assets and liabilities of the Company referred to in Section 1202, to receive,
pursuant to and in accordance with such Section, cash, property and securities
otherwise payable or
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deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 1203, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 1203(c).
Section 1207. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the Indebtedness of the Company owing to such Holder in the form required in
such proceedings and the causing of such claim to be approved.
Section 1208. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
the Company or by any act or failure to act by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section
and notwithstanding any other provision contained herein, the holders of Senior
Indebtedness may, at any time and from time to time, without the consent of or
notice to the Trustee or the Holders of the Securities, without incurring
responsibility to the Holders of the Securities and without impairing or
releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Securities to the holders of Senior
Indebtedness, do any one or more of the following: (1) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, Senior
Indebtedness or any instrument evidencing the same or any agreement under which
Senior Indebtedness is outstanding; (2) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior
Indebtedness; (3) release any Person liable in any manner for the collection or
payment of Senior Indebtedness; and (4) exercise or refrain from exercising any
rights against the Company and any other Person; provided, however, that in no
event shall any such actions limit the right of the Holders of the Securities to
take any action to accelerate the maturity of the Securities in accordance with
the provisions set forth in Article Five or to pursue any rights or remedies
under this Indenture or under applicable laws if the taking of such action does
not otherwise violate the terms of this Article.
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Section 1209. Notice to Trustee.
-----------------
(a) The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities or other Indenture Obligations.
Notwithstanding the provisions of this Article or any provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts which would prohibit the making of any payment to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Indebtedness or
from a Senior Representative or any trustee, fiduciary or agent therefor; and,
prior to the receipt of any such written notice, the Trustee shall be entitled
in all respects to assume that no such facts exist; provided, however, that if
the Trustee shall not have received the notice provided for in this Section
prior to the date upon which by the terms hereof any money may become payable
for any purpose (including, without limitation, the payment of the principal of,
premium, if any, or interest on any Security or other Indenture Obligations),
then, anything herein contained to the contrary notwithstanding but without
limiting the rights and remedies of the holders of Senior Indebtedness or any
trustee, fiduciary or agent thereof, the Trustee shall have full power and
authority to receive such money and to apply the same to the purpose for which
such money was received and shall not be affected by any notice to the contrary
which may be received by it after such date; nor shall the Trustee be charged
with knowledge of the curing of any such default or the elimination of the act
or condition preventing any such payment unless and until the Trustee shall have
received an Officers' Certificate to such effect.
(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.
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<PAGE>
Section 1210. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent.
- -----
Upon any payment or distribution of assets of the Company referred to
in this Article, the Trustee and the Holders of the Securities shall be entitled
to rely upon any order or decree entered by any court of competent jurisdiction
in which such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Article, provided that the foregoing shall apply only if such court has
been fully apprised of the provisions of this Article.
Section 1211. Rights of Trustee as a Holder of Senior Indebtedness;
------------------------------------------------------
Preservation of Trustee's Rights.
- --------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder. Nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 606.
Section 1212. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1211 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1213. No Suspension of Remedies.
--------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to Article Five and as set forth in this Indenture or to
pursue any rights or remedies hereunder or under applicable law, subject to the
rights, if any, under this Article of the
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holders, from time to time, of Senior Indebtedness to receive the cash, property
or securities receivable upon the exercise of such rights or remedies.
Section 1214. Trustee's Relation to Senior Indebtedness.
-----------------------------------------
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Article against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and the Trustee shall
not be liable to any holder of Senior Indebtedness if it shall mistakenly in the
absence of gross negligence or willful misconduct pay over or deliver to
Holders, the Company or any other Person moneys or assets to which any holder of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
ARTICLE THIRTEEN
----------------
SATISFACTION AND DISCHARGE
--------------------------
Section 1301. Satisfaction and Discharge of Indenture.
---------------------------------------
Unless otherwise provided pursuant to Section 301, this Indenture
shall cease to be of further effect (except as to surviving rights of
registration of transfer or exchange of Securities of any series herein, rights
to payment, rights to conversion, and rights to replacement of stolen, lost or
mutilated Securities of such series 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 of such series theretofore
authenticated and delivered (other than (i) Securities of such series
which have been destroyed, lost or stolen and which have been replaced
or paid as provided in Section 308 or (ii) all Securities of such
series for whose payment United States dollars have theretofore been
deposited in trust or segregated and held in trust by the Company and
thereafter repaid to the Company or discharged from such trust, as
provided in Section 1003) have been delivered to the Trustee for
cancellation; or
(2) all such Securities of such series 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
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<PAGE>
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 the purpose an
amount in United States dollars sufficient to pay and discharge the
entire Indebtedness on the Securities of such series not theretofore
delivered to the Trustee for cancellation, for the principal of,
premium, if any, and accrued interest at such Stated Maturity or
Redemption Date;
(b) the Company or any Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company or any Guarantor; and
(c) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel stating that (i) all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture have
been complied with and (ii) such satisfaction and discharge will not result in a
breach or violation of or constitute a default under, this Indenture or any
other material agreement or instrument to which the Company or any Guarantor is
a party or by which the Company or any Guarantor is bound.
Opinions of Counsel required to be delivered under this Section may
have qualifications customary for opinions of the type required and counsel
delivering such Opinions of Counsel may rely on certificates of the Company or
government or other officials customary for opinions of the type required,
including certificates certifying as to matters of fact, including that various
financial covenants have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 606 and, if United
States dollars shall have been deposited with the Trustee pursuant to subclause
(2) of Subsection (a) of this Section, the obligations of the Trustee under
Section 1302 and the last paragraph of Section 1003 shall survive.
Section 1302. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 1003, all
United States dollars deposited with the Trustee pursuant to Section 1301 shall
be held in trust and applied by it, in accordance with the provisions of the
Securities of any series 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 of such series for whose
payment such United States dollars have been deposited with the Trustee.
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<PAGE>
ARTICLE FOURTEEN
----------------
GUARANTEE
---------
If, pursuant to Section 301, the Securities of any series are to be
guaranteed by any Guarantor, the following provisions, unless otherwise provided
pursuant to Section 301, shall apply. In this Article Fourteen, unless the
context otherwise requires, all references to Securities refers to the series of
Securities guaranteed by the Guarantors and all references to Indenture
Obligations refer to Indenture Obligations in respect of the series of
Securities so guaranteed. If no series of Securities are guaranteed, this
Article Fourteen and all references to Guarantees and Guarantors in this
Indenture shall have no force and effect.
Section 1401. Guarantors' Guarantee.
---------------------
For value received, each of the Guarantors, in accordance with this
Article Fourteen, hereby absolutely, unconditionally and irrevocably guarantees,
jointly and severally, to the Trustee and the Holders, as if the Guarantors were
the principal debtor, the punctual payment and performance when due of all
Indenture Obligations (which for purposes of this Guarantee shall also be deemed
to include all commissions, fees, charges, costs and other expenses (including
reasonable legal fees and disbursements of one counsel in connection with any
one action or separate but similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances) arising out of or
incurred by the Trustee or the Holders in connection with the enforcement of
this Guarantee).
Section 1402. Continuing Guarantee; No Right of Set-Off; Independent
--------------------------------------------------------
Obligation.
- ----------
(a) This Guarantee shall be a continuing guarantee of the payment and
performance of all Indenture Obligations and shall remain in full force and
effect until the payment in full of all of the Indenture Obligations and shall
apply to and secure any ultimate balance due or remaining unpaid to the Trustee
or the Holders; and this Guarantee shall not be considered as wholly or
partially satisfied by the payment or liquidation at any time or from time to
time of any sum of money for the time being due or remaining unpaid to the
Trustee or the Holders. Each Guarantor, jointly and severally, covenants and
agrees to comply with all obligations, covenants, agreements and provisions
applicable to it in this Indenture including those set forth in Article Eight.
Without limiting the generality of the foregoing, each of the Guarantors'
liability shall extend to all amounts which constitute part of the Indenture
Obligations and would be owed by the Company under this Indenture and the
Securities but for the fact that they are unenforceable, reduced, limited,
impaired, suspended or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Company.
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<PAGE>
(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 under this Guarantee to pay or perform
or cause the performance of the Indenture Obligations shall arise forthwith
after demand for payment or performance by the Trustee has been given to the
Guarantors in the manner prescribed in Section 106 hereof.
(e) Except as provided herein, the provisions of this Article Fourteen
cover all agreements between the parties hereto relative to this Guarantee and
none of the parties shall be bound by any representation, warranty or promise
made by any Person relative thereto which is not embodied herein; and it is
specifically acknowledged and agreed that this Guarantee has been delivered by
each Guarantor free of any conditions whatsoever and that no representations,
warranties or promises have been made to any Guarantor affecting its liabilities
hereunder, and that the Trustee shall not be bound by any representations,
warranties or promises now or at any time hereafter made by the Company to any
Guarantor.
Section 1403. Guarantee Absolute.
------------------
The obligations of the Guarantors hereunder are independent of the
obligations of the Company under the Securities and this Indenture and a
separate action or actions may be brought and prosecuted against any Guarantor
whether or not an action or proceeding is brought against the Company and
whether or not the Company is joined in any such action or proceeding. The
liability of the Guarantors hereunder is irrevocable, absolute and unconditional
and (to the extent permitted by law) the liability and obligations of the
Guarantors hereunder shall not be released, discharged, mitigated, waived,
impaired or affected in whole or in part by:
(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
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<PAGE>
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;
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<PAGE>
(j) the release or discharge of the Company or any
Guarantor of the Securities or of any Person liable
directly as surety or otherwise by operation of law or
otherwise for the Securities, other than an express
release in writing given by the Trustee, on behalf of the
Holders, of the liability and obligations of any
Guarantor hereunder;
(k) any change in the name, business, capital structure
or governing instrument of the Company or any Guarantor
or any refinancing or restructuring of any of the
Indenture Obligations;
(l) the sale of the Company's or any Guarantor's business
or any part thereof;
(m) subject to Section 1414, any merger or consolidation,
arrangement or reorganization of the Company, any
Guarantor, any Person resulting from the merger or
consolidation of the Company or any Guarantor with any
other Person or any other successor to such Person or
merged or consolidated Person or any other change in the
corporate existence, structure or ownership of the
Company or any Guarantor;
(n) the insolvency, bankruptcy, liquidation, winding-up,
dissolution, receivership or distribution of the assets
of the Company or its assets or any resulting discharge
of any obligations of the Company (whether voluntary or
involuntary) or of any Guarantor or the loss of corporate
existence;
(o) subject to Section 1414, any arrangement or plan of
reorganization affecting the Company or any Guarantor;
(p) any other circumstance (including any statute of
limitations) that might otherwise constitute a defense
available to, or discharge of, the Company or any
Guarantor; or
(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.
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<PAGE>
Section 1404. Right to Demand Full Performance.
--------------------------------
In the event of any demand for payment or performance by the Trustee
from any Guarantor hereunder, the Trustee or the Holders shall have the right to
demand its full claim and to receive all dividends or other payments in respect
thereof until the Indenture Obligations have been paid in full, and the
Guarantors shall continue to be jointly and severally liable hereunder for any
balance which may be owing to the Trustee or the Holders by the Company under
this Indenture and the Securities. The retention by the Trustee or the Holders
of any security, prior to the realization by the Trustee or the Holders of its
rights to such security upon foreclosure thereon, shall not, as between the
Trustee and any Guarantor, be considered as a purchase of such security, or as
payment, satisfaction or reduction of the Indenture Obligations due to the
Trustee or the Holders by the Company or any part thereof.
Section 1405. Waivers.
-------
(a) Each Guarantor hereby expressly waives (to the extent permitted by
law) notice of the acceptance of this Guarantee and notice of the existence,
renewal, extension or the non-performance, non-payment, or non-observance on the
part of the Company of any of the terms, covenants, conditions and provisions of
this Indenture or the Securities or any other notice whatsoever to or upon the
Company or such Guarantor with respect to the Indenture Obligations. Each
Guarantor hereby acknowledges communication to it of the terms of this Indenture
and the Securities and all of the provisions therein contained and consents to
and approves the same. Each Guarantor hereby expressly waives (to the extent
permitted by law) diligence, presentment, protest and demand for payment.
(b) Without prejudice to any of the rights or recourses which the
Trustee or the Holders may have against the Company, each Guarantor hereby
expressly waives (to the extent permitted by law) any right to require the
Trustee or the Holders to:
(i) initiate or exhaust any rights, remedies or recourse
against the Company, any Guarantor or any other Person;
(ii) value, realize upon, or dispose of any security of the
Company or any other Person held by the Trustee or the
Holders; or
(iii)initiate or exhaust any other remedy which the Trustee
or the Holders may have in law or equity;
before requiring or becoming entitled to demand payment from such Guarantor
under this Guarantee.
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<PAGE>
(c) With respect to this Section 1405, to the extent applicable to any
Guarantor, each Guarantor expressly waives application of Sections 26-7 through
26-9 of the North Carolina General Statutes.
Section 1406. The Guarantors Remain Obligated in Event the Company Is
--------------------------------------------------------
No Longer Obligated to Discharge Indenture Obligations.
- ------------------------------------------------------
It is the express intention of the Trustee and the Guarantors that if
for any reason the Company has no legal existence, is or becomes under no legal
obligation to discharge the Indenture Obligations owing to the Trustee or the
Holders by the Company or if any of the Indenture Obligations owing by the
Company to the Trustee or the Holders becomes irrecoverable from the Company by
operation of law or for any reason whatsoever, this Guarantee and the covenants,
agreements and obligations of the Guarantors contained in this Article Fourteen
shall nevertheless be binding upon the Guarantors, as principal debtor, until
such time as all such Indenture Obligations have been paid in full to the
Trustee and all such Indenture Obligations owing to the Trustee or the Holders
by the Company have been discharged, or such earlier time as Section 402 shall
apply to the Securities and the Guarantors shall be responsible for the payment
thereof to the Trustee or the Holders upon demand.
Section 1407. Fraudulent Conveyance; Contribution Subrogation.
-----------------------------------------------
(a) Each Guarantor that is a Subsidiary of the Company, and by its
acceptance hereof each Holder, hereby confirms that it is the intention of all
such parties that the Guarantee by such Guarantor pursuant to its Guarantee not
constitute a fraudulent transfer or conveyance for purposes of the Bankruptcy
Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act
or any similar federal or state law. To effectuate the foregoing intention, the
Holders and such Guarantor hereby irrevocably agree that the obligations of such
Guarantor under its Guarantee shall be limited to the maximum amount which,
after giving effect to all other contingent and fixed liabilities of such
Guarantor, and after giving effect to any collections from or payments made by
or on behalf of any other Guarantor in respect of the obligations of such other
Guarantor under its Guarantee or pursuant to its contribution obligations under
this Indenture, will result in the obligations of such Guarantor under its
Guarantee not constituting such fraudulent transfer or conveyance.
(b) Each Guarantor that makes a payment or distribution under its
Guarantee shall be entitled to a contribution from each other Guarantor, if any,
in a pro rata amount based on the net assets of each Guarantor, determined in
accordance with GAAP.
(c) Each Guarantor hereby waives all rights of subrogation or
contribution, whether arising by contract or operation of law (including,
without limitation, any such
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right arising under federal bankruptcy law) or otherwise by reason of any
payment by it pursuant to the provisions of this Article Fourteen.
Section 1408. Guarantee Is in Addition to Other Security.
------------------------------------------
This Guarantee shall be in addition to and not in substitution for any
other guarantees or other security which the Trustee may now or hereafter hold
in respect of the Indenture Obligations owing to the Trustee or the Holders by
the Company and (except as may be required by law) the Trustee shall be under no
obligation to marshal in favor of each of the Guarantors any other guarantees or
other security or any moneys or other assets which the Trustee may be entitled
to receive or upon which the Trustee or the Holders may have a claim.
Section 1409. Release of Security Interests.
-----------------------------
Without limiting the generality of the foregoing and except as
otherwise provided in this Indenture, each Guarantor hereby consents and agrees,
to the fullest extent permitted by applicable law, that the rights of the
Trustee hereunder, and the liability of the Guarantors hereunder, shall not be
affected by any and all 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 1410. No Bar to Further Actions.
-------------------------
Except as provided by law, no action or proceeding brought or
instituted under Article Fourteen and this Guarantee and no recovery or judgment
in pursuance thereof shall be a bar or defense to any further action or
proceeding which may be brought under Article Fourteen and this Guarantee by
reason of any further default or defaults under Article Fourteen and this
Guarantee or in the payment of any of the Indenture Obligations owing by the
Company.
Section 1411. Failure to Exercise Rights Shall Not Operate as a
------------------------------------------------------
Waiver; No Suspension of Remedies.
- ---------------------------------
(a) No failure to exercise and no delay in exercising, on the part of
the Trustee or the Holders, any right, power, privilege or remedy under this
Article Fourteen and this Guarantee shall operate as a waiver thereof, nor shall
any single or partial exercise of any rights, power, privilege or remedy
preclude any other or further exercise thereof, or the exercise of any other
rights, powers, privileges or remedies. The rights and remedies
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<PAGE>
herein provided for are cumulative and not exclusive of any rights or remedies
provided in law or equity.
(b) Nothing contained in this Article Fourteen shall limit the right
of the Trustee or the Holders to take any action to accelerate the maturity of
the Securities pursuant to Article Five or to pursue any rights or remedies
hereunder or under applicable law.
Section 1412. Trustee's Duties; Notice to Trustee.
-----------------------------------
(a) 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 where the failure of the Trustee to request
any such information or to take any such action arises from the Trustee's
negligence, bad faith or willful misconduct.
(b) The Trustee shall not be required to inquire into the existence,
powers or capacities of the Company, any Guarantor or the officers, directors or
agents acting or purporting to act on their respective behalf.
Section 1413. Successors and Assigns.
----------------------
All terms, agreements and conditions of this Article Fourteen shall
extend to and be binding upon each Guarantor and its successors and permitted
assigns and shall enure to the benefit of and may be enforced by the Trustee and
its successors and assigns; provided, however, that the Guarantors may not
assign any of their rights or obligations hereunder other than in accordance
with Article Eight.
Section 1414. Release of Guarantee.
--------------------
Concurrently with the payment in full of all of the Indenture
Obligations, the Guarantors shall be released from and relieved of their
obligations under this Article Fourteen. Upon the delivery by the Company to the
Trustee of an Officer's Certificate and, if requested by the Trustee, 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
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<PAGE>
Guarantor shall enter into an amendment to this Guarantee, reasonably
satisfactory to the Trustee, evidencing such revival and reinstatement.
This Guarantee shall terminate with respect to each Guarantor and
shall be automatically and unconditionally released and discharged under any
circumstances set forth pursuant to Section 301.
Section 1415. Execution of Guarantee.
----------------------
To evidence the Guarantee, each Guarantor hereby agrees to execute the
guarantee substantially in the form set forth in Section 204, to be endorsed on
each Security authenticated and delivered by the Trustee and that this Indenture
shall be executed on behalf of each Guarantor by its Chairman of the Board, its
President, or one of its Vice Presidents and attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Section 1416. Guarantee Subordinate to Guarantor Senior Indebtedness.
------------------------------------------------------
Each Guarantor covenants and agrees, and each Holder of a Guarantee,
by 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 Guarantees is hereby made subordinate and subject in right of
payment as provided in this Article to the prior payment in full in cash or Cash
Equivalents or in any other form as acceptable to the holders of Guarantor
Senior Indebtedness of all Guarantor Senior Indebtedness; provided, however,
that the Indebtedness represented by this Guarantee in all respects shall rank
equally with, or prior to, all existing and future Indebtedness of such
Guarantor that is expressly subordinated to such Guarantor's Guarantor Senior
Indebtedness.
This Article Fourteen shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become holders of, or continue to
hold Guarantor Senior Indebtedness; and such provisions are made for the benefit
of the holders of Guarantor Senior Indebtedness; and such holders are made
obligees hereunder and they or each of them may enforce such provisions.
With respect to the relative rights of Holders and holders of Senior
Indebtedness and Guarantor Senior Indebtedness and for the purpose of Section
1407(a), each Holder of a Security by his acceptance thereof acknowledges that
all Senior Indebtedness and any guarantee by a Guarantor of such Senior
Indebtedness shall be deemed to have been incurred prior to the incurrence by
such Guarantor of its liability under its Guarantee.
Section 1417. Payment Over of Proceeds Upon Dissolution of the
------------------------------------------------------
Guarantor, etc.
- --------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection
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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; and
(2) any payment or distribution of assets of any Guarantor of any kind
or character, whether in cash, property or securities (excluding Permitted
Guarantor Junior Securities), by set-off or otherwise, to which the Holders or
the Trustee would be entitled but for the provisions of this Article shall be
paid by the liquidating trustee or agent or other Person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating trustee
or otherwise, directly to the holders of Guarantor Senior Indebtedness or their
representative or representatives or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Guarantor Senior
Indebtedness may have been issued, ratably according to the aggregate amounts
remaining unpaid on account of the Guarantor 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 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.
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<PAGE>
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 1418. Default on Guarantor Senior Indebtedness.
----------------------------------------
(a) Upon the maturity of any Guarantor Senior Indebtedness by lapse of
time, acceleration or otherwise, all principal thereof and interest thereon and
other amounts due in connection therewith shall first be paid in full or such
payment duly provided for before any payment is made by any of the Guarantors or
any Person acting on behalf of any of the Guarantors in respect of the Guarantee
of such Guarantor.
(b) No payment (excluding payments in the form of Permitted Guarantor
Junior Securities) shall be made by any Guarantor in respect of its Guarantee
during the period in which Section 1417 shall be applicable, during any
suspension of payments in effect under Section 1203(a) of this Indenture or
during any Payment Blockage Period in effect under Section 1203(b) of this
Indenture.
(c) In the event that, notwithstanding the foregoing, any Guarantor
shall make any payment to the Trustee or the Holder of its Guarantee prohibited
by the foregoing provisions of this Section, then and in such event such payment
shall be paid over and delivered forthwith to the representatives of Guarantor
Senior Indebtedness or as a court of competent jurisdiction shall direct.
Section 1419. Payment Permitted by Each of the Guarantors if No
------------------------------------------------------
Default.
- -------
Nothing contained in this Article, elsewhere in this Indenture or in
any of the Securities shall prevent any Guarantor, at any time except during the
pendency of any case, proceeding, dissolution, liquidation or other winding up,
assignment for the benefit of creditors or other marshaling of assets and
liabilities of such Guarantor referred to in Section 1417 or under the
conditions described in Section 1418, from making payments at any time of
principal of, premium, if any, or interest on the Securities.
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<PAGE>
Section 1420. Subrogation to Rights of Holders of Guarantor Senior
------------------------------------------------------
Indebtedness.
- ------------
Subject to the payment in full of all Guarantor Senior Indebtedness in
cash or Cash Equivalents or in any other form acceptable to the holders of
Guarantor Senior Indebtedness, the Holders of the Securities shall be subrogated
to the rights of the holders of such Guarantor Senior Indebtedness to receive
payments and distributions of cash, property and securities applicable to the
Guarantor Senior Indebtedness until the principal of, premium, if any, and
interest on the Securities shall be paid in full. For purposes of such
subrogation, no payments or distributions to the holders of Guarantor Senior
Indebtedness of any cash, property or securities to which the Holders of the
Securities or the Trustee would be entitled except for the provisions of this
Article, and no payments over pursuant to the provisions of this Article to the
holders of Guarantor Senior Indebtedness by Holders of the Securities or the
Trustee, shall, as among any Guarantor, its creditors other than holders of
Guarantor Senior Indebtedness, and the Holders of the Securities, be deemed to
be a payment or distribution by such Guarantor to or on account of the Guarantor
Senior Indebtedness.
Section 1421. Provisions Solely to Define Relative Rights.
-------------------------------------------
The provisions of Sections 1416 through 1429 of this Indenture are
intended solely for the purpose of defining the relative rights of the Holders
of the Securities on the one hand and the holders of Guarantor Senior
Indebtedness on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities is intended to or shall (a) impair, as
among any Guarantor, its creditors other than holders of Guarantor Senior
Indebtedness and the Holders of the Securities, the obligation of such
Guarantor, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of, premium, if any, and interest on the Securities as
and when the same shall become due and payable in accordance with their terms;
or (b) affect the relative rights against each of the Guarantors of the Holders
of the Securities and creditors of each of the Guarantors other than the holders
of Guarantor Senior Indebtedness; or (c) prevent the Trustee or the Holder of
any Security from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article of the holders of Guarantor Senior Indebtedness (1) in any case,
proceeding, dissolution, liquidation or other winding up, assignment for the
benefit of creditors or other marshaling of assets and liabilities of the
Guarantors referred to in Section 1417, to receive, pursuant to and in
accordance with such Section, cash, property and securities otherwise payable or
deliverable to the Trustee or such Holder, or (2) under the conditions specified
in Section 1418, to prevent any payment prohibited by such Section or enforce
their rights pursuant to Section 1418(c).
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<PAGE>
Section 1422. Trustee to Effectuate Subordination.
-----------------------------------
Each Holder of a Security by his acceptance thereof authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes,
including, in the event of any dissolution, winding-up, liquidation or
reorganization of any Guarantor whether in bankruptcy, insolvency, receivership
proceedings, or otherwise, the timely filing of a claim for the unpaid balance
of the indebtedness of any Guarantor owing to such Holder in the form required
in such proceedings and the causing of such claim to be approved.
Section 1423. No Waiver of Subordination Provisions.
-------------------------------------
(a) No right of any present or future holder of any Guarantor Senior
Indebtedness to enforce subordination as herein provided shall at any time in
any way be prejudiced or impaired by any act or failure to act on the part of
any Guarantor or by any act or failure to act by any such holder, or by any
non-compliance by any Guarantor with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
(b) Without limiting the generality of Subsection (a) of this Section
and notwithstanding any other provision contained herein, the holders of
Guarantor Senior Indebtedness may, at any time and from time to time, without
the consent of or notice to the Trustee or the Holders of the Securities,
without incurring responsibility to the Holders of the Securities and without
impairing or releasing the subordination provided in this Article or the
obligations hereunder of the Holders of the Securities to the holders of
Guarantor Senior Indebtedness, do any one or more of the following: (1) change
the manner, place or terms of payment or extend the time of payment of, or renew
or alter, Guarantor Senior Indebtedness or any instrument evidencing the same or
any agreement under which Guarantor Senior Indebtedness is outstanding; (2)
sell, exchange, release or otherwise deal with any property pledged, mortgaged
or otherwise securing Guarantor Senior Indebtedness; (3) release any Person
liable in any manner for the collection or payment of Guarantor Senior
Indebtedness; and (4) exercise or refrain from exercising any rights against any
of the Guarantors and any other Person; provided, however, that in no event
shall any such actions limit the right of the Holders of the Securities to take
any action to accelerate the maturity of the Securities in accordance with the
provisions set forth in Article 5 or to pursue any rights or remedies under this
Indenture or under applicable laws if the taking of such action does not
otherwise violate the terms of this Article.
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<PAGE>
Section 1424. Notice to Trustee by Each of the Guarantors.
-------------------------------------------
(a) Each Guarantor shall give prompt written notice to the Trustee of
any fact known to such Guarantor which would prohibit the making of any payment
to or by the Trustee in respect of the Guarantee. Notwithstanding the provisions
of this Article or any provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from any
Guarantor or a holder of Guarantor Senior Indebtedness or 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.
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<PAGE>
Section 1425. Reliance on Judicial Order or Certificate of Liquidating
--------------------------------------------------------
Agent.
- -----
Upon any payment or distribution of assets of any Guarantor referred
to in this Article, the Trustee and the Holders of the Securities shall be
entitled to rely upon any order or decree entered by any court of competent
jurisdiction in which such insolvency, bankruptcy, receivership, liquidation,
reorganization, dissolution, winding up or similar case or proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Guarantor Senior
Indebtedness and other indebtedness of such Guarantor, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article, provided that the foregoing shall
apply only if such court has been fully apprised of the provisions of this
Article.
Section 1426. Rights of Trustee as a Holder of Guarantor Senior
------------------------------------------------------
Indebtedness; Preservation of Trustee's Rights.
- ----------------------------------------------
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Guarantor Senior
Indebtedness which may at any time be held by it, to the same extent as any
other holder of Guarantor Senior Indebtedness, and nothing in this Indenture
shall deprive the Trustee of any of its rights as such holder. Nothing in this
Article shall apply to claims of, or payments to, the Trustee under or pursuant
to Section 606.
Section 1427. Article Applicable to Paying Agents.
-----------------------------------
In case at any time any Paying Agent other than the Trustee shall have
been appointed by the Company and be then acting under this Indenture, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Section 1426 shall not apply to the Company or any Affiliate of
the Company if it or such Affiliate acts as Paying Agent.
Section 1428. No Suspension of Remedies.
-------------------------
Nothing contained in this Article shall limit the right of the Trustee
or the Holders of Securities to take any action to accelerate the maturity of
the Securities pursuant to the provisions described under Article Five and as
set forth in this Indenture or to pursue any rights or remedies hereunder or
under applicable law, subject to the rights, if any, under
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<PAGE>
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 1429. Trustee's Relation to Guarantor Senior Indebtedness.
---------------------------------------------------
With respect to the holders of Guarantor Senior Indebtedness, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article, and no implied
covenants or obligations with respect to the holders of Guarantor Senior
Indebtedness shall be read into this Article against the Trustee. The Trustee
shall not be deemed to owe any fiduciary duty to the holders of Guarantor Senior
Indebtedness and the Trustee shall not be liable to any holder of Guarantor
Senior Indebtedness if it shall mistakenly in the absence of gross negligence or
willful misconduct pay over or deliver to Holders, the Company or any other
Person moneys or assets to which any holder of Guarantor Senior Indebtedness
shall be entitled by virtue of this Article or otherwise.
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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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, all as of the day and year first above written.
SINCLAIR BROADCAST GROUP, INC.,
as Issuer
Attest By:
--------------------------- ---------------------------------
Name: Name:
Title: Title:
FIRST UNION NATIONAL BANK,
as Trustee
By:
---------------------------------
Name:
Title:
- 103 -
<PAGE>
STATE OF ___________________________)
) ss.:
COUNTY OF __________________________)
On the 17th day of December, 1997, before me personally came
____________________, to me known, who, being by me duly sworn, did depose and
say that he resides at ________________________________________________; that he
is ____________________of Sinclair Broadcast Group, Inc., the corporation
described in and which executed the foregoing instrument; and that he signed his
name thereto pursuant to authority of the Boards of Directors of such
corporation.
(NOTARIAL
SEAL)
-----------------------
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<PAGE>
STATE OF ___________________________)
) ss.:
COUNTY OF __________________________)
On the 17th day of December, 1997, before me personally came
________________, to me known, who, being by me duly sworn, did depose and say
that he resides at ________________________________; that he is ________________
an authorized officer of First Union National Bank, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of such corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed pursuant to authority of the Board
of Directors of such corporation; and that he signed his name thereto pursuant
to like authority.
(NOTARIAL
SEAL)
-------------------------
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SINCLAIR BROADCAST GROUP, INC., as Issuer,
and certain of its subsidiaries, as Guarantors
and
FIRST UNION NATIONAL BANK, as Trustee
FIRST SUPPLEMENTAL INDENTURE
Dated as of December 17, 1997
SENIOR SUBORDINATED DEBT SECURITIES
Supplemental to Indenture dated as of December 17, 1997
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of December 17, 1997 (the
"First Supplemental Indenture" or "this Supplemental Indenture"), among SINCLAIR
BROADCAST GROUP, INC., a Maryland corporation (the "Company"), CHESAPEAKE
TELEVISION, INC., a Maryland corporation, CHESAPEAKE TELEVISION LICENSEE, INC.,
a Delaware corporation, FSF-TV, INC., a North Carolina corporation, KABB
LICENSEE, INC., a Delaware corporation, KDNL LICENSEE, INC., a Delaware
corporation, KSMO, INC., a Maryland corporation, KSMO LICENSEE, INC., a Delaware
corporation, KUPN LICENSEE, INC., a Maryland corporation, SCI-INDIANA LICENSEE,
INC., a Delaware corporation, SCI-SACRAMENTO LICENSEE, INC., a Delaware
corporation, SINCLAIR COMMUNICATIONS, INC., a Maryland corporation, SINCLAIR
RADIO OF ALBUQUERQUE, INC., a Maryland corporation, SINCLAIR RADIO OF
ALBUQUERQUE LICENSEE, INC., a Delaware corporation, SINCLAIR RADIO OF BUFFALO,
INC., a Maryland corporation, SINCLAIR RADIO OF BUFFALO LICENSEE, INC., a
Delaware corporation, SINCLAIR RADIO OF GREENVILLE, INC., a Maryland
corporation, SINCLAIR RADIO OF GREENVILLE LICENSEE, INC., a Delaware
corporation, SINCLAIR RADIO OF LOS ANGELES, INC., a Maryland corporation,
SINCLAIR RADIO OF LOS ANGELES LICENSEE, INC., a Delaware corporation, SINCLAIR
RADIO OF MEMPHIS, INC., a Maryland corporation, SINCLAIR RADIO OF MEMPHIS
LICENSEE, INC., a Delaware corporation, SINCLAIR RADIO OF NASHVILLE, INC., a
Maryland corporation, SINCLAIR RADIO OF NASHVILLE LICENSEE, INC., a Delaware
corporation, SINCLAIR RADIO OF NEW ORLEANS, INC., a Maryland corporation,
SINCLAIR RADIO OF NEW ORLEANS LICENSEE, INC., a Delaware corporation, SINCLAIR
RADIO OF ST. LOUIS, INC., a Maryland corporation, SINCLAIR RADIO OF ST. LOUIS
LICENSEE, INC., a Delaware corporation, SINCLAIR RADIO OF WILKES-BARRE, INC., a
Maryland corporation, SINCLAIR RADIO OF WILKES-BARRE LICENSEE, INC., a Delaware
corporation, SUPERIOR COMMUNICATIONS OF KENTUCKY, INC., a Delaware corporation,
SUPERIOR COMMUNICATIONS OF OKLAHOMA, INC., an Oklahoma corporation, SUPERIOR KY
LICENSE CORP., a Delaware corporation, SUPERIOR OK LICENSE CORP., a Delaware
corporation, TUSCALOOSA BROADCASTING INC., a Maryland corporation, WCGV, INC., a
Maryland corporation, WCGV LICENSEE, INC., a Delaware corporation, WDBB, INC., a
Maryland corporation, WLFL, INC., a Maryland corporation, WLFL LICENSEE, INC., a
Delaware corporation, WLOS LICENSEE, INC., a Delaware corporation, WPGH, INC., a
Maryland corporation, WPGH LICENSEE, INC., a Maryland corporation, WSMH, INC., a
Maryland corporation, WSMH LICENSEE, INC., a Delaware corporation, WSTR, INC., a
Maryland corporation, WSTR LICENSEE, INC., a Maryland corporation, WSYX, INC., a
Maryland corporation, WTTE, CHANNEL 28, INC., a Maryland corporation, WTTE,
CHANNEL 28 LICENSEE, INC., a Maryland corporation, WTTO, INC., a Maryland
corporation, WTTO LICENSEE, INC., a Delaware corporation, WTVZ, INC., a Maryland
corporation, WTVZ LICENSEE, INC., a Maryland
- 1 -
<PAGE>
corporation, WYZZ, INC., a Maryland corporation, and WYZZ LICENSEE, INC., a
Delaware corporation, (collectively, the "Guarantors"), and FIRST UNION NATIONAL
BANK, a national banking association organized under the laws of the United
States of America, as trustee (the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has executed and delivered an Indenture,
dated as of December 17, 1997 (the "Base Indenture", all capitalized terms used
in this First Supplemental Indenture and not otherwise defined being used as
defined in the Base Indenture), with the Trustee, to provide for the future
issuance of the Company's unsecured subordinated debentures, notes or other
evidence of indebtedness (the "Securities") thereto, to be issued from time to
time in one or more series as might be determined by the Company under the Base
Indenture, as may thereafter be supplemented; and
WHEREAS, pursuant to the terms of the Base Indenture, the
Company desires to provide for the establishment of a new series of its
Securities to be known as its "8 3/4% Senior Subordinated Notes due 2007" (the
"Notes"), the terms, provisions and conditions of such Notes and the form
thereof to be set forth as provided in the Base Indenture as supplemented by
this First Supplemental Indenture; and
WHEREAS, each Guarantor has duly authorized the issuance of a
guarantee (the "Guarantees") of the Notes, of substantially the tenor
hereinafter set forth, and to provide therefor, each Guarantor has duly
authorized the execution and delivery of this First Supplemental Indenture and
the Guarantee; and
WHEREAS, Section 901 of the Base Indenture provides, among
other things, that 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 to the Base Indenture without the consent of
holders of Securities for, among other things, the purpose of establishing the
forms and terms of securities of any series as permitted by Sections 201 and 301
thereof and to add to, change or eliminate any of the provisions of the Base
Indenture in respect of one or more series of Securities to be issued
thereunder; and
WHEREAS, the entry into this First Supplemental Indenture by
the parties hereto is in all respects authorized by the provisions of the Base
Indenture; and
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WHEREAS, all things necessary have been done to make this
First Supplemental Indenture, when executed and delivered by the Company and the
Guarantors, the legal, valid and binding agreement of the Company and the
Guarantors, in accordance with its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Notes by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Notes, as follows:
ARTICLE ONE
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RELATION TO INDENTURE; GENERAL PROVISIONS
Section 101. Relation to Indenture. This First Supplemental
Indenture constitutes an integral part of the Base Indenture but is effective
only with respect to the Notes issued under the Indenture.
Section 102. General Provisions. For all purposes of this First
Supplemental Indenture:
(a) references herein to the Indenture shall mean the Base
Indenture as supplemented by this First Supplemental Indenture;
(b) a term defined in the Base Indenture has the same meaning
when used in this First Supplemental Indenture unless otherwise defined herein
(in which case the definition set forth herein shall govern);
(c) a term defined anywhere in this First Supplemental Indenture
has the same meaning throughout;
(d) the singular includes the plural and vice versa;
(e) headings are for convenience of reference only and do not
affect interpretation;
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(f) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(g) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with GAAP;
(h) 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
(i) all references to $, US$, dollars or United States dollars
shall refer to the lawful currency of the United States of America.
ARTICLE TWO
-----------
AMENDMENT TO THE INDENTURE
Section 201. Definitions. Section 101 of the Indenture is amended
so that the following definitions are amended, restated or added in alphabetical
order:
"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.
"Asset Sale" means any sale, issuance, conveyance, transfer,
lease or other disposition (including, without limitation, by way of merger,
consolidation or Sale and Leaseback Transaction) (collectively, a "transfer"),
directly or indirectly, in one or a series of related transactions, of (i) any
Equity Interest of any Restricted Subsidiary; (ii) all or substantially all of
the properties and assets of any division or line of business of the Company or
its Restricted Subsidiaries; or (iii) any other properties or assets of the
Company or any Restricted Subsidiary, other than in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any transfer of properties and assets (A) that is governed by Section
801(a), (B) that is by the Company to any Wholly Owned Restricted Subsidiary, or
by any Restricted Subsidiary to the
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Company or any Wholly Owned Restricted Subsidiary in accordance with the terms
of this Indenture or (C) that aggregates not more than $1,000,000 in gross
proceeds.
"Asset Swap" means an Asset Sale by the Company or any Restricted
Subsidiary in exchange for properties or assets that will be used in the
business of the Company and its Restricted Subsidiaries existing on the date of
this Supplemental 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 Third Amended and Restated
Credit Agreement, dated as of May 20, 1997, between the Company, the
subsidiaries of the Company identified on the signature pages thereof under the
caption "SUBSIDIARY GUARANTORS," the lenders named therein and The Chase
Manhattan Bank, as agent, as amended and as such agreement may be further
amended, renewed, extended, substituted, refinanced, restructured, replaced,
supplemented or otherwise modified from time to time (including, without
limitation, any successive renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplementations or other modifications of the
foregoing). For all purposes under this Indenture, "Bank Credit Agreement" shall
include any amendments, renewals, extensions, substitutions, refinancings,
restructurings, replacements, supplements or any other modifications that
increase the principal amount of the Indebtedness or the commitments to lend
thereunder and have been made in compliance with Section 1008; provided that,
for purposes of the definition of "Permitted Indebtedness," no such increase may
result in the principal amount of Indebtedness of the Company under the Bank
Credit Agreement exceeding the amount permitted by Section 1008(b)(i).
"Change of Control" means the occurrence of any of the following
events: (i) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act), other than Permitted Holders, is or becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have beneficial ownership of all shares
that such Person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 40% of the total outstanding Voting Stock of the Company, provided that the
Permitted Holders "beneficially own" (as so defined) a lesser percentage of such
Voting Stock than such other Person and do not have the right or ability by
voting power, contract or otherwise to elect or designate for election a
majority of the Board of Directors of the Company; (ii) during any period of two
consecutive years, individuals who at the beginning of such period constituted
the Board of Directors
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of the Company (together with any new directors whose election to such Board or
whose nomination for election by the shareholders of the Company, was approved
by a vote of at least 66-2/3% of the directors then still in office who were
either directors at the beginning of such period or whose election or nomination
for election was previously so approved) cease for any reason to constitute a
majority of such Board of Directors then in office; (iii) the Company
consolidates with or merges with or into any Person or conveys, transfers or
leases all or substantially all of its assets to any Person, or any corporation
consolidates with or merges into or with the Company, in any such event pursuant
to a transaction in which the outstanding Voting Stock of the Company is changed
into or exchanged for cash, securities or other property, other than any such
transaction where the outstanding Voting Stock of the Company is not changed or
exchanged at all (except to the extent necessary to reflect a change in the
jurisdiction of incorporation of the Company) or where (A) the outstanding
Voting Stock of the Company is changed into or exchanged for (x) Voting Stock of
the surviving corporation which is not Disqualified Equity Interests or (y)
cash, securities and other property (other than Equity Interests of the
surviving corporation) in an amount which could be paid by the Company as a
Restricted Payment in accordance with Section 1009 (and such amount shall be
treated as a Restricted Payment subject to the provisions described under
Section 1009) and (B) no "person" or "group" other than Permitted Holders owns
immediately after such transaction, directly or indirectly, more than the
greater of (1) 40% of the total outstanding Voting Stock of the surviving
corporation and (2) the percentage of the outstanding Voting Stock of the
surviving corporation owned, directly or indirectly, by Permitted Holders
immediately after such transaction; or (iv) the Company is liquidated or
dissolved or adopts a plan of liquidation or dissolution other than in a
transaction which complies with the provisions described under Article Eight.
"Consolidated Interest Expense" means, without duplication, for
any period, the sum of (a) the interest expense of the Company and its
Consolidated Restricted Subsidiaries for such period, on a Consolidated basis,
including, without limitation, (i) amortization of debt discount, (ii) the net
cost under interest rate contracts (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 the Company during such
period, and all capitalized interest of the Company and its Consolidated
Restricted Subsidiaries, in each case as determined in accordance with GAAP
consistently applied.
"Consolidated Net Income (Loss)" means, for any period, the
Consolidated net income (or loss) of the Company and its Consolidated Restricted
Subsidiaries for such period as determined in accordance with GAAP consistently
applied, adjusted, to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) all extraordinary gains but not
losses (less all fees and expenses relating thereto), (ii) the portion of net
income (or loss) of the Company and its Consolidated
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Restricted Subsidiaries allocable to interests in unconsolidated Persons or
Unrestricted Subsidiaries, except to the extent of the amount of dividends or
distributions actually paid to the Company or its Consolidated Restricted
Subsidiaries by such other Person during such period, (iii) net income (or loss)
of any Person combined with the Company or any of its Restricted Subsidiaries on
a "pooling of interests" basis attributable to any period prior to the date of
combination, (iv) any gain or loss, net of taxes, realized upon the termination
of any employee pension benefit plan, (v) net gains but not losses (less all
fees and expenses relating thereto) in respect of dispositions of assets other
than in the ordinary course of business, or (vi) the net income of any
Restricted Subsidiary to the extent that the declaration of dividends or similar
distributions by that Restricted Subsidiary of that income is not at the time
permitted, directly or indirectly, by operation of the terms of its charter or
any agreement, instrument, judgment, decree, order, statute, rule or
governmental regulation applicable to that Restricted Subsidiary or its
shareholders.
"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.
"Cumulative Consolidated Interest Expense" means, as of any date
of determination, Consolidated Interest Expense from September 30, 1993 to the
end of the Company's most recently ended full fiscal quarter prior to such date,
taken as a single accounting period.
"Cumulative Operating Cash Flow" means, as of any date of
determination, Operating Cash Flow from September 30, 1993 to the end of the
Company's most recently ended full fiscal quarter prior to such date, taken as a
single accounting period.
"Debt to Operating Cash Flow Ratio" means, as of any date of
determination, the ratio of (a) the aggregate principal amount of all
outstanding Indebtedness of the Company and its Restricted Subsidiaries as of
such date on a Consolidated basis plus the aggregate liquidation preference or
redemption amount of all Disqualified Equity Interests of the Company (excluding
any such Disqualified Equity Interests held by the Company or a Wholly Owned
Restricted Subsidiary of the Company), to (b) Operating Cash Flow of the Company
and its Restricted Subsidiaries on a Consolidated basis for the four most recent
full fiscal quarters ending immediately prior to such date, determined on a pro
forma basis (and after giving pro forma effect to (i) the incurrence of such
Indebtedness and (if applicable) the application of the net proceeds therefrom,
including to refinance other Indebtedness, as if such Indebtedness was incurred,
and the application of such proceeds occurred, at the beginning of such
four-quarter period; (ii) the
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incurrence, repayment or retirement of any other Indebtedness by the Company and
its Restricted Subsidiaries since the first day of such four-quarter period as
if such Indebtedness was incurred, repaid or retired at the beginning of such
four-quarter period (except that, in making such computation, the amount of
Indebtedness under any revolving credit facility shall be computed based upon
the average balance of such Indebtedness at the end of each month during such
four-quarter period); (iii) in the case of Acquired Indebtedness, the related
acquisition, as if such acquisition had occurred at the beginning of such
four-quarter period; and (iv) any acquisition or disposition by the Company and
its Restricted Subsidiaries of any company or any business or any assets out of
the ordinary course of business, or any related repayment of Indebtedness, in
each case since the first day of such four-quarter period, assuming such
acquisition or disposition had been consummated on the first day of such
four-quarter period).
"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 Notes 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.
"Guarantor" means the Subsidiaries listed as guarantors in this
Indenture or any other guarantor of the Indenture Obligations. On the date
hereof, the Guarantors consist of all of the Company's Subsidiaries other than
Cresap Enterprises, Inc., KDSM, Inc., KDSM Licensee, Inc. and Sinclair Capital.
"Guarantor Senior Indebtedness" is defined as the principal of,
premium, if any, and interest (including interest accruing after the filing of a
petition initiating any proceeding under any state, federal or foreign
bankruptcy laws whether or not allowable as a claim in such proceeding) on any
Indebtedness of any Guarantor (other than as otherwise provided in this
definition), whether outstanding on the date of this Supplemental Indenture or
thereafter created, incurred or assumed, and whether at any time owing, actually
or contingent, unless, in the case of any particular Indebtedness, the
instrument creating or evidencing the same or pursuant to which the same is
outstanding expressly provides that such Indebtedness shall not be senior in
right of payment to any Guarantee. Without limiting the generality of the
foregoing, "Guarantor Senior Indebtedness" shall include (i) the principal of,
premium, if any, and interest (including interest accruing after the filing of a
petition initiating any proceeding under any state, federal or foreign
bankruptcy law whether or not allowable as a claim in such proceeding) and all
other obligations of every nature of any Guarantor from time to time owed to the
lenders (or their agent) under the Bank Credit Agreement; provided, however,
that any Indebtedness under any refinancing, refunding or replacement of the
Bank Credit
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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, (ii) Indebtedness evidenced by any guarantee of
the Founders' Notes and (iii) Indebtedness under Interest Rate Agreements.
Notwithstanding the foregoing, "Guarantor Senior Indebtedness" shall not include
(i) Indebtedness evidenced by the Guarantees, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of any Guarantor,
(iii) Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
any Guarantor, (iv) Indebtedness which is represented by Disqualified Equity
Interests, (v) any liability for foreign, federal, state, local or other taxes
owed or owing by any Guarantor to the extent such liability constitutes
Indebtedness, (vi) Indebtedness of any Guarantor to a Subsidiary or any other
Affiliate of the Company or any of such Affiliate's subsidiaries, (vii)
Indebtedness evidenced by any guarantee of any Subordinated Indebtedness or Pari
Passu Indebtedness, (viii) that portion of any Indebtedness which at the time of
issuance is issued in violation of this Indenture, (ix) Indebtedness owed by any
Guarantor for compensation to employees or for services and (x) any guarantee of
the Minority Note.
"Indenture Obligations" means the obligations of the Company and
any other obligor under this Indenture or under the Notes, 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 Notes and the performance of all other obligations to the Trustee
and the Holders under this Indenture and the Notes, according to the terms
hereof and thereof.
"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 any obligations in
respect of any Hedging Agreements (as defined in the Bank Credit Agreement).
"Local Marketing Agreement" means a local marketing arrangement,
sale agreement, time brokerage agreement, management agreement or similar
arrangement pursuant to which a Person (i) obtains the right to sell at least a
majority of the advertising inventory of a television station on behalf of a
third party, (ii) purchases at least a majority of the air time of a television
station to exhibit programming and sell advertising time, (iii) manages the
selling operations of a television station with respect to at least a majority
of the advertising inventory of such station, (iv) manages the acquisition of
programming for a television station, (v) acts as a program consultant for a
television station, or (vi) manages the operation of a television station
generally.
"Minority Note" means the promissory note, dated December 26,
1986, made by the Company to Frederick M. Himes, B. Stanley Resnick and Edward
A. Johnston, as
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representatives, pursuant to a stock purchase agreement, dated December 22,
1986, among the Company, Commercial Radio Institute, Inc., Chesapeake
Television, Inc. and certain individuals.
"Net Cash Proceeds" means (a) with respect to any Asset Sale by
any Person, the proceeds thereof in the form of cash or Temporary Cash
Investments including payments in respect of deferred payment obligations when
received in the form of, or stock or other assets when disposed of for, cash or
Temporary Cash Investments (except to the extent that such obligations are
financed or sold with recourse to the Company or any Restricted Subsidiary) net
of (i) brokerage commissions and other reasonable fees and expenses (including
fees and expenses of counsel and investment bankers) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale, (iii)
payments made to retire Indebtedness where payment of such Indebtedness is
secured by the assets or properties the subject of such Asset Sale, (iv) amounts
required to be paid to any Person (other than the Company or any Restricted
Subsidiary) owning a beneficial interest in the assets subject to the Asset Sale
and (v) appropriate amounts to be provided by the Company or any Restricted
Subsidiary, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by the Company or
any Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pension and other post-employment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee and (b) with respect to any
issuance or sale of Equity Interests, or debt securities or Equity Interests
that have been converted into or exchanged for Equity Interests, as referred to
under Section 1009, the proceeds of such issuance or sale in the form of cash or
Temporary Cash Investments, including payments in respect of deferred payment
obligations when received in the form of, or stock or other assets when disposed
for, cash or Temporary Cash Investments (except to the extent that such
obligations are financed or sold with recourse to the Company or any Restricted
Subsidiary), net of attorney's fees, accountant's fees and brokerage,
consultation, underwriting and other fees and expenses actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.
"Operating Cash Flow" means, for any period, the Consolidated Net
Income (Loss) of the Company and its Restricted Subsidiaries for such period,
plus (a) extraordinary net losses and net losses on sales of assets outside the
ordinary course of business during such period, to the extent such losses were
deducted in computing Consolidated Net Income (Loss), 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 (Loss), and any provision for
taxes utilized in computing the net losses under clause (a) hereof, plus (c)
Consolidated Interest Expense of the Company and its Restricted Subsidiaries for
such period, plus (d) depreciation, amortization and all other
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non-cash charges, to the extent such depreciation, amortization and other
non-cash charges were deducted in computing such Consolidated Net Income (Loss)
(including amortization of goodwill and other intangibles, including Film
Contracts and write-downs of Film Contracts, minus (e) any cash payments
contractually required to be made with respect to Film Contracts (to the extent
not previously included in computing such Consolidated Net Income (Loss)).
"Permitted Holders" means as of the date of determination (i) any
of David D. Smith, Frederick G. Smith, J. Duncan Smith and Robert E. Smith; (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 clause (i), (ii)
or (iv) or any trust for the benefit of any such trust; or (iv) in the event of
the incompetence or death of any of the Persons described in clauses (i) and
(ii), such Person's estate, executor, administrator, committee or other personal
representative or beneficiaries, in each case who at any particular date shall
beneficially own or have the right to acquire, directly or indirectly, Equity
Interests of the Company.
"Permitted Indebtedness" has the meaning specified in Section
1008.
"Permitted Investment" means (i) Investments in any Wholly Owned
Restricted Subsidiary; (ii) Indebtedness of the Company or a Restricted
Subsidiary described under clauses (vi) and (vii) of the definition of Permitted
Indebtedness; (iii) Temporary Cash Investments; (iv) Investments acquired by the
Company or any Restricted Subsidiary in connection with an Asset Sale permitted
under Section 1013 to the extent such Investments are non-cash proceeds as
permitted under such covenant; (v) guarantees of Indebtedness otherwise
permitted by the Indenture; (vi) Investments in existence on the date of this
Supplemental Indenture; (vii) loans up to an aggregate of $1,000,000 outstanding
at any time to employees pursuant to benefits available to the employees of the
Company or any Restricted Subsidiary from time to time in the ordinary course of
business; (viii) any Investments in the Notes; (ix) a Guarantee by any Guarantor
and any other guarantee given by a Guarantor of any Indebtedness of the Company
in accordance with this Indenture; (x) Investments by the Company or any
Restricted Subsidiary in a Person, if as a result of such Investment (I) such
Person becomes a Restricted Subsidiary or (II) such Person is merged,
consolidated with or into, or transfers or conveys substantially all of its
assets to, or is liquidated into, the Company or a Restricted Subsidiary; and
(xi) other Investments that do not exceed $5,000,000 at any time outstanding.
"Permitted Subsidiary Indebtedness" means:
(i) Indebtedness of any Guarantor under Capital Lease Obligations
incurred in the ordinary course of business; and
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(ii) Indebtedness of any Guarantor (a) issued to finance or
refinance the purchase or construction of any assets of such Guarantor or (b)
secured by a Lien on any assets of such Guarantor where the lender's sole
recourse is to the assets so encumbered, in either case (x) to the extent the
purchase or construction prices for such assets are or should be included in
"property and equipment" in accordance with GAAP and (y) if the purchase or
construction of such assets is not part of any acquisition of a Person or
business unit.
"Predecessor Note" of any particular Note means every previous
Note evidencing all or a portion of the same debt as that evidenced by such
particular Note; and, for the purposes of this definition, any Note
authenticated and delivered under Section 307 in exchange for a mutilated Note
or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.
"Preferred Equity Interest" , as applied to the Equity Interest
of any Person, means an Equity Interest of any class or classes (however
designated) which is preferred as to the payment of dividends or distributions,
or as to the distribution of assets upon any voluntary or involuntary
liquidation or dissolution of such person, over Equity Interests of any other
class of such Person.
"Public Equity Offering" means, with respect to any Person, an
underwritten public offering by such Person of some or all of its Equity
Interests (other than Disqualified Equity Interests), the net proceeds of which
(after deducting any underwriting discounts and commissions) exceed $10,000,000.
"Restricted Payment" has the meaning specified in Section 1009.
"Restricted Subsidiary" means a Subsidiary of the Company other
than an Unrestricted Subsidiary.
"Sale and Leaseback Transaction" means any transaction or series
of related transactions pursuant to which the Company or a Restricted Subsidiary
sells or transfers any property or asset in connection with the leasing, or the
resale against installment payments, of such property or asset to the seller or
transferor.
"Senior Indebtedness" is defined as the principal of, premium, if
any, and interest (including interest accruing after the filing of a petition
initiating any proceeding under any state, federal or foreign bankruptcy law
whether or not allowable as a claim in such proceeding) on any Indebtedness of
the Company (other than as otherwise provided in this definition), whether
outstanding on the date of this Supplemental 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
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such Indebtedness shall not be senior in right of payment to the Notes. Without
limiting the generality of the foregoing, "Senior Indebtedness" shall include
the principal of, premium, if any, and interest (including interest accruing
after the filing of a petition initiating any proceeding under any state,
federal or foreign bankruptcy law whether or not allowable as a claim in such
proceeding) and all other obligations of every nature of the Company from time
to time owed to the lenders (or their agent) under the Bank Credit Agreement;
provided, however, that any Indebtedness under any refinancing, refunding or
replacement of the Bank Credit Agreement shall not constitute Senior
Indebtedness to the extent that the Indebtedness thereunder is by its express
terms subordinate to any other Indebtedness of the Company, (ii) Indebtedness
outstanding under the Founders' Notes and (iii) Indebtedness under Interest Rate
Agreements. Notwithstanding the foregoing, "Senior Indebtedness" shall not
include (i) Indebtedness evidenced by the Notes, (ii) Indebtedness that is
subordinate or junior in right of payment to any Indebtedness of the Company,
(iii) Indebtedness which when incurred and without respect to any election under
Section 1111(b) of Title 11 of the United States Code, is without recourse to
the Company, (iv) Indebtedness which is represented by Disqualified Equity
Interests, (v) any liability for foreign, federal, state, local or other taxes
owed or owing by the Company 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, (viii) Indebtedness owed by the Company for compensation to
employees or for services and (ix) Indebtedness outstanding under the Minority
Note.
"Stated Maturity" when used with respect to any Indebtedness or
any installment of interest thereon, means the date specified in such
Indebtedness as the fixed date on which the principal of such Indebtedness or
such installment of interest is due and payable.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
that at the time of determination shall be an Unrestricted Subsidiary (as
designated by the Board of Directors of the Company, as provided below) and (ii)
any Subsidiary of an Unrestricted Subsidiary. The Board of Directors of the
Company may designate any Subsidiary of the Company (including any newly
acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary if all of
the following conditions apply: (a) such Subsidiary is not liable, directly or
indirectly, with respect to any Indebtedness other than Unrestricted Subsidiary
Indebtedness and (b) any Investment in such Subsidiary made as a result of
designating such Subsidiary an Unrestricted Subsidiary shall not violate the
provisions of Section 1019. Any such designation by the Board of Directors of
the Company shall be evidenced to the Trustee by filing with the Trustee a Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complies with the foregoing conditions. The
Board of Directors of the Company may designate any Unrestricted Subsidiary as a
Restricted Subsidiary; provided that immediately after
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<PAGE>
giving effect to such designation, the Company could incur $1.00 of additional
Indebtedness (other than Permitted Indebtedness) pursuant to the restrictions
under Section 1008. KDSM, Inc., KDSM License, Inc., Sinclair Capital and Cresap,
Inc. are Unrestricted Subsidiaries.
"Unrestricted Subsidiary Indebtedness" of any Unrestricted
Subsidiary means Indebtedness of such Unrestricted Subsidiary (i) as to which
neither the Company nor any Restricted Subsidiary is directly or indirectly
liable (by virtue of the Company or any such Restricted Subsidiary being the
primary obligor on, guarantor of, or otherwise liable in any respect to, such
Indebtedness), except Guaranteed Debt of the Company or any Restricted
Subsidiary to any Affiliate, in which case (unless the incurrence of such
Guaranteed Debt resulted in a Restricted Payment at the time of incurrence) the
Company shall be deemed to have made a Restricted Payment equal to the principal
amount of any such Indebtedness to the extent guaranteed at the time such
Affiliate is designated an Unrestricted Subsidiary and (ii) which, upon the
occurrence of a default with respect thereto, does not result in, or permit any
holder of any Indebtedness of the Company or any Restricted Subsidiary to
declare, a default on such Indebtedness of the Company or any Restricted
Subsidiary or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Wholly Owned Restricted Subsidiary" means a Restricted
Subsidiary all the Equity Interest of which is owned by the Company or another
Wholly Owned Restricted Subsidiary. The Wholly Owned Restricted Subsidiaries of
the Company on the date hereof consist of all of the Company" subsidiaries other
than Cresap Enterprises, Inc., KDSM, Inc. and KDSM License, Inc.
Section 202. Other Definitions. Section 102 of the Indenture is
amended so that the following definitions are added in alphabetical order:
Defined in
Term Section
---- ----------
"Change of Control Offer" 1016
"Change of Control Purchase Date" 1016
"Change of Control Purchase Notice" 1016
"Change of Control Purchase Price" 1016
Section 203. Establishment of Series. There is hereby
established, pursuant to the authority granted under the Base Indenture, a
series of Securities that shall be known and designated as the "8 3/4% Senior
Subordinated Notes due 2007" of the Company. The
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<PAGE>
Stated Maturity of the Notes shall be December 15, 2007, and the Notes shall
each bear interest at the rate of 8 3/4% from December 17, 1997 or from the most
recent Interest Payment Date to which interest has been paid, as the case may
be, payable on June 15, 1998 and semiannually thereafter on June 15 and December
15 in each year, until the principal thereof is paid or duly provided for.
The aggregate principal amount of Notes which may be
authenticated and delivered is limited to $250,000,000 in principal amount of
Notes, except for Notes authenticated and delivered upon registration of
transfer of, or in exchange for, or in lieu of, other Notes pursuant to Section
303, 304, 305, 306, 307, 906, 1013, 1016 or 1108 of the Indenture.
The principal of, premium, if any, and interest on the Notes
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 Note Register. If any of the Notes 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 Notes shall be redeemable as provided in Article Eleven of
the Base Indenture. The terms of redemption are set forth in the form of the
Note as set forth in Section 204 and in Section 210 of this First Supplemental
Indenture.
The Notes shall be subordinated in right of payment to Senior
Indebtedness as provided in Article Twelve of the Indenture.
The obligations of the Company pursuant to the Notes shall be
guaranteed by each and every Guarantor as provided in Article Fourteen of the
Indenture.
The Notes shall be redeemable, at the option of the Holder, upon
a Change of Control as provided in Section 209 of this First Supplemental
Indenture.
At the election of the Company, the entire Indebtedness on the
Notes or certain of the Company's obligations and covenants and certain Events
of Default thereunder may be defeased as provided in Article Four of the
Indenture.
Section 204. Form of Notes.
--------------------------
(a) The form of the face of any Note authenticated and delivered
hereunder shall be substantially as follows:
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<PAGE>
SINCLAIR BROADCAST GROUP, INC.
---------------------------
8 3/4% SENIOR SUBORDINATED NOTE DUE 2007
No. ___________________ $_________________
SINCLAIR BROADCAST GROUP, INC., a Maryland corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to or registered assigns, the principal sum of United States dollars
($_________) on December 15, 2007, at the office or agency of the Company
referred to below, and to pay interest thereon from December 17, 1997, 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, in each year, commencing
June 15, 1998 at the rate of 8 3/4% per annum, in United States dollars, until
the principal hereof is paid or duly provided for.
The interest so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in such Indenture, be paid
to the Person in whose name this Note 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 Notes, 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 Note 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 Notes 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 Notes
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 Note 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 Note Register. If any of the Notes 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.
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<PAGE>
Reference is hereby made to the further provisions of this Note
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 Note 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 Note 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
and its corporate seal to be affixed or reproduced hereon.
Dated: SINCLAIR BROADCAST GROUP, INC.
By:
---------------------------
Attest:
- ------------------------------------
Secretary
(b) The form of the reverse of any Note authenticated and
delivered hereunder shall be substantially as follows:
SINCLAIR BROADCAST GROUP, INC.
---------------------------
8 3/4% SENIOR SUBORDINATED NOTE DUE 2007
This Note is one of a duly authorized issue of Notes of the
Company designated as its 8 3/4% Senior Subordinated Notes due 2007 (herein
called the "Notes"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $250,000,000, which may be
issued under an indenture between the Company and First Union National Bank, as
trustee (herein called the "Trustee", which includes any successor trustee under
the Indenture), dated as of December 17, 1997, as supplemented by a First
Supplemental Indenture among the Company, the Guarantors and
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<PAGE>
the Trustee, dated as of December 17, 1997 (such indenture as supplemented, 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 Notes, and of the terms upon
which the Notes 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 Notes and (b) certain restrictive covenants
and related Defaults and Events of Default, in each case upon compliance or
noncompliance with certain conditions set forth therein.
The Indebtedness evidenced by the Notes 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 Note is issued
subject to such provisions. Each Holder of this Note, by accepting the same, (a)
agrees to and shall be bound by such provisions, (b) authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in the Indenture and (c) appoints the
Trustee his attorney-in-fact for such purpose; provided, however, that, subject
to Section 406 of the Indenture, the Indebtedness evidenced by this Note shall
cease to be so subordinate and subject in right of payment upon any defeasance
of this Note referred to in clause (a) or (b) of the preceding paragraph.
The Notes are subject to redemption at any time on or after
December 15, 2002, at the option of the Company, in whole or in part, on not
less than 30 nor more than 60 days' prior notice by first-class mail in amounts
of $1,000 or an integral multiple of $1,000 at the following redemption prices
(expressed as a percentage of the principal amount), if redeemed during the
12-month period beginning December 15 of the years indicated below:
Redemption
Year Price
---- ----------
2002..................... 104.375%
2003..................... 102.917%
2004..................... 101.458%
and thereafter at 100% of the principal amount, 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 Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof
- 18 -
<PAGE>
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, 2000, the
Company may redeem up to 25% of the original principal amount of Notes with the
net proceeds of a Public Equity Offering of the Company at 108.75% of the
aggregate principal amount, 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). The Trustee
shall select the Notes or portions thereof to be redeemed pro rata, by lot or by
any other method the Trustee shall deem fair and reasonable.
Upon the occurrence of a Change of Control, each Holder may
require the Company to repurchase all or a portion of such Holder's Notes in an
amount of $1,000 or integral multiples of $1,000, at a purchase price in cash
equal to 101% of the principal amount thereof, together with accrued and unpaid
interest, if any, to the date of repurchase.
Under certain circumstances, in the event the Net Cash Proceeds
received by the Company or a Restricted Subsidiary from any Asset Sale, which
proceeds are not used to prepay Senior Indebtedness or invested in properties or
assets used in the businesses of the Company, exceed $5,000,000, the Company
will be required to apply such proceeds to the repayment of the Notes and
certain Indebtedness ranking pari passu to the Notes.
In the case of any redemption of Notes, interest installments
whose Stated Maturity is on or prior to the Redemption Date will be payable to
the Holders of such Notes of record as of the close of business on the relevant
record date referred to on the face hereof. Notes (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 Note in part only, a new Note
or Notes 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 Notes may be declared due and payable in the manner
and with the effect provided in the Indenture.
If this Note is in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Note is registrable on the Note Register of the Company, upon surrender of
this Note for registration of transfer at the office or agency of the Company
maintained for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Company and
- 19 -
<PAGE>
the Note Registrar duly executed by, the Holder hereof or its attorney duly
authorized in writing, and thereupon one or more new Notes, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
If this Note is a Global Note, except as described below, it is
not exchangeable for a Note or Notes in certificated form. The Notes 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 Notes, (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 Notes represented by such
Global Note 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 Notes in the name of, and cause the same to be delivered to, such
Person or Persons (or the nominee of any thereof).
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the Guarantors and the rights of the Holders under the Indenture and
the Guarantees at any time by the Company, the Guarantors and the Trustee with
the consent of the Holders of a specified percentage in aggregate principal
amount of the Notes at the time Outstanding. The Indenture also contains
provisions permitting the Holders of specified percentages in aggregate
principal amount of the Notes at the time Outstanding, on behalf of the Holders
of all the Notes, 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 Note shall be conclusive and
binding upon such Holder and upon all future Holders of this Note and of any
Note 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 Note.
No reference herein to the Indenture and no provision of this
Note or of the Indenture shall alter or impair the obligation of the Company,
any Guarantor or any other obligor upon the Notes (in the event such other
obligor is obligated to make payments in respect of the Notes), which is
absolute and unconditional, to pay the principal of, premium, if any, and
interest on this Note at the times, place, and rate, and in the coin or
currency, herein prescribed, subject to the subordination provisions of the
Indenture.
The Notes 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 Notes are
exchangeable for a like
- 20 -
<PAGE>
aggregate principal amount of Notes 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 Notes, 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 Note 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 Note 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 Note is overdue, and
neither the Company, the Trustee nor any agent shall be affected by notice to
the contrary.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PRINCIPLES THEREOF).
All terms used in this Note which are defined in the Indenture
and not otherwise defined herein shall have the meanings assigned to them in the
Indenture.
Section 205. Form of Guarantees. The form of Guarantee shall be
set forth on the Notes substantially as follows:
GUARANTEES
For value received, each of the undersigned hereby
unconditionally guarantees, jointly and severally, to the holder of this Note
the payment of principal of, premium, if any, and interest on this Note in the
amounts and at the time when due and interest on the overdue principal and
interest, if any, of this Note, if lawful, and the payment or performance of all
other obligations of the Company under the Indenture or the Notes, to the holder
of this Note and the Trustee, all in accordance with and subject to the terms
and limitations of this Note and Article Fourteen of the Indenture. These
Guarantees will not become effective until the Trustee duly executes the
certificate of authentication on this Note. 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.
- 21 -
<PAGE>
CHESAPEAKE TELEVISION, INC.
CHESAPEAKE TELEVISION
LICENSEE, INC.
FSF-TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KSMO, INC.
KSMO LICENSEE, INC.
KUPN LICENSEE, INC.
SCI-INDIANA LICENSEE, INC.
SCI-SACRAMENTO LICENSEE, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF ALBUQUERQUE
LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF BUFFALO LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF GREENVILLE
LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC.
SINCLAIR RADIO OF LOS ANGELES
LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS, INC.
SINCLAIR RADIO OF MEMPHIS LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NASHVILLE
LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF NEW ORLEANS
LICENSEE, INC.
SINCLAIR RADIO OF ST. LOUIS, INC.
SINCLAIR RADIO OF ST. LOUIS LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE, INC.
- 22 -
<PAGE>
SINCLAIR RADIO OF WILKES-BARRE
LICENSEE, INC.
SUPERIOR COMMUNICATIONS OF
KENTUCKY, INC.
SUPERIOR COMMUNICATIONS OF
OKLAHOMA, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
TUSCALOOSA BROADCASTING INC.
WCGV, INC.
WCGV LICENSEE, INC.
WDBB, INC.
WLFL, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSMH LICENSEE, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WSYX, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTTO LICENSEE, INC.
WTVZ, INC.
WTVZ LICENSEE, INC.
WYZZ, INC.
WYZZ LICENSEE, INC.
Attest By
--------------------- -------------------------
Name: Name:
Title: Title:
- 23 -
<PAGE>
Section 206. Denominations. The Notes shall be issuable only in
registered form without coupons and only in denominations of $1,000 and any
integral multiple thereof.
Section 207. Remedies. Sections 501 and 502 of the Base Indenture
are hereby replaced with the following for purposes of the Notes only:
" Section 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events which has occurred and is continuing (whatever the reason for
such Event of Default and whether it shall be occasioned by the provisions of
Article Twelve or be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) there shall be a default in the payment of any interest on
any Note (including any Penalty 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 Note at its Maturity (upon acceleration, optional
or mandatory redemption, required repurchase or otherwise);
(c) (i) there shall be a default in the performance, or breach,
of any covenant or agreement of the Company or any Guarantor under this
Indenture (other than a default in the performance or breach of a covenant or
agreement which is specifically dealt with in clause (a) or (b) or in clause
(ii), (iii) or (iv) of this clause (c)) and such default or breach shall
continue for a period of 30 days after written notice has been given, by
certified mail, (1) 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 Notes; (ii) there shall be a default in the performance or breach of
the provisions of Article Eight; (iii) the Company shall have failed to make or
consummate an Offer in accordance with the provisions of Section 1013; or (iv)
the Company shall have failed to make or consummate a Change of Control Offer in
accordance with the provisions of Section 1016;
(d) one or more defaults shall have occurred under any
agreements, indentures or instruments under which the Company, any Guarantor or
any Restricted Subsidiary then has outstanding Indebtedness in excess of
$5,000,000 in the aggregate
- 24 -
<PAGE>
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 t o be, or be
asserted in writing by any Guarantor or the Company not to be, in full force and
effect, and 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 Guarantors, or any Restricted Subsidiary or any
of their respective properties and shall not be discharged and either (a) any
creditor shall have commenced an enforcement proceeding upon such judgment,
order or decree or (b) there shall have been a period of 60 consecutive days
during which a stay of enforcement of such judgment or order, by reason of an
appeal or otherwise, shall not be in effect;
(g) any holder or holders of at least $5,000,000 in aggregate
principal amount of Indebtedness of the Company, any Guarantors, or any
Restricted Subsidiary after a default under such Indebtedness shall notify the
Trustee of the intended sale or disposition of any assets of the Company, any
Guarantors or any Restricted Subsidiary that have been pledged to or for the
benefit of such holder or holders to secure such Indebtedness or shall commence
proceedings, or take any action (including by way of set-off), to retain in
satisfaction of such Indebtedness or to collect on, seize, dispose of or apply
in satisfaction of Indebtedness, assets of the Company or any Restricted
Subsidiary (including funds on deposit or held pursuant to lock-box and other
similar arrangements);
(h) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company, any
Guarantor or any Restricted Subsidiary in an involuntary case or proceeding
under any applicable Bankruptcy Law or (ii) a decree or order adjudging the
Company, any Guarantor or any Restricted Subsidiary bankrupt or insolvent, or
seeking reorganization, arrangement, adjustment or composition of or in respect
of the Company, any Guarantor or any Restricted Subsidiary under any applicable
federal or state law, or appointing a custodian, receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Company, any Guarantor
or any Restricted Subsidiary or of any substantial part of their respective
properties, or ordering the winding up or liquidation of their affairs, and any
such decree or order for relief shall continue to be in effect, or any such
other decree or order shall be unstayed and in effect, for a period of 60
consecutive days; or
(i) (i) the Company, any Guarantor or any Restricted Subsidiary
commences a voluntary case or proceeding under any applicable Bankruptcy Law or
any other case or proceeding to be adjudicated bankrupt or insolvent, (ii) the
Company, any
- 25 -
<PAGE>
Guarantor or any Restricted Subsidiary consents to the entry of a decree or
order for relief in respect of the Company, any Guarantor or such Restricted
Subsidiary in an involuntary case or proceeding under any applicable Bankruptcy
Law or to the commencement of any bankruptcy or insolvency case or proceeding
against it, (iii) the Company, any Guarantor or any Restricted Subsidiary files
a petition or answer or consent seeking reorganization or relief under any
applicable federal or state law, (iv) the Company, any Guarantor or any
Restricted Subsidiary (1) consents to the filing of such petition or the
appointment of, or taking possession by, a custodian, receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company, any
Guarantor or such Restricted Subsidiary or of any substantial part of its
respective properties, (2) makes an assignment for the benefit of creditors or
(3) admits in writing its inability to pay its debts generally as they become
due, or (v) the Company, any Guarantor or any Restricted Subsidiary takes any
corporate action authorizing any such actions in this paragraph (i).
The Company shall deliver to the Trustee within five days after
the occurrence thereof, written notice, in the form of an Officers' Certificate,
of any Default, its status and what action the Company is taking or proposes to
take with respect thereto. Unless the Corporate Trust Office of the Trustee has
received written notice of an Event of Default of the nature described in this
Section, the Trustee shall not be deemed to have knowledge of such Event of
Default for the purposes of Article Five or for any other purpose.
Section 502. Acceleration of Maturity; Rescission and Annulment.
---------------------------------------------------
If an Event of Default (other than an Event of Default specified
in Sections 501(h) and (i)), shall occur and be continuing, the Trustee or the
Holders of not less than 25% in aggregate principal amount of the Notes
Outstanding may, and the Trustee at the request of the Holders of not less than
25% in aggregate principal amount of the Notes Outstanding shall, declare all
unpaid principal of, premium, if any, and accrued interest on all the Notes 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 Notes); 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 Notes by appropriate judicial
proceeding. If an Event of Default specified in clause (h) or (i) of Section 501
occurs and is continuing, then all the Notes shall ipso facto become and be
immediately due and payable, in an amount equal to the principal amount of the
Notes, together with accrued and unpaid interest, if any, to the date the Notes
become due and payable, without any declaration or other act on the part of the
Trustee or any Holder.
- 26 -
<PAGE>
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.
At any time after such declaration of acceleration has been made
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 Notes Outstanding, by written
notice to the Company and the Trustee, may rescind and annul such declaration
and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(i) all sums paid or advanced by the Trustee under
this Indenture and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel,
(ii) all overdue interest on all Notes,
(iii) the principal of and premium, if any, on any
Notes which have become due otherwise than by such
declaration of acceleration and interest thereon at a rate
borne by the Notes, and
(iv) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate borne by
the Notes; and
(b) all Events of Default, other than the non-payment of
principal of the Notes which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any right
consequent thereon provided in Section 513."
Section 208. Supplemental Indentures. Sections 901 and 902 of the
Base Indenture are hereby replaced with the following for purposes of the Notes
only:
"Section 901. Supplemental Indentures and Agreements without
-----------------------------------------------------------------
Consent of Holders.
- -------------------
Without the consent of any Holders, the Company and the
Guarantors, when authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter into one or more indentures supplemental hereto
or agreements or other
- 27 -
<PAGE>
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 Notes, and the assumption by any
such successor of the covenants of the Company or such Guarantor or obligor
herein and in the Notes 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 Notes 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 Notes, as applicable, herein, in the Notes 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 Notes or any Guarantee; provided
that, in each case, such provisions shall not adversely affect the interests of
the Holders;
(d) to comply with the requirements of the Commission in order
to effect or maintain the qualification of this Indenture under the Trust
Indenture Act, as contemplated by Section 905 or otherwise;
(e) to add a Guarantor pursuant to the requirements of Section
1014;
(f) to evidence and provide the acceptance of the appointment of
a successor trustee hereunder;
(g) to mortgage, pledge, hypothecate or grant a security
interest in favor of the Trustee for the benefit of the Holders as additional
security for the payment and performance of the Indenture Obligations, in any
property or assets, including any which are required to be mortgaged, pledged or
hypothecated, or in which a security interest is required to be granted to the
Trustee pursuant to this Indenture or otherwise; or
(h) to provide for uncertificated Notes in place of or in
addition to certificated Notes.
Section 902. Supplemental Indentures and Agreements with Consent
----------------------------------------------------
of Holders.
- -----------
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Notes, by Act of said Holders
delivered to the Company, each Guarantor, and the Trustee, the Company, and each
Guarantor (if a party thereto) when authorized by a Board Resolution, and the
Trustee may enter into an
- 28 -
<PAGE>
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 Notes or any
Guarantee; provided, however, that no such supplemental indenture, agreement or
instrument shall, without the consent of the Holder of each Outstanding Note
affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on, any Note, 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 Notes 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) (other than the
provisions of Section 1013);
(b) amend, change or modify the obligation of the Company to
make and consummate an Offer with respect to any Asset Sale or Asset Sales in
accordance with Section 1013 or the obligation of the Company to make and
consummate a Change of Control Offer in the event of a Change of Control in
accordance with Section 1016, including amending, changing or modifying any
definitions with respect thereto;
(c) reduce the percentage in principal amount of the Outstanding
Notes, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for any waiver or
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences provided for in this Indenture or with respect
to any Guarantee;
(d) modify any of the provisions of this Section or Sections 513
or 1022, except to increase the percentage in principal amount of the
Outstanding Notes, the consent of whose Holders is required for any such actions
or to provide that certain other provisions of this Indenture cannot be modified
or waived without the consent of the Holder of each Note 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 Notes or any Guarantee in any manner
adverse to the Holders of the Notes or any Guarantee;
- 29 -
<PAGE>
provided, further that no such modification or amendment may without the consent
of the holders of 66-2/3% of the outstanding Notes affected thereby, amend,
change or modify the obligation of the Company to make and consummate an Offer
with respect to any Asset Sale or Asset Sales in accordance with Section 1013,
including amending, changing or modifying any definitions with respect thereto.
Upon the written request of the Company and each Guarantor,
accompanied by a copy of a Board Resolution authorizing the execution of any
such supplemental indenture or Guarantee, and upon the filing with the Trustee
of evidence of the consent of Holders as aforesaid, the Trustee shall, subject
to Section 903, join with the Company and each Guarantor in the execution of
such supplemental indenture or Guarantee.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture or
Guarantee or agreement or instrument relating to any Guarantee, but it shall be
sufficient if such Act shall approve the substance thereof."
Section 209. Covenants.
---------
(a) Section 1005 of the Base Indenture is hereby replaced with
the following for purposes of the Notes only:
"Section 1005. Payment of Taxes and Other Claims.
----------------------------------
The Company will pay or discharge or cause to be paid or
discharged, on or before the date the same shall become due and payable, (a) all
taxes, assessments and governmental charges levied or imposed upon the Company
or any Subsidiary shown to be due on any return of the Company or any Subsidiary
or otherwise assessed or upon the income, profits or property of the Company or
any Subsidiary if failure to pay or discharge the same could reasonably be
expected to have a material adverse effect on the ability of the Company or any
Guarantor to perform its obligations hereunder and (b) all lawful claims for
labor, materials and supplies, which, if unpaid, would by law become a Lien upon
the property of the Company or any Subsidiary, except for any Lien permitted to
be incurred under Section 1012 if failure to pay or discharge the same could
reasonably be expected to have a material adverse effect on the ability of the
Company or any Guarantor to perform its obligations hereunder; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and in respect of which
appropriate reserves (in the good faith judgment of management of the
- 30 -
<PAGE>
Company) are being maintained in accordance with generally accepted accounting
principles consistently applied."
(b) Sections 1008 and 1009 of the Base Indenture are hereby
renumbered as Sections 1021 and 1022, respectively, and Sections 1010 through
1020 as follows are added to the Base Indenture, for purposes of the Notes only:
"Section 1008. Limitation on Indebtedness.
--------------------------
(a) The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, assume or directly or indirectly guarantee or in
any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Indebtedness), except that the Company may
incur Indebtedness and a Guarantor may incur Permitted Subsidiary Indebtedness
if, in each case, the Debt to Operating Cash Flow Ratio of the Company and its
Restricted Subsidiaries at the time of the incurrence of such Indebtedness,
after giving pro forma effect thereto, is 7:1 or less.
(b) The foregoing limitation will not apply to the incurrence of
any of the following (collectively, "Permitted Indebtedness"):
(i) Indebtedness of the Company under the Bank Credit
Agreement in an aggregate principal amount at any one time outstanding not to
exceed $50,000,000 under any revolving credit facility thereunder;
(ii) Indebtedness of the Company pursuant to the Notes and
Indebtedness of any Guarantor pursuant to a Guarantee;
(iii) Indebtedness of any Guarantor consisting of a guarantee
of the Company's Indebtedness under the Bank Credit Agreement;
(iv) Indebtedness of the Company or any Restricted Subsidiary
outstanding on the date of this Supplemental Indenture and listed on Schedule I
hereto;
(v) Indebtedness of the Company owing to a Restricted
Subsidiary; provided that any Indebtedness of the Company owing to a Restricted
Subsidiary that is not a Guarantor is made pursuant to an intercompany note in
the form attached to this Supplemental Indenture as Exhibit A and is
subordinated in right of payment from and after such time as the Notes shall
become due and payable (whether at Stated Maturity, acceleration or otherwise)
to the payment and performance of the Company's obligations under the Notes;
provided, further, that any disposition, pledge or transfer of any such
Indebtedness to a Person (other than a disposition, pledge or transfer to a
Wholly Owned Restricted Subsidiary or a pledge to or for the benefit of the
lenders under the Bank Credit Agreement) shall be deemed to be an incurrence of
such Indebtedness by the obligor not permitted by this clause (v);
- 31 -
<PAGE>
(vi) Indebtedness of a Wholly Owned Restricted Subsidiary
owing to the Company or another Wholly Owned Restricted Subsidiary; provided
that, with respect to Indebtedness owing to a Wholly Owned Subsidiary that is
not a Guarantor, (1) any such Indebtedness is made pursuant to an intercompany
note in the form attached to this Indenture as Exhibit A and (2) any such
Indebtedness shall be subordinated in right of payment from and after such time
as the obligations under the Guarantee by such Wholly Owned Restricted
Subsidiary shall become due and payable to the payment and performance of such
Wholly Owned Restricted Subsidiary's obligations under its Guarantee; provided,
further, that (1) any disposition, pledge or transfer of any such Indebtedness
to a Person (other than a disposition, pledge or transfer to the Company or a
Wholly Owned Restricted Subsidiary or pledge to or for the benefit of the
lenders under the Bank Credit Agreement) shall be deemed to be an incurrence of
such Indebtedness by the obligor not permitted by this clause (vi) and (2) any
transaction pursuant to which any Wholly Owned Restricted Subsidiary, which has
Indebtedness owing to the Company or any other Wholly Owned Restricted
Subsidiary, ceases to be a Wholly Owned Restricted Subsidiary shall be deemed to
be the incurrence of Indebtedness by such Wholly Owned Restricted Subsidiary
that is not permitted by this clause (vi);
(vii) guarantees of any Restricted Subsidiary made in
accordance with the provisions of Section 1014;
(viii) obligations of the Company entered into in the ordinary
course of business pursuant to Interest Rate Agreements designed to protect the
Company against fluctuations in interest rates in respect of Indebtedness of the
Company, as long as such obligations at the time incurred do not exceed the
aggregate principal amount of such Indebtedness then outstanding or in good
faith anticipated to be outstanding within 90 days of such incurrence;
(ix) any renewals, extensions, substitutions, refundings,
refinancings or replacements (collectively, a "refinancing") of any Indebtedness
described in clauses (ii), (iii), (iv) and (v) above, including any successive
refinancings so long as the aggregate principal amount of Indebtedness
represented thereby is not increased by such refinancing 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 and, in the case of Pari Passu or Subordinated Indebtedness, such
refinancing does not reduce the Average Life to Stated Maturity or the Stated
Maturity of such Indebtedness; and
(x) Indebtedness of the Company in addition to that described
in clauses (i) through (ix) above, and any renewals, extensions, substitutions,
refinancings, or
<PAGE>
replacements of such Indebtedness, so long as the aggregate principal amount of
all such Indebtedness shall not exceed $25,000,000.
Section 1009. Limitation on Restricted Payments. (a)The Company
shall not, and shall not permit any Restricted Subsidiary to, directly or
indirectly:
(i) declare or pay any dividend on, or make any distribution
to holders of, any of the Company's Equity Interests (other than dividends or
distributions payable solely in its Qualified Equity Interests);
(ii) purchase, redeem or otherwise acquire or retire for
value, directly or indirectly, any Equity Interest of the Company or any
Affiliate thereof (except Equity Interests held by the Company or a Wholly Owned
Restricted Subsidiary);
(iii) make any principal payment on, or repurchase, redeem,
defease, retire or otherwise acquire for value, prior to any scheduled principal
payment, sinking fund or maturity, any Subordinated Indebtedness;
(iv) declare or pay any dividend or distribution on any Equity
Interests of any Subsidiary to any Person (other than the Company or any of its
Wholly Owned Restricted Subsidiaries);
(v) incur, create or assume any guarantee of Indebtedness of
any Affiliate (other than a Wholly Owned Restricted Subsidiary of the Company);
or
(vi) make any Investment in any Person (other than any
Permitted Investments)
(any of the foregoing payments described in clauses (i) through (vi), other than
any such action that is a Permitted Payment, collectively, "Restricted
Payments") unless after giving effect to the proposed Restricted Payment (the
amount of any such Restricted Payment, if other than cash, as determined by the
Board of Directors of the Company, whose determination shall be conclusive and
evidenced by a Board Resolution), (1) no Default or Event of Default shall have
occurred and be continuing and such Restricted Payment shall not be an event
which is, or after notice or lapse of time or both, would be, an "event of
default" under the terms of any Indebtedness of the Company or its Restricted
Subsidiaries; and (2) the aggregate amount of all such Restricted Payments
declared or made after the date of this Supplemental Indenture does not exceed
the sum of:
(A) an amount equal to the Company's Cumulative
Operating Cash Flow less 1.4 times the Company's Cumulative Consolidated
Interest Expense;
- 33 -
<PAGE>
(B) the aggregate Net Cash Proceeds received after
December 9, 1993 by the Company
from capital contributions (other than from a Subsidiary) or from the issuance
or sale (other than to any of its Subsidiaries) of its Qualified Equity
Interests (except, in each case, to the extent such proceeds are used to
purchase, redeem or otherwise retire Equity Interests or Subordinated
Indebtedness as set forth below); and
(C) to the extent that any Investment constituting a
Restricted Payment (including an Investment in an Unrestricted Subsidiary) that
was made after the date of the Supplemental Indenture is sold or is otherwise
liquidated or repaid, 100% of the amount (to the extent not included in
Cumulative Operating Cash Flow) equal to the Net Cash Proceeds or Fair Market
Value of marketable securities received with respect to such Investment (less
the cost of the disposition of such Investment and net of taxes).
(b) Notwithstanding the foregoing, and in the case of clauses
(ii) through (v) below, so long as there is no Default or Event of Default
continuing, the foregoing provisions shall not prohibit the following actions
(clauses (i) through (v) being referred to as "Permitted Payments"):
(i) the payment of any dividend within 60 days after the date
of declaration thereof, if at such date of declaration such payment would be
permitted by the provisions of paragraph (a) of this Section and such payment
shall be deemed to have been paid on such date of declaration for purposes of
the calculation required by paragraph (a) of this Section;
(ii) any transaction with an officer or director of the
Company entered into in the ordinary course of business (including compensation
or employee benefit arrangements with any officer or director of the Company);
(iii) the repurchase, redemption, or other acquisition or
retirement of any Equity Interests of the Company in exchange for (including any
such exchange pursuant to the exercise of a conversion right or privilege in
connection therewith cash is paid in lieu of the issuance of fractional shares
or scrip), or out of the Net Cash Proceeds of, a substantially concurrent issue
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 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 Qualified Equity Interests are excluded
from clause (2)(B) of paragraph (a) of this Section; and
- 34 -
<PAGE>
(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 Notes; (3) has a Stated
Maturity for its final scheduled principal payment later than the Stated
Maturity for the final scheduled principal payment of the Notes; and (4) is
expressly subordinated in right of payment to the Notes at least to the same
extent as the Indebtedness to be refinanced.
Section 1010. Limitation on Transactions with Affiliates.
--------------------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, enter into or suffer to exist any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company (other than the Company or a Wholly Owned Restricted
Subsidiary) unless (a) such transaction or series of transactions is in writing
on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than would be available in a comparable
transaction in arm's-length dealings with an unrelated third party and (b) (i)
with respect to any transaction or series of transactions involving aggregate
payments in excess of $1,000,000, the Company delivers an Officers' Certificate
to the Trustee certifying that such transaction or series of related
transactions complies with clause (a) above and such transaction or series of
related transactions has been approved by a majority of the members of the Board
of Directors of the Company (and approved by a majority of Independent Directors
or, in the event there is only one Independent Director, by such Independent
Director) and (ii) with respect to any transaction or series of transactions
involving aggregate payments in excess of $5,000,000, an opinion as to the
fairness to the Company or such Restricted Subsidiary from a financial point of
view issued by an investment banking or appraisal 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
- 35-
<PAGE>
Subsidiaries with a Wholly Owned Restricted Subsidiary of the Company, and (C)
transactions in existence on the date of this Supplemental Indenture.
- 36 -
<PAGE>
Section 1011. Limitation on Senior Subordinated Indebtedness.
----------------------------------------------
The Company shall not, and shall not permit any Guarantor to,
directly or indirectly, create, incur, issue, assume, guarantee or otherwise in
any manner become directly or indirectly liable for or with respect to or
otherwise permit to exist any Indebtedness that is subordinate in right of
payment to any Indebtedness of the Company or such Guarantor, as the case may
be, unless such Indebtedness is also pari passu with the Notes or the Guarantee
of such Guarantor, or subordinate in right of payment to the Notes or such
Guarantee to at least the same extent as the Notes or such Guarantee are
subordinate in right of payment to Senior Indebtedness or Guarantor Senior
Indebtedness, as the case may be, as set forth in this Indenture.
Section 1012. Limitation on Liens.
--------------------
The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, affirm or suffer to exist
any Lien of any kind upon any of its property or assets (including any
intercompany notes), now owned or acquired after the date of this Supplemental
Indenture, or any income or profits therefrom, except if the Notes 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 Supplemental
Indenture and listed on Schedule II hereto;
(b) any Lien arising by reason of (i) any judgment, decree or
order of any court, so long as such Lien is adequately bonded and any
appropriate legal proceedings which may have been duly initiated for the review
of such judgment, decree or order shall not have been finally terminated or the
period within which such proceedings may be initiated shall not have expired;
(ii) taxes not yet delinquent or which are being contested in good faith; (iii)
security for payment of workers' compensation or other insurance; (iv) good
faith deposits in connection with tenders, leases, contracts (other than
contracts for the payment of money); (v) zoning restrictions, easements,
licenses, reservations, provisions, covenants, conditions, waivers, restrictions
on the use of property or minor irregularities of title (and with respect to
leasehold interests, mortgages, obligations, liens and other encumbrances
incurred, created, assumed or permitted to exist and arising by, through or
under a landlord or owner of the leased property, with or without consent of the
lessee), none of which materially impairs the use of any parcel of property
material to the operation of the business of the Company or any Subsidiary or
the value of such property for the purpose of such business; (vi) deposits to
secure public or statutory obligations, or in lieu of surety or appeal bonds;
(vii) surveys, exceptions, title defects, encumbrances, reservations of, or
rights of others for, rights of way, sewers, electric lines, telegraph or
telephone lines and other similar purposes or
- 37 -
<PAGE>
zoning or other restrictions as to the use of real property not interfering with
the ordinary conduct of the business of the Company or any of its Subsidiaries;
or (viii) operation of law in favor of mechanics, materialmen, laborers,
employees or suppliers, incurred in the ordinary course of business for sums
which are not yet delinquent or are being contested in good faith by
negotiations or by appropriate proceedings which suspend the collection thereof;
(c) any Lien now or hereafter existing on property of the
Company or any of its Restricted Subsidiaries securing Senior Indebtedness or
Guarantor Senior Indebtedness, in each case which Indebtedness is permitted
under the provisions of Section 1008 and provided that the provisions of Section
1014 are complied with;
(d) any Lien securing Acquired Indebtedness created prior to
(and not created in connection with or in contemplation of) the incurrence of
such Indebtedness by the Company or any Subsidiary, in each case which
Indebtedness is permitted under the provisions of Section 1008; provided that
any such Lien only extends to the assets that were subject to such Lien securing
such Acquired Indebtedness prior to the related transaction by the Company or
its Subsidiaries;
(e) any Lien securing Permitted Subsidiary Indebtedness; and
(f) any extension, renewal, refinancing or replacement, in whole
or in part, of any Lien described in the foregoing clauses (a) through (e) so
long as the amount of security is not increased thereby.
Section 1013. Limitation on Sale of Assets.
----------------------------
(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, consummate an Asset Sale
unless (i) at least 80% of the consideration from such Asset Sale (exclusive of
assumed Senior Indebtedness to which the Company and its Restricted Subsidiaries
have received a full and unconditional release from such liability in connection
with such Asset Sale) is received in cash and (ii) the Company or such
Restricted Subsidiary receives consideration at the time of such Asset Sale at
least equal to the Fair Market Value of the shares or assets sold (other than in
the case of an involuntary Asset Sale, as determined by the Board of Directors
of the Company and evidenced in a Board Resolution or in connection with an
Asset Swap, the Fair Market Value as determined in writing by a nationally
recognized investment banking or appraisal firm); provided, however that, in the
event that the Company or any Restricted Subsidiary engages in an Asset Sale
with any third party and receives in consideration therefor, or simultaneously
with such Asset Sale enters into, a Local Marketing Agreement with such third
party or any affiliate thereof, the Fair Market Value of such Local Marketing
Agreement (as determined in writing by a nationally recognized investment
banking or appraisal firm) shall be deemed cash and considered when
- 38 -
<PAGE>
determining whether such Asset Sale complies with the foregoing clauses (i) and
(ii). Notwithstanding the foregoing, clause (i) of the preceding sentence shall
not be applicable to any Asset Swap.
(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 Supplemental 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 Notes and any Pari Passu Indebtedness required to be repurchased under
the instrument governing such Pari Passu Indebtedness as follows: (i) the
Company shall make an offer to purchase (an "Offer") from all Holders of the
Notes in accordance with the procedures set forth in this Indenture in the
maximum principal amount (expressed as a multiple of $1,000) of Notes that may
be purchased out of an amount (the "Note Amount") equal to the product of such
Excess Proceeds multiplied by a fraction, the numerator of which is the
outstanding principal amount of the Notes, and the denominator of which is the
sum of the outstanding principal amount of the Notes and such Pari Passu
Indebtedness (subject to proration in the event such amount is less than the
aggregate Offered Price of all Notes tendered) and (ii) to the extent required
by such Pari Passu Indebtedness to permanently reduce the principal amount of
such Pari Passu Indebtedness, the Company shall make an offer to purchase or
otherwise repurchase or redeem Pari Passu Indebtedness (a "Pari Passu Offer") in
an amount (the "Pari Passu Debt Amount") equal to the excess of the Excess
Proceeds over the Note 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 Notes 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 Notes tendered pursuant to the
Offer is less than the Note 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
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<PAGE>
Company shall use such Deficiency in the business of the Company and its
Restricted Subsidiaries. Upon completion of the purchase of all the Notes
tendered pursuant to an Offer and repurchase of the Pari Passu Indebtedness
pursuant to a Pari Passu Offer, the amount of Excess Proceeds, if any, shall be
reset at zero.
(d) Whenever the Excess Proceeds received by the Company exceed
$5,000,000, such Excess Proceeds shall be set aside by the Company in a separate
account pending (i) deposit with the depositary or a Paying Agent of the amount
required to purchase the Notes or Pari Passu Indebtedness tendered in an Offer
or a Pari Passu Offer, (ii) delivery by the Company of the Offered Price to the
Holders of the Notes or Pari Passu Indebtedness tendered in an Offer or a Pari
Passu Offer and (iii) application, as set forth above, of Excess Proceeds in the
business of the Company and its Restricted Subsidiaries. Such Excess Proceeds
may be invested in Temporary Cash Investments, provided that the maturity date
of any such investment made after the amount of Excess Proceeds exceeds
$5,000,000 shall not be later than the Offer Date. The Company shall be entitled
to any interest or dividends accrued, earned or paid on such Temporary Cash
Investments, provided that the Company shall not withdraw such interest from the
separate account if an Event of Default has occurred and is continuing.
(e) If the Company becomes obligated to make an Offer pursuant
to clause (c) above, the Notes shall be purchased by the Company, at the option
of the Holder thereof, in whole or in part in integral multiples of $1,000, on a
date that is not earlier than 45 days and not later than 60 days from the date
the notice is given to Holders, or such later date as may be necessary for the
Company to comply with the requirements under the Exchange Act, subject to
proration in the event the Note Amount is less than the aggregate Offered Price
of all Notes tendered.
(f) The Company shall comply with the applicable tender offer
rules, including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with an Offer.
(g) The Company shall not, and shall not permit any Restricted
Subsidiary to, create or permit to exist or become effective any restriction
(other than restrictions existing under (i) Indebtedness as in effect on the
date of this Supplemental 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 Notes than those existing
on the date of this Supplemental 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 Notes or, if such Offer is made, to
pay for the Notes 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
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<PAGE>
send or cause to be sent by first-class mail, postage prepaid, to the Trustee
and to each Holder of the Notes, at his address appearing in the Note 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 Notes
at the Offered Price;
(2) the Offer Date;
(3) the instructions a Holder must follow in order to
have its Notes purchased in accordance with paragraph (c) of this
Section; and
(4) (i) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Quarterly Report on
Form 10-Q and any Current Report on Form 8-K of the Company filed
subsequent to such Quarterly Report, other than Current Reports
describing Asset Sales otherwise described in the offering
materials (or corresponding successor reports)(or in the event
the Company is not required to prepare any of the foregoing
Forms, the comparable information required pursuant to Section
1020), (ii) a description of material developments in the
Company's business subsequent to the date of the latest of such
Reports, (iii) if material, appropriate pro forma financial
information, and (iv) such other information, if any, concerning
the business of the Company which the Company in good faith
believes will enable such Holders to make an informed investment
decision.
(i) Holders electing to have Notes purchased hereunder will be
required to surrender such Notes 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 Notes purchased pursuant to this Section
1013 if the Company receives, not later than three Business Days prior to the
Offer Date, a telegram, telex, facsimile transmission or letter setting forth
(1) the name of the Holder, (2) the certificate number of the Note in respect of
which such notice of withdrawal is being submitted, (3) the principal amount of
the Note (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 Note purchased, and (5) the principal amount, if any, of such
Note (which shall be $1,000 or an integral multiple thereof) that remains
subject to the original notice of the Offer and that has been or will be
delivered for purchase by the Company.
(j) The Company shall (i) not later than the Offer Date, accept
for payment Notes 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
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<PAGE>
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust as provided in Section 1003) an amount of money in same day funds (or
New York Clearing House funds if such deposit is made prior to the Offer Date)
sufficient to pay the aggregate Offered Price of all the Notes or portions
thereof which 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 Notes or portions thereof accepted for payment by the
Company.
Subject to applicable escheat laws, as provided in the Notes, 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 Notes 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) Notes 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 Notes 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 Note 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 Note for purchase in
accordance with the foregoing provisions, such Note 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 Notes, or one or more Predecessor Notes, registered as such on the
relevant Regular Record Dates according to the terms and the provisions of
Section 309; provided, further, that Notes to be purchased are subject to
proration in the event the Excess Proceeds are less than the aggregate Offered
Price of all Notes tendered for purchase, with such adjustments as may be
appropriate by the Trustee so that only Notes in denominations of $1,000 or
integral multiples thereof, shall be purchased. If any Note 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 Note. Any Note 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 Note Registrar or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the Note
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 Note, without
service charge,
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<PAGE>
one or more new Notes 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 Note so surrendered that is not purchased.
Section 1014. Limitation on Issuances of Guarantees of and
-------------------------------------------------
Pledges for Indebtedness.
- ------------------------
(a) The Company shall not permit any Restricted Subsidiary,
other than the Guarantors, directly or indirectly, to secure the payment of any
Senior Indebtedness of the Company and the Company will not, and will not permit
any Restricted Subsidiary to, pledge any intercompany notes representing
obligations of any Restricted Subsidiary (other than the Guarantors) to secure
the payment of any Senior Indebtedness unless such Restricted Subsidiary
simultaneously executes and delivers a supplemental indenture to this Indenture
providing for a guarantee of payment of the Notes by such Restricted Subsidiary,
which guarantee shall be on the same terms as the guarantee of the Senior
Indebtedness (if a guarantee of Senior Indebtedness is granted by any such
Restricted Subsidiary) except that the guarantee of the Notes 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 Notes are
subordinated to Senior Indebtedness of the Company under this Indenture.
(b) The Company shall not permit any Restricted Subsidiary,
other than the Guarantors, directly or indirectly, to guarantee, assume or in
any other manner become liable with respect to any Indebtedness of the Company
(other than guarantees in existence on the date of the Supplemental Indenture)
unless such Restricted Subsidiary simultaneously executes and delivers a
supplemental indenture to this Indenture providing for a guarantee of the Notes
on the same terms as the guarantee of such Indebtedness except that if the Notes
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 Notes are subordinated to such
Indebtedness under this Indenture.
(c) Each guarantee created pursuant to the provisions described
in the foregoing paragraph is referred to as a "Guarantee" and the issuer of
each such Guarantee is referred to as a "Guarantor." Notwithstanding the
foregoing, any Guarantee by a Restricted Subsidiary of the Notes shall provide
by its terms that it shall be automatically and unconditionally released and
discharged upon (i) any sale, exchange or transfer, to any Person not an
Affiliate of the Company, of all of the Company's Equity Interest in, or all or
substantially all the assets of, such Restricted Subsidiary, which is in
compliance with this Indenture or (ii) (with respect to any Guarantees created
after the date of this Supplemental Indenture) the release by the holders of the
Indebtedness of the Company described in clauses (a) and (b) above of their
security interest or their guarantee by such Restricted Subsidiary (including
any deemed release upon payment in full of all
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<PAGE>
obligations under such Indebtedness), at a time when (A) no other Indebtedness
of the Company has been secured or guaranteed by such Restricted Subsidiary, as
the case may be, or (B) the holders of all such other Indebtedness which is
secured or guaranteed by such Restricted Subsidiary also release their security
interest in, or guarantee by, such Restricted Subsidiary (including any deemed
release upon payment in full of all obligations under such Indebtedness).
Section 1015. Restriction on Transfer of Assets.
---------------------------------
The Company and the Guarantors shall not sell, convey, transfer
or otherwise dispose of their respective assets or property to any of the
Company's Restricted Subsidiaries (other than any Guarantor), except for sales,
conveyances, transfers or other dispositions made in the ordinary course of
business and except for capital contributions to any Restricted Subsidiary, the
only material assets of which are broadcast licenses. 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."
Section 1016. Purchase of Notes upon a Change of Control.
------------------------------------------
(a) If a Change of Control shall occur at any time, then each
Holder of Notes shall have the right to require that the Company purchase such
Holder's Notes 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 Notes, 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 Note Register stating or
including:
(1) that a Change of Control has occurred, the date
of such event, and that such Holder has the right to require the
Company to repurchase such Holder's Notes 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
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<PAGE>
historical income, cash flow and capitalization after giving
effect to such Change of Control);
(3) (i) the most recently filed Annual Report on Form
10-K (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Quarterly Report on
Form 10-Q, as applicable, and any Current Report on Form 8-K of
the Company filed subsequent to such Quarterly Report (or in the
event the Company is not required to prepare any of the foregoing
Forms, the comparable information required to be prepared by the
Company and any Guarantor pursuant to Section 1020), (ii) a
description of material developments in the Company's business
subsequent to the date of the latest of such reports and (iii)
such other information, if any, concerning the business of the
Company which the Company in good faith believes will enable such
Holders to make an informed investment decision;
(4) that the Change of Control Offer is being made
pursuant to this Section 1016(a) and that all Notes properly
tendered pursuant to the Change of Control Offer will be accepted
for payment at the Change of Control Purchase Price;
(5) the Change of Control Purchase Date which shall
be a Business Day no earlier than 30 days nor later than 60 days
from the date such notice is mailed, or such later date as is
necessary to comply with requirements under the Exchange Act;
(6) the Change of Control Purchase Price;
(7) the names and addresses of the Paying Agent and
the offices or agencies referred to in Section 1002;
(8) that Notes must be surrendered on or prior to the
Change of Control Purchase Date to the Paying Agent at the office
of the Paying Agent or to an office or agency referred to in
Section 1002 to collect payment;
(9) that the Change of Control Purchase Price for any
Note 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 Notes
and Change of Control Purchase Notice;
(11) that any Note not tendered will continue to
accrue interest; and
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<PAGE>
(12) that, unless the Company defaults in the payment
of the Change of Control Purchase Price, any Note 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 Notes,
the Holder of the Note in respect of which such proper tender was made shall
(unless the tender of such Note is properly withdrawn) thereafter be entitled to
receive solely the Change of Control Purchase Price with respect to such Note.
Upon surrender of any such Note for purchase in accordance with the foregoing
provisions, such Note 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 Notes, or one or more Predecessor Notes, registered as
such on the relevant Regular Record Dates according to the terms and the
provisions of Section 309. If any Note tendered for purchase shall not be so
paid upon surrender thereof, the principal thereof (and premium, if any,
thereon) shall, until paid, bear interest from the Change of Control Purchase
Date at the rate borne by such Note. Holders electing to have Notes purchased
will be required to surrender such Notes 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 Note 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 Note Registrar or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Note 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 Note, without service charge, one or more new Notes 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
Note so surrendered that is not purchased.
(d) The Company shall (i) not later than the Change of Control
Purchase Date, accept for payment Notes or portions thereof tendered pursuant to
the Change of Control Offer, (ii) not later than 11:00 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 Notes 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 Notes or
portions thereof accepted for payment by the Company. The Paying Agent shall
promptly mail or deliver to Holders of Notes so accepted payment in an amount
equal to the Change of Control Purchase Price of the Notes purchased from each
such Holder, and the Company shall execute and the Trustee shall promptly
authenticate and mail or deliver to such Holders a new Note equal in principal
amount to any
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<PAGE>
unpurchased portion of the Note surrendered. Any Notes not so accepted shall be
promptly mailed or delivered by the Paying Agent at the Company's expense to the
Holder thereof. The Company will publicly announce the results of the Change of
Control Offer on the Change of Control Purchase Date. For purposes of this
Section 1016, the Company shall choose a Paying Agent which shall not be the
Company.
(e) A Change of Control Purchase Notice may be withdrawn before
or after delivery by the Holder to the Paying Agent at the office of the Paying
Agent of the Note to which such Change of Control Purchase Notice relates, by
means of a written notice of withdrawal delivered by the Holder to the Paying
Agent at the office of the Paying Agent or to the office or agency referred to
in Section 1002 to which the related Change of Control Purchase Notice was
delivered not later than three Business Days prior to the Change of Control
Purchase Date specifying, as applicable:
(1) the name of the Holder;
(2) the certificate number of the Note in respect of
which such notice of withdrawal is being submitted;
(3) the principal amount of the Note (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 Note (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, as provided in the Notes,
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 Notes or portions thereof to be
purchased, then the Trustee shall hold such excess for the Company and (y)
unless otherwise directed by the Company in writing, promptly after the Business
Day following the Change of Control Purchase Date the Trustee shall return any
such excess to the Company together with interest, if any, thereon.
(g) The Company shall comply with the applicable tender offer
rules, including Rule 14e-1 under the Exchange Act, and any other applicable
securities laws or regulations in connection with a Change of Control Offer.
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<PAGE>
Section 1017. Limitation on Subsidiary Equity Interests.
-----------------------------------------
The Company shall not permit any Restricted Subsidiary of the
Company to issue any Equity Interests, except for (a) Equity Interests issued to
and held by the Company or a Wholly Owned Restricted Subsidiary, and (b) Equity
Interests issued by a Person prior to the time (A) such Person becomes a
Restricted Subsidiary, (B) such Person merges with or into a Restricted
Subsidiary or (C) a Restricted Subsidiary merges with or into such Person;
provided that such Equity Interests were not issued or incurred by such Person
in anticipation of the type of transaction contemplated by subclause (A), (B) or
(C).
Section 1018. Limitation on Dividends and Other Payment
-----------------------------------------------
Restrictions Affecting Subsidiaries.
- -----------------------------------
The Company shall not, and shall not permit any of its Restricted
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the ability of any
Restricted Subsidiary of the Company to (i) pay dividends or make any other
distribution on its Equity Interests, (ii) pay any Indebtedness owed to the
Company or a Restricted Subsidiary of the Company, (iii) make any Investment in
the Company or a Restricted Subsidiary of the Company or (iv) transfer any of
its properties or assets to the Company or any Restricted Subsidiary, except (a)
any encumbrance or restriction pursuant to an agreement in effect on the date of
this Supplemental Indenture and listed on Schedule III hereto; (b) any
encumbrance or restriction, with respect to a Restricted Subsidiary that is not
a Subsidiary of the Company on the date of this Supplemental 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 Notes than those under or pursuant to the agreement evidencing the
Indebtedness so extended, renewed, refinanced or replaced or are not more
restrictive than those set forth in this Indenture; and (d) any encumbrance or
restriction created pursuant to an asset sale agreement, stock sale agreement or
similar instrument pursuant to which an Asset Sale permitted under Section 1013
is to be consummated, so long as such restriction or encumbrance shall be
effective only for a period from the execution and delivery of such agreement or
instrument through a termination date not later than 270 days after such
execution and delivery.
Section 1019. Limitation on Unrestricted Subsidiaries.
---------------------------------------
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<PAGE>
The Company shall not make, and shall not permit any of its
Restricted Subsidiaries to make, any Investments in Unrestricted Subsidiaries
if, at the time thereof, the aggregate amount of such Investments would exceed
the amount of Restricted Payments then permitted to be made pursuant to Section
1009. Any Investments in Unrestricted Subsidiaries permitted to be made pursuant
to this covenant (i) will be treated as the payment of a Restricted Payment in
calculating the amount of Restricted Payments made by the Company and (ii) may
be made in cash or property.
Section 1020. Provision of Financial Statements.
---------------------------------
Whether or not the Company is subject to Section 13(a) or 15(d)
of the Exchange Act, the Company shall, to the extent permitted under the
Exchange Act, file with the Commission the annual reports, quarterly reports and
other documents which the Company would have been required to file with the
Commission pursuant to such Sections 13(a) or 15(d) if the Company were so
subject, such documents to be filed with the Commission on or prior to the
respective dates (the "Required Filing Dates") by which the Company would have
been required so to file such documents if the Company were so subject. The
Company will also in any event (x) within 15 days of each Required Filing Date
(i) transmit by mail to all Holders, as their names and addresses appear in the
Note Register, without cost to such Holders and (ii) file with the Trustee
copies of the annual reports, quarterly reports 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
and (y) if filing such documents by the Company with the Commission is not
permitted under the Exchange Act, promptly upon written request and payment of
the reasonable cost of duplication and delivery, supply copies of such documents
to any prospective Holder at the Company's cost."
Section 210. Redemption of Notes. In accordance with Article
Eleven of the Indenture, the following sets forth the terms and conditions on
which the Notes may be redeemed:
"Section 1101. Rights of Redemption.
--------------------
(a) The Notes may be redeemable, at the Company's option, in
whole or from time to time in part, at any time on or after December 15, 2002,
upon not less than 30 nor more than 60 days' prior notice by first class mail to
each Holder of Notes to be redeemed at its address appearing in the Note
Register and prior to Maturity at the following redemption prices ("Redemption
Prices"), expressed as percentages of the principal amount, plus accrued
interest to the dated fixed for such redemption (the "Redemption Date"), subject
to the right of Holders of record on the relevant Regular Record Date to
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<PAGE>
receive interest due on an Interest Payment Date that is on or prior to the
Redemption Date. If less than all of the Notes are to be redeemed, the Trustee
shall select the Notes or portions thereof to be redeemed pro rata, by lot or by
any other method the Trustee shall deem fair and reasonable.
(b) If redeemed during the twelve-month period beginning December
15, in the year indicated, the Redemption Price shall be:
Redemption
Year Price
---- ----------
2002.......................... 104.375%
2003.......................... 102.917%
2004.......................... 101.458%
and thereafter at 100% of the principal amount, in each case together with
accrued and unpaid interest, if any, to the redemption date (subject to the
right of the holders of record on relevant record dates to receive interest due
on an interest payment date).
(c) In addition, at any time on or prior to December 15, 2000,
the Company may redeem up to 25% of the original principal amount of Notes with
the net proceeds of a Public Equity Offering of the Company at 108.75% of the
aggregate principal amount, 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)."
Section 211. Release of Guarantees. The second paragraph of
Section 1414 of the Base Indenture is hereby replaced with the following for
purposes of the Notes only:
"This Guarantee shall terminate with respect to each Guarantor
and shall be automatically and unconditionally released and discharged as
provided in Section 1014(c)."
ARTICLE THREE
-------------
MISCELLANEOUS
-------------
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<PAGE>
Section 301. Continued Effectiveness of Indenture. Except as
amended hereby, the Indenture shall continue in full force and effect.
Section 302. Purpose. The purpose of this First Supplemental
Indenture is to effect the amendments set forth herein. Each of the Company and
the Guarantors represents and warrants that all the conditions and requirements
necessary to make this First Supplemental Indenture, when duly executed and
delivered, a valid and binding agreement in accordance with its terms and for
the purposes herein expressed, have been performed and fulfilled.
Section 303. Rights of Trustee. The Trustee executes this First
Supplemental Indenture only on the condition that it shall have and enjoy with
respect thereto all of the rights, duties, and immunities as set forth in the
Indenture.
Section 304. Successors and Assigns. All covenants and agreements
in this First Supplemental Indenture by the Company and the Guarantors shall
bind their respective successors and assigns, whether or not so expressed.
Section 305. Separability Clause. In case any provision in this
First Supplemental Indenture 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 306. Benefits of First Supplemental Indenture. Nothing in
this First Supplemental Indenture or in the related Notes, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Paying Agent and the Holders of Notes of any series created on or
after the date hereof, any benefit or any legal or equitable right, remedy or
claim under this First Supplemental Indenture.
Section 307. Governing Law. This First Supplemental Indenture
shall be governed by and construed in accordance with the laws of the State of
New York applicable to agreements made and to be performed in said state.
- 51 -
<PAGE>
Section 308. Counterparts. This First Supplemental Indenture may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
one and the same instrument.
Section 309. Effect of Headings and Table of Contents. The
Article and Section headings are for convenience only and shall not affect the
construction hereof.
- 52 -
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the day and year first
above written.
SINCLAIR BROADCAST GROUP, INC.,
as Issuer
CHESAPEAKE TELEVISION, INC.
CHESAPEAKE TELEVISION LICENSEE, INC.
FSF-TV, INC.
KABB LICENSEE, INC.
KDNL LICENSEE, INC.
KSMO, INC.
KSMO LICENSEE, INC.
KUPN LICENSEE, INC.
SCI-INDIANA LICENSEE, INC.
SCI-SACRAMENTO LICENSEE, INC.
SINCLAIR COMMUNICATIONS, INC.
SINCLAIR RADIO OF ALBUQUERQUE, INC.
SINCLAIR RADIO OF ALBUQUERQUE LICENSEE, INC.
SINCLAIR RADIO OF BUFFALO, INC.
SINCLAIR RADIO OF BUFFALO LICENSEE, INC.
SINCLAIR RADIO OF GREENVILLE, INC.
SINCLAIR RADIO OF GREENVILLE LICENSEE, INC.
SINCLAIR RADIO OF LOS ANGELES, INC.
SINCLAIR RADIO OF LOS ANGELES LICENSEE, INC.
SINCLAIR RADIO OF MEMPHIS, INC.
SINCLAIR RADIO OF MEMPHIS LICENSEE, INC.
SINCLAIR RADIO OF NASHVILLE, INC.
SINCLAIR RADIO OF NASHVILLE LICENSEE, INC.
SINCLAIR RADIO OF NEW ORLEANS, INC.
SINCLAIR RADIO OF NEW ORLEANS LICENSEE, INC.
- 53 -
<PAGE>
SINCLAIR RADIO OF ST. LOUIS, INC.
SINCLAIR RADIO OF ST. LOUIS LICENSEE, INC.
SINCLAIR RADIO OF WILKES-BARRE, INC.
SINCLAIR RADIO OF WILKES-BARRE LICENSEE, INC.
SUPERIOR COMMUNICATIONS OF KENTUCKY, INC.
SUPERIOR COMMUNICATIONS OF OKLAHOMA, INC.
SUPERIOR KY LICENSE CORP.
SUPERIOR OK LICENSE CORP.
TUSCALOOSA BROADCASTING INC.
WCGV, INC.
WCGV LICENSEE, INC.
WDBB, INC.
WLFL, INC.
WLFL LICENSEE, INC.
WLOS LICENSEE, INC.
WPGH, INC.
WPGH LICENSEE, INC.
WSMH, INC.
WSMH LICENSEE, INC.
WSTR, INC.
WSTR LICENSEE, INC.
WSYX, INC.
WTTE, CHANNEL 28, INC.
WTTE, CHANNEL 28 LICENSEE, INC.
WTTO, INC.
WTTO LICENSEE, INC.
WTVZ, INC.
- 54 -
<PAGE>
WTVZ LICENSEE, INC.
WYZZ, INC.
WYZZ LICENSEE, INC.,
as Guarantors
Attest By:
-------------------------- -------------------------------
Name: Name:
Title: Title:
FIRST UNION NATIONAL BANK,
as Trustee
By:
-------------------------------
Name:
Title:
- 55 -
<PAGE>
STATE OF ___________________________)
) ss.:
COUNTY OF __________________________)
On the 17th day of December, 1997, before me personally came
____________________________, to me known, who, being by me duly sworn, did
depose and say that he resides at _____________________________; that he is of
Sinclair Broadcast Group, Inc. and ________________________________ of each of
Chesapeake Television, Inc., WTTE, Channel 28, Inc., WPGH, Inc., WTTO, Inc.,
WCGV, Inc., Chesapeake Television Licensee, Inc., FSF-TV, Inc., KABB Licensee,
Inc., KDNL Licensee, Inc., KSMO, Inc., KSMO Licensee, Inc., KUPN Licensee, Inc.,
SCI-Indiana Licensee, Inc., SCI-Sacramento Licensee, Inc., Sinclair
Communications, Inc., Sinclair Radio of Albuquerque, Inc., Sinclair Radio of
Albuquerque Licensee, Inc., Sinclair Radio of Buffalo, Inc., Sinclair Radio of
Buffalo Licensee, Inc., Sinclair Radio of Greenville, Inc., Sinclair Radio of
Greenville Licensee, Inc., Sinclair Radio of Los Angeles, Inc., Sinclair Radio
of Los Angeles Licensee, Inc., Sinclair Radio of Memphis, Inc., Sinclair Radio
of Memphis Licensee, Inc., Sinclair Radio of Nashville, Inc., Sinclair Radio of
Nashville Licensee, Inc., Sinclair Radio of New Orleans, Inc., Sinclair Radio of
New Orleans Licensee, Inc., Sinclair Radio of St. Louis, Inc., Sinclair Radio of
St. Louis Licensee, Inc., Sinclair Radio of Wilkes-Barre, Inc., Sinclair Radio
of Wilkes-Barre Licensee, Inc., Superior Communications of Kentucky, Inc.,
Superior Communications of Oklahoma, Inc., Superior KY License Corp., Superior
OK License Corp., Tuscaloosa Broadcasting Inc., WCGV, Inc., WCGV Licensee, Inc.,
WDBB, Inc., WLFL, Inc., WLFL Licensee, Inc., WLOS Licensee, Inc., WPGH, Inc.,
WPGH Licensee, Inc., WSMH, Inc., WSMH Licensee, Inc., WSTR, Inc., WSTR Licensee,
Inc., WSYX, Inc., WTTE, Channel 28, Inc., WTTE, Channel 28 Licensee, Inc., WTTO,
Inc., WTTO Licensee, Inc., WTVZ, Inc., WTVZ Licensee, Inc., WYZZ, Inc., and WYZZ
Licensee, Inc., the corporations described in and which executed the foregoing
instrument; and that he signed his name thereto pursuant to authority of the
Boards of Directors of such corporations.
(NOTARIAL
SEAL)
-------------------------------
<PAGE>
STATE OF ___________________________)
) ss.:
COUNTY OF __________________________)
On the 17th day of December, 1997, before me personally came
_______________________, to me known, who, being by me duly sworn, did depose
and say that he resides at _____________________; that he is an authorized
officer of First Union National Bank, one of the corporations described in and
which executed the above instrument; that he knows the corporate seal of such
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed pursuant to authority of the Board of Directors of such
corporation; and that he signed his name thereto pursuant to like authority.
(NOTARIAL
SEAL)
------------------------------
<PAGE>
SCHEDULE I
EXISTING INDEBTEDNESS OF SINCLAIR BROADCAST GROUP, INC.
AND ITS RESTRICTED SUBSIDIARIES
1. Term Note, dated September 30, 1990, between Sinclair Broadcast Group, Inc.
(as borrower) and Julian S. Smith (as lender).
2. Term Note, dated September 30, 1990, between Sinclair Broadcast Group, Inc.
(as borrower) and Carolyn C. Smith (as lender).
3. Promissory Note, dated December 26, 1986, between Sinclair Broadcast Group,
Inc. (as borrower) and Frederick H. Hines, B. Stanley Resnick and Edward A.
Johnston (as representatives for the lenders).
4. Mortgage, dated April 8, 1981, between Sinclair Broadcast Group, Inc. (as
borrower) and Harry Rosen, as Trustee for Penn Montier Realty Company (as
lender), expiring in March 1996, for the property located at 500 Seco Road,
Monroeville, Pennsylvania, deeded to WPGH, Inc. on November 4, 1993.
5. Mortgage, dated September 30, 1981, between Sinclair Broadcast Group, Inc.
(as borrower) and Lafayette Life Insurance Company, expiring in October
1996, for the property located at 6130 Sunbury Road, Waterville, Ohio,
deeded to WPGH, Inc. on November 4, 1993.
6. Lease Agreement, dated January 1, 1991, between Chesapeake Television, Inc.
(as lessee) and Keyser Investment Group, Inc. (as lessor), for space
located at 2000-2008 W. 41st Street, Baltimore, MA.
7. Lease Agreement, dated April 2, 1987, between Chesapeake Television, Inc.
(as lessee) and Cunningham Communications, Inc. (as lessor), for space
located on the primary Baltimore broadcasting tower at 3900 Hooper Avenue,
Baltimore, MA.
8. Lease Agreement, dated March 16, 1988, between Chesapeake Television, Inc.
(as lessee) and Cunningham Communications, Inc. (as lessor), for space
located on the back-up Baltimore broadcasting tower at 1200 N. Rolling
Road, Baltimore, MA.
9. Lease Agreement, dated September 23, 1993, between WPGH, Inc. (as lessee)
and Gerstell Development Limited Partnership (as lessor), for tower and
building space located at 750 Ivory Avenue, Pittsburgh, PA.
10. Guaranty of Payment Agreement, dated October 15, 1993, by and between the
Company and Maryland National Bank, relating to Gerstell Development
Limited Partnership Loan from Maryland National Bank.
<PAGE>
11. Indenture, dated as of December 9, 1993, as amended, among Sinclair
Broadcast Group, Inc. (as borrower), the Guarantors named therein (as
guarantors), and First Union National Bank (as trustee).
12. Option Agreement, dated as of December 16, 1994, between The Smith Brothers
and Chase Manhattan bank (National Association), which Option Agreement was
assigned by The Smith Brothers to the Company on June 12, 1993.
13. Indenture, dated as of August 28, 1995, as amended, among Sinclair
Broadcast Group, Inc. (as borrower), the Guarantors named therein, (as
guarantors), and United States Trust Company of New York (as trustee).
14. Third Amended and Restated Credit Agreement, dated as of May 20, 1997,
between Sinclair Broadcast Group, Inc. (as borrower), various subsidiaries
of Sinclair Broadcast Group, Inc. party thereto (as guarantors), various
lenders (as lenders) and The Chase Manhattan Bank (as agent), as amended.
15. Indenture, dated as of July 2, 1997, as amended, among Sinclair Broadcast
Group, Inc. (as borrower), the Guarantors named therein, (as guarantors),
and First Union National Bank (as trustee).
[UPDATE]
<PAGE>
SCHEDULE II
EXISTING LIENS
1. Bank Credit Agreement.
2. Term Note dated September 30, 1990, between Sinclair Broadcast Group, Inc.
(as borrower) and Julian S. Smith (as lender).
3. Term Note dated September 30, 1990, between Sinclair Broadcast Group, Inc.
(as borrower) and Carolyn C. Smith (as lender).
[UPDATE]
<PAGE>
SCHEDULE III
EXISTING ENCUMBRANCES AND RESTRICTIONS
Notes
1. Encumbrances and restrictions under the Bank Credit Agreement, Founders'
Notes and Minority Note as in effect on the date hereof.
2. Indenture, dated as of December 9, 1993, as amended, among Sinclair
Broadcast Group, Inc. (as borrower), the Guarantors named therein (as
guarantors), and First Union National Bank (as trustee).
3. Indenture, dated as of August 28, 1995, as amended, among Sinclair
Broadcast Group, Inc. (as borrower), the Guarantors named therein, (as
guarantors), and United States Trust Company of New York (as trustee).
4. Indenture, dated as of July 2, 1997, as amended, among Sinclair Broadcast
Group, Inc. (as borrower), the Guarantors named therein, (as guarantors),
and First Union National Bank (as trustee).
5. The restrictions, if any, contained in the terms of the Company's Series B
Convertible Preferred Stock, par value $.01 per share.
6. The restrictions, if any, contained in the terms of the Company's Series C
Preferred Stock, par value $.01 per share.
7. The restrictions, if any, contained in the terms of the Company's Series D
Convertible Exchangeable Preferred Stock, par value $.01 per share.
[UPDATE]
<PAGE>
EXHIBIT A
INTERCOMPANY NOTE
-----------------
__________ __, 1997
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 to which has not been previously paid.
All capitalized terms used herein that are defined in, or by
reference in, the Indenture between Sinclair Broadcast Group, Inc., a Maryland
corporation (the "Company") and First Union National Bank, as trustee (the
"Trustee"), dated as of December __, 1997, as supplemented by the First
Supplemental Indenture between the Company, the guarantors party thereto and the
Trustee (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 Forgivable. 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 reflected on the grid
attached hereto.
(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.
<PAGE>
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 Notes, the Guarantees or any other Indebtedness ranking
senior to or pari passu with the Notes, or any Guarantors, including, without
limitation, any Indebtedness incurred under the Bank Credit Agreement; provided
that with respect to a Subsidiary in any specific instance, such Subsidiary is
also an obligor under the Indenture, the Notes, a Guarantee or such other senior
or pari passu Indebtedness, as the case may be, whether as a borrower, guarantor
or pledgor of collateral.
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, the amounts owing
under the Loans hereunder shall not be due and payable; provided, however, that
if such Event of Default or event of default has been waived, cured or
rescinded, such amounts shall no longer be due and payable in the case of clause
(x), and such amounts may be payable in the case of clause (y). If the Holder is
a Subsidiary, then the Holder hereby agrees that if it receives any payments or
distributions on any Loan from the Company or a Guarantor which is not payable
pursuant to clause (y) of the prior sentence after any Event of Default or event
or default described in clauses (i), (ii) or (iii) above has occurred, is
continuing and has not been waived, cured or rescinded, it will pay over and
deliver forthwith to the Company or such Guarantor, as the case may be, all such
payments and distributions.
ARTICLE III
MISCELLANEOUS
Section 3.01 Amendments, Etc. No amendment or waiver of any
provision of this intercompany note, or consent to depart herefrom is permitted
at any time for any reason, except with the consent of the Holders of not less
than a majority in aggregate principal amount of the Outstanding Notes.
<PAGE>
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 Notes
or any other Indebtedness ranking pari passu with or senior to, the Notes 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 (WITHOUT
GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF).
Section 3.07 Waivers. The Maker hereby waives presentment, demand
for payment, notice of protest and all other demands and notices in connection
with the delivery, acceptance, performance or enforcement hereof.
By:
-----------------------------
<PAGE>
BORROWINGS, MATURITIES, AND PAYMENTS OF PRINCIPAL
-------------------------------------------------
Amount of Maturity of Amount Principal Unpaid Principal
Borrowing/ Borrowing/ Paid or Prepaid Balance Notation
Date Principal Principal --------------- ---------------- Made by
- ---- --------- --------- ------
Wilmer, Cutler & Pickering
100 Light Street
Baltimore, Maryland
(410) 986-2800 (phone)
(410) 986-2828 (fax)
December 16, 1997
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Re: Sinclair Broadcast Group, Inc. Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We have acted as counsel to Sinclair Broadcast Group, Inc., a Maryland
corporation (the "Company"), in connection with a Registration Statement (as
amended, and including prospectus supplements filed pursuant to Rule 424 of the
Securities Act of 1933, the "Registration Statement") on Form S-3 filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended. The Registration Statement relates to the registration of
the issuance by the Company of, among other things, 8 3/4% Senior Subordinated
Notes due 2007 of the Company (the "Notes"). The Notes are to be sold pursuant
to an Underwriting Agreement (the "Underwriting Agreement") by and among the
Company, certain Guarantors named therein, Salomon Brothers Inc and Chase
Securities Inc. (the "Underwriters").
For the purposes of this opinion, we have examined copies of the
following documents:
1. The Registration Statement;
<PAGE>
Sinclair Broadcast Group, Inc.
December 16, 1997
Page 2
2. The Amended and Restated Articles of Incorporation of the
Company;
3. The form of the Senior Subordinated Indenture (the "Indenture")
between the Company and the First Union National Bank, as Trustee
(the "Trustee");
4. The form of the First Supplemental Indenture (the "Supplemental
Indenture") between the Company, The Guarantors named therein and
the Trustee;
5. The Bylaws of the Company;
6. The Underwriting Agreement; and
7. The Resolutions of the Board of Directors of the Company dated
November 14, 1997 and December 11, 1997 and the Resolutions of
the Pricing Committee of the Board of Directors dated December
11, 1997
In our examination of the aforesaid documents, we have assumed the
legal capacity of all natural persons, the genuineness of all signatures, the
completeness and authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
telecopied, photostatic or reproduced copies.
This opinion is limited to the laws of the United States, the General
Corporation Law of Maryland and New York contract law (but not including any
statutes, ordinances, administrative decisions, rules or regulations of any
political subdivision of the State of New York). We are members of the Bar of
the State of Maryland and do not hold ourselves out as being experts in the laws
of any other jurisdiction. Although we do not hold ourselves out as being
experts in the laws of any other jurisdiction, we have made such investigation
of the laws of the State of New York as we have deemed necessary to express the
opinions set forth herein. Our opinion is rendered only with respect to the laws
and the rules, regulations and orders thereunder that are currently in effect.
Based upon, subject to, and limited by the foregoing, we are of the
opinion that:
<PAGE>
Sinclair Broadcast Group, Inc.
December 16, 1997
Page 3
1. The Notes have been lawfully and duly authorized and such Notes,
upon execution and delivery of the Indenture and the Supplemental Indenture by
the Company and the Trustee and upon issuance, execution and delivery of the
Notes in accordance with the terms of the Indenture, the Supplemental Indenture
and the Underwriting Agreement, and assuming due authentication by the Trustee,
will be legal and binding obligations of the Company enforceable against the
Company in accordance with their terms except (a) as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights and remedies generally and (b) as such enforcement
is sought in a proceeding at law or in equity.
We assume no obligation to advise you of any changes in the foregoing
subsequent to the delivery of this opinion. This opinion has been prepared
solely for your use in connection with the filing of the Current Report on Form
8-K on December 16, 1997 and incorporation by reference into the Registration
Statement, and should not be quoted in whole or in part or otherwise be referred
to, nor otherwise be filed with or furnished to any governmental agency or other
person or entity, without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Current Report on Form 8-K and incorporation by reference into the Registration
Statement and to the use of our name therein under the caption "Legal Matters."
Sincerely,
WILMER, CUTLER & PICKERING
By: /s/ John B. Watkins
--------------------------------------
John B. Watkins, a partner
[LAW OFFICES THOMAS & LIBOWITZ, P.A. LETTERHEAD]
December 16, 1997
Sinclair Broadcast Group, Inc.
2000 West 41st Street
Baltimore, Maryland 21211
Re: Sinclair Broadcast Group Inc. Registration Statement on Form S-3
Dear Ladies and Gentlemen:
We have acted as counsel to Sinclair Broadcast Group, Inc., a Maryland
corporation (the "Company"), in connection with a Registration Statement (as
amended, and including prospectus supplements filed pursuant to Rule 424 of the
Securities Act of 1933, the "Registration Statement") on Form S-3 filed with the
Securities and Exchange Commission (the "Commission") under the Securities Act
of 1933, as amended. The Registration Statement relates to the registration of
the issuance by the Company of, among other things, 8 3/4% Senior Subordinated
Notes due 2007 of the Company (the "Notes"). The Notes are to be sold pursuant
to an Underwriting Agreement (the "Underwriting Agreement") by and among the
Company, certain Guarantors named therein, Salomon Brothers Inc and Chase
Securities Inc. (the "Underwriters").
For the purposes of this opinion, we have examined copies of the following
documents:
1. The Registration Statement;
2. The Amended and Restated Articles of Incorporation of the Company;
3. The form of the Senior Subordinated Indenture (the "Indenture")
between the Company and the First Union National Bank, as Trustee (the
"Trustee");
4. The form of the First Supplemental Indenture (the "Supplemental
<PAGE>
Sinclair Broadcast Group, Inc.
December 16, 1997
Page 2
Indenture") between the Company, the Guarantors named therein and the
Trustee;
5. The Bylaws of the Company;
6. The Underwriting Agreement; and
7. The Resolutions of the Board of Directors of the Company dated
November 14, 1997 and December 11, 1997, and the Resolutions of the
Pricing Committee of the Board of Directors dated December 11, 1997.
In our examination of the aforesaid documents, we have assumed the legal
capacity of all natural persons, the genuineness of all signatures, the
completeness and authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as certified,
telecopied, photostatic or reproduced copies.
We are members of the Bar of Maryland. This opinion is limited to the laws
of the United States of America and the State of Maryland; provided, however,
that "Applicable Law" includes only those laws that, in our experience, in
transactions of the type provided for in the Registration Statement, and with
respect to general business corporations engaged in regulated activities, are
normally applicable to such transactions. Insofar as this opinion relates to the
laws of any jurisdiction other than those jurisdictions subsumed within the
definition of the Applicable Laws, we have assumed with your consent, without
any independent investigation, that the law of each such other jurisdiction is
identical to the law of the State of Maryland. We express no opinion whatsoever
as to any other laws or regulations or as to laws relating to choice of law or
conflicts of law principles.
Based upon, subject to, and limited by the foregoing, we are of the opinion
that:
1. The Notes have been lawfully and duly authorized and such Notes, upon
execution and delivery of the Indenture and the Supplemental Indenture by the
Company and the Trustee and upon issuance, execution and delivery of the Notes
in accordance with the terms of the Indenture, the Supplemental Indenture and
the Underwriting Agreement, and assuming due authentication by the Trustee, will
be legal and binding obligations of the Company enforceable against the Company
in accordance with their terms except (a) as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights and remedies generally and (b) as such enforcement may be
limited by general principles of equity, regardless of whether enforcement is
sought in a proceeding at law or in equity.
We assume no obligation to advise you of any changes in the foregoing
subsequent
<PAGE>
Sinclair Broadcast Group, Inc.
December 16, 1997
Page 3
to the delivery of this opinion. This opinion has been prepared solely for your
use in connection with the filing of the Current Report on Form 8-K on December
16, 1997 and incorporation by reference into the Registration Statement, and
should not be quoted in whole or in part or otherwise be referred to, nor
otherwise be filed with or furnished to any governmental agency or other person
or entity, without our prior written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Current Report on Form 8-K and incorporations by reference into the Registration
Statement and to the use of our name therein under the caption "Legal Matters."
Sincerely,
/s/ THOMAS & LIBOWITZ, P.A.
---------------------------
THOMAS & LIBOWITZ, P.A.
