EXHIBIT 4.09
SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
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SUBSIDIARY GUARANTY AND SECURITY AGREEMENT (as the same may be
amended, supplemented or otherwise modified from time to time, this
"Agreement"), dated as of September 25, 1997, by and among the Persons party
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hereto (the "Current Guarantors"), such other Persons which from time to time
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may become party hereto (the "Additional Guarantors", and collectively with the
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Current Guarantors, the "Guarantors"), SALEM COMMUNICATIONS CORPORATION, a
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California corporation (the "Borrower"), and THE BANK OF NEW YORK (the
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"Administrative Agent"), in its capacity as Administrative Agent for the Lenders
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under the Credit Agreement referred to below and the Rate Protection Lenders as
hereinafter defined.
RECITALS
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I. Reference is made to the Credit Agreement, dated as of the date
hereof, by and among the Borrower, the Lenders party thereto, the Administrative
Agent, and Bank of America NT&SA, as Documentation Agent (as the same may be
amended, supplemented or otherwise modified from time to time, the "Credit
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Agreement").
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II. In the past, as now, the Borrower has provided financing for the
Guarantors and the Guarantors have relied upon the Borrower to provide such
financing. In addition, it is anticipated that, if the Guarantors execute and
deliver this Agreement, the Borrower will continue to provide such financing to
the Guarantors, and that the proceeds of the Loans to be made and Letters of
Credit to be issued will be used, in part, for the general corporate and working
capital purposes of the Guarantors. Pursuant to the Credit Agreement, the
Lenders will not make Loans and the Issuing Bank will not issue Letters of
Credit unless and until the Guarantors shall have executed and delivered this
Agreement and, therefore, in light of all of the foregoing, each Guarantor
expects to derive substantial benefit from the Credit Agreement and the
transactions contemplated thereby and, in furtherance thereof, has agreed to
execute and deliver this Agreement.
Therefore, in consideration of the Recitals, the terms and conditions
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Guarantors, the Borrower and
the Administrative Agent hereby agree as follows:
1. Defined Terms
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(a) Capitalized terms used herein which are not otherwise defined
herein shall have the respective meanings ascribed thereto in the Credit
Agreement.
(b) When used in this Agreement, the following capitalized terms shall
have the respective meanings ascribed thereto as follows:
"Borrower Obligations": all of the obligations and liabilities of the
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Borrower under the Loan Documents and under each Interest Rate Protection
Arrangement entered into by the Borrower with a Rate Protection Lender, in each
case whether fixed, contingent, now existing or hereafter arising, created,
assumed, incurred or
acquired, and whether before or after the occurrence of any Insolvency Event,
and including (i) any obligation or liability in respect of any breach of any
representation or warranty and (ii) all post-petition interest and funding
losses, whether or not allowed as a claim in any proceeding arising in
connection with an Insolvency Event.
"Collateral": as defined in section 4.
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"Equity Interest": (i) with respect to a corporation, the capital
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stock thereof, (ii) with respect to a partnership, a partnership interest
therein, all rights of a partner in such partnership, whether arising under the
partnership agreement of such partnership or otherwise; (iii) with respect to a
limited liability company, a membership interest therein, all rights of a member
of such limited liability company, whether arising under the limited liability
company agreement of such limited liability company or otherwise; (iv) with
respect to any other firm, association, trust, business enterprise or other
entity, any equity interest therein, any interest therein which entitles the
holder thereof to share in the revenue, income, earnings or losses thereof or to
vote or otherwise participate in any election of one or more members of the
Managing Person thereof, and (v) all warrants and options in respect of any of
the foregoing and all other securities which are convertible or exchangeable
therefor.
"Financing Statements": the UCC financing statements executed by the
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Guarantor and delivered pursuant to the Credit Agreement.
"Grants of Security Interests": collectively, the Grant of Security
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Interest (Patents) and the Grant of Security Interest (Trademarks), in the form
of Annexes C-1 and C-2 hereto, respectively, in each case appropriately
completed and signed by the Guarantor.
"Guarantor Obligations": with respect to each Guarantor, all of the
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obligations and liabilities of such Guarantor hereunder, whether fixed,
contingent, now existing or hereafter arising, created, assumed, incurred or
acquired.
"Insolvency Event": any Event of Default under section 9.1(h) or
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(i) of the Credit Agreement.
"NYUCC": the UCC as in effect in the State of New York on the date
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hereof.
"Office Location": as defined in section 5(c).
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"Patents": all patents issued under the laws of the United States of
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America and all patent applications filed with the United States Patent and
Trademark Office, and all of the rights associated with each of the foregoing.
"Proceeds": as defined in the NYUCC, together with (i) all dividends,
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distributions and income on and in respect of all of the Securities and
Instruments and all other rights and benefits in respect thereof, and (ii) with
respect to the Patents and Trademarks, all renewals thereof, all proceeds of
infringement suits, all rights to ▇▇▇ for infringement, all license royalties,
all reissues, divisions, continuations, extensions and continuations-in-part
thereof.
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"Registrations": (i) patents issued under the laws of the United
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States of America, (ii) patent applications filed with the United States Patent
and Trademark Office, and (iii) all registered trademarks.
"Rate Protection Lenders": collectively, the Lenders and any
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affiliates of the Lenders which from time to time enter or have entered into
Interest Rate Protection Arrangements with the Borrower.
"Supplement": a Supplement to this Agreement, duly completed, in the
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form of Annex A hereto.
"Trademarks": as to any Guarantor (i) all rights under the laws of the
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United States of America, and each State thereof, to trademarks, together with
all registrations thereof, applications therefor and all of the rights
associated therewith, and (ii) the goodwill of such Guarantor's business
symbolized by registered trademarks.
"Transaction Statement": a transaction statement in the form of
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Annex B hereto.
"UCC": with respect to any jurisdiction, Articles 1, 8 and 9 of the
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Uniform Commercial Code as from time to time in effect in such jurisdiction.
(c) When used in this Agreement, the following capitalized terms shall
have the respective meanings ascribed thereto in the NYUCC: "Account",
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"Certificated Security", "Chattel Paper", "Document", "Equipment", "Fixture",
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"General Intangible", "Instrument", "Inventory", "Issuer", "Secured Party",
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"Security", "Security Interest" and "Uncertificated Security".
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2. Guaranty
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(a) Subject to section 2(b) hereof, each Guarantor hereby absolutely,
irrevocably and unconditionally guarantees the full and prompt payment when due
(whether at stated maturity, by acceleration or otherwise) of the Borrower
Obligations. This Agreement constitutes a guaranty of payment and neither the
Administrative Agent, the Issuing Bank nor any Lender shall have any obligation
to enforce any Loan Document or any Interest Rate Protection Arrangement or
exercise any right or remedy with respect to any collateral security thereunder
by any action, including making or perfecting any claim against any Person or
any collateral security for any of the Borrower Obligations, prior to being
entitled to the benefits of this Agreement. The Administrative Agent may, at
its option, proceed against the Guarantors, or any one or more of them, in the
first instance, to enforce the Guarantor Obligations without first proceeding
against the Borrower or any other Person, and without first resorting to any
other rights or remedies, as the Administrative Agent may deem advisable. In
furtherance hereof, if the Administrative Agent, the Issuing Bank or any Lender
is prevented by law from collecting or otherwise hindered from collecting or
otherwise enforcing any Borrower Obligation in accordance with its terms, the
Administrative Agent, the Issuing Bank or such Lender, as the case may be, shall
be entitled to receive hereunder from the Guarantors after demand therefor, the
sums which would have been otherwise due had such collection or enforcement not
been prevented or hindered.
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(b) Anything contained in this Agreement to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be limited to
a maximum aggregate amount equal to the greatest amount that would not render
such Guarantor's obligations hereunder subject to avoidance as a fraudulent
transfer or conveyance under Section 548 of Title 11 of the United States Code
or any provisions of applicable state law (collectively, the "Fraudulent
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Transfer Laws"), in each case after giving effect to all other liabilities of
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such Guarantor, contingent or otherwise, that are relevant under the Fraudulent
Transfer Laws (specifically excluding, however, any liabilities of such
Guarantor (a) in respect of intercompany indebtedness to the Borrower or
Affiliates of the Borrower to the extent that such indebtedness would be
discharged in an amount equal to the amount paid by such Guarantor hereunder and
(b) under any guarantee of senior unsecured indebtedness or Indebtedness
subordinated in right of payment to the Obligations which guarantee contains an
assumption that indebtedness incurred under the Credit Agreement shall be deemed
to have been incurred prior to any indebtedness incurred under any such
guarantee or contains a limitation as to maximum amount similar to that set
forth in this subsection, pursuant to which the liability of such Guarantor
hereunder is included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as determined
under the applicable provisions of the Fraudulent Transfer Laws) of any rights
to subrogation, contribution, reimbursement, indemnity or similar rights of such
Guarantor pursuant to (i) applicable law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the Borrower
of obligations arising under guarantees by such parties.
(c) Each Guarantor agrees that the Guarantor Obligations may at any
time and from time to time exceed the maximum liability of such Guarantor
hereunder without impairing this Agreement or affecting the rights and remedies
of the Administrative Agent, the Issuing Bank or any Lender hereunder.
3. Absolute Obligation
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No Guarantor shall be released from liability hereunder unless and
until the Maturity Date shall have occurred and either (a) the Issuing Bank
shall not have any obligation under the Letters of Credit and the Borrower shall
have paid in full in cash the outstanding principal balance of the Loans,
together with all accrued interest thereon, all of the Reimbursement
Obligations, and all other sums then due and owing under the Loan Documents, or
(b) the Guarantor Obligations of such Guarantor shall have been paid in full in
cash. Each Guarantor acknowledges and agrees that (i) neither the
Administrative Agent, the Issuing Bank nor any Lender has made any
representation or warranty to such Guarantor with respect to the Borrower, its
Subsidiaries, any Loan Document, any Interest Rate Protection Arrangement, or
any agreement, instrument or document executed or delivered in connection
therewith, or any other matter whatsoever, and (ii) such Guarantor shall be
liable hereunder, and such liability shall not be affected or impaired,
irrespective of (A) the validity or enforceability of any Loan Document, any
Interest Rate Protection Arrangement, or any agreement, instrument or document
executed or delivered in connection therewith, or the collectability of any of
the Borrower Obligations, (B) the preference or priority ranking with respect to
any of the Borrower Obligations, (C) the existence, validity, enforceability or
perfection of any security interest or collateral security under
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any Loan Document, or any Interest Rate Protection Arrangement, or the release,
exchange, substitution or loss or impairment of any such security interest or
collateral security, (D) any failure, delay, neglect or omission by the
Administrative Agent, the Issuing Bank or any Lender to realize upon, enforce or
protect any direct or indirect collateral security, indebtedness, liability or
obligation, any Loan Document, any Interest Rate Protection Arrangement, or any
agreement, instrument or document executed or delivered in connection therewith,
or any of the Borrower Obligations, (E) the existence or exercise of any right
of set-off by the Administrative Agent, the Issuing Bank or any Lender, (F) the
existence, validity or enforceability of any other guaranty with respect to any
of the Borrower Obligations, the liability of any other Person in respect of any
of the Borrower Obligations, or the release of any such Person or any other
guarantor of any of the Borrower Obligations, (G) any act or omission of the
Administrative Agent, the Issuing Bank or any Lender in connection with the
administration of any Loan Document, any Interest Rate Protection Arrangement,
or any of the Borrower Obligations, (H) the bankruptcy, insolvency,
reorganization or receivership of, or any other proceeding for the relief of
debtors commenced by or against, any Person, (I) the disaffirmance or rejection,
or the purported disaffirmance or purported rejection, of any of the Borrower
Obligations, any Loan Document, any Interest Rate Protection Arrangement, or any
agreement, instrument or document executed or delivered in connection therewith,
in any bankruptcy, insolvency, reorganization or receivership, or any other
proceeding for the relief of debtor, relating to any Person, (J) any law,
regulation or decree now or hereafter in effect which might in any manner affect
any of the terms or provisions of any Loan Document, any Interest Rate
Protection Arrangement, or any agreement, instrument or document executed or
delivered in connection therewith or any of the Borrower Obligations, or which
might cause or permit to be invoked any alteration in the time, amount, manner
or payment or performance of any of the Borrower's obligations and liabilities
(including the Borrower Obligations), (K) the merger or consolidation of the
Borrower into or with any Person, (L) the sale by the Borrower of all or any
part of its assets, (M) the fact that at any time and from time to time none of
the Borrower Obligations may be outstanding or owing to the Administrative
Agent, the Issuing Bank or any Lender, (N) any amendment or modification of, or
supplement to, any Loan Document or any Interest Rate Protection Arrangement or
(O) any other reason or circumstance which might otherwise constitute a defense
available to or a discharge of the Borrower in respect of its obligations or
liabilities (including the Borrower Obligations) or of such Guarantor in respect
of any of the Guarantor Obligations (other than by the performance in full
thereof).
4. Grant of Security Interest
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To secure the prompt and complete payment, observance and performance
of the Guarantor Obligations, each Guarantor hereby grants to the Administrative
Agent, for its benefit and the ratable benefit of the Issuing Bank, the Lenders
and the Rate Protection Lenders, a Security Interest in and to all of such
Guarantor's right, title and interest in and to all: Accounts, Chattel Paper,
Documents, Equipment, Fixtures, General Intangibles, Instruments, including,
without limitation, Instruments evidencing intercompany Indebtedness, Inventory,
Patents, Trademarks, Equity Interests in each Person which now is or may
hereafter become a Subsidiary of such Guarantor or of the Borrower, whether or
not evidenced by a Security, and all Proceeds of all of the foregoing, and
including, without limitation, all licenses, approvals, permits and other
authorizations issued by the FCC, including the Proceeds of any sale or other
disposition thereof, in each case to the extent that a security interest therein
is not prohibited by law, provided that to
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the extent that a security interest therein is now so prohibited and to the
extent that such security interest at any time hereafter shall no longer be so
prohibited, then such security interest shall automatically and without any
further action attach and become fully effective at that time (giving effect to
any retroactive effect to any change in applicable law or regulation), in each
case whether now owned or existing or hereafter arising or acquired,
(collectively, the "Collateral").
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5. Representations and Warranties
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Each Guarantor hereby represents and warrants to the Administrative
Agent as follows:
(a) Binding Obligation. This Agreement constitutes the valid and
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binding obligation of such Guarantor, enforceable in accordance with its terms,
except as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws related to or affecting
the enforcement of creditors' rights generally.
(b) Solvency. Such Guarantor (if a Current Guarantor, both immediately
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before and after giving effect to this Agreement and to all Indebtedness
incurred by the Borrower in connection with the Loan Documents or, if an
Additional Guarantor, immediately before and after giving effect to this
Agreement) (i) is not insolvent, (ii) is not engaged, and is not about to
engage, in any business or transaction, for which it has unreasonably small
capital, and (iii) does not intend to incur, and does not believe that it would
incur, debts that would be beyond its ability to pay such debts as they mature,
in each case referred to above within the meaning of both Title XI of the United
States Code and Article 10 of New York Debtor Credit Law, each as in effect on
the date hereof.
(c) Chief Executive Office. As of the date hereof, such Guarantor's
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place of business or, if such Guarantor has more than one place of business, its
chief executive office, is, and has been continuously for the immediately
preceding 5 month period, located (the "Office Location") at, (i) if such
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Guarantor is a Current Guarantor, the address therefor referred to in Schedule
5(c) hereto, or (ii) if such Guarantor is an Additional Guarantor, the address
therefor set forth on Schedule 5(c) to the Supplement delivered by such
Additional Guarantor. Such Guarantor, (i) in the case of a Current Guarantor,
has not changed its legal name during the 6 year period immediately preceding
the date hereof, and (ii) in the case of an Additional Guarantor, has not
changed its legal name during the 6 year period immediately preceding the date
it became a Guarantor hereunder, except as otherwise disclosed on the Supplement
delivered by such Additional Guarantor.
(d) Information. If such Guarantor is a Current Guarantor, all of the
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information with respect to such Guarantor, or any of its Property, set forth on
each of the Schedules hereto is true, complete and correct as of the date
hereof. If such Guarantor is an Additional Guarantor, all of the information
with respect to such Guarantor, or any of its Property, set forth on each of the
Schedules to the Supplement delivered by such Additional Guarantor is true,
complete and correct as of the date of such Supplement. All of such Guarantor's
books, records and documents relating to its Guarantor Collateral are in all
material respects what they purport to be.
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(e) Security Interest. This Agreement, together with the delivery to
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the Administrative Agent of the Certificated Securities constituting Collateral
and the continuous possession thereof by the Administrative Agent in the State
of New York, creates a continuing "enforceable" Security Interest in the
Collateral in favor of the Administrative Agent. Upon (i) the presentation for
filing of the Financing Statements at the respective offices listed thereon
together with the appropriate filing fee therefor, (ii) the delivery to the
Administrative Agent of the Instruments constituting the Collateral, (iii) the
registration, in accordance with Article 8 of the NYUCC, of the Security
Interest granted hereby on the books of each Person which is an Issuer of an
Uncertificated Security constituting the Collateral, and (iv) the filing of the
Grants of Security Interests in the United States Patent and Trademark Office
with respect to Patents, Registrations, and Trademarks, (A) such Security
Interest shall be perfected, and (B) assuming that the Administrative Agent has
acted in "good faith and without notice of any adverse claim" within the meaning
of Article 8 of the NYUCC, the Administrative Agent shall be a "bona fide
purchaser", within the meaning of such Article, with respect to the Collateral
consisting of Securities.
(f) Absence of Liens. There are no Liens upon the Collateral other
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than Permitted Liens, if any.
(g) Equity Interests. As of the Effective Date with respect to each
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Current Guarantor, as of the date of the Supplement executed by an Additional
Guarantor with respect to such Additional Guarantor, (i) the Equity Interests
listed on Schedule 5(g) or Schedule 5(g) to the Supplement, as the case may be,
constitute all of the Equity Interests in each Subsidiary in which such
Guarantor has any right, title or interest, and each such Equity Interest issued
by a corporate Issuer has been duly authorized, validly issued and fully paid
for, and is non-assessable and (ii) except as set forth in such Schedule 5(g) or
Schedule 5(g) to such Supplement, (A) no Subsidiary of such Guarantor has issued
any securities convertible into, or options or warrants for, any common or
preferred equity securities thereof, (B) there are no agreements, voting trusts
or understandings binding upon such Guarantor or any of its Subsidiaries with
respect to the voting securities of any of such Subsidiary or affecting in any
manner the sale, pledge, assignment or other disposition thereof, including any
right of first refusal, option, redemption, call or other right with respect
thereto, whether similar or dissimilar to any of the foregoing and (C) no such
Equity Interest is represented by an Uncertificated Security.
(h) Chattel Paper, Documents and Instruments. With respect to each
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Current Guarantor, the Chattel Paper, Documents and Instruments listed on
Schedule 5(h) hereto constitute, as of the date hereof, and with respect to each
Additional Guarantor, the Chattel Paper, Documents and Instruments listed on
Schedule 5(h) to the Supplement delivered by such Additional Guarantor
constitute, as of the date of such Supplement, all of the Chattel Paper,
Documents and Instruments which constitute the Collateral, and, to the best of
such Guarantor's knowledge, all such Chattel Paper, Documents and Instruments
have been duly authorized, issued and delivered, and constitute the legal,
valid, binding and enforceable obligations of the respective makers thereof.
(i) Accounts. As of the date hereof, all records concerning any
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Account constituting the Collateral are located at its Office Location, and no
such Account is evidenced by a promissory note or other instrument.
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(j) Equipment and Inventory. Except for Equipment and Inventory in
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transit with common carriers, such Guarantor has exclusive possession and
control of all Equipment and Inventory constituting the Collateral, all of which
is as of the date hereof and has been continuously for the 5 month period
immediately preceding the date hereof (or, in the case of an Additional
Guarantor, the date of the Supplement delivered by such Additional Guarantor),
located at one or more of the places listed on (i) if such Guarantor is a
Current Guarantor, Schedule 5(j) hereto hereto, and (ii) if such Guarantor is an
Additional Guarantor, Schedule 5(j) hereto to the Supplement delivered by such
Additional Guarantor. Within the last 5-1/2 years as of the date hereof (or of
the Supplement of such Additional Guarantor) such Guarantor has not acquired any
Inventory or Equipment in connection with any bulk sale, or other than in the
ordinary course of business.
(k) Patents and Trademarks. Such Guarantor has no Registrations
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relating to Patents other than those listed on (i) if such Guarantor is a
Current Guarantor, Schedule 5(k) hereto, and (ii) if such Guarantor is an
Additional Guarantor, Schedule 5(k) to the Supplement delivered by such
Guarantor, and each such Registration is subsisting and is not invalid or
unenforceable, in whole or in part, except to the extent that the
unenforceability thereof could not reasonably be expected to have a material
adverse effect on the value of the Patents taken as a whole. Such Guarantor has
no Registrations relating to Trademarks other than those listed on (i) if such
Guarantor is a Current Guarantor, Schedule 5(k) hereto, and (ii) if such
Guarantor is an Additional Guarantor, Schedule 5(k) to the Supplement delivered
by such Guarantor, and each such Registration is subsisting and has not been
adjudged invalid or unenforceable, in whole or in part , except to the extent
that the unenforceability thereof could not reasonably be expected to have a
material adverse effect on the value of the Trademarks taken as a whole. To the
best of such Guarantor's knowledge, each Patent and Trademark constituting
Collateral is valid and enforceable. Except for Permitted Liens, such Guarantor
is the sole and exclusive owner of the entire and unencumbered right, title and
interest in and to each of the Patents and Trademarks constituting Collateral,
free and clear of all Liens. To the best of such Guarantor's knowledge, no
claim has been made that the use of any Patent or Trademark violates the rights
of any third person. Such Guarantor has used consistent standards of quality in
its manufacture of products sold under the Patents and Trademarks.
6. Covenants
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Each Guarantor covenants with the Administrative Agent as follows:
(a) Chief Executive Office. Such Guarantor shall maintain its place of
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business, or if it has more than one place of business, its chief executive
office, at the Office Location or at such other location in respect of which (i)
such Guarantor shall have provided the Administrative Agent with prior written
notice thereof, and (ii) UCC financing statements (or amendments thereto), in
form and substance reasonably satisfactory to the Administrative Agent, shall
have been filed within two months of such change.
(b) Further Assurances. Such Guarantor shall, at its own expense,
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promptly execute and deliver all certificates, documents, instruments, financing
and continuation statements and amendments thereto, notices and other
agreements, and take
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all further action, that the Administrative Agent may reasonably request from
time to time, in order to perfect and protect the Security Interest granted
hereby or to enable the Administrative Agent to exercise and enforce its rights
and remedies hereunder with respect to the Collateral. Such Guarantor hereby
irrevocably appoints the Administrative Agent as such Guarantor's true and
lawful attorney-in-fact, in the name, place and stead of such Guarantor, to
perform on behalf of such Guarantor any and all obligations of such Guarantor
under this Agreement, and such Guarantor agrees that the power of attorney
herein granted constitutes a power coupled with an interest, provided, however,
that the Administrative Agent shall have no obligation to perform any such
obligation and such performance shall be at the sole cost and expense of such
Guarantor. If such Guarantor fails to comply with any of its obligations
hereunder, the Administrative Agent may do so in such Guarantor's name or in the
Administrative Agent's name, but at such Guarantor's expense, and such Guarantor
hereby agrees to reimburse the Administrative Agent in full for all reasonable
expenses, including reasonable attorney's fees, incurred by the Administrative
Agent in connection therewith.
(c) Information. Such Guarantor shall, at its own expense, furnish to
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the Administrative Agent such information, reports, statements and schedules
with respect to the Collateral as the Administrative Agent may reasonably
request from time to time.
(d) Defense of Collateral. Such Guarantor shall, at its own expense,
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defend the Collateral against all claims of any kind or nature (other than
Permitted Liens, if any) of all Persons at any time claiming the same or any
interest therein adverse to the interests of the Administrative Agent, the
Issuing Bank, any Rate Protection Lender or any Lender, and such Guarantor shall
not cause, permit or suffer to exist any Lien upon the Collateral other than
Permitted Liens, if any.
(e) Uncertificated Securities. Such Guarantor shall cause each Person
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which is an Issuer of an Uncertificated Security constituting the Collateral (i)
to register the Security Interest granted hereby upon the books of such Person
in accordance with Article 8 of the NYUCC, and (ii) to issue to the
Administrative Agent an initial Transaction Statement and issue to the
Administrative Agent subsequent Transaction Statements in accordance with
Section 8-408 of the UCC in effect in the State of New York.
(f) Delivery of Pledged Collateral. Each Certificated Security
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representing an Equity Interest in a Person which is or shall become a
Subsidiary of the Borrower shall be promptly delivered to the Administrative
Agent, to be held by the Administrative Agent pursuant hereto, in suitable form
for transfer by delivery or accompanied by duly executed documents of transfer
or assignment in blank, all in form and substance satisfactory to the
Administrative Agent. Such Guarantor agrees that until so delivered, each such
Certificated Security shall be held by such Guarantor in trust for the benefit
of the Administrative Agent and be segregated from the other Property of such
Guarantor.
(g) Chattel Paper, Documents and Instruments. All of the Instruments,
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Documents and Chattel Paper now or hereafter owned by or in the possession of
such Guarantor which constitute Collateral (other than checks received in the
ordinary course of collection) shall be promptly delivered to the Administrative
Agent, to be held
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by the Administrative Agent pursuant hereto, in suitable form for transfer by
delivery or accompanied by duly executed documents of transfer or assignment in
blank, all in form and substance reasonably satisfactory to the Administrative
Agent. Such Guarantor agrees that, with respect to all items of the Collateral
which it is or shall hereafter be obligated to deliver to the Administrative
Agent, until so delivered such items shall be held by such Guarantor in trust
for the benefit of the Administrative Agent and be segregated from the other
Property of such Guarantor.
(h) Accounts. Except as otherwise provided in this subsection, such
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Guarantor shall continue to collect in accordance with its customary practice,
at its own expense, all amounts due or to become due to such Guarantor in
respect of such Guarantor's Accounts and, prior to the occurrence of an Event of
Default, such Guarantor shall have the right to adjust, settle or compromise the
amount or payment of any such Account, all in accordance with its customary
practices. In connection with such collections, such Guarantor may take and, at
the direction of the Administrative Agent at any time that an Event of Default
shall have occurred and be continuing shall take, such action as such Guarantor
or the Administrative Agent may reasonably deem necessary or advisable to
enforce collection of such Accounts.
(i) Equipment and Inventory. Such Guarantor shall keep the Equipment
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and Inventory constituting Collateral at the places listed on (i) if such
Guarantor is a Current Guarantor, Schedule 5(l) hereto, and (ii) if such
Guarantor is an Additional Guarantor, Schedule 5(l) to the Supplement delivered
by such Guarantor, and at such other places located within the United States in
respect of which (A) such Guarantor shall have provided the Administrative Agent
with prior written notice, and (B) UCC financing statements (or amendments
thereto), in form and substance satisfactory to the Administrative Agent, shall
have been filed within two months of such change. Such Guarantor shall promptly
furnish to the Administrative Agent a statement respecting any material loss or
damage to any of the Equipment or Inventory constituting Collateral except to
the extent that such loss or damage shall be insured pursuant to policies
required to be maintained pursuant to the Credit Agreement.
(j) Patents and Trademarks. Such Guarantor will continue to use for
----------------------
the duration of this Agreement, consistent standards of quality in its
manufacture of products sold under the Patents and Trademarks constituting
Collateral. Such Guarantor shall give to the Administrative Agent prompt
written notice thereof in the event that such Guarantor shall obtain any right
to any new Patent or Trademark or to any reissue, division, continuation,
renewal, extension, or continuation-in-part of any Patent or Trademark. Such
Guarantor shall prosecute diligently any applications of the Patents and
Trademarks constituting Collateral pending as of the date of this Agreement or
thereafter, and preserve and maintain all rights in applications of Patents and
Trademarks constituting Collateral consistent with past practice, including the
payment of all maintenance fees , except to the extent the failure so to
preserve or maintain such rights could not reasonably be expected to have a
material adverse effect on either (i) the value of the Patents taken as a whole,
or (ii) the value of the Trademarks taken as a whole. Such Guarantor shall not
abandon any right to file an application or any pending application for any
Patent or Trademark unless the failure so to do could not reasonably be expected
to have a material adverse effect on either (i) the value of the Patents taken
as a whole, or (ii) the value of the Trademarks taken as a whole. Such
Guarantor agrees that it will not enter into any agreement, including a license
agreement, with respect to any Patent or Trademark which
-10-
is inconsistent with such Guarantor's past practices of licensing Patents or
Trademarks as the case may be. Such Guarantor hereby grants to the
Administrative Agent the right to visit such Guarantor's plants and facilities
which manufacture, inspect or store products sold under any of the Patents and
Trademarks, and to inspect the products and quality control records relating
thereto at reasonable times during regular business hours upon reasonable prior
notice.
7. Other Agreements of the Guarantors
----------------------------------
(a) No Duty to Preserve. Except as otherwise required by law, each
-------------------
Guarantor agrees that, with respect to the Collateral, neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender has any obligation to preserve rights against prior or third parties.
(b) Administrative Agent's Duty With Respect to Collateral. Each
------------------------------------------------------
Guarantor agrees that the Administrative Agent's only duty with respect to the
Collateral delivered to the Administrative Agent shall be to use reasonable care
in the custody and preservation of the Collateral, and each Guarantor agrees
that if the Administrative Agent accords the Collateral substantially the same
kind of care as the Administrative Agent accords its own Property, such care
shall conclusively be deemed reasonable. In the event that all or any part of
the Certificated Securities or Instruments constituting the Collateral are lost,
destroyed or wrongfully taken while such Certificated Securities or Instruments
are in the possession of the Administrative Agent, each Guarantor agrees that it
will use its best efforts to cause the delivery of new Certificated Securities
or Instruments in place of the lost, destroyed or wrongfully taken Certificated
Securities or Instruments upon request therefor by the Administrative Agent,
without the necessity of any indemnity bond or other security, other than the
Administrative Agent's agreement of indemnity upon usual and customary terms
therefor. Anything herein to the contrary notwithstanding, the Administrative
Agent shall not be under any duty to send notices, perform services, exercise
any rights of collection, enforcement, conversion or exchange, vote, pay for
insurance, taxes or other charges or take any action of any kind in connection
with the management of the Collateral.
(c) Liability of Guarantors under Contracts and Agreements Included in
------------------------------------------------------------------
the Collateral. Anything herein to the contrary notwithstanding, (i) each
--------------
Guarantor shall remain liable under the contracts and agreements to which it is
a party and which is included in the Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (ii) the exercise by the Administrative
Agent, the Issuing Bank, any Rate Protection Lender or any Lender of any of its
rights hereunder shall not release any Guarantor from any of its duties or
obligations under any such contract or agreement, (iii) neither the
Administrative Agent, the Issuing Bank, any Rate Protection Lender nor any
Lender shall have any obligation or liability, including indemnification
obligations, under any such contract or agreement by reason of this Agreement,
nor shall the Administrative Agent, the Issuing Bank, any Rate Protection Lender
or any Lender be obligated to perform any of the obligations or duties of any
Guarantor thereunder, to make any payment, to make any inquiry as to the nature
or sufficiency of any payment received by any Guarantor or the sufficiency of
any performance by any party under any such contract or agreement or to take any
action to collect or enforce any claim for payment assigned hereunder, and (iv)
neither the Administrative Agent, the Issuing Bank, any Rate Protection Lender
nor any
-11-
Lender shall be under any duty to send notices, perform services, exercise any
rights of collection, enforcement, conversion or exchange, vote, pay for
insurance, taxes or other charges or take any action of any kind in connection
with the management of the Collateral.
8. Events of Default
-----------------
Each of the following shall constitute an "Event of Default":
----------------
(a) The failure of any Guarantor to observe or perform any term,
covenant or agreement contained in this Agreement; or
(b) The occurrence and continuance of an Event of Default under, and
as such term is defined in, the Credit Agreement.
9. Remedies
--------
(a) Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, the Administrative Agent may:
(i) exercise any and all rights and remedies (A) granted to a
Secured Party by the UCC in effect in the State of New York or otherwise
allowed at law, and (B) otherwise provided by this Agreement, and
(ii) dispose of the Collateral as it may choose, so long as every
aspect of the disposition including the method, manner, time, place and
terms are commercially reasonable, and each Guarantor agrees that, without
limitation, the following are each commercially reasonable: (A) the
Administrative Agent shall not in any event be required to give more than
10 days' prior notice to the Guarantors of any such disposition, (B) any
place within the City of New York or the Counties of Nassau, Suffolk, and
Westchester may be designated by the Administrative Agent for disposition,
and (C) the Administrative Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and
such sale may, without further notice, be made at the time and place to
which it was so adjourned.
(b) Each Guarantor acknowledges and agrees that the Administrative
Agent may elect, with respect to the offer or sale of any or all of the Equity
Interests constituting the Collateral, to conduct such offer and sale in such a
manner as to avoid the need for registration or qualification of such Equity
Interests or the offer and sale thereof under any Federal or state securities
laws and that the Administrative Agent is authorized to comply with any
limitation or restriction in connection with such sale as counsel may advise the
Administrative Agent is reasonably necessary in order to avoid any violation of
applicable law, compliance with such procedures as may restrict the number of
prospective bidders and purchasers, require that such prospective bidders and
purchasers have certain qualifications, and restrict such prospective bidders
and purchasers to Persons who will represent and agree that they are purchasing
for their own account for investment and not with a view to the distribution or
resale of such Equity Interests, or in order to obtain any required approval of
the sale or of the purchaser by any Governmental Authority. Each Guarantor
further acknowledges and agrees that any such transaction may be at
-12-
prices and on terms less favorable than those which may be obtained through a
public sale and not subject to such restrictions and agrees that,
notwithstanding the foregoing, the Administrative Agent is under no obligation
to conduct any such public sale and may elect to impose any or all of the
foregoing restrictions, or any other restrictions which may be reasonably
necessary in order to avoid any such registration or qualification, at its sole
discretion or with the consent or direction of the Required Lenders, and that
any such offer and sale so conducted shall be deemed to have been made in a
commercially reasonable manner.
(c) To the extent permitted by law, each Guarantor hereby expressly
waives and covenants not to assert any appraisement, valuation, stay, extension,
redemption or similar laws, now or at any time hereafter in force, which might
delay, prevent or otherwise impede the performance or enforcement of this
Agreement.
(d) Notwithstanding anything to the contrary contained in this
Agreement, any other Loan Document or in any other agreement, instrument or
document executed by any Guarantor and delivered to the Administrative Agent,
the Issuing Bank or any Lender, neither the Administrative Agent, the Issuing
Bank nor any Lender will take any action pursuant to this Agreement, any other
Loan Document or any other document referred to above which would constitute or
result in any assignment of any license, approval, permit, certificate or other
authorization issued by the FCC or any change of control of the Borrower or any
Subsidiary if such assignment or change of control would require, under then
existing law, the prior approval of the FCC without first obtaining such prior
approval of the FCC. Upon the occurrence of an Event of Default or at any time
thereafter during the continuance thereof, each Guarantor waives, to the extent
permitted by law, any right it may have to oppose, and agrees to take any action
that the Administrative Agent may reasonably request in order to obtain from the
FCC, such approval as may be necessary to enable the Administrative Agent, the
Issuing Bank and the Lenders to exercise and enjoy the full rights and benefits
granted to the Administrative Agent, the Issuing Bank and the Lenders by this
Agreement, the other Loan Documents and the other documents referred to above,
including specifically, at the cost and expense of the Borrower, the use of
commercially reasonable efforts to assist in obtaining approval of the FCC for
any action or transaction contemplated by this Agreement for which such approval
is or shall be required by law, and specifically, without limitation, upon
request, to prepare, sign and file with the FCC the assignor's or transferor's
portion of any application or applications for consent to the assignment of
license, approval, permit, certificate or other authorization or transfer of
control necessary or appropriate under the FCC's rules and regulations for
approval of (i) any sale or other disposition of the Collateral by or on behalf
of the Administrative Agent, or (ii) any assumption by the Administrative Agent
of voting rights in the Collateral effected in accordance with the terms of this
Agreement. It is understood and agreed that all foreclosure and related actions
will be made in accordance with the Communications Act and applicable
regulations and published policies and decisions of the FCC pertaining to such
foreclosure and related actions.
10. Voting
------
Notwithstanding anything to the contrary contained in this Agreement,
each Guarantor shall have the right to vote all Securities constituting its
Collateral and receive and retain all dividends and distributions thereon until
such time, if any, as an Event of
-13-
Default shall have occurred and be continuing and the Administrative Agent shall
have notified such Guarantor that the Administrative Agent shall have elected to
terminate the rights of such Guarantor under this section, at which time the
Administrative Agent shall then be vested with the right to vote all Securities
constituting the Collateral and receive and retain all dividends and
distributions thereon, until such time as such Event of Default is cured or
waived.
11. Termination
-----------
On any date upon which (i) the Lenders shall no longer have any
obligation to make Loans, (ii) the Issuing Bank shall no longer have (A) any
obligation to issue Letters of Credit and (B) any obligations under the Letters
of Credit theretofor issued, and (iii) the Obligations shall have been paid in
full in cash, the outstanding principal balance of the Loans together with all
accrued interest thereon, all of the Reimbursement Obligations and all other
sums then due and owing under the Loan Documents, the Liens granted hereby shall
cease and the Administrative Agent shall, at the Guarantors' expense (A) execute
and deliver all UCC Termination Statements and other documents necessary to
terminate the Liens granted hereby that the Guarantors shall have reasonably
requested, and (B) return to the Guarantors all their respective Collateral that
shall remain in the possession of the Administrative Agent at such time.
12. Notices
-------
Except as otherwise specifically provided herein, all notices,
requests, consents, demands, waivers and other communications hereunder shall be
in writing (including facsimile) and shall be electronically transmitted or
mailed by registered or certified mail or delivered in person, and all
statements, reports, documents, certificates and papers to be delivered
hereunder shall be mailed by first class mail or delivered in person, in each
case to the respective parties to this Agreement as follows: in the case of the
Administrative Agent or the Borrower, as set forth in section 11.2 of the Credit
Agreement, in the case of each Current Guarantor, as set forth adjacent to the
name of such Current Guarantor on the signature page(s) hereof, and, in the case
of each Additional Guarantor, as set forth adjacent to the name of such
Additional Guarantor on the signature page(s) of the Supplement delivered by
such Additional Guarantor, or to such other addresses as to which the
Administrative Agent may be hereafter notified by the respective parties hereto.
Any notice, request, consent, demand, waiver or communication given in
accordance with the provisions of this section shall be conclusively deemed to
have been received by a party hereto and to be effective on the day on which
delivered to such party at its address specified above or, if sent by registered
or certified mail, on the delivery date noted on the receipt therefor, provided
that a notice of change of address shall be deemed to be effective only when
actually received. Any party hereto may rely on signatures of the other parties
hereto which are transmitted by facsimile or other electronic means as fully as
if originally signed.
13. Expenses
--------
Each Guarantor agrees that it shall, upon demand, pay to the
Administrative Agent any and all reasonable out-of-pocket sums, costs and
expenses, which the Administrative Agent, the Issuing Bank or any Lender may pay
or incur defending,
-14-
protecting or enforcing this Agreement (whether suit is instituted or not),
reasonable attorneys' fees and disbursements. All sums, costs and expenses which
are due and payable pursuant to this section shall bear interest, payable on
demand, at the highest rate then payable on the Borrower Obligations.
14. Repayment in Bankruptcy, etc.
----------------------------
If, at any time or times subsequent to the payment of all or any part
of the Borrower Obligations or the Guarantor Obligations, the Administrative
Agent, the Issuing Bank or any Lender shall be required to repay any amounts
previously paid by or on behalf of the Borrower or any Guarantor in reduction
thereof by virtue of an order of any court having jurisdiction in the premises,
as a result of an adjudication that such amounts constituted preferential
payments or fraudulent conveyances, the Guarantors unconditionally agree to pay
to the Administrative Agent within 10 days after demand a sum in cash equal to
the amount of such repayment, together with interest on such amount from the
date of such repayment by the Administrative Agent, the Issuing Bank or such
Lender, as the case may be, to the date of payment to the Administrative Agent
at the applicable after-maturity rate set forth in the Credit Agreement.
15. Additional Guarantors
---------------------
Upon the execution and delivery to the Administrative Agent of a
Supplement by any Person, appropriately acknowledged, such Person shall be a
Guarantor.
16. Agreement to Pay; Subordination
-------------------------------
In furtherance of the foregoing and not in limitation of any other
right that the Administrative Agent, the Issuing Bank, any Lender or any Rate
Protection Lender has at law or in equity against any Guarantor by virtue
hereof, upon the failure of the Borrower or any other Loan Party to pay any
Borrower Obligations when and as the same shall become due, whether at maturity,
be acceleration, after notice of prepayment or otherwise, each Guarantor hereby
promises to and will forthwith pay, or cause to be paid, to the Administrative
Agent in cash the amount of such unpaid Obligations. Upon payment by any
Guarantor of any sums to the Administrative Agent as provided above, all rights
of such Guarantor against the Borrower arising as a result thereof by way of
right of subrogation, contribution, reimbursement, indemnity or otherwise shall
in all respects be subordinate and junior in right of payment to the prior
indefeasible payment in full in cash of all the Borrower Obligations. In
addition, any indebtedness of the Borrower now or hereafter held by any
Guarantor is hereby subordinated in right of payment to the prior payment in
full in cash of the Borrower Obligations. If any amount shall erroneously be
paid to any Guarantor on account of (i) such subrogation, contribution,
reimbursement, indemnity or similar right or (ii) any such indebtedness of the
Borrower, such amount shall be held in trust for the benefit of the
Administrative Agent, the Issuing Bank, the Lenders and the Rate Protection
Lenders and shall forthwith be paid to the Administrative Agent to be credited
against the payment of the Borrower Obligations, whether matured or unmatured,
in accordance with the terms of the Loan Documents.
-15-
17. Miscellaneous
-------------
(a) Except as otherwise expressly provided in this Agreement, each
Guarantor hereby waives presentment, demand for payment, notice of default,
nonperformance and dishonor, protest and notice of protest of or in respect of
this Agreement, the other Loan Documents, each Interest Protection Arrangement,
and the Borrower Obligations, notice of acceptance of this Agreement and
reliance hereupon by the Administrative Agent, the Issuing Bank and each Lender,
and the incurrence of any of the Borrower Obligations, notice of any sale of
collateral security or any default of any sort.
(b) No Guarantor is relying upon the Administrative Agent, the Issuing
Bank or any Lender to provide to such Guarantor any information concerning the
Borrower or any of its Subsidiaries, and each Guarantor has made arrangements
satisfactory to such Guarantor to obtain from the Borrower on a continuing basis
such information concerning the Borrower and its Subsidiaries as such Guarantor
may desire.
(c) Each Guarantor agrees that any statement of account with respect
to the Borrower Obligations from the Administrative Agent, the Issuing Bank or
any Lender to the Borrower which binds the Borrower shall also be binding upon
such Guarantor, and that copies of said statements of account maintained in the
regular course of the Administrative Agent's, the Issuing Bank's or such
Lender's business, as the case may be, may be used in evidence against such
Guarantor in order to establish its Guarantor Obligations.
(d) Each Guarantor acknowledges that it has received a copy of the
Loan Documents and each Interest Rate Protection Arrangement and has approved of
the same. In addition, such Guarantor acknowledges having read each Loan
Document and each such Interest Rate Protection Arrangement and having had the
advice of counsel in connection with all matters concerning its execution and
delivery of this Agreement.
(e) No Guarantor may assign any right, or delegate any duty, it may
have under this Agreement.
(f) Subject to the limitations set forth in section 2(b), the
Guarantor Obligations shall be joint and several and shall also be joint and
several.
(g) This Agreement is the "Subsidiary Guaranty" referred to in the
Credit Agreement, and is subject to, and should be construed in accordance with,
the provisions thereof. Each of the Administrative Agent, the Guarantors and the
Borrower acknowledges that certain provisions of the Credit Agreement,
including, without limitation, sections 1.2 (Principles of Construction), 11.1
(Amendments and Waivers), 11.3 (No Waiver; Cumulative Remedies), 11.4 (Survival
of Certain Obligations), 11.7 (Successors and Assigns), 11.8 (Counterparts),
11.9 (Adjustments; Set-off), 11.12 (Governing Law), 11.13 (Headings), 11.14
(Severability), 11.15 (Integration), 11.16 (Limitation of Liability), 11.17
(Consent to Jurisdiction), 11.18 (Service of Process), 11.19 (No Limitation on
Service or Suit) and 11.20 (WAIVER OF TRIAL BY JURY) thereof, are made
applicable to this Agreement and all such provisions are incorporated by
reference herein as if fully set forth herein.
-16-
IN EVIDENCE of the agreement by the parties hereto to the terms and
conditions herein contained, each such party has caused this Subsidiary Guaranty
and Security Agreement to be duly executed on its behalf.
Beltway Media Partners
By: Salem Communications
Corporation, a General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
By: Golden Gate Broadcasting
Company, Inc., a General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
By: New Inspiration Broadcasting Company,
Inc.,
a General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
ATEP Radio, Inc.
Bison Media, Inc.
▇▇▇▇▇ Broadcasting, Inc.
Common Ground Broadcasting, Inc.
Golden Gate Broadcasting Company, Inc.
Inland Radio, Inc.
Inspiration Media of Texas, Inc.
Inspiration Media, Inc.
New England Continental Media, Inc.
New Inspiration Broadcasting Company, Inc.
Oasis Radio, Inc.
Pennsylvania Media Associates, Inc.
Radio 1210, Inc.
Salem Communications Corporation, a
Delaware corporation
Salem Media Corporation
Salem Media of California, Inc.
Salem Media of Colorado, Inc.
Salem Media of Louisiana, Inc.
-17-
Salem Media of Ohio, Inc.
Salem Media of Oregon, Inc.
Salem Media of Pennsylvania, Inc.
Salem Media of Texas, Inc.
Salem Music Network, Inc.
Salem Radio Network Incorporated
Salem Radio Representatives, Inc.
South Texas Broadcasting, Inc.
SRN News Network, Inc.
Vista Broadcasting, Inc.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notices:
--------------------
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention:▇▇▇▇▇▇▇▇ ▇. Block
Telephone:(▇▇▇)▇▇▇-▇▇▇▇(ext.106)
Telecopy: (▇▇▇)▇▇▇-▇▇▇▇
SALEM COMMUNICATIONS CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
THE BANK OF NEW YORK, as
Administrative Agent
By: ILLEGIBLE
-----------------
Name:
Title:
-18-
SCHEDULE 5(c)
TO SUBSIDIARY GUARANTY
SCHEDULE 5(c) TO THE SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
LIST OF OFFICE LOCATIONS
------------------------
1. The chief executive office of all Guarantors is ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SCHEDULE 5(g)
TO SUBSIDIARY GUARANTY
SCHEDULE 5(g) TO THE SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
LIST OF EQUITY INTERESTS
------------------------
1. Borrower, New Inspiration Broadcasting Co., Inc. and Golden Gate
Broadcasting Co., Inc. are the sole partners of Beltway Media Partners, as
follows:
New Inspiration Broadcasting Co., Inc. 45% ownership interest
Golden Gate Broadcasting Co., Inc. 40% ownership interest
Borrower 15% ownership interest
SCHEDULE 5(h)
TO SUBSIDIARY GUARANTY
SCHEDULE 5(h) TO THE SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
LIST OF CHATTEL PAPER, DOCUMENTS AND INSTRUMENTS
------------------------------------------------
Promissory Note, dated February 12, 1992, in the original
principal amount of $20,000,000, made by Beltway Media Partners
to Salem Communications Corporation, New Inspiration
Broadcasting Company, Inc. and Golden Gate Broadcasting Company,
Inc.
SCHEDULE 5(j)
-------------
TO BORROWER SECURITY AGREEMENT
------------------------------
Schedule 5(j) to the Subsidiary Guaranty and Security Agreement
Dated as of October 8, 1997
ADDRESSES FOR EQUIPMENT AND INVENTORY LOCATIONS
-----------------------------------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
ATEP Radio, Inc. KDAR(FM) AT&T site at Hall Canyon
P.O. Box 5626/Zip 93031 2.9 Km NE of Ventura,
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Beltway Media Partners ▇▇▇▇(FM) ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Bison Media, Inc. KGFT(FM), KPRZ(FM),KBIQ(FM): KBIQ(FM)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Colorado Springs, CO
KPRZ-FM
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇.,
Cheyenne Mountains, El Paso
County, CO
KTSL(FM): ▇▇▇▇▇▇▇ Hill, 1 km S of
1212 ▇. ▇▇▇▇▇▇▇▇▇▇, Suite ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇ ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇ ▇▇ ESE of
Medical Lake, WA
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
▇▇▇▇▇ Broadcasting, Inc. WITH(AM ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇., #▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WTSJ(AM) 9th and Willow Run
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇. ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WHK(FM) ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WHLO(AM) Road and Cleveland
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Fairlawn, OH
Common Ground KKMS(AM) ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
Broadcasting, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
KPXQ-AM ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, #▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WHK-AM ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Golden Gate Broadcasting KFAX ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Co., Inc. ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
Inland Radio, Inc. KKLA(AM)/KKLA(FM) KKLA(AM)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
KKLA(FM)
Main: Mt. ▇▇▇▇▇▇ Antenna
Farm
Emergency: Flint Peak, Los
Angeles
Inspiration Media of KWRD(FM) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Road
Texas, Inc. ▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.▇▇ miles ▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Inspiration Media, KGNW-AM/KLFE-AM/KKOL-AM KKOL-AM
Inc. ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 1100 S.W. Florida Street
Seattle, WA 98121 Seattle, WA
KLFE-AM
NE Corner Pt. ▇▇▇▇▇▇▇
Pt. Madison, Manitou Drive
Near ▇▇▇▇▇▇▇, WA
New England WPZE(AM)/WEZE(AM) WPZE(AM)
Continental Media, P.O. Box 9121 Corner of Vershire St. and
Inc. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
WEZA(AM)
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
New Inspiration KKLA-AM 990 Inland Center Drive
Broadcasting Co., Inc. ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
KKLA(FM) Main: Mt. ▇▇▇▇▇▇ Antenna
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇. ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Emergency: Flint Peak
Los Angeles
Oasis Radio, Inc. KAVC-FM ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Pennsylvania Media WFIL(AM)/WZZD(AM) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, Inc. ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Radio 1210, Inc. KPRZ(AM) ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
9255 Towne Centre Dr., Suite ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Encinatas, CA
Salem Media of KLTX(AM) (K-LIGHT) ▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇▇▇▇▇▇, Inc. ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Media of KRKS(AM&FM)/KNUS(AM) KRKS(AM)
Colorado, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Lakewood, CO
KRKS(FM)
CO-111 Mine Lane, 4.8
Kilometers West of Boulder,
CO
KNUS(AM)
▇▇ ▇▇▇▇▇▇▇ ▇▇, ▇ ▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇▇▇, ▇▇
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
Salem Media of WRFD-AM .8 km E from intersection of
Ohio, Inc. ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇., ▇.▇. ▇▇▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Westerville, OH
Salem Media of KPDQ(AM) & (FM) KPDQ(AM)
Oregon, Inc. ▇▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇. Approx. 2.7 miles East of
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
KPDQ-FM
OR - ▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Media of WORD(FM)/WPIT(AM) ▇▇▇▇ ▇▇. ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, Inc. ▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Media of KSLR-AM US Highway 87
Texas, Inc. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Media Corporation WMCA-AM/WWDJ-AM WMCA-AM
▇▇▇ ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Kearny, NJ
WWDJ-AM
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇
WYLL-FM ▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
Elk ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
Salem Music Network (The Word in Music) N/A
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(Morningstar) N/A
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Radio Network, SRN ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Rd., 0.45 miles
Incorporated 545 E. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Freeway, #▇▇▇ ▇ ▇▇ ▇▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SRN East ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Salem Radio ▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇ ▇/▇
Representatives, Inc. ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
South Texas Broadcasting, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇., off Hwy. 105
Inc. ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ 7 miles west of Cleveland, TX
SRN News Network, Inc. ▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇., ▇▇▇▇▇ ▇▇▇ ▇/▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SCHEDULE 5(j)
-------------
TO SUBSIDIARY GUARANTY
----------------------
ENTITY STUDIO/OFFICE LOCATION TRANSMITTER LOCATION
------ ---------------------- --------------------
Vista Broadcasting, Inc. KFIA (AM)/KTZA(AM) KFIA(AM)
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Lincoln, CA
KTKZ(AM)
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇
SCHEDULE 5(k)
TO SUBSIDIARY GUARANTY
SCHEDULE 5(k) TO THE SUBSIDIARY GUARANTY AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
LIST OF REGISTRATIONS
---------------------
A. Patents
-------
None
B. Trademarks
----------
None
C. Servicemarks
------------
1. "Salem Radio Network" - Reg. No. 1,968,784
2. "SRN" - Reg. No. 1,935,920
3. Salem Radio Network Logo - Reg. No. 1,946,784
4. "StandardNews" - Reg. No. 1,869,020
5. "The Washington Newsdesk" - Reg. No. 1,875,741
ANNEX A TO THE SUBSIDIARY GUARANTY
FORM OF SUPPLEMENT TO SUBSIDIARY GUARANTY
-----------------------------------------
SUBSIDIARY GUARANTY AND SECURITY AGREEMENT, dated as of September
25, 1997, by and among the Guarantors party thereto and The Bank of New York, as
Administrative Agent (as the same may be amended, supplemented or otherwise
modified from time to time, the "Agreement").
---------
[DATE]
Capitalized terms used herein which are not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement. Pursuant
to section 15 of the Agreement, by execution and delivery of this Supplement
and, upon acceptance hereof by the Administrative Agent, the undersigned (i)
shall be, and shall be deemed to be, a "Guarantor" under, and as such term is
defined in, the Agreement, (ii) shall have made, and shall be deemed to have
made, the representations and warranties contained in section 5 of the Agreement
on and as of the date hereof, (iii) as security for the payment and performance
in full of its Guarantor Obligations, does hereby create and grant to the
Administrative Agent, its successors and permitted assigns, for its benefit and
the ratable benefit of the Issuing Bank, the Lenders and the Rate Protection
Lenders, their respective successors and permitted assigns, a security interest
in the Collateral (as defined in the Agreement) of the Additional Guarantor and
(iv) shall have made, and shall be deemed to have made, all of the covenants and
agreements of a Guarantor set forth in the Agreement.
[NAME OF ADDITIONAL GUARANTOR]
By:______________________________
Name:____________________________
Title:___________________________
Address for Notices:
--------------------
____________________________
____________________________
____________________________
Attention:__________________
_______________
Telephone: (___) ___-____
Telecopy: (___) ___-____
Accepted and agreed to as
of the date first above written:
THE BANK OF NEW YORK, as Administrative Agent
By:________________________
Name:______________________
Title:_____________________
[SCHEDULES CORRESPONDING TO THE SCHEDULES
IN THE AGREEMENT ARE TO BE ATTACHED]
-2-
ANNEX B TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
FORM OF TRANSACTION STATEMENT
-----------------------------
THIS STATEMENT IS MERELY A RECORD OF THE RIGHTS OF THE ADDRESSEE AS OF THE
TIME OF ITS ISSUANCE. DELIVERY OF THIS STATEMENT, OF ITSELF, CONFERS NO RIGHT
ON THE RECIPIENT. THIS STATEMENT IS NEITHER A NEGOTIABLE INSTRUMENT NOR A
SECURITY.
[DATE]
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
The undersigned, _________________ (the "Issuer"), hereby acknowledges
------
receipt of the Subsidiary Guaranty and Security Agreement, dated as of September
25, 1997 (as the same may be amended, supplemented or otherwise modified from
time to time, the "Agreement"), by and among each Guarantor party thereto, SALEM
---------
COMMUNICATIONS CORPORATION (the "Borrower") and THE BANK OF NEW YORK, as
--------
Administrative Agent (in such capacity, the "Administrative Agent") and (i)
--------------------
consents to the terms thereof and (ii) confirms that a pledge of the right,
title and interest in the security referred to below has been registered in the
books and records of the Issuer in the name of the Administrative Agent, as set
forth below. This Transaction Statement is issued under Section 8-408 of the
New York State Uniform Commercial Code.
1. DESCRIPTION OF THE SECURITY:_______________________.
2. NUMBER OF SHARES OR UNITS PLEDGED:_________________.
3. REGISTERED OWNER:
[NAME OF PLEDGING GUARANTOR]
__________________________
__________________________
__________________________
Attention:_______________________
_______________________
Taxpayer ID# ___________.
4. REGISTERED PLEDGEE AND TAXPAYER IDENTIFICATION NUMBER (IF ANY):
The Bank of New York, as Administrative Agent
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention:___________________
________________
Taxpayer ID# ▇▇-▇▇▇▇▇▇▇
5. DATE OF REGISTRATION OF THE PLEDGE: The pledge described herein was
registered on _______ on the books and records of the Issuer.
6. NOTATION OF LIENS: There are no liens, restrictions or adverse claims as to
which the Issuer has a duty under Section 8-403(4) of the Uniform
Commercial Code (the "UCC") to which such security is or may be subject,
---
other than those set forth in the Loan Documents (as defined in that
certain Credit Agreement, dated as of the date hereof, by and among the
Borrower, the Lenders party thereto and The Bank of New York, as
Administrative Agent and Bank of America NT & SA, as Documentation Agent,
as amended, supplemented or otherwise modified from time to time) or [LIST
APPLICABLE ORGANIZATIONAL DOCUMENTS].
The Issuer hereby agrees, at the request of the Administrative Agent
and at the expense of the Issuer, to register any further assignment or transfer
of the foregoing security effected in the manner contemplated by the Agreement
and promptly to furnish to the Administrative Agent and any such assignee or
transferee any statement contemplated by Section 8-408 of the UCC.
[NAME OF ISSUER]
By:____________________________
Name:__________________________
Title:_________________________
-2-
ANNEX C-1 TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
FORM OF GRANT OF SECURITY INTEREST (PATENTS)
--------------------------------------------
[NAME OF GUARANTOR], a _____________ corporation (the "Guarantor"), is
---------
obligated to THE BANK OF NEW YORK, as Administrative Agent (the "Administrative
--------------
Agent"), and has entered into a Subsidiary Guaranty and Security Agreement,
-----
dated as of September 25, 1997 (as the same may be amended, supplemented or
otherwise modified from time to time, the "Agreement"), by and among each
---------
Guarantor party thereto, SALEM COMMUNICATIONS CORPORATION (the "Borrower") and
--------
THE BANK OF NEW YORK, as Administrative Agent (in such capacity, the
"Administrative Agent").
---------------------
Pursuant to the Agreement, the Guarantor granted to the Administrative
Agent a security interest in all of the right, title and interest of the
Guarantor in and to the letters patent or applications for letters patent, of
the United States, more particularly described on Schedule 1 (the "Patents")
-------
together with any reissue, continuation, continuation-in-part or extension
thereof, and all proceeds thereof, any and all causes of action which may exist
by reason of infringement thereof for the full term of the Patents (the
"Collateral"), to secure the prompt payment, performance and observance of the
-----------
Guarantor Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Guarantor does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Guarantor Obligations.
The Guarantor does hereby further acknowledge and affirm that the
rights and remedies of the Administrative Agent with respect to the assignment
of and security interest in the Collateral made and granted hereby are set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Guarantor
Obligations (as such term is defined in the Agreement), the Administrative Agent
will take whatever actions are necessary at the Guarantor's expense to release
or reconvey to Guarantor all right, title and interest of the Guarantor in and
to the Patents.
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be
duly executed by its duly authorized officer as of the __ day of _____, ____.
[NAME OF GUARANTOR]
By:_____________________________
Name:___________________________
Title:__________________________
-▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of [NAME OF
GUARANTOR], the corporation described in and which executed the above
instrument, and that he signed his name thereto by order of the board of
directors thereof.
____________________________
Notary Public
[Notary's Stamp]
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Schedule 1
to Grant of Security Interest (Patents)
Dated as of __________
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ANNEX C-2 TO THE SUBSIDIARY GUARANTY
AND SECURITY AGREEMENT
DATED AS OF SEPTEMBER 25, 1997
FORM OF GRANT OF SECURITY INTEREST (TRADEMARKS)
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[NAME OF GUARANTOR], a _____________ corporation (the
"Guarantor"), is obligated to THE BANK OF NEW YORK, as Administrative Agent (the
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"Administrative Agent"), and has entered into a Subsidiary Guaranty and Security
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Agreement, dated as of September 25, 1997 (as the same may be amended,
supplemented or otherwise modified from time to time, the "Agreement"), by and
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among each Guarantor party thereto, SALEM COMMUNICATIONS CORPORATION (the
"Borrower") and THE BANK OF NEW YORK, as Administrative Agent (in such capacity,
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the "Administrative Agent").
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Pursuant to the Agreement, the Guarantor granted to the Administrative
Agent a security interest in all of the right, title and interest of the
Guarantor in and to the trademarks listed on Schedule 1, which trademarks are
registered in the United States Patent and Trademark Office (the "Trademarks"),
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together with the goodwill of the business symbolized by the Trademarks and the
applications and registrations therefor, and all proceeds thereof, any and all
causes of action which may exist by reason of infringement thereof (the
"Collateral"), to secure the prompt payment, performance and observance of the
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Guarantor Obligations (as defined in the Agreement).
For good and valuable consideration, the receipt of which is hereby
acknowledged, and for the purpose of recording the grant of the security
interest as aforesaid, the Guarantor does hereby further assign to the
Administrative Agent, and grant to the Administrative Agent a security interest
in, the Collateral to secure the prompt payment, performance and observance of
the Guarantor Obligations.
The Guarantor does hereby further acknowledge and affirm that the
rights and remedies of the Administrative Agent with respect to the assignment
of and security interest in the Collateral made and granted hereby are set forth
in the Agreement, the terms and provisions of which are hereby incorporated
herein by reference as if fully set forth herein.
Upon the indefeasible cash payment in full of all Guarantor
Obligations (as such term is defined in the Agreement), the Administrative Agent
will take whatever actions are necessary at the Guarantor's expense to release
or reconvey to the Guarantor all right, title and interest of the Guarantor in
and to the Trademarks.
The Administrative Agent's address is: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
IN WITNESS WHEREOF, the Guarantor has caused this Assignment to be
duly executed by its duly authorized officer as of the __ day of _____, ____.
[NAME OF GUARANTOR]
By:_____________________________
Name:___________________________
Title:__________________________
-▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
) ss.:
COUNTY OF NEW YORK )
On this __ day of _____, ____, before me personally came
___________________, to me known, who, being by me duly sworn, did depose and
say that he resides at __________________; that he is the ________ of [NAME OF
GUARANTOR], the corporation described in and which executed the above
instrument, and that he signed his name thereto by order of the board of
directors thereof.
____________________________
Notary Public
[Notary's Stamp]
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Schedule 1
to Grant of Security Interest (Trademarks)
Dated as of _________
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