EX-4.1 2 d461843dex41.htm INDENTURE Indenture

EXHIBIT 4.1

 

 

 

 

LBI MEDIA, INC.

 

 

INDENTURE

Dated as of December 31, 2012

 

 

U.S. Bank National Association

Trustee

 

 

 

 

 


TABLE OF CONTENTS

 

         Page  
ARTICLE 1. DEFINITIONS AND INCORPORATION BY REFERENCE      1   

Section 1.01.

  Definitions      1   

Section 1.02.

  Other Definitions      34   

Section 1.03.

  Rules of Construction      35   

Section 1.04.

  Priority Lien Intercreditor Agreement      35   
ARTICLE 2. THE NOTES      36   

Section 2.01.

  Form and Dating      36   

Section 2.02.

  Execution and Authentication      38   

Section 2.03.

  Registrar and Paying Agent      38   

Section 2.04.

  Paying Agent to Hold Money in Trust      38   

Section 2.05.

  Holder Lists      39   

Section 2.06.

  Transfer and Exchange      39   

Section 2.07.

  Replacement Notes      49   

Section 2.08.

  Outstanding Notes      49   

Section 2.09.

  Treasury Notes      50   

Section 2.10.

  Temporary Notes      50   

Section 2.11.

  Cancellation      50   

Section 2.12.

  Defaulted Interest      50   
ARTICLE 3. REDEMPTION AND PREPAYMENT      50   

Section 3.01.

  Notices to Trustee      50   

Section 3.02.

  Selection of Notes to Be Redeemed or Purchased      51   

Section 3.03.

  Notice of Redemption      51   

Section 3.04.

  Effect of Notice of Redemption      52   

Section 3.05.

  Deposit of Redemption or Purchase Price      52   

Section 3.06.

  Notes Redeemed or Purchased in Part      52   

Section 3.07.

  Optional Redemption      53   

Section 3.08.

  Mandatory Redemption; Open Market Purchases      53   

Section 3.09.    

  Offer to Purchase by Application of Excess Proceeds      53   

 

i


ARTICLE 4. COVENANTS

     55   

Section 4.01.

  Payment of Notes      55   

Section 4.02.

  Maintenance of Office or Agency      55   

Section 4.03.

  Reports      56   

Section 4.04.

  Compliance Certificate      58   

Section 4.05.

  Taxes      58   

Section 4.06.

  Stay, Extension and Usury Laws      58   

Section 4.07.

  Restricted Payments      59   

Section 4.08.

  Dividend and Other Payment Restrictions Affecting Subsidiaries      64   

Section 4.09.

  Incurrence of Indebtedness and Issuance of Preferred Stock      65   

Section 4.10.

  Asset Sales      69   

Section 4.11.

  Transactions with Affiliates      72   

Section 4.12.

  Liens      73   

Section 4.13.

  Corporate Existence      74   

Section 4.14.

  Business Activities      74   

Section 4.15.

  Offer to Repurchase Upon Change of Control      74   

Section 4.16.

  [Reserved.]      76   

Section 4.17.

  Additional Subsidiary Guarantees      76   

Section 4.18.

  [Reserved.]      76   

Section 4.19.

  Designation of Restricted and Unrestricted Subsidiaries      76   

Section 4.20.

  No Amendment of Subordination Provisions      76   

Section 4.21.

  Restrictions on Empire Burbank      77   

Section 4.22.

  Advances to Subsidiaries      77   

ARTICLE 5. SUCCESSORS

     78   

Section 5.01.    

  Merger, Consolidation, or Sale of Assets      78   

Section 5.02.

  Successor Corporation Substituted      79   

ARTICLE 6. DEFAULTS AND REMEDIES

     79   

Section 6.01.

  Events of Default      79   

Section 6.02.

  Acceleration      81   

Section 6.03.

  Other Remedies      82   

Section 6.04.

  Waiver of Past Defaults      82   

Section 6.05.

  Control by Majority      82   

Section 6.06.

  Limitation on Suits      83   

 

ii


Section 6.07.     

  Rights of Holders of Notes to Receive Payment      83   

Section 6.08.

  Collection Suit by Trustee      83   

Section 6.09.

  Trustee May File Proofs of Claim      83   

Section 6.10.

  Priorities      84   

Section 6.11.

  Undertaking for Costs      84   

ARTICLE 7. TRUSTEE

     85   

Section 7.01.

  Duties of Trustee      85   

Section 7.02.

  Rights of Trustee      86   

Section 7.03.

  Individual Rights of Trustee      86   

Section 7.04.

  Trustee’s Disclaimer      86   

Section 7.05.

  Notice of Defaults      86   

Section 7.06.

  Compensation and Indemnity      87   

Section 7.07.

  Replacement of Trustee      88   

Section 7.08.

  Successor Trustee by Merger, etc      89   

Section 7.09.

  Eligibility; Disqualification      89   

ARTICLE 8. LEGAL DEFEASANCE AND COVENANT DEFEASANCE

     89   

Section 8.01.

  Option to Effect Legal Defeasance or Covenant Defeasance      89   

Section 8.02.

  Legal Defeasance and Discharge      89   

Section 8.03.

  Covenant Defeasance      90   

Section 8.04.

  Conditions to Legal or Covenant Defeasance      90   

Section 8.05.

  Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions      91   

Section 8.06.

  Repayment to Company      91   

Section 8.07.

  Reinstatement      92   

ARTICLE 9. AMENDMENT, SUPPLEMENT AND WAIVER

     92   

Section 9.01.

  Without Consent of Holders of Notes      92   

Section 9.02.

  With Consent of Holders of Notes      93   

Section 9.03.

  Revocation and Effect of Consents      95   

Section 9.04.

  Notation on or Exchange of Notes      95   

Section 9.05.

  Trustee to Sign Amendments, etc      95   

 

iii


ARTICLE 10. SECURITY

     96   

Section 10.01.    

  Security Interest      96   

Section 10.02.

  Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt      96   

Section 10.03.

  Relative Rights      97   

Section 10.04.

  Release of Collateral      97   

Section 10.05.

  Real Property      98   

Section 10.06.

  Control Agreements      99   

Section 10.07.

  After-acquired Collateral      99   

Section 10.08.

  Further assurances      99   

ARTICLE 11. SUBSIDIARY GUARANTEES

     99   

Section 11.01.

  Guarantee      99   

Section 11.02.

  [Intentionally Omitted]      100   

Section 11.03.

  Limitation on Guarantor Liability      100   

Section 11.04.

  Execution and Delivery of Subsidiary Guarantee      101   

Section 11.05.

  Guarantors May Consolidate, etc., on Certain Terms      101   

Section 11.06.

  Releases Following Sale of Assets      102   

ARTICLE 12. SATISFACTION AND DISCHARGE

     102   

Section 12.01.

  Satisfaction and Discharge      102   

Section 12.02.

  Application of Trust Money      103   

ARTICLE 13. SUBORDINATION

     103   

Section 13.01.

  Agreement to Subordinate      103   

Section 13.02.

  Liquidation; Dissolution; Bankruptcy      104   

Section 13.03.

  Default on Designated Senior Debt      104   

Section 13.04.

  Acceleration of Notes      105   

Section 13.05.

  When Distribution Must Be Paid Over      105   

Section 13.06.

  Notice by Company      105   

Section 13.07.

  Subrogation      106   

Section 13.08.

  Relative Rights      106   

Section 13.09.

  Subordination May Not Be Impaired by Company      106   

Section 13.10.

  Distribution or Notice to Representative      106   

Section 13.11.

  Rights of Trustee and Paying Agent      107   

Section 13.12.

  Authorization to Effect Subordination      107   

Section 13.13.

  Amendments      107   

 

iv


ARTICLE 14. MISCELLANEOUS

     107   

Section 14.01.    

  Notices      107   

Section 14.02.

  Certificate and Opinion as to Conditions Precedent      109   

Section 14.03.

  Statements Required in Certificate or Opinion      109   

Section 14.04.

  Rules by Trustee and Agents      109   

Section 14.05.

  No Personal Liability of Directors, Officers, Employees and Shareholders      109   

Section 14.06.

  Governing Law      109   

Section 14.07.

  No Adverse Interpretation of Other Agreements      110   

Section 14.08.

  Successors      110   

Section 14.09.

  Severability      110   

Section 14.10.

  Counterpart Originals      110   

Section 14.11.

  Table of Contents, Headings, etc      110   

 

v


EXHIBITS

 

Exhibit A-1    FORM OF NOTE
Exhibit A-2    FORM OF REGULATION S TEMPORARY GLOBAL NOTE
Exhibit B    FORM OF CERTIFICATE OF TRANSFER
Exhibit C    FORM OF CERTIFICATE OF EXCHANGE
Exhibit D    FORM OF CERTIFICATE OF ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR
Exhibit E    FORM OF SUBSIDIARY GUARANTEE
Exhibit F    FORM OF SUPPLEMENTAL INDENTURE
Exhibit G    FORM OF SUBSIDIARY INTERCOMPANY NOTE
Exhibit H    FORM OF DISCOUNT NOTES FORBEARANCE AGREEMENT
Exhibit I    FORM OF MORTGAGE FOR SAWYER PROPERTY
Exhibit J    FORM OF MORTGAGE RELEASE
SCHEDULES
Schedule I    SCHEDULE OF GUARANTORS
Schedule II            MORTGAGED PROPERTY
Schedule III    LEASED REAL PROPERTY

 

vi


INDENTURE dated as of December 31, 2012 among LBI Media, Inc., a California corporation (and its successors in interest) (the “Company”), the Guarantors listed on Schedule I hereto (the “Guarantors”) and U.S. Bank National Association, a national banking association, as trustee (the “Trustee”).

The Company, the Guarantors and the Trustee agree as follows for the benefit of each other and for the equal and ratable benefit of the Holders (as defined below) of the 11 1/2%/13  1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020 (the “Notes”):

ARTICLE 1.

DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.01. Definitions.

144A Global Note” means a Global Note substantially in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

Acquired Debt” means, with respect to any specified Person: (1) Indebtedness of any other Person existing at the time such other Person is merged with or into or became a Restricted Subsidiary of such specified Person, whether or not such Indebtedness is incurred in connection with, or in contemplation of, such other Person merging with or into, or becoming a Restricted Subsidiary of, such specified Person; and (2) Indebtedness secured by a Lien encumbering any asset acquired by such specified Person.

Acquisition Debt” means Indebtedness, the proceeds of which are utilized solely to acquire all or a portion of the assets or a majority of the Voting Stock of an existing radio or television broadcasting business or station or any other business engaged in a Permitted Business.

Actionable Default” means the occurrence of any event of default under any Secured Debt Document, the result of which is that:

(1) the holders of Parity Lien Debt under such Secured Debt Document have the right to declare all of the Parity Lien Obligations thereunder to be due and payable prior to the stated maturity thereof; or

(2) such Parity Lien Obligations automatically become due and payable prior to the stated maturity thereof.

Additional Notes” means additional Notes (other than the Initial Notes) issued from time to time under this Indenture in accordance with Sections 2.01(f) and 4.09 hereof.

Affiliate” of any specified Person means any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified Person provided that OCM Principal Opportunities Fund III, L.P., a Delaware limited partnership, OCM Principal Opportunities Fund IIIA, L.P., a Delaware limited partnership, OCM OPPS Broadcasting, LLC, a Delaware limited liability company, OCM Principal Opportunities Fund IV AIF (Delaware), L.P., Tinicum Capital Partners II, L.P., a Delaware limited partnership, Tinicum Capital Partners II Parallel Fund, L.P., a Delaware limited partnership, and Tinicum Capital Partners II Executive Fund L.L.C., a Delaware limited liability company, and their Affiliates (excluding Parent, Holdings, the Company or any of its Subsidiaries) shall

 

1


not be deemed to be Affiliates of Parent, Holdings, the Company or any of its Subsidiaries so long as they collectively hold less than 10% of the voting power of the Voting Stock of any of Parent, Holdings or the Company. For purposes of this definition, “control,” as used with respect to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such Person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms “controlling,” “controlled by” and “under common control with” have correlative meanings.

Agent” means any Registrar, co-registrar, Paying Agent or additional paying agent.

Applicable Premium” means, with respect to any Note on any redemption date, the greater of:

 

  (1) 1.0% of the principal amount of such Note; and

 

  (2) the excess, if any of (a) the present value at such redemption date of (i) the redemption price of such Note at November 15, 2016 (such redemption price being set forth in the tables appearing in Section 3.07), plus (ii) all required interest payments due on such Note through November 15, 2016 (excluding accrued but unpaid interest to the applicable redemption date), computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the principal amount of such Note.

Applicable Procedures” means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depositary, Euroclear and Clearstream that apply to such transfer or exchange.

Asset Sale” means

(1) the sale, lease, conveyance or other disposition of any assets or rights, other than in the ordinary course of business; provided that the sale, conveyance or other disposition of all or substantially all of the assets (which term shall include Media Licenses) owned by the Company and its Subsidiaries taken as a whole will be governed by the provisions of Sections 4.15 and/or 5.01 and not by the provisions of Section 4.10; and

(2) the issuance of Equity Interests by any Restricted Subsidiary or the sale of Equity Interests in any Restricted Subsidiary.

Notwithstanding the preceding, none of the following items will be deemed to be an Asset Sale:

(1) [Reserved];

(2) a transfer of assets or rights between or among the Company and its Restricted Subsidiaries;

(3) an issuance of Equity Interests by a Subsidiary of the Company to the Company or to another Subsidiary of the Company;

(4) the sale or lease of equipment, inventory, accounts receivable or other assets or rights in the ordinary course of business;

(5) the disposition of obsolete, damaged or worn-out equipment or other assets no longer used or useful in the business of the Company or any of its Restricted Subsidiaries;

 

2


(6) the sale and leaseback of any assets within 90 days of the acquisition thereof;

(7) the sale or other disposition of Cash Equivalents;

(8) a Restricted Payment that is permitted by Section 4.07, or a Permitted Investment;

(9) foreclosures on assets;

(10) Permitted Liens;

(11) the grant of any license of patents, trademarks, registrations therefor and other similar intellectual property in the ordinary course of business;

(12) the cancellation or forgiveness of any loan made by the Company or any of its Restricted Subsidiaries (i) permitted by clause (10) of Section 4.07(b) or (ii) permitted by clauses (8), (9), (13), (15) or (17) of the definition of “Permitted Investments”; and

(13) sales or other dispositions or transfers of Equity Interests in, or Indebtedness or other securities of, Unrestricted Subsidiaries.

Bankruptcy Law” means Title 11, U.S. Code or any similar federal or state law for the relief of debtors.

Beneficial Owner” has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that in calculating the beneficial ownership of any particular “person” (as that term is used in Section 13(d)(3) of the Exchange Act), such “person” will be deemed to have beneficial ownership of all securities that such “person” has the right to acquire by conversion or exercise of other securities, whether such right is currently exercisable or is exercisable only upon the occurrence of a subsequent condition. The terms “Beneficially Owns” and “Beneficially Owned” have a corresponding meaning.

Board of Directors” means:

(1) with respect to a corporation, the board of directors of the corporation or any committee thereof duly authorized to act on behalf of such board;

(2) with respect to a partnership, the general partner of which is a corporation, the board of directors of the general partner of the partnership or any committee thereof duly authorized to act on behalf of such board; and

(3) with respect to any other Person, the board or committee of such Person serving a similar function.

Burbank Office Property” means that certain real property located at 1845 West Empire Avenue, Burbank, California 91504.

Burbank Studio Property” means that certain real property owned in fee by the Company or the Guarantors located on Hollywood Way in Burbank, California.

Business Day” means any day other than a Legal Holiday.

 

3


Capital Lease Obligation” means, at the time any determination is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP.

Capital Stock” means:

(1) in the case of a corporation, corporate stock;

(2) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock;

(3) in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and

(4) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

Cash Equivalents” means:

(1) United States dollars;

(2) securities issued or directly and fully guaranteed or insured by the United States government (provided that the full faith and credit of the United States is pledged in support of those securities) or any agency or instrumentality of the United States government having maturities of not more than 24 months from the date of acquisition;

(3) certificates of deposit and Eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case, with any lender party to the Credit Facility or with any domestic commercial bank having capital and surplus in excess of $500.0 million and a Thomson Bank Watch Rating of “B” or better;

(4) repurchase obligations with a term of not more than 30 days for underlying securities of the types described in clauses (2) and (3) above entered into with any financial institution meeting the qualifications specified in clause (3) above;

(5) commercial paper having one of the two highest ratings obtainable from Moody’s Investors Service, Inc. or Standard & Poor’s Rating Services and in each case maturing within one year after the date of acquisition;

(6) marketable short-term money market and similar securities having a rating of at least P-2 or A-2 from either Moody’s or S&P, respectively (or, if at any time neither Moody’s nor S&P shall be rating such obligations, an equivalent rating from another Rating Agency) and in each case maturing within 24 months after the date of creation thereof; and

(7) money market funds at least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (6) of this definition.

 

4


Change of Control” means the occurrence of any of the following:

(1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets (which term shall include Media Licenses) of the Company and its Restricted Subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) other than a Principal or a Related Party of a Principal;

(2) the adoption of a plan relating to the liquidation or dissolution of the Company; or

(3) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as defined above), other than the Principals and their Related Parties, becomes the Beneficial Owner, directly or indirectly, of more than 50% of the Voting Stock of the Company, measured by voting power rather than number of shares.

Clearstream” means Clearstream Banking, S.A.

Collateral” means all assets, other than Excluded Collateral, now owned or hereafter acquired, of the Company, any Guarantor, or any other Person, to the extent such assets are pledged or assigned or purported to be pledged or assigned, or are required to be pledged or assigned under the Secured Debt Documents to the Collateral Agent, together with the proceeds and products thereof. For purposes of clarification, the Collateral shall not include any assets released from the Liens of the Collateral Agent in accordance with the Secured Debt Documents or with respect to which the Collateral Agent is required to release its Liens pursuant to the Priority Lien Intercreditor Agreement; provided, that, if such Liens are required to be released as a result of the sale, transfer or other disposition of any assets of the Company or any Guarantor, such assets will cease to be excluded from the Collateral if the Company or any Guarantor thereafter acquires or reacquires such assets.

Collateral Agent” means US Bank National Association, acting as the collateral agent under the Security Documents, together with its successors and permitted assigns under the Priority Lien Intercreditor Agreement and the other Security Documents.

Consolidated Cash Flow” means, with respect to any specified Person for any period, the Consolidated Net Income of such Person for such period plus:

(1) provision for taxes based on income or profits of such Person and the Restricted Subsidiaries for such period (and to the extent not included in the foregoing, Permitted Tax Distributions), to the extent that such provision for taxes or Permitted Tax Distributions were deducted in computing such Consolidated Net Income; plus

(2) Consolidated Interest Expense to the extent that any such expense was deducted in computing such Consolidated Net Income; plus

(3) depreciation, amortization (including non-cash employee and officer equity compensation expenses, amortization of goodwill and other intangibles, amortization of programming costs (net of program payments made or to be made), barter expenses and impairment charges under SFAS 142 for broadcast licenses, goodwill or other indefinite lived intangible assets, but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses (excluding any such non-cash expense to the extent that it

 

5


represents amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period, to the extent that such depreciation, amortization, impairment charges and other non-cash expenses were deducted in computing such Consolidated Net Income; plus

(4) any costs or expense incurred by such Person or its Restricted Subsidiaries pursuant to any management equity plan or stock option plan or any other management or employee benefit plan or agreement or any stock subscription or shareholder agreement, to the extent that such costs or expense are funded with cash proceeds contributed to the capital of such Person or net cash proceeds of an issuance of Equity Interests of such Person (other than Disqualified Stock) and such net cash proceeds are excluded from the calculation set forth in clause (c) of the first paragraph of Section 4.07 and are not treated as an Equity Offering for purposes of Section 3.07 or used to support an incurrence of Indebtedness under clause (xiv) of Section 4.09; plus

(5) any extraordinary or non-recurring expenses and charges of such Person and the Restricted Subsidiaries for such period, including, without limitation, transaction costs in respect of acquisitions and transaction costs in respect of the Exchange Offers, to the extent that such expenses and charges were deducted in computing such Consolidated Net Income; minus

(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business; minus

(7) cash payments related to non-cash charges that increased Consolidated Cash Flow in any prior period; minus

(8) barter revenues;

in each case, on a consolidated basis and determined in accordance with GAAP.

Notwithstanding the foregoing, the provision for taxes based on the income or profits of, and the depreciation and amortization and other non-cash expenses of, a Subsidiary of the Company will be added to Consolidated Net Income to compute Consolidated Cash Flow of the Company only to the extent that a corresponding amount would be permitted at the date of determination to be dividended, distributed or loaned to the Company by such Subsidiary without prior governmental approval (that has not been obtained), and without direct or indirect restriction pursuant to the terms of its charter and all agreements, instruments, judgments, decrees, orders, statutes, rules and governmental regulations applicable to that Subsidiary or its stockholders.

Consolidated Interest Expense” means, with respect to any Person for any period, the sum, without duplication of:

(1) consolidated interest expense of such Person and the Restricted Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, imputed interest with respect to obligations with respect to any sale and leaseback transaction, fees, including but not limited to agency fees, letter of credit fees, commitment fees, commissions, discounts and other fees and charges incurred in respect of Indebtedness and net of the effect of all payments made or received pursuant to Hedging Obligations); plus

 

6


(2) the consolidated interest expense of such Person and the Restricted Subsidiaries that was capitalized during such period; plus

(3) any interest on Indebtedness of another Person that is guaranteed by such Person or any Restricted Subsidiary or secured by a Lien on assets of such Person or any Restricted Subsidiary whether or not such guarantee or Lien is called upon; plus

(4) the product of:

 

  (a) all dividend payments on any series of Disqualified Stock of such Person or preferred stock of any Restricted Subsidiaries to Persons other than the Company or any of the Restricted Subsidiaries (excluding any dividends paid in Capital Stock (other than Disqualified Stock)), times

 

  (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal,

in each case, on a consolidated basis and in accordance with GAAP.

Consolidated Net Income” means, with respect to any specified Person for any period, the aggregate of the Net Income of such Person and its Restricted Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP; provided that:

(1) the Net Income of any Person that is not a Restricted Subsidiary will be included only to the extent of the amount of dividends or similar distributions paid in cash to the specified Person or a Restricted Subsidiary of the Person;

(2) the Net Income of any Restricted Subsidiary will be excluded to the extent that the declaration or payment of dividends or similar distributions or loans by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, 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 stockholders; and

(3) the cumulative effect of a change in accounting principles will be excluded.

Consolidated Secured Leverage Ratio” means, as of any date of determination, the ratio of (1) total consolidated secured Indebtedness of the Company and its Restricted Subsidiaries as of such date, after giving effect to all incurrences and repayments of Indebtedness on or about such date, to (2) Consolidated Cash Flow of the Company for the most recent four consecutive fiscal quarters for which financial statements are available ending prior to such date, in each case, with such pro forma and other adjustments as are appropriate and consistent with the pro forma and other adjustment provisions set forth in the definition of Leverage Ratio.

Control Agreement” means, with respect to any bank account of the Company or any of its Restricted Subsidiaries, a Control Agreement in form and substance satisfactory to the First Priority Lien Collateral Trustee or the Collateral Agent, as applicable, in its reasonable discretion, executed and delivered by the Company or such Restricted Subsidiary, the depository institution at which such account is maintained and the First Priority Lien Collateral Trustee or the Collateral Agent, as applicable, as any such agreement may be amended, supplemented or otherwise modified from time to time.

 

7


Corporate Trust Office of the Trustee” will be at the address of the Trustee specified in Section 14.01 hereof or such other address as to which the Trustee may give notice to the Company.

Credit Agreement” means that certain Amended and Restated Credit Agreement dated as of March 18, 2011, by and among the Company, the guarantors party thereto, the lenders party thereto, Credit Suisse AG, Cayman Islands Branch, as administrative agent and as collateral trustee and the other parties thereto, including any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith, in each case, as further amended (including any amendment and restatement thereof), modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding Subsidiaries of the Company as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder; provided that Credit Agreement shall exclude any replacement, refinancing or restructuring by means of sales of debt securities (it being understood that a revolving or term loan facility that is evidenced by a credit agreement pursuant to customary documentation shall constitute a Credit Agreement); and provided, further that, for purposes of the Priority Lien Intercreditor Agreement, any replacement, refinancing or restructuring credit agreement shall constitute a “Credit Agreement” only to the extent designated as First Priority Lien Debt in accordance with the terms of the Priority Lien Intercreditor Agreement.

Credit Agreement Agent” means any administrative agent under any Credit Agreement.

Credit Facility” or “Credit Facilities” means, one or more debt facilities (including, without limitation, the Credit Agreement) or commercial paper facilities, in each case with banks or other institutional lenders providing for revolving credit loans, term loans, receivables financing (including through the sale of receivables to such lenders or to special purpose entities formed to borrow from such lenders against such receivables) or letters of credit, in each case, as amended, restated, modified, renewed, refunded, replaced (whether upon or after termination or otherwise) or refinanced (including by means of sales of debt securities to institutional investors) in whole or in part from time to time, including any agreement extending the maturity of, consolidating or otherwise restructuring (including adding subsidiaries of the Company as additional guarantors thereunder) all or any portion of the Indebtedness under such agreement or any successor or replacement agreement and whether by the same or any other agent, lender or group and whether or not increasing the amount of Indebtedness that may be incurred thereunder.

Custodian” means the Trustee, as custodian with respect to the Notes in global form, or any successor entity thereto.

Dallas Studio Property” means that certain real property owned in fee by the Company or the Guarantors located on Gateway in Dallas, Texas.

Default” means any event that is, or with the passage of time or the giving of notice or both would be, an Event of Default.

Definitive Note” means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, substantially in the form of Exhibit A-1 hereto except that such Note shall not bear the Global Note Legend and shall not have the “Schedule of Exchanges of Interests in the Global Note” attached thereto.

 

8


Depositary” means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depositary with respect to the Notes, and any and all successors thereto appointed as depositary hereunder and having become such pursuant to the applicable provision of this Indenture.

Designated Senior Debt” means:

(1) any Indebtedness outstanding under the Credit Agreement and the First Priority Senior Secured Notes; and

(2) any other Senior Debt permitted under this Indenture the principal amount of which is $25.0 million or more (including amounts available under a committed facility) and that has been designated by the Company as “Designated Senior Debt.”

Discount Notes” means the 11% Senior Discount Notes due 2013 issued by Holdings.

Discount Notes Forbearance Agreement” means a forbearance agreement, substantially in the form of Exhibit H to this Indenture, between Holdings and the trustee under the Discount Notes Indenture with respect to the Discount Notes held by Holdings.

Discount Notes Indenture” means the indenture, dated as of October 10, 2003, by and between Holdings and U.S. Bank National Association, a national banking association, as trustee, as amended or supplemented from time to time.

Disqualified Stock” means any Capital Stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder of the Capital Stock), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at the option of the holder of the Capital Stock, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes mature. Notwithstanding the preceding sentence, any Capital Stock that would constitute Disqualified Stock solely because the holders of the Capital Stock have the right to require the Company to repurchase such Capital Stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions unless such repurchase or redemption complies with the provisions of Section 4.07.

Domestic Subsidiary” means any Restricted Subsidiary of the Company that was formed under the laws of the United States or any state of the United States or the District of Columbia or that guarantees or otherwise provides direct credit support for any Indebtedness of the Company or any other Domestic Subsidiary of the Company.

Empire Burbank” means Empire Burbank Studios LLC, a California limited liability company.

Empire Burbank Lease” means that certain Lease dated as of July 15, 1999 between Empire Burbank, as lessor, and LBCI, as lessee, relating to occupancy of the Burbank Office Property (or a replacement lease in substantially the same form except that the Company is the lessee and the term thereof is extended), as modified by that certain First Amendment to Lease and Assignment and Assumption Agreement dated as of June 28, 2004 by and among Empire Burbank, LBCI and the Company and in each case as such lease may be further amended or modified in accordance with this Indenture.

 

9


Empire Burbank Sublease” means that certain Sublease Agreement between LBCI, as sublessor, and Empire Burbank, as sublessee, (or a replacement sublease in substantially the same form except that the Company is the sublessor and the term thereof is extended), in each case relating to occupancy of certain portions of the Burbank Office Property by Empire Burbank, as modified by that certain First Amendment to Sublease Agreement and Assignment and Assumption dated as of June 28, 2004 by and among Empire Burbank, LBCI, and the Company and as such sublease may be further amended or modified from time to time.

Equity Interests” means Capital Stock and all warrants, options or other rights to acquire Capital Stock (but excluding any debt security that is convertible into, or exchangeable for, Capital Stock).

Equity Offering” means the issuance and sale of Equity Interests of the Company or Parent; provided, however, that in the event of an Equity Offering by Parent, all or a portion of the net proceeds therefrom are contributed to the Company, provided further, however, that in no event will any issuance or sale of Capital Stock used to support the incurrence of Indebtedness under clause (xiv) of the second paragraph under Section 4.09 be deemed to be an Equity Offering.

Euroclear” means Euroclear Bank, S.A./N.V., as operator of the Euroclear system.

Exchange Act” means the Securities Exchange Act of 1934, as amended.

Exchange Offers” means (A) the offer to exchange (i) Notes and (ii) Warrants for any and all outstanding Old Senior Subordinated Notes, and (B) the offer to exchange either (i) Notes for any and all outstanding Discount Notes or (ii) Holdings Notes for any and all outstanding Discount Notes.

Excluded Collateral” means each of the following:

(1) any FCC License, except at such times and to the extent that a security interest in such FCC License is permitted under applicable law;

(2) any Excluded Equity Interests;

(3) any United States Trademark applications filed on the basis of an Obligor’s intent-to-use such mark, in each case, unless and until evidence of the use of such Trademark in interstate commerce is submitted to the United States Patent and Trademark Office, but only if and to the extent that the granting of a security interest in such application would result in the invalidation of such application;

(4) any interest in leased real property (including, without limitation, any leasehold interests in real property);

(5) any fee interest in real property (other than Mortgaged Property);

(6) any assets subject to a permitted Lease Related Lien (in the case of a permitted refinancing in respect of the Indebtedness secured by such Lease Related Lien) to the extent the documents governing such Lease Related Lien prohibit, or require a consent or approval in order for, such assets to be subject to the Liens created by the Secured Debt Documents; and

 

10


(7) any other Collateral to the extent and for so long as such grant of security interest, (a) is prohibited by any Requirement of Law, (b) requires a filing with or consent from any Governmental Authority pursuant to any Requirement of Law that has not been made or obtained, or (c) constitutes a breach or default under or results in the termination of, or requires any consent not obtained under, any program, lease, license (including, without limitation, any software license), contract or agreement, except to the extent that such Requirement of Law or provisions of any such program, lease, license, contract or agreement is ineffective under applicable law or would be ineffective under Sections 9-406, 9-407, 9-408 or 9-409 of the New York Uniform Commercial Code to prevent the attachment of the security interest granted hereunder;

provided, that, notwithstanding anything in this Indenture, the Notes or any other Security Document to the contrary, the security interest granted pursuant to the Security Documents (x) shall attach at all times to all proceeds of the foregoing items to the extent that the assignment or encumbering of such proceeds is not prohibited by any Requirement of Law, (y) shall attach to the foregoing items immediately and automatically (without need for any further grant or act) at such time as the condition described in the applicable clause (1) through (7) above ceases to exist and (z) to the extent severable shall in any event attach to all rights in respect of the foregoing items that are not subject to the applicable condition described in clause (1) through (7) above.

Excluded Equity Interests” means, collectively, all shares of stock, partnership interests, limited liability interests, and all other equity interests in (1) any Person (other than a Wholly Owned Subsidiary or a Subsidiary controlled by the Company or any Wholly Owned Subsidiary of the Company) to the extent a security interest granted thereon is not permitted by the terms of such Person’s organizational or joint venture documents, (2) any voting Capital Stock in excess of 65% of the outstanding voting Capital Stock of any Foreign Subsidiary owned by an Obligor, (3) all Capital Stock of a Foreign Subsidiary indirectly owned by any Obligor and (4) all Capital Stock of Domestic Subsidiaries of Foreign Subsidiaries (for purposes of this definition, “voting Capital Stock” means, with respect to any issuer, the issued and outstanding shares of each class of stock of such issuer entitled to vote (within the meaning of Treasury Regulations §1.956-2(c)(2))); provided, however, that the provisions of this definition shall not apply to Foreign Subsidiaries which are required to become an Obligor pursuant to the requirements of any Security Document.

Existing Indebtedness” means Indebtedness of the Company and its Restricted Subsidiaries (other than Indebtedness under the Credit Agreement) in existence on the date of this Indenture.

FCC” means the Federal Communications Commission or any successor thereto.

FCC Licenses” means all radio, broadcast or other licenses, permits, certificates of compliance, franchises, approvals or authorizations granted or issued by the FCC to any Obligor that are necessary for the broadcast or other operations of the Company or any Subsidiary.

First Lien Intercreditor Agreement” means the Collateral Trust and Intercreditor Agreement dated as of March 18, 2011 by and among LBI Media, the guarantors from time to time party thereto, the trustee in respect of the First Priority Senior Secured Notes, Credit Suisse AG, Cayman Islands Branch, as administrative agent, the other First Priority Lien Debt Representatives from time to time party thereto, and the First Priority Lien Collateral Trustee, as amended, modified or otherwise supplemented.

First Priority Bank Debt” means (a) any Indebtedness incurred under the Credit Agreement pursuant to Section 4.09(i) in respect of which the First Priority Lien Debt Representative has agreed to be bound by or is otherwise subject to the terms of the First Lien Intercreditor Agreement in accordance with its terms and (b) Indebtedness incurred under the Specified Hedging Agreement in accordance with

 

11


the second paragraph of Section 4.09 in respect of which the Specified Hedge Provider has agreed to be bound by or is otherwise subject to the terms of the First Lien Intercreditor Agreement in accordance with its terms; provided that the Indebtedness incurred under the Specified Hedging Agreement may not exceed $3,000,000; provided, further, that the sum of (x) the principal amount of First Priority Bank Debt incurred under clause (a) above plus (y) Indebtedness incurred under the Specified Hedging Agreement may not, in the aggregate, exceed (i) prior to the closing of a Qualifying IPO, $50.0 million and (ii) from and after the closing of a Qualifying IPO, $100.0 million. For the avoidance of doubt, the principal amount of any Indebtedness incurred under the Credit Agreement or Indebtedness incurred under the Specified Hedging Agreement that is not First Priority Bank Debt is First Priority Lien Debt.

First Priority Bank Debt Documents” means the Credit Agreement, the guarantees of the Credit Agreement, the Specified Hedging Agreement, each First Priority Debt Sharing Confirmation and the Security Documents.

First Priority Bank Debt Obligations” means the First Priority Bank Debt and all other Obligations in respect thereof.

First Priority Debt Sharing Confirmation” means, as to any Series of First Priority Lien Debt, the written agreement of the holders of such Series of First Priority Lien Debt, as set forth in the credit agreement, indenture or other agreement governing such Series of First Priority Lien Debt, for the benefit of all holders of each other existing and future Series of First Priority Lien Debt and each existing and future First Priority Lien Debt Representative, that, subject to the terms of the First Lien Intercreditor Agreement, all First Priority Lien Obligations will be and are secured equally and ratably by all Liens at any time granted by the Company or any other Obligor to secure any Obligations in respect of such Series of First Priority Lien Debt, whether or not upon property otherwise constituting Collateral, that all such Liens will be enforceable by the First Priority Lien Collateral Trustee for the benefit of all holders of First Priority Lien Obligations equally and ratably, and that the holders of Obligations in respect of such Series of First Priority Lien Debt are bound by the provisions in the First Lien Intercreditor Agreement relating to the order of application of proceeds from enforcement of such Liens, and consent to and direct the First Priority Lien Collateral Trustee to perform its obligations under the First Lien Intercreditor Agreement.

First Priority Lien” means a Lien granted to the First Priority Lien Collateral Trustee, for the benefit of the First Priority Lien Secured Parties, upon any property of the Company or any other Obligor to secure First Priority Lien Obligations.

First Priority Lien Collateral Trustee” means Credit Suisse AG, Cayman Islands Branch, acting as the collateral trustee under the security documents governing the Lien securing the First Priority Lien Debt, together with its successors and permitted assigns under the Priority Lien Intercreditor Agreement and such security documents.

First Priority Lien Debt” means:

(1) the First Priority Senior Secured Notes and the related subsidiary guarantees issued under the First Priority Senior Secured Notes Indenture;

(2) the First Priority Bank Debt;

(3) Indebtedness under existing Hedging Agreements and any guarantees thereof that, in each case, was permitted to be incurred and so secured under each applicable First Priority Lien Debt Document (or as to which the lenders obtained an officer’s certificate at the time of incurrence to the effect that such Indebtedness was permitted to be incurred and secured by all applicable First Priority Lien Debt Documents); and

 

12


(4) Indebtedness under any other Credit Facility or other Hedging Agreements or an issuance of debt securities that, in each case, is secured equally and ratably with the First Priority Senior Secured Notes by a First Priority Lien that was permitted to be incurred and so secured under each applicable First Priority Lien Debt Document; provided, in the case of each issue or series of Indebtedness referred to in this clause (4), that:

 

  (a) on or before the date on which such Indebtedness is incurred by the Company or any other Obligor, as the case may be, such Indebtedness is designated by the Company or any other Obligor, as the case may be, in an officer’s certificate delivered to each First Priority Lien Debt Representative and the First Priority Lien Collateral Trustee, as “First Priority Lien Debt” for the purposes of the First Priority Lien Debt Documents;

 

  (b) such Indebtedness is governed by a credit agreement, an indenture or other agreement that includes a First Priority Debt Sharing Confirmation; and

 

  (c) all requirements set forth in the First Lien Intercreditor Agreement as to the confirmation, grant or perfection of the First Priority Lien Collateral Trustee’s Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (c) will be conclusively established if the Company or any other Obligor, as the case may be, delivers to the First Priority Lien Collateral Trustee an officer’s certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “First Priority Lien Debt”).

For the avoidance of doubt, in respect of any Hedging Obligation, the requirements in the foregoing clause (3) and clause (4), as applicable, need be satisfied only once in respect of such Hedging Obligations and not, for the avoidance of doubt, on multiple occasions upon the execution of each confirmation executed in connection therewith.

First Priority Lien Debt Documents” means collectively, the First Priority Bank Debt Documents, the First Priority Senior Secured Notes Indenture, the First Priority Senior Secured Notes and the related subsidiary guarantees, the First Lien Intercreditor Agreement (and related security documents), each First Priority Debt Sharing Confirmation, all other agreements related to the First Priority Senior Secured Notes Indenture, the First Priority Senior Secured Notes and related subsidiary guarantees, and the indenture or agreement governing each other Series of First Priority Lien Debt and all other agreements governing, securing or relating to any First Priority Lien Obligation.

First Priority Lien Debt Representative” means:

(1) in the case of the First Priority Senior Secured Notes and the related subsidiary guarantees, the trustee under the First Priority Senior Secured Notes Indenture, and

(2) in the case of the First Priority Bank Debt Obligations, the administrative agent under the Credit Agreement.

 

13


First Priority Lien Obligations” means the First Priority Lien Debt and all other Obligations in respect thereof, including Obligations owed to the First Priority Lien Collateral Trustee under the First Priority Lien Debt Documents.

First Priority Lien Secured Parties” means the holders of First Priority Lien Obligations, any First Priority Lien Debt Representatives and the First Priority Lien Collateral Trustee.

First Priority Senior Secured Notes” means the 10% Senior Secured Notes due 2019 issued by the Company and the related subsidiary guarantees, issued under the First Priority Senior Secured Notes Indenture.

First Priority Senior Secured Notes Indenture” means the indenture dated March 18, 2011 among the Company, the subsidiary guarantors of the First Priority Senior Secured Notes, and U.S. Bank National Association, a national banking association, as trustee, as amended by that certain First Supplemental Indenture, dated as of December 31, 2012, among the Company, the subsidiary guarantors of the First Priority Senior Secured Notes, and U.S. Bank National Association, a national banking association, as trustee.

Foreign Subsidiary” means any Subsidiary of the Company or any Guarantor (other than Empire Burbank) that is not a Domestic Subsidiary.

GAAP” means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as have been approved by a significant segment of the accounting profession, which are in effect on the date of this Indenture.

Global Note Legend” means the legend set forth in Section 2.06(f)(ii), which is required to be placed on all Global Notes issued under this Indenture.

Global Notes” means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes deposited with or on behalf of and registered in the name of the Depositary or its nominee, substantially in the form of Exhibit A hereto and that bears the Global Note Legend and that has the “Schedule of Exchanges of Interests in the Global Note” attached thereto, issued in accordance with Sections 2.01, 2.06(a), 2.06(c) or 2.06(d) hereof.

Government Securities” means direct obligations of, or obligations guaranteed by, the United States of America, and the payment for which the United States pledges its full faith and credit.

Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government and the National Association of Insurance Commissioners.

Guarantee” means a guarantee, other than by endorsement of negotiable instruments for collection in the ordinary course of business, direct or indirect, in any manner including, without limitation, by way of a pledge of assets or through letters of credit or reimbursement agreements in respect thereof, of all or any part of any Indebtedness.

 

14


Guarantors” means each of:

(1) the Company’s Restricted Subsidiaries on the date of this Indenture; and

(2) any other subsidiary of the Company that executes a Subsidiary Guarantee in accordance with the provisions of this Indenture;

and their respective successors and assigns.

Hedge Providers” means any Person who enters into a Hedging Agreement with the Company or any other Obligor to the extent permitted under each applicable Secured Debt Document and includes, without limitation, any Specified Hedge Provider.

Hedging Agreement” means any interest rate swap agreement, commodity swap agreement, foreign exchange swap agreement or any other derivative or similar agreement which is permitted under each applicable Secured Debt Document and, in each case, any confirmations executed in connection therewith.

Hedging Obligations” means the actual Indebtedness of the Company or any other Obligor to a Hedge Provider under or pursuant to a Hedging Agreement to which it is a party.

Holder” means a Person in whose name a Note is registered.

Holdings” means LBI Media Holdings, Inc., a Delaware corporation, or any successor.

Holdings Notes” means the 11% Senior Notes due 2017 to be issued by Holdings.

Holdings Notes Indenture” means the indenture to be entered into by and among Holdings and U.S. Bank National Association, a national banking association, as trustee.

Houston Studio Property” means that certain real property owned in fee by the Company or the Guarantors located at 3000 Bering Drive, Houston, Texas.

IAI Global Note” means a Global Note substantially in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold to Institutional Accredited Investors.

Indebtedness” means, with respect to any specified Person, any indebtedness of such Person, whether or not contingent:

(1) in respect of borrowed money;

(2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);

(3) in respect of banker’s acceptances;

(4) representing Capital Lease Obligations;

(5) representing the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable incurred in the ordinary course of business; or

 

15


(6) representing any Hedging Obligations (the amount of any such obligations to be equal at any time to the termination value of such agreement or arrangement giving rise to such obligation that would be payable by such Person at such time),

if and to the extent any of the preceding items (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term “Indebtedness” includes all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) and, to the extent not otherwise included, the Guarantee by the specified Person of any indebtedness of any other Person; provided that Indebtedness shall not include the pledge of the Capital Stock of an Unrestricted Subsidiary securing Non-Recourse Debt of that Unrestricted Subsidiary.

The amount of any Indebtedness outstanding as of any date will be:

(1) the accreted value of the Indebtedness, in the case of any Indebtedness issued with original issue discount; and

(2) the principal amount of the Indebtedness, together with any interest on the Indebtedness that is more than 30 days past due, in the case of any other Indebtedness.

Indenture” means this Indenture, as amended or supplemented from time to time.

Indirect Participant” means a Person who holds a beneficial interest in a Global Note through a Participant.

Initial Notes” means the first $[            ] aggregate principal amount of Notes issued under this Indenture on the date hereof.

Insolvency Proceeding” means:

(1) any voluntary or involuntary case or proceeding under the Bankruptcy Code with respect to any Obligor;

(2) any other voluntary or involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding, with respect to the Company or any other Obligor or with respect to a material portion of its assets;

(3) any liquidation, dissolution, reorganization or winding up of the Company or any other Obligor, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy; or

(4) any assignment for the benefit of creditors or any other marshalling of assets and liabilities of the Company or any other Obligor.

Institutional Accredited Investor” means an institution that is an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act, who are not also QIBs.

Investment Agreement” means the Investment Agreement, dated as of March 30, 2007, among Parents, the investors named therein and the stockholders named therein.

 

16


Investments” means, with respect to any Person, all direct or indirect investments by such Person in other Persons (including Affiliates) in the forms of loans (including Guarantees or other obligations), advances or capital contributions (excluding accounts receivable, trade credit and advances to customers, commission, travel and similar advances to directors, officers and employees, in each case made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, together with all items that are or would be classified as investments on a balance sheet prepared in accordance with GAAP. If the Company or any Restricted Subsidiary of the Company sells or otherwise disposes of any Equity Interests of any direct or indirect Restricted Subsidiary of the Company such that, after giving effect to any such sale or disposition, such Person is no longer a Restricted Subsidiary of the Company, the Company will be deemed to have made an Investment on the date of any such sale or disposition equal to the fair market value of the Company’s Investments in such Restricted Subsidiary that were not sold or disposed of in an amount determined as provided in the final paragraph of Section 4.07. The acquisition by the Company or any Subsidiary of the Company of a Person that holds an Investment in a third Person will be deemed to be an Investment by the Company or such Subsidiary in such third Person in an amount equal to the fair market value of the Investments held by the acquired Person in such third Person in an amount determined as provided in the final paragraph of Section 4.07. Except as otherwise provided herein, the amount of an Investment will be determined at the time the Investment is made and without giving effect to subsequent changes in value.

Investor Rights Agreement” means the Investor Rights Agreement, dated as of March 30, 2007, as amended by Amendment No. 1 to Investor Rights Agreement, by and among Parent and each of the stockholders of Parent listed on the signature page thereto.

LBCI” means Liberman Broadcasting of California LLC, a California limited liability company (successor in interest to Liberman Broadcasting, Inc., a California corporation).

LBI Media Intercompany Note” means, following a Qualifying IPO, to the extent that Parent or Holdings may elect to complete the redemption or repurchase (including without limitation pursuant to a defeasance, satisfaction or discharge, retirement for value or other acquisition or prepayment and whether pursuant to the optional redemption provisions, in open market transactions or otherwise) of any Parent Entity Allowable Indebtedness, Holdings Notes and Discount Notes with proceeds from a Qualifying IPO, that certain promissory note that may be issued on or within 15 months after the Qualifying IPO closing date by the Company, as borrower, to the order of Parent or Holdings in exchange for cash proceeds to be loaned to the Company pursuant thereto in an aggregate principal amount not to exceed the amount necessary to complete the redemption or repurchase of the Parent Entity Allowable Indebtedness, Holdings Notes and Discount Notes (including all or any portion of the outstanding principal amount of the Parent Entity Allowable Indebtedness, Holdings Notes and Discount Notes and any premiums (including call premiums, early tender premiums or consent premiums) and interest thereon, which may consist of accrued interest, plus, if applicable, an amount of interest calculated on the basis of the next succeeding contractual redemption or maturity date, and any other amounts owing with respect thereto) outstanding on the date of such promissory note.

Lease Related Lien” means (1) any interest or title of a lessor or sublessor under any lease of real estate or personal property permitted by the Secured Debt Documents; and (2) any Uniform Commercial Code financing statements with respect to property leased by the Obligors.

Legal Holiday” means a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed. If a payment date is a Legal Holiday at a place of payment, payment may be made at that place on the next succeeding day that is not a Legal Holiday, and no interest shall accrue on such payment for the intervening period

 

17


Lender Hedge Provider” means a Hedge Provider who enters into a Hedging Agreement that is permitted under the First Priority Lien Debt Documents and who at the time of entering into such Hedging Agreement is either (1) a lender under a Credit Facility, or (2) an Affiliate of a lender under a Credit Facility.

Letters of Credit” shall mean letters of credit issued pursuant to the Credit Agreement.

Leverage Ratio” means the ratio of (1) the sum of (a) the aggregate outstanding amount of Indebtedness of each of the Company and the Restricted Subsidiaries as of the last day of the most recently ended fiscal quarter for which financial statements are internally available as of the date of calculation on a combined consolidated basis in accordance with GAAP, plus (b) the aggregate liquidation preference of all outstanding Disqualified Stock of the Company and preferred stock of the Restricted Subsidiaries (except preferred stock issued to the Company or a Restricted Subsidiary) as of the last day of such fiscal quarter (in each case, subject to the terms described in the next paragraph) to (2) the aggregate Consolidated Cash Flow of the Company for the last four full fiscal quarters for which financial statements are internally available ending on or prior to the date of determination (the “Reference Period”).

For purposes of this definition, the aggregate outstanding principal amount of Indebtedness of the Company and the Restricted Subsidiaries and the aggregate liquidation preference of all outstanding preferred stock of the Restricted Subsidiaries for which such calculation is made shall be determined on a pro forma basis as if the Indebtedness and preferred stock giving rise to the need to perform such calculation had been incurred and issued and the proceeds therefrom had been applied, and all other transactions in respect of which such Indebtedness is being incurred or preferred stock is being issued had occurred, on the first day of such Reference Period. In addition to the foregoing, for purposes of this definition, the Leverage Ratio shall be calculated on a pro forma basis after giving effect to (i) the incurrence of the Indebtedness of such Person and the Restricted Subsidiaries and the issuance of the preferred stock of such Subsidiaries (and the application of the proceeds therefrom) giving rise to the need to make such calculation and any incurrence (and the application of the proceeds therefrom) or repayment of other Indebtedness or preferred stock, at any time subsequent to the beginning of the Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the Trustee during such period pursuant to clause (xi) of the definition of Permitted Debt; provided, however, that Indebtedness shall not include any Acquisition Debt that has been the subject of an Incurrence Notice under clause (xi) of the definition of Permitted Debt at any time after such Incurrence Notice has been withdrawn or after the passage of 365 days following the giving of such Incurrence Notice if and to the extent such Acquisition Debt has not then been incurred), as if such incurrence or issuance (and the application of the proceeds thereof), or the repayment, as the case may be, occurred on the first day of the Reference 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 period) and (ii) any acquisition at any time on or subsequent to the first day of the Reference Period and on or prior to the date of determination (including any such incurrence or issuance which is the subject of an Incurrence Notice delivered to the Trustee during such period pursuant to clause (xi) of the definition of Permitted Debt subject to the proviso in clause (i) above), as if such acquisition (including the incurrence, assumption or liability for any such Indebtedness and the issuance of such preferred stock and also including any Consolidated Cash Flow associated with such acquisition) occurred on the first day of the Reference Period giving pro forma effect to any non-recurring expenses, non-recurring costs and cost reductions within the first year after such acquisition the Company reasonably anticipates in good faith if the Company delivers to the Trustee

 

18


an Officer’s Certificate executed by an executive officer of the Company certifying to and describing and quantifying with reasonable specificity such non-recurring expenses, non-recurring costs and cost reductions. Furthermore, in calculating consolidated interest expense for purposes of the calculation of Consolidated Cash Flow, (a) interest on Indebtedness determined on a fluctuating basis as of the date of determination (including Indebtedness actually incurred on the date of the transaction giving rise to the need to calculate the Leverage Ratio) and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness as in effect on the date of determination and (b) notwithstanding (a) above, interest determined on a fluctuating basis, to the extent such interest is covered by Hedging Obligations, shall be deemed to accrue at the rate per annum resulting after giving effect to the operation of such agreements.

Lien” means, with respect to any asset, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, whether or not filed, recorded or otherwise perfected under applicable law, including any conditional sale or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

LMA” means a local marketing arrangement, joint sales agreement, time brokerage agreement, shared service agreement, management agreement or similar arrangement pursuant to which a Person, subject to customary preemption rights and other limitations, (i) obtains the right to sell a portion of the advertising inventory of a radio or television station of which a third party is the licensee, (ii) obtains the right to exhibit programming and sell advertising time during a portion of the air time of a radio or television station or (iii) manages a portion of the operations of a radio or television station.

Management Incentive Contracts” means employment agreements between Parent and employees providing for payments in the event that the net value of Parent exceeds certain thresholds.

Media Licenses” means any license, permit, certificate, ordinance, approval or other authorization, or any renewal or extension thereof, from the FCC that is necessary for the broadcast or other operations of the Company and its Subsidiaries.

Moody’s” means Moody’s Investor Service, Inc. and any successor to its rating agency business.

Mortgaged Property” means, (1) with respect to the Real Property Assets of the Company and the Guarantors (other than Empire Burbank) as of the issuance date of the Initial Notes, the Burbank Studio Property, the Dallas Studio Property, the Houston Studio Property and each other fee ownership interest in any Real Property Asset listed on Schedule II hereto and (2) with respect to any fee ownership interest in any Real Property Asset acquired by the Company or any Guarantor (other than Empire Burbank) following the issuance date of the Initial Notes, any other fee ownership interest in any Real Property Asset with a fair market value (as determined by the Company in its reasonable discretion as of the date of such acquisition or a date such Person becomes a Subsidiary) in excess of $2,500,000.

Mortgages” means the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents securing Liens on the premises, as well as the other Collateral secured by and described in the mortgages, deeds of trust, deeds to secure Indebtedness or other similar documents.

Net Income” means, with respect to any specified Person, the net income (loss) of such Person, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends, excluding, however: (1) any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any Asset Sale; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; and (2) any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss.

 

19


Net Proceeds” means the aggregate cash proceeds received by the Company or any of its Restricted Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (i) the costs directly related to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, and any relocation expenses incurred as a result of the Asset Sale, (ii) taxes paid or estimated to be payable as a result of the Asset Sale (and to the extent not included in the foregoing, that portion of any Permitted Tax Distributions attributable thereto), in each case, after taking into account any available tax credits or deductions and any tax sharing arrangements, (iii) amounts required to be applied to the repayment of Indebtedness and (iv) any reserve for adjustment in respect of the sale price of such asset or assets established in accordance with GAAP.

Non-Lender Hedge Provider” means a Hedge Provider that is not a Lender Hedge Provider (and includes any Lender Hedge Provider that is no longer a holder of other First Priority Lien Debt, or an Affiliate of such holder, whether or not Section 3.8 of the First Lien Intercreditor Agreement has been complied with).

Non-Recourse Debt” means Indebtedness:

(1) as to which neither the Company, the Guarantors, nor any of the Restricted Subsidiaries (a) provides credit support of any kind (including any undertaking, agreement or instrument that would constitute Indebtedness), (b) is directly liable as a guarantor or otherwise, or (c) constitutes the lender, in each case other than a pledge of the Equity Interests of an Unrestricted Subsidiary; and

(2) no default with respect to which (including any rights that the holders of the Indebtedness may have to take enforcement action against an Unrestricted Subsidiary) would permit upon notice, lapse of time or both any holder of any other Indebtedness (other than the Notes) of the Company, the Guarantors, or any of the Restricted Subsidiaries to declare a default on such other Indebtedness or cause the payment of the Indebtedness to be accelerated or payable prior to its stated maturity.

Non-U.S. Person” means a Person who is not a U.S. Person.

Notes” has the meaning assigned to it in the preamble to this Indenture. The Initial Notes, the PIK Notes, and the Additional Notes shall be treated as a single class for all purposes under this Indenture.

Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursements, damages and other liabilities payable (including post-petition interest) under the documentation governing any Indebtedness.

Obligor” means the Company, the Guarantors (other than Empire Burbank) and each other Person (if any) that at any time provides collateral security for any First Priority Lien Obligations.

 

20


Offering Circular” means the confidential offering memorandum and consent solicitation statement, dated July 17, 2012, pursuant to a Confidential Offering Memorandum and Consent Solicitation Statement dated July 17, 2012, as supplemented by the Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated July 24, 2012, the Second Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated October 12, 2012, the Third Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated October 18, 2012, the Fourth Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated October 26, 2012, the Fifth Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated November 2, 2012, the Sixth Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated November 19, 2012, the Seventh Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated December 11, 2012, the Eighth Supplement to the Confidential Offering Memorandum and Consent Solicitation Statement dated December 21, 2012, and the press releases issued by the Company and/or Holdings and/or Parent on August 14, 2012, August 30, 2012, September 21, 2012, September 28, 2012, October 5, 2012, October 12, 2012, October 26, 2012, November 2, 2012, November 13, 2012, November 19, 2012, December 4, 2012, December 10, 2012, December 11, 2012, December 12, 2012 and December 27, 2012, related to the Notes.

Officer” means, with respect to any Person, the Chairman of the Board, the Chief Executive Officer, the President, the Chief Operating Officer, the Chief Financial Officer, the Treasurer, any Assistant Treasurer, the Controller, the Secretary or any Vice President or Executive Vice President of such Person.

Officer’s Certificate” means a certificate signed on behalf of the Company by an Officer of the Company, who must be the principal executive officer, the principal financial officer or the principal accounting officer of the Company, that meets the requirements of Section 14.03 hereof.

Old Senior Subordinated Notes” means the 8 1/2% Senior Subordinated Notes due 2017 issued by the Company and the related subsidiary guarantees.

Old Senior Subordinated Notes Indenture” means the indenture, dated as of July 23, 2007, among the Company, the subsidiary guarantors of the Old Senior Subordinated Notes and U.S. Bank National Association, a national banking association, as trustee, as amended or supplemented from time to time.

Opinion of Counsel” means an opinion from legal counsel who is reasonably acceptable to the Trustee, that meets the requirements of Section 14.03 hereof. Such counsel may be an employee of or counsel to the Company, any Subsidiary of the Company or the Trustee.

Parent” means Liberman Broadcasting, Inc., a Delaware corporation, or any successor.

Parent Entity Allowable Indebtedness” means Indebtedness of Holdings other than the Discount Notes and the Holdings Notes issued in the Exchange Offers; provided that (i) the principal amount of such Indebtedness (excluding any paid-in-kind interest on such Indebtedness) does not exceed at any time $5.0 million, (ii) such Indebtedness has a final maturity date no earlier than the final maturity date of the Holdings Notes, (iii) such Indebtedness does not have the benefit of covenants or events of default that are more restrictive than those contained in the indenture governing the Holdings Notes, (iv) such Indebtedness does not have the benefit of any guarantees by the Company or any of its Subsidiaries on the date of incurrence, (v) the rate of any interest payable in cash on such Indebtedness does not exceed the rate of interest payable in cash on the Holdings Notes and any interest payable in cash on such Indebtedness is due no earlier than the first date on which interest is payable in cash on the Holdings Notes, (vi) the percentage of principal amount on such Indebtedness that may be subject to amortization payments prior to final maturity of such Indebtedness does not exceed the percentage of principal amount of Holdings Notes that may be subject to amortization payments prior to final maturity of Holdings Notes and any amortization payments on such Indebtedness are due no earlier than the first date on which amortization payments are due on the Holdings Notes, and (vii) such Indebtedness is issued in exchange for, or issued to otherwise repurchase, refinance, retire or otherwise acquire for value the Discount Notes

 

21


Parity Lien” means a Lien granted upon any property of the Company or any other Obligor to secure Parity Lien Obligations that is subject to the Priority Lien Intercreditor Agreement.

Parity Lien Debt” means:

(1) the Notes and the related Subsidiary Guarantees issued under this Indenture in the Exchange Offers together with any PIK Notes; and

(2) Indebtedness under any other Credit Facility or other Hedging Agreements or an issuance of debt securities that, in each case, is secured equally and ratably with the Notes by a Parity Lien that was permitted to be incurred and so secured under this Indenture; provided, in the case of each issue or series of Indebtedness referred to in this clause (2), that:

(a) on or before the date on which such Indebtedness is incurred by the Company or any other Obligor, as the case may be, such Indebtedness is designated by the Company or any other Obligor, as the case may be, in an officer’s certificate delivered to the trustee, as “Parity Lien Debt” for the purposes of this Indenture; and

(b) all requirements set forth in the Priority Lien Intercreditor Agreement as to the confirmation, grant or perfection of the Lien to secure such Indebtedness or Obligations in respect thereof are satisfied (and the satisfaction of such requirements and the other provisions of this clause (b) will be conclusively established if the Company or any other Obligor, as the case may be, delivers to the trustee an officer’s certificate stating that such requirements and other provisions have been satisfied and that such Indebtedness is “Parity Lien Debt”);

provided that, the aggregate outstanding principal amount (excluding any paid-in-kind interest) of the Indebtedness referred to in clause (2) does not exceed the amount of such Indebtedness permitted to be incurred under (and not in violation of) Section 4.09(xix), and under Section 4.09(v) as Permitted Refinancing Indebtedness of the Notes and the related Subsidiary Guarantees.

Parity Lien Debt Representatives” means:

(1) in the case of the Notes and the Subsidiary Guarantees, the Trustee, or

(2) in the case of any other Series of Parity Lien Debt, the trustee, agent or representative of the holders of such Series of Parity Lien Debt who maintains the transfer register for such Series of Parity Lien Debt and is appointed as a Parity Lien Debt Representative (for purposes related to the administration of the security documents securing the Parity Lien Debt) pursuant to the Credit Facility, indenture or other agreement governing such Series of Parity Lien Debt, and who has become a party to the Priority Lien Intercreditor Agreement.

Parity Lien Obligations” means the Parity Lien Debt and all other Obligations in respect thereof.

 

22


Participant” means, with respect to the Depositary, Euroclear or Clearstream, a Person who has an account with the Depositary, Euroclear or Clearstream, respectively (and, with respect to DTC, shall include Euroclear and Clearstream).

Permitted Asset Swap” means, with respect to any Person, the substantially concurrent exchange of assets of such Person (including Equity Interests of a Restricted Subsidiary) for assets of another Person, which assets are useful in a Permitted Business.

Permitted Business” means any business activity engaged in by the Company or its Restricted Subsidiaries as of the date of this Indenture or any business similar, reasonably related, incidental, ancillary or complementary thereto.

Permitted Investments” means:

(1) any Investment in the Company or in a Restricted Subsidiary;

(2) any Investment in Cash Equivalents;

(3) any Investment by the Company or any Restricted Subsidiary in a Person, if as a result of such Investment:

(a) such Person becomes a Restricted Subsidiary of the Company; or

(b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated or dissolved into, the Company or a Restricted Subsidiary of the Company;

and, in each case, any Investment held by such Person at the time it becomes a Restricted Subsidiary or is merged or consolidated with the Company or any of its Restricted Subsidiaries; provided that such Investment was not acquired by such Person in contemplation of such acquisition, merger or consolidation or transfer;

(4) any Investment made or held as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.10 or any other disposition not constituting an Asset Sale;

(5) any acquisition of assets (including Investments in Unrestricted Subsidiaries) to the extent the payment for which consists of Equity Interests (other than Disqualified Stock) of the Company or Parent;

(6) any Investments received in compromise of obligations of trade creditors or customers that were incurred in the ordinary course of business, including pursuant to any plan of reorganization or similar arrangement upon the bankruptcy or insolvency of any trade creditor or customer;

(7) Hedging Obligations;

(8) loans and advances to employees of the Company and its Restricted Subsidiaries and loans to Affiliates of the Company and other Persons not in excess of $5.0 million in aggregate principal amount at any time outstanding and the cancellation or forgiveness thereof; provided, however, that no such cancellation or forgiveness shall increase the aggregate amount of loans or advances otherwise permitted under this clause (8);

 

23


(9) the receipt by the Company of notes from one or more employees of the Company or any Restricted Subsidiary of the Company in connection with such employees’ acquisition of shares of Parent’s common stock and any cancellation or forgiveness thereof, so long as no cash is advanced by the Company or any Restricted Subsidiary of the Company to such officers or employees or Parent in connection with the acquisition of any such obligations or the cancellation or forgiveness thereof;

(10) escrow deposits made pursuant to Investments permitted hereunder or acquisitions;

(11) Investments relating to LMAs entered into in connection with independently owned broadcast properties, not to exceed an aggregate of $10.0 million;

(12) Investments in joint ventures that will own assets, such as transmission towers or studio space, or provide programming or other services, such as news or advertising, that may be used by the Company or a Restricted Subsidiary in the ordinary course of business, not in excess of $3.0 million at any time outstanding;

(13) Investments in existence on the date of this Indenture;

(14) Investments in the ordinary course of business consisting of endorsements for collection or deposit;

(15) the loans to Lenard Liberman made on December 20, 2001, June 14, 2002 and July 9, 2002 in the principal amount of $243,095, $32,000 and $1,916,563, respectively, the loans made to Jose Liberman on December 20, 2001 and July 29, 2002 in the principal amount of $146,590 and $75,000, respectively, the loans made to Winter Horton on November 20, 1998, November 22, 2002, November 29, 2002 and April 8, 2006 in the principal amount of $30,000, $36,000, $349,000 and $275,000, respectively, and any cancellation or forgiveness thereof;

(16) guarantees issued in accordance with Section 4.09; and

(17) other Investments in any Person having an aggregate fair market value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (17) that are at the time outstanding not to exceed the greater of (a) $10.0 million or (b) 5.0% of Total Assets.

Notwithstanding the foregoing, Permitted Investments shall not include, and the Company and its Restricted Subsidiaries may not make or hold, Investments in Subsidiaries or Affiliates of the Company that are not Guarantors.

Permitted Junior Securities” means:

(1) Equity Interests in the Company or, subject to the terms of the Credit Agreement, any Guarantor; or

 

24


(2) debt securities that are subordinated to all Senior Debt and any debt securities issued in exchange for Senior Debt to substantially the same extent as, or to a greater extent than, the Notes and the related subsidiary guarantees are subordinated to Senior Debt under this Indenture.

Permitted Liens” means:

(1) Liens of the Company and any Guarantor securing First Priority Bank Debt and all related First Priority Bank Debt Obligations permitted by the terms of this Indenture to be incurred;

(2) Liens in favor of the Company or any Restricted Subsidiary;

(3) Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary; provided that such Liens were not incurred in contemplation of such merger or consolidation and do not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary;

(4) Liens on property existing at the time of acquisition of the property by the Company or any Restricted Subsidiary; provided that such Liens were not incurred in contemplation of such acquisition;

(5) Liens to secure the performance of statutory obligations, surety or appeal bonds, performance bonds or other obligations of a like nature incurred in the ordinary course of business;

(6) Liens to secure Obligations under Indebtedness (including Capital Lease Obligations) permitted by clause (iv) of the second paragraph of Section 4.09 covering only the assets acquired, constructed or improved with such Indebtedness;

(7) Liens existing on the date of this Indenture, including Liens securing the Obligations under the First Priority Senior Secured Notes and their related subsidiary guarantees;

(8) Liens for taxes, assessments or governmental charges or claims that are not yet delinquent or that are being contested in good faith by appropriate proceedings promptly instituted and diligently concluded; provided that any reserve or other appropriate provision as is required in conformity with GAAP has been made therefor;

(9) Liens on assets of Unrestricted Subsidiaries that secure Non-Recourse Debt of Unrestricted Subsidiaries;

(10) Liens created for the benefit of the Notes or the Subsidiary Guarantees;

(11) Liens securing Permitted Refinancing Indebtedness where the Liens securing indebtedness being refinanced were permitted under this Indenture; provided, however, that the new Lien is limited to all or part of the same property and assets that secured or, under the written agreements pursuant to which the original Lien arose, could secure the original Lien (plus improvements and accessions to, such property or proceeds or distributions thereof);

 

25


(12) easements, rights-of-way, zoning and similar restrictions and other similar encumbrances or title defects incurred or imposed, as applicable, in the ordinary course of business and consistent with industry practices;

(13) any interest or title of a lessor under any Capital Lease Obligation;

(14) Liens securing reimbursement obligations with respect to letters of credit which encumber documents and other property relating to letters of credit and products and proceeds thereof;

(15) Liens encumbering deposits made to secure statutory, regulatory, contractual or warranty obligations, including rights of offset and set-off;

(16) Liens securing Hedging Obligations permitted under this Indenture;

(17) leases or subleases granted to others;

(18) Liens under licensing agreements;

(19) Liens arising from filing Uniform Commercial Code financing statements regarding leases;

(20) judgment Liens not giving rise to an Event of Default;

(21) Liens encumbering property of the Company or a Restricted Subsidiary consisting of carriers, warehousemen, mechanics, materialmen, repairmen and landlords, and other Liens arising by operation of law and incurred in the ordinary course of business for sums that are not overdue or that are being contested in good faith by appropriate proceedings and (if so contested) for which appropriate reserves with respect thereto have been established and maintained on the books of the Company or a Restricted Subsidiary in accordance with GAAP;

(22) Liens encumbering property of the Company or a Restricted Subsidiary incurred in the ordinary course of business in connection with workers’ compensation, unemployment insurance, or other forms of governmental insurance or benefits, or to secure performance of bids, tenders, statutory obligations, leases, and contracts (other than for Indebtedness for borrowed money) entered into in the ordinary course of business of the Company or a Restricted Subsidiary;

(23) Liens on property or assets used to defease or to satisfy and discharge Indebtedness; provided that (a) the incurrence of such Indebtedness was not prohibited by this Indenture and (b) such defeasance or satisfaction and discharge is not prohibited by this Indenture;

(24) Liens (i) of a collection bank arising under Section 4-210 of the Uniform Commercial Code on items in the course of collection, (ii) attaching to commodity trading accounts or other commodity brokerage accounts incurred in the ordinary course of business, and (iii) in favor of banking institutions arising as a matter of law encumbering deposits (including the right of set-off) and which are within the general parameters customary in the banking industry;

 

26


(25) Liens deemed to exist in connection with Investments in repurchase agreements permitted under Section 4.09; provided that such Liens do not extend to any assets other than those that are the subject of such repurchase agreement;

(26) customary Liens for the fees, costs and expenses of trustees and escrow agents pursuant to this Indenture, escrow agreements and similar agreements;

(27) bankers’ Liens in the nature of rights of setoff arising in the ordinary course of business of the Company or any of its Restricted Subsidiaries;

(28) Liens incurred in the ordinary course of business of the Company or its Restricted Subsidiaries with respect to Obligations that do not exceed $5.0 million at any one time outstanding; and

(29) Parity Liens to secure Obligations under Indebtedness permitted by Section 4.09(xix).

Permitted New Second Priority Debt” means Indebtedness of the Company incurred to redeem, repurchase, retire, defease or otherwise refinance Old Senior Subordinated Notes or Discount Notes; provided that (i) the principal amount of such Indebtedness does not exceed at any time an amount equal to $5.0 million, (ii) such Indebtedness has a final maturity date no earlier than the final maturity date of the Notes, (iii) such Indebtedness does not have the benefit of covenants or events of default that are more restrictive than those contained in this Indenture, and (iv) the rate of any interest payable in cash on such Indebtedness does not exceed the amount of interest that is permitted to be paid in cash on the Notes in accordance with the terms of the Notes.

Permitted Refinancing Indebtedness” means any Indebtedness of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than intercompany Indebtedness); provided that:

(1) the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued interest on the Indebtedness and the amount of all expenses and premiums incurred in connection therewith) and, to the extent and in the proportion that the Indebtedness extended, refinanced, renewed, replaced, defeased or refunded is paid-in-kind, interest on such Permitted Refinancing Indebtedness shall be paid-in-kind;

(2) such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; and

(3) if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is Subordinated Debt, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and shall constitute Subordinated Debt at least to the same extent as and on terms at least as favorable to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded and such Permitted Refinancing Indebtedness shall not have the benefit of covenants or events of default more restrictive than those contained in this Indenture.

 

27


Permitted Tax Distributions” means, for so long as the Company is a member of a group filing a consolidated or combined tax return with the Parent and/or Holdings, cash distributions or loans to the Parent and/or Holdings (including through Holdings) in respect of the allocable portion of the tax liabilities of such group that is attributable to the Company and its Subsidiaries (“Tax Payments”). The Tax Payments for any given tax period shall not exceed the lesser of (i) the amount of the relevant tax (including any penalties and interest) that the Company would owe if the Company were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group for tax purposes), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of the Company and such Subsidiaries from other taxable years to the extent such tax attributes actually offset any tax liability in such tax period and (ii) the net amount of the relevant tax that the Parent actually owes to the appropriate taxing authority. Any Tax Payments from the Company shall be paid over to the appropriate taxing authority within 30 days of the Parent’s and/or Holdings’ receipt of such Tax Payments or contributed or repaid to the Company.

Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, limited liability company or government or other entity.

PIK Interest” means (A) on or prior to November 15, 2015, at the election of the Company (made by delivering a notice to the Trustee prior to the beginning of each applicable interest period), an amount equal to either (i) 2.75% per annum paid by issuing additional principal on the Notes or (ii) 9.25% per annum paid by issuing additional principal on the Notes, and (B) from and after November 15, 2015, an annual amount equal to 2.75% per annum paid by issuing additional principal on the Notes.

PIK Notes” means any additional Notes issued evidencing any PIK Interest pursuant to the terms of this Indenture.

Principals” means Jose Liberman and Lenard Liberman.

Priority Lien Intercreditor Agreement” means that certain Intercreditor Agreement, dated as of December 31, 2012, among the Company, the guarantors from time to time party thereto, the Trustee, as trustee and collateral agent, the First Priority Lien Collateral Trustee, and the other first priority lien debt representatives and subordinated lien debt representatives from time to time party thereto, as amended, supplemented or otherwise modified from time to time.

Private Placement Legend” means the legend set forth in Section 2.06(f)(i) to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

Public Equity Offering” means an underwritten primary public offering of common stock of the Company or Parent.

QIB” means a “qualified institutional buyer” as defined in Rule 144A.

Qualifying IPO” means the consummation by Parent of an initial public offering of common stock resulting in gross proceeds to Parent (prior to the deduction of commissions) of $50.0 million or more.

Real Property Asset” means, at any time of determination, any fee ownership or leasehold interest then owned by the Company or any Guarantor (other than Empire Burbank) in any real property.

Regulation S” means Regulation S promulgated under the Securities Act.

 

28


Regulation S Global Note” means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate.

Regulation S Permanent Global Note” means a permanent Global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.

Regulation S Temporary Global Note” means a temporary Global Note in the form of Exhibit A-2 hereto and deposited with or on behalf of and registered in the name of the Depositary or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903 of Regulation S.

Related Party” means:

(1) any family member, spouse, heir, devisee, executor or similar legal representative of any Principal; or

(2) any trust, corporation, partnership or other entity, the beneficiaries, stockholders, partners, owners or Persons beneficially holding an 80% or more controlling interest of which consist of any one or more Principals and/or such other Persons referred to in the immediately preceding clause (1); or

(3) to the extent not included in clause (1) or (2), any other Class B Permitted Transferee (as defined in the Restated Certificate of Incorporation of Parent, as in effect on the date of this Indenture).

Requirement of Law” means as to any Person, any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its property or to which such Person or any of its property is subject.

Responsible Officer” means with respect to any Person, its chief executive officer, president or chief financial officer, but in any event, with respect to financial matters, the chief financial officer or, in each case, the person performing the functions associated with such titles.

Restricted Asset Sale Proceeds” means Net Proceeds from Asset Sales that are less than or equal to (i) $12.5 million in the aggregate for the first full year after the date of this Indenture and (ii) $10 million in the aggregate for each year period beginning on an anniversary date of this Indenture; provided that unused amounts for any period may be carried forward to subsequent periods and shall constitute Restricted Asset Sale Proceeds for such subsequent periods; provided further that all Net Proceeds from the sale of the Sawyer Property and the sale of KTCY-FM shall constitute Restricted Asset Sale Proceeds but the amount of Net Proceeds from such sales shall not count toward the amounts in clauses (i) and (ii) above. For example, if Net Proceeds from Asset Sales total $7.5 million during the first full year after the date of this Indenture (“Year 1”), Restricted Asset Sale Proceeds for the annual period beginning on the first anniversary date of this Indenture (“Year 2”) shall equal $15 million ($10 million + $5 million carried forward from Year 1). If Net Proceeds from Asset Sales total $12 million during Year 2, Restricted Asset Sale Proceeds for the following annual period (“Year 3”) shall equal $13 million ($10 million + $3 million carried forward from Year 2). If Net Proceeds from Asset Sales total $13 million during Year 3, Restricted Asset Sale Proceeds for the following annual period shall equal $10 million ($10 million + no carry forward from Year 3).

 

29


Restricted Definitive Note” means a Definitive Note bearing the Private Placement Legend.

Restricted Global Note” means a Global Note bearing the Private Placement Legend.

Restricted Investment” means an Investment other than a Permitted Investment.

Restricted Period” means the 40-day distribution compliance period as defined in Regulation S.

Restricted Subsidiary” means any Subsidiary of the Company that is not an Unrestricted Subsidiary.

Rule 144” means Rule 144 promulgated under the Securities Act.

Rule 144A” means Rule 144A promulgated under the Securities Act.

Rule 903” means Rule 903 promulgated under the Securities Act.

Rule 904” means Rule 904 promulgated under the Securities Act.

S&P” means Standard & Poor’s, a division of the McGraw-Hill Companies, Inc. and any successor to its rating agency business.

SEC” means the Securities and Exchange Commission.

Secured Debt Documents” means collectively, this Indenture, the Notes, the Subsidiary Guarantees, the Priority Lien Intercreditor Agreement, the Security Documents and all other agreements related to this Indenture, the Notes and the Subsidiary Guarantees, and the indenture or agreement governing each other Series of Parity Lien Debt and all other agreements governing, securing or relating to any Parity Lien Obligation.

Secured Parties” means the holders of the Notes and any other Parity Lien Obligations, any Parity Lien Debt Representatives and the Trustee.

Securities Act” means the Securities Act of 1933, as amended.

Security Documents” means one or more security agreements, debentures, pledge agreements, collateral assignments, mortgages, collateral agency agreements, control agreements, deeds of trust or other grants or transfers for security executed and delivered by the Company and each other Guarantor (other than Empire Burbank, but solely with respect to the Lien on certain property of Empire Burbank in favor of Jefferson Pilot Financial Insurance Company) creating (or purporting to create) a Lien upon Collateral in favor of the Collateral Agent, for the benefit of the Secured Parties, in each case, as amended, supplemented, amended and restated or otherwise modified and in effect from time to time, in accordance with its terms.

“Senior Debt” means:

(1) the Indebtedness of the Company or any Restricted Subsidiary outstanding under Credit Facilities and all Hedging Obligations with respect thereto;

(2) the First Priority Senior Secured Notes;

 

30


(3) any other Indebtedness of the Company or any Guarantor permitted to be incurred under the terms of this Indenture, unless the instrument under which such Indebtedness is incurred expressly provides that it is on a parity with or subordinated in right of payment to the Notes or any Subsidiary Guarantee; and

(4) all Obligations with respect to the items listed in the preceding clauses (1), (2) and (3).

Notwithstanding anything to the contrary in the preceding, Senior Debt will not include:

(1) any liability for federal, state, local or other taxes owed or owing by the Company or any Restricted Subsidiary;

(2) any intercompany Indebtedness of the Company or any of its Restricted Subsidiaries to the Company or any of its Affiliates;

(3) any trade payables; or

(4) the portion of any Indebtedness that is incurred in violation of this Indenture; provided that such Indebtedness shall be deemed not to have been incurred in violation of this Indenture for purposes of this clause (4) if such Indebtedness consists of Indebtedness under any Credit Facility and holders of such Indebtedness or their agent or representative (i) had no actual knowledge at the time of the incurrence that the incurrence of such Indebtedness violated this Indenture and (ii) shall have received an Officer’s Certificate to the effect that the incurrence of such Indebtedness does not violate the provisions of this Indenture (but nothing in this clause (4) shall preclude the existence of any Default or Event of Default in the event that the Indebtedness is in fact incurred in violation of this Indenture).

Series of First Priority Lien Debt” means, severally, the First Priority Senior Secured Notes and the related subsidiary guarantees, the Indebtedness under the Credit Agreement, the guarantees of the Credit Agreement and each other issue or series of First Priority Lien Debt for which a single transfer register is maintained, and for purposes of the First Lien Intercreditor Agreement, Hedging Obligations (other than the Specified Hedge Obligations) owed to Lender Hedge Providers will be treated as part of the same Series of First Priority Lien Debt as the other First Priority Lien Debt owed to such Lender Hedge Provider or its Affiliate or which pursuant to any amendment to the First Lien Intercreditor Agreement are to be represented thereunder by a common First Priority Lien Debt Representative (in its capacity as such for such First Priority Lien Debt).

Series of Parity Lien Debt” means, severally, the Notes and the Subsidiary Guarantees and each other issue or series of First Priority Lien Debt for which a single transfer register is maintained or which pursuant to any amendment to the Priority Lien Intercreditor Agreement are to be represented thereunder by a common Parity Lien Debt Representative (in its capacity as such for such Parity Lien Debt).

Significant Subsidiary” means any Subsidiary that would be a “significant subsidiary” as defined in Article 1, Rule 1-02 of Regulation S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect on the date of this Indenture.

Specified Hedge Obligations” means, so long as the Specified Hedge Provider has executed and delivered a joinder to the First Lien Intercreditor Agreement in accordance with the terms thereof, the actual Indebtedness of the Company to the Specified Hedge Provider pursuant to the Specified Hedging Agreement.

 

31


Specified Hedge Provider” means, so long as it has executed a Collateral Trust Joinder (as defined in the First Lien Intercreditor Agreement), Credit Suisse International.

Specified Hedging Agreement” means, so long as the Specified Hedge Provider has executed and delivered a Collateral Trust Joinder (as defined in the First Lien Intercreditor Agreement), that certain confirmation dated as of February 9, 2009 between the Company and the Specified Hedge Provider and the ISDA Master Agreement related thereto, if any.

Stated Maturity” means, with respect to any installment of interest or principal on any series of Indebtedness, the date on which the payment of interest or principal was scheduled to be paid in the original documentation governing such Indebtedness, and shall not include any contingent obligations to repay, redeem or repurchase any such interest or principal prior to the date originally scheduled for the payment thereof.

Subsidiary” means, with respect to any specified Person:

(1) any corporation, limited liability company, association or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees or comparable governing body of the corporation, limited liability company, association or other business entity is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and

(2) any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are that Person or one or more Subsidiaries of that Person (or any combination thereof).

Subsidiary Guarantee” means the Guarantee by each Guarantor of the Company’s payment obligations under this Indenture and on the Notes, executed pursuant to the provisions of this Indenture.

TIA” means the Trust Indenture Act of 1939 (15 U.S.C. §§ 77aaa-77bbbb) as in effect on the date on which this Indenture is qualified under the TIA.

Total Assets” means, as of any date, the total assets of the Company and the Restricted Subsidiaries on a consolidated basis at the end of the fiscal quarter immediately preceding such date, and, in the case of any determination relating to the incurrence of Indebtedness or any Permitted Investment, calculated on a pro forma basis including any property or assets being acquired in connection therewith.

Treasury Rate” means, as of any redemption date, the yield to maturity as of such redemption date of United States Treasury securities with a constant maturity (as compiled and published in the most recent Federal Reserve Statistical Release H.15 (519) that has become publicly available at least two Business Days prior to the redemption date (or, if such Statistical Release is no longer published, any publicly available source of similar market data)) most nearly equal to the period from the redemption date to November 15, 2016; provided, however, that (i) if the period from such redemption date to such date is not equal to the constant maturity of a United States Treasury security for which a weekly average yield is given, the Treasury Rate shall be obtained by linear interpolation of extrapolation (calculated to the nearest one twelfth of a year) from the weekly average yields of United States Treasury securities for which such yields are given and (ii) if the period from the redemption date to November 15, 2016 is less than one year, the weekly average yield on actually traded United States Treasury securities adjusted to a constant maturity of one year will be used.

 

32


Trust Officer” when used with respect to the Trustee, means any officer within the corporate trust administration group of the Trustee (or any successor group of the Trustee) or any other officer of the Trustee customarily performing functions similar to those performed by any such officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

Trustee” means the party named as such in the preamble to this Indenture until a successor replaces it in accordance with the applicable provisions of this Indenture and thereafter means the successor serving hereunder.

Unrestricted Definitive Note” means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

Unrestricted Global Note” means a permanent Global Note that does not bear and is not required to bear the Private Placement Legend.

Unrestricted Subsidiary” means any Subsidiary of the Company that is designated by the Company’s Board of Directors as an Unrestricted Subsidiary pursuant to a resolution of the Board of Directors, but only to the extent that such Subsidiary:

(1) has no Indebtedness other than Non-Recourse Debt;

(2) is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are not materially less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company;

(3) is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (a) to subscribe for additional Equity Interests or (b) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and

(4) has not guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries.

Any designation of a Subsidiary of the Company as an Unrestricted Subsidiary will be evidenced to the Trustee by filing with the Trustee a certified copy of the resolution of the Company’s Board of Directors giving effect to such designation and an Officer’s Certificate certifying that such designation complied with the preceding conditions and was permitted by the terms of Section 4.07 hereof. If, at any time, any Unrestricted Subsidiary would fail to meet the preceding requirements as an Unrestricted Subsidiary, it will thereafter cease to be an Unrestricted Subsidiary for purposes of this Indenture and any Indebtedness of such Subsidiary will be deemed to be incurred by a Restricted Subsidiary of the Company as of such date and, if such Indebtedness is not permitted to be incurred as of such date pursuant to Section 4.09, the Company will be in default under such section. The Company’s Board of Directors may at any time designate any Unrestricted Subsidiary to be a Restricted Subsidiary; provided that such designation will be deemed to be an incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if (1) such Indebtedness is permitted pursuant to Section 4.09, calculated on a pro forma basis as if such designation had occurred at the beginning of the four-quarter reference period; and (2) no Default or Event of Default would be in existence following such designation.

 

33


U.S. Person” means a U.S. person as defined in Rule 902(k) under the Securities Act.

Voting Stock” of any Person as of any date means the Capital Stock of such Person that is at the time entitled to vote in the election of the Board of Directors of such Person.

Warrants” means the warrants to purchase shares of Class A common stock, par value $0.001, of Parent.

Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing:

(1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect of the Indebtedness, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by

(2) the then outstanding principal amount of such Indebtedness.

Wholly Owned Subsidiary” means, with respect to any Person at any date, any corporation, limited liability company, partnership, association or other entity of which securities or other ownership interests representing 100% of the equity or ordinary voting power (other than directors’ qualifying shares) or, in the case of a partnership, 100% of the general partnership interests are, as of such date, directly or indirectly owned, controlled or held by such Person or one or more Wholly Owned Subsidiaries of such Person or by such Person and one or more Wholly Owned Subsidiaries of such Person.

Section 1.02. Other Definitions.

 

Term

   Defined in
Section

“Affiliate Transaction”

   4.11

“Asset Sale Offer”

   3.09

“Authentication Order”

   2.02

“Cash Interest”

   Exhibit A

“Change of Control Offer”

   4.15

“Change of Control Payment”

   4.15

“Change of Control Payment Date”

   4.15

“Company”

   Preamble

“Covenant Defeasance”

   8.03

“DTC”

   2.03

“Event of Default”

   6.01

“Excess Proceeds”

   4.10

“incur”

   4.09

“Incurrence Notice”

   4.09

“Insignificant Subsidiaries”

   6.01

“Issue Date Mortgaged Properties”

   10.03

“Legal Defeasance”

   8.02

“Mortgage Release”

   10.05

“Offer Amount”

   3.09

 

34


Term

   Defined in
Section

“Offer Period”

   3.09

“Paying Agent”

   2.03

“Payment Blockage Notice”

   13.03

“Payment Default”

   6.01

“Permitted Debt”

   4.09

“PIK Payment”

   2.01

“Purchase Date”

   3.09

“Registrar”

   2.03

“Restricted Payments”

   4.07

“Sawyer Property”

   10.05

“Sawyer Sale”

   10.05

“Subordinated Debt”

   4.07

“Successor Person”

   5.01

“Tax Payments”

   1.01

Section 1.03. Rules of Construction.

Unless the context otherwise requires:

(a) a term has the meaning assigned to it;

(b) an accounting term not otherwise defined has the meaning assigned to it in accordance with GAAP;

(c) “or” is not exclusive;

(d) words in the singular include the plural, and in the plural include the singular;

(e) “will” shall be interpreted to express a command;

(f) provisions apply to successive events and transactions; and

(g) references to sections of or rules under the Securities Act will be deemed to include substitute, replacement of successor sections or rules adopted by the SEC from time to time.

Section 1.04. Priority Lien Intercreditor Agreement.

(a) Each Holder, by accepting a Note, agrees, and the Trustee agrees, that this Indenture is subject to the terms of the Priority Lien Intercreditor Agreement, that such Holder’s and the Trustee’s rights and benefits hereunder are limited accordingly, that such Holder’s and the Trustee’s rights and benefits are subject to all relevant provisions of the Priority Lien Intercreditor Agreement, and that such Holder shall comply with the provisions of the Priority Lien Intercreditor Agreement applicable to such Holder in its capacity as such as if such Holder was a party thereto. In the event of any conflict between the terms of this Indenture and those of the Priority Lien Intercreditor Agreement with respect to the rights, privileges, protections, indemnities and exemptions of the Trustee (in any of its capacities hereunder), the terms of this Indenture shall control.

(b) Each Holder, by accepting a Note, hereby authorizes and directs the Trustee to execute and deliver the Priority Lien Intercreditor Agreement and hereby agrees to be bound by the terms thereof.

 

35


ARTICLE 2.

THE NOTES

Section 2.01. Form and Dating.

(a) General. The Notes and the Trustee’s certificate of authentication will be substantially in the form of Exhibit A hereto. The Notes may have notations, legends or endorsements required by law, stock exchange rule or usage. Each Note will be dated the date of its authentication. Subject to the issuance of PIK Notes as described herein, the Notes shall be in fully registered form, without coupons, equal to $2,000 and any integral multiple of $1,000 in excess thereof, and PIK Payments, if any, shall be equal to $1.00 and any integral multiple of $1.00 in excess thereof.

The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture; and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling. Unless the context requires otherwise, (1) references to “Notes” for all purposes of this Indenture include any Additional Notes and PIK Notes that are actually issued and (2) references to “principal amount” of Notes includes any increase in the principal amount of outstanding Notes (including PIK Notes) as a result of a PIK Payment.

(b) Global Notes. Notes issued in global form will be substantially in the form of Exhibit A-1 or A-2 attached hereto (including the Global Note Legend thereon and the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Notes issued in definitive form will be substantially in the form of Exhibit A-1 attached hereto (but without the Global Note Legend thereon and without the “Schedule of Exchanges of Interests in the Global Note” attached thereto). Each Global Note will represent such of the outstanding Notes as will be specified therein and each shall provide that it represents the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions or PIK Interest. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby will be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

(c) Temporary Global Notes. Notes offered and sold in reliance on Regulation S will be issued initially in the form of the Regulation S Temporary Global Note, which will be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, at its New York office, as custodian for the Depositary, and registered in the name of the Depositary or the nominee of the Depositary for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. The Restricted Period will be terminated upon the receipt by the Trustee of:

(i) a written certificate from the Depositary, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note or an IAI Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(b) hereof); and

(ii) an Officer’s Certificate from the Company.

 

36


Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note will be exchanged for beneficial interests in the Regulation S Permanent Global Note pursuant to the Applicable Procedures. Simultaneously with the authentication of the Regulation S Permanent Global Note, the Trustee will cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Note may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depositary or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

(d) Euroclear and Clearstream Procedures Applicable. The provisions of the “Operating Procedures of the Euroclear System” and “Terms and Conditions Governing Use of Euroclear” and the “General Terms and Conditions of Clearstream Banking” and “Customer Handbook” of Clearstream will be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Note that are held by Participants through Euroclear or Clearstream.

(e) Terms. The aggregate principal amount of Notes that may be authenticated and delivered under this Indenture is unlimited.

The terms and provisions contained in the Notes will constitute, and are hereby expressly made, a part of this Indenture and the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

(f) Issuance of Additional Notes. Additional Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Company without notice to or consent of the Holders and shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes; provided that the Company’s ability to issue Additional Notes shall be subject to the Company’s compliance with Section 4.09 hereof. Any Additional Notes shall be issued with the benefit of an indenture supplemental to this Indenture.

(g) PIK Payments. In connection with the payment of PIK Interest in respect of the Notes, without notice to or consent of the Holders and without regard to any restrictions or limitations set forth in Section 4.09 hereof, the outstanding principal amount of the Notes may be increased from time to time or PIK Notes ranking pari passu with the Initial Notes may be created and issued from time to time by the Company (in each case, a “PIK Payment”) and such PIK Notes shall be consolidated with and form a single class with the Initial Notes and shall have the same terms as to status, redemption or otherwise as the Initial Notes. PIK Interest on the Notes will be payable (x) with respect to Global Notes registered in the name of, or held by, the Depository, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Company to the Trustee and (y) with respect to Definitive Notes, by issuing PIK Notes in definitive form in an aggregate principal amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar). The Trustee will, at the request of the Company, authenticate and deliver such PIK Notes in certificated form for original issuance to the Holders on the relevant record date, as shown by the records of the register of Holders. Following an increase in the principal amount of the outstanding global Notes as a result of a PIK Payment, the Notes will bear interest on such increased principal amount from and after the date of such PIK Payment. Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. Any PIK Notes issued in certificated form shall be issued with the benefit of an indenture supplemental to this Indenture and shall be issued substantially in the form of Exhibit A-1 attached hereto with the description “PIK” on the face of such PIK Note.

 

37


Section 2.02. Execution and Authentication.

One Officer will sign the Notes for the Company by manual or facsimile signature.

If an Officer whose signature is on a Note no longer holds that office at the time a Note is authenticated, the Note will nevertheless be valid.

A Note will not be valid until authenticated by the manual signature of the Trustee. The signature will be conclusive evidence that the Note has been authenticated under this Indenture.

The Trustee will, upon receipt of a written order of the Company signed by an Officer (an “Authentication Order”), authenticate Notes for original issue up to the aggregate principal amount of the Initial Notes, plus the aggregate principal amount of any PIK Payments, plus the aggregate principal amount of any Additional Notes permitted to be issued under this Indenture. The aggregate principal amount of Notes outstanding at any time may not exceed such amount except as provided in Section 2.07 hereof.

The Trustee may appoint an authenticating agent acceptable to the Company to authenticate the Notes. An authenticating agent may authenticate Notes 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 an Agent to deal with Holders or an Affiliate of the Company.

Section 2.03. Registrar and Paying Agent.

The Company will maintain an office or agency where Notes may be presented for registration of transfer or for exchange (“Registrar”) and an office or agency where Notes may be presented for payment (“Paying Agent”). The Registrar will keep a register of the Notes and of their transfer and exchange. The Company may appoint one or more co-registrars and one or more additional paying agents. The term “Registrar” includes any co-registrar and the term “Paying Agent” includes any additional paying agent. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company will notify the Trustee in writing of the name and address of any Agent not a party to this Indenture. If the Company fails to appoint or maintain another entity as Registrar or Paying Agent, the Trustee shall act as such. The Company or any of its Subsidiaries may act as Paying Agent or Registrar.

The Company initially appoints The Depository Trust Company (“DTC”) to act as Depositary with respect to the Global Notes.

The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Custodian with respect to the Global Notes.

Section 2.04. Paying Agent to Hold Money in Trust.

The Company will require each Paying Agent other than the Trustee to agree in writing that the Paying Agent will hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal, premium, if any, or interest on the Notes, and will notify the Trustee of any default by the Company in making any such payment. While any such default continues, the Trustee may require a Paying Agent to pay all money held by it to the Trustee. The Company at any time

 

38


may require a Paying Agent to pay all money held by it to the Trustee. Upon payment over to the Trustee, the Paying Agent (if other than the Company or a Subsidiary) will have no further liability for the money. If the Company or a Subsidiary acts as Paying Agent, it will segregate and hold in a separate trust fund for the benefit of the Holders all money held by it as Paying Agent. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee will serve as Paying Agent for the Notes.

Section 2.05. Holder Lists.

The Trustee will preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of all Holders. If the Trustee is not the Registrar, the Company will furnish to the Trustee at least seven Business Days before each interest payment date and at such other times as the Trustee may request in writing, a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of the Holders of Notes.

Section 2.06. Transfer and Exchange.

(a) Transfer and Exchange of Global Notes. A Global Note may not be transferred except as a whole by the Depositary to a nominee of the Depositary, by a nominee of the Depositary to the Depositary or to another nominee of the Depositary, or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary. All Global Notes will be exchanged by the Company for Definitive Notes if:

(i) the Company delivers to the Trustee notice from the Depositary that it is unwilling or unable to continue to act as Depositary or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depositary is not appointed by the Company within 120 days after the date of such notice from the Depositary; or

(ii) the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee; provided that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act.

Upon the occurrence of either of the preceding events in (i) or (ii) above, Definitive Notes shall be issued in such names as the Depositary shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note except for Definitive Notes issued subsequent to any of the preceding events in (i) or (ii) above and Section 2.06(c) hereof. A Global Note may not be exchanged for another Note other than as provided in this Section 2.06(a), however, beneficial interests in a Global Note may be transferred and exchanged as provided in Section 2.06(b), (c) or (f) hereof.

(b) Transfer and Exchange of Beneficial Interests in the Global Notes. The transfer and exchange of beneficial interests in the Global Notes will be effected through the Depositary, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the Restricted Global Notes will be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also will require compliance with either subparagraph (i) or (ii) below, as applicable, as well as one or more of the other following subparagraphs, as applicable:

 

39


(i) Transfer of Beneficial Interests in the Same Global Note. Beneficial interests in any Restricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Regulation S Temporary Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser or pursuant to Rule 144A). Beneficial interests in any Unrestricted Global Note may be transferred to Persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

(ii) All Other Transfers and Exchanges of Beneficial Interests in Global Notes. In connection with all transfers and exchanges of beneficial interests that are not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar either (A) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase or (B) (1) a written order from a Participant or an Indirect Participant given to the Depositary in accordance with the Applicable Procedures directing the Depositary to cause to be issued a Definitive Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given by the Depositary to the Registrar containing information regarding the Person in whose name such Definitive Note shall be registered to effect the transfer or exchange referred to in (1) above; provided that in no event shall Definitive Notes be issued upon the transfer or exchange of beneficial interests in the Regulation S Temporary Global Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903 under the Securities Act. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(g) hereof.

(iii) Transfer of Beneficial Interests to Another Restricted Global Note. A beneficial interest in any Restricted Global Note may be transferred to a Person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following:

(A) if the transferee will take delivery in the form of a beneficial interest in the 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transferee will take delivery in the form of a beneficial interest in the Regulation S Temporary Global Note or the Regulation S Permanent Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

(C) if the transferee will take delivery in the form of a beneficial interest in the IAI Global Note, then the transferor must deliver a certificate in the form of Exhibit D hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.

 

40


(iv) Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note. A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in subparagraph (1) or (2) above, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

If any such transfer is effected pursuant to clause (iv) above at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to clause (iv) above.

Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to Persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

(c) Transfer or Exchange of Beneficial Interests for Definitive Notes.

(i) Beneficial Interests in Restricted Global Notes to Restricted Definitive Notes. If any holder of a beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Restricted Definitive Note, then, upon receipt by the Registrar of the following documentation:

(A) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a Restricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

(B) if such beneficial interest is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

 

41


(C) if such beneficial interest is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such beneficial interest is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

(E) if such beneficial interest is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable; or

(F) if such beneficial interest is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof;

the Trustee shall cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company shall execute and the Trustee shall authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c) shall be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest shall instruct the Registrar through instructions from the Depositary and the Participant or Indirect Participant. The Trustee shall deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest in a Restricted Global Note pursuant to this Section 2.06(c)(i) shall bear the Private Placement Legend and shall be subject to all restrictions on transfer contained therein.

(ii) Beneficial Interests in Regulation S Temporary Global Note to Definitive Notes. Notwithstanding Sections 2.06(c)(i)(A) and (C) hereof, a beneficial interest in the Regulation S Temporary Global Note may not be exchanged for a Definitive Note or transferred to a Person who takes delivery thereof in the form of a Definitive Note prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act, except in the case of a transfer pursuant to an exemption from the registration requirements of the Securities Act other than Rule 903 or Rule 904.

(iii) Beneficial Interests in Restricted Global Notes to Unrestricted Definitive Notes. A holder of a beneficial interest in a Restricted Global Note may exchange such beneficial interest for an Unrestricted Definitive Note or may transfer such beneficial interest to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note only if the Registrar receives the following:

(1) if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

 

42


(2) if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in subparagraph (1) or (2) above, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iv) Beneficial Interests in Unrestricted Global Notes to Unrestricted Definitive Notes. If any holder of a beneficial interest in an Unrestricted Global Note proposes to exchange such beneficial interest for a Definitive Note or to transfer such beneficial interest to a Person who takes delivery thereof in the form of a Definitive Note, then, upon satisfaction of the conditions set forth in Section 2.06(b)(ii) hereof, the Trustee will cause the aggregate principal amount of the applicable Global Note to be reduced accordingly pursuant to Section 2.06(g) hereof, and the Company will execute and the Trustee will authenticate and deliver to the Person designated in the instructions a Definitive Note in the appropriate principal amount. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) will be registered in such name or names and in such authorized denomination or denominations as the holder of such beneficial interest instructs the Registrar through instructions to the Registrar from or through the Depositary and the Participant or Indirect Participant. The Trustee will deliver such Definitive Notes to the Persons in whose names such Notes are so registered. Any Definitive Note issued in exchange for a beneficial interest pursuant to this Section 2.06(c)(iv) will not bear the Private Placement Legend.

(d) Transfer and Exchange of Definitive Notes for Beneficial Interests.

(i) Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes. If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

(A) if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(b) thereof;

(B) if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

(C) if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

(D) if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

 

43


(E) if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) above, a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable;

(F) if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

(G) if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cancel such Restricted Definitive Note, increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, in the case of clause (C) above, the Regulation S Global Note, and in all other cases, the IAI Global Note.

(ii) Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if the Registrar receives the following:

(1) if the Holder of such Definitive Notes proposes to exchange such Notes for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

(2) if the Holder of such Definitive Note proposes to transfer such Note to a Person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (1) or (2) above, if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee will cancel the Definitive Notes so transferred or exchanged and increase or cause to be increased the aggregate principal amount of the applicable Unrestricted Global Note.

 

44


(iii) Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes. A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Definitive Note to a Person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee will cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of one of the Unrestricted Global Notes.

If any such exchange or transfer from a Definitive Note to a beneficial interest is effected pursuant to subparagraphs (ii)(B), (ii)(D) or (iii) above at a time when an Unrestricted Global Note has not yet been issued, the Company will issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee will authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

(e) Transfer and Exchange of Definitive Notes for Definitive Notes. Upon request by a Holder of Definitive Notes and such Holder’s compliance with the provisions of this Section 2.06(e), the Registrar will register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder must present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder must provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

(i) Restricted Definitive Notes to Restricted Definitive Notes. Any Restricted Definitive Note may be transferred to and registered in the name of Persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

(A) if the transfer will be made pursuant to Rule 144A then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

(B) if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

(C) if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3) thereof, if applicable.

(ii) Restricted Definitive Notes to Unrestricted Definitive Notes. Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a Person or Persons who take delivery thereof in the form of an Unrestricted Definitive Note if the Registrar receives the following:

(1) if the Holder of such Restricted Definitive Notes proposes to exchange such Notes for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(d) thereof; or

(2) if the Holder of such Restricted Definitive Notes proposes to transfer such Notes to a Person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

 

45


and, in each such case set forth in this subparagraph (1) or (2) above, if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

(iii) Unrestricted Definitive Notes to Unrestricted Definitive Notes. A Holder of Unrestricted Definitive Notes may transfer such Notes to a Person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Notes pursuant to the instructions from the Holder thereof.

(f) Legends. The following legends will appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

(i) Private Placement Legend.

(A) Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED STATES SECURITIES ACT OF 1933 (THE “SECURITIES ACT”), AND THIS NOTE MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES

 

46


(I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.”

(B) Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraphs (b)(iv),
(c)(iii), (c)(iv), (d)(ii), (d)(iii), (e)(ii) or (e)(iii) to this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) will not bear the Private Placement Legend.

(ii) Global Note Legend. Each Global Note will bear a legend in substantially the following form:

“THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE OR SECTION 2.01(g) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.”

(iii) Regulation S Temporary Global Note Legend. The Regulation S Temporary Global Note will bear a legend in substantially the following form:

“THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

 

47


THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.”

(g) Cancellation and/or Adjustment of Global Notes. At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note will be returned to or retained and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note will be reduced accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a Person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note will be increased accordingly and an endorsement will be made on such Global Note by the Trustee or by the Depositary at the direction of the Trustee to reflect such increase.

(h) General Provisions Relating to Transfers and Exchanges.

(i) To permit registrations of transfers and exchanges, the Company will execute and the Trustee will authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order in accordance with Section 2.02 or at the Registrar’s request.

(ii) No service charge will be made to a Holder of a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.10, 3.06, 3.09, 4.10, 4.15 and 9.05 hereof).

(iii) The Registrar will not be required to register the transfer of or exchange any Note selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

(iv) All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes will be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

(v) The Company will not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding interest payment date.

 

48


(vi) Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the Person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

(vii) The Trustee will authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

(viii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

Section 2.07. Replacement Notes.

If any mutilated Note is surrendered to the Trustee or the Company and the Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, the Company will issue and the Trustee, upon receipt of an Authentication Order, will authenticate a replacement Note if the Trustee’s requirements are met. If required by the Trustee or the Company, an indemnity bond must be supplied by the Holder that is sufficient in the judgment of the Trustee and the Company to protect the Company, the Trustee, any Agent and any authenticating agent from any loss that any of them may suffer if a Note is replaced. The Company or, if applicable, the Trustee may charge the Holder of any lost or mutilated Note for its expenses in replacing a Note. In the event any such Note shall have matured, instead of issuing a replacement Note as provided above, the Trustee may pay the same upon receipt by the Company and the Trustee of indemnity satisfactory to each of them.

Every replacement Note is an additional obligation of the Company and will be entitled to all of the benefits of this Indenture equally and proportionately with all other Notes duly issued hereunder.

Section 2.08. Outstanding Notes.

The Notes outstanding at any time are all the Notes authenticated by the Trustee except for those canceled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof, and those described in this Section 2.08 as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or an Affiliate of the Company holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(a) hereof.

If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a protected purchaser.

If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.

If the Paying Agent (other than the Company, a Subsidiary or an Affiliate of any thereof) holds, on a redemption date or maturity date, money sufficient to pay Notes payable on that date, then on and after that date such Notes will be deemed to be no longer outstanding and will cease to accrue interest.

 

49


Section 2.09. Treasury Notes.

In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any Guarantor, or any Affiliate of the Company or any Guarantor, will be considered as though not outstanding, except that for the purposes of determining whether the Trustee will be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows are so owned will be so disregarded.

Section 2.10. Temporary Notes.

Until certificates representing Notes are ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, will authenticate temporary Notes. Temporary Notes will be substantially in the form of certificated Notes but may have variations that the Company considers appropriate for temporary Notes and as may be reasonably acceptable to the Trustee. Without unreasonable delay, the Company will prepare and the Trustee will authenticate definitive Notes in exchange for temporary Notes.

Holders of temporary Notes will be entitled to all of the benefits of this Indenture.

Section 2.11. Cancellation.

The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and Paying Agent will forward to the Trustee any Notes surrendered to them for registration of transfer, exchange or payment. The Trustee and no one else will cancel all Notes surrendered for registration of transfer, exchange, payment, replacement or cancellation and will destroy canceled Notes (subject to the record retention requirement of the Exchange Act). Certification of the destruction of all canceled Notes will be delivered to the Company. The Company may not issue new Notes to replace Notes that it has paid or that have been delivered to the Trustee for cancellation.

Section 2.12. Defaulted Interest.

If the Company defaults in a payment of interest on the Notes, the Company will pay the defaulted interest in any lawful manner plus, to the extent lawful, interest payable on the defaulted interest, to the Persons who are Holders on a subsequent special record date, in each case at the rate provided in the Notes and in Section 4.01 hereof. The Company will notify the Trustee in writing of the amount of defaulted interest proposed to be paid on each Note and the date of the proposed payment. The Company will fix or cause to be fixed each such special record date and payment date, provided that no such special record date will be less than 10 days prior to the related payment date for such defaulted interest. At least 15 days before the special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) will mail or cause to be mailed to Holders a notice that states the special record date, the related payment date and the amount of such interest to be paid.

ARTICLE 3.

REDEMPTION AND PREPAYMENT

Section 3.01. Notices to Trustee.

If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it will furnish to the Trustee, at least 35 days (or shorter period of time acceptable to the Trustee), but not more than 60 days before a redemption date, an Officer’s Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the redemption date, (iii) the principal amount of Notes to be redeemed and (iv) the redemption price.

 

50


Section 3.02. Selection of Notes to Be Redeemed or Purchased.

If less than all of the Notes are to be redeemed or purchased in an offer to purchase at any time, the Trustee will select Notes for redemption or repurchase as follows:

(a) if the Notes are listed on any national securities exchange, in compliance with the requirements of the principal national securities exchange on which the Notes are listed; or

(b) if the Notes are not listed on any national securities exchange, on a pro rata basis, by lot or by such method as the Trustee deems fair and appropriate.

In the event of partial redemption or purchase by lot, the particular Notes to be redeemed or purchased will be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption or purchase date by the Trustee from the outstanding Notes not previously called for redemption or purchase.

The Trustee will promptly notify the Company in writing of the Notes selected for redemption or purchase and, in the case of any Note selected for partial redemption or purchase, the principal amount thereof to be redeemed or purchased. Notes and portions of Notes selected will be in the amounts of $2,000 or whole multiples of $1,000 in excess thereof (or if a PIK Payment has been made, in the amounts of $1.00 or whole multiples of $1.00 in excess thereof); except that if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed or purchased. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption or purchase also apply to portions of Notes called for redemption or purchase.

Section 3.03. Notice of Redemption.

Subject to the provisions of Section 3.09 hereof, at least 30 days but not more than 60 days before a redemption date, the Company will mail or cause to be mailed, by first class mail, a notice of redemption to each Holder whose Notes are to be redeemed at its registered address, except that redemption notices may be mailed more than 60 days prior to a redemption date if the notice is issued in connection with a defeasance of the Notes or a satisfaction and discharge of this Indenture pursuant to Article 8 or 12 of this Indenture.

The notice will identify the Notes to be redeemed and will state:

(a) the redemption date;

(b) the redemption price;

(c) if any Note is being redeemed in part, the portion of the principal amount of such Note to be redeemed and that, after the redemption date upon surrender of such Note, a new Note or Notes in principal amount equal to the unredeemed portion will be issued upon cancellation of the original Note;

(d) the name and address of the Paying Agent;

 

51


(e) that Notes called for redemption must be surrendered to the Paying Agent to collect the redemption price;

(f) that, unless the Company defaults in making such redemption payment, interest on Notes called for redemption ceases to accrue on and after the redemption date;

(g) the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes called for redemption are being redeemed; and

(h) that no representation is made as to the correctness or accuracy of the CUSIP number, if any, listed in such notice or printed on the Notes.

At the Company’s request, the Trustee will give the notice of redemption in the Company’s name and at its expense; provided, however, that the Company has delivered to the Trustee, at least 5 Business Days before notice of redemption is required to be mailed to Holders pursuant to this Section 3.03 (unless a shorter time is agreed to by the Trustee), an Officer’s Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph.

Section 3.04. Effect of Notice of Redemption.

Once notice of redemption is mailed in accordance with Section 3.03 hereof, Notes called for redemption become irrevocably due and payable on the redemption date at the redemption price. A notice of redemption may not be conditional. The notice, if mailed in the manner provided herein, shall be conclusively presumed to have been given, whether or not the Holder received such notice.

Section 3.05. Deposit of Redemption or Purchase Price.

Prior to 11:00 a.m. (New York City time) on the redemption date or purchase date, the Company will deposit with the Trustee or with the Paying Agent money sufficient to pay the redemption or purchase price of and accrued interest, if any, on all Notes to be redeemed or purchased on that date. The Trustee or the Paying Agent will promptly return to the Company any money deposited with the Trustee or the Paying Agent by the Company in excess of the amounts necessary to pay the redemption or purchase price of, and accrued interest, if any, on, all Notes to be redeemed or purchased.

If the Company complies with the provisions of the preceding paragraph, on and after the redemption or purchase date, interest will cease to accrue on the Notes or the portions of Notes called for redemption or purchase. If a Note is redeemed or purchased on or after an interest record date but on or prior to the related interest payment date, then any accrued and unpaid interest shall be paid to the Person in whose name such Note was registered at the close of business on such record date. If any Note called for redemption or purchase is not so paid upon surrender for redemption or purchase because of the failure of the Company to comply with the preceding paragraph, interest shall be paid on the unpaid principal, from the redemption or purchase date until such principal is paid, and to the extent lawful on any interest not paid on such unpaid principal, in each case at the rate provided in the Notes and in Section 4.01 hereof.

Section 3.06. Notes Redeemed or Purchased in Part.

Upon surrender of a Note that is redeemed or purchased in part, the Company will issue and the Trustee will authenticate for the Holder at the expense of the Company a new Note equal in principal amount to the unredeemed or unpurchased portion of the Note surrendered.

 

52


Section 3.07. Optional Redemption.

(a) At any time prior to November 15, 2015, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes issued under this Indenture at a redemption price of 111% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the applicable redemption date, with all or a portion of the net cash proceeds of one or more Equity Offerings; provided that:

(i) at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Affiliates); and

(ii) the redemption occurs within 90 days of the date of the closing of such Equity Offering.

(b) On or after November 15, 2016, the Company may redeem all or a part of the Notes upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on November 15 of the years indicated below:

 

Year    Percentage  
2016      105.500
2017      102.750
2018 and thereafter      100.000

(c) At any time or from time to time prior to November 15, 2016, the Company, at its option, may redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium, together with accrued and unpaid interest thereon, if any, to the redemption date. The Company may provide that payment of such redemption price may be made by, and performance of the obligations in respect of such redemption may be performed by, another Person.

(d) Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Section 3.01 through 3.06 hereof.

Section 3.08. Mandatory Redemption; Open Market Purchases.

The Company is not required to make mandatory redemption or sinking fund payments with respect to the Notes. The Company may at any time and from time to time purchase Notes in the open market or otherwise.

Section 3.09. Offer to Purchase by Application of Excess Proceeds.

In the event that, pursuant to Section 4.10 hereof, the Company is required to commence an offer to all Holders to purchase Notes (an “Asset Sale Offer”), it will follow the procedures specified below.

The Asset Sale Offer shall be made to all Holders and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets. The Asset Sale Offer will remain open for a period of at least 20 Business Days following its commencement and not more than 30 Business

 

53


Days, except to the extent that a longer period is required by applicable law (the “Offer Period”). No later than five Business Days after the termination of the Offer Period (the “Purchase Date”), the Company will apply all Excess Proceeds (the “Offer Amount”) to the purchase of Notes and such other pari passu Indebtedness (on a pro rata basis, if applicable) or, if less than the Offer Amount has been tendered, all Notes and other Indebtedness tendered in response to the Asset Sale Offer. Payment for any Notes so purchased will be made in the same manner as principal payments at maturity are made.

If the Purchase Date is on or after an interest record date and on or before the related interest payment date, any accrued and unpaid interest, if any, will be paid to the Person in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender Notes pursuant to the Asset Sale Offer.

Upon the commencement of an Asset Sale Offer, the Company will send, by first class mail, a notice to the Trustee and each of the Holders, with a copy to the Trustee. The notice will contain all instructions and materials necessary to enable such Holders to tender Notes pursuant to the Asset Sale Offer. The notice, which will govern the terms of the Asset Sale Offer, will state:

(a) that the Asset Sale Offer is being made pursuant to this Section 3.09 and Section 4.10 hereof and the length of time the Asset Sale Offer will remain open;

(b) the Offer Amount, the purchase price and the Purchase Date;

(c) that any Note not tendered or accepted for payment will continue to accrue interest;

(d) that, unless the Company defaults in making such payment, any Note accepted for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Purchase Date;

(e) that Holders electing to have a Note purchased pursuant to an Asset Sale Offer may elect to have Notes purchased in denominations of $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof);

(f) that Holders electing to have a Note purchased pursuant to any Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, or transfer by book-entry transfer, to the Company, a depositary, if appointed by the Company, or a Paying Agent at the address specified in the notice at least three days before the Purchase Date;

(g) that Holders will be entitled to withdraw their election if the Company, the depositary or the Paying Agent, as the case may be, receives, not later than the expiration of the Offer Period, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Note the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased;

(h) that, if the aggregate principal amount of Notes and other pari passu Indebtedness, as the case may be, surrendered by Holders or holders of such pari passu Indebtedness exceeds the Offer Amount, the Company will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis based on the principal amount of Notes and such other pari passu Indebtedness surrendered (with such adjustments as may be deemed appropriate by the Company so that only Notes in denominations of $2,000, or integral multiples of $1,000 in excess thereof, will be purchased (or if a PIK Payment has been made, in minimum denominations of $1.00, or integral multiples of $1.00 in excess thereof)); and

 

54


(i) that Holders whose Notes were purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered (or transferred by book-entry transfer).

On or before the Purchase Date, the Company will, to the extent lawful, accept for payment, on a pro rata basis to the extent necessary, the Offer Amount of Notes and any pari passu Indebtedness or portions thereof tendered pursuant to the Asset Sale Offer, or if less than the Offer Amount has been tendered, all Notes and other pari passu Indebtedness tendered, and will deliver to the Trustee an Officer’s Certificate stating that such Notes and pari passu Indebtedness or portions thereof were accepted for payment by the Company in accordance with the terms of this Section 3.09. The Company, the Depositary or the Paying Agent, as the case may be, will promptly (but in any case not later than five days after the Purchase Date) mail or deliver to each tendering Holder an amount equal to the purchase price of the Notes tendered by such Holder and accepted by the Company for purchase, and the Company will promptly issue a new Note, and the Trustee, upon written request from the Company will authenticate and mail or deliver such new Note to such Holder, in a principal amount equal to any unpurchased portion of the Note surrendered. Any Note not so accepted shall be promptly mailed or delivered by the Company to the Holder thereof. The Company will publicly announce the results of the Asset Sale Offer on the Purchase Date.

Other than as specifically provided in this Section 3.09, any purchase pursuant to this Section 3.09 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

ARTICLE 4.

COVENANTS

Section 4.01. Payment of Notes.

The Company will pay or cause to be paid the principal of, premium, if any, and interest, if any, on the Notes on the dates and in the manner provided in the Notes. Principal, premium, if any, and Cash Interest will be considered paid on the date due if the Paying Agent, if other than the Company or a Subsidiary thereof, holds as of 12:00 p.m. Eastern Time on the due date money deposited by the Company in immediately available funds and designated for and sufficient to pay all principal, premium, if any, and Cash Interest then due. PIK Interest shall be considered paid on the date due if on such date the Trustee has received (i) a written order from the Company signed by one Officer to increase the balance of any Global Note to reflect such PIK Interest or (ii) PIK Notes duly executed by the Company together with a written order of the Company signed by one Officer requesting the authentication of such PIK Notes by the Trustee.

The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the rate equal to the then applicable interest rate on the Notes to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace period) at the same rate to the extent lawful.

Section 4.02. Maintenance of Office or Agency.

The Company will maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or for exchange and where notices and

 

55


demands to or upon the Company in respect of the Notes 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 such office or agency. If at any time the Company will fail to maintain any such required office or agency or will fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the Corporate Trust Office of the Trustee.

The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission will in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company will give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

The Company hereby designates the Corporate Trust Office of the Trustee as one such office or agency of the Company in accordance with Section 2.03.

Section 4.03. Reports

(a) So long as any Notes are outstanding, the Company will cause to be furnished to the Holders and filed with the Trustee:

(1) within 95 days after the end of each fiscal year:

(A) audited year-end consolidated financial statements of either (i) the Company and its Subsidiaries or (ii) Parent and its Subsidiaries (including balance sheets, statements of operations and statements of cash flows that would be required from an SEC registrant in an Annual Report on Form 10-K, including pursuant to Rule 3-10 of Regulation S-K promulgated by the SEC) prepared in accordance with GAAP, including a report on the annual financial statements by certified independent accountants;

(B) the information described in Item 303 of Regulation S-K under the Securities Act (“Management’s Discussion and Analysis of Financial Condition and Results of Operations”) with respect to such period, to the extent such information would otherwise be required to be filed in an Annual Report on Form 10-K; and

(C) a presentation of adjusted EBITDA, consistent in all material respects with the presentation of adjusted EBITDA in the Offering Circular and derived from the financial statements described in (1)(A) above;

(2) within 50 days after the end of each of the first three fiscal quarters of each fiscal year,

(A) unaudited quarterly consolidated financial statements of either (i) the Company and its Subsidiaries or (ii) Parent and its Subsidiaries (including balance sheets, statements of operations and statements of cash flows) that would be required from an SEC registrant in a Quarterly Report on Form 10-Q, and a SAS 100 review by certified independent accountants, prepared in accordance with GAAP, subject to normal year-end adjustments;

 

56


(B) the information described in Item 303 of Regulation S-K under the Securities Act with respect to such period, to the extent such information would otherwise be required to be filed in a Quarterly Report on Form 10-Q; and

(C) a presentation of adjusted EBITDA, consistent in all material respects with the presentation of adjusted EBITDA in the Offering Circular and derived from the financial statements described in (2)(A) immediately above; and

(3) within 5 Business Days after the occurrence of each event that would have been required to be reported in a Current Report on Form 8-K under the Exchange Act (other than with respect to information otherwise required or contemplated by Item 402 of Regulation S-K) if the Company had been a reporting company under the Exchange Act, current reports containing substantially all of the information that would have been required to be contained in a Current Report on Form 8-K under the Exchange Act under such items if the Company had been a reporting company under the Exchange Act; provided, however, that no such current report will be required to be furnished if the Company determines in its good faith judgment that such event is not material to Holders or the business, assets, operations, financial positions or prospects of the Company and its Subsidiaries, taken as a whole.

Notwithstanding the foregoing, in no event will such reports be required to (1) comply with Section 302 or Section 404 of the Sarbanes-Oxley Act of 2002, or related Items 307 and 308 of Regulation S-K promulgated by the SEC, or Item 10(e) of Regulation S-K (with respect to any non-GAAP financial measures contained therein), or (2) contain the separate financial statements of Subsidiaries whose securities are pledged to secure the Notes as contemplated by Rule 3-16 of Regulation S-X promulgated by the SEC.

(b) So long as any Notes are outstanding, the Company will also:

(1) within 10 Business Days after causing the annual report required by clause (1) of Section 4.03(a) to be furnished to the Holders and filed with the Trustee, use commercially reasonable efforts to hold a conference call to discuss such report and the results of operations for the reporting period;

(2) issue a press release to a nationally recognized wire service no fewer than three Business Days prior to the date of the conference call required to be held in accordance with this Section 4.03(b), announcing the time and date of such conference call and either including all information necessary to access the call or directing Holders, beneficial owners, prospective investors, broker-dealers and securities analysts to contact the appropriate person at the Company to obtain such information; and

(3) either (a) maintain a website (which may be non-public) to which Holders, beneficial owners that certify they are beneficial owners of the Notes, prospective investors that certify that they are qualified institutional buyers, broker-dealers, securities analysts and market makers are given access and to which all of the information required by this Section 4.03 is posted; or (b) file such information with the SEC on its EDGAR system (or any successor system).

(c) To the extent that the Company elects to furnish information in respect of Parent and its Subsidiaries rather than the Company and its Subsidiaries, as provided in subparagraphs (1) and (2) of Section 4.03(a), the Company will include in such information to be provided pursuant to such subparagraphs (1) and (2) above, a capitalization table in respect of the Company and its Subsidiaries consistent in all material respects with the presentation of the capitalization table in the Offering Circular.

 

57


(d) If Parent or the Company, as the case may be, has complied with the reporting requirements of Section 13 or 15(d) of the Exchange Act, if applicable, and has furnished the Holders, or filed electronically with the SEC’s EDGAR system (or any successor system) the reports described herein (but for clauses 1(C) and 2(C) only to the extent not prohibited by the rules and regulations of the Exchange Act) with respect to Parent or the Company within the time period required pursuant to Section 13 or 15(d) of the Exchange Act, as the case may be, then the Company shall be deemed to be in compliance with the provisions of Section 4.03(a).

(e) The Company shall provide S&P and Moody’s (and their respective successors) with information on a periodic basis as S&P or Moody’s, as the case may be, shall reasonably require in order to maintain public ratings of the Notes. In addition, the Company shall furnish to Holders, prospective investors, broker-dealers and securities analysts, upon their request, any information required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act so long as the Notes are not freely transferable under the Securities Act.

Section 4.04. Compliance Certificate.

(a) The Company and each Guarantor shall deliver to the Trustee, within 90 days after the end of each fiscal year, an Officer’s Certificate stating that a review of the activities of the Company and its Subsidiaries, during the preceding fiscal year has been made under the supervision of the signing Officers with a view to determining whether the Company has kept, observed, performed and fulfilled its obligations under this Indenture, and further stating, as to such Officer signing such certificate, that to the best of his or her knowledge the Company has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and that there is no default in the performance or observance of any of the terms, provisions and conditions of this Indenture (or, if a Default or Event of Default will have occurred, describing all such Defaults or Events of Default of which he or she may have knowledge and what action the Company is taking or proposes to take with respect thereto).

(b) So long as the Notes are outstanding, deliver to the Trustee, within five Business Days of any Officer becoming aware of any Default or Event of Default, an Officer’s Certificate specifying such Default or Event of Default.

Section 4.05. Taxes.

The Company will pay, and will cause each of its Restricted Subsidiaries to pay, prior to delinquency, all material taxes, assessments, and governmental levies except such as are contested in good faith and by appropriate negotiations or proceedings or where the failure to effect such payment is not adverse in any material respect to the Holders of the Notes.

Section 4.06. Stay, Extension and Usury Laws.

The Company and each of the Guarantors covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law wherever enacted, now or at any time hereafter in force, that may affect the covenants or the performance of this Indenture; and the Company and each of the Guarantors (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, by resort to any such law, hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law has been enacted.

 

58


Section 4.07. Restricted Payments.

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly:

(i) declare or pay any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends or distributions payable in Equity Interests (other than Disqualified Stock) of the Company and other than dividends or distributions payable to the Company or a Restricted Subsidiary of the Company and pro rata dividends or distributions payable to minority stockholders of any Restricted Subsidiary);

(ii) purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any direct or indirect parent of the Company (other than any such Equity Interests owned by the Company or any of its Restricted Subsidiaries);

(iii) make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is (x) secured by a lien junior in right of payment to the Notes, (y) contractually subordinated in right of payment to the Notes or the Subsidiary Guarantees or (z) is unsecured (other than Indebtedness permitted to be incurred pursuant to clause (i), (iv), (vi) (to the extent such Indebtedness is owed to the Company or a Guarantor), (ix), (x), (xiii) or (xvi) of Section 4.09 (collectively, “Subordinated Debt”), except:

(A) a payment of interest or principal at the Stated Maturity thereof;

(B) a payment into a trust within one year of the Stated Maturity of any such Subordinated Debt which payment effects a defeasance or discharge of such Indebtedness;

(C) intercompany Indebtedness permitted under clause (vi) of Section 4.09 and

(D) the payment of interest or principal in anticipation of satisfying a sinking fund obligation, mandatory redemption or final maturity, in each case, within one year of the due date thereof; or

(iv) make any Restricted Investment (all such payments and other actions set forth in these clauses (i) through (iv) being collectively referred to as “Restricted Payments”),

unless, at the time of and after giving effect to such Restricted Payment:

(a) no Default or Event of Default has occurred and is continuing or would occur as a consequence of such Restricted Payment; and

 

59


(b) the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of Section 4.09; and

(c) such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries after the date of this Indenture (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (7), (8), (9), (10), (12), (13), (16), (17), (18) and (19) and, to the extent that any payment made by Parent pursuant to the terms of the Management Incentive Contracts reduces Consolidated Net Income of the Company, (11) of Section 4.07(b)), is less than the sum, without duplication, of:

(i) (A) 100% of the aggregate of the Company’s Consolidated Cash Flow (or, in the event such Consolidated Cash Flow shall be a deficit, minus 100% of such deficit) accrued for the period beginning April 1, 2011 and ending on the last day of the most recently completed month for which internal consolidated financial information is available to the Company at the time of such Restricted Payment, taken as one accounting period, less (ii) 1.4 times Consolidated Interest Expense for the same period, plus

(ii) 100% of the aggregate net cash proceeds and the fair market value, as determined in good faith by the Company’s Board of Directors, of other assets used or useful in the business of the Company and its Restricted Subsidiaries received by the Company since the date of the indenture governing the First Priority Senior Secured Notes from the issue or sale of Equity Interests of the Company (other than Disqualified Stock) or Disqualified Stock or debt securities of the Company that have been converted into such Equity Interests (other than (i) Equity Interests (or Disqualified Stock or convertible debt securities) sold to a Restricted Subsidiary and (ii) Disqualified Stock or convertible debt securities that have been converted into Disqualified Stock), plus

(iii) 100% of the net cash proceeds and the fair market value, as determined in good faith by the Company’s Board of Directors, of other assets used or useful in the business of the Company and its Restricted Subsidiaries received by the Company as bona fide equity capital contributions since the date of the indenture governing the First Priority Senior Secured Notes, plus

(iv) the aggregate amount returned in cash with respect to Restricted Investments made after the date of the indenture governing the First Priority Senior Secured Notes, to the extent such dividends were not otherwise included in Consolidated Cash Flow, whether through interest payments, principal payments, dividends or other distributions, plus

(v) the net cash proceeds and the fair market value, as determined in good faith by the Company’s Board of Directors, of other assets used or useful in the business of the Company and its Restricted Subsidiaries received by the Company or any of its Restricted Subsidiaries from the disposition (other than to a Restricted Subsidiary), retirement or redemption of all or any portion of Restricted Investments made after the date of the indenture governing the First Priority Senior Secured Notes, less the cost of the disposition and net of taxes, plus

 

60


(vi) upon a redesignation of an Unrestricted Subsidiary as a Restricted Subsidiary after the date of the indenture governing the First Priority Senior Secured Notes, the fair market value, as determined in good faith by the Company’s Board of Directors, of the Company’s or a Restricted Subsidiary’s Investment in such Unrestricted Subsidiary immediately following such redesignation,

provided, however, that the sum of clauses (iv) and (v) above shall not exceed the aggregate amount of all such Investments made subsequent to the date of this Indenture.

(b) The provisions of Section 4.07(a) will not prohibit:

(1) the payment of any dividend or the consummation of any irrevocable redemption within 60 days after the date of declaration of the dividend or giving the redemption notice, as the case may be, if at the date of declaration or notice the dividend or redemption payment would have complied with the provisions of this Indenture;

(2) the redemption, repurchase, retirement, defeasance or other acquisition of any Subordinated Debt of the Company or any Guarantor or of any Equity Interests of the Company in exchange for, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of, Equity Interests of the Company (other than Disqualified Stock) or from any contribution to the Company’s common equity stock; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition shall be excluded from clauses (c)(ii) and (c)(iii) of Section 4.07(a), as applicable;

(3) the defeasance, redemption, repurchase or other acquisition of Subordinated Debt of the Company or any Guarantor in exchange for, or with the net cash proceeds from, an incurrence of Subordinated Debt of the Company or any Guarantor constituting Permitted Refinancing Indebtedness;

(4) the declaration and payment of any dividend by a Restricted Subsidiary of the Company to the holders of such Restricted Subsidiary’s Equity Interests on a pro rata basis;

(5) the declaration and payment of dividends or distributions or the making of loans by the Company to Parent (including through Holdings) and/or Holdings in order to pay, and in an amount not to exceed, the Permitted Tax Distributions;

(6) the declaration and payment of any dividends or distributions or the making of any loans by the Company or any of its Restricted Subsidiaries to Parent (including through Holdings) to be used for, and in an amount equal to, the amount of any dividends or distributions paid or loans made by Parent to, or the repurchase of any Equity Interests of Parent from, the Principals or their Related Parties, provided that the aggregate amount of all such dividends, distributions and loans to Parent do not exceed $1.0 million in any calendar year;

 

61


(7) the repurchase of Equity Interests of the Company or any of its Restricted Subsidiaries deemed to occur upon the exercise of stock options, warrants (to the extent equity interests represent a portion of the exercise price of such options or warrants) or other convertible securities and cash payments in lieu of the issuance of fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for the Company’s or such Restricted Subsidiaries’ Equity Interests (including upon surrender of Equity Interests to pay the exercise price of such options, warrants or other convertible securities);

(8) the declaration and payment of any dividends or distributions or the making of any loans to Parent (including through Holdings) and/or Holdings to permit Parent and/or Holdings to pay franchise or similar taxes and corporate costs and expenses incurred in the ordinary course of business, including legal, accounting and other general corporate overhead costs and expenses of Parent and Holdings actually incurred by Parent and/or Holdings, and customary salary, bonus and other benefits (other than payments permitted under clause (11) below) payable to, and indemnity provided on behalf of, directors, officers, employees and consultants of Parent and/or Holdings;

(9) the retirement of any shares of Disqualified Stock of the Company by conversion into, or by exchange for, shares of Disqualified Stock of the Company, or out of the net cash proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary of the Company) of other shares of Disqualified Stock of the Company; provided that the Disqualified Stock of the Company that replaces the retired shares of Disqualified Stock of the Company shall not require the direct or indirect payment of the liquidation preference earlier in time than the final stated maturity of the retired shares of Disqualified Stock of the Company;

(10) the cancellation or forgiveness of any loan between the Company and/or its Affiliates existing on the date of this Indenture or any loan permitted by subparagraphs (5), (6) and (8) above and (11), (12), (13), (16), (17) and (18) below (it being understood that any forgiveness or cancellation of such loans made in connection with any Permitted Tax Distribution shall not reduce the amount of subsequent Permitted Tax Distributions);

(11) the declaration and payment of any dividends or distributions or the making of any loans to Parent (including through Holdings) for payments required to be made pursuant to the terms of future Management Incentive Contracts in an aggregate amount not to exceed $20.0 million;

(12) the declaration and payment of any dividends or distributions or the making of any loans to Parent (including through Holdings) for payments required pursuant to indemnity claims arising under, or amounts required to be paid to third parties pursuant to, the Investment Agreement and/or the Investor Rights Agreement in an aggregate amount not to exceed the amount of proceeds from any private equity issuance under the Investment Agreement and Investor Rights Agreement that were actually contributed to the Company;

 

62


(13) any payment to be made with the proceeds of the Notes as described in the Offering Circular under the caption “Use of Proceeds”;

(14) [Reserved];

(15) [Reserved];

(16) other Restricted Payments since the date of this Indenture not to exceed $10.0 million; provided that this clause (16) shall only be available to the Company and its Restricted Subsidiaries through and including the consummation of the Exchange Offers and thereafter this clause (16) will no longer be available;

(17) the declaration and payment of any dividends or distributions or the making of any loans by the Company or any of its Restricted Subsidiaries to Holdings in order for Holdings to, in each case only to the extent such dividends, distributions or loans are actually used to, (a) make scheduled cash interest payments on the Discount Notes provided that, in the case of any Discount Notes held by Holdings, the amount of such payments, if any, that exceed an amount equal to the amount of amortization payments due on the Holdings Notes and Parent Entity Allowable Indebtedness (x) within five Business Days after the Exchange Offers have been consummated (or in the case of Parent Entity Allowable Indebtedness, within five Business Days after such Parent Entity Allowable Indebtedness has been issued) and (y) in April 2013 shall be contributed to the Company by Holdings within five (5) Business Days after each such amortization payment is made (provided that, Holdings shall be permitted to retain cash of up to 3.49% of $5.0 million, or $174,500, until Parent Entity Allowable Indebtedness of $5.0 million principal amount has been issued), and (b) redeem, repurchase, satisfy and discharge, defease, retire for value or otherwise acquire (i) the Discount Notes held by Holdings, but only in an amount equal to the amount of interest payments due on the Holdings Notes or Parent Entity Allowable Indebtedness in April 2016, October 2016 and April 2017 and (ii) no more than 10% of the outstanding principal amount of the Discount Notes outstanding immediately prior to the closing of the Exchange Offers (excluding Discount Notes held by Holdings or its Affiliates or any directors, officers, stockholders and other Affiliates of the Company or Holdings)_and pay any related interest, premium, fees, costs, expenses and other amounts owing thereunder with respect thereto, and in the case of each of (a) and (b)(i) above (other than the payment made within five Business Days after the Exchange Offers or the $174,500 permitted to be retained by Holdings) such payment to be made to Holdings not more than twelve (12) Business Days prior to the date each such payment is due;

(18) the redemption, repurchase, retirement, defeasance or other acquisition of (x) the Old Senior Subordinated Notes in exchange for, or out of the net cash proceeds of the substantially concurrent sale of, Notes and the Warrants in the Exchange Offers and (y) the Discount Notes in exchange for, or out of the net cash proceeds of the substantially concurrent sale of, Notes in the Exchange Offers; provided that the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, defeasance or other acquisition shall be excluded from clauses (c)(ii) and (c)(iii) of Section 4.07(a), as applicable; and

 

63


(19) the redemption, repurchase, retirement, defeasance or other acquisition of Old Senior Subordinated Notes or Discount Notes in exchange for, or out of the net cash proceeds of the substantially concurrent sale of, Permitted New Second Priority Debt plus the payment of any related interest, premium, fees, costs, expenses and other amounts owing thereunder with respect thereto.

The amount of all Restricted Payments (other than cash) will be the fair market value on the date of the Restricted Payment of the assets or securities proposed to be transferred or issued by the Company or such Restricted Subsidiary, as the case may be, pursuant to the Restricted Payment. The fair market value of any assets or securities that are required to be valued by this Section 4.07 will be determined by the Company’s Board of Directors whose resolution with respect thereto shall be delivered to the Trustee.

Section 4.08. Dividend 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 permit to exist or become effective any consensual encumbrance or restriction on the ability of any Restricted Subsidiary to:

(a) pay dividends or make any other distributions on its Capital Stock to the Company or any of its Restricted Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or pay any indebtedness owed to the Company or any of its Restricted Subsidiaries;

(b) make loans or advances to the Company or any of its Restricted Subsidiaries; or

(c) transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries.

However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of:

(i) agreements governing Existing Indebtedness, the First Priority Senior Secured Notes, the Notes, the Discount Notes, the Holdings Notes and Credit Facilities, other agreements as in effect on the date of this Indenture and any future agreements governing Parent Entity Allowable Indebtedness or Permitted New Second Priority Debt and any amendments, modifications, restatements, renewals, increases, supplements, refundings, replacements or refinancings of those agreements; provided that the amendments, modifications, restatements, renewals, increases, supplements, refundings, replacement or refinancings are not more restrictive, taken as a whole, with respect to such encumbrances or restrictions, than those contained in those agreements on the date of this Indenture or, if entered into subsequent to the date of this Indenture, on the date that such agreement was entered into originally;

(ii) agreements governing First Priority Lien Debt permitted to be incurred under this Indenture to the extent not permitted under another clause of this paragraph; provided, that provisions relating to such encumbrances or restrictions are not materially more restrictive, taken as a whole, than those contained in the Credit Agreement on the date of this Indenture;

(iii) [Reserved];

(iv) applicable law, rule, regulation or order;

 

64


(v) any instrument of a Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness or Capital Stock was incurred in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired; provided that, in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred;

(vi) customary non-assignment provisions in leases and other agreements entered into in the ordinary course of business;

(vii) purchase money obligations (including Capital Lease Obligations) for property acquired in the ordinary course of business that impose restrictions on that property of the nature described in clause (c) of the preceding paragraph;

(viii) Permitted Refinancing Indebtedness; provided that the restrictions contained in the agreements governing such Permitted Refinancing Indebtedness are not materially more restrictive, taken as a whole, than those contained in the agreements governing the Indebtedness being refinanced;

(ix) Liens securing Indebtedness or other obligations otherwise permitted to be incurred under the provisions of Section 4.12 that limit the right of the debtor to dispose of the assets subject to such Liens;

(x) provisions with respect to the disposition or distribution of assets or property in joint venture agreements, asset sale agreements, stock sale agreements and other similar agreements entered into in the ordinary course of business;

(xi) restrictions on cash or other deposits or net worth imposed by customers under contracts or net worth provisions contained in leases and other agreements entered into in the ordinary course of business;

(xii) customary restrictions with respect to a Restricted Subsidiary pursuant to an agreement entered into for the sale or disposition of all or substantially all of the Capital Stock or assets of such Restricted Subsidiary pending the closing of such sale or disposition; provided, that such restrictions apply solely to the Capital Stock or assets of the Restricted Subsidiary that is being sold; and

(xiii) any agreement for the sale or other disposition of assets, including the sale or other disposition of a Restricted Subsidiary, that restricts the disposition of such assets or distributions by that Restricted Subsidiary pending the sale or other disposition of such assets.

Section 4.09. Incurrence of Indebtedness and Issuance of Preferred Stock.

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, issue, assume, guarantee or otherwise become directly or indirectly liable, contingently or otherwise, with respect to (collectively, “incur”) any Indebtedness (including Acquired Debt), and the Company will not issue any Disqualified Stock and will not permit any of its Restricted Subsidiaries to issue any shares of preferred stock; provided, however, that the Company or any Guarantor may incur Indebtedness (including Acquired Debt) or issue Disqualified Stock or preferred stock if the Company’s Leverage Ratio at the time of incurrence of such Indebtedness or the issuance of

 

65


such Disqualified Stock or such preferred stock, as the case may be, after giving pro forma effect to such incurrence or issuance as of such date and to the use of proceeds therefrom, as if the same had occurred at the beginning of the most recently ended four fiscal quarter period of the Company for which internal financial statements are available, would have been no greater than 7.0 to 1.0.

The provisions of the first paragraph of this Section 4.09 will not prohibit the incurrence of any of the following items of Indebtedness (collectively, “Permitted Debt”):

(i) the incurrence by the Company or any Restricted Subsidiary of Indebtedness and letters of credit under one or more Credit Facilities in an aggregate principal amount at any one time outstanding under this clause (i) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Subsidiaries thereunder) not to exceed (a)(i) prior to the closing of a Qualifying IPO, $50.0 million and (ii) from and after the closing of a Qualifying IPO, $100.0 million, less (b) the aggregate amount of all Net Proceeds of Asset Sales applied by the Company or any of its Restricted Subsidiaries after the date of this Indenture to repay any term Indebtedness under a Credit Facility or to repay any revolving credit Indebtedness under a Credit Facility and effect a corresponding commitment reduction thereunder, in each case for both such term Indebtedness and such revolving credit Indebtedness pursuant to Section 4.10;

(ii) the incurrence by the Company and its Restricted Subsidiaries of the Existing Indebtedness;

(iii) the incurrence by the Company and the Guarantors of Indebtedness represented by the Notes issued in the Exchange Offers and any PIK Notes, and, in each case, the related Subsidiary Guarantees;

(iv) the incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary (whether through the direct purchase of assets or through the acquisition of at least a majority of the Voting Stock of any Person owning such assets), in an aggregate principal amount, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (iv), not to exceed at any time outstanding the greater of (a) $10.0 million or (b) 2.0% of Total Assets;

(v) the incurrence by the Company or any of its Restricted Subsidiaries of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace, Indebtedness (other than intercompany Indebtedness) that was permitted by this Indenture to be incurred under the first paragraph of this Section 4.09 or any of clauses (ii), (iii), (iv), (v), (viii), (ix), (xi), (xiv), (xviii) or (xix) of this paragraph;

(vi) the incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness or preferred stock between or among the Company and any of its Restricted Subsidiaries; provided, however, that (a) if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be (i) unsecured and (ii) if the obligee is neither the Company nor a Guarantor, expressly subordinated to the prior payment in full in cash of all obligations with respect to the Notes (in the case of the Company) or the related Subsidiary Guarantee (in the case of a Guarantor), and (b) any subsequent issuance; event or transfer of Equity Interests that results in any such Indebtedness or preferred stock being held by a Person

 

66


other than the Company or a Restricted Subsidiary of the Company and any sale or other transfer of any such Indebtedness or preferred stock to a Person that is not either the Company or a Restricted Subsidiary of the Company will be deemed, in each case, to constitute an incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (vi);

(vii) Indebtedness under Hedging Obligations entered into for bona fide hedging purposes of the Company or any Restricted Subsidiary not for the purpose of speculation;

(viii) guarantees provided pursuant to Section 4.17 and the guarantee by the Company or any Restricted Subsidiary of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be incurred by another provision of this Section 4.09;

(ix) Indebtedness incurred by the Company or any of its Restricted Subsidiaries constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect to workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims; provided, however, that upon the drawing of such letters of credit or the incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or incurrence;

(x) Obligations in respect of performance and surety bonds and completion guarantees provided by the Company or any of its Restricted Subsidiaries in the ordinary course of business;

(xi) Acquisition Debt of the Company or any Restricted Subsidiary if (w) such Acquisition Debt is incurred within 365 days after the date on which the related definitive acquisition agreement was entered into by the Company or such Restricted Subsidiary, (x) the aggregate principal amount of such Acquisition Debt is no greater than the aggregate principal amount of Acquisition Debt set forth in a notice from the Company to the Trustee (an “Incurrence Notice”) within 30 days after the date on which the related definitive acquisition agreement was entered into by the Company or such Restricted Subsidiary, which notice shall be executed on the Company’s behalf by an executive officer of the Company in such capacity and shall describe in reasonable detail the acquisition that such Acquisition Debt will be incurred to finance, (y) after giving pro forma effect to the acquisition described in such Incurrence Notice, the Company or such Restricted Subsidiary could have incurred such Acquisition Debt under this Indenture, including compliance with the first paragraph of this Section 4.09, as of the date upon which the Company delivers such Incurrence Notice to the Trustee and (z) such Acquisition Debt is utilized solely to finance the acquisition described in such Incurrence Notice and any other pending acquisitions previously described in one or more Incurrence Notices and which satisfy the foregoing provisions (including to repay or refinance indebtedness or other obligations incurred in connection with such acquisition and to pay related fees and expenses); provided, however, that any Incurrence Notice given hereunder may be withdrawn or the amount of Acquisition Debt referred to therein may be reduced at any time prior to the incurrence of such Acquisition Debt;

(xii) the incurrence by the Company’s Unrestricted Subsidiaries of Non-Recourse Debt, provided, however, that if any such Indebtedness ceases to be Non-Recourse Debt of an Unrestricted Subsidiary, such event will be deemed to constitute an incurrence of Indebtedness by a Restricted Subsidiary of the Company that was not permitted by this clause (xii);

 

67


(xiii) the incurrence by the Company or any Restricted Subsidiary of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business and such Indebtedness is extinguished within five Business Days after notice thereof;

(xiv) the incurrence by the Company of Indebtedness in an aggregate principal amount not greater than two times the aggregate amount of cash contributions (other than from the issuance of Disqualified Stock of the Company) made to the common equity capital of the Company after the date of this Indenture (whether through the issuance or sale of Capital Stock or through capital contributions from Parent or Holdings), provided, that (a) such Indebtedness is incurred within 180 days after the making of such cash contribution and is so designated as contribution indebtedness pursuant to an Officer’s Certificate on the incurrence date thereof, and (b) any equity contribution that forms the basis for an incurrence of Indebtedness under this paragraph (xiv) will be disregarded for purposes of all calculations called for by Section 4.07 and will not be considered to be an Equity Offering for purposes of Section 3.07;

(xv) the incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness incurred to refund, refinance or replace any Indebtedness incurred pursuant to this clause (xv), not to exceed $15.0 million;

(xvi) agreements of the Company or any Restricted Subsidiary providing for indemnification, adjustment of purchase price or similar customary obligations, in each case incurred or assumed in connection with the acquisition or disposition of any business or assets permitted by this Indenture;

(xvii) the incurrence by the Company of Indebtedness under the LBI Media Intercompany Note; provided that if Parent or Holdings, as the case may be, irrevocably forgives or cancels all or any portion of such LBI Media Intercompany Note, the amount thereof so forgiven or cancelled shall at such time be treated as a capital contribution pursuant to clause (c)(iii) of Section 4.07(a);

(xviii) the incurrence by the Company of Notes issued in exchange for Old Senior Subordinated Notes and Discount Notes pursuant to the Exchange Offers, and any Notes issued from time to time to pay interest in kind in accordance with the terms of the Indenture and, in each case, the related subsidiary guarantees; and

(xix) the incurrence by the Company of any Permitted New Second Priority Debt.

For purposes of determining compliance with this Section 4.09, in the event that an item of proposed Indebtedness meets the criteria of more than one of the categories of Permitted Debt described in clauses (i) through (xix) above, or is entitled to be incurred pursuant to the first paragraph of this Section 4.09, the Company will be permitted to classify such item of Indebtedness on the date of its incurrence, in any manner that complies with this Section 4.09; provided, that, in no event shall the Notes or Permitted New Second Priority Debt be classified as Indebtedness entitled to be incurred pursuant to the first paragraph of this Section 4.09. Indebtedness under the Credit Facilities outstanding on the date on which Notes are first issued and authenticated under this Indenture will initially be deemed to have been incurred on such date in reliance on the exception provided by clause (i) of the definition of Permitted Debt (but may later be reclassified in accordance with the following sentence). In addition, the Company may, at any time, change the classification of an item of Indebtedness, Disqualified Stock or preferred stock, or any portion thereof, to any other clause of Permitted Debt or to the first paragraph of

 

68


this Section 4.09, provided that the Company or a Restricted Subsidiary would be permitted to incur the item of Indebtedness, Disqualified Stock or preferred stock, or portion thereof, under such other clause or the first paragraph of this Section 4.09, as the case may be, at the time of reclassification. The accrual of interest, the accretion or amortization of original issue discount, the payment of interest on any Indebtedness in the form of additional Indebtedness with the same terms, the reclassification of preferred stock as Indebtedness due to a change in accounting principles, and the payment of dividends on Disqualified Stock or preferred stock in the form of additional shares of the same class of Disqualified Stock or preferred stock will not be deemed to be an incurrence of Indebtedness or an issuance of Disqualified Stock or preferred stock for purposes of this Section 4.09; provided, in each such case, that the amount of any such accrual, accretion or payment shall be included in Consolidated Interest Expense of the Company to the extent (and only to the extent) required by the definition of the term “Consolidated Interest Expense.”

The Company will not incur, and will not permit any Guarantor to incur, any Subordinated Debt (including Permitted Debt) unless such Indebtedness also constitutes Subordinated Debt with respect to the Notes and the applicable Subsidiary Guarantee at least to the same extent.

Section 4.10. Asset Sales

(a) The Company will not, and will not permit any of its Restricted Subsidiaries to, consummate an Asset Sale unless:

(i) the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of;

(ii) the fair market value is determined in good faith by the Company’s Board of Directors and evidenced by a resolution of the Board of Directors or by a Responsible Officer of the Company set forth in an Officer’s Certificate, in each case, delivered to the Trustee;

(iii) at least 75% of the consideration received in the Asset Sale by the Company or such Restricted Subsidiary is in the form of cash or Cash Equivalents except to the extent the Company is undertaking a Permitted Asset Swap. For purposes of this provision and subparagraph (z) below, each of the following shall be deemed to be cash:

(A) any liabilities, as shown on the Company’s most recent consolidated balance sheet, of the Company or any Restricted Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes or any Subsidiary Guarantee) that are assumed by the transferee of any such assets pursuant to a customary novation agreement that releases the Company or such Restricted Subsidiary from further liability; and

(B) any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee converted by the Company or such Restricted Subsidiary within 180 days into cash or Cash Equivalents, to the extent of the cash or Cash Equivalents received in that conversion; and

(iv) if such Asset Sale involves the transfer of Collateral:

(A) such Asset Sale complies with the applicable provisions of the Security Documents; and

 

69


(B) to the extent required by the Security Documents, all consideration (including Cash Equivalents) received in such Asset Sale shall be expressly made subject to Liens under the Security Documents.

The 75% limitation referred to in clause (iii) above will not apply to any Asset Sale in which the cash or Cash Equivalents portion of the consideration received therefrom, determined in accordance with the preceding provision, is equal to or greater than what the after tax proceeds would have been had such Asset Sale complied with the aforementioned 75% limitation.

Notwithstanding the foregoing, the Company or any Restricted Subsidiary will be permitted to consummate an Asset Sale without complying with the foregoing if:

(x) 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 assets or other property sold, issued or otherwise disposed of;

(y) the fair market value is determined in good faith by the Company’s Board of Directors and evidenced by a resolution of the Board of Directors or by a Responsible Officer of the Company set forth in an Officer’s Certificate, in each case, delivered to the Trustee; and

(z) at least 75% of the consideration for such Asset Sale constitutes a controlling interest in a Permitted Business, assets used or useful in a Permitted Business and/or cash and Cash Equivalents;

provided, however, that any cash or Cash Equivalents (other than any amount deemed cash under clause (iii)(A) of the first paragraph of this Section 4.10) received by the Company or such Restricted Subsidiary in connection with any Asset Sale permitted to be consummated under this paragraph shall constitute Net Proceeds subject to the provisions of the next paragraph.

(b) For Asset Sales by the Company or any of its Restricted Subsidiaries that are consummated after the date of this Indenture, the Company or such Restricted Subsidiary shall apply the Net Proceeds from such Asset Sales as follows:

(i) Within 365 days after the receipt of any Restricted Asset Sale Proceeds (as defined below) from such Asset Sales, the Company or such Restricted Subsidiary shall apply those Restricted Asset Sale Proceeds at its option:

(A) to repay Senior Debt and if such Senior Debt is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto;

(B) to acquire all or substantially all of the assets of, or a majority of the Voting Stock of, a Permitted Business if, after giving effect to any such acquisition of Voting Stock, the Permitted Business is or becomes a Restricted Subsidiary of or is merged with or into the Company or a Restricted Subsidiary;

(C) to make capital expenditures that are used or useful in a Permitted Business; or

(D) to acquire other assets that are used or useful in a Permitted Business;

 

70


provided, that in the case of clauses (B), (C) and (D) above, a binding commitment shall be treated as a permitted application of the Restricted Asset Sale Proceeds as of the date of such commitment so long as the Company or such Restricted Subsidiary enters into such commitment with the good faith expectation that such Restricted Asset Sale Proceeds will be applied to satisfy such commitment prior to the later of (a) 180 days after the date of such commitment or (b) 365 days after the date of such Asset Sale and if such Restricted Asset Sale Proceeds are not so applied within that time frame, such Restricted Asset Sale Proceeds shall constitute “Excess Proceeds” (as defined below) and be applied as provided in clause (ii) below. Pending the final application of any Restricted Asset Sale Proceeds, the Company may temporarily reduce revolving credit borrowings or otherwise invest the Restricted Asset Sale Proceeds in any manner that is not prohibited by this Indenture. For the avoidance of doubt, the Company shall not make any Restricted Payment to Holdings, directly or indirectly (including through the temporary repayment of any revolving credit facility), with Restricted Asset Sale Proceeds.

(ii) With respect to Net Proceeds from such Asset Sales (other than Net Proceeds from the sale of the Sawyer Property and the sale of KTCY-FM, which shall not be subject to this clause (ii) but shall be subject to clause (i) above) that are in excess of the Restricted Asset Sale Proceeds (the “Excess Proceeds”), within 60 days after the receipt of any such Excess Proceeds, the Company or such Restricted Subsidiary shall apply those Excess Proceeds at its option:

(A) to repay Senior Debt and if such Senior Debt is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; or

(B) to commence an Asset Sale Offer as provided in the following paragraph.

The Company will make an Asset Sale Offer to all holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in this Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets to purchase the maximum principal amount of Notes and such Parity Lien Debt that may be purchased out of the Excess Proceeds. The offer price in any Asset Sale Offer will be equal to 100% of the principal amount of the Notes and such Parity Lien Debt plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash. If the date of purchase is on or after an interest record date and on or before the related interest payment date, accrued and unpaid interest, if any, will be paid to the holder in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to holders who tender pursuant to the Asset Sale Offer. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes and Parity Lien Debt tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select such tendered Notes and such Parity Lien Debt to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero.

(c) The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with each repurchase of Notes pursuant to an Asset Sale Offer. To the extent that the provisions of any securities laws or regulations conflict with the Asset Sale provisions of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under the Asset Sale provisions of this Indenture by virtue of such conflict.

 

71


Section 4.11. Transactions with Affiliates.

The Company will not, and will not permit any of its Restricted Subsidiaries to, make any payment to, or sell, lease, transfer or otherwise dispose of any of its properties or assets to, or purchase any property or assets from, or enter into or make or amend any transaction, contract, agreement, understanding, loan, advance or guarantee with, or for the benefit of, any Affiliate (each, an “Affiliate Transaction”), unless:

(a) the Affiliate Transaction is on terms that are not materially less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable transaction by the Company or such Restricted Subsidiary with an unrelated Person; and

(b) the Company delivers to the Trustee:

(i) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $10.0 million, a resolution of the Company’s Board of Directors set forth in an Officer’s Certificate certifying that such Affiliate Transaction complies with this Section 4.11 and that such Affiliate Transaction has been approved by a majority of the members of the Company’s Board of Directors, which approval, if the Company’s Board of Directors includes disinterested members at such time, shall include the approval of at least one disinterested member; and

(ii) with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, an opinion as to the fairness to the Company of such Affiliate Transaction from a financial point of view issued by an accounting, appraisal or investment banking firm of national standing.

The following items will not be deemed to be Affiliate Transactions and, therefore, will not be subject to the provisions of the prior paragraph:

(a) any employment and consulting agreement or other compensation arrangement entered into by the Company or any of its Restricted Subsidiaries in the ordinary course of business and the payment of compensation and the reimbursement of expenses pursuant thereto;

(b) transactions between or among the Company and/or any of its Restricted Subsidiaries;

(c) transactions with a Person that is an Affiliate of the Company solely because the Company owns an Equity Interest in, or controls, such Person;

(d) payment of reasonable fees and expenses to directors;

(e) indemnification of officers and directors of the Company or any Restricted Subsidiary pursuant to reasonable and customary indemnification provisions;

(f) sales of Equity Interests (other than Disqualified Stock) to Affiliates of the Company;

(g) Restricted Payments that are permitted by the provisions of Section 4.07, and Permitted Investments;

 

72


(h) transactions under any contract or agreement of the Company or any Restricted Subsidiary in effect on the date of this Indenture, in each case, as the same may be amended, modified or replaced from time to time so long as any such amendment, modification or replacement is not materially less favorable to the Company and its Restricted Subsidiaries than the contract or agreement as in effect on the date of this Indenture;

(i) loans or advances to employees who are Affiliates in the ordinary course of business not to exceed $2.5 million in the aggregate at any one time outstanding;

(j) the existence of, or the performance by Parent, the Company or any of the Restricted Subsidiaries of obligations (including obligations resulting from Parent causing the Company or any of its Restricted Subsidiaries to take certain actions as required thereby) under the terms of, the Investor Rights Agreement as in effect on date of this Indenture and as subsequently amended and any related agreements which it may enter into thereafter; provided, however, that the existence of, or the performance by Parent, the Company or any of the Restricted Subsidiaries of obligations (including obligations resulting from Parent causing the Company or any of its Restricted Subsidiaries to take certain actions as required thereby) under any future amendment to any such existing agreement or under any similar agreement entered into after the date of this Indenture shall only be permitted by this clause (j) to the extent that the terms of any such amendment or related agreement are not otherwise disadvantageous in any material respect to the Holders, when taken as a whole;

(k) services provided to any Unrestricted Subsidiary in the ordinary course of business, which the Company’s Board of Directors has determined, pursuant to a resolution thereof, are provided on terms at least as favorable to the Company and its Restricted Subsidiaries as those that would have been obtained in a comparable transaction with an unrelated Person;

(l) any transactions permitted under Section 5.01;

(m) tax sharing agreements, or payments pursuant thereto, between the Company or one or more Subsidiaries, on the one hand, and any other Person with which the Company or such Subsidiaries are required or permitted to file a consolidated tax return or with which the Company or such Subsidiaries are part of a consolidated group for tax purposes to be used by such Person to pay taxes, and which payments by the Company and the Restricted Subsidiaries are not in excess of the Permitted Tax Distributions;

(n) any merger of the Company and any direct or indirect parent company of the Company; provided, however, that such merger is otherwise in compliance with the terms of this Indenture, including Section 5.01;

(o) L.D.L. Enterprises, Inc.’s use of advertising time on radio and television stations of the Company and its Subsidiaries as described in “Certain Relationships and Related Transactions” in the Offering Circular; and

(p) the incurrence by the Company of Indebtedness under the LBI Media Intercompany Note and payments of principal, interest and other amounts owing thereunder.

Section 4.12. Liens.

The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly, create, incur, assume or suffer to exist any Lien of any kind securing Indebtedness on any asset now owned or hereafter acquired, except Permitted Liens.

 

73


Section 4.13. Corporate Existence.

Subject to Article 5 hereof, the Company shall do or cause to be done all things necessary to preserve and keep in full force and effect:

(i) its corporate existence, and the corporate, partnership or other existence of each of its Restricted Subsidiaries, in accordance with the respective organizational documents (as the same may be amended from time to time) of the Company or any such Restricted Subsidiary; and

(ii) the rights (charter and statutory), licenses and franchises of the Company and its Restricted Subsidiaries; provided, however, that the Company shall not be required to preserve any such right, license or franchise, or the corporate, partnership or other existence of any of its Restricted Subsidiaries, if the Company’s Board of Directors shall determine that the preservation thereof is no longer desirable in the conduct of the business of the Company and its Subsidiaries, taken as a whole.

Section 4.14. Business Activities.

Until the consummation of a Public Equity Offering, the Company will not, and will not permit any Subsidiary to, engage in any business other than Permitted Businesses, except to such extent as would not be material to the Company and its Subsidiaries taken as a whole.

Section 4.15. Offer to Repurchase Upon Change of Control.

(a) Upon the occurrence of a Change of Control, the Company will make an offer (a “Change of Control Offer”) to each Holder to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof)) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, on the Notes repurchased, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date (the “Change of Control Payment”); provided, that the Company will not be obligated to repurchase Notes in the event that it exercises its right to redeem all of the Notes as described in Section 3.07 hereof, unless and until there is a default in payment of the applicable redemption price. Within 30 days following any Change of Control, the Company will mail a notice to each Holder describing the transaction or transactions that constitute the Change of Control and stating:

(i) that the Change of Control Offer is being made pursuant to this Section 4.15 and that all Notes tendered will be accepted for payment;

(ii) the purchase price and the purchase date, which shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed (the “Change of Control Payment Date”);

(iii) that any Note not tendered will continue to accrue interest;

(iv) that, unless the Company defaults in the payment of the Change of Control Payment, all Notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest after the Change of Control Payment Date;

(v) that Holders electing to have any Notes purchased pursuant to a Change of Control Offer will be required to surrender the Notes, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes completed, or transfer by book-entry transfer, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day preceding the Change of Control Payment Date;

 

74


(vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the close of business on the second Business Day preceding the Change of Control Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the Holder, the principal amount of Notes delivered for purchase, and a statement that such Holder is withdrawing his election to have the Notes purchased; and

(vii) that Holders whose Notes are being purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered, which unpurchased portion must be equal to $2,000 in principal amount or an integral multiple of $1,000 in excess thereof.

The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder to the extent such laws and regulations are applicable in connection with the repurchase of Notes as a result of a Change of Control. To the extent that the provisions of any securities laws or regulations conflict with the provisions of Sections 3.09 or 4.15 of this Indenture, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under Section 3.09 or this Section 4.15 by virtue of such conflict.

(b) On the Change of Control Payment Date, the Company will, to the extent lawful:

(i) accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

(ii) deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof properly tendered; and

(iii) deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officer’s Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

The Paying Agent will promptly mail or wire transfer to each Holder of Notes properly tendered the Change of Control Payment for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided that each new Note will be in a principal amount of $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof). If the Change of Control Payment Date is on or after an interest record date and on or before the related interest payment date, accrued and unpaid interest, if any, will be paid to the Holder in whose name a Note is registered at the close of business on such record date, and no additional interest will be payable to Holders who tender pursuant to the Change of Control Offer.

(c) Prior to repurchasing any Notes pursuant to the provisions of this Section 4.15, the Company will either repay all outstanding Senior Debt or obtain the requisite consents, if any, under all the agreements governing outstanding Senior Debt to permit the repurchase of the Notes required by this Section 4.15. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Payment Date.

 

75


(d) Notwithstanding anything to the contrary in this Section 4.15, the Company will not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements set forth in this Section 4.15 and Section 3.09 hereof and all other provisions of this Indenture applicable to a Change of Control Offer made by the Company and purchases all Notes properly tendered and not withdrawn under the Change of Control Offer. The Company will not be obligated to make a Change of Control Offer if a notice of redemption has been given pursuant to the terms of this Indenture as described in Section 3.07 unless and until there is a default in payment of the applicable redemption price. Notwithstanding anything to the contrary herein, a Change of Control Offer may be commenced by the Company or a third party in advance of a Change of Control, conditional upon such Change of Control, if a definitive agreement is in place for the Change of Control at the time of making of the Change of Control Offer.

Section 4.16. [Reserved.]

Section 4.17. Additional Subsidiary Guarantees.

If the Company or any of its Subsidiaries acquires or creates another Domestic Subsidiary after the date of this Indenture, excluding all Subsidiaries that have been properly designated as Unrestricted Subsidiaries in accordance with this Indenture for so long as they continue to constitute Unrestricted Subsidiaries, then that newly acquired or created Domestic Subsidiary will become a Guarantor and execute a supplemental indenture to this Indenture, the form of which is attached as Exhibit E hereto, and each applicable Security Document within fifteen Business Days of the date on which it was acquired or created. Notwithstanding the foregoing, if any Restricted Subsidiary of the Company guarantees any Indebtedness the primary obligor of which is the Company or any Guarantor, such Restricted Subsidiary will become a Guarantor, execute a supplemental indenture to this Indenture, and deliver an Opinion of Counsel satisfactory to the Trustee and, for each such Guarantor (other than Empire Burbank), will execute each applicable Security Document.

Section 4.18. [Reserved.]

Section 4.19. Designation of Restricted and Unrestricted Subsidiaries

The Company’s Board of Directors may designate any Restricted Subsidiary to be an Unrestricted Subsidiary if that designation would not cause a Default. If a Restricted Subsidiary is designated as an Unrestricted Subsidiary, the aggregate fair market value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary properly designated will be deemed to be an Investment made as of the time of the designation and will reduce the amount available for Restricted Payments under Section 4.07(a) or one or more clauses of the definition of “Permitted Investments,” as determined by the Company. That designation will only be permitted if the Investment would be permitted at that time and if the Restricted Subsidiary otherwise meets the definition of an Unrestricted Subsidiary. The Company’s Board of Directors may re-designate any Unrestricted Subsidiary to be a Restricted Subsidiary if the re-designation would not cause a Default.

Section 4.20. No Amendment of Subordination Provisions.

(a) Without the consent of the Holders of at least a majority in aggregate principal amount of the Notes then outstanding, the Company will not amend, modify or alter the indenture governing the Old Senior Subordinated Notes of the Company in any way to:

 

76


(i) increase the rate of or accelerate or shorten the time for payment of interest on any Old Senior Subordinated Notes;

(ii) increase the principal of, shorten the final maturity date of or shorten the Weighted Average Life to Maturity of any Old Senior Subordinated Notes;

(iii) alter the redemption provisions in a manner that is adverse to the Holders of the Notes or increase the price or terms at which the Company is required to offer to purchase any Old Senior Subordinated Notes; or

(iv) amend the provisions of Article 10 of the indenture governing the Old Senior Subordinated Notes.

Section 4.21. Restrictions on Empire Burbank.

Empire Burbank will not own any assets other than the Burbank Office Property and any additions to such property, its interests under the Empire Burbank Lease and the Empire Burbank Sublease and certain production and related equipment for use by third parties in connection with the subleasing of such sound stages and studios and additional assets necessary or advisable for the conduct of its business in the ordinary course. Notwithstanding anything contained herein to the contrary, Empire Burbank will not incur any new secured Indebtedness, increase the amount of its secured Indebtedness existing as of the date of the Indenture or incur any unsecured Indebtedness outside of the ordinary course of business, except, in each case, for providing guarantees on First Priority Lien Debt, the Notes, Permitted New Second Priority Debt and the Old Senior Subordinated Notes. To the extent that the Company or any of its Restricted Subsidiaries is the fee owner of the Burbank Office Property after the repayment in full of the Indebtedness owed by Empire Burbank that is secured by the mortgage in effect as of the date of the Indenture on the Burbank Office Property, (I) within thirty (30) days after the repayment of such Indebtedness, the Company shall cause Empire Burbank to (a) execute each applicable Security Document and (b) deliver to the Trustee (i) a Mortgage for the Burbank Office Property, (ii) to the extent within the possession or control of the Company or any Guarantor as of the date of the Indenture, (A) surveys, (B) phase one environmental reports, (C) appraisals and (D) other material due diligence reasonably requested, in each case related to the Burbank Office Property, and (iii) a customary opinion of local counsel relating to the enforceability of the Mortgage covering the Burbank Office Property; and (II) within forty-five (45) days after such repayment or such later date as the First Priority Lien Collateral Trustee may agree in its reasonable discretion to have such delivered to it (for the benefit of the secured parties under the Credit Agreement and the holders of First Priority Senior Secured Notes), the Company shall cause Empire Burbank to deliver to the Trustee a mortgagee’s title insurance policy for the Burbank Office Property reasonably acceptable to the First Priority Lien Collateral Trustee (it being understood that such title policy shall not be required to include a survey endorsement).

Section 4.22. Advances to Subsidiaries.

(a) All advances to Restricted Subsidiaries (that are not otherwise Guarantors) made by the Company (or any Guarantor) after the date of this Indenture will be evidenced by intercompany notes in favor of the Company or the applicable Guarantor. These intercompany notes will be pledged pursuant to the Security Documents as Collateral to secure the First Priority Lien Obligations and Parity Lien Obligations. Each intercompany note will be payable upon demand and will bear interest at the same rate as the First Priority Senior Secured Notes and will be subordinated in right of payment to all existing Senior Debt of the non-Guarantor Restricted Subsidiary to which the loan is made. “Senior Debt” of Subsidiaries for the purposes of the intercompany notes will be defined as all Indebtedness of the non-Guarantor Restricted Subsidiaries that is not specifically by its terms made pari passu with or junior to

 

77


the intercompany notes. A form of intercompany note is attached to this Indenture as Exhibit G hereto. Repayments of principal with respect to any intercompany notes will be required to be pledged pursuant to the Security Documents as Collateral to secure the Notes until such amounts are advanced to a Subsidiary in accordance with this Indenture.

(b) The Company will not permit any Restricted Subsidiary (that is not otherwise a Guarantor) in respect of which the Company is a creditor by virtue of an intercompany note to incur any Indebtedness that is subordinate or junior in right of payment to any Senior Debt of such non-Guarantor Restricted Subsidiary and senior in any respect in right of payment to any intercompany note.

ARTICLE 5.

SUCCESSORS

Section 5.01. Merger, Consolidation, or Sale of Assets.

The Company will not, directly or indirectly: (1) consolidate or merge with or into another Person (whether or not the Company is the surviving corporation); or (2) sell, assign, transfer, convey or otherwise dispose of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries taken as a whole, in one or more related transactions, to another Person unless:

(i) either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition has been made is a corporation, limited liability company or partnership organized or existing under the laws of the United States, any state of the United States or the District of Columbia (such other Person being herein called the “Successor Person”);

(ii) the Person formed by or surviving any such consolidation or merger (if other than the Company) or the Person to which such sale, assignment, transfer, conveyance or other disposition shall have been made assumes all the obligations of the Company under the Notes, this Indenture and the Security Documents pursuant to agreements reasonably satisfactory to the Trustee;

(iii) immediately after such transaction, no Default or Event of Default exists;

(iv) the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition has been made (a) would, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to incur at least $1.00 of additional Indebtedness pursuant to the Leverage Ratio test set forth in the first paragraph of Section 4.09 or (b) would have a lower Leverage Ratio immediately after the transaction, after giving pro forma effect to the transaction as if the transaction had occurred at the beginning of the applicable four quarter period, than the Company’s Leverage Ratio immediately prior to the transaction; and

(v) if the Successor Person is not a corporation, a Restricted Subsidiary of the Successor Person that is a corporation organized and existing under the laws of the United States of America, any State thereof or the District of Columbia, shall be a co-obligor of the Notes pursuant to a supplemental indenture in a form reasonably acceptable to the Trustee.

 

78


In addition, the Company may not, directly or indirectly, lease all or substantially all of its properties or assets, in one or more related transactions, to any other Person. This Section 5.01 will not prohibit (i) any sale, assignment, transfer, conveyance or other disposition of assets between or among the Company and any of its Restricted Subsidiaries, (ii) any Restricted Subsidiary from consolidating with, merging into or transferring all or part of its assets to the Company or any Restricted Subsidiary or (iii) the Company from merging with an Affiliate incorporated solely for the purpose of reincorporating the Company in another jurisdiction to realize tax or other benefits.

Section 5.02. Successor Corporation Substituted.

Upon any consolidation, combination or merger, or any sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the assets of the Company in a transaction that is subject to, and that complies with Section 5.01 hereof, the successor Person formed by such consolidation or into or with which the Company is merged or to which such sale, assignment, transfer, lease, conveyance or other disposition is made shall succeed to, and be substituted for (so that from and after the date of such consolidation, merger, sale, lease, conveyance or other disposition, the provisions of this Indenture and the Security Documents referring to the “Company” shall refer instead to the successor Person and not to the Company), and may exercise every right and power of the Company under this Indenture and the Security Documents with the same effect as if such successor Person had been named as the Company herein; provided, however, that the predecessor Company shall not be relieved from the obligation to pay the principal of and interest on the Notes except in the case of a sale, assignment, transfer, conveyance or other disposition of all of the Company’s assets in a transaction that is subject to, and that complies with the provisions of, Section 5.01 hereof.

ARTICLE 6.

DEFAULTS AND REMEDIES

Section 6.01. Events of Default.

An “Event of Default” occurs if:

(a) the Company defaults in the payment when due of interest on the Notes and such default continues for a period of 30 days;

(b) the Company defaults in the payment when due of principal of, and premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise;

(c) the Company or any of its Restricted Subsidiaries fails to comply with the provisions of Section 4.15 or 5.01 hereof;

(d) the Company or any of its Restricted Subsidiaries fails to comply with the provisions of Section 4.07, 4.09, 4.10, 10.05 or 10.06 hereof for 30 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

(e) the Company or any of its Restricted Subsidiaries fails to observe or perform any other covenant or other agreement in this Indenture, the Security Documents or the Notes for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding;

 

79


(f) a default occurs under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of the Restricted Subsidiaries (or the payment of which is guaranteed by the Company or any of the Restricted Subsidiaries), other than Indebtedness owing to the Company or its Restricted Subsidiaries, whether such Indebtedness or Guarantee now exists, or is created after the date hereof, if that default:

(i) is caused by a failure to pay principal of or interest on such Indebtedness when due (giving effect to any applicable grace periods and any extensions thereof) (a “Payment Default”); or

(ii) results in the acceleration of such Indebtedness prior to its express maturity;

and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been and continues to be a Payment Default or the maturity of which has been and continues to be so accelerated, aggregates $10.0 million or more;

(g) the Company or any of its Restricted Subsidiaries fails to pay final judgments aggregating in excess of $10.0 million (not covered by insurance), which judgments are not paid, vacated, discharged, bonded or stayed for a period of 60 days;

(h) (i) any Security Document is held in any judicial proceeding to be unenforceable or invalid in any material respect or ceases for any reason to be in full force and effect in any material respect, other than in accordance with the terms of the relevant Security Documents and except solely as a result of any action taken or not taken by the Collateral Agent acting in its capacity as collateral agent that was required to be taken or not taken by the Collateral Agent acting in its capacity as collateral agent pursuant to the Security Documents, (ii) any security interest created by any Security Document ceases to be in full force and effect (except as permitted by the terms of this Indenture or the Security Documents and except solely as a result of any action taken or not taken by the Collateral Agent that was required to be taken or not taken by the Collateral Agent pursuant to the Security Documents) with respect to Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million, and such default continues for a period of 60 days after the Company receives notice thereof from the Trustee or from the Holders of at least 25% in principal amount of the Notes outstanding specifying such default or (iii) the Company or any of its Restricted Subsidiaries, or any Person acting on behalf of any of them, asserts in writing that any Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million is not subject to a valid, perfected security interest (except as permitted by the terms of this Indenture or the Security Documents);

(i) except as permitted by this Indenture, any Subsidiary Guarantee of a Significant Subsidiary is held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor which is a Significant Subsidiary, or any Person acting on behalf of any Guarantor which is a Significant Subsidiary, shall deny or disaffirm its obligations under its Subsidiary Guarantee; provided, however, that an Event of Default will also be deemed to occur with respect to Subsidiary Guarantors that are not Significant Subsidiaries (“Insignificant Subsidiaries”) if the Subsidiary Guarantees of such Insignificant Subsidiaries are held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or such Insignificant Subsidiaries deny or disaffirm their obligations under their Subsidiary Guarantees (other than in accordance with the terms of such Subsidiary Guarantee), if when aggregated and taken as a whole the Insignificant Subsidiaries subject to this clause (i) would meet the definition of a Significant Subsidiary;

 

80


(j) the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary, pursuant to or within the meaning of Bankruptcy Law:

(i) commences a voluntary case,

(ii) consents to the entry of an order for relief against it in an involuntary case,

(iii) consents to the appointment of a custodian of it or for all or substantially all of its property,

(iv) makes a general assignment for the benefit of its creditors,

(v) generally is not paying its debts as they become due;

(k) a court of competent jurisdiction enters an order or decree under any Bankruptcy Law that:

(i) is for relief against the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary in an involuntary case;

(ii) appoints a custodian of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary or for all or substantially all of the property of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary; or

(iii) orders the liquidation of the Company or any of its Significant Subsidiaries or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary;

and the order or decree remains unstayed and in effect for 60 consecutive days; or

(l) (i) Holdings and the trustee under the Discount Notes Indenture shall fail to have executed and delivered the Discount Notes Forbearance Agreement not later than September 15, 2013; (ii) Holdings shall fail to have delivered a copy thereof to the Trustee under the Indenture within five (5) Business Days after the execution thereof; (iii) the Discount Notes Forbearance Agreement shall fail to be in full force and effect, or Holdings shall fail to be in compliance therewith, at all times from and after September 15, 2013 until the indefeasible payment in full of all Obligations under the Notes; or (iv) the Discount Notes Forbearance Agreement shall be amended, restated, modified or supplemented without the prior written consent of the holders of at least a majority in principal amount of the Notes.

Section 6.02. Acceleration.

If any Event of Default (other than an Event of Default specified in clause (j) or (k) of Section 6.01 hereof with respect to the Company, any Significant Subsidiary or any group of Subsidiaries that, taken as a whole, would constitute a Significant Subsidiary) occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable immediately. Upon any such declaration, the Notes shall become due and payable immediately. Notwithstanding the foregoing, if an Event of Default specified in clause (j) or (k) of Section 6.01 hereof occurs with respect to the Company, any Restricted Subsidiary that is a Significant Subsidiary or any group of Restricted Subsidiaries that, taken together, would constitute a Significant

 

81


Subsidiary, all outstanding Notes shall be due and payable immediately without further action or notice. The Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences if the rescission would not conflict with any judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived.

In the event of a declaration of acceleration of the Notes because an Event of Default has occurred and is continuing as a result of the acceleration of any Indebtedness described in clause (f) of Section 6.01, the declaration of acceleration of the Notes shall be automatically annulled if (a) the holders of any Indebtedness described in clause (f) of Section 6.01 have rescinded or waived the declaration of acceleration in respect of the Indebtedness, (b) the Indebtedness that is the basis of such Event of Default has been discharged or (c) the default that is the basis of such Event of Default has been cured, in each case within 30 days of the date of the declaration and if: (i) the annulment of the acceleration of Notes would not conflict with any judgment or decree of a court of competent jurisdiction; and (ii) all existing Events of Default, except nonpayment of principal or interest on the Notes that became due solely because of the acceleration of the Notes, have been cured or waived.

Section 6.03. Other Remedies.

If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy to collect the payment of principal and premium, if any, and interest on the Notes or to enforce the performance of any provision of the Notes or this Indenture.

The Trustee may maintain a proceeding even if it does not possess any of the Notes or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder of a Note in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. All remedies are cumulative to the extent permitted by law.

Section 6.04. Waiver of Past Defaults.

Holders of not less than a majority in aggregate principal amount of the then outstanding Notes by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences hereunder, except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes (including in connection with an offer to purchase); provided, however, that the Holders of a majority in aggregate principal amount of the then outstanding Notes by written notice to the Trustee may on behalf of all of the Holders rescind an acceleration and its consequences, including any related payment default that resulted from such acceleration, if the rescission would not conflict with a judgment or decree and if all existing Events of Default (except nonpayment of principal, interest or premium that has become due solely because of the acceleration) have been cured or waived. 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 6.05. Control by Majority.

Holders of a majority in principal amount of the then outstanding Notes may direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee or exercising any trust or power conferred on it. However, the Trustee may refuse to follow any direction that conflicts with law, this Indenture or any Security Document that the Trustee determines in good faith may be unduly prejudicial to the rights of other Holders of Notes or that may involve the Trustee in personal liability.

 

82


Section 6.06. Limitation on Suits.

A Holder of a Note may pursue a remedy with respect to this Indenture, the Security Documents or the Notes only if:

(a) such Holder gives to the Trustee written notice of a continuing Event of Default;

(b) the Holders of at least 25% in principal amount of the then outstanding Notes make a written request to the Trustee to pursue the remedy;

(c) such Holder of a Note or Holders of Notes offer and, if requested, provide to the Trustee indemnity satisfactory to the Trustee against any loss, liability or expense;

(d) the Trustee does not comply with the request within 60 days after receipt of the request and the offer and, if requested, the provision of indemnity; and

(e) during such 60-day period the Holders of a majority in principal amount of the then outstanding Notes do not give the Trustee a direction inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another Holder of a Note or to obtain a preference or priority over another Holder of a Note.

Section 6.07. Rights of Holders of Notes to Receive Payment.

Notwithstanding any other provision of this Indenture, the right of any Holder of a Note to receive payment of principal and premium, if any, and interest on the Note, on or after the respective due dates expressed in the Note (including in connection with an offer to purchase), or to bring suit for the enforcement of any such payment on or after such respective dates, shall not be impaired or affected without the consent of such Holder.

Section 6.08. Collection Suit by Trustee.

If an Event of Default specified in Section 6.01(a) or (b) hereof occurs and is continuing, the Trustee is authorized to recover judgment in its own name and as trustee of an express trust against the Company for the whole amount of principal and premium, if any, and interest remaining unpaid on the Notes and interest on overdue principal and, to the extent lawful, interest and 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.

Section 6.09. Trustee May File Proofs of Claim.

Subject to the Priority Lien Intercreditor Agreement, the Trustee is authorized to file such proofs of claim and 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 the Holders of the Notes allowed in any judicial proceedings relative to the Company or any Guarantor (or any other obligor upon the Notes), its creditors or its property and shall be entitled and empowered to collect, receive and distribute any money or other property payable or deliverable on any such claims and any custodian in any such judicial proceeding is

 

83


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 to the Trustee any amount due to 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 7.06 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.06 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. 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 Notes or the rights of any Holder, or to authorize the Trustee to vote in respect of the claim of any Holder in any such proceeding.

Section 6.10. Priorities.

If the Trustee collects any money pursuant to this Article 6 or any Security Document (but subject to the Priority Lien Intercreditor Agreement), it shall pay out the money in the following order:

First: to the Trustee, its agents and attorneys for amounts due under Section 7.06 hereof, including payment of all compensation, expense and liabilities incurred, and all advances made, by the Trustee and the costs and expenses of collection;

Second: to Holders of Notes for amounts due and unpaid on the Notes for principal and premium, if any, and interest, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal and premium, if any and interest, respectively; and

Third: to the Company, or any Guarantor, or to such party as a court of competent jurisdiction shall direct.

The Trustee may fix a record date and payment date for any payment to Holders of Notes pursuant to this Section 6.10.

Section 6.11. Undertaking for Costs.

In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as a Trustee, a court in its discretion may require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys’ fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in principal amount of the then outstanding Notes.

 

84


ARTICLE 7.

TRUSTEE

Section 7.01. Duties of Trustee.

(a) If an Event of Default has occurred and is continuing, the Trustee will 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, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs.

(b) Except during the continuance of an Event of Default:

(i) the duties of the Trustee will be determined solely by the express provisions of this Indenture and the Trustee need perform only those duties that are specifically set forth in this Indenture and no others, and no implied covenants or obligations shall be read into this Indenture against the Trustee; and

(ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture. However, the Trustee will examine the certificates and opinions to determine whether or not they conform to the requirements of this Indenture.

(c) The Trustee may not be relieved from liabilities for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

(i) this paragraph does not limit the effect of paragraph (b) of this Section 7.01;

(ii) the Trustee will not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

(iii) the Trustee will not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05 hereof.

(d) Whether or not therein expressly so provided, every provision of this Indenture that in any way relates to the Trustee is subject to paragraphs (a), (b), and (c) of this Section 7.01.

(e) No provision of this Indenture will require the Trustee to expend or risk its own funds or incur any liability. The Trustee will be under no obligation to exercise any of its rights and powers under this Indenture at the request of any Holders, unless such Holder has offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

(f) The Trustee will not be liable for interest on any money received by it except as the Trustee may agree in writing with the Company. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

 

85


Section 7.02. Rights of Trustee.

(a) The Trustee may conclusively rely upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Trustee need not investigate any fact or matter stated in the document.

(b) Before the Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel or both. The Trustee will not be liable for any action it takes or omits to take in good faith in reliance on such Officer’s Certificate or Opinion of Counsel. The Trustee may consult with counsel and the written advice of such counsel or any Opinion of Counsel will be full and complete authorization and protection from liability in respect of any action taken, suffered or omitted by it hereunder in good faith and in reliance thereon.

(c) The Trustee may act through its attorneys and agents and will not be responsible for the misconduct or negligence of any agent appointed with due care.

(d) The Trustee will not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within the rights or powers conferred upon it by this Indenture.

(e) Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company will be sufficient if signed by an Officer of the Company.

(f) The Trustee will 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 unless such Holders shall have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities that might be incurred by it in compliance with such request or direction.

Section 7.03. Individual Rights of Trustee.

The Trustee in its individual or any other capacity may become the owner or pledgee of Notes and may otherwise deal with the Company or any Affiliate of the Company with the same rights it would have if it were not Trustee. However, in the event that the Trustee acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the SEC for permission to continue as Trustee or resign. Any Agent may do the same with like rights and duties. The Trustee is also subject to Section 7.09 hereof.

Section 7.04. Trustee’s Disclaimer.

The Trustee will not be responsible for and makes no representation as to the validity or adequacy of this Indenture or the Notes, it shall not be accountable for the Company’s use of the proceeds from the Notes or any money paid to the Company or upon the Company’s direction under any provision of this Indenture, it will not be responsible for the use or application of any money received by any Paying Agent other than the Trustee, and it will not be responsible for any statement or recital herein or any statement in the Notes or any other document in connection with the sale of the Notes or pursuant to this Indenture other than its certificate of authentication.

Section 7.05. Notice of Defaults.

If a Default or Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee will mail to Holders of Notes a notice of the Default or Event of Default within 90 days after it occurs. Except in the case of a Default or Event of Default in payment of principal of, and premium, if any, or interest on any Note, the Trustee may withhold the notice if and so long as a committee of its Trust Officers in good faith determines that withholding the notice is in the interests of the Holders of the Notes.

 

86


The Trustee shall not be required to take notice or be deemed to have notice of any Default hereunder, except for Defaults arising from failure to make any required payments to the Trustee or Defaults of which the Trustee has actual knowledge, unless the Trustee is specifically notified in writing of such Default by the Company or the Holders of twenty-five percent (25%) in aggregate principal amount of the Notes then outstanding, and all such notices or other instruments required to be delivered to the Trustee must be delivered to the Corporate Trust Office of the Trustee.

Section 7.06. Compensation and Indemnity.

(a) The Company will pay to the Trustee from time to time reasonable compensation for its acceptance of this Indenture and services hereunder. The Trustee’s compensation will not be limited by any law on compensation of a trustee of an express trust. The Company will reimburse the Trustee promptly upon request for all reasonable disbursements, advances and expenses incurred or made by it in addition to the compensation for its services. Such expenses will include the reasonable compensation, disbursements and expenses of the Trustee’s agents and counsel.

(b) The Company will indemnify the Trustee against any and all losses, liabilities or expenses incurred by it arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.06) and defending itself against any claim (whether asserted by the Company, the Guarantors or any Holder or any other Person) or liability in connection with the exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, liability or expense may be attributable to its gross negligence or bad faith. The Trustee will notify the Company promptly of any claim for which it may seek indemnity. Such notice shall include a copy of any complaint that may have been filed with respect to that claim or any demand letter or other notification the Trustee has received which the Trustee believes will give rise to a claim for which it may seek indemnification. Failure by the Trustee to so notify the Company will not relieve the Company or any of the Guarantors of their obligations hereunder, except to the extent that such failure prejudices the availability of defenses or counterclaims or otherwise adversely impacts the ability of the Company or any Guarantor to conduct the defense of such action. The Company or such Guarantor will defend the claim and shall have the right to make all decisions with respect to conduct of any litigation or other proceedings with respect to that claim, including but not limited to determining the defenses or counterclaims to pursue and the right to settle any such claim. The Trustee shall cooperate with the Company or any Guarantor in the Company’s or such Guarantor’s conduct of such defense. The Trustee may retain separate counsel to represent it in connection with that defense at the Trustee’s own expense; provided that, if the Trustee can demonstrate that a conflict of interest exists between the Company or the applicable Guarantor and the Trustee which makes it impossible for the Company or such Guarantor to defend the Trustee in such matter or the Company refuses to conduct a defense, the Company shall pay the Trustee’s reasonable legal expenses in conducting that defense. Neither the Company nor any Guarantor need pay for any settlement made without the Company’s consent, which consent will not be unreasonably withheld.

(c) The obligations of the Company and the Guarantors under this Section 7.06 will survive the satisfaction and discharge of this Indenture.

(d) To secure the Company’s payment obligations in this Section 7.06, the Trustee will have a Lien prior to the Notes on all money or property held or collected by the Trustee, except that held in trust to pay principal and interest on particular Notes. Such Lien will survive the satisfaction and discharge of this Indenture.

 

87


(e) When the Trustee incurs expenses or renders services after an Event of Default specified in Section 6.01(j) or (k) hereof occurs, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

Section 7.07. Replacement of Trustee.

A resignation or removal of the Trustee and appointment of a successor Trustee will become effective only upon the successor Trustee’s acceptance of appointment as provided in this Section 7.07.

The Trustee may resign in writing at any time and be discharged from the trust hereby created by so notifying the Company. The Holders of a majority in principal amount of the then outstanding Notes may remove the Trustee by so notifying the Trustee and the Company in writing. The Company may remove the Trustee if:

(a) the Trustee fails to comply with Section 7.09 hereof;

(b) the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

(c) a custodian or public officer takes charge of the Trustee or its property; or

(d) the Trustee becomes incapable of acting.

If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company will promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company, or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee.

If the Trustee, after written request by any Holder who has been a Holder for at least six months, fails to comply with Section 7.09, such Holder may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

A successor Trustee will deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Thereupon, the resignation or removal of the retiring Trustee will become effective, and the successor Trustee will have all the rights, powers and duties of the Trustee under this Indenture. The successor Trustee will mail a notice of its succession to Holders. The retiring Trustee will promptly transfer all property held by it as Trustee to the successor Trustee; provided all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.06 hereof. Notwithstanding replacement of the Trustee pursuant to this Section 7.07, the Company’s obligations under Section 7.06 hereof will continue for the benefit of the retiring Trustee.

 

88


Section 7.08. Successor Trustee by Merger, etc.

If the Trustee consolidates, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation, the successor corporation without any further act will be the successor Trustee.

Section 7.09. Eligibility; Disqualification.

There will at all times be a Trustee hereunder that is a corporation organized and doing business under the laws of the United States of America or of any state thereof that is authorized under such laws to exercise corporate trustee power, that is subject to supervision or examination by federal or state authorities and that has a combined capital and surplus of at least $100 million as set forth in its most recent published annual report of condition.

ARTICLE 8.

LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.01. Option to Effect Legal Defeasance or Covenant Defeasance.

The Company may, at the option of its Board of Directors evidenced by a resolution set forth in an Officer’s Certificate, at any time, elect to have either Section 8.02 or 8.03 hereof be applied to all outstanding Notes upon compliance with the conditions set forth below in this Article 8.

Section 8.02. Legal Defeasance and Discharge.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.02, the Company and each of the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be deemed to have been discharged from their obligations with respect to all outstanding Notes (including the Subsidiary Guarantees) on the date the conditions set forth below are satisfied (hereinafter, “Legal Defeasance”). For this purpose, Legal Defeasance means that the Company and the Guarantors will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes (including the Subsidiary Guarantees), which will thereafter be deemed to be “outstanding” only for the purposes of Section 8.05 hereof and the other Sections of this Indenture referred to in (a) and (b) below, and to have satisfied all their other obligations under such Notes, the Subsidiary Guarantees and this Indenture (and the Trustee, on demand of and at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following provisions which will survive until otherwise terminated or discharged hereunder:

(a) the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium, if any, on such Notes when such payments are due from the trust referred to below;

(b) 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;

(c) the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Guarantor’s obligations in connection therewith; and

(d) this Article 8.

 

89


Subject to compliance with this Article 8, the Company may exercise its option under this Section 8.02 notwithstanding the prior existence of its option under Section 8.03 hereof.

Section 8.03. Covenant Defeasance.

Upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, the Company and the Guarantors will, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, be released from their obligations under the covenants contained in Sections 4.03, 4.04, 4.05, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17, 4.18, 4.19, 4.20, 4.21 and 4.22 hereof and clause (iv) of Section 5.01 hereof with respect to the outstanding Notes on and after the date the conditions set forth in Section 8.04 are satisfied (hereinafter, “Covenant Defeasance”), and the Notes will thereafter be deemed 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, but will continue to be deemed “outstanding” for all other purposes hereunder (it being understood that such Notes will not be deemed outstanding for accounting purposes). For this purpose, Covenant Defeasance means that, with respect to the outstanding Notes and Subsidiary Guarantees, the Company and the Guarantors may omit to comply with and will have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply will not constitute a Default or an Event of Default under Section 6.01 hereof, but, except as specified above, the remainder of this Indenture and such Notes and Subsidiary Guarantees will be unaffected thereby. In addition, upon the Company’s exercise under Section 8.01 hereof of the option applicable to this Section 8.03, subject to the satisfaction of the conditions set forth in Section 8.04 hereof, Sections 6.01(c) through 6.01(i) hereof will not constitute Events of Default.

Section 8.04. Conditions to Legal or Covenant Defeasance.

In order to exercise either Legal Defeasance or Covenant Defeasance:

(a) the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders, cash in United States dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, to pay the principal of, interest and premium, if any, on the outstanding Notes on the stated maturity thereof or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

(b) in the case of an election under Section 8.02 hereof, the Company has delivered to the Trustee an Opinion of Counsel confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) since the date hereof, 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 Counsel 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 Legal 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 Legal Defeasance had not occurred;

(c) in the case of an election under Section 8.03 hereof, the Company must deliver to the Trustee an Opinion of Counsel confirming 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;

 

90


(d) no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

(e) such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of its Restricted Subsidiaries is a party or by which the Company or any of its Restricted Subsidiaries is bound;

(f) the Company must deliver to the Trustee an Officer’s Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over the other creditors of the Company or with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; and

(g) the Company must deliver to the Trustee an Officer’s Certificate and an Opinion of Counsel, which opinion may be subject to customary assumptions and exclusions, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with.

Section 8.05. Deposited Money and Government Securities to be Held in Trust; Other Miscellaneous Provisions.

Subject to Section 8.06 hereof, all money and non-callable Government Securities (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.05, the “Trustee”) pursuant to Section 8.04 hereof in respect of the outstanding Notes will be held in trust and applied by the Trustee, in accordance with the provisions of such Notes and this Indenture, to the payment, either directly or through any Paying Agent (including the Company acting as Paying Agent) as the Trustee may determine, to the Holders of such Notes 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 will pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the cash or non-callable Government Securities deposited pursuant to Section 8.04 hereof 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 outstanding Notes.

Anything in this Article Eight to the contrary notwithstanding, the Trustee will deliver or pay to the Company from time to time upon the request of the Company any money or non-callable Government Securities held by it as provided in Section 8.04 hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee (which may be the opinion delivered under Section 8.04(a) hereof), are in excess of the amount thereof that would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

Section 8.06. Repayment to Company.

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, and premium, if any, or interest on any Note and remaining unclaimed for two years after such principal, and premium, if any, or interest has become due and payable shall be paid to the Company on its request or (if then held by the Company) will be discharged from such trust; and the Holder of such Note will thereafter 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, will thereupon cease.

 

91


Section 8.07. Reinstatement.

If the Trustee or Paying Agent is unable to apply any United States dollars or non-callable Government Securities in accordance with Section 8.02 or 8.03 hereof, 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 the Guarantors’ obligations under this Indenture and the Notes and the Subsidiary Guarantees will be revived and reinstated as though no deposit had occurred pursuant to Section 8.02 or 8.03 hereof until such time as the Trustee or Paying Agent is permitted to apply all such money in accordance with Section 8.02 or 8.03 hereof, as the case may be; provided, however, that, if the Company makes any payment of principal of, and premium, if any, or interest on any Note following the reinstatement of its obligations, the Company will be subrogated to the rights of the Holders of such Notes to receive such payment from the money held by the Trustee or Paying Agent.

ARTICLE 9.

AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.01. Without Consent of Holders of Notes.

Notwithstanding Section 9.02 of this Indenture, the Company, the Guarantors and the Trustee may amend or supplement this Indenture, the Notes, any Subsidiary Guarantee, the Priority Lien Intercreditor Agreement or any Security Document without the consent of any Holder of a Note:

(a) to cure any ambiguity, defect or inconsistency;

(b) to provide for uncertificated Notes in addition to or in place of certificated Notes, including, in the event that PIK Notes are issued in certificated form, to make appropriate amendments to this Indenture to reflect an appropriate minimum denomination of certificated PIK Notes and establish minimum redemption amounts for certificated PIK Notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code);

(c) to provide for the assumption of the Company’s obligations to the Holders of the Notes by a successor to the Company pursuant to Article 5 hereof;

(d) to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under this Indenture, any Subsidiary Guarantee, the Priority Lien Intercreditor Agreement or any Security Document of any such Holder, including, for avoidance of doubt, to make any covenant or event of default more restrictive than the covenants or events of default contained in this Indenture, as of the date thereof;

(e) to comply with requirements of the SEC in order to effect or maintain the qualification of this Indenture under the TIA;

(f) to provide for the issuance of Additional Notes and PIK Notes in accordance with the limitations set forth in this Indenture as of the date hereof;

 

92


(g) to conform the text of this Indenture, the Security Documents, the Priority Lien Intercreditor Agreement, the Subsidiary Guarantees or Notes to any provision of the Offering Circular, as amended, under the caption “Description of Second Priority Secured Subordinated Notes” to the extent such provisions in the “Description of Second Priority Secured Subordinated Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Security Documents, the Priority Lien Intercreditor Agreement, Subsidiary Guarantees or the Notes;

(h) to enter into additional or supplemental Security Documents, including Security Documents adding additional First Priority Lien Secured Parties and First Priority Lien Obligations to any Security Document or the Priority Lien Intercreditor Agreement;

(i) to release a Guarantor from its obligations under its Subsidiary Guarantees, the Notes or this Indenture in accordance with the applicable provisions of this Indenture;

(j) to release Collateral in accordance with the terms of this Indenture, the Security Documents or the Priority Lien Intercreditor Agreement;

(k) to evidence and provide for the acceptance and appointment under this Indenture of a successor trustee thereunder pursuant to the requirements thereof;

(l) to make, complete or confirm any grant of Collateral permitted or required by this Indenture or any of the Security Documents or any release of Collateral that becomes effective as set forth in this Indenture, any of the Security Documents or the Priority Lien Intercreditor Agreement;

(m) to allow any Guarantor to execute a supplemental indenture and/or a Subsidiary Guarantee with respect to the Notes; or

(n) to secure any First Priority Lien Debt under the Security Documents and to appropriately include the same in the Priority Lien Intercreditor Agreement.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental Indenture, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company and the Guarantors in the execution of any amended or supplemental indenture authorized or permitted by the terms of this Indenture and to make any further appropriate agreements and stipulations that may be therein contained, but the Trustee will not be obligated to enter into such amended or supplemental indenture that affects its own rights, duties or immunities under this Indenture or otherwise.

Section 9.02. With Consent of Holders of Notes.

Except as provided below in this Section 9.02, the Company and the Trustee may amend or supplement this Indenture (including, without limitation, Section 3.09, 4.10 and 4.15 hereof) and the Notes (including the Subsidiary Guarantees) with the consent of the Holders of at least a majority in principal amount of the outstanding Notes (including Additional Notes and PIK Notes, if any) voting as a single class (including, without limitation, consents obtained in connection with a tender offer or exchange offer for, or purchase of, the Notes), and, subject to Sections 6.04 and 6.07 hereof, any existing Default or Event of Default (other than a Default or Event of Default in the payment of the principal of, and premium, if any, or interest on the Notes, except a payment default resulting from an acceleration that has been rescinded) or compliance with any provision of this Indenture, the Subsidiary Guarantees or the Notes (including the obligation of the Company to make an offer to repurchase the Notes as a result of a Change of Control) may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes (including Additional Notes or PIK Notes, if any) voting as a single class (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, the

 

93


Notes). Without the consent of at least 75% in principal amount of the Notes then outstanding (including consents obtained in connection with a tender offer or exchange offer for, or purchase of, such Notes), no waiver or amendment to this Indenture may make any change relating to any release of any Guarantor from any of its obligations under its Subsidiary Guarantee or this Indenture, except in accordance with the terms of this Indenture. Sections 2.08 and 2.09 hereof shall determine which Notes are considered to be “outstanding” for purposes of this Section 9.02. In addition, without the consent of at least 66 2/3% in principal amount of the Notes then outstanding (including consents retained in connection with a tender offer or exchange offer for, or purchase of, such Notes) no waiver or amendment to the provisions of this Indenture or any Security Document has the effect of releasing all or substantially all of the Collateral from the Liens securing the Notes.

Upon the request of the Company accompanied by a resolution of its Board of Directors authorizing the execution of any such amended or supplemental indenture, and upon the filing with the Trustee of evidence satisfactory to the Trustee of the consent of the Holders of Notes as aforesaid, and upon receipt by the Trustee of the documents described in Section 7.02 hereof, the Trustee will join with the Company in the execution of such amended or supplemental indenture unless such amended or supplemental indenture directly affects the Trustee’s own rights, duties or immunities under this Indenture or otherwise, in which case the Trustee may in its discretion, but will not be obligated to, enter into such amended or supplemental indenture.

It is not necessary for the consent of the Holders of Notes under this Section 9.02 to approve the particular form of any proposed amendment or waiver, but it is sufficient if such consent approves the substance thereof.

After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company will mail to the Holders of Notes affected thereby a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, will not, however, in any way impair or affect the validity of any such amended or supplemental indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in aggregate principal amount of the Notes then outstanding voting as a single class may waive compliance in a particular instance by the Company with any provision of this Indenture or the Notes. However, without the consent of each Holder affected, an amendment or waiver under this Section 9.02 may not (with respect to any Notes held by a non-consenting Holder):

(a) reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver;

(b) reduce the principal of or change the fixed maturity of any Note or alter the provisions with respect to the redemption of the Notes except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof;

(c) reduce the rate of or change the time for payment of interest, including default interest, on any Note;

(d) waive a Default or Event of Default in the payment of principal of, or interest or premium, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the then outstanding Notes and a waiver of the payment default that resulted from such acceleration);

(e) make any Note payable in money other than that stated in the Notes;

 

94


(f) make any change in the provisions of this Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of, principal of or interest or premium, if any, on the Notes;

(g) waive a redemption payment with respect to any Note except as provided above with respect to Sections 3.09, 4.10 and 4.15 hereof; or

(h) make any change in the foregoing amendment and waiver provisions.

Section 9.03. Revocation and Effect of Consents.

Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by the Holder of a Note and every subsequent Holder of a Note or portion of a Note that evidences the same debt as the consenting Holder’s Note, even if notation of the consent is not made on any Note. However, any such Holder of a Note or subsequent Holder of a Note may revoke the consent as to its Note if the Trustee receives written notice of revocation before the date the waiver, supplement or amendment becomes effective. An amendment, supplement or waiver becomes effective in accordance with its terms and thereafter binds every Holder.

Section 9.04. Notation on or Exchange of Notes.

The Trustee may place an appropriate notation about an amendment, supplement or waiver on any Note thereafter authenticated. The Company in exchange for all Notes may issue and the Trustee shall, upon receipt of an Authentication Order, authenticate new Notes that reflect the amendment, supplement or waiver.

Failure to make the appropriate notation or issue a new Note will not affect the validity and effect of such amendment, supplement or waiver.

Section 9.05. Trustee to Sign Amendments, etc.

The Trustee will sign any amended or supplemental indenture authorized pursuant to this Article 9 if the amendment or supplement does not adversely affect the rights, duties, liabilities or immunities of the Trustee. The Company may not sign an amendment or supplemental indenture until the Board of Directors approves it. In executing any amended or supplemental indenture, the Trustee will be entitled to receive and (subject to Section 7.01 hereof) will be fully protected in relying upon, in addition to the documents required by Section 14.02 hereof, an Officer’s Certificate and an Opinion of Counsel stating that the execution of such amended or supplemental indenture is authorized or permitted by this Indenture.

Notwithstanding the foregoing, an Opinion of Counsel shall not be required in connection with the addition of a Guarantor under this Indenture upon execution and delivery by such Guarantor and the Trustee of a supplemental indenture to this Indenture, the form of which is attached as Exhibit E hereto.

 

95


ARTICLE 10.

SECURITY

Section 10.01. Security Interest.

Effective upon the execution of the Security Documents by the parties thereto, the obligations of the Company and the Guarantors (other than Empire Burbank) with respect to the Notes and the Subsidiary Guarantees, all obligations under any future Parity Lien Debt, all other Parity Lien Obligations and the performance of all other obligations of the Company and the Guarantors (other than Empire Burbank) under this Indenture, the Notes, the Subsidiary Guarantees and the Security Documents shall, subject to the Priority Lien Intercreditor Agreement, be secured equally and ratably by junior-priority security interests (subject to Permitted Liens) in the Collateral granted to the Collateral Agent for the benefit of the holders of the Parity Lien Obligations, all as more fully set forth in the Security Documents. Notwithstanding the foregoing, pursuant to the Priority Lien Intercreditor Agreement and as further described in Section 1.04(a) hereof, the security interests securing the Notes will be junior in priority to any and all security interests at any time granted to secure the First Priority Lien Obligations, pari passu with any and all security interests at any time granted to secure Parity Lien Obligations, and will also be subject to all other Permitted Liens.

Section 10.02. Equal and Ratable Sharing of Collateral by Holders of Parity Lien Debt.

(a) Notwithstanding:

(i) anything to the contrary contained in the Security Documents,

(ii) the time of incurrence of any Series of Parity Lien Debt,

(iii) the order or method of attachment or perfection of any Liens securing any Series of Parity Lien Debt,

(iv) the time or order of filing or recording of financing statements, Mortgages or other documents filed or recorded to perfect any Lien upon any Collateral,

(v) the time of taking possession or control over any Collateral,

(vi) that any Parity Lien may not have been perfected or may be or have become subordinated, by equitable subordination or otherwise, to any other Lien, or

(vii) the rules for determining priority under any law governing relative priorities of Liens:

(A) all Liens at any time granted to secure any of the Parity Lien Debt will secure, equally and ratably, all present and future Parity Lien Obligations;

(B) and all proceeds of all Liens at any time granted to secure any of the Parity Lien Debt and other Parity Lien Obligations will be allocated and distributed equally and ratably on account of the Parity Lien Debt and other Parity Lien Obligations, subject to the provisions of the Priority Lien Intercreditor Agreement; provided, that in the absence of an Actionable Default, the Company shall be entitled to utilize cash proceeds of Collateral in the ordinary course of its business or as may be required by its financing agreements.

(b) Section 10.02(a) is intended for the benefit of, and will be enforceable as a third party beneficiary by, each present and future holder of Parity Lien Obligations, each present and future Parity Lien Debt Representative and the Trustee as holder of Parity Liens. No other Person will be entitled to rely on, have the benefit of or enforce this provision. The Parity Lien Debt Representative of each future Series of Parity Lien Debt will be required to deliver a debt sharing confirmation to, among others, the Trustee at the time of incurrence of such Series of Parity Lien Debt.

 

96


Section 10.03. Relative Rights.

(a) Each Holder of Notes, by its acceptance thereof, consents and agrees to the terms of the Security Documents and the Priority Lien Intercreditor Agreement (including, without limitation, the provisions providing for foreclosure and release of Collateral) as the same may be in effect or may be amended from time to time in accordance with their terms and authorizes and directs the Trustee to enter into the Priority Lien Intercreditor Agreement and the other Security Documents and to perform its respective obligations and exercise its respective rights thereunder in accordance therewith.

(b) Nothing in this Indenture, any Note or any Security Document will:

(i) impair, as between the Company and the Holders of the Notes or holder of Parity Lien Obligations, the obligation of the Company to pay principal of, or premium or interest, if any, on the Notes in accordance with their terms or any other obligation of the Company or any other Obligor under this Indenture, any Note or any Security Document;

(ii) restrict the right of any Holder of Notes or holder of Parity Lien Obligations to sue for payments that are then due and owing in a manner not prohibited by the Priority Lien Intercreditor Agreement;

(iii) restrict or prevent any Holder of Notes or holder of Parity Lien Obligations, the Trustee, the Collateral Agent or other Person on their behalf from exercising any of its rights or remedies upon a Default or Event of Default not prohibited by the Priority Lien Intercreditor Agreement; or

(iv) restrict or prevent any Holder of Notes or holder of Parity Lien Obligations, the Trustee, the Collateral Agent or any other Person on their behalf from taking any lawful action in a bankruptcy, insolvency or liquidation proceeding not prohibited by the Priority Lien Intercreditor Agreement.

Section 10.04. Release of Collateral.

The Collateral subject to the Security Documents may be released from the Lien and security interest created by the Security Documents under any one or more of the following circumstances:

(i) to enable the Company or any of the Guarantors to consummate the disposition of such property or assets to the extent not prohibited under Section 4.10;

(ii) in the case of a Guarantor that is released from its Subsidiary Guarantee with respect to the Notes, the release of the property and assets of such Guarantor;

(iii) in respect of the property and assets of a Restricted Subsidiary that is a Guarantor, upon the designation of such Guarantor to be an Unrestricted Subsidiary in accordance with Section 4.07 and the definition of “Unrestricted Subsidiary”;

(iv) in whole or in part, with the consent of the Holders of the requisite percentage of Notes in accordance with the provisions described in Article 9 hereof;

(v) upon satisfaction and discharge of this Indenture pursuant to Section 12.01 hereof;

 

97


(vi) upon a Legal Defeasance or Covenant Defeasance of the Notes pursuant to Section 8.02 hereof;

(vii) upon payment in full and discharge of all Notes outstanding under this Indenture and all Obligations that are outstanding, due and payable under this Indenture at the time the Notes are paid in full and discharged; or

(viii) as otherwise required by Section 5.1 of the Priority Lien Intercreditor Agreement.

Section 10.05. Real Property.

Within sixty (60) days of the issue date of the Initial Notes, the Company shall deliver to the Trustee Mortgages for each of the Burbank Studio Property, Dallas Studio Property and Houston Studio Property (the “Issue Date Mortgaged Properties”). The Company and the applicable Guarantors will use their commercially reasonable efforts to deliver, as soon as applicable but in no event later than sixty (60) days following the issue date of the Initial Notes: (i) a mortgagee’s title insurance policy reasonably acceptable to the Trustee (it being understood that such title policy shall not be required to include a survey endorsement) insuring a junior priority lien with respect to each Issue Date Mortgaged Property, (ii) to the extent reasonably available to the Company or any Guarantor as of the issue date of the Initial Notes, (A) surveys, (B) phase one environmental reports, (C) appraisals; and (D) other material due diligence to the extent previously provided to the Credit Agreement Agent, in each case related to the Issue Date Mortgaged Properties (it being understood in each case no updates thereof are required), and (iii) a customary opinion of local counsel relating to the enforceability of the Mortgages.

Within fifteen (15) days of the date of the Indenture, with respect to the fee ownership interest in the Real Property Asset located at 5930 Sawyer Street, Los Angeles, California (the “Sawyer Property”), and within thirty (30) days of the date of the Indenture (or, in the case of clause (ii) below, such later date as the Credit Agreement Agent may agree in its reasonable discretion to have such delivered to it (for the benefit of the secured parties under the Credit Agreement and the holders of the First Priority Senior Secured Notes)), with respect to each other fee ownership interest in any Real Property Asset listed on Schedule II hereto, the Company shall deliver to the Trustee (i) a Mortgage, (ii) other than with respect to the Sawyer Property, a mortgagee’s title insurance policy (it being understood that such title policy shall not be required to include a survey endorsement) insuring a junior priority lien on such properties (subject to certain exceptions to be agreed), (iii) to the extent within the possession or control of the Company or any Guarantor as of the date of this Indenture, (A) surveys, (B) phase one environmental reports, (C) appraisals, and (D) other material due diligence to the extent reasonably requested, and (iv) a customary opinion of local counsel relating to the enforceability of the Mortgages; provided, that (I) any mortgage encumbering the Sawyer Property shall be substantially in the form of Exhibit H attached hereto and (II) no mortgage encumbering the Sawyer Property shall be required unless the Trustee shall have executed and delivered a substitution of trustee and full reconveyance of deed of trust substantially in the form of Exhibit I attached hereto and such substitution of trustee and full reconveyance of deed of trust shall have been placed into escrow pending the sale of the Sawyer Property. All proceeds received by the Company and its Subsidiaries from the Sawyer Sale shall be deposited directly into, and held in, a deposit account that is subject to a Control Agreement; provided that such proceeds may thereafter be used by the Company and its Subsidiaries in accordance with the terms of the Indenture.

Within sixty (60) days of the date of this Indenture, the Company shall use commercially reasonable efforts to deliver to the Trustee leasehold mortgages with respect to each leased real property listed on Schedule III to this Supplement.

 

98


Notwithstanding anything contained in this Section 10.05 to the contrary, to the extent that the Trustee reasonably requests that the Company enter into any non-disturbance or similar agreement in connection with any of the Mortgaged Property or any of the leased real property subject to a leasehold mortgage, the Company shall only be required to use commercially reasonable efforts to do so.

Section 10.06. Control Agreements.

The Company shall use its commercially reasonable efforts to deliver to the First Priority Lien Collateral Trustee within forty-five (45) days of the date of this Indenture, a Control Agreement for any accounts not subject to a Control Agreement as of the date of this Indenture, in each case, in form and substance reasonably satisfactory to the Credit Agreement Agent.

Section 10.07. After-acquired Collateral.

From and after the issue date of the Initial Notes and subject to limitations and exceptions, if any, set forth in the Security Documents, if the Company or any Guarantor creates any additional security interest upon any property or asset to secure any First Priority Lien Obligations (which include Obligations in respect of the Credit Agreement), it must concurrently grant a junior-priority security interest (subject to Permitted Liens, including the senior-priority lien that secures obligations in respect of the First Priority Lien Obligations) upon such property as security for the Notes. Within sixty (60) days of the acquisition by the Company or any Guarantor of any owned real property with a Fair Market Value (as defined in the Credit Agreement) in excess of $2,500,000, the Company or the applicable Guarantors will (i) deliver to the Trustee Mortgages for each such owned real property and (ii) deliver the other documents and take the other actions specified in Section 10.04 with respect to each such owned real property.

Section 10.08. Further assurances.

The Company shall, and shall cause each of the Guarantors (other than Empire Burbank) to, do or cause to be done all acts and things which may be required, or which the Trustee from time to time may reasonably request, to assure and confirm that the Trustee holds, for the benefit of the holders of Parity Lien Debt, duly created, enforceable and perfected Liens upon the Collateral as contemplated by this Indenture and the Security Documents.

ARTICLE 11.

SUBSIDIARY GUARANTEES

Section 11.01. Guarantee.

Subject to this Article 11, each of the Guarantors hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes, the Security Documents or the obligations of the Company hereunder or thereunder, that: (a) the principal of, and premium, if any, and interest on the Notes will be promptly paid in full when due, whether at maturity, by acceleration, redemption or otherwise, and interest on the overdue principal of and interest on the Notes, if any, if lawful, and all other obligations of the Company to the Holders or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. Failing payment when due of any amount so guaranteed or any performance so guaranteed for whatever reason, the Guarantors will be jointly and severally obligated to pay the same immediately. Each Guarantor agrees that this is a Guarantee of payment and not a Guarantee of collection.

 

99


The Guarantors hereby agree that their obligations hereunder are unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, any action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenant that this Subsidiary Guarantee will not be discharged except by complete performance of the obligations contained in the Notes and this Indenture.

If any Holder or the Trustee is required by any court or otherwise to return to the Company, the Guarantors or any custodian, trustee, liquidator or other similar official acting in relation to either the Company or the Guarantors, any amount paid by either to the Trustee or such Holder, this Subsidiary Guarantee, to the extent theretofore discharged, will be reinstated in full force and effect.

Each Guarantor agrees that it will not be entitled to any right of subrogation in relation to the Holders in respect of any obligations guaranteed hereby until payment in full of all obligations guaranteed hereby. Each Guarantor further agrees that, as between the Guarantors, on the one hand, and the Holders and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article 6 hereof for the purposes of this Subsidiary Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (y) in the event of any declaration of acceleration of such obligations as provided in Article 6 hereof, such obligations (whether or not due and payable) will forthwith become due and payable by the Guarantors for the purpose of this Subsidiary Guarantee. The Guarantors will have the right to seek contribution from any non-paying Guarantor so long as the exercise of such right does not impair the rights of the Holders under the Guarantee.

Section 11.02. [Intentionally Omitted]

Section 11.03. Limitation on Guarantor Liability.

Each Guarantor, and by its acceptance of Notes, each Holder, hereby confirms that it is the intention of all such parties that the Subsidiary Guarantee of such Guarantor not constitute a fraudulent transfer or conveyance for purposes of Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar federal or state law to the extent applicable to any Subsidiary Guarantee. To effectuate the foregoing intention, the Trustee, the Holders and the Guarantors hereby irrevocably agree that the obligations of such Guarantor will be limited to the maximum amount that will, after giving effect to such maximum amount and all other contingent and fixed liabilities of such Guarantor that are relevant under such laws, and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under this Article 11, result in the obligations of such Guarantor under its Subsidiary Guarantee not constituting a fraudulent transfer or conveyance.

 

100


Section 11.04. Execution and Delivery of Subsidiary Guarantee.

To evidence its Subsidiary Guarantee set forth in Section 11.01, each Guarantor hereby agrees that a notation of such Subsidiary Guarantee substantially in the form included in Exhibit E will be endorsed by an Officer of such Guarantor on each Note authenticated and delivered by the Trustee and that this Indenture will be executed on behalf of such Guarantor by one of its Officers.

Each Guarantor hereby agrees that its Subsidiary Guarantee set forth in Section 11.01 will remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Subsidiary Guarantee.

If an Officer whose signature is on this Indenture or on the Subsidiary Guarantee no longer holds that office at the time the Trustee authenticates the Note on which a Subsidiary Guarantee is endorsed, the Subsidiary Guarantee will be valid nevertheless.

The delivery of any Note by the Trustee, after the authentication thereof hereunder, will constitute due delivery of the Subsidiary Guarantee set forth in this Indenture on behalf of the Guarantors.

In the event that the Company creates or acquires any new Domestic Subsidiary after the date of this Indenture, if required by Section 4.17 hereof, the Company will cause such Domestic Subsidiary to comply with the provisions of Section 4.17 hereof and this Article 11, to the extent applicable.

Section 11.05. Guarantors May Consolidate, etc., on Certain Terms.

Except as otherwise provided in Section 11.06, no Guarantor may sell or otherwise dispose of all or substantially all of its assets to, or consolidate with or merge with or into (whether or not such Guarantor is the surviving Person), another Person, other than the Company or another Guarantor, unless:

(a) immediately after giving effect to such transaction, no Default or Event of Default exists; and

(b) either:

(i) subject to Section 11.06 hereof, the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger assumes all the obligations of that Guarantor under this Indenture, its Subsidiary Guarantee and the Security Documents pursuant to a supplemental indenture substantially in the form of Exhibit E hereto and appropriate Security Documents satisfactory to the Trustee; or

(ii) the Net Proceeds of such sale or other disposition are applied in accordance with the applicable provisions of this Indenture.

In case of any such consolidation, merger, sale or conveyance and upon the assumption by the successor Person, by supplemental indenture, executed and delivered to the Trustee and satisfactory in form to the Trustee, of the Subsidiary Guarantee endorsed upon the Notes and the due and punctual performance of all of the covenants and conditions of this Indenture to be performed by the Guarantor, such successor Person will succeed to and be substituted for the Guarantor with the same effect as if it had been named herein as a Guarantor. Such successor Person thereupon may cause to be signed any or all of the Subsidiary Guarantees to be endorsed upon all of the Notes issuable hereunder which theretofore shall not have been signed by the Company and delivered to the Trustee. All the Subsidiary Guarantees so issued will in all respects have the same legal rank and benefit under this Indenture as the Subsidiary Guarantees theretofore and thereafter issued in accordance with the terms of this Indenture as though all of such Subsidiary Guarantees had been issued at the date of the execution hereof.

 

101


Except as set forth in Articles 4 and 5 hereof, and notwithstanding clauses (a) and (b) above, nothing contained in this Indenture or in any of the Notes will prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor, or will prevent any sale or conveyance of the property of a Guarantor as an entirety or substantially as an entirety to the Company or another Guarantor.

Section 11.06. Releases Following Sale of Assets.

In the event (a) of a sale or other disposition of all or substantially all of the assets of any Guarantor (including by way of merger or consolidation) or a sale or other disposition of all of the Capital Stock of any Guarantor, in each case to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, provided that the Net Proceeds of such sale or other disposition are applied in accordance with Section 4.10 hereof, (b) the Company designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary in accordance with the applicable provisions of this Indenture, including without limitation, Section 4.19 hereof, or (c) of defeasance of the Notes as described below under Section 8.02 or Section 8.03 or satisfaction and discharge of this Indenture as described below under Section 12.01, then such Guarantor will be automatically and unconditionally released and discharged of any obligations under its Subsidiary Guarantee. Upon delivery by the Company to the Trustee of an Officer’s Certificate and an Opinion of Counsel to the effect that such sale or other disposition was made by the Company in accordance with the provisions of this Indenture, including without limitation Section 4.10 hereof, the Trustee will execute any documents reasonably required in order to evidence the release of any Guarantor from its obligations under its Subsidiary Guarantee.

Any Guarantor not released from its obligations under its Subsidiary Guarantee will remain liable for the full amount of principal of and interest on the Notes and for the other obligations of any Guarantor under this Indenture as provided in this Article 11.

ARTICLE 12.

SATISFACTION AND DISCHARGE

Section 12.01. Satisfaction and Discharge.

This Indenture and the Security Documents will be discharged and will cease to be of further effect as to all Notes issued hereunder, when:

(a) either:

(i) all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or

(ii) all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal and premium, if any, and accrued interest to the date of maturity or redemption;

 

102


(b) no Default or Event of Default (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposits) has occurred and is continuing on the date of such deposit or will occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other material instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound;

(c) the Company or any Guarantor has paid or caused to be paid all sums payable by it under this Indenture; and

(d) the Company has delivered irrevocable instructions to the Trustee under this Indenture to apply the deposited money toward the payment of the Notes at maturity or the redemption date, as the case may be.

In addition, the Company must deliver an Officer’s Certificate and an Opinion of Counsel, which opinion may be subject to customary assumptions and exclusions, to the Trustee stating that all conditions precedent to satisfaction and discharge have been satisfied.

Notwithstanding the satisfaction and discharge of this Indenture, if money has been deposited with the Trustee pursuant to subclause (ii) of clause (a) of this Section 12.01, the provisions of Section 12.02 and Section 8.06 will survive.

Section 12.02. Application of Trust Money.

Subject to the provisions of Section 8.06, all money deposited with the Trustee pursuant to Section 12.01 shall be held in trust and applied by it, in accordance with the provisions of the Notes, the Security Documents 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 (and premium, if any) and interest for whose payment such money has been deposited with the Trustee; but such money need not be segregated from other funds except to the extent required by law.

If the Trustee or Paying Agent is unable to apply any money or Government Securities in accordance with Section 12.01 by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, the Company’s and any Guarantor’s obligations under this Indenture, the Security Documents and the Notes shall be revived and reinstated as though no deposit had occurred pursuant to Section 12.01; provided that if the Company has made any payment of principal of, premium, if any, or interest on any Notes because of the reinstatement of its obligations, the Company shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or Government Securities held by the Trustee or Paying Agent.

ARTICLE 13.

SUBORDINATION

Section 13.01. Agreement to Subordinate.

The Company agrees, and each Holder by accepting a Note agrees, that the Indebtedness evidenced by the Notes is subordinated in right of payment, to the extent and in the manner provided in this Article 13, to the prior payment in full of all Senior Debt (whether outstanding on the date hereof or hereafter created, incurred, assumed or guaranteed), and that the subordination is for the benefit of the holders of Senior Debt.

 

103


Section 13.02. Liquidation; Dissolution; Bankruptcy.

Upon any distribution to creditors of the Company in a liquidation or dissolution of the Company or in a bankruptcy, reorganization, insolvency, receivership or similar proceeding relating to the Company or its property, in an assignment for the benefit of creditors or in any marshaling of the Company’s assets and liabilities holders of Senior Debt will be entitled to receive payment in full of all Obligations due in respect of such Senior Debt (including interest after the commencement of any bankruptcy proceeding at the rate specified in the applicable Senior Debt) before Holders of the Notes will be entitled to receive any payment with respect to the Notes, on account of any purchase or redemption or other acquisition on any Note in connection with an Asset Sale Offer or a Change of Control Offer (except that Holders may receive and retain (A) Permitted Junior Securities and (B) payments made from any trusts created pursuant to Article 8 or 12 hereof).

To the extent any payment of Senior Debt (whether by or on behalf of the Company, as proceeds of security or enforcement of any right of setoff or otherwise) is declared to be fraudulent or preferential, set aside or required to be paid to any receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person under any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law, then, if such payment is recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating trustee, agent or other similar Person, the Senior Debt or part thereof originally intended to be satisfied will be deemed to be reinstated and outstanding as if such payment had not occurred.

Section 13.03. Default on Designated Senior Debt.

(a) Neither the Company nor any Guarantor may make any payment or distribution to the Trustee or any Holder in respect of Obligations with respect to the Notes and may not acquire from the Trustee or any Holder any Notes for cash or property (other than (A) Permitted Junior Securities and (B) payments made from any trusts created pursuant to Article 8 or 12 hereof) until all principal and other Obligations with respect to the Senior Debt have been paid in full if:

(i) a default in the payment of any principal or other Obligations with respect to Designated Senior Debt occurs and is continuing beyond any applicable grace period in the agreement, indenture or other document governing such Designated Senior Debt; or

(ii) any other default occurs and is continuing on any series of Designated Senior Debt that then permits holders of that series of Designated Senior Debt to accelerate its maturity and the Trustee receives a notice of the default (a “Payment Blockage Notice”) from the Company or the holders of any Designated Senior Debt. If the Trustee receives any such Payment Blockage Notice, no subsequent Payment Blockage Notice will be effective for purposes of this Section 13.03 unless and until at least 360 days have elapsed since the delivery of the immediately prior Payment Blockage Notice. No nonpayment default that existed or was continuing on the date of delivery of any Payment Blockage Notice to the Trustee will be, or be made, the basis for a subsequent Payment Blockage Notice unless such default has been cured or waived for a period of not less than 90 days.

(b) The Company may and will resume payments on and distributions in respect of the Notes and may acquire them upon the earlier of:

(i) in the case of a payment default, upon the date on which such default is cured or waived, or

(ii) in the case of a nonpayment default, upon the earlier of:

 

104


(A) the date on which such nonpayment default is cured or waived,

(B) 179 days after the date on which the applicable Payment Blockage Notice is received, or

(C) the date on which the Trustee receives notice from or on behalf of the holders of Designated Senior Debt to terminate the applicable Payment Blockage Notice, unless the maturity of any Designated Senior Debt has been accelerated,

if this Article 13 otherwise permits the payment, distribution or acquisition at the time of such payment or acquisition.

Section 13.04. Acceleration of Notes.

If payment of the Notes is accelerated because of an Event of Default, the Company will promptly notify holders of Senior Debt of the acceleration.

Section 13.05. When Distribution Must Be Paid Over.

In the event that the Trustee or any Holder receives any payment of any Obligations with respect to the Notes (except (A) in Permitted Junior Securities or (B) from payments and other distributions made from any trusts created pursuant to Article 8 or 12 hereof so long as, on the date or dates the respective amounts were paid into trust, such payments were made without violating any of the provisions of this Article 13) at a time such payment is prohibited by Section 13.03 hereof, such payment will be held by the Trustee or such Holder, in trust for the benefit of, and will be paid forthwith over and delivered, upon written request, to, the holders of Senior Debt as their interests may appear or their Representative under the agreement, indenture or other document (if any) pursuant to which Senior Debt may have been issued, as their respective interests may appear, for application to the payment of all Obligations with respect to Senior Debt remaining unpaid to the extent necessary to pay such Obligations in full in accordance with their terms, after giving effect to any concurrent payment or distribution to or for the holders of Senior Debt.

With respect to the holders of Senior Debt, the Trustee undertakes to perform only such obligations on the part of the Trustee as are specifically set forth in this Article 13, and no implied covenants or obligations with respect to the holders of Senior Debt will be read into this Indenture against the Trustee. The Trustee will not be deemed to owe any fiduciary duty to the holders of Senior Debt, and will not be liable to any such holders if the Trustee in good faith shall pay over or distribute to or on behalf of Holders or the Company money or assets to which any holders of Senior Debt are then entitled by virtue of this Article 13, except if such payment is made as a result of the willful misconduct or gross negligence of the Trustee.

Section 13.06. Notice by Company.

The Company will promptly notify the Trustee and the Paying Agent of any facts known to the Company that would cause a payment of any Obligations with respect to the Notes to violate this Article 13, but failure to give such notice will not affect the subordination of the Notes to the Senior Debt as provided in this Article 13.

 

105


Section 13.07. Subrogation.

After all Senior Debt is paid in full and until the Notes are paid in full, Holders of Notes will be subrogated (equally and ratably with all other Indebtedness pari passu with the Notes) to the rights of holders of Senior Debt to receive distributions applicable to Senior Debt to the extent that distributions otherwise payable to the Holders of Notes have been applied to the payment of Senior Debt. A distribution made under this Article 13 to holders of Senior Debt that otherwise would have been made to Holders of Notes is not, as between the Company and Holders, a payment by the Company on the Notes.

Section 13.08. Relative Rights.

This Article 13 defines the relative rights of Holders of Notes and holders of Senior Debt. Nothing in this Indenture will:

(i) impair, as between the Company and Holders of Notes, the obligation of the Company, which is absolute and unconditional, to pay principal of and interest on the Notes in accordance with their terms;

(ii) affect the relative rights of Holders of Notes and creditors of the Company other than their rights in relation to holders of Senior Debt; or

(iii) prevent the Trustee or any Holder of Notes from exercising its available remedies upon a Default or Event of Default, subject to the rights of holders and owners of Senior Debt to receive distributions and payments otherwise payable to Holders of Notes.

If the Company fails because of this Article 13 to pay principal of or interest on a Note on the due date, the failure is still a Default or Event of Default.

Section 13.09. Subordination May Not Be Impaired by Company.

No right of any holder of Senior Debt to enforce the subordination of the Indebtedness evidenced by the Notes will be impaired by any act or failure to act by the Company or any Holder or by the failure of the Company or any Holder to comply with this Indenture.

Without in any way limiting the generality of the foregoing paragraph, the holders of Senior Debt may, at any time from time to time, without the consent of or notice to the Trustee, without incurring responsibility to the Trustee or the Holders of the Notes and without impairing or releasing the provisions of this Article 13 or the obligations under this Indenture of the Holders of the Notes to the holders of the Senior Debt, do any one or more of the following: (i) change the manner, place or terms of payment or extend the time of payment of, or renew or alter, the Senior Debt, or otherwise amend or supplement in any manner, Senior Debt, or any instrument evidencing the same or any agreement under which Senior Debt is outstanding; (ii) subject to the Priority Lien Intercreditor Agreement, sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing Senior Debt; (iii) release any Person liable in any manner for the payment or collection of Senior Debt; and (iv) exercise or refrain from exercising any rights against the Company and any other Person.

Section 13.10. Distribution or Notice to Representative.

Whenever a distribution is to be made or a notice given to holders of Senior Debt, the distribution may be made and the notice given to their Representative.

 

106


Upon any payment or distribution of assets of the Company referred to in this Article 13, the Trustee and the Holders of Notes will be entitled to rely upon any order or decree made by any court of competent jurisdiction or upon any certificate of such Representative or of the liquidating trustee or agent or other Person making any distribution to the Trustee or to the Holders of Notes for the purpose of ascertaining the Persons entitled to participate in such distribution, the holders of the Senior Debt 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 13.

Section 13.11. Rights of Trustee and Paying Agent.

Notwithstanding the provisions of this Article 13 or any other provision of this Indenture, the Trustee will not be charged with knowledge of the existence of any facts that would prohibit the making of any payment or distribution by the Trustee, and the Trustee and the Paying Agent may continue to make payments on the Notes, unless the Trustee has received at its Corporate Trust Office at least five Business Days prior to the date of such payment written notice of facts that would cause the payment of any Obligations with respect to the Notes to violate this Article 13. Only the Company or a Representative may give the notice. Nothing in this Article 13 will impair the claims of, or payments to, the Trustee under or pursuant to Section 7.06 hereof.

The Trustee in its individual or any other capacity may hold Senior Debt with the same rights it would have if it were not Trustee. Any Agent may do the same with like rights.

Section 13.12. Authorization to Effect Subordination.

Each Holder of Notes, by the Holder’s acceptance thereof, authorizes and directs the Trustee on such Holder’s behalf to take such action as may be necessary or appropriate to effectuate the subordination as provided in this Article 13, and appoints the Trustee to act as such Holder’s attorney-in-fact for any and all such purposes. If the Trustee does not file a proper proof of claim or proof of debt in the form required in any proceeding referred to in Section 6.09 hereof at least 30 days before the expiration of the time to file such claim, the Representatives are hereby authorized to file an appropriate claim for and on behalf of the Holders of the Notes.

Section 13.13. Amendments.

No amendment may be made to the provisions of this Article 13 that adversely affects the rights of any holder of Senior Debt then outstanding unless the holders of such Senior Debt (or any group or representative thereof authorized to give a consent) consent to such change.

ARTICLE 14.

MISCELLANEOUS

Section 14.01. Notices.

Any notice or communication by the Company, any Guarantor or the Trustee to the others is duly given if in writing and delivered in Person or mailed by first class mail (registered or certified, return receipt requested), telex, telecopier or overnight air courier guaranteeing next day delivery, to the others’ address:

 

107


If to the Company and/or any Guarantor:

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

Telecopier No.: (818) 729-5678

Attention: Lenard D. Liberman

Blima Tuller

With a copy to:

O’Melveny & Myers LLP

400 South Hope Street

Los Angeles, CA 90071

Telecopier No.: (213) 430-6000

Attention: Joseph K. Kim

John-Paul Motley

If to the Trustee:

U.S. Bank National Association

1420 Fifth Avenue, 7th Floor

Seattle, WA 98101

Telecopier No.: (206) 344-4630

Attention: Corporate Trust Services

The Company, any Guarantor or the Trustee, by notice to the others may designate additional or different addresses for subsequent notices or communications.

All notices and communications (other than those sent to Holders) will be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

Any notice or communication to a Holder will be mailed by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery to its address shown on the register kept by the Registrar. Failure to mail a notice or communication to a Holder or any defect in it will not affect its sufficiency with respect to other Holders.

If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.

If the Company mails a notice or communication to Holders, it will mail a copy to the Trustee and each Agent at the same time.

 

108


Section 14.02. Certificate and Opinion as to Conditions Precedent.

Upon any request or application by the Company to the Trustee to take any action under this Indenture, the Company shall furnish to the Trustee:

(a) an Officer’s Certificate in form and substance reasonably satisfactory to the Trustee (which will include the statements set forth in Section 14.03 hereof) stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been satisfied; and

(b) an Opinion of Counsel stating that, in the opinion of such counsel, all such conditions precedent and covenants have been satisfied.

Section 14.03. Statements Required in Certificate or Opinion.

Each certificate or Opinion of Counsel with respect to compliance with a condition or covenant provided for in this Indenture will include:

(a) a statement that the Person making such certificate or rendering such opinion has read such covenant or condition;

(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 such Person, he or she 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 satisfied; and

(d) a statement as to whether or not, in the opinion of such Person, such condition or covenant has been satisfied.

Section 14.04. Rules by Trustee and Agents.

The Trustee may make reasonable rules for action by or at a meeting of Holders. The Registrar or Paying Agent may make reasonable rules and set reasonable requirements for its functions.

Section 14.05. No Personal Liability of Directors, Officers, Employees and Shareholders.

No director, officer, employee, incorporator, member, manager, partner or shareholder of the Company or any Guarantor, as such, will have any liability for any obligations of the Company or the Guarantors under the Notes, the Subsidiary Guarantees, the Security Documents, this Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under the federal securities laws.

Section 14.06. Governing Law.

THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THIS INDENTURE, THE NOTES AND THE SUBSIDIARY GUARANTEES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

109


Section 14.07. No Adverse Interpretation of Other Agreements.

This Indenture may not be used to interpret any other indenture, loan or debt agreement of the Company or its Subsidiaries or of any other Person. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

Section 14.08. Successors.

All agreements of the Company in this Indenture, the Security Documents and the Notes will bind its successors. All agreements of the Trustee in this Indenture will bind its successors. All agreements of each Guarantor in this Indenture will bind its successors, except as otherwise provided in Section 11.06.

Section 14.09. Severability.

In case any provision in this Indenture or in the Notes is be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions will not in any way be affected or impaired thereby.

Section 14.10. Counterpart Originals.

The parties may sign any number of copies of this Indenture. Each signed copy will be an original, but all of them together represent the same agreement.

Section 14.11. Table of Contents, Headings, etc.

The Table of Contents, Cross-Reference Table and Headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part of this Indenture and will in no way modify or restrict any of the terms or provisions hereof.

[Signatures on following page]

 

110


SIGNATURES

Dated as of December 31, 2012

 

LBI MEDIA, INC.

By:   /s/ Blima Tuller
 

Name:  Blima Tuller

Title:    Chief Financial Officer

GUARANTORS:

 

LIBERMAN TELEVISION LLC

LIBERMAN BROADCASTING OF CALIFORNIA LLC

LBI RADIO LICENSE LLC

KRCA LICENSE LLC

KRCA TELEVISION LLC

EMPIRE BURBANK STUDIOS LLC

KZJL LICENSE LLC

LIBERMAN TELEVISION OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LICENSE LLC LIBERMAN BROADCASTING OF
DALLAS LLC

LIBERMAN BROADCASTING OF DALLAS LICENSE LLC

LIBERMAN TELEVISION OF DALLAS LLC

LIBERMAN TELEVISION OF DALLAS LICENSE LLC

By:   /s/ Blima Tuller
 

Name:  Blima Tuller

Title:    As Chief Financial Officer
of each of the entities listed above

U.S. BANK National Association
By:   /s/ Thomas Zrust
 

Name:  Thomas Zrust

Title:    Vice President


EXHIBIT A-1

[Face of Note]

 

CUSIP/CINS                         

11 1/2%/13 1 /2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

[PIK]

 

No.                         $                    

LBI MEDIA, INC.

promise to pay to                                                       or registered assigns, the principal sum of                                                       Dollars on April 15, 2020.

Interest Payment Dates: May 15 and November 15

Record Dates: May 1 and November 1

Dated:                     

 

LBI MEDIA, INC.

By:

   
 

Name:

 

Title:

This is one of the Notes referred to in the within-mentioned Indenture:

 

U.S. BANK NATIONAL ASSOCIATION

    as Trustee

By:

   
  Authorized Signatory

 

 

 

A-1-1


[Back of Note]

11  1/2%/13 1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

Capitalized terms used herein will have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. LBI Media, Inc., a California corporation (the “Company”), promises to pay interest on the principal amount of this Note (x) on or prior to November 15, 2015, at the election of the Company (made by delivering a notice to the Trustee prior to the beginning of each such interest period), at a rate of (i) 8.75% per annum in cash (“Cash Interest”), plus 2.75% per annum paid-in-kind interest (“PIK Interest”) or (ii) 4.25% Cash Interest plus 9.25% PIK Interest and (y) from and after November 15, 2015, at a rate of 8.75% Cash Interest plus 2.75% PIK Interest, in each case, calculated based on the outstanding principal amount of this Note as of the beginning of such interest period (after giving effect to any issuance of PIK Notes in respect of the immediately preceding interest period). For each interest period on or prior to November 15, 2015, in the absence of notice sent by the Company electing to pay interest on the Note at a rate of 8.75% Cash Interest and 2.75% PIK Interest prior to the beginning of such interest period, interest on the Note will be payable in the manner described in clause (x)(ii) of the preceding sentence. PIK Interest on this Note will be payable (x) with respect to Global Notes registered in the name of, or held by, the Depository, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Company to the Trustee and (y) with respect to Definitive Notes, by issuing PIK Notes in definitive form in an aggregate principal amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar). Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. Cash Interest will accrue from December 31, 2012 until maturity and, following an increase in the principal amount of this Note as a result of a PIK Payment, this Note will bear interest on such increased principal amount from and after the date of such PIK Payment until maturity. The last interest payment will be entirely in cash. Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption of this Note pursuant to Section 5, Section 7(a) or Section 7(b) hereof, shall be made solely in cash. Any certificated PIK Note will be issued with the description “PIK” on the face of such PIK Note.

The Company will pay interest semi-annually in arrears on May 15 and November 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be May 15, 2013. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

 

A-1-2


2. METHOD OF PAYMENT. The Company will pay Cash Interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal and premium, if any, and Cash Interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York, or, at the option of the Company, payment of Cash Interest, if any, may be made by check mailed on the Interest Payment Date to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal of and Cash Interest and premium, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent. Such payment will be 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.

3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association, a national banking association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. INDENTURE. The Company issued the Notes under an Indenture dated as of December 31, 2012 (the “Indenture”) among the Company, the guarantors party thereto (the “Guarantors”) and the Trustee. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

5. OPTIONAL REDEMPTION.

(a) Except as set forth in subparagraphs (b) or (c) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to November 15, 2016. Thereafter, the Company will have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes to be redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on November 15 of the years indicated below:

 

Year

   Percentage  

2016

     105.500

2017

     102.750

2018 and thereafter

     100.000

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to November 15, 2015, the Company may on one or more occasions redeem Notes with all or a portion of the net cash proceeds of one or more Equity Offerings at a redemption price equal to 111% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the applicable redemption date; provided that at least 65% of the aggregate principal amount of the Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Affiliates) and that such redemption occurs within 90 days of the date of the closing of such Equity Offering.

 

A-1-3


(c) At any time or from time to time prior to November 15, 2016, the Company, at its option, may redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium, together with accrued and unpaid interest thereon, if any, to the redemption date. The Company may provide that payment of such redemption price may be made by, and performance of the obligations in respect of such redemption may be performed by, another Person.

6. MANDATORY REDEMPTION; OPEN MARKET PURCHASES.

The Company will not be required to make mandatory redemption or sinking fund payments with respect to the Notes. The Company may at any time and from time to time purchase Notes in the open market or otherwise.

7. REPURCHASE AT THE OPTION OF HOLDERS.

(a) If there is a Change of Control, the Company will be required to make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof)) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date (the “Change of Control Payment”); provided, that the Company will not be obligated to repurchase Notes in the event that it exercises its right to redeem all of the Notes as described in Section 3.07 of the Indenture, unless and until there is a default in payment of the applicable redemption price. Within 30 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.

(b) Within 60 days after the receipt of Excess Proceeds, the Company or such Restricted Subsidiary shall apply those Excess Proceeds at its option: (i) to repay Senior Debt and if such Senior Debt is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; or (ii) commence an offer to all Holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets pursuant to Section 3.09 of the Indenture (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (including any Additional Notes and any PIK Notes) and such Parity Lien Debt that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date fixed for the closing of such offer, in accordance with the procedures set forth in the Indenture or the indenture or other agreement governing such Parity Lien Debt, as applicable. To the extent that the aggregate amount of Notes (including any Additional Notes and any PIK Notes) and Parity Lien Debt tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (including any Additional Notes and any PIK Notes) and other Parity Lien Debt surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select such tendered Notes and such tendered Parity Lien Debt to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof), unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

 

A-1-4


9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof. PIK Payments, if any, will be made in PIK Note denominations of $1.00 and any integral multiple of $1.00 in excess thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, and PIK Notes, if any, voting as a single class, and any existing default or compliance with any provision of the Indenture, the Subsidiary Guarantees, or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and Additional Notes, if any, and PIK Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Subsidiary Guarantees, the Priority Lien Intercreditor Agreement, the Security Documents or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, including, in the event that any PIK Notes are issued in certificated form, to make appropriate amendments to the Indenture to reflect an appropriate minimum denomination of certificated PIK Notes and establish minimum redemption amounts for certificated PIK Notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code), to provide for the assumption of the Company’s obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Company’s assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture, any Subsidiary Guarantee, the Priority Lien Intercreditor Agreement or any Security Document of any such Holder, including, for the avoidance of doubt, to make any covenant or event of default more restrictive than the covenants or events of default contained in the Indenture as of the date thereof, to provide for the Issuance of Additional Notes and PIK Notes in accordance with the limitations set forth in the Indenture, to conform the text of this Indenture, the Security Documents, the Priority Lien Intercreditor Agreement, the Subsidiary Guarantees or Notes to any provision of the Offering Circular, as amended, under the caption “Description of Second Priority Secured Subordinated Notes” to the extent such provisions in the “Description of Second Priority Secured Subordinated Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Subsidiary Guarantees, the Security Documents, the Priority Lien Intercreditor Agreement or the Notes, to enter into additional supplemental Security Documents, including Security Documents adding additional First Priority Lien Secured Parties and First Priority Lien Obligations to any Security Document or the Priority Lien Intercreditor Agreement, to release a Guarantor from its obligations under its Subsidiary Guarantee, the Notes or the Indenture in accordance with the applicable provisions of the Indenture, to release Collateral in accordance with the terms of the Indenture, the Security Documents or the Priority Lien Intercreditor Agreement, to evidence

 

A-1-5


and provide for the acceptance and appointment under this Indenture of a successor trustee thereunder pursuant to the requirements thereof, to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any of the Security Documents or any release of Collateral that becomes effective as set forth in the Indenture, any of the Security Documents or the Priority Lien Intercreditor Agreement, to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Subsidiary Guarantee with respect to the Notes, or to secure any First Priority Lien Debt under the Security Documents and to appropriately include the same in the Priority Lien Intercreditor Agreement.

12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of principal of, or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise, (iii) failure by the Company or any of its Restricted Subsidiaries to comply with Section 4.15 or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted Subsidiaries for 30 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding to comply with Section 4.07, 4.09, 4.10, 10.05 or 10.06 of the Indenture; (v) failure by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding to observe or perform any other covenant, representation, warranty or other agreement in the Indenture, the Security Documents or the Notes; (vi) default under certain other agreements relating to Indebtedness of the Company which default is caused by a failure to pay principal of or interest on such Indebtedness when due (giving effect to any applicable grace periods and any extensions thereof) or results in the acceleration of such Indebtedness prior to its express maturity; (vii) default under certain other agreements relating to Indebtedness of Holdings if that default results in the acceleration of such Indebtedness prior to its express maturity; (viii) certain final judgments for the payment of money that remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of 60 days; (ix) (x) any Security Document is held in any judicial proceeding to be unenforceable or invalid in any material respect or ceases for any reason to be in full force and effect in any material respect, other than in accordance with the terms of the relevant Security Documents and except solely as a result of any action taken or not taken by the Trustee acting in its capacity as collateral agent that was required to be taken or not taken by the Trustee acting in its capacity as collateral agent pursuant to the Security Documents, (y) any security interest created by any Security Document ceases to be in full force and effect (except as permitted by the terms of the Indenture or the Security Documents and except solely as a result of any action taken or not taken by the Trustee acting in its capacity as collateral agent that was required to be taken or not taken by the Trustee acting in its capacity as collateral agent pursuant to the Security Documents) with respect to Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million, and such default continues for a period of 60 days after the Company receives notice thereof from the Trustee or from the Holders of at least 25% in principal amount of the Notes outstanding specifying such default or (z) the Company or any of its Restricted Subsidiaries, or any Person acting on behalf of any of them, asserts in writing that any Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million is not subject to a valid, perfected security interest (except as permitted by the terms of the Indenture or Security Documents); (x) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries; (xi) except as permitted by the Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor which is a Significant Subsidiary or any Person acting on its behalf shall deny or disaffirm its obligations under its Subsidiary Guarantee, provided, however, that an Event of Default will also be deemed to occur with respect to Subsidiary Guarantors that are not Significant Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or such Insignificant Subsidiaries deny or disaffirm their obligations under their Subsidiary Guarantees (other than in accordance with the terms of such Subsidiary

 

A-1-6


Guarantee), if when aggregated and taken as a whole such Insignificant Subsidiaries would meet the definition of a Significant Subsidiary; and (xii) (I) Holdings shall fail to have executed the Discount Notes Forbearance Agreement not later than September 15, 2013, (II) Holdings shall fail to have delivered a copy thereof to the Trustee within five (5) Business Days after the execution thereof, (III) the Discount Notes Forbearance Agreement shall fail to be in full force and effect, or Holdings shall fail to be in compliance therewith, at all times from and after September 15, 2013 until the indefeasible payment in full of all Obligations under the Notes or (IV) the Discount Notes Forbearance Agreement shall be amended, restated, modified or supplemented without the prior written consent of the holders of at least a majority in principal amount of the Notes. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator, member, manager, partner or shareholder of the Company or any of the Guarantors, as such, will not have any liability for any obligations of the Company or such Guarantor under the Notes, the Subsidiary Guarantees, the Security Documents or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

15. AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

 

A-1-7


18. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

Attention: Lenard D. Liberman

 

A-1-8


ASSIGNMENT FORM

To assign this Note, fill in the form below:

(I) or (we) assign and transfer this Note to:                                                                                                                                                                                  

                                                         (Insert assignee’s legal name)

 

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)

and irrevocably appoint                                                                                   to transfer this Note on the books of the Company. The agent may substitute another to act for him.

 

Date:                             
    Your Signature:    
     

(Sign exactly as your name appears

on the face of this Note)

Signature Guarantee*:                                                        

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-1-9


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

¨  Section 4.10                      ¨  Section 4.15

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

$                         

 

Date:                                 
            Your Signature:    
     

(Sign exactly as your name appears

on the face of this Note)

            Tax Identification No.:                                                                               
Signature Guarantee*:                                           

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-1-10


SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE*

The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

 

Date of Exchange

   Amount of decrease in
Principal Amount

of this Global Note
   Amount of increase in
Principal Amount

of this Global Note
   Amount of increase in
Principal Amount of
this Global Note as a
result of PIK Interest
   Principal Amount
of this Global  Note
following such
decrease (or increase)
   Signature of authorized
officer of Trustee or
Custodian

 

 

* This schedule should be included only if the Note is issued in global form.

 

 

A-1-11


EXHIBIT A-2

[Face of Regulation S Temporary Global Note]

 

CUSIP/CINS                         

11 1/2%/13  1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

[PIK]

 

No.                         $                    

LBI MEDIA, INC.

promise to pay to                                                                                                                        or registered assigns, the principal sum of                                                       Dollars on April 15, 2020.

Interest Payment Dates: May 15 and November 15

Record Dates: May 1 and November 1

Dated:                     

 

LBI MEDIA, INC.
By:     
 

Name:

 

Title:

This is one of the Notes referred to in the within-mentioned Indenture:

 

U.S. BANK NATIONAL ASSOCIATION

    as Trustee

By:

   
  Authorized Signatory

 

 

 

A-2-1


[Back of Regulation S Temporary Global Note]

11  1/2%/13 1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN). NEITHER THE HOLDER NOR THE BENEFICIAL OWNERS OF THIS REGULATION S TEMPORARY GLOBAL NOTE SHALL BE ENTITLED TO RECEIVE PAYMENT OF INTEREST HEREON.

THIS GLOBAL NOTE IS HELD BY THE DEPOSITARY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO SECTION 2.06 OF THE INDENTURE OR SECTION 2.01(g) OF THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITARY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR NOTES IN DEFINITIVE FORM, THIS NOTE 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 OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS MAY BE REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR SUCH OTHER ENTITY AS MAY BE 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.

THIS NOTE (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A TRANSACTION ORIGINALLY EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED IN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON EXCEPT PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND ALL APPLICABLE STATE SECURITIES LAWS. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM IN REGULATION S UNDER THE SECURITIES ACT.

THE HOLDER OF THIS NOTE AGREES FOR THE BENEFIT OF THE COMPANY THAT (A) THIS NOTE MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES

 

A-2-2


ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (II) TO AN “ACCREDITED INVESTOR” WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT THAT, PRIOR TO SUCH TRANSFER, FURNISHES A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE TRANSFER OF THIS NOTE (THE FORM OF WHICH CAN BE OBTAINED FROM THE TRUSTEE) AND, IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL AMOUNT OF NOTES LESS THAN $250,000, AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY THAT SUCH TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE.

Capitalized terms used herein will have the meanings assigned to them in the Indenture referred to below unless otherwise indicated.

1. INTEREST. LBI Media, Inc., a California corporation (the “Company”), promises to pay interest on the principal amount of this Note (x) on or prior to November 15, 2015, at the election of the Company (made by delivering a notice to the Trustee prior to the beginning of each such interest period), at a rate of (i) 8.75% per annum in cash (“Cash Interest”), plus 2.75% per annum paid-in-kind interest (“PIK Interest”) or (ii) 4.25% Cash Interest plus 9.25% PIK Interest and (y) from and after November 15, 2015, at a rate of 8.75% Cash Interest plus 2.75% PIK Interest, in each case, calculated based on the outstanding principal amount of this Note as of the beginning of such interest period (after giving effect to any issuance of PIK Notes in respect of the immediately preceding interest period). For each interest period on or prior to November 15, 2015, in the absence of notice sent by the Company electing to pay interest on the Note at a rate of 8.75% Cash Interest and 2.75% PIK Interest prior to the beginning of such interest period, interest on the Note will be payable in the manner described in clause (x)(ii) of the preceding sentence. PIK Interest on this Note will be payable (x) with respect to Global Notes registered in the name of, or held by, the Depository, by increasing the principal amount of the outstanding Global Note by an amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar) as provided in writing by the Company to the Trustee and (y) with respect to Definitive Notes, by issuing PIK Notes in definitive form in an aggregate principal amount equal to the amount of PIK Interest for the applicable interest period (rounded down to the nearest whole dollar). Any PIK Notes issued in certificated form will be dated as of the applicable interest payment date and will bear interest from and after such date. Cash Interest will accrue from December 31, 2012 until maturity and, following an increase in the principal amount of this Note as a result of a PIK Payment, this Note will bear interest on such increased principal amount from and after the date of such PIK Payment until maturity. The last interest payment will be entirely in cash. Notwithstanding anything to the contrary, the payment of accrued interest in connection with any redemption of this Note pursuant to Section 5, Section 7(a) or Section 7(b) hereof, shall be made solely in cash. Any certificated PIK Note will be issued with the description “PIK” on the face of such PIK Note.

The Company will pay interest semi-annually in arrears on May 15 and November 15 of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an “Interest Payment Date”). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of issuance; provided that if there is no existing Default

 

A-2-3


in the payment of interest, and if this Note is authenticated between a record date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be May 15, 2013. The Company will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand at the rate then in effect to the extent lawful; it will pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

Until this Regulation S Temporary Global Note is exchanged for one or more Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as other Notes under the Indenture.

2. METHOD OF PAYMENT. The Company will pay Cash Interest on the Notes (except defaulted interest) to the Persons who are registered Holders of Notes at the close of business on the May 1 or November 1 next preceding the Interest Payment Date, even if such Notes are canceled after such record date and on or before such Interest Payment Date, except as provided in Section 2.12 of the Indenture with respect to defaulted interest. The Notes will be payable as to principal and premium, if any, and Cash Interest at the office or agency of the Company maintained for such purpose within or without the City and State of New York or, at the option of the Company, payment of Cash Interest, if any, may be made by check mailed on the Interest Payment Date to the Holders at their addresses set forth in the register of Holders, provided that payment by wire transfer of immediately available funds will be required with respect to principal of and Cash Interest and premium, if any, on, all Global Notes and all other Notes the Holders of which will have provided wire transfer instructions to the Company or the Paying Agent. Such payment will be 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.

3. PAYING AGENT AND REGISTRAR. Initially, U.S. Bank National Association, a national banking association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

4. INDENTURE. The Company issued the Notes under an Indenture dated as of December 31, 2012 (the “Indenture”) among the Company, the guarantors party thereto (the “Guarantors”) and the Trustee. The terms of the Notes include those stated in the Indenture. The Notes are subject to all such terms, and Holders are referred to the Indenture for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. The Indenture does not limit the aggregate principal amount of Notes that may be issued thereunder.

5. OPTIONAL REDEMPTION.

(a) Except as set forth in subparagraphs (b) or (c) of this Paragraph 5, the Company will not have the option to redeem the Notes prior to November 15, 2016. Thereafter, the Company will have the option to redeem the Notes, in whole or in part, upon not less than 30 nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes to be redeemed, to the applicable redemption date, if redeemed during the twelve-month period beginning on November 15 of the years indicated below:

 

A-2-4


Year

   Percentage  

2016

     105.500

2017

     102.750

2018 and thereafter

     100.000

(b) Notwithstanding the provisions of subparagraph (a) of this Paragraph 5, at any time prior to November 15, 2015, the Company may on one or more occasions redeem Notes with all or a portion of the net cash proceeds of one or more Equity Offerings at a redemption price equal to 111% of the principal amount thereof, plus accrued and unpaid interest, if any, thereon to the applicable redemption date; provided that at least 65% of the aggregate principal amount of the Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Affiliates) and that such redemption occurs within 90 days of the date of the closing of such Equity Offering.

(c) At any time or from time to time prior to November 15, 2016, the Company, at its option, may redeem the Notes, in whole or in part, at a price equal to 100% of the principal amount of the Notes redeemed plus the Applicable Premium, together with accrued and unpaid interest thereon, if any, to the redemption date. The Company may provide that payment of such redemption price may be made by, and performance of the obligations in respect of such redemption may be performed by, another Person.

6. MANDATORY REDEMPTION; OPEN MARKET PURCHASES.

The Company will not be required to make mandatory redemption or sinking fund payments with respect to the Notes. The Company may at any time and from time to time purchase Notes in the open market or otherwise.

7. REPURCHASE AT THE OPTION OF HOLDERS.

(a) If there is a Change of Control, the Company will be required to make an offer (a “Change of Control Offer”) to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof)) of each Holder’s Notes at a purchase price equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, subject to the rights of Holders on the relevant record date to receive interest due on the relevant Interest Payment Date (the “Change of Control Payment”); provided, that the Company will not be obligated to repurchase Notes in the event that it exercises its right to redeem all of the Notes as described in Section 3.07 of the Indenture, unless and until there is a default in payment of the applicable redemption price. Within 30 days following any Change of Control, the Company will mail a notice to each Holder setting forth the procedures governing the Change of Control Offer as required by the Indenture.

(b) Within 60 days after the receipt of Excess Proceeds, the Company or such Restricted Subsidiary shall apply those Excess Proceeds at its option: (i) to repay Senior Debt and if such Senior Debt is revolving credit Indebtedness, to correspondingly reduce commitments with respect thereto; or (ii) commence an offer to all Holders of Notes and all holders of Parity Lien Debt containing provisions similar to those set forth in the Indenture with respect to offers to purchase or redeem with the proceeds of sales of assets pursuant to Section 3.09 of the Indenture (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes (including any Additional Notes and any PIK Notes) and such Parity Lien Debt that may be purchased out of the Excess Proceeds at an offer price in cash in an amount equal to 100% of the principal amount thereof plus accrued and unpaid interest, if any, to the date fixed for the closing of

 

A-2-5


such offer, in accordance with the procedures set forth in the Indenture or the indenture or other agreement governing such Parity Lien Debt, as applicable. To the extent that the aggregate amount of Notes (including any Additional Notes and any PIK Notes) and Parity Lien Debt tendered pursuant to an Asset Sale Offer is less than the Excess Proceeds, the Company (or such Restricted Subsidiary) may use such deficiency for any purpose not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes (including any Additional Notes and any PIK Notes) and other Parity Lien Debt surrendered by holders thereof exceeds the amount of Excess Proceeds, the Trustee shall select such tendered Notes and such tendered Parity Lien Debt to be purchased on a pro rata basis. Holders of Notes that are the subject of an offer to purchase will receive an Asset Sale Offer from the Company prior to any related purchase date and may elect to have such Notes purchased by completing the form entitled “Option of Holder to Elect Purchase” on the reverse of the Notes.

8. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least 30 days but not more than 60 days before the redemption date to each Holder whose Notes are to be redeemed at its registered address. Notes in denominations larger than $2,000 may be redeemed in part but only in whole multiples of $1,000 (or if a PIK Payment has been made, in minimum denominations of $1.00 and any integral multiple of $1.00 in excess thereof), unless all of the Notes held by a Holder are to be redeemed. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption.

9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof in excess thereof. PIK Payments, if any, will be made in PIK Note denominations of $1.00 and any integral multiple of $1.00. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture. The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company need not exchange or register the transfer of any Note or portion of a Note selected for redemption, except for the unredeemed portion of any Note being redeemed in part. Also, the Company need not exchange or register the transfer of any Notes for a period of 15 days before a selection of Notes to be redeemed or during the period between a record date and the corresponding Interest Payment Date.

This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Global Notes only (i) on or after the termination of the 40-day restricted period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon exchange of this Regulation S Temporary Global Note for one or more Global Notes, the Trustee shall cancel this Regulation S Temporary Global Note.

10. PERSONS DEEMED OWNERS. The registered Holder of a Note may be treated as its owner for all purposes.

11. AMENDMENT, SUPPLEMENT AND WAIVER. Subject to certain exceptions, the Indenture, the Subsidiary Guarantees or the Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Notes and Additional Notes, if any, and PIK Notes, if any, voting as a single class, and any existing default or compliance with any provision of the Indenture, the Subsidiary Guarantees, or the Notes may be waived with the consent of the Holders of a majority in principal amount of the then outstanding Notes and Additional Notes, if any, and any PIK Notes, if any, voting as a single class. Without the consent of any Holder of a Note, the Indenture, the Subsidiary Guarantees, the Priority Lien Intercreditor Agreement, the Security Documents or the Notes may be amended or supplemented to cure any ambiguity, defect or inconsistency, to provide for uncertificated Notes in addition to or in place of certificated Notes, including, in the event that PIK Notes are issued in certificated form, to make appropriate amendments to the Indenture to reflect an appropriate

 

A-2-6


minimum denomination of certificated PIK Notes and establish minimum redemption amounts for certificated PIK Notes (provided that the uncertificated notes are issued in registered form for purposes of Section 163(f) of the Internal Revenue Code), to provide for the assumption of the Company’s obligations to Holders of the Notes in case of a merger or consolidation or sale of all or substantially all of the Company’s assets, to make any change that would provide any additional rights or benefits to the Holders of the Notes or that does not adversely affect the legal rights under the Indenture, any Subsidiary Guarantee, the Priority Lien Intercreditor Agreement or any Security Document of any such Holder, including, for the avoidance of doubt, to make any covenant or event of default more restrictive than the covenants or events of default contained in the Indenture as of the date thereof, to provide for the Issuance of Additional Notes and any PIK Notes in accordance with the limitations set forth in the Indenture, to conform the text of this Indenture, the Security Documents, the Priority Lien Intercreditor Agreement, the Subsidiary Guarantees or Notes to any provision of the Offering Circular, as amended, under the caption “Description of Second Priority Secured Subordinated Notes” to the extent such provisions in the “Description of Second Priority Secured Subordinated Notes” was intended to be a verbatim recitation of a provision of this Indenture, the Subsidiary Guarantees, the Security Documents, the Priority Lien Intercreditor Agreement or the Notes, to enter into additional supplemental Security Documents, including Security Documents adding additional First Priority Lien Secured Parties and First Priority Lien Obligations to any Security Document or the Priority Lien Intercreditor Agreement, to release a Guarantor from its obligations under its Subsidiary Guarantee, the Notes or the Indenture in accordance with the applicable provisions of the Indenture, to release Collateral in accordance with the terms of the Indenture, the Security Documents or the Priority Lien Intercreditor Agreement, to evidence and provide for the acceptance and appointment under this Indenture of a successor trustee thereunder pursuant to the requirements thereof, to make, complete or confirm any grant of Collateral permitted or required by the Indenture or any of the Security Documents or any release of Collateral that becomes effective as set forth in the Indenture, any of the Security Documents or the Priority Lien Intercreditor Agreement, to allow any Guarantor to execute a supplemental indenture to the Indenture and/or a Subsidiary Guarantee with respect to the Notes, or to secure any First Priority Lien Debt under the Security Documents and to appropriately include the same in the Priority Lien Intercreditor Agreement.

12. DEFAULTS AND REMEDIES. Events of Default include: (i) default for 30 days in the payment when due of interest on the Notes; (ii) default in payment when due of principal of, or premium, if any, on the Notes when the same becomes due and payable at maturity, upon redemption (including in connection with an offer to purchase) or otherwise, (iii) failure by the Company or any of its Restricted Subsidiaries to comply with Section 4.15 or 5.01 of the Indenture; (iv) failure by the Company or any of its Restricted Subsidiaries for 30 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding to comply with Section 4.07, 4.09, 4.10, 10.05 or 10.06 of the Indenture; (v) failure by the Company or any of its Restricted Subsidiaries for 60 days after notice to the Company by the Trustee or the Holders of at least 25% in principal amount of the Notes then outstanding to observe or perform any other covenant, representation, warranty or other agreement in the Indenture, the Security Documents or the Notes; (vi) default under certain other agreements relating to Indebtedness of the Company which default is caused by a failure to pay principal of or interest on such Indebtedness when due (giving effect to any applicable grace periods and any extensions thereof) or results in the acceleration of such Indebtedness prior to its express maturity; (vii) default under certain other agreements relating to Indebtedness of Holdings if that default results in the acceleration of such Indebtedness prior to its express maturity; (viii) certain final judgments for the payment of money that remain undischarged, unpaid, unrestricted, unbonded or unstayed for a period of 60 days; (ix) (x) any Security Document is held in any judicial proceeding to be unenforceable or invalid in any material respect or ceases for any reason to be in full force and effect in any material respect, other than in accordance with the terms of the relevant Security Documents and except solely as a result of any action taken or not taken by the Trustee acting in its capacity as collateral agent that was required to be taken or not taken by the Trustee acting in its capacity as collateral agent pursuant to the Security Documents,

 

A-2-7


(y) any security interest created by any Security Document ceases to be in full force and effect (except as permitted by the terms of the Indenture or the Security Documents and except solely as a result of any action taken or not taken by the Trustee acting in its capacity as collateral agent that was required to be taken or not taken by the Trustee acting in its capacity as collateral agent pursuant to the Security Documents) with respect to Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million, and such default continues for a period of 60 days after the Company receives notice thereof from the Trustee or from the Holders of at least 25% in principal amount of the Notes outstanding specifying such default or (z) the Company or any of its Restricted Subsidiaries, or any Person acting on behalf of any of them, asserts in writing that any Collateral having a fair market value, as determined in good faith by the Company’s Board of Directors, in excess of $10.0 million is not subject to a valid, perfected security interest (except as permitted by the terms of the Indenture or Security Documents); (x) certain events of bankruptcy or insolvency with respect to the Company or any of its Significant Subsidiaries; (xi) except as permitted by the Indenture, any Subsidiary Guarantee of a Significant Subsidiary shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor which is a Significant Subsidiary or any Person acting on its behalf shall deny or disaffirm its obligations under its Subsidiary Guarantee, provided, however, that an Event of Default will also be deemed to occur with respect to Subsidiary Guarantors that are not Significant Subsidiaries if the Subsidiary Guarantees of such Insignificant Subsidiaries are held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or such Insignificant Subsidiaries deny or disaffirm their obligations under their Subsidiary Guarantees (other than in accordance with the terms of such Subsidiary Guarantee), if when aggregated and taken as a whole such Insignificant Subsidiaries would meet the definition of a Significant Subsidiary; and (xii) (I) Holdings shall fail to have executed the Discount Notes Forbearance Agreement not later than September 15, 2013, (II) Holdings shall fail to have delivered a copy thereof to the Trustee within five (5) Business Days after the execution thereof, (III) the Discount Notes Forbearance Agreement shall fail to be in full force and effect, or Holdings shall fail to be in compliance therewith, at all times from and after September 15, 2013 until the indefeasible payment in full of all Obligations under the Notes or (IV) the Discount Notes Forbearance Agreement shall be amended, restated, modified or supplemented without the prior written consent of the holders of at least a majority in principal amount of the Notes. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in principal amount of the then outstanding Notes may declare all the Notes to be due and payable. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency, all outstanding Notes will become due and payable without further action or notice. Holders may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, the Notes. The Company is required to deliver to the Trustee annually a statement regarding compliance with the Indenture, and the Company is required upon becoming aware of any Default or Event of Default, to deliver to the Trustee a statement specifying such Default or Event of Default.

13. TRUSTEE DEALINGS WITH COMPANY. The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or its Affiliates, and may otherwise deal with the Company or its Affiliates, as if it were not the Trustee.

 

A-2-8


14. NO RECOURSE AGAINST OTHERS. A director, officer, employee, incorporator, member, manager, partner or shareholder of the Company or any of the Guarantors, as such, will not have any liability for any obligations of the Company or such Guarantor under the Notes, the Subsidiary Guarantees, the Security Documents or the Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for the issuance of the Notes.

15. AUTHENTICATION. This Note will not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

16. ABBREVIATIONS. Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

17. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon.

18. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK WILL GOVERN AND BE USED TO CONSTRUE THE NOTES WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

The Company will furnish to any Holder upon written request and without charge a copy of the Indenture. Requests may be made to:

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

Attention: Lenard D. Liberman

 

A-2-9


ASSIGNMENT FORM

To assign this Note, fill in the form below:

 

(I) or (we) assign and transfer this Note to:                                                                                                                                                                                   
  (Insert assignee’s legal name)

 

(Insert assignee’s soc. sec. or tax I.D. no.)

 

 

 

 

(Print or type assignee’s name, address and zip code)
and irrevocably appoint                                                                                   to transfer this Note on the books of the Company. The agent may substitute another to act for him.
Date:                               
    Your Signature:     
     

(Sign exactly as your name appears

on the face of this Note)

Signature Guarantee*:                                                              

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-2-10


OPTION OF HOLDER TO ELECT PURCHASE

If you want to elect to have this Note purchased by the Company pursuant to Section 4.10 or 4.15 of the Indenture, check the appropriate box below:

¨  Section 4.10                      ¨  Section 4.15

If you want to elect to have only part of the Note purchased by the Company pursuant to Section 4.10 or Section 4.15 of the Indenture, state the amount you elect to have purchased:

$                         

 

Date:                               
                Your Signature:     
     

(Sign exactly as your name appears

on the face of this Note)

Signature Guarantee*:                                                                     Tax Identification No.:                                                                                      

 

* Participant in a recognized Signature Guarantee Medallion Program (or other signature guarantor acceptable to the Trustee).

 

A-2-11


SCHEDULE OF EXCHANGES OF REGULATION S TEMPORARY GLOBAL NOTE

The following exchanges of a part of this Regulation S Temporary Global Note for an interest in another Global Note, or of other Restricted Global Notes for an interest in this Regulation S Temporary Global Note, have been made:

 

Date of Exchange

   Amount of decrease in
Principal Amount

of this Global Note
   Amount of increase in
Principal Amount

of this Global Note
   Amount of increase in
Principal Amount of
this Global Note as a
result of PIK Interest
   Principal Amount
of this Global  Note
following such
decrease (or increase)
   Signature of authorized
officer of Trustee or
Custodian

 

 

 

A-2-12


EXHIBIT B

FORM OF CERTIFICATE OF TRANSFER

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

U.S. Bank National Association

1420 Fifth Avenue, 7th Floor

Seattle, WA 98101

Re: 11 1/2%/13 1 /2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

Reference is hereby made to the Indenture, dated as of December 31, 2012 (the “Indenture”), between LBI Media, Inc., a California corporation, as issuer (the “Company”), the Guarantors party thereto, and U.S. Bank National Association, a national banking association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                    , (the “Transferor”) owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                 in such Note[s] or interests (the “Transfer”), to                      (the “Transferee”), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

1. ¨ Check if Transferee will take delivery of a beneficial interest in the 144A Global Note or a Restricted Definitive Note Pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a Person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such Person exercises sole investment discretion, and such Person and each such account is a “qualified institutional buyer” within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

2. ¨ Check if Transferee will take delivery of a beneficial interest in the Regulation S Temporary Global Note, the Regulation S Permanent Global Note or a Restricted Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any Person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any Person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being

 

B-1


made to a U.S. Person or for the account or benefit of a U.S. Person (other than an Initial Purchaser). Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Permanent Global Note, the Regulation S Temporary Global Note and/or the Restricted Definitive Note and in the Indenture and the Securities Act.

3. ¨ Check and complete if Transferee will take delivery of a beneficial interest in the IAI Global Note or a Restricted Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable blue sky securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

(a) ¨ such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

(b) ¨ such Transfer is being effected to the Company or a subsidiary thereof;

or

(c) ¨ such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

or

(d) ¨ such Transfer is being effected to an Institutional Accredited Investor and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144, Rule 903 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the IAI Global Note and/or the Restricted Definitive Notes and in the Indenture and the Securities Act.

4. ¨ Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or of an Unrestricted Definitive Note.

(a) ¨ Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement

 

B-2


Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(b) ¨ Check if Transfer is Pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

(c) ¨ Check if Transfer is Pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable blue sky securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

 
[Insert Name of Transferor]

By:

   
 

Name:

 

Title:

Dated:                                     

 

B-3


ANNEX A TO CERTIFICATE OF TRANSFER

 

1. The Transferor owns and proposes to transfer the following:

[CHECK ONE OF (a) OR (b)]

 

  (a) ¨ a beneficial interest in the:

 

  (i) ¨    144A Global Note (CUSIP                    ), or

 

  (ii) ¨    Regulation S Global Note (CUSIP                    ), or

 

  (iii) ¨    IAI Global Note (CUSIP                    ), or

 

  (b) ¨ a Restricted Definitive Note.

 

2. After the Transfer the Transferee will hold:

[CHECK ONE]

 

  (a) ¨ a beneficial interest in the:

 

  (i) ¨    144A Global Note (CUSIP                    ), or

 

  (ii) ¨    Regulation S Global Note (CUSIP                    ), or

 

  (ii) ¨    IAI Global Note (CUSIP                    ), or

 

  (iv) ¨    Unrestricted Global Note (CUSIP                    ); or

 

  (b) ¨ a Restricted Definitive Note; or

 

  (c) ¨ an Unrestricted Definitive Note,

in accordance with the terms of the Indenture.

 

B-4


EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

U.S. Bank National Association

1420 Fifth Avenue, 7th Floor

Seattle, WA 98101

Re: 11 1/2%/13 1 /2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

(CUSIP)

Reference is hereby made to the Indenture, dated as of December 31, 2012 (the “Indenture”), between LBI Media, Inc., a California corporation, as issuer (the “Company”), the Guarantors party thereto, and U.S. Bank National Association, a national banking association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                    , (the “Owner”) owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $             in such Note[s] or interests (the “Exchange”). In connection with the Exchange, the Owner hereby certifies that:

1. Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the Securities Act of 1933, as amended (the “Securities Act”), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(b) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Unrestricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

 

C-1


(c) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

(d) ¨ Check if Exchange is from Restricted Definitive Note to Unrestricted Definitive Note. In connection with the Owner’s Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner’s own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the Unrestricted Definitive Note is being acquired in compliance with any applicable blue sky securities laws of any state of the United States.

2. Exchange of Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

(a) ¨ Check if Exchange is from beneficial interest in a Restricted Global Note to Restricted Definitive Note. In connection with the Exchange of the Owner’s beneficial interest in a Restricted Global Note for a Restricted Definitive Note with an equal principal amount, the Owner hereby certifies that the Restricted Definitive Note is being acquired for the Owner’s own account without transfer. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the Restricted Definitive Note issued will continue to be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Definitive Note and in the Indenture and the Securities Act.

(b) ¨ Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner’s Restricted Definitive Note for a beneficial interest in the [CHECK ONE] ¨ 144A Global Note, ¨ Regulation S Global Note, ¨ IAI Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner’s own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable blue sky securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

 

C-2


This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

 

 
[Insert Name of Transferor]

By:

   
  Name:
  Title:

Dated:                                 

 

C-3


EXHIBIT D

FORM OF CERTIFICATE FROM

ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

LBI Media, Inc.

1845 West Empire Avenue

Burbank, CA 91504

U.S. Bank National Association

1420 Fifth Avenue, 7th Floor

Seattle, WA 98101

Re: 11 1/2%/13  1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020

Reference is hereby made to the Indenture, dated as of December 31, 2012 (the “Indenture”), between LBI Media, Inc., a California corporation, as issuer (the “Company”), the Guarantors party thereto, and U.S. Bank N.A., a national banking association, as Trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

In connection with our proposed purchase of $             aggregate principal amount of:

(a) ¨ a beneficial interest in a Global Note, or

(b) ¨ a Definitive Note,

we confirm that:

1. We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the Securities Act of 1933, as amended (the “Securities Act”).

2. We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a “qualified institutional buyer” (as defined therein), (C) to an institutional “accredited investor” (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act or (F) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (E) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

 

D-1


3. We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

4. We are an institutional “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

5. We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional “accredited investor”) as to each of which we exercise sole investment discretion.

You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

 

 
[Insert Name of Accredited Investor]

By:

   
  Name:
  Title:

Dated:                     

 

D-2


EXHIBIT E

FORM OF NOTATION OF GUARANTEE

For value received, each Guarantor (which term includes any successor Person under the Indenture) has, jointly and severally, unconditionally guaranteed, to the extent set forth in the Indenture and subject to the provisions in the Indenture dated as of December 31, 2012 (the “Indenture”) among LBI Media, Inc., the Guarantors listed on Schedule I thereto and U.S. Bank National Association, a national banking association, as Trustee (the “Trustee”), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders or the Trustee all in accordance with the terms of the Indenture and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, by acceleration or otherwise. The obligations of the Guarantors to the Holders of Notes and to the Trustee pursuant to the Subsidiary Guarantee and the Indenture are expressly set forth in Article 11 of the Indenture and reference is hereby made to the Indenture for the precise terms of the Subsidiary Guarantee. Each Holder of a Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee, on behalf of such Holder, to take such action as may be necessary or appropriate to effectuate the subordination as provided in the Indenture and (c) appoints the Trustee attorney-in-fact of such Holder for such purpose; provided, however, that the Indebtedness evidenced by this Subsidiary Guarantee shall cease to be so subordinated and subject in right of payment upon any defeasance of this Note in accordance with the provisions of the Indenture.

GUARANTORS:

LIBERMAN TELEVISION LLC

LIBERMAN BROADCASTING OF CALIFORNIA LLC

LBI RADIO LICENSE LLC

KRCA LICENSE LLC

KRCA TELEVISION LLC

EMPIRE BURBANK STUDIOS LLC

KZJL LICENSE LLC

LIBERMAN TELEVISION OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LICENSE LLC

LIBERMAN BROADCASTING OF DALLAS LLC

LIBERMAN BROADCASTING OF DALLAS LICENSE LLC

LIBERMAN TELEVISION OF DALLAS LLC

LIBERMAN TELEVISION OF DALLAS LICENSE LLC

 

By:

   
 

Name:

Title:

 

E-1


EXHIBIT F

FORM OF SUPPLEMENTAL INDENTURE

TO BE DELIVERED BY SUBSEQUENT GUARANTORS

SUPPLEMENTAL INDENTURE (this “Supplemental Indenture”), dated as of             , 20     among                      (the “Guaranteeing Subsidiary”), a subsidiary of LBI Media, Inc. (or its permitted successor), a California corporation (the “Company”), the Company, the other Guarantors (as defined in the Indenture referred to herein) and U.S. Bank National Association, a national banking association, as trustee under the Indenture referred to below (the “Trustee”).

W I T N E S S E T H

WHEREAS, the Company has heretofore executed and delivered to the Trustee an indenture (the “Indenture”), dated as of December 31, 2012 providing for the issuance of 11 1/2%/13 1/2% PIK Toggle Second Priority Secured Subordinated Notes due 2020 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall unconditionally guarantee all of the Company’s Obligations under the Notes and the Indenture on the terms and conditions set forth herein (the “Subsidiary Guarantee”); and

WHEREAS, pursuant to Section 9.01 of the Indenture, the Trustee is authorized to execute and deliver this Supplemental Indenture.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt of which is hereby acknowledged, the Guaranteeing Subsidiary and the Trustee mutually covenant and agree for the equal and ratable benefit of the Holders of the Notes as follows:

1. CAPITALIZED TERMS. Capitalized terms used herein without definition shall have the meanings assigned to them in the Indenture.

2. AGREEMENT TO GUARANTEE. The Guaranteeing Subsidiary hereby agrees to provide an unconditional Guarantee on the terms and subject to the conditions set forth in the Subsidiary Guarantee and in the Indenture including, but not limited to Article 11 thereof.

3. NO RECOURSE AGAINST OTHERS. No past, present or future director, officer, employee, incorporator, stockholder, member, manager, partner or agent of the Guaranteeing Subsidiary, as such, shall have any liability for any obligations of the Company or any Guaranteeing Subsidiary under the Notes, any Subsidiary Guarantees, the Indenture or this Supplemental Indenture or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of the Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. Such waiver may not be effective to waive liabilities under the federal securities laws and it is the view of the SEC that such a waiver is against public policy.

4. GOVERNING LAW. THE INTERNAL LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO CONSTRUE THIS SUPPLEMENTAL INDENTURE WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

 

F-1


5. COUNTERPARTS. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be an original, but all of them together represent the same agreement.

6. EFFECT OF HEADINGS. The Section headings herein are for convenience only and shall not affect the construction hereof.

7. THE TRUSTEE. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or for or in respect of the recitals contained herein, all of which recitals are made solely by the Guaranteeing Subsidiary and the Company.

 

F-2


IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed and attested, all as of the date first above written.

Dated:             ,         

 

[GUARANTEEING SUBSIDIARY]
By:    
Name:
Title:
LBI MEDIA, INC.
By:    
Name:
Title:

GUARANTORS:

 

LIBERMAN TELEVISION LLC

LIBERMAN BROADCASTING OF CALIFORNIA LLC

LBI RADIO LICENSE LLC

KRCA LICENSE LLC

KRCA TELEVISION LLC

EMPIRE BURBANK STUDIOS LLC

KZJL LICENSE LLC

LIBERMAN TELEVISION OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LLC

LIBERMAN BROADCASTING OF HOUSTON LICENSE LLC

LIBERMAN BROADCASTING OF DALLAS LLC

LIBERMAN BROADCASTING OF DALLAS LICENSE LLC

LIBERMAN TELEVISION OF DALLAS LLC

LIBERMAN TELEVISION OF DALLAS LICENSE LLC

By:    
Name:
Title:

U.S. BANK NATIONAL ASSOCIATION

as Trustee

By:    
  Authorized Signatory

 

F-3


EXHIBIT G

FORM OF SUBSIDIARY INTERCOMPANY NOTE

INTERCOMPANY NOTE

Los Angeles, California

[            ,     ] , 20[    ]

FOR VALUE RECEIVED, each of the undersigned, as Maker, severally and not jointly, hereby unconditionally promises to pay to the order of each of the undersigned, as Payee, advances of principal (“Advances”) made from time to time by such Payee to such Maker as shown on the books and records of such Maker, together with interest from the date of the making of any such Advance, whether or not such Advance is made prior to or on or after the date hereof, on the unpaid principal thereof until paid in full at the interest rate per annum equal to the per annum interest rate applicable to the Second Priority Secured Subordinated Notes.

The unpaid principal of any Advances and all accrued and unpaid interest thereon, owing by any Maker to any Payee shall be due and payable on demand of such Payee.

Whenever any payment on this Intercompany Note (this “Note”) shall be stated to be due on a day which is not a Business Day, such payment shall be made on the next succeeding Business Day and such extension of time shall be included in the computation of the payment of interest on this Note.

Except as provided herein, Maker reserves the right to prepay the outstanding principal amount of this Note, in whole or in part, at any time and from time to time, without premium or penalty; provided that interest shall be paid on the amount prepaid to and including the date of prepayment.

This Note is one of the promissory notes contemplated by that certain Indenture, dated as of December 31, 2012 (as it may be amended, restated, supplemented or otherwise modified, the “Indenture”), by and among the LBI Media Inc., a California corporation, the guarantors party thereto and U.S. Bank National Association, as trustee (together with its successor and assigns, the “Trustee”). Capitalized terms used herein and not defined herein shall have the meanings assigned to such terms in that certain Intercreditor Agreement, dated as of December 31, 2012 (as it may be amended, restated, supplemented or otherwise modified, the “Priority Lien Intercreditor Agreement”), by and among the Company, the Guarantors from time to time party thereto, the Second Priority Secured Subordinated Notes Trustee, the First Priority Lien Debt Representatives and Subordinated Lien Debt Representatives from time to time party thereto party and Credit Suisse AG, Cayman Islands Branch, as collateral trustee (together with its successor and assigns, in such capacity, the “First Priority Lien Collateral Trustee”) and administrative agent.

Each Maker shall be entitled to deem and treat any Payee, or such person who has been so identified by the transferor in writing to such Maker as the holder of this Note, as the owner and holder of this Note. This Note will, forthwith upon its issuance by the Makers, be endorsed in blank and such endorsement undated; provided, however, that, subject to the terms of the Priority Lien Intercreditor Agreement, nothing contained herein or of the endorsement hereof shall allow the Trustee to demand payment under this Note unless an Event of Default has occurred and is continuing.

In addition to, and not in limitation of, the foregoing, Makers agree, jointly and severally, to pay all reasonable costs and expenses, including reasonable attorneys’ fees, incurred in connection with the collection and enforcement of this Note.

 

G-1


Each Maker, for itself and any of its successors and assigns, hereby waives diligence, presentment, protest and demand, (other than as set forth herein) and notice of protest, demand (other than as set forth herein), dishonor and nonpayment of this Note.

No delay on the part of any Payee in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by such Payee, of any right or remedy shall preclude any other or further exercise of any other right or remedy.

THIS NOTE AND THE RIGHTS AND OBLIGATIONS OF MAKERS AND PAYEES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF THAT WOULD REQUIRE THE APPLICATION OF LAWS OTHER THAN THOSE OF THE STATE OF NEW YORK.

In case any provision in or obligation under this Note shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions or obligations, or of such provision or obligation in any other jurisdiction, shall not in any way be affected or impaired thereby.

[Remainder of page intentionally left blank.]

 

G-2


IN WITNESS WHEREOF, each of the undersigned has caused this Intercompany Note to be duly executed and delivered by its officer thereunto duly authorized as of the date and at the place first above written.

 

    [____________]
   

By:

   
   

Name:

 
   

Title:

 

 

G-3


ALLONGE

This Allonge is attached to and made a part of that certain Intercompany Note dated as of [            ,     ] , 20[    ] (as it may be amended, restated or modified from time to time, the “Note”) made by and between each of the undersigned, as Maker, and each of the undersigned, as Payee (each in such capacity, a “Payee”). The outstanding principal amount owing from time to time under the Note is evidenced on the books and records of the Payees, as more fully set forth in the Note.

Each of the undersigned, as a Payee, hereby assigns and transfers its rights under the Note

 

   to the order of   
       

Dated as of                             , 20            

[Signature page follows]

 

G-4


    [                          ]
    By:    
    Name:  
    Title:  

 

G-5


EXHIBIT H

FORBEARANCE AGREEMENT

This FORBEARANCE AGREEMENT (this “Agreement”), dated as of [            ], 20[    ] (the “Effective Date”), is by and between LBI MEDIA HOLDINGS, INC., a Delaware corporation (the “Company”) and the holders of the Notes (as defined below) named in Annex A attached hereto (the “Holders”). Reference is hereby made to the Indenture, dated as of October 10, 2003 (as amended, supplemented or otherwise modified to the date hereof, the “Indenture”), between the Company and U.S. Bank, National Association, a national banking association (the “Trustee”), governing the Company’s 11% Senior Discount Notes due 2013 (the “Notes”). Capitalized terms used but not defined herein shall have the respective meanings given to such terms in the Indenture.

RECITALS

WHEREAS, the Company informed the Trustee and the Holders of the occurrence of the Events of Default and potential Events of Default described in Annex B hereto (together with any Defaults with respect thereto, collectively the “Specified Defaults”);

WHEREAS, the Company has requested that during the Forbearance Period (as defined below), (i) the Holders forbear from exercising any and all remedies available to them under the Indenture and the Notes (the “Note Documents”) with respect to the Specified Defaults (but not waive the Specified Defaults) pursuant to the terms of this Agreement during the Forbearance Period and (ii) defer the Company’ obligations to make payments of principal, interest and other amounts due on the Notes held by the Holders during the Forbearance Period, and the Holders are willing to grant such forbearance and deferral on the terms and conditions set forth in this Agreement; and

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants contained herein, and subject to the terms and conditions hereof, the Company and the Holders agree as follows:

1. Forbearance and Related Provisions.

a. Forbearance Period; Enforcement Actions. Upon the satisfaction of the conditions precedent set forth in Section3 of this Agreement, the Holders hereby agree to forbear from taking any of the “Enforcement Actions” defined below as a result of the occurrence and continuation of any of the Specified Defaults solely during the period (the “Forbearance Period”) beginning on the first date that the conditions set forth in Section 3 of this Agreement shall have been satisfied (the “Effective Date”) and ending at the earlier to occur of (i) the time of the indefeasible payment in full of all Obligations under LBI Media’s Senior Secured Notes due 2019 and (ii) the time of any breach by the Company of its obligations under Section 1(c) of this Agreement (such time being referred to herein as the “Termination Date”). “Enforcement Actions” shall mean any (1) commencement of judicial enforcement proceedings against the Company with respect to the payment of any Obligations with respect to the Notes and the Note Documents, (2) declaration that any portion of the unpaid principal amount of outstanding Notes (or any accrued interest thereon) or any other Obligation with respect to the Notes or the Note Documents is immediately due and payable or (3) the exercise of any and all other remedies available to the Holders under the Note Documents with respect to the Notes held by them.

 

H-1


b. Reservation of Rights. The Holders expressly reserve the right to exercise all remedies under the Note Documents immediately upon the expiration or termination of the Forbearance Period, including, without limitation, the Enforcement Actions, in respect of all Specified Defaults and any other Events of Default then existing. The Company hereby confirms that the Specified Defaults have occurred and are continuing. Except for the forbearance to the extent expressly set forth above, the Holders reserve each and every right and remedy they may have under the Note Documents with respect to the Specified Defaults. Nothing in this Agreement shall be deemed to constitute a waiver by the Holders of any Specified Default or any other Event of Default, whether now existing or hereafter arising, or of any right or remedy that the Agent and the Lenders may have under the Note Documents, except to the extent expressly set forth above.

c. Deferral of Payment Obligations. All unpaid Obligations with respect to the Notes held by the Holders (including the principal amount of such Notes and all unpaid interest that accrued on the Obligations prior to the Effective Date or accrue following the Effective Date) shall be due and payable as set forth in Annex C attached hereto. Any failure to make any payment due and payable as set forth in such Annex C shall be deemed to be a failure to pay principal for purposes of Section 6.01(b) of the Indenture. Upon the payment of all amounts set forth in such Annex C, all Obligations with respect to the Notes held by the Holders shall be satisfied and such Notes shall be deemed to be satisfied in full and no longer outstanding.

d. Prior Understandings. This Agreement sets forth the entire understanding of the parties relating to the subject matter hereof, and supersedes all prior understandings and agreements, written or oral, with respect to such subject matter.

2. Representations and Warranties; Covenants.

a. Enforceability. Each of the parties hereto hereby represents and warrants that this Agreement is the legal, valid and binding obligations of such party and is enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).

b. Authorization; No Conflicts. Each of the parties hereto hereby represents and warrants that its execution, delivery and performance of this Agreement (i) have been duly authorized by all necessary action on the part of such party and are within such party’s corporate or similar powers and (ii) do not (A) contravene such party’s constituent documents or (B) violate any applicable requirement of law.

3. Conditions Precedent. This Agreement shall become effective as of the Effective Date only upon the satisfaction of all of the following conditions precedent:

 

H-2


a. The Company and the Holders shall have executed and delivered their respective counterparts of this Agreement.

4. Ratification and Release. The Company hereby (i) ratifies and reaffirms all of its payment and performance obligations, contingent or otherwise under the Note Documents, (ii) agrees and acknowledges that the Obligations with respect to the Notes and the other Note Documents constitute legal, valid and binding obligations of the Company, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and that (x) no offsets, defenses or counterclaims to the Obligations with respect to the Notes or the Note Documents or any other causes of action with respect to the Obligations with respect to the Notes or the Note Documents exist and (y) no portion of the Obligations with respect to the Notes or the Note Documents is subject to avoidance, disallowance, reduction or subordination pursuant to any requirement of law, (iv) agrees that such ratification and reaffirmation is not a condition to the continued effectiveness of the Note Documents and (v) agrees that neither such ratification and reaffirmation, nor any Holder’s solicitation of such ratification and reaffirmation, constitutes a course of dealing giving rise to any obligation or condition requiring a similar or any other ratification or reaffirmation with respect to any subsequent modifications, consent or waiver with respect to the Note Documents. The Company acknowledges and agrees that any of the Note Documents to which it is a party or otherwise bound shall continue in full force and effect and that all of its obligations thereunder shall be valid and enforceable, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law), and shall not be impaired or limited by the execution or effectiveness of this Agreement.

5. Miscellaneous.

a. Effect. This Forbearance Agreement is limited to the specific purpose for which it is granted and shall not be construed as a consent, waiver, amendment or other modification with respect to any term, condition or other provision of any Note Document.

b. Severability. Any provision of this Agreement held by a court of competent jurisdiction to be invalid or unenforceable shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision so held to be invalid or unenforceable.

c. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall constitute an original, but all of which taken together shall be one and the same instrument. This Agreement may also be executed by facsimile and each facsimile signature hereto shall be deemed for all purposes to be an original signatory page.

d. APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF LAW PRINCIPLES.

 

H-3


e. Section Titles. The section titles contained in this Agreement are and shall be without substance, meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

* * * *

 

H-4


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective duly authorized representatives as of the date first written above.

 

   

THE COMPANY:

 

LBI MEDIA HOLDINGS, INC.

    By:    
    Name:  
    Title:  

[Signatures Continue on Following Page]

 

H-5


 

   

HOLDERS:

LBI MEDIA HOLDINGS, INC.

   

By:

   
   

Name:

 
   

Title:

 

 

H-6


ANNEX A

Holders

LBI Media Holdings, Inc.

 

H-7


ANNEX B

Specified Defaults

1. Events of Default arising under the Note Documents as a result of the Company’s failure to pay principal and other Obligations due under the Indenture on October 15, 2013.

2. Any and all Events of Default and Defaults existing as of the date of this Forbearance Agreement.

 

H-8


Annex C

Payment Schedule

 

April 25, 2016

   $ [             ]1 

October 25, 2016

   $ [             ]2 

April 25, 2017

   $ [             ]3 

 

 

1 

Amount equal to cash interest payment on New Holdings Notes and Parent Entity Allowable Indebtedness due on April 30, 2016.

2 

Amount equal to cash interest payment on New Holdings Notes and Parent Entity Allowable Indebtedness due on October 31, 2016.

3 

Amount equal to cash interest payment on New Holdings Notes and Parent Entity Allowable Indebtedness due on April 30, 2017.

 

H-9


EXHIBIT I

Recorded at Request of:

U.S. Bank National Association

When Recorded Mail to:

 

    
    
    
    

DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES,

AND SECURITY AGREEMENT

NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, (I) THE LIENS AND SECURITY INTERESTS GRANTED TO THE SECOND PRIORITY COLLATERAL AGENT PURSUANT TO THIS DEED OF TRUST ARE EXPRESSLY SUBJECT AND SUBORDINATE TO THE LIENS AND SECURITY INTERESTS GRANTED TO (A) CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, AS ADMINISTRATIVE AGENT AND COLLATERAL TRUSTEE (AND ITS PERMITTED SUCCESSORS) PURSUANT TO THAT CERTAIN DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT DATED AS OF                     , AND RECORDED                     , IN THE OFFICIAL RECORDS OF LOS ANGELES COUNTY AS DOCUMENT NUMBER                      (THE “FIRST LIEN DEED OF TRUST”), THAT CERTAIN AMENDED AND RESTATED SECURITY AGREEMENT, DATED AS OF                      (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED), BY AND AMONG LBI MEDIA, INC., THE OTHER DEBTORS PARTY THERETO AND CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, AS COLLATERAL TRUSTEE, AND THAT CERTAIN AMENDED AND RESTATED PLEDGE AGREEMENT, DATED AS OF                      (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED), BY AND AMONG LBI MEDIA, INC., THE OTHER PLEDGORS PARTY THERETO AND CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, AS COLLATERAL TRUSTEE, OR (B) ANY AGENT OR TRUSTEE FOR ANY OTHER FIRST PRIORITY LIEN HOLDERS (AS DEFINED IN THE INTERCREDITOR AGREEMENT REFERRED TO BELOW), AND (II) THE EXERCISE OF ANY RIGHT OR REMEDY BY THE SECOND PRIORITY COLLATERAL AGENT HEREUNDER IS SUBJECT TO THE LIMITATIONS AND PROVISIONS OF THE INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 31, 2012 (AS AMENDED, RESTATED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR AGREEMENT”), BY AND AMONG CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, AS FIRST PRIORITY LIEN COLLATERAL TRUSTEE, U.S. BANK NATIONAL ASSOCIATION AS TRUSTEE AND COLLATERAL AGENT, LBI MEDIA, INC. AND THE OTHER PARTIES PARTY THERETO. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS DEED OF TRUST, THE TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN.

 

I-1


THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT (the “Deed of Trust”), is executed this          day of                     , 2013, by LIBERMAN BROADCASTING OF CALIFORNIA LLC, a California limited liability company (“Grantor”), having its principal place of business at c/o LBI Media, Inc., 1845 West Empire Avenue, Burbank, California 91504, to Commonwealth Land Title Insurance Company, 801 S. Figueroa Street, Suite 870, Los Angeles, CA. 90017, as trustee (“Trustee”) for the benefit of U.S. BANK NATIONAL ASSOCIATION (“U.S. Bank”), as collateral agent (in such capacity, together with its successors and assigns in such capacity, the “Second Priority Collateral Agent”) for itself and the other Subordinated Lien Secured Parties, having an address at 1420 Fifth Avenue, 7th Floor, Seattle, Washington 98101.

Reference is made to the following facts:

A. The Grantor is the owner of the real property located at 5930 Sawyer Street, Los Angeles, Los Angeles County, California, as more particularly described in Exhibit A attached hereto (the “Real Property”); and

B. The Grantor and certain related entities, are guarantors (collectively, jointly and severally, the “Guarantors”) under the terms of that certain Indenture dated as of December 31, 2012 (as the same may be amended, modified, restated and/or supplemented from time to time, the “Second Priority Secured Subordinated Notes Indenture”) among LBI Media, Inc., a California corporation (the “Company”), the Guarantors party thereto from time to time including the Grantor and U.S. Bank National Association, as trustee (in such capacity, and together with its successor trustee, the “Second Priority Secured Subordinated Notes Indenture Trustee”), the Company has or will issue Second Priority Secured Subordinated Notes (the “Second Priority Secured Subordinated Notes”) as contemplated therein; and

E. The Company, Grantor, the other Guarantors, the other debtors thereunder from time to time party thereto, Credit Suisse AG, Cayman Islands Branch, as first priority lien collateral trustee (together with its successors and permitted assigns, the “First Priority Lien Collateral Trustee”), the Second Priority Collateral Agent, and U.S. Bank National Association have entered into the Intercreditor Agreement, which sets forth certain rights of the Second Priority Collateral Agent and the Subordinated Lien Secured Parties with respect to the Common Collateral (as defined in the Intercreditor Agreement), including, without limitation, the Collateral; and

F. Pursuant to the Intercreditor Agreement, each secured debt representative, on behalf of itself and each holder of Obligations (as hereinafter defined), and each holder of Obligations acting through its secured debt representative has appointed U.S. Bank National Association to serve as Second Priority Collateral Agent for the current and future holders of the Obligations; and

G. Pursuant to the Second Priority Secured Subordinated Notes Indenture, the Company and the Guarantors entered into that certain Security Agreement, dated as of December 31, 2012 (as may be amended, modified, restated and/or supplemented from time to time, the “Second Priority Security Agreement”), with the Second Priority Collateral Agent for the benefit of the Subordinated Lien Secured Parties; and

 

I-2


H. The Grantor will derive substantial direct and indirect benefits from the issuance of the Second Priority Secured Subordinated Notes under the Second Priority Secured Subordinated Notes Indenture; and

I. The Grantor is required to deliver this Deed of Trust to the Second Priority Collateral Agent pursuant to the terms of the other Subordinated Lien Debt Documents.

GRANT IN TRUST

In consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of all of which are acknowledged, and to secure the due and punctual payment and performance of the Subordinated Lien Obligations (hereinafter referred to as the “Obligations”), Grantor grants, conveys and assigns to Trustee, IN TRUST, WITH THE POWER OF SALE all of its right, title, interest and estate, now owned or hereafter acquired, in the Real Property, together with the Grantor’s entire right, title and interest, now owned or hereafter acquired, in and to the following:

(a) All Improvements (as hereinafter defined), and the rents, issues and profits therefrom;

(b) All rights, licenses, easements now or hereafter appurtenant thereto, and all other rights of the Grantor of whatever kind or nature, whether running covenants or otherwise now or hereafter appurtenant to the Real Property, to the extent that a security interest can be granted in any such licenses;

(c) Any other estate, title or interest in the Real Property or Improvements, and in the streets and ways adjacent thereto, to the extent now owned or hereafter acquired by the Grantor;

(d) All leases or subleases (the “Leases”) now existing or hereafter entered into by the Grantor with respect to all or any portion of the Real Property and Improvements, and all the rents, issues, profits, revenues, and other income received or receivable by the Grantor under and by virtue of such Leases (the “Revenues”);

(e) All goods, equipment, machinery, furnishings, furniture, chattels and articles of personal property of every kind and nature whatsoever, now or hereafter located on the Real Property or used or to be used in connection with the construction, operation, maintenance, occupancy or use of the Improvements, whether now owned or hereafter acquired by the Grantor. The foregoing shall include without limitation all heating, air conditioning, freezing, lighting, laundry, incinerating and power equipment; sprinkler systems; engines; pipes; pumps; tanks; motors; generators; conduits; switchboards; plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating, ventilating and communications apparatus; boilers, ranges, furnaces, oil burners or units thereof; appliances; vacuum cleaning systems; elevators; escalators; shades; awnings; screens; storm doors and windows; stoves; cabinets; partitions; ducts and compressors; rugs and carpets; draperies; plants and shrubbery; furniture and furnishings; whether now owned or hereafter from time to time acquired by the Grantor, together with all attachments and additions thereto, substitutions therefor, and replacements and component parts thereof, whether now or hereafter attached to or used or to be used on the Real Property in connection with the construction, operation, maintenance, occupancy or use of the Real Property or the Improvements located thereon; and

 

I-3


(f) All proceeds of the sale or conversion, voluntary or involuntary, of all or any portion of the above-described property into cash, negotiable instruments or other instruments for the payment of money, chattel paper, security agreements, documents or liquidated claims, including, without limitation, all insurance proceeds and all awards arising out of eminent domain proceedings or other proceedings similar thereto.

The above-described Real Property and Improvements, and other rights described in (a), (b), (c) and (d) above, together with any and all additions thereto or replacements thereof, and together with all such property described in (e) and (f) above, insofar as such property is, or can by agreement of the parties be made, a part of the realty, are herein referred to as the “Real Estate”. All such property described in (e) and (f) above is hereinafter referred to as the “Collateral”. The Collateral and the Real Estate are collectively referred to as the “Property”, or such portion thereof as is appropriate to the context in which the term “Property” is used.

Notwithstanding anything in this Deed of Trust to the contrary, the foregoing grant by Grantor and the rights of Second Priority Collateral Agent to exercise any power, right, privilege or remedy pursuant to this Deed of Trust shall in all events be subject to Section 22 of the Second Priority Security Agreement.

Nothing herein shall be deemed to be authorization by Second Priority Collateral Agent to Grantor to sell, assign or otherwise dispose of the Property, except in accordance with the provisions of this Deed of Trust and the other Subordinated Lien Debt Documents. Grantor agrees to execute and deliver from time to time such further instruments as may be requested by Second Priority Collateral Agent to confirm the assignment to Second Priority Collateral Agent of any award, payment or proceeds from any sale, assignment or other disposition of the Property.

It is intended that this Deed of Trust shall serve as a security agreement, and as security for the Obligations, Grantor hereby grants to the Second Priority Collateral Agent a security interest in all of the Property not classified as real property under applicable law, but including fixtures, in accordance with the terms of the Uniform Commercial Code as adopted in the jurisdiction where the Real Property is located (the “UCC”). Subject to the provisions of the Intercreditor Agreement, the Second Priority Security Agreement and the other Subordinated Lien Debt Documents, as to all such property, Second Priority Collateral Agent shall have, without limitation, all of the rights and remedies of a secured party under the UCC. The recordation of this Deed of Trust shall also constitute a fixture filing in accordance with the provisions of the UCC. Grantor covenants and agrees to execute promptly upon request such financing statements as Second Priority Collateral Agent may reasonably require from time to time, to cause same to be filed in the appropriate jurisdiction, and to take such other actions as Second Priority Collateral Agent may require in order to perfect the security interest created by this Deed of Trust.

 

I-4


It is further intended that this Deed of Trust shall secure not only existing indebtedness or advances made contemporaneously with the execution hereof, but also (i) all future advances made by any Subordinated Lien Secured Party under any Subordinated Lien Debt Document, whether such advances are obligatory or to be made at the option of such Subordinated Lien Secured Party, or otherwise, (ii) all additional advances made by such Subordinated Lien Secured Party following any increase in the amount of the lending commitments or other direct or contingent indebtedness under such Subordinated Lien Debt Documents as a result of an amendment thereof, and (iii) any and all additional amounts and/or interest which the Grantor is required to pay to the Second Priority Collateral Agent or any Subordinated Lien Secured Party under the Subordinated Lien Debt Documents or hereunder, to the same extent as if such future or additional advances were made and additional amounts and/or interest were incurred on the date hereof.

It is further intended that this Deed of Trust shall serve as a present and absolute assignment, and as additional security for the Obligations, Grantor hereby assigns to the Second Priority Collateral Agent all of the Grantor’s right, title and interest in and to the Leases, provided that, so long as no Event of Default (as hereinafter defined) has occurred and is continuing hereunder, Grantor shall have the right to the use and enjoyment of the Leases. In no event shall the foregoing assignment operate to place any liability on Second Priority Collateral Agent for the maintenance, care, operation or condition of the Real Property until such time, if any, as Second Priority Collateral Agent shall take possession or control of the Real Property.

Grantor hereby covenants and agrees as follows:

1. DEFINITIONS. As used in this Deed of Trust, unless the context otherwise requires, the following terms shall have the following meanings (capitalized terms used in this Deed of Trust that are not defined below shall have the meanings ascribed to them in the Second Priority Secured Subordinated Notes Indenture, the Intercreditor Agreement, or the Second Priority Security Agreement):

Environmental Law” means all applicable laws, rules, regulations, codes, ordinances, orders, decrees, judgments, injunctions, notices or binding agreements issued, promulgated or entered into by any Governmental Authority, relating in any way to the environment, preservation or reclamation of natural resources, the management, release or threatened release of any Hazardous Material or to health and safety matters.

Environmental Liability” means any liability, contingent or otherwise (including any liability for damages, costs of environmental remediation, fines, penalties or indemnities), of Grantor directly or indirectly resulting from or based upon (a) violation of any Environmental Law, (b) the generation, use, handling, transportation, storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous Materials, (d) the release or threatened release of any Hazardous Materials into the environment or (e) any contract, agreement or other consensual arrangement pursuant to which liability is assumed or imposed with respect to any of the foregoing.

FCC” means the Federal Communications Commission or any governmental authority succeeding to any of its functions.

 

I-5


Governmental Approvals” shall mean all approvals, certifications, consents, licenses, permits, authorizations and other official action required to be issued or taken by any Governmental Authorities for or with respect to the matter with respect to which such term is used, including, without limitation all applicable environmental, Hazardous Materials, air and water pollution, land use, flood hazard, coastal zone, waterways, wetlands, building, fire safety, health, planning, subdivision, and zoning permits and approvals.

Governmental Authorities” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government and the National Association of Insurance Commissioners.

Hazardous Materials” means all explosive or radioactive substances or wastes and all hazardous or toxic substances, wastes or other pollutants, including petroleum or petroleum distillates, asbestos or asbestos containing materials, polychlorinated biphenyls, radon gas, infectious or medical wastes and all other substances or wastes of any nature in each case regulated or subject to regulation pursuant to any Environmental Law.

Improvements” shall mean the existing buildings on the Real Estate and all improvements now or hereafter made to the Real Estate.

Laws and Other Governmental Requirements” shall mean all laws, statutes, ordinances, orders, rules and regulations now in effect or at any time hereafter enacted or issued by any Governmental Authorities which are applicable to the Grantor, the Real Estate, or the matter or party with respect to which such terms are used, including the Communications Act of 1934, as amended, and the rules and regulations of the FCC.

Material Adverse Effect” means a material adverse effect on (a) the business, assets, operations or financial condition of the Company and the Guarantors taken as a whole, (b) the ability of any of the Company or any Guarantor to perform any of its respective material obligations under this Deed of Trust or (c) the material rights of or material benefits available to the Subordinated Lien Secured Parties under this Deed of Trust and the other Subordinated Lien Debt Documents.

Other Applicable Requirements” shall mean all mortgages, deeds of trust, leases, bank loans, credit agreements, contracts, instruments, agreements, covenants, conditions and restrictions, public or private, now in effect or hereafter arising which are applicable to or which are binding on the Grantor, the Real Estate, the business or activity conducted thereon, or the matter or party with respect to which such terms are used, or to which the party with respect to which such terms are used is a party or by which such party may be bound or affected.

2. PAYMENT AND PERFORMANCE OF OBLIGATIONS. The Grantor shall make all payments and perform all obligations under the Intercreditor Agreement, the Second Priority Secured Subordinated Notes, this Deed of Trust and all other Subordinated Lien Debt Documents in accordance with the terms of such agreements.

 

I-6


3. PAYMENT OF TAXES, ETC.

(a) Grantor shall pay its taxes, assessments and governmental levies that, if not paid, could reasonably be expected to result in a Material Adverse Effect before the same shall become delinquent or in default except where (a) the validity or amount thereof is being contested in good faith by appropriate proceedings (b) Grantor has set aside on its books adequate reserves with respect thereto in accordance with GAAP and (b) the failure to make payment pending such contest could not reasonably be expected to result in a Material Adverse Effect.

(b) Further, the Grantor shall pay when due in accordance with the terms hereof or thereof all fees and charges incurred incident to the loan transaction described in the Subordinated Lien Debt Documents, the assurance of the security represented by this Deed of Trust, and the enforcement of this Deed of Trust, the other Subordinated Lien Debt Documents, and any other obligation secured by this Deed of Trust.

(c) Grantor further agrees that subject to Section 3(a) above, if Grantor shall default in making any payment due in accordance with this Deed of Trust within thirty (30) days after its due date, Second Priority Collateral Agent may (but shall not be obligated to) make such payment, together with penalties and interest thereon, on behalf of Grantor. The amount of such payment and expenses incurred by Second Priority Collateral Agent, together with any payments incurred by the Second Priority Collateral Agent on the behalf of the Grantor under any of the Subordinated Lien Debt Documents, shall be secured by this Deed of Trust.

4. INSPECTION. Subject to the rights of tenants under the Leases and to the provisions of the Intercreditor Agreement and the Subordinated Lien Debt Documents, the Second Priority Collateral Agent shall have and is hereby granted the right to enter the Real Estate and have access to the Collateral (and all books and records relating to the use, operation, construction or management thereof, to the extent in Grantor’s possession or control) at reasonable times during normal business hours and with reasonable notice to determine whether the Grantor is in compliance with its obligations under this Deed of Trust and the other Subordinated Lien Debt Documents, provided that the Second Priority Collateral Agent shall use reasonable efforts to minimize the disruption to the operation of Grantor’s business on the Property.

5. INSURANCE. The Grantor will maintain or cause to be maintained insurance on the Property as required by the Subordinated Lien Debt Documents.

6. INSURANCE PROCEEDS.

(a) The Grantor agrees to give immediate notice to the Second Priority Collateral Agent of any fire, material damage or other material casualty to all or any material part of the Property.

(b) In case of any damage or destruction to the Property, or any other casualty, all proceeds of insurance may be applied by Grantor (and Second Priority Collateral Agent shall make available such proceeds to Grantor) to the restoration or replacement of the property which was the subject of such loss provided that:

 

I-7


(i) Grantor shall have demonstrated to the reasonable satisfaction of Second Priority Collateral Agent that the Property will be restored to substantially its previous condition or will be replaced by a substantially identical property; and

(ii) the Second Priority Collateral Agent shall have received, to the extent reasonably required by Second Priority Collateral Agent and to the extent available, an endorsement to the lender’s policy of title insurance, if any, issued in favor of the Second Priority Collateral Agent in connection with this Deed of Trust (A) updating the effective date of such policy to the date such insurance proceeds are made available to the Grantor, and (B) showing no new liens or encumbrances except for Liens permitted under the Subordinated Lien Debt Documents and otherwise permitted under Section 11 hereof.

7. EMINENT DOMAIN PROCEEDS.

(a) Immediately upon obtaining knowledge of the institution of any proceedings for the condemnation of all or any material part of the Property or the whole or any part of the buildings, structures and improvements located on the Real Estate, Grantor will notify Second Priority Collateral Agent of the pendency of such proceedings. Second Priority Collateral Agent may participate in any such proceedings, and Grantor shall from time to time deliver to Second Priority Collateral Agent all instruments requested by it to permit such participation. Grantor shall, at its expense, diligently prosecute any such proceeding and shall consult with the Second Priority Collateral Agent, its attorneys and experts to the extent requested by Second Priority Collateral Agent and reasonably cooperate with them in any defense of any such proceedings.

(b) In case of any condemnation for public use or public injury to the Property, all awards of damages on account of such condemnation, shall be applied by the Grantor (and Second Priority Collateral Agent shall make available such proceeds to Grantor) to the restoration or replacement of the Property which was the subject of such condemnation provided that:

(i) Grantor shall have demonstrated to the reasonable satisfaction of Second Priority Collateral Agent that the Property will be restored to substantially its previous condition or will be replaced by a substantially identical property; and

(ii) the Second Priority Collateral Agent shall have received, to the extent reasonably required by Second Priority Collateral Agent and to the extent available, an endorsement to the lender’s policy of title insurance, if any, issued in favor of the Second Priority Collateral Agent in connection with this Deed of Trust (A) updating the effective date of such policy to the date such eminent domain proceeds are made available to the Grantor, and (B) showing no new liens or encumbrances except for Liens permitted under the Subordinated Lien Debt Documents and Liens otherwise permitted under Section 11 hereof.

(c) In the event eminent domain proceeds are released to the Grantor for the restoration of the Property as provided above and such proceeds are not sufficient to permit the complete restoration of the Property, the Grantor shall nevertheless fully restore the Property and shall supply any deficiency in the eminent domain proceeds with its own funds.

 

I-8


8. SUBORDINATION. This Deed of Trust is subject and subordinate to the First Lien Deed of Trust on the terms and conditions set forth in the Intercreditor Agreement. Notwithstanding the foregoing, nothing in this Section 8 shall be deemed a waiver of Second Priority Collateral Agent’s rights to prohibit the existence of any prior mortgages on the Real Property (other than the First Lien Deed of Trust).

9. WAIVER; REDEMPTION. Whether or not for consideration paid or payable to the Second Priority Collateral Agent or any other Subordinated Lien Secured Party, except to the extent that such forbearance or waiver expressly in writing releases or affects the original liability of the Grantor or the priority of this Deed of Trust, no forbearance on the part of the Second Priority Collateral Agent or any other Subordinated Lien Secured Party or extension of the time for the payment or performance of the whole or any part of the Obligations, whether oral or in writing, or any other indulgence given by the Second Priority Collateral Agent or any other Subordinated Lien Secured Party to the Grantor or to any other party claiming any interest in or to the Property, shall operate to release or in any manner affect the original liability of the Grantor, or the priority of this Deed of Trust or to limit, prejudice or impair any right of the Second Priority Collateral Agent or any other Subordinated Lien Secured Party, including, without limitation, the right to realize upon the security, or any part thereof, for the Obligations, notice of any such extension, forbearance or indulgence being hereby waived by the Grantor, and all those claiming by, through or under the Grantor; and no consent or waiver, express or implied, by the Second Priority Collateral Agent or any other Subordinated Lien Secured Party to or of any default by the Grantor shall be construed as a consent or waiver to or of any further default in the same or any other term, condition, covenant or provision of this Deed of Trust or of the Obligations. In case redemption is had by the Grantor after foreclosure proceedings have begun, the Second Priority Collateral Agent shall be entitled to collect all costs, charges and expenses incurred up to the time of redemption.

10. NOTICE. Wherever notice, demand or a request may properly be given to the Grantor or Second Priority Collateral Agent under this Deed of Trust, the same shall be given in accordance with the terms of the Intercreditor Agreement.

11. PRIORITY OF LIEN. Except for Liens permitted under the Subordinated Lien Debt Documents, and Liens for real estate taxes and assessments prior to delinquency, the Grantor shall not create or permit any encumbrance on the Real Property regardless of whether such encumbrance is inferior to this Deed of Trust.

12. MAINTENANCE OF GRANTOR; TRANSFERS. Except as otherwise provided in the Subordinated Lien Debt Documents, the Grantor shall not convey, transfer, assign, encumber, pledge or otherwise dispose of any legal, equitable or beneficial interest in the Grantor or the Property or any part thereof, or otherwise voluntarily or by operation of law transfer any legal or equitable interest in the Real Estate or in the equity of redemption in the Real Estate, or any part thereof.

13. INDEMNIFICATION/SUBROGATION.

(a) The Grantor will indemnify and hold harmless the Second Priority Collateral Agent and each other Subordinated Lien Secured Party from and against any and all claims,

 

I-9


demands, losses, judgments and liabilities (including liabilities for penalties) of whatever kind or nature, and will reimburse the Second Priority Collateral Agent for all costs and expenses, including reasonable attorneys’ fees, growing out of or resulting from the exercise by the Second Priority Collateral Agent of any right or remedy granted to it under this Deed of Trust. In no event shall the Second Priority Collateral Agent or any other Subordinated Lien Secured Party be liable for any manner or thing in connection with this Deed of Trust other than to account for monies actually received by and in accordance with the terms hereof.

(b) Should any Subordinated Lien Debt be used directly or indirectly to pay off, discharge or satisfy, in whole or in part, any lien or encumbrance upon the Property on a parity with or superior to the lien hereof, then as additional security hereunder, until such time as the Obligations have been performed and paid in full in accordance with the Subordinated Lien Debt Documents, the Second Priority Collateral Agent shall be subrogated to any and all rights, equal or superior titles, liens and equities owned or claimed by any owner or holder of said outstanding liens, charges and indebtedness, regardless of whether said liens, charges and indebtedness are acquired by assignment or have been released of record by the holder thereof upon payment.

14. OTHER AGREEMENTS. This Deed of Trust is also given as security for the performance of all covenants and agreements contained in the Subordinated Lien Debt Documents. The Grantor agrees that the Subordinated Lien Debt Documents are incorporated herein by reference and made a part hereof. The Grantor agrees faithfully to perform and observe all of its obligations under the terms of the Subordinated Lien Debt Documents and the Intercreditor Agreement. To the extent that any provisions of this Deed of Trust shall be in conflict or be inconsistent with any provisions of the Intercreditor Agreement, the provisions of the Intercreditor Agreement shall govern and control to the extent permitted by applicable law.

15. AMENDMENTS. If the maturity of any of the Subordinated Lien Debt or any part thereof is extended or varied or if any part of the security therefor is released, all persons now or at any time hereafter liable with respect to the Subordinated Lien Debt Documents, shall be held to assent to such extension, variation or release, and their liability and the lien and all provisions hereof shall continue in full force, the right of recourse, if any, against all such persons being expressly reserved by the Second Priority Collateral Agent, notwithstanding such extension, variation or release. Any person or entity taking a junior deed of trust or other lien upon the Property or any interest therein, shall take said lien subject to the rights of Second Priority Collateral Agent herein to amend, modify, and supplement this Deed of Trust and to the right of any Subordinated Lien Secured Party to amend, modify and supplement any of the other Subordinated Lien Debt Documents with respect to any Subordinated Lien Debt and to vary the rate of interest and the method of computing the same, and to impose additional fees and other charges, and to extend the maturity of said Subordinated Lien Debt, and to grant partial releases of the lien of this Deed of Trust, in each and every case, to the extent permitted under applicable Laws and Other Governmental Requirements, without obtaining the consent of the holder of such junior lien and without the lien of this Deed of Trust losing its priority over the rights of any such junior lien. Nothing contained in this section, however, shall be construed as waiving any provision contained herein which provides, among other things, that it shall constitute an Event of Default if the Property is sold, conveyed, or encumbered in violation of this Deed of Trust or any of the other Subordinated Lien Debt Documents.

 

I-10


16. EXPENSES OF TRUSTEE. If Trustee or Second Priority Collateral Agent or any other Subordinated Lien Secured Party shall be made a party to or shall intervene in any action or proceeding, whether in court or before any governmental agency, affecting the Property or the title thereto or the interest of Trustee or Second Priority Collateral Agent under this Deed of Trust, including, without limitation, any form of condemnation or eminent domain proceeding, Trustee and Second Priority Collateral Agent shall be reimbursed by Grantor upon demand for all costs, charges and reasonable attorneys’ fees incurred by them or either of them in any such case. All such sums shall be secured hereby, are due and payable within ten (10) Business Days after written demand, and if not paid within ten (10) Business Days after written demand, shall bear interest at the highest applicable post-default rate specified in the Subordinated Lien Debt Documents (the “Default Rate”) from and after the date that is ten (10) Business Days after written demand.

17. RIGHT TO MAKE ADVANCES. Upon the occurrence and during the continuance of an Event of Default, such Event of Default not having previously been waived, remedied or cured, Second Priority Collateral Agent shall have the right to advance or disburse funds for the performance of any term, warranty, covenant, condition, or obligation contained in this Deed of Trust. All sums advanced or disbursed by Second Priority Collateral Agent for performance of any such term, warranty, covenant, condition or obligation shall bear interest at the Default Rate from and after the date that is ten (10) Business Days after written demand therefor until paid, and such amounts, together with any amounts advanced or disbursed for the performance of any term, warranty, covenant, condition or obligation contained in any other Subordinated Lien Debt Document shall be secured hereby, and held to be a prior charge to the lien of this Deed of Trust upon foreclosure, and shall be paid by Grantor upon demand. Failure to pay within ten (10) Business Days after written demand shall constitute an Event of Default.

18. HAZARDOUS MATERIALS WARRANTIES AND INDEMNIFICATION.

(a) The Grantor shall comply with all the terms and provisions, if any, of the Subordinated Lien Debt Documents relating to Hazardous Materials, Environmental Laws or Environmental Liability (the “Hazardous Materials Provisions”).

(b) The warranties, representations, covenants and indemnifications set forth in the Hazardous Materials Provisions shall survive the payment and performance of the Obligations and any exercise by Second Priority Collateral Agent of any remedies under this Deed of Trust, including without limitation, the power of sale, or any other remedy in the nature of foreclosure, and shall not merge with any deed given by Grantor to Second Priority Collateral Agent in lieu of foreclosure or any deed under a power of sale.

(c) Without limiting the generality of the foregoing but subject to the terms of the Subordinated Lien Debt Documents and the Hazardous Materials Provisions, the Grantor, and the Property and all alterations thereof, shall comply in all material respects with all Governmental Approvals, Laws and Other Governmental Requirements, and Other Applicable Requirements now or hereafter in effect and applicable relating to the presence, abatement, removal, disposal, transportation or treatment of materials containing asbestos except where the failure to do so, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect. The Second Priority Collateral Agent may (but shall not be obligated

 

I-11


to), upon the occurrence and during the continuance of an Event of Default or upon a reasonable belief that asbestos or materials containing asbestos are located at the Real Property but not more frequently than once each 12-month period at the Grantor’s expense, subject to the terms of this Deed of Trust conduct such investigations as the Second Priority Collateral Agent deems reasonable to determine whether asbestos or materials containing asbestos are being released into the environment at the Property. Subject to the rights of tenants under the Leases and the provisions of the Subordinated Lien Debt Documents, the Grantor shall cooperate with the Second Priority Collateral Agent in conducting such investigations. The Second Priority Collateral Agent and its officers, employees, agents and contractors shall have and are hereby granted the right to enter upon the Property at reasonable times during normal business hours upon reasonable notice to Grantor for the foregoing purposes, and Grantor (and any of its officers, employees and agents) shall be entitled to accompany Second Priority Collateral Agent and its officers, employees, agents and contractors in connection with any such investigations. Second Priority Collateral Agent shall use reasonable efforts to minimize the disruption to the operation of the business being conducted on the Property by Grantor or any tenants under the Leases.

19. PROTECTION OF COLLATERAL TRUSTEE’S SECURITY. Upon the occurrence and during the continuance of an Event of Default, such Event of Default not having previously been waived, remedied or cured, subject to the Intercreditor Agreement, Second Priority Collateral Agent, at Second Priority Collateral Agent’s option, may make such appearances, disburse such sums and take such action as Second Priority Collateral Agent deems reasonably necessary to protect Second Priority Collateral Agent’s interest, including, but not limited to, disbursement of reasonable attorneys’ fees, payment, contest or compromise of any lien or security interest which is prior to the lien or security interest of this Deed of Trust, and entry upon the Property to make repairs. Any amounts disbursed by Second Priority Collateral Agent pursuant to this Section 19, with interest thereon, shall become a portion of the Obligations. Unless Grantor and Second Priority Collateral Agent agree to other terms of payment, such amounts shall be payable within ten (10) Business Days after written notice from Second Priority Collateral Agent to Grantor requesting payment thereof and shall bear interest from the date that is ten (10) Business Days after such written demand therefor at the Default Rate unless collection from Grantor of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from Grantor under applicable law. Grantor shall have the right to prepay such amounts in whole or in part at any time in accordance with the provisions of the Subordinated Lien Debt Documents. Nothing contained in this Section 19 shall require Second Priority Collateral Agent to incur any expense or do any act.

20. LEASES AND RENTS.

(a) As part of the consideration for the Obligations, the Grantor hereby absolutely and unconditionally assigns and transfers to Second Priority Collateral Agent all of Grantor’s right, title and interest in and to the Leases and the Revenues to the extent required under the Second Priority Secured Subordinated Notes Indenture and the Subordinated Lien Debt Documents, including those now due, past due or to become due by virtue of any Lease for the occupancy or use of all or any part of the Property.

 

I-12


(b) Grantor agrees that neither the foregoing assignment of Leases and Revenues, nor the exercise of any of Second Priority Collateral Agent’s rights and remedies under Section 22 hereof shall be deemed to make Second Priority Collateral Agent or any Subordinated Lien Secured Party a mortgagee-in-possession or otherwise responsible or liable in any manner with respect to the Leases, the Property or the use, occupancy, enjoyment or operation of all or any portion thereof, unless and until Second Priority Collateral Agent, in person or by agent, assumes actual possession thereof. Nor shall the appointment of any receiver for the Property by any court at the request of Second Priority Collateral Agent or by agreement with Grantor, or the entering into possession of any part of the Property by such receiver, be deemed to make Second Priority Collateral Agent or any Subordinated Lien Secured Party a mortgagee-in-possession or otherwise responsible or liable in any manner with respect to the Leases, the Property or the use, occupancy, enjoyment or operation of all or any portion thereof.

(c) If Second Priority Collateral Agent or a court-appointed receiver enters upon, takes possession of and maintains control of the Property pursuant to Section 22 hereof, all Revenues thereafter collected shall be applied first to the costs of taking control of and managing the Property and collecting the Revenues, including, but not limited to, reasonable attorneys’ fees actually incurred, receiver’s fees, premiums on receiver’s bonds, costs of repairs to the Property, premiums on insurance policies, impositions and other charges on the Property, and the costs of discharging any obligation or liability of Grantor as landlord, lessor or licensor of the Property and then to the Obligations in accordance with the terms of the Intercreditor Agreement. Second Priority Collateral Agent or the receiver shall have access to the books and records used in the operation and maintenance of the Property and shall be liable to account only for those Revenues actually received. Neither Second Priority Collateral Agent nor any Subordinated Lien Secured Party shall be liable to Grantor, anyone claiming under or through Grantor or anyone having an interest in the Property by reason of anything done or left undone by Second Priority Collateral Agent pursuant to Section 22 hereof, except to the extent of any gross negligence and willful misconduct of Second Priority Collateral Agent or such Subordinated Lien Secured Party. If the Revenues are not sufficient to meet the costs of taking control of and managing the Property and collecting the Revenues, any monies expended by Second Priority Collateral Agent for such purposes shall become a portion of the Obligations. Unless Second Priority Collateral Agent and Grantor agree in writing to other terms of payment, such amounts shall be payable within ten (10) Business Days after written notice from Second Priority Collateral Agent to Grantor requesting payment thereof and shall bear interest from the date that is ten (10) Business Days after such written demand at the Default Rate, unless payment of interest at such rate would be contrary to applicable law, in which event such amounts shall bear interest at the highest rate which may be collected from Grantor under applicable law. The entering upon and taking possession of and maintaining of control of the Property by Second Priority Collateral Agent or the receiver pursuant to Section 22 hereof and the application of Revenues as provided herein shall not cure or waive any Event of Default or invalidate any other right or remedy of Second Priority Collateral Agent hereunder.

21. EVENTS OF DEFAULT. The Grantor shall be in default under this Deed of Trust (an “Event of Default”) upon the happening of any “Event of Default” under and as defined in the Second Priority Secured Subordinated Notes Indenture.

 

I-13


22. REMEDIES OF COLLATERAL TRUSTEE. Second Priority Collateral Agent and the Subordinated Lien Secured Parties shall have, but shall not be limited to, the following remedies upon the occurrence and during the continuance of an Event of Default, such Event of Default not having previously been waived, remedied or cured in accordance with the Subordinated Lien Debt Documents, which remedies are distinct and cumulative to any other right or remedy under this Deed of Trust or any other Subordinated Lien Debt Document or afforded at law or equity or by contract, and may be exercised concurrently, independently or successively with all other available remedies:

(a) Foreclosure. Upon the occurrence and during the continuance of any Event of Default, Second Priority Collateral Agent may, at its option and without further notice except as may be required by law or herein or in the other Subordinated Lien Debt Documents, subject to the terms of the Second Priority Secured Subordinated Notes Indenture, declare the Loan and all other sums secured hereby or otherwise due pursuant to the Subordinated Lien Debt Documents immediately due and payable, including any prepayment premium, and shall subject to the Intercreditor Agreement have the right to commence an action to judicially foreclose this Deed of Trust or have the Trustee take possession of the Property and proceed in accordance with applicable law to sell the Property at public auction, as a whole or in such parcels, for cash or credit and, in addition to the requirements imposed by state law, upon any terms as the Trustee deem appropriate. Second Priority Collateral Agent may become the purchaser of the Property so sold, and no purchaser shall be required to see to the proper application of the purchase money. The proceeds of any such sale shall be applied as required by applicable law in effect on the date hereof.

(b) Possession. Immediately upon the occurrence and during the continuance of an Event of Default, such Event of Default not having previously been waived, remedied or cured in accordance with the Subordinated Lien Debt Documents, and subject to the terms of the Subordinated Lien Debt Documents and the Intercreditor Agreement, Second Priority Collateral Agent, its agents or attorneys-in-fact or the Trustee, at the request of Second Priority Collateral Agent, are authorized to enter and take possession of the Real Property by actual physical possession or by written notice served personally upon or sent by registered or certified mail, postage prepaid, to Grantor, as Second Priority Collateral Agent may elect, and Grantor shall surrender possession upon request and Second Priority Collateral Agent may take possession without further authorization required. Following any such entry or taking of possession, Second Priority Collateral Agent may, either itself or through its agents:

(i) manage and operate the Property or any part thereof;

(ii) lease, sublease or assign existing Leases of all or any part or parts of the Real Property for such periods of time and upon such terms and conditions as Second Priority Collateral Agent may deem proper;

(iii) enforce, cancel or modify any of the Leases;

(iv) demand, collect, sue for, attach, levy, recover, receive, compromise and adjust, and make, execute and deliver receipts and releases for, all Revenues, rents and profits that may then or thereafter become due, owing or payable with respect to the Real Property or any part thereof, from any present or future lessees, tenants, subtenants or occupants thereof;

 

I-14


(v) institute, prosecute to completion or compromise and settle all summary proceedings and actions for rent or for removing any and all lessees, tenants, subtenants or occupants of the Real Property or any part or parts thereof;

(vi) enforce, enjoin or restrain the violation of any of the terms, provisions and conditions of any of the Leases;

(vii) make such repairs and alterations to the Real Property as Second Priority Collateral Agent may, in its reasonable discretion, deem proper;

(viii) pay from and out of the Revenues, rents and profits collected or from or out of any other funds of Grantor in its possession any insurance premiums, any taxes, assessments, water rates, sewer rates, or other governmental charges levied, assessed or imposed against the Real Property or any portion thereof, and any other charges, costs or expenses which Second Priority Collateral Agent deems necessary or advisable for it to pay in the management or operation of the Real Property, including, without limitation, the fees and costs of its agents, the costs of repairs and alterations necessary to maintain the Real Property in a first-class condition or to lease the Real Property to another, commissions for renting the Real Property or any portions thereof, and legal expenses in enforcing claims, preparing papers or for any other services that may be required; and

(ix) generally perform any other act, deed, matter or thing whatsoever that ought to be performed in and about or with respect to the Real Property as fully as Grantor might do.

After payment of proper costs and charges (including any payment owing to Second Priority Collateral Agent pursuant to the provisions of this Section 22 and a reasonable commission to any agents engaged by Second Priority Collateral Agent provided that any commission paid to any affiliate of Second Priority Collateral Agent shall not exceed market rates), Second Priority Collateral Agent shall apply the net amounts of any Revenues or other amounts received by it from the Real Property to the payment of the Obligations in accordance with the terms of the Intercreditor Agreement. The power granted in this paragraph is coupled with an interest, and is irrevocable.

(c) Receiver. Upon the occurrence and during the continuance of an Event of Default, such Event of Default not having previously been waived, remedied or cured in accordance with the Subordinated Lien Debt Documents, Second Priority Collateral Agent, subject to the terms of the Intercreditor Agreement, at the time provided by the Subordinated Lien Debt Documents and to the extent permitted by law and without regard to the value or adequacy of its security, shall be entitled as a matter of right to the appointment of a receiver to enter upon and take possession of the Property and to collect all rents, revenues, issues, income, and profits thereof and apply the same as the court may direct. The receiver shall have all rights and powers permitted under applicable law and such other powers as the court making such appointment shall confer. The expenses, including receivers’ fees, reasonable attorneys’ fees,

 

I-15


costs and agents’ compensation, incurred pursuant to the powers herein contained shall be secured by this Deed of Trust. The right to enter and take possession of and manage and operate the Property, and to collect the rents, issues and profits thereof, whether by receiver or otherwise, shall be cumulative with any other right or remedy hereunder or afforded by law, and may be exercised concurrently therewith or independently thereof. Second Priority Collateral Agent and Trustee shall be liable to account only for such rents, issues and profits as they may actually receive, whether from the receiver or pursuant to other provisions of the applicable Subordinated Lien Debt Documents. Notwithstanding the appointment of any receiver or other custodian, Second Priority Collateral Agent shall be entitled as Subordinated Lien Secured Party hereunder and under other applicable security agreement provisions of the Intercreditor Agreement and the Subordinated Lien Debt Documents but subject to the terms of the Intercreditor Agreement to the possession and control of any cash, deposits or instruments at the time held by or payable or deliverable under the terms of any Subordinated Lien Debt Document to Second Priority Collateral Agent. In no event shall any of the foregoing provisions be deemed to relieve or release Second Priority Collateral Agent, Trustee or any of the Lenders from any liability resulting from its own gross negligence or willful misconduct.

(d) Injunction. In addition to any other remedies Second Priority Collateral Agent and the Subordinated Lien Secured Parties may have under this Deed of Trust, any of the Subordinated Lien Debt Documents, or any applicable law, subject to the terms of the Intercreditor Agreement, Second Priority Collateral Agent may seek from a court of competent jurisdiction a mandatory injunction requiring Grantor to take such action as shall be necessary to comply with its covenant to maintain the Real Property.

23. MISCELLANEOUS.

(a) Any provision contained in this Deed of Trust, the Subordinated Lien Debt Documents or elsewhere notwithstanding, the Second Priority Collateral Agent shall not be entitled to receive or collect, nor shall the Grantor be obligated to pay, interest on any of the monies secured hereby in excess of the maximum rate of interest permitted by the laws of the state applicable thereto, and if any such provision shall ever be construed or held to permit the collection or to require the payment of any amount of interest in excess of that permitted by the laws of the state applicable thereto, the provisions of this Section 23(a) shall control and shall override any contrary or inconsistent provision in this Deed of Trust, the Subordinated Lien Debt Documents or elsewhere. The intention of the parties is to conform strictly to the usury laws now in force and every instrument relating to payment of any of the monies secured hereby shall be held subject to reduction to the amount allowed under said usury laws as now or hereafter construed by the courts having jurisdiction.

(b) If the Second Priority Collateral Agent shall have proceeded to invoke any right, remedy or recourse permitted under this Deed of Trust or otherwise require performance of any other obligation of the Grantor, and shall thereafter elect to discontinue or abandon the same for any reason, the Second Priority Collateral Agent shall have the unqualified right to do so and in such event the Grantor and the Second Priority Collateral Agent shall be restored to their former positions with respect to the Obligations. In such case this Deed of Trust, all other obligations, and all rights, remedies and recourse of the Second Priority Collateral Agent shall continue as if the same had not been invoked.

 

I-16


(c) No waiver at any time of any of the provisions or conditions of this Deed of Trust or of any other obligation of the Grantor shall be construed as a waiver of any other of the conditions or provisions of this Deed of Trust or of any of such obligations, nor shall such waiver in any instance be construed as a waiver of the same provision or condition in other or subsequent instances. A consent or approval given by the Second Priority Collateral Agent in one instance shall not render such consent or approval unnecessary in future instances.

(d) This Deed of Trust may not be waived, changed or discharged orally, but only by an agreement in writing and signed by the party against whom enforcement of any waiver, change or discharge is sought and any oral waiver, change or discharge of any provision of this Deed of Trust by a representative of any party shall be without authority and of no force and effect.

(e) If any term or provision of this Deed of Trust or the application thereof to any person or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Deed of Trust or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Deed of Trust shall be valid and shall be enforced to the fullest extent permitted by law.

(f) Section headings in this Deed of Trust are for convenience and reference only and the words and phrases contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of any of the provisions herein.

(g) The laws of State of New York shall govern the construction, interpretation, validity and legal effect of this Deed of Trust and the rights and duties of the parties hereunder, except the laws of the state in which the Property is located shall govern creation of the lien created under and the procedures for enforcing the rights and remedies of the Second Priority Collateral Agent hereunder.

(h) The word “Grantor”, as used herein, shall mean the person or persons named at the beginning of this instrument as the Grantor, any subsequent owner or owners of the equity of redemption of the Real Estate.

(i) The term “Second Priority Collateral Agent”, as used herein, shall mean the Second Priority Collateral Agent named and acting in the capacity described at the beginning of this instrument, and its permitted successors and assigns in such capacity, in accordance with the terms of the Intercreditor Agreement and the Subordinated Lien Debt Documents. Notwithstanding any other provision of this Deed of Trust, the rights of the parties hereunder are subject to the provisions of the Intercreditor Agreement and the Subordinated Lien Debt Documents, including the provisions thereof pertaining to the rights and responsibilities of the Second Priority Collateral Agent as collateral trustee under the Intercreditor Agreement. Unless the context shall otherwise clearly indicate, the term Second Priority Collateral Agent as used herein shall be deemed to refer to the Second Priority Collateral Agent acting on behalf of the Subordinated Lien Secured Parties pursuant to the Intercreditor Agreement.

 

I-17


(j) Further Rights and Duties of Trustee. Trustee shall be under no duty to take any action hereunder except as expressly required, to perform any act which would involve them in expense or liability, or to institute or defend any suit in respect hereof, unless properly indemnified to their satisfaction. All reasonable expenses, charges, reasonable counsel fees and other disbursements incurred by Trustee in and about the administration and execution of the trust created hereby, and the performance of their duties and powers hereunder shall be secured by this Deed of Trust prior to the Subordinated Lien Obligations, and except as otherwise expressly set forth herein, shall bear interest at the Default Rate from and after the date that is thirty (30) days after written demand therefor. Second Priority Collateral Agent, with or without cause, is hereby authorized and empowered to substitute and appoint, from time to time, by an instrument recorded wherever this Deed of Trust is recorded, a trustee in the place of any Trustee hereunder.

(k) The rights and remedies arising under and contained in this Deed of Trust shall be separate, distinct and cumulative, and none of them shall be in exclusion of any other. All remedies arising under or contained in this Deed of Trust shall be in addition to every other remedy now or hereafter existing at law or in equity or by statute. Neither any course of dealing by the Trustee, the Second Priority Collateral Agent or any Subordinated Lien Secured Party, nor any failure or delay on their or its part to exercise any right, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege.

(l) Consent to Jurisdiction; Waivers.

(i) Grantor hereby irrevocably and unconditionally submits, for itself and its property, to the nonexclusive jurisdiction of the courts of the jurisdiction in which the Real Property is located, in any action or proceeding arising out of or relating to this Deed of Trust, or for recognition or enforcement of any judgment, and the Grantor hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such court. Each of the parties hereto agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Deed of Trust shall affect any right that the Second Priority Collateral Agent or any Subordinated Lien Secured Party may otherwise have to bring any action or proceeding relating to the Subordinated Lien Debt Documents against any of the Grantors or its affiliates or its properties in the courts of any jurisdiction.

(ii) Grantor hereby irrevocably and unconditionally waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Deed of Trust in any court referred to in the foregoing paragraph. Grantor hereby irrevocably waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(iii) Each party to this Deed of Trust irrevocably consents to service of process in the manner provided for notices in Section 10. Nothing in this Deed of Trust will affect the right of any party to this Deed of Trust to serve process in any other manner permitted by law.

 

I-18


(iv) EACH PARTY HERETO WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING UNDER THIS DEED OF TRUST OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS DEED OF TRUST. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS DEED OF TRUST, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH PARTY HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS DEED OF TRUST, AND THAT EACH PARTY WILL CONTINUE TO RELY ON THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 23(L)(IV) AND EXECUTED BY EACH OF THE PARTIES), AND THIS WAIVER WILL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS OF OR TO THIS DEED OF TRUST. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(m) All of the grants, covenants, terms, provisions, and conditions herein shall run with the land and shall apply to, bind, and inure to the benefit of the successors and assigns of Grantor and the successors and assigns of Second Priority Collateral Agent. No provision of this paragraph shall be construed or shall operate to permit a sale or transfer of the Property except in strict accordance with the terms of this Deed of Trust, the other Subordinated Lien Debt Documents and the Intercreditor Agreement.

(The next page is the signature page.)

 

I-19


[SIGNATURE PAGE TO DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, AND SECURITY AGREEMENT DATED                , 2013]

IN WITNESS WHEREOF, Grantor has executed this Deed of Trust under seal as of the date first hereinabove written.

 

GRANTOR:
LIBERMAN BROADCASTING OF CALIFORNIA LLC
By:    
  Name:
  Its:

STATE OF CALIFORNIA

COUNTY OF                        

On                     , 2012, before me,             , the undersigned, a Notary Public in and for said State, personally appeared                     who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

 

  Signature    
     Name:     
    (typed or printed)

(Seal)

 

I-20


EXHIBIT A

Legal Description

All that certain real property situated in the County of Los Angeles, State of California, described as follows:

Parcel B of Parcel Map L.A. No. 6841, in the City of Los Angeles, County of Los Angeles, State of California, filed in Book 278, Pages 91 through 93 inclusive of Parcel Maps, in the Office of the County Recorder of said County.

Assessor’s Parcel Number: 5066-016-038

 

I-21


EXHIBIT J

                    , 2012

Lawyers Title Company

888 S. Figueroa Street, Suite 2100

Los Angeles, CA 90017

Attention: Mai-Ly Marsh, Senior Escrow Officer

 

  Re: Substitution of Trustee and Full Reconveyance of Deed of Trust/5930 Sawyer Street, Los Angeles, California (the “Property”)

Escrow No:                    

Ladies and Gentlemen:

This letter constitutes recording instructions to Commonwealth Land Title Insurance Company (“Escrow Holder”) in connection with the sale of the captioned Property. Enclosed is an original signed and notarized Substitution of Trustee and Deed of Full Reconveyance (the “Reconveyance”) with respect to that certain Deed of Trust, Assignment of Rents and Leases, and Security Agreement dated as of                     , executed by Liberman Broadcasting of California LLC (“Liberman”), as Grantor, to Escrow Holder, as Trustee, for the benefit of U.S. Bank National Association (“U.S. Bank”), for itself and other lenders and parties.

Escrow Holder is hereby authorized to complete the Reconveyance with the recording information of the recorded Deed of Trust to be reconveyed and to record the Reconveyance in Official Records of Los Angeles County, with no payoff amount due U.S. Bank and no further confirmations or instructions required, at the close of escrow of the sale of the Property pursuant to that certain Agreement of Purchase and Sale and Joint Escrow Instructions dated as of October 3, 2012 (as amended, the “Agreement”), by and between Liberman Broadcasting of California LLC and CIM Group Acquisitions, LLC.

Thank you for your assistance and cooperation in connection with this matter.

 

U.S. BANK NATIONAL ASSOCIATION

By:

 

 

 

Its:

 

 

 

Name:

 

 

 

J-1


RECORDING REQUESTED BY

  
 

AND WHEN RECORDED MAIL TO

  
 
Name   
 
Street Address   
 
City, State, Zip   
 
Order No. -     
RECORDER’S USE    SPACE ABOVE THIS LINE FOR

SUBSTITUTION OF TRUSTEE AND

DEED OF FULL RECONVEYANCE

The undersigned, in and under the provisions of that certain Deed of Trust, Assignment of Rents and Leases, and Security Agreement (the “Deed of Trust”), executed by LIBERMAN BROADCASTING OF CALIFORNIA LLC, a California limited liability company, as Grantor, to COMMONWEALTH LAND TITLE INSURANCE COMPANY, as Trustee for the benefit of U.S. BANK NATIONAL ASSOCIATION, as Second Priority Collateral Agent for itself and other lenders and parties (collectively, the “Beneficiary”), dated                  and recorded in the Official Records of the office of the Recorder of Los Angeles County, State of California, on                , as Instrument No .                 , does in accordance with the provisions of said Deed of Trust, hereby give notice of the Substitution and Appointment of U.S. BANK NATIONAL ASSOCIATION, in place and instead of COMMONWEALTH LAND TITLE INSURANCE COMPANY, the Trustee above named, and does hereby vest in said substituted Trustee, all the rights, title, estate, power, duty and trusts conferred by said Deed of Trust upon the Trustee therein named. And whereas the indebtedness secured by the Deed of Trust above mentioned has been fully satisfied