| ITEM 1.01 |
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT |
Additional 7.125% Senior Secured Notes due 2028
On March 20, 2023, Salem Media Group, Inc. (the “Company”) issued and sold an aggregate principal amount of $44,685,000 in additional 7.125% Senior Secured Notes due 2028 (the “Additional 2028 Notes”) pursuant to an indenture, dated as of September 10, 2021 (the “Base Indenture”), as amended and supplemented by a supplemental indenture, dated as of March 20, 2023 (the “First Supplemental Indenture” and together with the Base Indenture, the “2028 Notes Indenture”), among the Company, the guarantors named therein (the “Subsidiary Guarantors”) and U.S. Bank Trust Company, National Association (as successor in interest to U.S. Bank National Association), as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). The Additional 2028 Notes are guaranteed on a senior secured basis by each of the Subsidiary Guarantors. The Additional 2028 Notes will accrue interest from March 20, 2023 with an initial interest payment date of June 1, 2023 and will otherwise have the same terms as, and be treated as a single class for all purposes of the Indenture with, the Company’s outstanding 7.125% Senior Secured Notes due 2028 originally issued on September 10, 2021 (the “Existing 2028 Notes” and together with the Additional 2028 Notes, the “Notes”), except that the Additional 2028 Notes have been issued under a separate CUSIP number from the Existing 2028 Notes.
The Additional 2028 Notes were sold to certain purchasers who the Company believes to be qualified institutional buyers pursuant to a purchase agreement, dated as of September 10, 2021 (as amended, supplemented or otherwise modified to the date hereof, the “Purchase Agreement”), among the Company, the subsidiaries of the Company party thereto and the purchasers named therein (the “Purchasers”).
The Company will use a portion of the net proceeds of the sale of the Additional 2028 Notes to redeem in full its outstanding 6.750% Senior Secured Notes due 2024 (the “2024 Notes”) in an aggregate principal amount of $36,535,000, which are governed by that certain indenture, dated as of May 19, 2017 (as amended, supplemented or otherwise modified to the date hereof, the “2024 Notes Indenture”), among the Company, the guarantors named therein and U.S. Bank National Association, as predecessor trustee and collateral agent to UMB Bank, N.A., as successor trustee (the “2024 Notes Trustee”) and collateral agent, pursuant to an irrevocable redemption notice issued by the Company on February 20, 2023 in accordance with the 2024 Notes Indenture (the “2024 Notes Redemption”). The 2024 Notes will be redeemed on March 27, 2023 (the “Redemption Date”) at a redemption price equal to 100% of the principal amount of the 2024 Notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the Redemption Date.
In connection with the 2024 Notes Redemption, on March 20, 2024, the Company satisfied and discharged its obligations under the 2024 Notes Indenture by delivering to the 2024 Notes Trustee all amounts due to be paid to effect the 2024 Notes Redemption on the Redemption Date.
The Additional 2028 Notes and the related guarantees have not been and will not be registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction, and may not be offered or sold in the United States or to U.S. persons absent registration or an applicable exemption from, or in a transaction not subject to, the registration requirements of the Securities Act or any state securities laws.
First Supplemental Indenture
In addition to providing for the issuance of the Additional 2028 Notes, the First Supplemental Indenture added certain additional subsidiaries of the Company as Subsidiary Guarantors of the Notes and amended the 2028 Notes Indenture to decrease the Consolidated Total Debt Ratio (as defined in the 2028 Notes Indenture) which must be met in order for the Company to pay certain quarterly cash dividends.
A copy of each of the Base Indenture, the First Supplemental Indenture and the Purchase Agreement is attached as Exhibit 4.1, Exhibit 4.2 and Exhibit 4.3, respectively, to this current report on Form 8-K. The foregoing descriptions of the Base Indenture, the First Supplemental Indenture and the Purchase Agreement are qualified in their entirety by reference to such exhibits, which are incorporated herein by reference.
