<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 13, 1997
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BRILL MEDIA COMPANY, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 52-2071822
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
BRILL MEDIA MANAGEMENT, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1877458
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
BMC HOLDINGS, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 52-2071824
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
BRILL NEWSPAPERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1170289
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
BRILL RADIO, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1148743
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CADILLAC NEWSPAPERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 54-1170305
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-2438162
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 7398 62-1356763
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CENTRAL MICHIGAN NEWSPAPERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 54-1170307
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
<PAGE>
CENTRAL MISSOURI BROADCASTING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 54-1163979
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CMB II, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 43-1671356
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CMN ASSOCIATED PUBLICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-2438130
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
CMN HOLDING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1170304
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
GLADWIN NEWSPAPERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 54-1170304
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
GRAPH ADS PRINTING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-2438126
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
HURON HOLDINGS, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1867829
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
HURON NEWSPAPERS, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-3372402
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
HURON P.S., LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 7398 38-3372410
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
MIDLAND BUYERS GUIDE, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-2438164
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
<PAGE>
NB II, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 41-1803205
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NCH II, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1851918
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NCR II, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 84-1347311
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NCR III, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 54-1851920
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NORTHERN COLORADO HOLDINGS, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1862076
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NORTHERN COLORADO RADIO, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 84-1091274
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NORTHLAND BROADCASTING, LLC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 41-1862832
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
NORTHLAND HOLDINGS, LLC
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 6749 54-1838750
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
READING RADIO, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 54-1163978
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
ST. JOHNS NEWSPAPERS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 2710 38-3299223
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
<PAGE>
TRI-STATE BROADCASTING, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
VIRGINIA 4830 35-1888093
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
420 N.W. FIFTH STREET, EVANSVILLE, INDIANA 47708
(812) 423-6200
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
ALAN R. BRILL
PRESIDENT AND CHIEF EXECUTIVE OFFICER
BRILL MEDIA MANAGEMENT, INC.
420 N.W. FIFTH STREET, EVANSVILLE, INDIANA 47708
(812) 423-6200
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------------
COPIES TO:
<TABLE>
<S> <C>
THOMPSON & MCMULLAN, P.C. CARTER, LEDYARD & MILBURN
100 Shockoe Slip 2 Wall Street
Richmond, Virginia 23219 New York, New York 10005
(804) 649-7545 (212) 732-3200
Attention: Charles W. Laughlin Attention: John K. Whelan
</TABLE>
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
OF SECURITIES TO AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
BE REGISTERED REGISTERED NOTE OR SHARE(1) PRICE(1) FEE
<S> <C> <C> <C> <C>
12% Series B Senior Notes due 2007..................... $ 105,000,000 100% $ 105,000,000 $ 30,975
Series B Appreciation Notes............................ $ 3,000,000 100% $ 3,000,000 $ 885
Guarantee of 12% Series B Senior Notes due 2007(2)..... -- -- -- --
Guarantee of Series B Appreciation Notes due 2007(2)... -- -- -- --
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(n), no registration fee is required with respect to the
Guarantees.
------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY 13, 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS
BRILL MEDIA COMPANY, LLC
[LOGO]
BRILL MEDIA MANAGEMENT, INC.
OFFER TO EXCHANGE
12% SENIOR NOTES DUE 2007
FOR
12% SERIES B SENIOR NOTES DUE 2007
AND APPRECIATION NOTES DUE 2007
FOR
SERIES B APPRECIATION NOTES DUE 2007
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M.,
NEW YORK CITY TIME, ON , 1998, UNLESS EXTENDED
Brill Media Company, LLC, a Virginia limited liability company ("BMC") and
Brill Media Management, Inc., a Virginia corporation (collectively with BMC, the
"Issuer"), hereby offers, upon the terms and subject to the conditions set forth
in this Prospectus and the accompanying Letters of Transmittal (the "Exchange
Offer"), to exchange (i) its 12% Series B Senior Notes due 2007 (the "Exchange
Notes") for an equal principal amount of its outstanding 12% Senior Notes due
2007 (the "Original Notes" and collectively with the Exchange Notes, the
"Notes"), of which an aggregate of $105,000,000 in principal is outstanding as
of the date hereof, and (ii) its Series B Appreciation Notes due 2007 (the
"Exchange Appreciation Notes") for an equal principal amount of its outstanding
Appreciation Notes due 2007 (the "Original Appreciation Notes" and, collectively
with the Exchange Appreciation Notes, the "Appreciation Notes"), of which an
aggregate of $3,000,000 in principal is outstanding as of the date hereof. The
form and the terms of each of the Exchange Notes and the Exchange Appreciation
Notes will be the same as the form and terms of each of the Original Notes and
the Original Appreciation Notes, respectively, except that (i) each of the
Exchange Notes and the Exchange Appreciation Notes will bear a "Series B"
designation and will bear different CUSIP Numbers from the Original Notes and
the Original Appreciation Notes, (ii) the Exchange Notes and the Exchange
Appreciation Notes will have been registered under the Securities Act of 1933,
as amended (the "Securities Act"), and, therefore, will not bear legends
restricting their transfer, and (iii) holders of the Exchange Notes and the
Exchange Appreciation Notes will not be entitled to certain rights of holders of
Notes and Appreciation Notes, respectively, under the Registration Rights
Agreements (as defined), which rights will terminate as to holders of the
Exchange Notes and Exchange Appreciation Notes upon consummation of the Exchange
Offer. Exchange Notes will evidence the same debt as the Original Notes and will
be entitled to the benefits of the indenture (the "Indenture") dated as of
December 30, 1997 governing the Original Notes and the Exchange Notes. Exchange
Appreciation Notes will evidence the same debt as the Original Appreciation
Notes and will be entitled to the benefits of the indenture (the "Appreciation
Note Indenture") dated as of December 30, 1997 governing the Appreciation Notes
and the Exchange Appreciation Notes. The Original Notes and the Original
Appreciation Notes are sometimes referred to herein collectively as the
"Original Securities." The Exchange Notes and the Exchange Appreciation Notes
are sometimes referred to herein collectively as the "Exchange Securities." The
Original Securities and the Exchange Securities are sometimes referred to herein
collectively as the "Securities."
Interest on the Exchange Notes will accrue from and include their issuance
date. Additionally, interest on the Exchange Notes will accrue from the last
interest payment date on which interest was paid on the Original Notes
surrendered in exchange therefor or, if no interest has been paid on the
Original Notes, from the date of original issuance of such Original Notes to but
not including the issuance date of the Exchange Notes. Accordingly, holders who
exchange their Original Notes will receive the same interest payment on the next
interest payment date (expected to be June 15, 1998) that they would have
received had they not accepted the Exchange Offer.
The Notes will bear interest at a rate of 7 1/2% per annum from the date of
original issue until December 15, 1999 and at a rate of 12% from and after such
date until maturity. Interest on the Notes will be payable in cash semi-annually
on June 15 and December 15 of each year, commencing June 15, 1998. The Notes
will mature on December 15, 2007. Except as described below, the Issuer may not
redeem the Notes prior to December 15, 2002. On or after such date, the Issuer
may redeem the Notes, in whole or in part, at any time, at the redemption prices
set forth herein, together with accrued and unpaid interest, if any, to the date
of redemption. In addition, at any time and from time to time on or prior to
December 15, 2000, in the event of the sale by BMC of at least $25.0 million of
its equity securities in one or more Public Equity Offerings (as defined), the
Issuer may, at its option, use the net proceeds of such sale to redeem up to 25%
of the aggregate principal amount of the Notes, at a redemption price equal to
112.0% of the Accreted Value (as defined) of the Notes to be redeemed, together
with accrued and unpaid interest, if any, to the date of redemption; PROVIDED,
HOWEVER, that after any such redemption the aggregate principal of the Notes
outstanding must be at least $79.0 million. The Notes will not be subject to any
sinking fund requirement. Upon the occurrence of a Change of Control (as
defined), the Issuer will be required to make an offer to repurchase the Notes
at a price equal to 101% of the Accreted Value in the case of an offer to
purchase occurring prior to December 15, 1999, and thereafter at a purchase
price equal to 101% of the principal amount thereof, in each case plus accrued
and unpaid interest thereon to the date of repurchase. See "Description of Notes
- -- Optional Redemption" and "--Change of Control."
The Notes will be senior unsecured obligations of the Issuer. The Notes will
rank PARI PASSU with all existing and future senior indebtedness of the Issuer
and will rank senior in right of payment to any future subordinated indebtedness
of the Issuer. The Notes will be unconditionally guaranteed (the "Subsidiary
Guarantees"), jointly and severally, by each of the Issuer's subsidiaries on the
issue date of the Notes and by each Restricted Subsidiary (as defined) of the
Issuer organized or acquired thereafter (collectively the "Subsidiary
Guarantors"). The Guarantees will be senior unsecured obligations of the
Subsidiary Guarantors and will rank PARI PASSU in right of payment with all
other existing and future senior indebtedness of the respective Subsidiary
Guarantors and senior in right of payment to all existing and future
subordinated indebtedness of the respective Subsidiary Guarantors and may be
released upon the occurence of certain events. The Notes and Subsidiary
Guarantees will be effectively subordinated in right of payment to any secured
debt of the Issuer and the Subsidiary Guarantors to the extent of the assets
serving as security therefor. The Indenture permits the Issuer and its
Subsidiaries to incur additional indebtedness (including senior indebtedness),
subject to certain limitations. As of August 31, 1997, on a pro forma basis
after giving effect to the Transactions, the Issuer had no outstanding secured
indebtedness to which the Notes would have been effectively subordinated, and
the aggregate amount of the Subsidiary Guarantors' outstanding senior secured
indebtedness to which the Subsidiary Guarantees would have been effectively
subordinated was approximately $4.9 million. See "Description of Notes."
Each Appreciation Note will entitle the holder thereof to receive on
December 15, 2007 a cash payment of principal and interest in an amount equal to
(i) the principal amount thereof plus (ii) the amount by which the Specified
Percentage (as defined) of the Value (as defined) of BMC on such date exceeds
the principal amount of such Appreciation Note. The Appreciation Notes will be
subject to mandatory and optional redemption under certain circumstances. The
Appreciation Notes will be senior subordinated obligations of the Issuer. The
Appreciation Notes will be subordinated in right of payment to all existing and
future Senior Indebtedness (as defined) of the Issuer, including the Notes, and
will rank senior in right of payment to any subordinated indebtedness of the
Issuer. The Appreciation Notes will be unconditionally guaranteed, jointly and
severally, by each of the Subsidiary Guarantors. The Guarantees of the
Appreciation Notes will be senior subordinated obligations of the Subsidiary
Guarantors and will be subordinated in right of payment to all existing and
future Guarantor Senior Indebtedness (as defined) of the respective Subsidiary
Guarantor, including the Subsidiaries Guarantees of the Notes. See "Description
of the Appreciation Notes."
SEE "RISK FACTORS" BEGINNING ON PAGE 22 FOR A DISCUSSION OF CERTAIN FACTORS
THAT SHOULD BE CONSIDERED BY HOLDERS WHO TENDER THEIR ORIGINAL SECURITIES IN THE
EXCHANGE OFFER.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1998.
<PAGE>
(CONTINUED FROM FRONT COVER)
The Issuer will accept for exchange any and all validly tendered Original
Securities not withdrawn prior to 5:00 p.m., New York City time, on ,
1998, unless extended by the Issuer in its sole discretion (the "Expiration
Date"). Tenders of Original Securities may be withdrawn at any time prior to the
Expiration Date. The Exchange Offer is not conditioned upon any minimum
aggregate principal amount of Original Notes or any minimum aggregate principal
amount of Original Appreciation Notes being tendered for exchange. In the event
the Issuer terminates the Exchange Offer and does not accept for exchange any
Original Securities, the Issuer will promptly return all previously tendered
Original Securities to the holders thereof. The Exchange Offer is subject to
certain customary conditions. See "The Exchange Offer--Conditions." The Issuer
has agreed to pay all expenses incident to the Exchange Offer. The Issuer will
not receive any proceeds from the Exchange Offer.
The Original Securities were originally issued and sold on December 30, 1997
in transactions (the "Offering") which were not registered under the Securities
Act in reliance upon exemptions from the registration requirements of the
Securities Act. Accordingly, the Original Securities may not be reoffered,
resold or otherwise pledged, hypothecated or transferred in the United States
unless registered under the Securities Act or unless an applicable exemption
from the registration requirements of the Securities Act is available. The
Exchange Securities are being offered hereunder to satisfy the obligations of
the Issuer under the Registration Rights Agreements. See "The Exchange
Offer--Purpose and Effect of Exchange Offer."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Issuer believes the
Exchange Notes and the Exchange Appreciation Notes issued pursuant to the
Exchange Offer may be offered for resale, resold and otherwise transferred by
any holder thereof (other than any such holder that is an "affiliate" of the
Issuer within the meaning of Rule 405 under the Securities Act), without further
registration under the Securities Act and without delivery of a prospectus that
satisfies the requirements of Section 10 of the Securities Act, provided that
such Exchange Securities are acquired in the ordinary course of such holder's
business and that such holder does not intend to participate, and has no
arrangement or understanding with any person to participate, in the distribution
of such Exchange Securities. Eligible holders wishing to accept the Exchange
Offer must represent to the Issuer that such conditions have been met. Each
broker-dealer that receives Exchange Securities pursuant to the Exchange Offer
in exchange for Securities acquired for its own account as a result of
market-making or other trading activities (a "Participating Broker-Dealer") may
be a statutory underwriter and must acknowledge that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Securities. The Letters of Transmittal state that by so
acknowledging and by delivering a prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-Dealer in connection with resales
of Exchange Securities received in exchange for Original Securities where such
Original Securities were acquired by such Participating Broker-Dealer as a
result of market-making activities or other trading activities. The Issuer has
agreed that, for a period of 180 days after consummation of the Exchange Offer,
it will make this Prospectus available to any Participating Broker-Dealer for
use in connection with any such resale. See "Plan of Distribution."
Holders of Original Securities whose Original Securities are not tendered
and accepted in the Exchange Offer will continue to hold such Original
Securities and will be entitled to all the rights and preferences and will be
subject to the limitations applicable thereto under the Indenture and the
Appreciation Note Indenture, respectively. Following consummation of the
Exchange Offer, the holders of Original Securities will continue to be subject
to the existing restrictions upon transfer thereof under the Securities Act.
There has been no previous public market for the Securities. The Issuer does
not intend to list the Exchange Securities on any securities exchange or to seek
approval for quotation through any automated quotation system. There can be no
assurance that an active market for the Exchange Securities will develop. See
"Risk Factors--Lack of Established Trading Market." Moreover, to the extent that
Original Securities are tendered and accepted in the Exchange Offer, the trading
market for untendered and tendered but unaccepted Original Securities could be
adversely affected.
THE EXCHANGE OFFER IS NOT BEING MADE TO, NOR WILL THE ISSUER ACCEPT
SURRENDERS FOR EXCHANGE FROM, HOLDERS OF ORIGINAL SECURITIES IN ANY JURISDICTION
IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE
WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH JURISDICTION.
CERTAIN OF THE MATTERS DISCUSSED UNDER "PROSPECTUS SUMMARY," "RISK FACTORS,"
"MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS," "BUSINESS" AND ELSEWHERE IN THIS PROSPECTUS CONTAIN FORWARD-LOOKING
STATEMENTS CONCERNING THE ISSUER'S OPERATIONS, ECONOMIC PERFORMANCE AND
FINANCIAL CONDITION, INCLUDING, AMONG OTHER THINGS, THE ISSUER'S BUSINESS
STRATEGY. THESE STATEMENTS ARE BASED ON THE ISSUER'S EXPECTATIONS AND ARE
SUBJECT TO VARIOUS RISKS AND UNCERTAINTIES. ACTUAL RESULTS COULD DIFFER
MATERIALLY FROM THOSE ANTICIPATED DUE TO A NUMBER OF FACTORS, INCLUDING THOSE
IDENTIFIED UNDER "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
<PAGE>
RADIO INDUSTRY DATA
Unless otherwise indicated herein, audience ratings and market radio
advertising revenues have been obtained from INVESTING IN RADIO, 1997 MARKET
REPORT--THIRD EDITION, BIA Publications Inc. ("BIA"). Revenue rankings in the
Company's radio markets have been derived by comparing the Company's revenues in
each market to the revenues for the Company's competitors (utilizing the
estimated revenues for each competing radio station as provided by BIA). Metro
rank for the Company's markets have been obtained from ARBITRON, RADIO MARKET
REPORT, the Arbitron Company ("Arbitron").
Audience rankings for the Fort Collins/Greeley/Loveland, Colorado market
("Fort Collins") and the Jefferson City/Columbia/Lake of Ozarks, Missouri market
("Jefferson City") have been taken from ARBITRON RADIO CUSTOM SURVEY RADIO AREA
REPORT, MAY 1997. No published market revenues or revenue rankings on the Fort
Collins and Jefferson City markets are available, and market revenues and
revenue ranking in such markets have been estimated by the Company, without the
benefit of any independent investigation or confirmation, on the basis of its
knowledge of each market and published retail sales statistics.
CERTAIN DEFINITIONS
Brill Media Company, LLC, a Virginia limited liability company ("BMC"), and
its wholly-owned subsidiary, Brill Media Management, Inc., a Virginia
corporation ("Media" and, collectively with BMC, the "Issuer"), are the
co-issuers of the Notes. Media and BMC, collectively with BMC's direct
subsidiary BMC Holdings, LLC, a Virginia limited liability company ("Holdings"),
and the direct and indirect subsidiaries of Holdings, are referred to herein as
the "Company." Certain management services are provided to the Company by Brill
Media Company, L.P., a Virginia limited partnership and an affiliate of the
Company ("BMCLP"). Radio station and newspaper affiliates that are managed by
the Company pursuant to Managed Affiliates Management Agreements (as defined)
are referred to collectively as "Managed Affiliates." See "Business--Structure
and Governance," "Certain Transactions" and "Description of Notes--Certain
Definitions."
The subsidiaries of BMC (the "Subsidiaries") presently include the following
entities, all of which are organized under the laws of Virginia: Holdings;
Reading Radio, Inc.; Tri-State Broadcasting, Inc.; Northern Colorado Radio,
Inc.; NCR II, Inc.; Central Missouri Broadcasting, Inc.; CMB II, Inc.; Northland
Broadcasting, LLC; NB II, Inc.; Central Michigan Newspapers, Inc.; Cadillac
Newspapers, Inc.; CMN Associated Publications, Inc.; Central Michigan
Distribution Co., L.P.; Central Michigan Distribution Co., Inc.; Gladwin
Newspapers, Inc.; Graph Ads Printing, Inc.; Midland Buyer's Guide, Inc.; St.
Johns Newspapers, Inc.; Huron P.S., LLC; Huron Newspapers, LLC; Huron Holdings,
LLC; Northern Colorado Holdings, LLC; NCR III, LLC; NCH II, LLC; Northland
Holdings, LLC; CMN Holding, Inc.; Brill Radio Inc.; and Brill Newspapers, Inc.
"EBITDA" means operating income before depreciation and amortization
expenses. References to "Media Cashflow" refer to EBITDA plus management fees,
incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to Managed
Affiliates. Management fees payable to BMCLP are subordinated, to the extent
provided in the Indenture, to the prior payment of the Issuer's obligations on
the Notes. Although Media Cashflow and EBITDA are not measures of performance
calculated in accordance with GAAP, management believes that these measures are
useful to an investor in evaluating the Company because these measures are
widely used in the media industry to evaluate a media company's operating
performance. However, Media Cashflow and EBITDA should not be considered in
isolation or as substitutes for net income, cash flows from operating activities
and other income or cash flow statements prepared in accordance with GAAP as
measures of liquidity or profitability.
"New Credit Facility" means a new senior secured credit facility which may
be entered into by the Company in the aggregate principal amount not to exceed
$15.0 million, as permitted by the Indenture. No
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assurances can be given that such New Credit Facility will be extended to the
Company by any lender or that it will be made available to the Company on terms
acceptable to the Company.
The terms local marketing agreement ("LMA"), time brokerage agreement ("Time
Brokerage Agreement") and joint sales agreement ("JSA") are referred to in
various places in this Prospectus. An LMA or Time Brokerage Agreement refers to
an agreement, although it may take various forms, under which one party agrees
in consideration of a fee paid to provide, on a cooperative basis, the
programming, sales, marketing and similar services for a separately owned radio
station located in the same radio market and realize the financial benefit of
such activities. A JSA refers to an agreement, similar to an LMA or Time
Brokerage Agreement, under which a radio station agrees to provide the sales and
marketing services for another station while the owner of such other radio
station provides the programming for such other radio station. LMAs, Time
Brokerage Agreements and JSAs are more fully described in "Business--Federal
Regulation of Radio Broadcasting."
The Company generally considers radio "middle markets" to be markets ranked
80 to 200 by Arbitron. The Company considers "middle markets" for purposes of
its newspaper operations to be generally comparable to the smaller markets in
such range.
All references in this Prospectus to "senior" in reference to the Notes or
other obligations of the Issuer or a Subsidiary Guarantor means obligations that
are not subordinated to other unsecured obligations of the Issuer or such
Subsidiary Guarantor but which may be subordinate to secured obligations of the
Issuer to the extent of the security therefor.
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PROSPECTUS SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN THIS
PROSPECTUS AND IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION AND
FINANCIAL STATEMENTS AND THE RELATED NOTES THERETO APPEARING ELSEWHERE HEREIN.
INVESTORS SHOULD CAREFULLY CONSIDER THE INFORMATION SET FORTH UNDER "RISK
FACTORS" PRIOR TO MAKING A DECISION TO TENDER ANY ORIGINAL SECURITIES IN
EXCHANGE FOR EXCHANGE SECURITIES HEREUNDER.
THE COMPANY
The Company is a diversified media enterprise that acquires, develops,
manages, and operates radio stations, newspapers and related businesses in
middle markets. The Company presently owns, operates, or manages fifteen radio
stations serving five markets located in Pennsylvania, Kentucky/Indiana,
Colorado, Minnesota/Wisconsin, and Missouri, including three radio stations
located in the Kentucky/Indiana market that are owned by Managed Affiliates (the
twelve such stations which are not owned by Managed Affiliates being referred to
herein as the "Stations"). The group of Stations and Managed Affiliates'
stations operated by the Company in each market holds a first or second ranking
in both combined audience ratings and combined revenues, compared to other
groups, in such market. In addition, in each of its markets, the Stations and
Managed Affiliates' stations individually have at least one of the top two
rankings in both audience ratings and revenues. The Company's newspaper
businesses (the "Newspapers") operate integrated newspaper publishing, printing
and print advertising distribution operations, providing total-market print
advertising coverage throughout a seventeen-county area in central Michigan.
This operation offers a two-edition daily newspaper, thirteen weekly
publications, a web offset printing operation for Newspapers' publications and
outside customers, and a private distribution company. The Company, each of its
Subsidiaries, BMCLP and the Managed Affiliates are wholly owned directly or
indirectly by Alan R. Brill ("Mr. Brill" or the "Stockholder"), who founded the
business and began its operations in 1981.
For the year ended February 28, 1997, the Company's pro forma combined
revenues and Media Cashflow, excluding the Missouri Properties which are under
contract to be sold (see "Transactions"), were $27.4 million and $10.4 million,
respectively. For the six months ended August 31, 1997, such pro forma combined
revenues and Media Cashflow were $15.0 million and $6.1 million, respectively.
The financial statements of the Managed Affiliates are not combined with those
of the Company.
Historically, the Company has focused on media properties located in middle
markets, which the Company believes offer greater opportunities than larger
markets to build and maintain consistently high market and revenue shares at
reasonable costs. The Company believes its markets are generally less
competitive than major markets and are characterized by a limited number of
direct competitors, local owner/operators that are less sophisticated and have
less financial resources, and fewer alternative advertising media. In such
markets, the Company is able to target broader demographic groups and to sell
its advertising to a wider customer base than in major markets. The Company
believes that, relative to larger markets, a higher percentage of revenues in
middle markets is derived from local advertising and therefore a correspondingly
higher portion of its revenues can be directly generated by its own sales
efforts. The Company believes that local advertisers in middle markets often
make advertising decisions based primarily on customer relationships and service
and advertising results. The Company's primary focus is to provide high-quality
customer service with promotional activities that yield results for advertisers
and to build and maintain superior local advertiser relationships.
The Company's overall operations, including its sales and marketing
strategy, long-range planning, and management support services are managed by
BMCLP, a limited partnership indirectly owned by Mr. Brill (see "Certain
Transactions"). The management support provided by BMCLP has been a key element
in the Company's ability to achieve significant increases in Media Cashflow at
each of its properties following their acquisition. Each of the Company's
properties is managed on a day-to-day basis by an
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experienced local president/general manager. As of September 30, 1997, the
Company had a workforce of approximately 340 full-time and 100 part-time
employees, none of whom is unionized.
The principal executive offices of the Company are located at 420 N.W. Fifth
Street, Evansville, Indiana 47708, and its telephone number is (812) 423-6200.
RADIO PROPERTY OVERVIEW
In each of its markets, the Company's Stations and the Managed Affiliates'
stations as a group hold at least one of the top two rankings in both combined
audience ratings and combined revenues. Furthermore, in each of its markets the
Company's Stations and the Managed Affiliates' stations individually hold at
least one of the top two audience and revenues rankings. Set forth below is a
list of the Stations and the Managed Affiliates' stations specifying their
broadcasting frequency, Federal Communications Commission ("FCC") class, format,
control, market, market rank and group rank by ratings and revenues.
<TABLE>
<CAPTION>
STATION GROUP
ARBITRON RANK
FCC OWNED/ MARKET --------------------------
STATION FREQUENCY CLASS FORMAT MANAGED MARKET(S) RANK RATINGS REVENUES
- ------------- ----------- --------- ----------- ------------ ------------------ ----------- --------- ---------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
WIOV-FM 105.1 FM-B Country Owned Lancaster, PA(1) 110 1 1
Reading, PA 130 2 2
WBKR-FM 92.5 FM-C Country Owned Evansville, IN 125(2) 1 1
WKDQ-FM 99.5 FM-C Country Managed(3) and Owensboro/
WSTO-FM 96.1 FM-C Adult Hits Managed(3) Henderson, KY
WOMI-AM 1490 AM-C News/Talk Owned
WVJS-AM 1420 AM-B News/Talk Managed(3)
KTRR-FM 102.5 FM-C2 Adult Hits Managed(4) Fort Collins/ 135 1 1
KUAD-FM 99.1 FM-C1 Country Owned Greeley/
Loveland, CO
KKCB-FM 105.1 FM-C1 Country Owned Duluth, MN/ 207 1 1
KLDJ-FM 101.7 FM-C2 Oldies Owned Superior, WI
WEBC-AM 560 AM-B News/Talk Owned
KATI-FM 94.3 FM-C2 Country Owned(5) Jefferson City/ NR(6) 2 2
KTXY-FM 106.9 FM-C Adult Hits Owned(5) Columbia/
KLIK-AM 950 AM-B Country Owned(5) Lake of the
Ozarks, MO
</TABLE>
- --------------------------
(1) WIOV-FM serves both Lancaster and Reading. The Company also owns and
operates WIOV-AM, an AM-C station in Reading. Ratings and revenues ranks for
WIOV-FM include WIOV-AM.
(2) The Company estimates that on a combined basis the
Evansville/Owensboro/Henderson market would have an Arbitron rank of 125
based on separate rankings of 151 and 255 for Evansville and Owensboro,
respectively.
(3) WKDQ-FM, WSTO-FM and WVJS-AM are owned by Managed Affiliates.
(4) The Company manages KTRR-FM pursuant to a Time Brokerage Agreement pending
completion of its acquisition.
(5) Missouri Properties are under contract for sale. See "--Transactions."
Accordingly, the pro forma financial statements presented herein do not
include the operating results of such stations.
(6) The Jefferson City/Columbia/Lake of the Ozarks, Missouri market is not
ranked by Arbitron. Columbia separately is ranked 237 by Arbitron, and
KTXY-FM is the top-rated station by audience ranking in such market.
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LANCASTER AND READING, PENNSYLVANIA, which the Company estimates combined
would have an Arbitron rank of 60, are served by WIOV-FM and WIOV-AM. WIOV-FM
programs a Country music format and consistently is one of the region's top
rated stations. WIOV-FM is the top-ranked radio station based on combined
revenues in the Lancaster market. WIOV-AM serves the Reading market with a
News/Talk format.
EVANSVILLE, INDIANA, AND OWENSBORO/HENDERSON, KENTUCKY, which the Company
estimates combined would have an Arbitron rank of 125, are served by WBKR-FM and
WOMI-AM. These stations broadcast to the Tri-State area of southwestern Indiana,
southern Illinois, and western Kentucky, which the Company believes is
undergoing significant economic expansion. WBKR-FM is the region's most powerful
and most listened to radio station. The five stations operated by the Company
(including the Managed Affiliates' stations, WKDQ-FM, WSTO-FM and WVJS-AM) rank
first in the market in terms of both their combined revenues and their combined
ratings, and individually hold three of the top four audience and revenues
rankings in the market.
FORT COLLINS/GREELEY/LOVELAND, COLORADO, which has recently been designated
as a market by Arbitron and is ranked 135, is served by KUAD-FM and KTRR-FM.
KUAD-FM is northern Colorado's leading radio station in terms of audience
ratings and advertising revenues, and in the seventeen months since the Company
began operating it pursuant to a Time Brokerage Agreement, KTRR-FM has
established a significant presence in the market. These Stations primarily serve
Larimer and Weld counties in northern Colorado, which comprise a distinct market
approximately 65 miles north of Denver. The Company believes that radio
advertising in the area is significantly underutilized by potential advertisers
based on national norms. The Stations focus on the Fort Collins/Greeley/Loveland
"triangle," and reach a listener base that the Company believes is
well-educated, has significant disposable income, and is served locally by few
other radio stations.
DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN, which have a combined Arbitron
rank of 207, are served by KKCB-FM, KLDJ-FM and WEBC-AM, which the Company
believes is the premier combination of radio stations in this market based on
revenues and audience ratings. KKCB-FM, which operates a Country format, is the
highest-rated station in its market.
JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI, is served by KATI-FM,
KTXY-FM and KLIK-AM. These stations are currently under contract for sale and
pending closing are being operated by the purchaser under the terms of a Time
Brokerage Agreement. See "--Transactions."
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PUBLICATIONS OVERVIEW
Set forth below is a list of the Newspaper publications specifying the
location and circulation of each.
<TABLE>
<CAPTION>
NEWSPAPER LOCATION CIRCULATION
- ------------------------------------------------- ------------------- -----------
<S> <C> <C> <C>
MORNING SUN...................................... Mt. Pleasant, MI 12,700
MT. PLEASANT BUYERS GUIDE........................ Mt. Pleasant, MI 28,400
CLARE COUNTY BUYERS GUIDE........................ Clare, MI 13,000
ALMA REMINDER.................................... Alma, MI 20,600
CADILLAC BUYERS GUIDE............................ Cadillac, MI 21,700
CARSON CITY REMINDER............................. Carson City, MI 11,000
EDMORE ADVERTISER................................ Edmore, MI 17,500
HEMLOCK SHOPPERS GUIDE........................... Hemlock, MI 12,500
GLADWIN BUYERS GUIDE............................. Gladwin, MI 16,800
ISABELLA COUNTY HERALD........................... Mt. Pleasant, MI 16,200
MIDLAND BUYERS GUIDE............................. Midland, MI 28,000
ST. JOHNS REMINDER............................... St. Johns, MI 16,200
THE NORTHEASTERN SHOPPER
(NORTH EDITION)................................ Tawas City, MI 24,400
THE NORTHEASTERN SHOPPER
(SOUTH EDITION)................................ Tawas City, MI 15,600
-----------
Total Circulation 254,600
</TABLE>
The Newspapers serve a seventeen county area of small communities in central
Michigan, where there are few other newspapers, no local television stations,
and few radio stations. The Company has central offices and production
facilities in Mt. Pleasant, Michigan and leads the central Michigan market in
media billings.
The Company's daily newspaper, the MORNING SUN, has a paid subscription base
of 12,700 readers and is the only daily newspaper published in Gratiot, Isabella
and southern Clare counties. The Company's weekly newspaper and twelve weekly
shopping guides are delivered free to more than 240,000 households in the
central Michigan area. The Company's multiple products and private delivery
system permit advertisers to buy customized advertising coverage for the portion
of the local market that best reaches their potential customers. The Company
also publishes numerous niche publications such as vacation guides and a monthly
business report. The Newspapers have a widely diversified base of advertising
and printing customers and during the year ended February 28, 1997 no one
customer represented more than 2% of the Company's revenues.
STRUCTURE AND GOVERNANCE
In anticipation of the Offering, the ownership of the Stations and
Newspapers was restructured to preserve certain historical tax benefits while
permitting Mr. Brill the flexibility required to continue growing the business
through acquisitions.
Set forth below is a chart outlining the ownership of the Company and its
principal affiliates. Certain intermediate entities have been omitted.
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[The chart, which is on file with the Issuer, shows that Mr. Brill is the
sole ultimate owner of (i) BMCLP, (ii) the Managed Affiliates, (iii) the
Subsidiaries (indirectly through BMC and Holdings) and (iv) Media (indirectly
through BMC).]
The Exchange Securities will be issued jointly by Brill Media Company, LLC,
a Virginia limited liability company ("BMC"), and its wholly-owned subsidiary,
Brill Media Management, Inc., a Virginia corporation ("Media"; collectively with
BMC, the "Issuer"). BMC through Subsidiaries directly and indirectly owns radio
and newspaper properties, including those previously identified. The historical
financial statements of The Radio and Newspaper Businesses of Alan R. Brill
included elsewhere in this Prospectus include the financial position and results
of operations of the radio and newspaper Subsidiaries on a combined basis. Each
Subsidiary is wholly-owned directly or indirectly by BMC except that Alan R.
Brill indirectly owns up to a 2% interest in eight Subsidiaries.
The Managed Affiliates are not subsidiaries of the Company, but are managed
by the Company pursuant to Managed Affiliates Management Agreements. As of the
date of this Prospectus, the Managed Affiliates operate radio stations WKDQ-FM,
WSTO-FM and WVJS-AM in Evansville, Indiana and Owensboro/Henderson, Kentucky,
which were acquired by Mr. Brill in 1997. While subject to a Managed Affiliate
Management Agreement, funds may be advanced from time to time to these and
future Managed Affiliates by the Company or its Subsidiaries in the form of
unsecured loans subject to certain limitations. See "Description of
Notes--Limitations on Affiliate Transactions."
Local general managers operate the Stations and Newspapers on a day-to-day
basis. Other management services, including benefit plan administration, risk
management, finance, tax management, and strategic planning and operations
oversight are provided to the Subsidiaries and the affiliates by BMCLP, which is
owned indirectly by Mr. Brill. The fees charged by BMCLP are established on a
contractual basis and, as set forth more fully under "Certain Transactions,"
such fees are payable to the extent set forth in the Description of the Notes.
BUSINESS STRENGTHS
MIDDLE MARKET FOCUS. The Company operates media businesses in middle
markets which generally are less competitive than larger markets and are
characterized by a limited number of direct competitors, local owner/operators
which are less sophisticated and have less financial resources, and fewer
alternative media. The Company believes that in its markets the majority of its
revenues are directly generated by its own sales efforts.
STRONG AND GROWING MARKET SHARE. In each of its radio markets the Company's
Stations or the Managed Affiliates' stations hold at least one of the top two
rankings in both audience ratings and revenues. The Company believes that it is
the leading advertising provider in its newspaper markets. The Company believes
the Stations and Newspapers have strong community support and work to build and
maintain strong middle market franchises.
SUCCESSFUL ACQUISITION HISTORY. Mr. Brill has a history of identifying
acquisition opportunities, initiating negotiations to buy such properties and
developing creative structures by which to meet the requirements of the sellers
of such properties. Mr. Brill and the management team have successfully
developed acquired radio stations and newspapers and have improved Media
Cashflow at each of the Company's properties following their acquisition.
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CONSISTENT CASHFLOWS. The Company's Subsidiaries have a history of
consistent cashflows. The Company's Subsidiaries generated Media Cashflow
margins (on a combined basis) of approximately 24%, 26%, and 30% for the
one-year periods ended February 28, 1995, February 29, 1996, and February 28,
1997, respectively, and 37% for the six-month period ended August 31, 1997. The
Company believes that its Media Cashflow will continue to be strong and will
enable the Company to continue its acquisition strategy. Furthermore, the
Company's continuing operations currently require relatively small capital
expenditures.
EXPERIENCED AND COMMITTED MANAGEMENT TEAM. The Company's senior management
team, provided by BMCLP, is highly experienced in the radio and newspaper
industries. BMCLP has experienced little management turnover, and BMCLP's four
senior operating executives have an average of 22 years each of experience in
the media industry and have worked together since 1988. The Company has a
decentralized management structure in which general managers make the key local
operating decisions for each station or newspaper with support from BMCLP
management.
STRONG LOCAL ADVERTISER RELATIONSHIPS. Historically, the Company has
created and maintained relationships directly with local advertisers in its
markets, which enable the Company to respond immediately and creatively to meet
customer needs. The Company believes that its marketing approach and customer
relationships enable the Stations to generate greater revenues and margins than
comparably ranked stations in their markets and enable the Newspapers to
increase revenues and margins. To further strengthen its relationships with
advertisers, the Company also offers and markets its ability to create customer
traffic through on-site events staged at, and broadcast from, an advertiser's
business.
ACQUISITION STRATEGY
The Company seeks to acquire underperforming middle market media businesses
whose acquisition costs are low relative to potential revenues and cashflow. The
Company focuses on developing significant long-term franchises in middle
markets. The Company then seeks to improve revenues and cashflow, using its
particular promotional, marketing, sales, programming and editorial approaches.
The Company targets businesses that it believes operate in underdeveloped market
segments with a low level of competition and a strong economic base, as well as
stations with competitive technical facilities and businesses that are located
in areas deemed desirable for relocation in terms of personnel recruitment.
The Company believes that its acquisition strategy, properly implemented,
has a number of specific benefits, including (i) diversification of revenues and
cashflow across a broader base of industries, properties and markets, (ii)
geographic clustering which has allowed improved cashflow margins through the
consolidation of facilities, centralized newsgathering, cross-selling of
advertising, elimination of redundant expenses, (iii) improved access to
consultants and other industry resources, (iv) greater appeal to qualified
industry management talent and (v) efficiencies from economies of scale.
OPERATING STRATEGY
In order to appeal to advertising customers and maximize the revenues and
cashflow of its properties, the Company's strategy is as follows:
MARKETING PARTNERSHIPS. The Company believes that advertisers in its
markets are attracted and retained through value-added customer services. While
the Company seeks and achieves audience ratings and circulation as a means of
attracting advertisers, its operations are distinguished by a particular
emphasis on soliciting advertisers directly. The Company believes that in many
middle markets the
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decision to advertise on a given radio station or in a given newspaper is driven
in large measure by direct customer relationships and the level of customer
success with past advertising programs and the marketing and sales effectiveness
of the station or newspaper staff. The Company believes that building and
solidifying marketing partnerships with advertisers and retaining such customers
through effective results and high quality customer service are significant
factors in maintaining leading revenue shares in its markets.
OWNERSHIP OF STRONG MEDIA GROUPS. In each of its markets, the Company seeks
to maintain and enhance its position as a market leader through its ownership of
groups of stations or publications. Its ownership of groups of stations and
publications allows the Company a variety of sales opportunities and customer
demographics. By strategically coordinating customized programming, publishing,
promotional, and selling strategies among a group of local stations or
newspapers, the Company attempts to reach a wide range of demographic groups
that appeal to advertisers. The Company believes that its wide range of
advertising options permits it to offer pricing choices to suit customer needs
and strengthen advertiser relationships.
AGGRESSIVE SALES AND MARKETING. The Company seeks to maximize its share of
local advertising revenues in each of its markets by implementing and
maintaining strong direct sales and marketing programs. The Company tends to
maintain separate sales forces for each of its Stations or Newspapers. The
Company's Stations strive to maximize revenues by managing the on-air inventory
of advertising time and adjusting prices based on local market conditions.
Through its marketing efforts, the Company provides advertisers with an
effective means of reaching a targeted demographic group. To further strengthen
its relationships with radio advertisers, the Company also offers and markets
its ability to create customer traffic through on-site events staged at, and
broadcast from, an advertiser's place of business and promotions in which
listeners are encouraged to participate by visiting such place of business.
EXPERIENCED LOCAL MANAGEMENT. The Company believes that each of its
Stations and Newspapers is primarily a local business and that much of its
success is the result of the efforts of local management and staff. Accordingly,
the Company decentralizes its operations. Each of the Company's local media
groups is managed by a team of experienced managers who understand the trends,
demographics, and competitive opportunities of the particular market. Local
managers are responsible for developing annual operating budgets, and a major
portion of their compensation is linked to performance against operating
targets. BMCLP approves each station or newspaper group's annual operating
budgets and imposes strict financial reporting requirements to track performance
and monitor operating trends. The Company seeks and motivates managers who
thrive on the challenges presented by such autonomy. Its success in finding and
developing such managers has enabled the Company to compete successfully in each
of its local markets.
CENTRALIZED SUPPORT AND OVERSIGHT. The Company believes that its ability to
utilize existing senior management and sales resources of its media groups
enhances the growth potential of both acquired start-up and underperforming
properties. Additionally, this support reduces the risks associated with
undertaking new means of improving performance, such as launching new formats.
Furthermore, the Company seeks to achieve substantial cost savings through the
consolidation of facilities, management and administrative personnel and human
resources, as well as through the reduction of redundant expenses. BMCLP
personnel regularly visit the Stations and Newspapers to review performance,
assist local management with their programming, editorial, sales, recruiting and
training efforts, and to develop and verify overall operating and marketing
strategies, including cost management, designed to improve cashflow. These
visits enable the Company to remain aware of developments in each Station's and
Newspaper's market and to control and monitor costs while providing useful input
to each local manager.
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COMMUNITY INVOLVEMENT. The Company believes that its marketing, sales and
promotion efforts create direct relationships with its advertisers and
audiences, making its Stations and Newspapers significant participants in the
middle markets they serve. Each of the Company's Newspapers and Stations
participates in numerous community programs, fund-raisers and activities that
benefit a wide variety of organizations and produce revenues for the Company.
TRANSACTIONS
The Offering, together with the transactions briefly described below,
collectively comprise the "Transactions" as referred to in this Prospectus.
The Company's Subsidiaries, Central Missouri Broadcasting, Inc. and CMB II,
Inc. (collectively the "Missouri Properties") have entered into agreements for
the sale of substantially all of the assets of the Missouri Properties for a net
cash purchase price of approximately $7.4 million, plus assumed liabilities of
$256,000. Pursuant to the terms of a Time Brokerage Agreement ("TBA") which
provides for monthly payments of $50,000 to the Missouri Properties, the
purchaser is providing operating and management services to the Missouri
Properties pending closing of the purchase. Closing of the sale and purchase is
expected to occur immediately upon the FCC granting requisite approval for
transfer of the broadcast licenses associated with these Stations. Applications
for transfer of the broadcast licenses of the Missouri Properties have been
filed with the FCC by the purchasers. A local market competitor has objected to
the transfer of the licenses and on December 12, 1997, filed with the FCC a
Petition to Deny the license transfers and to terminate the Time Brokerage
Agreement. No action has been taken on the Petition to Deny by the FCC, and the
Company believes that even if the Petition to Deny were granted, the
consequences would not be material to the Company.
The Company's Subsidiary, NCR II Inc., presently provides management and
programming services to radio station KTRR-FM in Loveland, Colorado pursuant to
a Time Brokerage Agreement with Onyx Broadcasting, Inc., has executed an option
to purchase substantially all of the assets of KTRR-FM for a purchase price of
$2.0 million, and will enter into a covenant not to compete with the sellers,
with a stated consideration of $500,000, payable over its five year term. It is
expected that closing of the purchase of KTRR-FM will occur shortly after
execution of a definitive asset purchase agreement for this transaction and
required approval for transfer of the broadcast licenses by the FCC.
Certain of the Subsidiaries and other affiliates were indebted under the
terms of certain senior secured obligations guaranteed by Mr. Brill and payable
to AMRESCO Funding Corporation ("Amresco") and Goldman Sachs Credit Partners
L.P. ("Goldman Sachs"). These obligations, including sums borrowed after August
31, 1997, a portion of which was used to pay dividends to Mr. Brill, were paid,
along with accrued interest thereon, and applicable prepayment premiums, as
appropriate, from the proceeds of the Offering, as reflected in the pro forma
combined financial statements contained in this Prospectus. Certain of the
proceeds of the Offering were used to pay certain related fees and expenses
associated therewith.
On October 1, 1997 two of the Company's newspaper Subsidiaries acquired the
assets of Huron Postal Service, Inc. ("Huron") and Northeastern Printers, Inc.
("Northeastern"), newspapers located on the coast of Lake Huron, Michigan for
total consideration of $2.8 million.
The Company loaned approximately $2.0 million of the proceeds of the
Offering to Managed Affiliates on an unsecured basis at a rate of interest of
12% per annum. Such amounts are in addition to the $14.3 million already loaned
by the Company to the Managed Affiliates at August 31, 1997.
8
<PAGE>
THE EXCHANGE OFFER
CERTAIN CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN HAVE THE MEANINGS
GIVEN THEM IN "DESCRIPTION OF NOTES--CERTAIN DEFINITIONS."
<TABLE>
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ISSUER............................ Brill Media Company, LLC and Brill Media Management,
Inc., as co-issuers.
REGISTRATION RIGHTS AGREEMENT..... The Original Securities were originally sold by the
Issuer on December 30, 1997 in transactions exempt from
the registration requirements of the Securities Act. The
$3,000,000 aggregate principal amount of Original
Appreciation Notes and $105,000,000 aggregate principal
amount of the Original Notes were sold to NatWest
Capital Markets Limited (the "Initial Purchaser")
pursuant to a Purchase Agreement dated as of December
22, 1997 by and among the Issuer, the Subsidiary
Guarantors and the Initial Purchaser (the "Purchase
Agreement"). The Initial Purchaser subsequently sold
such Original Securities. The Issuer, the Subsidiary
Guarantors and the Initial Purchaser entered into a
Notes Registration Rights Agreement dated December 30,
1997 (the "Note Registration Rights Agreement") and an
Appreciation Note Registration Rights Agreement dated
December 30, 1997 (the "Appreciation Note Registration
Rights Agreement" and, together with the Note
Registration Rights Agreement, the "Registration Rights
Agreements"), which grant the holders of the Original
Securities certain exchange and registration rights. The
Exchange Offer is intended to satisfy such rights. The
holders of the Exchange Securities are not entitled to
any exchange or registration rights with respect to the
Exchange Securities. See "Notes Exchange Offer and
Registration Rights" and "Appreciation Notes Exchange
Offer and Registration Rights."
THE EXCHANGE OFFER................ The Issuer and the Subsidiary Guarantors are offering to
exchange (i) an equal principal amount of Exchange Notes
for each such principal amount of Original Notes that
are properly tendered and accepted and (ii) an equal
principal amount of Exchange Appreciation Notes for each
such principal amount of Original Appreciation Notes
that are properly tendered and accepted. The Issuer will
issue Exchange Securities on or promptly after the
Expiration Date. As of the date hereof, there is
$105,000,000 aggregate principal amount of Original
Notes outstanding and there is $3,000,000 aggregate
principal amount of Original Appreciation Notes
outstanding. The Exchange Offer is not conditioned upon
any minimum aggregate principal amount of Original Notes
or any minimum aggregate principal amount of Original
Appreciation Notes being tendered for exchange. Based on
no-action letters issued by the staff of the Commission
to third parties, the Issuer believes the Exchange Notes
and the Exchange Appreciation Notes issued pursuant to
the Exchange Offer may be offered for resale, resold and
otherwise transferred by any holder thereof (other than
any such
</TABLE>
9
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<S> <C>
holder that is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act) without
further registration under the Securities Act and
without delivery of a prospectus that satisfies the
requirements of Section 10 of the Securities Act,
provided that such Exchange Securities are acquired in
the ordinary course of such holder's business and that
such holder does not intend to participate, and has no
arrangement or understanding with any person to
participate, in the distribution of such Exchange
Securities.
Each Participating Broker-Dealer that receives Exchange
Securities for its own account pursuant to the Exchange
Offer in exchange for Original Securities where such
Original Securities were acquired by such Participating
Broker-Dealer as a result of market-making activities or
other trading activities may be a statutory underwriter
and must acknowledge that it will deliver a prospectus
in connection with any resale of such Exchange
Securities. The Letters of Transmittal state that by so
acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit
that it is an "underwriter" within the meaning of the
Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by
Participating Broker-Dealers in connection with such
resales of Exchange Securities. The Issuer has agreed
that, for a period of 180 days after consummation of the
Exchange Offer, it will make this Prospectus available
to any Participating Broker-Dealer for use in connection
with any such resale. See "The Exchange Offer."
Any holder who tenders in the Exchange Offer with the
intention to participate, or for the purpose of
participating, in a distribution of the Exchange
Securities should not rely on the position of the staff
of the Commission communicated in no-action letters and,
in the absence of an exception therefrom, must comply
with the registration and prospectus delivery
requirements of the Securities Act in connection with
any resale transaction. Failure to comply with such
requirements in such instance may result in such holder
incurring liability under the Securities Act for which
the holder is not indemnified by the Issuer.
EXPIRATION DATE................... The Exchange Offer will expire at 5:00 p.m., New York
City time, on , 1998, unless the Exchange Offer is
extended by the Issuer in its reasonable discretion, in
which case the term "Expiration Date" shall mean the
latest date and time to which the Exchange Offer is
extended.
ACCRUED INTEREST ON THE EXCHANGE
NOTES........................... Interest on the Exchange Notes will accrue from and
include their issuance date. Additionally, interest on
the Exchange Notes will accrue from the last interest
payment date on which interest was paid on the Original
Notes surrendered in exchange therefor or, if no
interest has been paid on the Original Notes, from
</TABLE>
10
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<TABLE>
<S> <C>
the date of original issuance of such Original Notes to
but not including the issuance date of the Exchange
Notes. Accordingly, holders who exchange their Original
Notes will receive the same interest payment on the next
interest payment date (expected to be June 15, 1998)
that they would have received had they not accepted the
Exchange Offer.
CONDITIONS TO THE EXCHANGE
OFFER........................... The Exchange Offer is subject to certain customary
conditions. See "The Exchange Offer--Conditions." The
Issuer reserves the right to terminate or amend the
Exchange Offer at any time prior to the Expiration Date
upon the occurrence of any such conditions.
PROCEDURES FOR TENDERING ORIGINAL
SECURITIES...................... Each participant (a "DTC Participant") in the Depository
Trust Company ("DTC") holding Original Securities
through DTC must (i) electronically transmit its
acceptance to DTC through the DTC Automated Tender Offer
Program ("ATOP"), for which the transaction will be
eligible, and DTC will then edit and verify the
acceptance, execute a book-entry delivery to the
Exchange Agent's account at DTC and send an Agent's
Message (as defined herein) to the Exchange Agent for
its acceptance, or (ii) comply with the guaranteed
delivery procedures set forth in this Prospectus and in
the Letter of Transmittal. By tendering through ATOP,
DTC Participants will expressly acknowledge receipt of
the accompanying Letter of Transmittal and agree to be
bound by its terms and the Company will be able to
enforce such agreement against such DTC participants.
See "The Exchange Offer--Procedures for
Tendering--Original Securities held through DTC," and
"--Guaranteed Delivery Procedures-- Original Securities
held through DTC." Each holder of Original Securities
wishing to accept the Exchange Offer must complete, sign
and date the respective Letter of Transmittal, or a
facsimile thereof, in accordance with the instructions
contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such facsimile,
together with the Original Securities and any other
required documentation to the Exchange Agent at the
address set forth herein. A separate Letter of
Transmittal is required for the tender of Original Notes
and Original Appreciation Notes. Original Securities may
be physically delivered, but physical delivery is not
required if a confirmation of a book-entry transfer of
such Original Securities to the Exchange Agent's account
at The Depository Trust Company is delivered in a timely
fashion. By executing a Letter of Transmittal, each
holder will represent to the Issuer that, among other
things, the Exchange Securities acquired pursuant to the
Exchange Offer are being obtained in the ordinary course
of business of the person receiving such Exchange
Securities, whether or not such person is the holder,
that neither the holder nor any such other person is
engaged in, or intends to engage in, or has an arrange-
ment or understanding with any person to participate in,
the distribution of such Exchange Securities and that
neither the
</TABLE>
11
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<TABLE>
<S> <C>
holder nor any such person is an "affiliate," as defined
under Rule 405 of the Securities Act, of the Issuer.
Each Participating Broker-Dealer that receives Exchange
Securities for its own account in exchange for Original
Securities where such Original Securities were acquired
by such Participating Broker-Dealer as a result of
market-making activities or other trading activities,
must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities.
See "The Exchange Offer--Purpose and Effect of the
Exchange Offer" and "Plan of Distribution."
SPECIAL PROCEDURES FOR BENEFICIAL
OWNER........................... Any beneficial owner whose Original Securities are
registered in the name of a broker, dealer, commercial
bank, trust company or other nominee and who wishes to
tender should contact such registered holder promptly
and instruct such registered holder to tender on such
beneficial owner's behalf. If such beneficial owner
wishes to tender on such owner's own behalf, such owner
must, prior to completing and executing a Letter of
Transmittal and delivering its Original Securities,
either make appropriate arrangements to register
ownership of the Original Securities in such owner's
name or obtain a properly completed bond power for both
the Original Notes and Original Appreciation Notes from
the registered holder. The Transfer of registered
ownership may take considerable time and may not be
completed prior to the Expiration Date. See "The
Exchange Offer--Procedures for Tendering."
GUARANTEED DELIVERY PROCEDURES.... DTC Participants holding Original Securities through DTC
who wish to cause their Original Securities to be
tendered, but who cannot transmit their acceptances
through ATOP prior to the Expiration Date, may effect a
tender in accordance with the procedures set forth in
this Prospectus and in the Letters of Transmittal. See
"Exchange Offer--Guaranteed Delivery Procedures."
Holders of Original Securities who wish to tender their
Original Securities and whose Original Securities are
not immediately available or who cannot deliver their
Original Securities, the Letters of Transmittal or any
other documents required by the Letters of Transmittal
to the Exchange Agent prior to the Expiration Date, must
tender their Original Securities according to the
guaranteed delivery procedures set forth in "The
Exchange Offer--Guaranteed Delivery Procedures."
ACCEPTANCE OF THE ORIGINAL
SECURITIES AND DELIVERY OF THE
EXCHANGE
SECURITIES...................... Subject to the satisfaction of the conditions to the
Exchange Offer, the Issuer will accept for exchange any
and all Original Securities which are properly tendered
in the Exchange Offer prior to the Expiration Date. The
Exchange Securities issued pursuant to the Exchange
Offer will be delivered on the earliest practicable date
following the Expiration Date. See "The Exchange
Offer--Terms of the Exchange Offer."
</TABLE>
12
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<TABLE>
<S> <C>
WITHDRAWAL RIGHTS................. Tenders of Original Securities may be withdrawn at any
time prior to 5:00 p.m., New York City time, on the
Expiration Date. See "The Exchange Offer--Withdrawal of
Tenders."
EFFECT ON HOLDERS OF THE
SECURITIES...................... Following consummation of the Exchange Offer, holders of
the Original Securities eligible to participate in the
Exchange Offer but who do not tender their Original
Securities will not have further exchange rights and
such Original Securities will continue to be subject to
certain restrictions on transfer. To the extent that
Original Securities are tendered and accepted in the
Exchange Offer, the trading market for untendered
Original Securities could be adversely affected.
CONSEQUENCES OF FAILURE TO
EXCHANGE........................ The Original Securities that are not exchanged pursuant
to the Exchange Offer will remain restricted securities.
Accordingly, such Original Securities may be resold only
(i) to the Issuer, (ii) pursuant to Rule 144A or Rule
144 under the Securities Act or pursuant to another
exemption under the Securities Act, (iii) outside the
United States to a foreign person pursuant to the
requirements of Rule 904 under the Securities Act or
(iv) pursuant to an effective registration statement
under the Securities Act. See "The Exchange
Offer--Consequences of Failure to Exchange."
SHELF REGISTRATION STATEMENT...... Under certain circumstances, certain holders of Original
Securities (including holders who are not permitted to
participate in the Exchange Offer or who may not freely
resell Exchange Securities received in the Exchange
Offer) may require the Issuer to register the Original
Securities with a shelf registration statement and use
its best efforts to cause it to be declared effective by
the Commission. The Company has agreed to maintain the
effectiveness of any such shelf registration statement
for, under certain circumstances, a maximum of two
years, to cover resales of the Original Securities held
by any such holders. See "The Exchange Offer--Purpose
and Effect of the Exchange Offer."
EXCHANGE AGENT.................... The United States Trust Company of New York is serving
as the Exchange Agent in connection with the Exchange
Offer. See "The Exchange Offer--Exchange Agent."
THE EXCHANGE NOTES
GENERAL........................... The Exchange Offer applies to $105 million aggregate
principal amount of the Original Notes. The form and
terms of the Exchange Notes will be the same as the form
and terms of the Original Notes except that (i) the
Exchange Notes will bear a "Series B" designation and a
different CUSIP Number from the Notes, (ii) the Exchange
Notes will have been registered under the Securities Act
and, therefore, will not bear legends restricting the
transfer thereof and (iii) holders of the Exchange Notes
will not be entitled to certain rights of holders of
Original Notes under the Note Registration Rights
Agreement which rights will
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
terminate as to holders of the Exchange Notes upon
consummation of the Exchange Offer. The Exchange Notes
will evidence the same debt as the Original Notes, will
be entitled to the benefits of the Indenture and will be
treated as a single class thereunder with the Original
Notes. See "Description of Notes."
SECURITIES OFFERED................ $105 million principal amount of 12% Series B Senior
Notes due 2007 (the "Exchange Notes").
INTEREST RATE..................... The Notes will bear cash interest at a rate of 7 1/2%
per annum on their principal amount until December 15,
1999, and at a rate of 12% per annum on their principal
amount from and after such date until maturity.
MATURITY.......................... December 15, 2007.
INTEREST PAYMENT DATES............ June 15 and December 15 of each year, commencing on June
15, 1998.
RANKING........................... The Notes are senior unsecured obligations of the
Issuer. The Notes rank PARI PASSU in right of payment
with all existing and future senior indebtedness of the
Issuer and rank senior in right of payment to any
subordinated indebtedness of the Issuer. The Notes (and
the Subsidiary Guarantees) are effectively subordinated
in right of payment to any secured debt of the Issuer
and the Subsidiary Guarantors to the extent of the
assets serving as security therefor. As of August 31,
1997, on a pro forma basis after giving effect to the
Transactions, the Issuer had no outstanding secured
indebtedness to which the Notes would have been
effectively subordinated, and the aggregate amount of
the Subsidiary Guarantors' outstanding senior secured
indebtedness to which the Subsidiary Guarantees would
have been effectively subordinated was approximately
$4.9 million. See "Description of Notes--Ranking" and
"--Subordination."
GUARANTEES........................ The Notes are unconditionally guaranteed, jointly and
severally, by each of the Subsidiary Guarantors. The
Subsidiary Guarantees are senior unsecured obligations
of the Subsidiary Guarantors and rank PARI PASSU in
right of payment with all other existing and future
senior indebtedness of the respective Subsidiary
Guarantors and senior in right of payment to all
existing and future subordinated indebtedness of the
respective Subsidiary Guarantors and may be released
upon the occurrence of certain events. The Subsidiary
Guarantees are effectively subordinated to any secured
debt of the Subsidiary Guarantors to the extent of the
assets serving as security therefor. See "Description of
Notes--Ranking" and "--Subsidiary Guarantees."
OPTIONAL REDEMPTION............... Except as described below and under "Change of Control,"
the Issuer may not redeem the Notes prior to December
15, 2002. On or after such date, the Issuer may redeem
the Notes, in whole or in part, at any time at the
redemption prices set forth herein, together with
accrued and unpaid interest, if any, to the date of
redemption. In addition, in the event of the sale by the
</TABLE>
14
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<TABLE>
<S> <C>
Issuer prior to December 15, 2000, of its Capital Stock
(other than Disqualified Stock) in one or more Public
Equity Offerings the net cash proceeds of which are at
least $25.0 million in the aggregate, the Issuer may, at
its option, use the net cash proceeds of such sale or
sales of Capital Stock to redeem up to 25% of the
aggregate principal amount of the Notes at a redemption
price in the case of a redemption date prior to December
15, 1999, equal to 112% of the Accreted Value (as
defined) of the Notes to be redeemed, together with
accrued and unpaid interest, if any, to the date of
redemption and for any redemption date on or after
December 15, 1999, at a redemption price equal to 112%
of the principal amount thereof plus accrued interest
thereon, if any, to the date of redemption, PROVIDED,
HOWEVER that after any such redemption the aggregate
principal of the Notes outstanding must equal at least
$79 million. See "Description of Notes--Optional
Redemption."
CHANGE OF CONTROL................. Upon the occurrence of a Change of Control, each holder
will have the right to require the Issuer to repurchase
all or any part of such holder's Notes, in the case of a
repurchase date prior to December 15, 1999, at a
purchase price in cash equal to 101% of the Accreted
Value thereof plus any accrued and unpaid interest, if
any, to the date of repurchase and for any repurchase
date on or after December 15, 1999, at a purchase price
in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of
repurchase. See "Description of Notes--Optional
Redemption" and "--Change of Control."
RESTRICTIVE COVENANTS............. The indenture under which the Original Notes were issued
and the Exchange Notes will be issued (the "Indenture")
contains certain covenants that, among other things,
will limit (i) the incurrence of additional indebtedness
by the Company, (ii) distributions and withdrawals of
the capital of the Company and the redemption of certain
subordinated obligations of the Company, (iii)
investments, (iv) sales of assets and subsidiary stock,
(v) transactions with affiliates and (vi)
consolidations, mergers and transfers of all or
substantially all the assets of the Company. The
Indenture also contains certain restrictions on
distributions by Subsidiaries. However, all of these
limitations and prohibitions are subject to a number of
important qualifications and exceptions. See
"Description of Notes--Certain Covenants."
ORIGINAL ISSUE DISCOUNT........... The Notes were considered to be issued with original
issue discount ("OID") for United States federal income
tax purposes. As a result, a U.S. Holder (defined in
"Certain United States Federal Income Tax Consequences")
generally will be required to include OID in gross
income for United States federal income tax purposes as
it accrues, in advance of the receipt of cash
attributable to such income. See "Certain United States
Federal Income Tax Consequences."
</TABLE>
15
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THE APPRECIATION NOTES
<TABLE>
<S> <C>
GENERAL........................... The Exchange Offer applies to $3 million aggregate
principal amount of the Original Appreciation Notes. The
form and terms of the Exchange Appreciation Notes are
the same as the form and terms of the Original
Appreciation Notes except that (i) the Exchange
Appreciation Notes will bear a "Series B" designation
and a different CUSIP Number from the Original
Appreciation Notes, (ii) the Exchange Appreciation Notes
will have been registered under the Securities Act and,
therefore, will not bear legends restricting the
transfer thereof and (iii) holders of Exchange
Appreciation Notes will not be entitled to certain
rights of holders of Original Appreciation Notes under
the Appreciation Note Registration Rights Agreement
which rights will terminate as to holders of the
Exchange Appreciation Notes upon consummation of the
Exchange Offer. See "Description of the Appreciation
Notes."
SECURITIES OFFERED................ $3 million principal amount of Series B Appreciation
Notes due 2007 (the "Exchange Appreciation Notes"). Each
Appreciation Note will entitle the holder thereof to
receive on the Maturity Date (as defined) a cash payment
of principal and interest in the amount equal to (i) the
principal amount thereof plus (ii) the amount by which
the Specified Percentage (as defined) of the Value (as
defined) of BMC on the Maturity Date exceeds the
principal amount of such Appreciation Note. The "Value"
of BMC on the Maturity Date means an amount equal to 12
times Media Cashflow (as defined) for the then most
recent four fiscal quarters for which financial
statements of BMC are available plus the cash and cash
equivalents of BMC and its Subsidiaries on the Maturity
Date less the aggregate amount of Indebtedness (as
defined) of BMC and its Subsidiaries on a consolidated
basis outstanding on the Maturity Date.
"Specified Percentage" of an Appreciation Note with a
principal amount of $28.57 means 0.0000004761904761% (or
5% in the aggregate for all Appreciation Notes).
MATURITY DATE..................... December 15, 2007.
RANKING........................... The Appreciation Notes are senior subordinated
obligations of the Issuer. The Appreciation Notes are
subordinated in right of payment to all existing and
future Senior Indebtedness (as defined) of the Issuer,
including the Notes, and rank senior in right of payment
to any subordinated indebtedness of the Issuer. See
"Description of Appreciation Notes--Ranking and Subordi-
nation."
GUARANTEES........................ The Appreciation Notes are unconditionally guaranteed,
jointly and severally, by each of the Subsidiary
Guarantors. The guarantees of the Appreciation Notes are
senior subordinated obligations of the Subsidiary
Guarantors and are subordinated in right
</TABLE>
16
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<TABLE>
<S> <C>
of payment to all existing and future Guarantor Senior
Indebtedness (as defined) of the respective Subsidiary
Guarantor, including the Subsidiary Guarantees of the
Notes, and senior in right of payment to all existing
and future subordinated indebtedness of the respective
Subsidiary Guarantor and may be released upon the
occurrence of certain events. See "Description of
Appreciation Notes--Ranking and Subordination" and
"--Subsidiary Guarantees."
MANDATORY REDEMPTION AT THE OPTION
OF THE HOLDERS UPON THE OCCUR-
RENCE OF A SPECIFIED EVENT...... The Appreciation Notes will be redeemable, at the option
of the holders, upon the occurrence of (a) an Initial
Public Offering (as defined), (b) a Sale of the Company
(as defined), or (c) the liquidation of the Issuers in
each case at the redemption price (the "Specified Event
Redemption Price") equal to (i) in the case of a
redemption with respect to an Initial Public Offering,
the price at which membership interests in BMC (the
"Membership Interests") are sold in such Initial Public
Offering (less underwriting discounts and commissions,
if any) which represent a percentage interest in BMC
equal to the Specified Percentage of the Appreciation
Note being redeemed, (ii) in the case of a Sale of the
Company covering assets (as defined in clause (i) of the
definition thereof) the amount equal to the Specified
Percentage of the Appreciation Note being redeemed of
the sum of the aggregate fair market value of all
consideration received by the Issuer and its
Subsidiaries, net of any debt repaid therewith, net of
ordinary and customary transaction expenses of the
related transfer and the fair market value of BMC as
determined after giving effect to such sale, (iii) in
the case of a redemption with respect to a Sale of the
Company concerning securities (as defined in clause (ii)
of the definition thereof), the price at which
Membership Interests are sold in such Sale of the Com-
pany, or in the transaction which resulted in such Sale
of the Company, which represent a percentage interest in
BMC equal to the Specified Percentage of the
Appreciation Note being redeemed, and (iv) in the case
of a redemption with respect to a liquidation of the
Issuer, an amount equal to the greater of (i) the fair
market value of the distribution received by Membership
Interests representing a percentage interest in BMC
equal to the Specified Percentage of the Appreciation
Note being redeemed in connection with such liquidation
and (ii) the Pro Rata Percentage (as defined) of such
Appreciation Note of $3.0 million. See "Description of
the Appreciation Notes--Mandatory Redemption at the
Option of the Holders upon the Occurrence of Certain
Events."
MANDATORY REDEMPTION AT THE OPTION
OF THE HOLDERS ON SPECIFIED
DATE............................ In addition, if an Initial Public Offering has not
occurred on or before a date set forth below, the
holders may require the Issuer to redeem its
Appreciation Notes at a redemption price equal to
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17
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<TABLE>
<S> <C>
the Pro Rata Percentage of such Appreciation Note of the
amount set forth below opposite such date:
</TABLE>
<TABLE>
<CAPTION>
REDEMPTION DATE AMOUNT
---------------- ---------------
<S> <C> <C>
June 30, 2003.. $ 24.0 million
June 30, 2004.. $ 20.0 million
June 30, 2005.. $ 13.0 million
</TABLE>
<TABLE>
<S> <C>
If a holder so elects the Issuer shall redeem the
relevant Appreciation Notes no later than the 90th day
after the relevant redemption date. See "Description of
the Appreciation Notes-- Mandatory Redemption at the
Option of Holders on Specified Dates."
OPTIONAL REDEMPTION............... The Issuer may not redeem the Appreciation Notes prior
to June 15, 1999. Thereafter, if an Initial Public
Offering has not occurred on or before a date set forth
below, the Issuer may redeem the Appreciation Notes (in
whole but not in part) on any date set forth below at a
redemption price equal to the Pro Rata Percentage of
each Appreciation Note of the amount the price set forth
below opposite such date. See "Description of the
Appreciation Notes--Optional Redemption."
</TABLE>
<TABLE>
<CAPTION>
REDEMPTION DATE AMOUNT
---------------- ----------------
<S> <C> <C>
June 15, 1999.. $ 3.0 million
June 15, 2000.. $ 8.3 million
June 15, 2001.. $ 12.8 million
June 15, 2002.. $ 18.0 million
June 15, 2003.. $ 24.0 million
June 15, 2004 $ 31.0 million
June 15, 2005.. $ 39.0 million
June 15, 2006.. $ 48.0 million
June 15, 2007.. $ 58.0 million
</TABLE>
<TABLE>
<S> <C>
ORIGINAL ISSUE DISCOUNT........... The Appreciation Notes were considered to be issued with
original issue discount ("OID") for United States
federal income tax purposes. As a result, a U.S. Holder
(defined in "Certain United States Federal Income Tax
Consequences") generally will be required to include OID
in gross income for United States federal income tax
purposes as it accrues, in advance of the receipt of
cash attributable to such income. See "Certain United
States Federal Income Tax Consequences."
</TABLE>
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PRO FORMA MEDIA CASHFLOW AND OTHER DATA
The following pro forma Media Cashflow and Other Data give effect to the
Transactions as if they had been completed as of March 1, 1996 for results of
operations data or on August 31, 1997 for balance sheet data. The information
presented may not be indicative of the actual results had the Transactions
occurred on such dates, and there can be no assurance that the Company will be
able to achieve such results in the future. The pro forma Media Cashflow and
Other Data presented below should be read in conjunction with the information
contained in the combined financial statements of The Radio and Newspaper
Businesses of Alan R. Brill, "Pro Forma Financial Information" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
<TABLE>
<CAPTION>
PRO FORMA
--------------------------------
(DOLLARS IN THOUSANDS)
--------------------------------
YEAR ENDED SIX MONTHS
FEBRUARY 28, ENDED
1997 AUGUST 31, 1997
--------------- ---------------
<S> <C> <C>
Media Cashflow (a)......................................... $ 10,363 $ 6,056
EBITDA (a)................................................. 5,908 3,575
Net interest expense (b)................................... 12,688 6,347
Net cash interest expense (c).............................. 7,329 3,667
Net debt (d)............................................... 78,743 78,743
Ratio of Media Cashflow to net interest expense............ 0.82x 0.95x
Ratio of Media Cashflow to net cash interest expense....... 1.41x 1.65x
Ratio of net debt to Media Cashflow........................ 7.60x 6.50x(e)
</TABLE>
(a) "EBITDA" is defined as operating income before depreciation and amortization
expenses. "Media Cashflow" is defined as EBITDA plus management fees,
incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to
Managed Affiliates. Management fees payable to BMCLP are subordinated, to
the extent provided in the Indenture, to the prior payment of the Issuer's
obligations on the Notes. Although Media Cashflow and EBITDA are not
measures of performance calculated in accordance with GAAP, management
believes that these measures are useful to an investor in evaluating the
Company because these measures are widely used in the media industry to
evaluate a media company's operating performance. However, Media Cashflow
and EBITDA should not be considered in isolation or as substitutes for net
income, cash flows from operating activities and other income or cash flow
statements prepared in accordance with GAAP as measures of liquidity or
profitability.
(b) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively. Net interest expense is also net of expected interest income,
calculated at 5.5% on excess proceeds from the Transactions estimated to be
$23 million at August 31, 1997, of $1,265,000 and $633,000 for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively.
(c) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net cash interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and six months ended August 31, 1997, respectively
and also excludes interest accrued at the assumed effective rate of 12.2%,
which is in excess of the assumed current pay rate of 7.5% in each of years
one and two by $4,960,000 ($2,480,000 per six months) and excludes interest
on the Appreciation Notes accreted at 17% totaling $399,000 for the year
ended February 28, 1997 ($200,000 for six months). Net cash interest expense
is also net of expected interest income, calculated at 5.5% on excess
proceeds from the Transactions estimated to be $23 million at August 31,
1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and
the six months ended August 31, 1997, respectively.
(d) Net debt includes total debt less the incentive plan liability and less cash
and cash equivalents, all as of August 31, 1997, as significant portions of
the cash and cash equivalents are held for future acquisitions.
(e) For purposes of this ratio the Media Cashflow for the six months ended
August 31, 1997 has been doubled to estimate an annualized amount. No
assurance can be provided that such results will be achieved.
19
<PAGE>
SUMMARY COMBINED FINANCIAL DATA
The summary combined financial data presented below should be read in
conjunction with the combined financial statements of The Radio and Newspaper
Businesses of Alan R. Brill and notes thereto included elsewhere in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." The summary combined financial data (except for the
other financial and operating data) of The Radio and Newspaper Businesses of
Alan R. Brill (i) as of and for the years ended February 28, 1993 and 1994 have
been derived from schedules which primarily include information from the
separate audited combined financial statements of The Broadcasting Businesses of
Alan R. Brill and the separate audited consolidated financial statements of
Central Michigan Newspapers, Inc., (ii) as of and for the years ended February
28, 1995, February 29, 1996 and February 28, 1997 have been derived from the
audited combined financial statements of The Radio and Newspaper Businesses of
Alan R. Brill and (iii) as of and for the six months ended August 31, 1996 and
1997 have been derived from the unaudited condensed combined financial
statements of The Radio and Newspaper Businesses of Alan R. Brill. The summary
pro forma data presented below should be read in conjunction with the
information contained in the historical financial statements included elsewhere
herein and "Pro Forma Financial Information."
<TABLE>
<CAPTION>
HISTORICAL
------------------------------------------------------------
SIX MONTHS
FISCAL YEAR ENDED FEBRUARY 28 OR 29 ENDED
------------------------------------------------ AUGUST 31,
1993 1994 1995 1996 1997 1996
-------- -------- -------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenues:
Radio..................... $ 9,764 $ 10,961 $ 12,650 $ 13,096 $ 13,596 $ 6,852
Newspapers................ 10,877 10,499 10,537 12,217 13,440 6,854
-------- -------- -------- -------- -------- ----------
Total revenues........ 20,641 21,460 23,187 25,313 27,036 13,706
Operating expenses:
Operating departments..... 16,644 16,352 17,530 18,640 19,043 9,540
Incentive plan............ 25 176 634 1,467 628 316
Other..................... -- -- -- 37 86 (48)
Management fees........... 897 1,521 1,679 1,833 1,945 980
Depreciation and
amortization............ 1,306 1,277 1,111 1,312 1,395 670
-------- -------- -------- -------- -------- ----------
Total operating
expenses.............. 18,872 19,326 20,954 23,289 23,097 11,458
-------- -------- -------- -------- -------- ----------
Operating income............ 1,769 2,134 2,233 2,024 3,939 2,248
Other income (expense):
Interest expense, net..... (4,484) (4,645) (5,842) (7,130) (7,432) (3,686)
Other, net................ (148) 3,463 (144) (80) 1,007 1,035
-------- -------- -------- -------- -------- ----------
Total other income
(expense)........... (4,632) (1,182) (5,986) (7,210) (6,425) (2,651)
-------- -------- -------- -------- -------- ----------
Income (loss) before income
taxes and extraordinary
item...................... (2,863) 952 (3,753) (5,186) (2,486) (403)
Income tax provision
(benefit)................. 112 168 68 (39) 286 84
-------- -------- -------- -------- -------- ----------
Income (loss) before
extraordinary item........ (2,975) 784 (3,821) (5,147) (2,772) (487)
Extraordinary item (b)...... -- 245 -- 6,915 -- --
-------- -------- -------- -------- -------- ----------
Net income (loss)........... $ (2,975) $ 1,029 $ (3,821) $ 1,768 $ (2,772) $ (487)
-------- -------- -------- -------- -------- ----------
-------- -------- -------- -------- -------- ----------
OTHER FINANCIAL AND
OPERATING DATA:
Media Cashflow (c).......... $ 3,997 $ 5,108 $ 5,657 $ 6,673 $ 7,993 $ 4,166
EBITDA (c).................. 3,075 3,411 3,344 3,336 5,334 2,918
Capital expenditures
excluding acquisitions.... 410 833 974 977 1,269 304
Net interest expense (d)....
Net cash interest
expense (e)...............
Net debt (f)................
Ratio of Media Cashflow to
net interest expense......
Ratio of Media Cashflow to
net cash interest
expense...................
Ratio of net debt to Media
Cashflow..................
<CAPTION>
PRO FORMA
-------------------------
SIX MONTHS YEAR SIX MONTHS
ENDED ENDED ENDED
AUGUST 31, FEBRUARY 28, AUGUST 31,
1997 1997 (A) 1997 (A)
---------- ------------ ----------
<S> <C> <C> <C>
STATEMENT OF OPERATIONS DATA
Revenues:
Radio..................... $ 8,005 $ 11,644 $ 6,800
Newspapers................ 7,095 15,771 8,168
---------- ------------ ----------
Total revenues........ 15,100 27,415 14,968
Operating expenses:
Operating departments..... 10,104 19,010 9,891
Incentive plan............ 485 628 485
Other..................... 142 -- --
Management fees........... 1,072 1,869 1,017
Depreciation and
amortization............ 749 1,358 744
---------- ------------ ----------
Total operating
expenses.............. 12,552 22,865 12,137
---------- ------------ ----------
Operating income............ 2,548 4,550 2,831
Other income (expense):
Interest expense, net..... (3,981) (12,550) (6,276)
Other, net................ (31) (47) (26)
---------- ------------ ----------
Total other income
(expense)........... (4,012) (12,597) (6,302)
---------- ------------ ----------
Income (loss) before income
taxes and extraordinary
item...................... (1,464) (8,048) (3,471)
Income tax provision
(benefit)................. 78 272 86
---------- ------------ ----------
Income (loss) before
extraordinary item........ (1,542) (8,320) (3,557)
Extraordinary item (b)...... -- --
---------- ------------ ----------
Net income (loss)........... $ (1,542) $ (8,320) $(3,557)
---------- ------------ ----------
---------- ------------ ----------
OTHER FINANCIAL AND
OPERATING DATA:
Media Cashflow (c).......... $ 5,560 $ 10,363 $ 6,056
EBITDA (c).................. 3,297 5,908 3,575
Capital expenditures
excluding acquisitions.... 408 1,336 411
Net interest expense (d).... 12,688 6,347
Net cash interest
expense (e)............... 7,329 3,667
Net debt (f)................ 78,743 78,743
Ratio of Media Cashflow to
net interest expense...... 0.82x 0.95x
Ratio of Media Cashflow to
net cash interest
expense................... 1.41x 1.65x
Ratio of net debt to Media
Cashflow.................. 7.60x 6.50x (g)
</TABLE>
- ------------------------------
20
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA
HISTORICAL -----------
-------------------------------------------------------------------------------
AS OF AS OF AS OF
AS OF FEBRUARY 28 OR 29 AUGUST 31, AUGUST 31, AUGUST 31,
----------------------------------------------------- ----------- ----------- -----------
1993 1994 1995 1996 1997 1996 1997 1997 (A)
--------- --------- --------- --------- --------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF FINANCIAL POSITION
DATA:
Cash and cash equivalents....... $ 104 $ 202 $ 550 $ 2,075 $ 775 $ 955 $ 351 $ 23,991
Working capital (deficit)....... (3,469) (1,881) (334) 2,398 1,014 1,860 (1,303) 25,511
Intangible assets............... 4,103 5,219 5,099 7,374 7,583 7,631 10,207 17,474
Total assets.................... 16,454 21,938 21,784 26,011 26,442 25,800 42,569 70,251
Total debt including due to
affiliates (h)................ 49,796 55,160 58,715 61,636 50,475 50,245 68,046 107,374
Net capital deficiency.......... (37,153) (36,302) (40,123) (38,354) (26,610) (26,944) (31,150) (39,517)(i)
</TABLE>
- ------------------------
(a) The pro forma statement of operations and other financial and operating data
for the year ended February 28, 1997 and for the six months ended August 31,
1997 give effect to the Transactions as if they occurred March 1, 1996. The
pro forma statement of financial position data give effect to the
Transactions as if they had occurred on August 31, 1997. See "Pro Forma
Financial Information."
(b) The extraordinary item in fiscal 1996 reflects an adjustment of accrued
interest in the amount of $7.0 million related to subordinated debt for
which contingent interest had been accrued at the maximum rate but was
reduced at maturity pursuant to terms of an alternative valuation formula,
as defined in the agreement. The gain was offset by the write-off of certain
previously deferred financing fees of $131,000.
(c) "EBITDA" is defined as operating income before depreciation and amortization
expenses. "Media Cashflow" is defined as EBITDA plus management fees,
incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to
Managed Affiliates. Management fees payable to BMCLP are subordinated, to
the extent provided in the Indenture, to the prior payment of the Issuer's
obligations on the Notes. Although Media Cashflow and EBITDA are not
measures of performance calculated in accordance with GAAP, management
believes that these measures are useful to an investor in evaluating the
Company because these measures are widely used in the media industry to
evaluate a media company's operating performance. However, Media Cashflow
and EBITDA should not be considered in isolation or as substitutes for net
income, cash flows from operating activities and other income or cash flow
statements prepared in accordance with GAAP as measures of liquidity or
profitability.
(d) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively. Net interest expense is also net of expected interest income,
calculated at 5.5% on excess proceeds from the Transactions estimated to be
$23 million at August 31, 1997, of $1,265,000 and $633,000 for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively.
(e) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net cash interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and six months ended August 31, 1997, respectively
and also excludes interest accrued at the assumed effective rate of 12.2%,
which is in excess of the assumed current pay rate of 7.5% in each of years
one and two by $4,960,000 ($2,480,000 per six months) and excludes interest
on the Appreciation Notes accreted at 17% totaling $399,000 for the year
ended February 28, 1997 ($200,000 for six months). Net cash interest expense
is also net of expected interest income, calculated at 5.5% on excess
proceeds from the Transactions estimated to be $23 million at August 31,
1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and
six months ended August 31, 1997, respectively.
(f) Net debt includes total debt less the incentive plan liability and less cash
and cash equivalents, all as of August 31, 1997, as significant portions of
the cash and cash equivalents are held for future acquisitions.
(g) For purposes of this ratio the Media Cashflow for the six months ended
August 31, 1997 has been doubled to estimate an annualized amount. No
assurance can be provided that such results will be achieved.
(h) Total debt including due to affiliates includes the senior note, obligations
under capital leases, unsecured and subordinated obligations, debt due to
affiliates and, on a pro forma basis, the Notes and Appreciation Notes.
(i) The net capital deficiency as of August 31, 1997 reflects the declaration of
a distribution in the amount of $3.0 million which was subsequently paid in
cash. The pro forma net capital deficiency as of August 31, 1997 reflects,
in part, the subsequent declaration and payment of distributions in the
amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes
of satisfaction of affiliate notes receivable.
21
<PAGE>
RISK FACTORS
Investors should carefully examine this entire Prospectus and should give
particular attention to the risk factors set forth below in evaluating whether
to tender their Original Securities for Exchange Securities in the Exchange
Offer.
COMPANY STRUCTURE
BMC is a holding company with no business operations of its own. Media, a
wholly owned Subsidiary of BMC, is BMC's manager and, with BMC, co-issuer of the
Securities (collectively, the "Issuer").
BMC has lent the proceeds received by it from the Offering to Holdings in
exchange for Holdings' unsecured promissory note (the "Holdings' Note"). BMC's
only material assets are the Holdings' Note and its ownership of all membership
interests of BMC Holdings, LLC ("Holdings"), a Subsidiary that directly and
indirectly owns all equity and membership interests in all of the other
Subsidiaries. Accordingly, BMC will be dependent upon the earnings and cashflows
of, and dividends and distributions from, its direct and indirect Subsidiaries
to pay its expenses, meet its obligations and pay interest and principal on the
Securities. There can be no assurance that these Subsidiaries will generate
earnings and cashflows sufficient to pay dividends or distribute funds to BMC
that will enable it to pay its expenses and meet its obligations to pay interest
and principal on the Securities.
Subject to applicable restrictions in the Indenture or the proposed New
Credit Facility, acting pursuant to a revolving credit agreement (the "Revolving
Credit Agreement") entered into by and among Holdings as lender and Holdings'
Subsidiaries as borrowers thereunder, from time to time Holdings will lend and
relend available funds to such Subsidiaries, in exchange for the Subsidiaries'
unsecured promissory note (the "Subsidiaries' Note") payable to Holdings. From
time to time Holdings and the Subsidiaries also will lend and relend available
funds to the Managed Affiliates in exchange for the Managed Affiliates'
unsecured notes. See "Description of Notes."
SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE INDEBTEDNESS; NET LOSSES
As of August 31, 1997, after giving effect to the Transactions on a pro
forma basis, the Company had outstanding approximately $107 million of long term
obligations. See "Capitalization." Holdings is a holding company with no
business operations of its own, and the Newspapers' and Stations' operations are
conducted through the Subsidiaries. The Subsidiaries are not required to make
capital or other contributions to BMC or Holdings, and BMC's expected revenues
and assets will consist almost entirely of interest, principal, and dividend or
other payments or distributions to be received by BMC from the Subsidiaries
through their payments to Holdings on the Subsidiaries' Note and Holdings'
payments to BMC on the Holdings' Note. Media is a new corporation with
negligible assets and no material sources of income and will be only an
accommodation maker on the Securities, and BMC will be expected to pay all
obligations on the Securities and to reimburse Media for any amounts it may pay
on the Securities. BMC's ability to pay interest on the Securities when due and
to satisfy its other obligations ultimately depends, therefore, in large part
upon the future operating performance of the Subsidiaries, which ability
necessarily will be affected by prevailing economic conditions, which in turn
will depend upon and be affected by financial, business, market, technological,
competitive, and other conditions, developments, pressures, and factors, many of
which are and will continue to be beyond their knowledge or control. BMC,
Holdings, and the Subsidiaries are and will be highly leveraged, and many of
their competitors are believed to operate with much less leverage and to have
significantly greater operating and financial flexibility and resources.
The Company and its Subsidiaries are organized under the laws of the
Commonwealth of Virginia. In addition to restrictions contained in agreements to
which they are parties, due to restrictions imposed by applicable law on the
payment of dividends or other distributions on capital stock (in the case of
corporations) or membership interests (in the case of limited liability
companies), a corporation or limited liability company may not make a
distribution or dividend, if, after giving effect to such dividend or
22
<PAGE>
distribution, the corporation or limited liability company, as applicable, would
not be able to pay its debts as they become due in the usual course of business
or if the corporation's or limited liability company's total assets would then
be less than the sum of its then total liabilities. In making such a
determination of the ability of a corporation or limited liability company to
make a dividend or distribution, applicable Virginia law permits the board of
directors (in the case of a corporation) or the manager (in the case of a
limited liability company) to base its determination in part on its
determination of a then fair valuation of the entity's assets. There can be no
assurance that any such dividends or distributions to BMC or Holdings will be
allowed.
While net income or loss may not be considered a meaningful measure of
performance for media properties, in the past, depreciation, amortization, and
interest charges have contributed significantly to periodic net losses suffered
by the Subsidiaries, and it is expected that such net losses will continue in
the future. On a combined basis, the Company and its predecessors reported a net
loss in three of their last five fiscal years. In the fiscal year ended February
28, 1997, the Company and its predecessors reported a net loss of $2.8 million.
While the Company expects that the Subsidiaries' cashflow will improve, the
Company nonetheless expects that the Subsidiaries will continue to incur
substantial net losses. There can be no assurance that the Subsidiaries will not
continue to generate further net losses in the future, which ultimately could
have a material, adverse effect on the Issuer's ability to pay interest or
principal on the Securities when due.
Media has nominal assets and no operations, and all representations as to
Media's solvency are based upon the assumption that BMC will hold Media harmless
from any claims asserted against Media on the Securities. The future of the
Company and its Subsidiaries involves a high degree of risk.
DEPENDENCE ON SUBSIDIARIES' OPERATING RESULTS; EFFECTIVE SUBORDINATION
While Holdings' Subsidiaries are obligated to pay principal and interest on
the Subsidiaries' Note, as and to the extent therein provided, Holdings'
Subsidiaries are legally distinct from Holdings and the Issuer, and none of the
Subsidiaries has or has now undertaken any obligation, direct, indirect,
contingent, or otherwise, to pay to holders of the Securities any amounts due
thereon or to secure payment thereof, or to make any funds available to the
Issuer or Holdings for any such purpose other than as may be required under each
Subsidiary's guarantees of the Securities. Additionally, since the Subsidiaries
own all operating assets of the Newspapers and Stations, the rights of holders
of the Securities effectively will be subordinate and inferior to the rights of
the secured creditors of each of the Subsidiaries to the extent of such
Subsidiary's assets.
Current levels of the Subsidiaries' operating results may not result in
dividend, distribution, or debt service payments to BMC or Holdings in amounts
sufficient, from that source alone, to meet all of BMC's expenses and debt
service requirements on the Securities, and the Subsidiaries may need to achieve
future increases in their operating results if BMC is to repay the Securities or
its other obligations when due. There can be no assurance that the Subsidiaries
can achieve such necessary increases or can sustain historical rates of growth
in revenues and operating results.
If the Company is unable to service its obligations in the ordinary course,
inevitably it will be forced to adopt alternative financial or operating
strategies, which may include using its working capital, reducing or delaying
capital expenditures, selling assets, restructuring or refinancing obligations,
or seeking equity capital. There can be no assurance that the Company can effect
any of these strategies on satisfactory terms, if at all.
RANKING OF THE SECURITIES AND THE SUBSIDIARY GUARANTEES, ABILITY TO INCUR
ADDITIONAL SECURED DEBT;
PRIORITY OF LIEN CREDITORS
The Notes are senior unsecured obligations of the Issuer and rank junior to
all secured indebtedness of the Issuer to the extent of the assets serving as
security therefor. As senior unsecured obligations of the
23
<PAGE>
Issuer, the Notes rank PARI PASSU in right of payment with all other existing
and future senior unsecured indebtedness of the Issuer. Under the terms of the
Indenture and the Appreciation Note Indenture, the Company is permitted, upon
the satisfaction of certain conditions, to incur secured indebtedness. The
rights of holders of the Notes as against the Company's assets will be
subordinate and inferior to all existing and future liens or secured
indebtedness or other secured obligations of the Company or any Subsidiary,
including any secured indebtedness under the proposed New Credit Facility, the
rights of judgment or other secured or lien creditors as against the assets of
the Company or any Subsidiary, and any prior, secured, or judgment liens against
the Company's assets, or any part thereof. In certain circumstances, provisions
of applicable secured indebtedness effectively could prohibit or prevent either
or both of (a) the Subsidiaries making debt service or other payments to
Holdings on the Subsidiaries' Note or (b) Holdings making debt service or other
payments to BMC on the Holdings' Note, and, as a result, the Issuer might have
insufficient funds available to make required payments due to holders of the
Notes. The Subsidiary Guarantors have unconditionally guaranteed the payment of
principal and interest on the Notes when due. The Subsidiary Guarantees rank
PARI PASSU with all existing and future senior indebtedness of the Issuer and
the Subsidiary Guarantors. The Subsidiary Guarantees are unsecured and thus, in
effect, would rank junior to any secured indebtedness of the Subsidiary
Guarantors. Upon completion of the Transactions, the Subsidiary Guarantors will
have approximately $4.9 million in aggregate principal amount of secured
indebtedness outstanding. The Indenture permits the Issuer and its Subsidiaries
(including the Subsidiary Guarantors) to incur additional secured debt under
certain circumstances. Some or all of such additional indebtedness may rank PARI
PASSU with the Subsidiary Guarantees, and the holders of such indebtedness may
have a claim to assets of a Subsidiary Guarantor superior to that of the holders
of the Notes because such additional indebtedness is secured by liens on assets
of such Subsidiary Guarantor. Although there are certain limitations on the
ability of the Subsidiary Guarantors to secure such debt, the incurrence of such
additional debt might adversely affect the Subsidiary Guarantors' ability to
meet their obligations under the Subsidiary Guarantees. See "Description of the
Notes--Subsidiary Guarantees." Consequently, in the event of dissolution,
liquidation or reorganization of, or similar proceeding relating to, any
Subsidiary Guarantor, such Subsidiary Guarantor's secured lenders would be
entitled to receive payment to the extent of the value of their collateral or in
full, whichever is less, prior to any payment in respect of such Subsidiary
Guarantee.
The Appreciation Notes are unsecured, subordinated obligations of the Issuer
and are subordinated in right of payment to all existing and future Senior
Indebtedness of the Issuer. Similarly, the Indebtedness evidenced by the
Guarantees of the Appreciation Notes by the Subsidiary Guarantors is
subordinated to the prior payment in full of all existing and future Guarantor
Senior Indebtedness (as defined under "Description of Appreciation Notes"). As
of August 31, 1997, after giving effect to the Offering and the use of proceeds
therefrom, the Issuer and the Subsidiary Guarantors would have had approximately
$99.4 million of Senior Indebtedness outstanding. The Issuer and the Subsidiary
Guarantors can also incur additional Senior Indebtedness under the terms of the
Appreciation Notes. In the event of a bankruptcy, liquidation, dissolution,
reorganization or similar proceeding with respect to the Issuer and the
Subsidiary Guarantors, assets of the Issuer and the Subsidiary Guarantors will
be available to pay obligations on the Appreciation Notes only after all Senior
Indebtedness has been paid in full, and there can be no assurance that there
will be sufficient assets to pay amounts due on all or any of the Appreciation
Notes. See "Description of Appreciation Notes--Ranking and Subordination" and
"--Subsidiary Guarantees."
In the event of bankruptcy, liquidation, dissolution and winding up, or
reorganization of the Company, the assets of the Company will be available to
pay obligations on the Notes or the Appreciation Notes only after all secured
indebtedness of the Company (or effectively any indebtedness of its
Subsidiaries) has been paid in full, and there may not be sufficient assets then
remaining to pay amounts due on any or all Notes or Appreciation Notes then
outstanding. Also, in any bankruptcy proceeding the rights of the holders of the
Notes or the Appreciation Notes as against the Company's assets are subject to
being equitably subordinated to the rights of other creditors. In like fashion,
the rights of BMC on the Holdings' Note and of Holdings on the Subsidiaries'
Note effectively will be subordinate and inferior to the rights of all holders
24
<PAGE>
of secured indebtedness of the Company. Secured indebtedness may be incurred by
the Company from time to time in an aggregate amount up to $15.0 million under
the proposed New Credit Facility, subject to certain restrictions, and may be
secured by substantially all of the Company's assets. In addition, the Company
may incur additional indebtedness in accordance with the terms of the Notes and
the Indenture, the proceeds of which indebtedness may or may not benefit the
Company's future operating results. See "Description of Notes--Certain
Covenants--Limitations on Indebtedness."
FRAUDULENT CONVEYANCE
The incurrence and servicing by the Issuer of the obligations evidenced by
the Notes and the Appreciation Notes, the Issuer's and Holdings' use of the
proceeds of the Offering, Holdings' incurrence and servicing of obligations to
BMC on Holdings' Note, and the Subsidiaries' incurrence and servicing of
obligations to Holdings on the Subsidiaries' Note, each may be subject to review
under applicable federal and state fraudulent or voluntary conveyance laws and
similar laws and statutes enacted for the protection of creditors, and such laws
and statutes may be utilized by a court to subordinate or avoid such
obligations, payments, and transfers in favor of other existing or future
creditors of the Company.
If a court or other tribunal were to find (a) that when any of the Notes,
the Appreciation Notes, Holdings' Note, or the Subsidiaries' Note (collectively
and individually, the "Obligations"), as the case may be, were entered into or
issued, or (b) that when any advance or any payment of principal or interest was
made on any of them, that Media, the Company, or any Subsidiary taking such
action then was acting (i) with the intent of hindering, delaying, or defrauding
such actor's current or future creditors or (ii) that (x) such entity received
less than reasonably equivalent value or fair consideration for taking such
actions, making any such advance, transfer, or payment, or issuing such
indebtedness, or for issuing or paying interest or principal on any of the
Obligations, and that (y) Media, the Company or its Subsidiary or Subsidiaries,
as then applicable, then either (1) was insolvent or was rendered insolvent by
reason of such actions, (2) was engaged, or was about to engage, in a business
or transaction for which its assets constituted unreasonably small capital or
(3) intended to incur or believed that it would incur debts beyond its ability
to pay as such debts matured (as all of the foregoing terms are defined in or
interpreted under relevant fraudulent or voluntary conveyance or bankruptcy laws
or statutes), such court could, among other things, declare void, voidable, or
avoid one or more of such payments, advances, transfers, or indebtednesses, or
the Obligations, or any one or more of them, or subordinate, avoid, or postpone
the enforcement thereof, in whole or in part, in favor of other creditors.
The measure of insolvency for purposes of the foregoing considerations will
vary depending upon the laws being applied. Generally, however, any one of
Media, the Company or its Subsidiaries would be considered insolvent if, at the
relevant time, either (a) the fair market value of its assets was less than the
amount required to pay the probable liability on its total existing debts and
liabilities (including contingent liabilities) as they became absolute and
matured or (b) that it was incurring debt beyond its ability to pay at maturity.
As described above, a court could, therefore, declare void, avoid, or
subordinate or postpone payment or enforcement of the Obligations, or any of
them, to the prior satisfaction of other obligations or other creditors, the
satisfaction of which obligations or creditors may be beyond the capacity of the
Company.
As to these transactions, Media, the Company and the Subsidiaries believe
that at all relevant times each was and will be (a) neither insolvent nor
rendered insolvent thereby, (b) in possession of sufficient capital to pay its
debts as the same mature or become due and to operate its business effectively,
and (c) incurring debt within its ability to pay as it matures in the ordinary
course. In reaching the foregoing conclusions, the Company has relied upon
analyses of financial and other information currently available to it and upon
internal projections and estimated values and amounts of assets and liabilities
of the Company and its Subsidiaries (including any applicable rights of
contribution, or indemnification as
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between them). There can be no assurance, however, that such conclusions and
assumptions are correct or that a court or other tribunal passing on such
questions would reach the same results.
In addition, the Guarantees of the Notes and the Appreciation Notes by the
Subsidiary Guarantors may be subject to review under relevant federal and state
fraudulent conveyance and similar statues in a bankruptcy or reorganization case
or a lawsuit by or on behalf of creditors of any of the Subsidiary Guarantors.
In such a case, the analysis set forth above would generally apply, except that
such Guarantees could also be subject to the claim that, since such Guarantees
were incurred for the benefit of the Issuer (and only indirectly for the benefit
of the Subsidiary Guarantors), the obligations of the Subsidiary Guarantors
thereunder were incurred for less than reasonably equivalent value or fair
consideration. A court could avoid a Subsidiary Guarantor's obligation under its
Guarantees, subordinate such Guarantee to other indebtedness of a Subsidiary
Guarantor or take other action detrimental to the holders of the Notes and/or
the Appreciation Notes.
To the extent any Guarantee of a Subsidiary Guarantor was avoided as a
fraudulent conveyance, limited as described above, or held unenforceable for any
other reason, holders of the Notes and the Appreciation Notes would, to such
extent, cease to have a claim in respect of such Subsidiary Guarantee and, to
such such extent, would be creditors solely of the Issuer and any Subsidiary
Guarantor whose Guarantee was not avoided, limited or held unenforceable. In
such event, the claims of the holders of the Notes and the Appreciation Notes
against the issuer of an avoided, limited or unenforceable Guarantee would be
subject to the prior payment of all liabilities of such Subsidiary Guarantor.
There can be no assurance that, after providing for all prior claims, there
would be sufficient assets to satisfy the claims of the holders of Notes and/or
the Appreciation Notes.
ABILITY TO EXECUTE ACQUISITION STRATEGY
Historically, the Company has achieved significant growth through
acquisitions. In order for the Company to achieve needed future growth in
revenues and earnings and to replace the revenues and earnings of properties
that may be sold by one or more of the Subsidiaries from time to time,
additional acquisitions may be necessary. Meeting this need for acquisitions
will depend upon several factors, including the continued availability of
suitable financing and the ability to identify and acquire businesses on a
cost-effective basis, as well as the Company's ability effectively to integrate
acquired personnel, operations, products, and technologies, to retain and
motivate key personnel, and to retain the goodwill and customers of acquired
properties. There can be no assurance that the Company can or will successfully
acquire and integrate future operations. In connection with future acquisition
opportunities, the Company, or one or more of its Subsidiaries, may need to
incur additional indebtedness or issue additional equity or debt instruments.
There can be no assurance that debt or equity financing for such acquisitions
will be available on acceptable terms, or that the Company will be able to
identify or consummate any new acquisitions.
If and when achieved, new acquisitions may adversely affect near-term
operating results due to increased capital requirements, transitional management
and operating adjustments, increased interest costs associated with acquisition
debt, and other factors. Any future acquisitions may be highly-leveraged, and
such acquisitions well may increase the Company's overall leveraged position.
Any failure to make necessary acquisitions, or the making of unsuccessful
acquisitions, could have a material, adverse effect on the future financial
condition and operating results of the Company and each of its Subsidiaries.
To date, the Company's principal investments and acquisitions have been
confined to acquiring newspaper publishing, printing, and radio broadcasting
properties and related businesses as sole owners in middle markets. See
"Business."
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RESTRICTIVE DEBT COVENANTS; PROPOSED NEW CREDIT FACILITY
It is expected that the proposed New Credit Facility, if and when put in
place, will contain certain restrictive covenants that, among other things, may
limit the Company's ability to incur additional indebtedness, create liens, or
make investments and capital expenditures. The proposed New Credit Facility also
may require that the Company comply with certain financial ratios and tests
requiring that the Company achieve certain financial and operating results. The
Company's ability to meet such financial ratios and tests may be affected by
events beyond its control, and there can be no assurance that such ratios and
tests will be met. In the event of such a failure or a default under the
proposed New Credit Facility, the lenders thereunder may terminate their lending
commitments and may declare any indebtedness then existing under the proposed
New Credit Facility to be immediately due and payable, which could result in a
default on the Notes. As a result of the priority and security to be afforded to
others under the proposed New Credit Facility, to prior liens of secured
creditors, and to prior rights of the Subsidiaries' creditors by reason of
effective subordination as described above, in such circumstances there can be
no assurance that the Issuer then would have sufficient assets remaining and
available to pay indebtedness then outstanding under the Securities. Any
refinancing of the proposed New Credit Facility is likely to contain similar
restrictive covenants. See "Description of Notes--Restrictions on Indebtedness."
DEPENDENCE ON KEY PERSONNEL; CONTROL BY MR. BRILL
The Company's businesses depend to a significant extent upon the efforts,
abilities, and expertise of Mr. Brill, Donald C. TenBarge, Alan L. Beck, and
Clifton E. Forrest. The loss of any of these executives of BMCLP potentially
would have an adverse effect on the Company. Moreover, Mr. Brill owns and
controls the Company, and such control may have the effect of discouraging
transactions involving a potential change of control of the Company. Neither
BMCLP, the Issuer, Holdings nor any of the Subsidiaries has any long-term
employment contract with Mr. Brill or any other executive officer. Mr. Brill has
procured key man insurance on his life in the face amount of $5.0 million for
the Company's benefit.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control as defined in the Indenture, each
holder of a Note may seek to require the Issuer to repurchase all or a portion
of such holder's Notes. If a Change of Control were to occur, there can be no
assurance that the Issuer would then have sufficient financial resources (or
would be able to arrange financing) to pay the repurchase price for all Notes
tendered by holders thereof. Further, the Indenture's provisions may not afford
protection to holders of Notes in the event of a highly leveraged transaction,
reorganization, debt restructuring, merger, or similar transaction involving the
Company that ultimately may adversely affect holders of the Notes, even though
such a transaction may not have resulted in a Change of Control as such. In
addition, terms of the proposed New Credit Facility may limit the Issuer's
ability to purchase any Notes and also may identify certain events that would
constitute a Change of Control, as well as certain other events with respect to
the Company that would constitute an event of default under any New Credit
Facility. Any future credit or other agreements relating to other Indebtedness
to which the Company, or any of them, may become a party may contain similar
restrictions and provisions. See "Description of Notes."
In the event a Change of Control occurs at a time when the Issuer is
contractually prohibited from purchasing Notes, the Issuer could seek consent
for the Issuer to purchase Notes, or could attempt to refinance any borrowings
containing such prohibitions. If the Issuer does not obtain such consent or
effect such a refinancing, the Issuer could remain prohibited from purchasing
Notes. In such case, the Issuer's failure to purchase tendered Notes would
constitute an Event of Default under the Indenture, which may, in turn,
constitute a default under the terms of other indebtedness that the Issuer may
have entered into from time to time, including secured indebtedness.
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LACK OF ESTABLISHED TRADING MARKET
There has not been any public market for the Original Securities. The
Exchange Securities will constitute a new issue of securities with no
established trading market. The Issuer does not intend to list the Exchange
Securities on any securities exchange or to seek their admission to trading in
any automated quotation system. The Initial Purchaser has advised the Issuer
that it currently intends to make a market in the Exchange Securities, but it is
not obligated to do so and may discontinue such market-making at any time
without notice. In addition, such market-making activity will be subject to the
limits imposed by the Securities Act and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and may be limited during the Exchange Offer and
at certain other times. Accordingly, no assurance can be given that an active
public or other market will develop for the Exchange Securities or as to the
liquidity of the trading market for the Exchange Securities. If a trading market
does not develop or is not maintained, holders of the Exchange Securities may
experience difficulty in reselling the Exchange Securities or may be unable to
sell them at all. If a market for the Exchange Securities develops, any such
market may be discontinued at any time.
If a public trading market develops for the Exchange Securities, future
trading prices of the Exchange Securities will depend on many factors,
including, among other things, prevailing interest rates, the Issuer's operating
results and the market for similar securities. Depending on prevailing interest
rates, the market for similar securities and other factors, including the
financial condition of the Issuer, the Exchange Securities may trade at a
discount from their principal amount.
FAILURE TO FOLLOW EXCHANGE OFFER PROCEDURES; CONSEQUENCES OF FAILURE TO EXCHANGE
Issuance of the Exchange Securities in exchange for the Original Securities
pursuant to the Exchange Offer will be made only after a timely receipt by the
Issuer of such Original Securities, properly completed and duly executed Letters
of Transmittal and all other required documents. Therefore, holders of the
Original Securities desiring to tender such Original Securities in exchange for
Exchange Securities should allow sufficient time to ensure timely delivery. The
Issuer is under no duty to give notification of defects or irregularities with
respect to the tenders of Original Securities for exchange. Original Securities
that are not tendered or are tendered but not accepted will, following
consummation of the Exchange Offer, continue to be subject to the existing
restrictions upon transfer thereof and, upon consummation of the Exchange Offer,
certain registration rights under the Registration Rights Agreements will
terminate. In addition, any holder of Original Securities who tenders in the
Exchange Offer for the purpose of participating in a distribution of the
Exchange Securities may be deemed to have received restricted securities and, if
so, will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transactions.
Each holder of the Original Securities (other than certain specified holders)
who wishes to exchange the Original Securities for Exchange Securities in the
Exchange Offer will be required to represent in the Letters of Transmittal that
(i) it is not an affiliate of the Issuer, (ii) the Exchange Securities to be
received by it are being acquired in the ordinary course of its business and
(iii) at the time of commencement of the Exchange Offer, it has no arrangement
with any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Securities. Each Participating Broker-Dealer
that receives Exchange Securities for its own account in exchange for Original
Securities, where such Original Securities were acquired by such Participating
Broker-Dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution." To the
extent that Original Securities are tendered and accepted in the Exchange Offer,
the trading market for untendered and tendered but unaccepted Original
Securities could be adversely affected. See "The Exchange Offer."
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ORIGINAL ISSUE DISCOUNT
The Exchange Securities will be considered to be issued with original issue
discount (the difference between the stated redemption price at maturity of a
debt instrument and the issue price of such debt instrument) for United States
federal income tax purposes. Original issue discount will accrue from the issue
date of the Exchange Securities and generally will be includable as interest
income in the U.S. Holder's (defined in "Certain United States Federal Income
Tax Consequences") gross income for United States federal income tax purposes in
advance of the cash payments to which the income is attributable. For a more
detailed discussion of the United States federal income tax consequences to the
holders of the purchase, ownership and disposition of the Exchange Securities,
see "Certain United States Federal Income Tax Consequences."
If a bankruptcy case is commenced by or against the Company under the United
States Bankruptcy Code (the "Bankruptcy Code") after the issuance of the
Exchange Securities, the claim of a holder of any of the Exchange Securities
with respect to the principal amount thereof may be limited to an amount equal
to the sum of (i) the initial offering price allocable to such debt instrument
and (ii) the portion of original issue discount which is not deemed to
constitute "unmatured interest" for purposes of the Bankruptcy Code. Any
original issue discount that was not amortized as of any such bankruptcy filing
would constitute "unmatured interest."
GOVERNMENTAL REGULATIONS
The radio broadcasting industry is subject to extensive and changing
regulation. Among other things, the Communications Act of 1934, as amended (the
"Communications Act"), and rules, regulations, and policies of the Federal
Communication Commission (the "FCC") require FCC consent to assignments of FCC
licenses or transfers of control of FCC licensees. Each of the Stations operates
pursuant to one or more licenses issued by the FCC, which expire at different
times. Each licensee may apply to renew applicable licenses prior to their
expiration. Third parties may challenge these applications or file competing
applications by filing petitions with the FCC seeking to deny the renewal
application. The FCC must grant the renewal application if it determines that
during the preceding license term: (i) the station served the public interest,
convenience and necessity; (ii) the licensee has committed no serious violation
of the Communications Act or the FCC's rules; and (iii) there have been no other
violations of the Act or such rules which taken together would indicate a
pattern of abuse.
If a substantial and material question of fact concerning a renewal
application is raised by the FCC or other interested parties, or if for any
reason the FCC cannot determine on the basis of the application and related
pleadings that renewal would serve the public interest, convenience and
necessity, the FCC will hold an evidentiary hearing on the application. If the
FCC denies the renewal application upon conclusion of the hearing, third parties
may then file applications for a license to operate those facilities. In
determining whether to renew a station license, the FCC may not consider whether
the public interest, convenience, and necessity would be better served by the
grant of a license to a party other than the renewal applicant.
In connection with the Company's proposed sale of the Missouri Properties, a
competitor of the purchaser has filed a Petition to Deny the FCC's approval of
the requisite transfer of the broadcast licenses of the Missouri Properties. The
Company cannot now predict the outcome of such petition with any certainty. See
"Certain Transactions."
There have been a number of petitions to deny and competing applications
filed with respect to broadcast license renewal applications. In the vast
majority of cases, the FCC has renewed incumbent operators' station licenses.
Such a filing presently is pending against station KUAD-FM located in Windsor,
Colorado, which is owned and operated by Northern Colorado Radio, Inc., one of
the Subsidiaries, which filing the Company believes is without a significant
basis. Although the Company believes that this and the Stations' other licenses
will be renewed, there can be no assurance that this will occur.
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The Company is aware that the U.S. Federal Trade Commission (the "FTC") and
the Antitrust Division of the U.S. Department of Justice (the "DOJ"), which
evaluate transactions to determine whether those transactions should be
challenged under the federal antitrust laws, have been increasingly active
recently in their review of radio station acquisitions, particularly where an
operator proposes to acquire additional stations in its existing markets.
For an acquisition meeting certain size thresholds, the Hart-Scott-Rodino
Act (the "HSR Act") and the rules promulgated thereunder require the parties to
file Notification and Report Forms with the FTC and the DOJ and to observe
specified waiting period requirements before consummating the acquisition.
During the initial 30 day period after the filing, the agencies decide which of
them will investigate the transaction. If the investigating agency determines
that the transaction does not raise significant antitrust issues, then it will
either terminate the waiting period or allow it to expire after the initial 30
days. On the other hand, if the agency determines that the transaction requires
a more detailed investigation, then prior to or at the conclusion of the initial
30 day period, it will issue a formal request for additional information
("Second Request"). The issuance of a Second Request extends the waiting period
until the twentieth calendar day after the date of substantial compliance by all
parties to the acquisition. Thereafter, such waiting period may only be extended
by court order or with the consent of the parties. In practice, complying with a
Second Request can take a significant amount of time. In addition, if the
investigating agency raises substantive issues in connection with a proposed
transaction, then the parties frequently engage in lengthy discussions or
negotiations with the investigating agency concerning possible means of
addressing those issues, including but not limited to persuading the agency that
the proposed acquisition would not violate the antitrust laws, restructuring the
proposed acquisition, divestiture of other assets of one or more parties, or
abandonment of the transaction. Such discussions and negotiations can be time
consuming, and the parties may agree to delay consummation of the acquisition
during their pendency.
At any time before or after the consummation of a proposed acquisition, the
FTC or the DOJ could take such action under the antitrust laws as it deems
necessary or desirable in the public interest, including seeking to enjoin the
acquisition or seeking divestiture of the business acquired or other assets of
the acquiring company. Acquisitions that are not required to be reported under
the HSR Act may be investigated by the FTC or the DOJ under the antitrust laws
before or after consummation. In addition, private parties may under certain
circumstances bring legal action to challenge an acquisition under the antitrust
laws.
As part of its increased scrutiny of radio station acquisitions, the DOJ has
stated publicly that it believes that LMAs, JSAs and other similar agreements
customarily entered into in connection with radio station transfers prior to the
expiration of the waiting period under the HSR Act could violate the HSR Act.
If the Company should grow in size, whether through acquisitions or
otherwise, it will become increasingly vulnerable to scrutiny under various
antitrust and similar regulatory laws administered by various federal and state
authorities, laws and regulations in which considerations of absolute or
relative size or market share may be relevant if not controlling. Such laws and
regulations are quite complex and subject to amendment and to frequent
variations in interpretation or enforcement. The radio broadcast industry has
been subject to increased scrutiny by the Antitrust Division of the DOJ. As a
result of such increased scrutiny, the Company could experience delays,
increased costs, and compelled changes in connection with future transactions.
If it were to be determined that one or more of the Company or its Subsidiaries
had violated or were violating one or more of such laws or regulations, in
addition to liability for resulting damages, any affected entity could face
potential regulatory or court-ordered divestiture of one or more properties. Any
such result could have a material, adverse effect upon the Company. See
"Business--Federal Regulation of Radio Broadcasting--Federal Antitrust
Considerations."
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CHANGES IN THE RADIO BROADCASTING INDUSTRY
The profitability of the Stations is subject to various factors that
influence the radio broadcasting industry as a whole. The Stations may be
affected by changes in audience taste, priorities of advertisers, new laws and
governmental regulations and policies, changes in broadcast technical
requirements, proposals to limit the tax deductibility of expenses incurred by
advertisers, changes in the willingness of financial institutions and other
lenders to finance radio station acquisitions and operations, and the
development of competitive technologies. The Company cannot predict which, if
any, of these factors might have a significant impact on the radio broadcasting
industry in the future, nor can it predict what impact, if any, the occurrence
of these events might have on the Company or on the Subsidiaries' operations.
ECONOMIC CONDITIONS; SEASONALITY
Radio broadcasting is a highly competitive business, and the Stations
operate in highly competitive markets. Their financial success in each market
depends, to a significant degree, upon audience characteristics and ratings,
signal strength, each operator's share of the overall radio sales within its
geographic market, the number and economic strength of other stations in the
market, the economic health of the market, in particular its retailers, and the
popularity and audience ratings of each competitor in the market. Any material
adverse change in one or more of these conditions in a particular market
ultimately could have a material effect on the Company's resulting revenues and
cashflow. There can be no assurance that the Stations will be able to maintain
or increase their current audience ratings or revenues. During a general
economic recession or downturn, advertising expenditures tend to decline. In
addition, because substantial portions of the Stations' or Newspapers' revenues
are derived from local advertisers, operating results in individual geographic
markets could be adversely affected by short or long-term local or regional
economic downturns. See "Business."
Seasonal revenue fluctuations also are common in the newspaper and radio
broadcasting industries, caused by localized fluctuations in advertising
expenditures. Accordingly, the Stations' and Newspapers' quarterly operating
results have fluctuated in the past and will fluctuate in the future as a result
of various factors, including seasonal demands of retailers and the timing and
size of advertising purchases. Generally, in each calendar year the lowest level
of advertising revenues occurs in the first quarter and the highest levels occur
in the second and fourth quarters.
COMPETITION; NEW TECHNOLOGIES; PROPOSED REGULATIONS
The Stations and Newspapers compete for audience share and advertising
revenues with other newspapers, magazines, direct mail, free shoppers, outdoor
advertising, other FM and AM radio stations, television and cable television
stations, and other media present within their respective markets. Radio
broadcasting and newspaper distribution also are exposed to competition from
developing media technologies, such as the delivery of audio programming through
cable television or telephone wires, the introduction of digital radio
broadcasting, which may provide a medium for the delivery by satellite or
terrestrial means of multiple audio programming formats to local and national
audiences, the increasing development and use of direct mail advertising, the
growth of wireless communications and fiber optic delivery systems, the
development of televised shopping programs, the potential for televised
"newspapers," and the increasing growth of the internet. The Stations and
Newspapers also may encounter competition from future, unforeseen developments
in technology that subsequently may be commercialized, and at all times they
will face potential, additional competition from new or expanding market
entrants. The Company cannot predict what effect, if any, these or other new
technologies or competitors may have on the Company. See
"Business--Competition."
From time to time, the Congress and the FCC have considered, and in the
future may consider and adopt, new or revised laws, regulations, and policies
regarding a wide variety of matters that, directly or indirectly, could affect
the operation, ownership, and profitability of the Stations, result in the loss
of
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audience share and advertising revenues for the Stations, or affect the
Company's ability to acquire additional radio stations or to finance such
acquisitions. Such matters include: proposals to impose spectrum use or other
fees on FCC licensees; the FCC's equal employment opportunity rules and matters
relating to political broadcasting; technical and frequency allocation matters;
proposals to restrict or prohibit the advertising of beer, wine, and other
alcoholic beverages on radio; changes in the FCC's cross-interest, multiple
ownership, and cross-ownership policies; changes to broadcast technical
requirements; proposals to allow telephone or cable television companies to
deliver audio and video programming to the home through existing phone lines;
proposals to limit the tax deductibility of advertising expenses by advertisers;
and proposals to auction the right to use the radio broadcast spectrum to the
highest bidder, instead of granting FCC licenses and subsequent license renewals
without such bidding.
On April 2, 1997, the FCC awarded two licenses for the provision of
satellite digital audio radio services ("DARS"). Under rules adopted for this
service, licensees must begin construction of their space stations within one
year, begin operating within four years, and be operating their entire system
within six years. The Company cannot predict whether the service will be
subscription or advertiser supported. Digital technology also may be used in the
future by terrestrial radio broadcast stations either on existing or alternate
broadcasting frequencies, and the FCC has stated that it will consider making
changes to its rules to permit AM and FM radio stations to offer digital sound
following industry analysis of technical standards. In addition, the FCC has
authorized an additional 100 kHz of bandwidth for the AM band and, on March 17,
1997, adopted an allotment plan for the expanded band that identified the 88 AM
radio stations selected to move into the band. At the end of a five-year
transition period, those licensees will be required to return to the FCC either
the license for their existing AM band station or the license for the expanded
AM band station.
The Company cannot predict whether any proposed changes will be adopted or
what other matters might be considered in the future, nor can it judge in
advance what impact, if any, the implementation of any of these proposals or
changes might have on the Company.
The foregoing brief description does not purport to be comprehensive and
reference should be made to the Communications Act, the FCC's rules, and the
public notices and rulings of the FCC for further information concerning the
nature and extent of federal regulation of radio broadcast stations.
COST OF NEWSPRINT
Newsprint represents the Newspapers' single largest raw material expense and
is one of the Newspapers' most significant operating costs. Newsprint costs are
cyclical and vary widely from period to period. For example, newsprint costs
increased approximately 40% per metric ton in late 1994 and 1995 on an
industry-wide basis. Newsprint costs decreased significantly, however, in the
second half of 1996. Future increases in the price of newsprint may have an
adverse effect on the Newspapers' operating results. The Newspapers have no
effective ability to hedge their exposure to such price fluctuations.
POTENTIAL CONFLICTS OF INTEREST
BMCLP will provide management services to certain of the Subsidiaries, and
Holdings will provide loans to the Subsidiaries. In addition, BMCLP may provide
such services to other affiliates, and Holdings or the Subsidiaries are expected
to provide loans to the Managed Affiliates. Mr. Brill owns and controls,
directly or indirectly, all of such entities, which also may enter into other
contractual relationships from time to time. Such relationships may present a
conflict between Mr. Brill's interests, as the ultimate owner of all parties to
such relationships, and the interest of the holders of the Securities. The
Indenture includes certain provisions that are intended to prevent unfair
transactions between the Issuer and affiliates. See "Certain Transactions" and
"Description of Notes--Certain Covenants--Limitation on Affiliate Transactions."
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BMCLP, which provides management services, including benefit plan
administration, risk management, finance and tax management services and
strategic planning and operations oversight, is owned by Mr. Brill, directly or
indirectly, and provides similar services to other entities owned by Mr. Brill.
The fees charged by BMCLP are established on a contractual basis, as set forth
more fully under "Certain Transactions," and are payable to the extent set forth
in the "Description of Notes." Any failure by BMCLP (and its management team) to
continue providing such services to the Company or the diversion of BMCLP's
efforts to other businesses of Mr. Brill could have a material adverse effect
upon the Company. In addition, from time to time certain of the Subsidiaries
will enter into management agreements (the "Managed Affiliate Management
Agreements") with certain affiliates of the Company. Such Managed Affiliates
also will issue Managed Affiliate Notes payable to certain of the Subsidiaries,
the aggregate amount of which notes will be subject to limitations set forth in
the Indenture. See "Description of Notes--Certain Covenants--Limitation on
Affiliate Transactions." Any default in payment of one or more of the Managed
Affiliate Notes or under any Managed Affiliate Management Agreement could have a
material adverse effect on the Company.
FORWARD-LOOKING STATEMENTS
The forward-looking statements contained in this Prospectus are subject to
certain risks and uncertainties. Such statements are based on the Company's and
its Subsidiaries' past experience and what they believe to be reasonable
assumptions. Past experience does not necessarily accurately foretell future
events. Also, such statements are based upon the underlying fundamental
assumptions that business, economic, and regulatory conditions over the
foreseeable future will remain relatively stable. There can be no assurance that
this will occur or that actual results will not differ materially and adversely
from those suggested by or inherent in such forward-looking statements as a
result of various factors, including, but not limited to: risks associated with
acquisitions and expansions of operations, unforeseen inability to obtain or
retain competent personnel, intense competition, unaccounted-for variations in
national or local markets, unpredictable market or regulatory developments,
unforeseen or unaccounted-for economic changes, unexpected management mistakes
or failures, unexpected variations in operating results or technological
changes, unforeseen cash or capital shortages or requirements, unforeseen and
unexpected uninsured torts or breaches of contract, and uncertainties as to the
nature and extent of future governmental regulation.
Such forward-looking statements are not statements of fact but of the
Company's and Issuer's opinions as to future events, opinions held, in their
view, with a reasonable degree of certainty based upon assumptions and
information then available to them, assumptions that, while considered by the
Company to be reasonable, are inherently subject to significant business,
economic, competitive, and regulatory uncertainty and contingencies that are
subject to change and beyond control of the Company. Such forward-looking
statements may prove to have been materially incorrect when made and may not
properly have reflected all variables that may turn out to have been material,
including unexpected material deviations in assumed general economic trends,
events, or components. Inevitably, certain of these expectations will not
materialize or will prove to have been materially unfounded, and unanticipated
events may materially and adversely affect actual results. The Company's actual
results of operations in future years undoubtedly will vary from that inherent
in such statements, and such variations may be negative or positive and well may
be material. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."
It is vital that all forward-looking statements be understood and considered
only in context with all other information contained in this Prospectus and that
such statements not be considered in isolation or taken out of context. While
the Company believes such statements have a reasonable basis, these statements
may prove to have been materially incorrect when made and in no way are they, or
are they to be taken as, predictions or forecasts of future results.
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USE OF PROCEEDS
The Exchange Offer is intended to satisfy certain of the Issuer's
obligations under the Registration Rights Agreements. The Issuer will not
receive any cash proceeds from the issuance of the Exchange Securities in the
Exchange Offer. The net proceeds to the Issuer from the issuance of $105,000,000
aggregate principal amount of the Original Notes and $3,000,000 aggregate
principal amount of the Original Appreciation Notes were approximately $96.8
million. Of these net proceeds $1.6 million was used to pay for acquisitions,
approximately $70.3 million was used to repay certain indebtedness of the
Issuer, $2.0 million was used to provide loans to Managed Affiliates,
approximately $5.5 million was or will be used to pay fees and expenses and the
balance will be used for operations and working capital purposes or will be
available for acquisitions.
34
<PAGE>
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
August 31, 1997 (a) on a historical basis, and (b) on a pro forma basis to give
effect to the Transactions as if the Transactions had been consummated on August
31, 1997. This table should be read in conjunction with the Pro Forma Financial
Statements and notes thereto and the separate historical combined financial
statements of The Radio and Newspaper Businesses of Alan R. Brill and notes
thereto included elsewhere in this Offering Memorandum.
<TABLE>
<CAPTION>
AS OF AUGUST 31, 1997
-----------------------
<S> <C> <C>
ACTUAL PRO FORMA
---------- -----------
<CAPTION>
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Cash and cash equivalents................................................................. $ 351 $ 23,991
---------- -----------
---------- -----------
12% Senior notes due 2007................................................................. $ -- $ 94,461
Senior notes (a).......................................................................... 59,118 --
Other senior secured obligations.......................................................... 1,344 2,200
Mortgages and purchase money.............................................................. 1,072 1,072
Obligations under capital leases.......................................................... 937 554
Subordinated secured obligations.......................................................... 371 1,071
Appreciation Notes........................................................................ -- 2,349
Unsecured obligations..................................................................... 564 1,027
Incentive plan liability.................................................................. 4,640 4,640
---------- -----------
Total long-term debt (including current maturities)................................... 68,046 107,374
Capital................................................................................... 7 6
Additional paid in capital................................................................ 1,793 1,793
Accumulated deficit....................................................................... (32,950) (41,316)
---------- -----------
Net capital deficiency (b)............................................................ (31,150) (39,517)
---------- -----------
Total capitalization.................................................................. $ 36,896 $ 67,857
---------- -----------
---------- -----------
</TABLE>
(a) Interest only payable monthly at the rate of 10% per annum, due September
30, 1999. Additional interest accrues at the rate of 7.5% per annum, due
September 30, 1999.
(b) The net capital deficiency as of August 31, 1997 reflects the declaration of
a distribution in the amount of $3.0 million which was subsequently paid in
cash. The pro forma net capital deficiency as of August 31, 1997, reflects,
in part, the subsequent declaration and payment of distributions in the
amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes
of satisfaction of affiliate notes receivable.
35
<PAGE>
PRO FORMA FINANCIAL INFORMATION
The following unaudited pro forma condensed combined balance sheet of the
Company gives effect to the Transactions as if they had occurred on August 31,
1997. The following unaudited condensed combined statements of operations and
other data for the year ended February 28, 1997 and the six months ended August
31, 1997 give effect to the Transactions as if they had occurred March 1, 1996.
The acquisitions which comprise part of the Transactions will be accounted
for using the purchase method of accounting. The total cost of such acquisitions
will be allocated to the tangible and intangible assets acquired and liabilities
assumed based upon their respective fair values. The allocation of the
respective purchase prices of such acquisitions included in the pro forma
financial information is preliminary and is subject to revisions when additional
information concerning certain asset valuations is obtained and such revisions
could be material.
The pro forma adjustments are based on available information and certain
assumptions that the Company believes are reasonable under the circumstances.
The pro forma financial information should be read in conjunction with the
separate historical combined financial statements of The Radio and Newspaper
Businesses of Alan R. Brill, and related notes thereto, included elsewhere in
this Prospectus. The unaudited pro forma condensed combined financial statements
are presented for illustrative purposes only, and do not purport to be
indicative of the results that actually would have been obtained had the
Transactions occurred as of the assumed dates and for the periods presented, and
are not intended to be a projection of future results or trends.
36
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED
STATEMENT OF OPERATIONS AND OTHER DATA
YEAR ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
ACQUISITIONS
AND
DISPOSITIONS--
COMPANY-- HISTORICAL PRO FORMA COMBINED PRO
HISTORICAL (A) ADJUSTMENTS FORMA
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Broadcasting............................... $ 13,555,820 $(2,151,413) $ -- $ 11,404,407
Newspaper.................................. 13,440,395 2,330,070 -- 15,770,465
Management fees............................ 40,000 -- 200,000(k) 240,000
------------ ------------ ------------ --------------
Total revenues........................... 27,036,215 178,657 200,000 27,414,872
Operating expenses:
Operating departments...................... 19,042,885 317,397 (350,276)(g) 19,010,006
Incentive plan............................. 627,966 -- -- 627,966
Management fees............................ 1,944,699 (192,047) 116,504(e) 1,869,156
Time brokerage agreement fee, net.......... (54,500) 82,500 (28,000)(f) --
Consulting................................. 140,992 (22,992) (118,000)(f) --
Depreciation............................... 1,025,543 (180,082) (26,615)(h) 818,846
Amortization............................... 369,484 (83,929) 253,928(i) 539,483
------------ ------------ ------------ --------------
Total operating expenses................. 23,097,069 (79,153) (152,459) 22,865,457
------------ ------------ ------------ --------------
Operating income............................. 3,939,146 257,810 352,459 4,549,415
Other income (expense):
Interest--Managed Affiliates............... -- -- 1,957,915(d) 1,957,915
Interest--stockholder and affiliates,
net...................................... 246,909 133,937 (380,846)(l) --
Interest--other, net....................... (7,190,504) 961,656 (7,724,607)(b)(c)(j) (13,953,455)
Amortization of deferred financing costs... (488,712) 76,348 (142,540)(b)(c) (554,904)
Gain on sale of assets, net................ 1,076,181 (1,067,360) -- 8,821
Other, net................................. (68,689) 13,095 -- (55,594)
------------ ------------ ------------ --------------
Total other income (expense)............. (6,424,815) 117,676 (6,290,078) (12,597,217)
------------ ------------ ------------ --------------
Loss before income taxes..................... (2,485,669) 375,486 (5,937,619) (8,047,802)
Income tax provision......................... 286,504 (14,300) -- 272,204
------------ ------------ ------------ --------------
Net loss..................................... $ (2,772,173) $ 389,786 $ (5,937,619) $ (8,320,006)
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
OTHER DATA:
Media Cashflow (m)........................... $ 10,363,000
EBITDA (m)................................... 5,908,000
Net interest expense (n)..................... 12,688,000
Net cash interest expense (o)................ 7,329,000
Net debt (p)................................. 78,743,000
Ratio of Media Cashflow to net interest
expense.................................... 0.82x
Ratio of Media Cashflow to net cash interest
expense.................................... 1.41x
Ratio of net debt to Media Cashflow (p)...... 7.60x
Media Cashflow margin........................ 38%
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Statement of
Operations
37
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
YEAR ENDED FEBRUARY 28, 1997
(a) To reflect the inclusion of the results of operations of Clinton
Distribution, Inc. ("Clinton") (acquisitions closed July, 1996) and Huron Postal
Service, Inc. ("Huron") and Northeastern Printers, Inc. ("Northeastern")
(acquisitions closed October, 1997) in the period prior to their respective
acquisitions and combination with the Company. To reflect the elimination of the
results of operations of radio stations KQWB-FM and KQFN-AM located in Fargo,
North Dakota and Moorhead, Minnesota (sale closed August, 1996). To reflect the
elimination of the results of operations of Central Missouri Broadcasting, Inc.
and CMB II, Inc. in the period prior to their respective sales and dissolution
with the Company. Applications for transfer of the broadcast licenses of the
Missouri Properties have been filed with the FCC by the buyers. A local market
competitor has objected to the transfer of the licenses and on December 12,
1997, filed with the FCC a Petition to Deny the license transfers and to
terminate the Time Brokerage Agreement. No action has been taken on the Petition
to Deny by the FCC and the Company believes that even if the Petition to Deny
were granted, the consequences would not be material to the Company.
(b) To reflect the elimination of interest expense in the amount of
$5,891,548 and deferred financing amortization of $407,460 relating to the
existing senior notes.
(c) To reflect interest expense of $12,834,872 (at 12.2% assumed effective
rate) associated with the Notes and $399,283 (at 17% assumed effective rate)
associated with the Appreciation Notes and deferred financing amortization of
$550,000.
(d) To reflect a $16.3 million loan made during fiscal 1998 and related
interest income at the assumed effective rate of 12% of $1,957,915 related to
the Managed Affiliates (WSTO-FM, WVJS-AM and WKDQ-FM).
(e) To reflect the additional management fee expense calculated at 5% of
revenues in the period prior to the acquisition and combination with the Company
for Clinton, Huron and Northeastern.
(f) To reflect the elimination of time brokerage and consulting expenses
recorded in operations for KTRR-FM prior to the acquisition and combination with
the Company.
(g) To reflect the elimination of operating expenses which represent prior
owners' compensation and benefits, terminated benefit plans and cost savings due
to "in-house" printing of the publications and performance of certain accounting
writeup functions, which were previously outsourced, of Huron and Northeastern
prior to acquisition and combination with the Company. These outsourcing
contracts are being terminated in conjunction with the acquisition.
(h) To reflect depreciation expense for purchase accounting allocations made
for the acquisitions based on preliminary allocations of consideration as
follows:
<TABLE>
<CAPTION>
KTRR-FM HURON AND NORTHEASTERN
------------------------- ------------------------
ALLOCATED PRO FORMA ALLOCATED PRO FORMA
COST DEPRECIATION COST DEPRECIATION
----------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
Property and equipment......................................... $ -- $ -- $ 275,000 $ 19,000
----------- ----------
----------- ----------
Less depreciation reported..................................... -- 45,615
------------ ------------
Pro forma adjustment........................................... $ -- $ (26,615)
------------ ------------
------------ ------------
</TABLE>
38
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED)
YEAR ENDED FEBRUARY 28, 1997
(i) To reflect amortization expense for purchase accounting allocations made
for the acquisitions based on preliminary allocations of consideration as
follows:
<TABLE>
<CAPTION>
KTRR-FM HURON AND NORTHEASTERN
-------------------------- --------------------------
ALLOCATED PRO FORMA ALLOCATED PRO FORMA
COST AMORTIZATION COST AMORTIZATION
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FCC licenses and/or goodwill............................. $ 2,000,000 $ 50,000 $ 1,339,037 $ 33,476
Noncompete agreements.................................... 179,850 35,970 672,411 134,482
------------ ------------ ------------ ------------
$ 2,179,850 85,970 $ 2,011,448 167,958
------------ ------------
------------ ------------
Less amortization reported............................... -- --
------------ ------------
Pro forma adjustment..................................... $ 85,970 $ 167,958
------------ ------------
------------ ------------
</TABLE>
(j) To reflect interest expense for Huron and Northeastern in the amount of
$214,000 and KTRR-FM in the amount of $168,000 related to debt incurred to
finance their respective acquisitions.
(k) To reflect income from the Managed Affiliates Management Agreements with
the Managed Affiliates prior to their respective effective dates of December 1,
1997 for the WSTO-FM and WVJS-AM stations and February 1, 1997 for the WKDQ-FM
station.
(l) To reflect the elimination of interest income from affiliate notes
receivable satisfied through distributions to the Stockholder.
(m) "EBITDA" is defined as operating income before depreciation and
amortization expenses. "Media Cashflow" is defined as EBITDA plus management
fees, incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to Managed
Affiliates. Management fees payable to BMCLP are subordinated, to the extent
provided in the Indenture, to the prior payment of the Issuer's obligations on
the Notes. Although Media Cashflow and EBITDA are not measures of performance
calculated in accordance with GAAP, management believes that these measures are
useful to an investor in evaluating the Company because these measures are
widely used in the media industry to evaluate a media company's operating
performance. However, Media Cashflow and EBITDA should not be considered in
isolation or as substitutes for net income, cash flows from operating activities
and other income or cash flow statements prepared in accordance with GAAP as
measures of liquidity or profitability.
(n) Reflects interest expense on the Notes and Appreciation Notes and on
other debt and capitalized leases. Net interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year ended
February 28, 1997 and the six months ended August 31, 1997, respectively. Net
interest expense is also net of expected interest income, calculated at 5.5% on
excess proceeds from the Transactions estimated to be $23 million at August 31,
1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the
six months ended August 31, 1997, respectively.
(o) Reflects interest expense on the Notes and Appreciation Notes and on
other debt and capitalized leases. Net cash interest expense excludes $555,000
and $275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and six months ended August 31, 1997, respectively and
also excludes interest accrued at the assumed effective rate of 12.2%, which is
in excess of the assumed current pay rate of 7.5% in each of years one and two
by $4,960,000 ($2,480,000 per six months) and excludes interest on the
Appreciation Notes accreted at 17% totaling $399,000 for the year ended February
28, 1997 ($200,000 for six months). Net cash interest expense is also net of
expected interest income, calculated at 5.5% on excess proceeds from the
Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and
$633,000 for the year ended February 28, 1997 and the six months ended August
31, 1997, respectively.
(p) Net debt includes total debt less the incentive plan liability and less
cash and cash equivalents, all as of August 31, 1997, as significant portions of
the cash and cash equivalents are held for future acquisitions.
39
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT
OF OPERATIONS AND OTHER DATA
SIX MONTHS ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
ACQUISITIONS
AND
DISPOSITIONS--
COMPANY-- HISTORICAL PRO FORMA COMBINED
HISTORICAL (A) ADJUSTMENTS PRO FORMA
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Broadcasting............................... $ 7,884,988 $(1,204,751) $ -- $ 6,680,237
Newspaper.................................. 7,095,069 1,072,985 -- 8,168,054
Management fees............................ 120,000 -- -- 120,000
------------ ------------ ------------ --------------
Total revenues........................... 15,100,057 (131,766) -- 14,968,291
Operating expenses:
Operating departments...................... 10,104,343 (37,429) (175,552)(g) 9,891,362
Incentive plan............................. 485,000 -- -- 485,000
Management fees............................ 1,071,714 (108,000) 53,649(e) 1,017,363
Time brokerage agreement fee, net.......... 24,000 -- (24,000)(f) --
Consulting................................. 117,996 (9,996) (108,000)(f) --
Depreciation............................... 508,312 (86,355) (4,600)(h) 417,357
Amortization............................... 240,715 (41,224) 126,964(i) 326,455
------------ ------------ ------------ --------------
Total operating expenses................. 12,552,080 (283,004) (131,539) 12,137,537
------------ ------------ ------------ --------------
Operating income............................. 2,547,977 151,238 131,539 2,830,754
Other income (expense):
Interest--Managed Affiliates............... 563,582 -- 415,376(d) 978,958
Interest--stockholder and affiliates,
net...................................... 128,078 62,261 (190,339)(k) --
Interest--other, net....................... (4,390,195) 567,340 (3,156,952)(b)(c)(j) (6,979,807)
Amortization of deferred financing costs... (282,876) 46,223 (38,347)(b)(c) (275,000)
Loss on sale of assets, net................ (8,948) -- -- (8,948)
Other, net................................. (21,963) 4,864 -- (17,099)
------------ ------------ ------------ --------------
Total other income (expense)............. (4,012,322) 680,688 (2,970,262) (6,301,896)
------------ ------------ ------------ --------------
Loss before income taxes..................... (1,464,345) 831,926 (2,838,723) (3,471,142)
Income tax provision......................... 77,866 7,950 -- 85,816
------------ ------------ ------------ --------------
Net loss..................................... $ (1,542,211) $ 823,976 $ (2,838,723) $ (3,556,958)
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
OTHER DATA:
Media Cashflow (l)........................... $ 6,056,000
EBITDA (l)................................... 3,575,000
Net interest expense (m)..................... 6,347,000
Net cash interest expense (n)................ 3,667,000
Net debt (o)................................. 78,743,000
Ratio of Media Cashflow to net interest
expense.................................... 0.95x
Ratio of Media Cashflow to net cash interest
expense.................................... 1.65x
Ratio of net debt to Media Cashflow(p)....... 6.50x
Media Cashflow margin........................ 40%
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Statement of
Operations
40
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1997
(a) To reflect the inclusion of the results of operations of Huron and
Northeastern in the period prior to their respective acquisitions and
combination with the Company (acquisition closed October, 1997). To reflect the
elimination of the results of operations of Central Missouri Broadcasting, Inc.
and CMB II, Inc. in the period prior to their sale and dissolution with the
Company. Applications for transfer of the broadcast licenses of the Missouri
Properties have been filed with the FCC by the buyers. A local market competitor
has objected to the transfer of the licenses and on December 12, 1997, filed
with the FCC a Petition to Deny the license transfers and to terminate the Time
Brokerage Agreements. No action has been taken on the Petition to Deny by the
FCC, and the Company believes that, even if the Petition to Deny were granted,
the consequences to the Company would not be material.
(b) To reflect the elimination of interest expense in the amount of
$3,651,126 and deferred financing amortization of $236,653 related to the
existing senior notes.
(c) To reflect interest expense of $6,417,436 (at 12.2% assumed effective
rate) associated with the Notes and $199,642 (at 17% assumed effective rate)
associated with the Appreciation Notes and deferred financing amortization of
$275,000.
(d) To reflect a $16.3 million loan made during fiscal 1998 and additional
related interest income at the assumed effective rate of 12% of $415,376 related
to the Managed Affiliates (WSTO-FM, WVJS-AM and WKDQ-FM).
(e) To reflect the additional management fee expense calculated at 5% of
revenues in the period prior to the acquisition and combination with the Company
for Huron and Northeastern.
(f) To reflect the elimination of time brokerage and consulting expenses
recorded in operations for KTRR-FM prior to the acquisition and combination with
the Company.
(g) To reflect the elimination of operating expenses which represent prior
owners' compensation and benefits, terminated benefit plans and cost savings due
to "in-house" printing of the publications and performance of certain accounting
writeup functions, which were previously outsourced, of Huron and Northeastern
prior to acquisition and combination with the Company. These outsourcing
contracts are being terminated in conjunction with the acquisition.
(h) To reflect depreciation expense for purchase accounting allocations made
for the acquisitions based on preliminary allocations of consideration as
follows:
<TABLE>
<CAPTION>
KTRR-FM HURON AND NORTHEASTERN
---------------------------- --------------------------
ALLOCATED PRO FORMA ALLOCATED PRO FORMA
COST DEPRECIATION COST DEPRECIATION
----------- --------------- ------------ ------------
<S> <C> <C> <C> <C>
Property and equipment....................................... $ -- $ -- $ 275,000 $ 9,500
----- ------------
----- ------------
Less depreciation reported................................... -- 14,100
----- ------------
Pro forma adjustment......................................... $ -- $ (4,600)
----- ------------
----- ------------
</TABLE>
41
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED AUGUST 31, 1997
(i) To reflect amortization expense for purchase accounting allocations made
for the acquisitions based on preliminary allocations of consideration as
follows:
<TABLE>
<CAPTION>
KTRR-FM HURON AND NORTHEASTERN
-------------------------- --------------------------
ALLOCATED PRO FORMA ALLOCATED PRO FORMA
COST AMORTIZATION COST AMORTIZATION
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
FCC licenses and/or goodwill.............................. $ 2,000,000 $ 25,000 $1,339,037 $ 16,738
Noncompete agreements..................................... 179,850 17,985 672,411 67,241
------------ ------------ ------------ ------------
$ 2,179,850 42,985 $2,011,448 83,979
------------ ------------
------------ ------------
Less amortization reported................................ -- --
------------ ------------
Pro forma adjustment...................................... $ 42,985 $ 83,979
------------ ------------
------------ ------------
</TABLE>
(j) To reflect interest expense for Huron and Northeastern in the amount of
$107,000 and KTRR-FM in the amount of $84,000 related to debt incurred to
finance their respective acquisitions.
(k) To reflect the elimination of the interest income from affiliate notes
receivable satisfied through distributions to the Stockholder.
(l) "EBITDA" is defined as operating income before depreciation and
amortization expenses. "Media Cashflow" is defined as EBITDA plus management
fees, incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to Managed
Affiliates. Management fees payable to BMCLP are subordinated, to the extent
provided in the Indenture, to the prior payment of the Issuer's obligations on
the Notes. Although Media Cashflow and EBITDA are not measures of performance
calculated in accordance with GAAP, management believes that these measures are
useful to an investor in evaluating the Company because these measures are
widely used in the media industry to evaluate a media company's operating
performance. However, Media Cashflow and EBITDA should not be considered in
isolation or as substitutes for net income, cash flows from operating activities
and other income or cash flow statements prepared in accordance with GAAP as
measures of liquidity or profitability.
(m) Reflects interest expense on the Notes and Appreciation Notes and on
other debt and capitalized leases. Net interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year ended
February 28, 1997 and the six months ended August 31, 1997, respectively. Net
interest expense is also net of expected interest income, calculated at 5.5% on
excess proceeds from the Transactions estimated to be $23 million at August 31,
1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and the
six months ended August 31, 1997, respectively.
(n) Reflects interest expense on the Notes and Appreciation Notes and on
other debt and capitalized leases. Net cash interest expense excludes $555,000
and $275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and six months ended August 31, 1997, respectively and
also excludes interest accrued at the assumed effective rate of 12.2%, which is
in excess of the assumed current pay rate of 7.5% in each of years one and two
by $4,960,000 ($2,480,000 per six months) and excludes interest on the
Appreciation Notes accreted at 17% totaling $399,000 for the year ended February
28, 1997, ($200,000 for six months). Net cash interest expense is also net of
expected interest income, calculated at 5.5% on excess proceeds from the
Transactions estimated to be $23 million at August 31, 1997, of $1,265,000 and
$633,000 for the year ended February 28, 1997 and the six months ended August
31, 1997, respectively.
42
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED STATEMENT OF OPERATIONS (CONTINUED)
SIX MONTHS ENDED AUGUST 31, 1997
(o) Net debt includes total debt less the incentive plan liability and less
cash and cash equivalents, all as of August 31, 1997, as significant portions of
the cash and cash equivalents are held for future acquisitions.
(p) Net debt for purposes of this ratio includes total debt less the
incentive plan liability and less cash and cash equivalents, all as of August
31, 1997, as significant portions of the cash and cash equivalents are held for
future acquisitions. For purposes of this ratio the Media Cashflow for the six
months ended August 31, 1997 has been doubled to estimate an annualized amount.
No assurance can be provided that such results will be achieved.
43
<PAGE>
UNAUDITED PRO FORMA CONDENSED COMBINED
BALANCE SHEET
AS OF AUGUST 31, 1997
<TABLE>
<CAPTION>
ACQUISITIONS
AND
COMPANY-- DISPOSITIONS-- PRO FORMA COMBINED
HISTORICAL HISTORICAL(A) ADJUSTMENTS PRO FORMA
------------ ------------ ------------ --------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.................. $ 351,057 $ 4,679,196 $18,961,188(b)(c)(d)(e) $ 23,991,441
Accounts receivable, net of allowance for
doubtful accounts........................ 4,037,687 (264,269) -- 3,773,418
Inventories................................ 318,638 20,000 -- 338,638
Other current assets....................... 392,588 (82,603) -- 309,985
------------ ------------ ------------ --------------
Total current assets................... 5,099,970 4,352,324 18,961,188 28,413,482
Notes receivable from Managed Affiliates..... 14,315,962 -- 2,000,000(e) 16,315,962
Property and equipment....................... 16,854,777 (2,335,341) -- 14,519,436
Less accumulated depreciation................ (8,318,276) 1,794,396 -- (6,523,880)
------------ ------------ ------------ --------------
Net property and equipment............. 8,536,501 (540,945) -- 7,995,556
Goodwill and FCC licenses, net............... 5,375,217 2,570,842 -- 7,946,059
Covenants not to compete, net................ 3,190,391 764,105 -- 3,954,496
Other assets, net............................ 1,641,981 (338,772) 4,270,112(b)(c)(d) 5,573,321
Other long term assets....................... 251,956 (200,000) -- 51,956
Due from affiliates.......................... 4,157,453 -- (4,157,453)(f) --
------------ ------------ ------------ --------------
14,616,998 2,796,175 112,659 17,525,832
------------ ------------ ------------ --------------
Total assets................................. $ 42,569,431 $ 6,607,554 $21,073,847 $ 70,250,832
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Short term notes........................... $ 500,000 $ -- $ -- $ 500,000
Due to affiliates.......................... 617,950 (233,695) -- 384,255
Accounts payable........................... 897,985 (38,802) -- 859,183
Other accrued expenses..................... 657,525 (6,863) -- 650,662
Distributions payable...................... 3,000,000 -- (3,000,000)(b) --
Current maturities of long-term
obligations.............................. 729,315 (220,958) -- 508,357
------------ ------------ ------------ --------------
Total current liabilities.............. 6,402,775 (500,318) (3,000,000) 2,902,457
Long-term obligations:
Senior notes............................... 59,117,885 -- 35,343,391(b)(c)(d) 94,461,276
Secured seller obligations................. 1,343,987 856,345 -- 2,200,332
Mortgages and purchase money............... 1,072,066 -- -- 1,072,066
Obligations under capital leases........... 936,966 (383,224) -- 553,742
Secured subordinated obligations........... 371,142 700,000 -- 1,071,142
Appreciation Notes......................... -- -- 2,348,724(d) 2,348,724
Unsecured obligations...................... 564,119 462,320 -- 1,026,439
Incentive plan liability................... 4,640,000 -- -- 4,640,000
Less current maturities of long-term
obligations.............................. (729,315) 220,958 -- (508,357)
------------ ------------ ------------ --------------
67,316,850 1,856,399 37,692,115 106,865,364
Capital deficiency:
Capital.................................... 6,750 (1,100) -- 5,650
Additional paid-in capital................. 1,792,852 -- -- 1,792,852
Accumulated deficit........................ (32,949,796) 5,252,573 (13,618,268)(b)(c)(f) (41,315,491)
------------ ------------ ------------ --------------
Net capital deficiency................. (31,150,194) 5,251,473 (13,618,268) (39,516,989)
------------ ------------ ------------ --------------
$ 42,569,431 $ 6,607,554 $21,073,847 $ 70,250,832
------------ ------------ ------------ --------------
------------ ------------ ------------ --------------
</TABLE>
See Accompanying Notes to Unaudited Pro Forma Condensed Combined Balance Sheet
44
<PAGE>
NOTES TO UNAUDITED PRO FORMA
CONDENSED COMBINED BALANCE SHEET
AS OF AUGUST 31, 1997
(a) To reflect the purchase of assets of KTRR-FM, Huron and Northeastern and the
sale of all of the operating assets of Central Missouri Broadcasting, Inc.
and CMB II, Inc. Applications for transfer of the broadcast licenses of the
Missouri Properties have been filed with the FCC by the buyers. A local
market competitor has objected to the transfer of the licenses and on
December 12, 1997, filed with the FCC a Petition to Deny the license
transfers and to terminate the TBA. No action has been taken on the Petition
to Deny by the FCC, and the Company believes that, even if the Petition to
Deny were granted, the consequences to the Company would not be material.
(b) To reflect additional senior note borrowings subsequent to August 31, 1997
in the amount of $10,295,039 used for the following: deferred financing
costs of $430,927; dividends paid to Stockholder of $8,000,000 ($3,000,000
of which was accrued at August 31, 1997) and working capital of $1,864,112.
(c) To reflect payment of the senior note in the amount of $69,412,924, related
prepayment penalty of $2,800,000 and corresponding write-off of net book
value of deferred financing costs of $1,660,815.
(d) To reflect proceeds from the Notes and Appreciation Notes of $96,810,000 net
of $5,500,000 to be applied towards deferred financing costs. The
Appreciation Notes have been valued at an estimated fair value of $2,348,724
based on an assumed 17% discount rate and $3,000,000 payout on the first
call date of June 15, 1999.
(e) To reflect an additional loan of $2,000,000 to the Managed Affiliates
(WSTO-FM, WVJS-AM, and WKDQ-FM).
(f) To reflect the elimination of affiliate notes receivable satisfied through
distributions to the Stockholder.
<TABLE>
<S> <C> <C>
CASH TRANSACTIONS
- -----------------------------------------------------------------------------------
Post August 31, 1997 senior note proceeds............................ $ 1,864,112 (see b)
Payment of senior note............................................... (69,412,924) (see c)
Payment of senior note--prepayment penalty........................... (2,800,000) (see c)
Net proceeds from the Notes and Appreciation Notes................... 91,310,000 (see d)
Loans to Managed Affiliates.......................................... (2,000,000) (see e)
------------
$ 18,961,188
------------
------------
ACCUMULATED DEFICIT TRANSACTIONS
- ----------------------------------------------------------------------------------------------
Dividend to Stockholder.............................................. $ 5,000,000 (see b)
Senior note--prepayment penalty...................................... 2,800,000 (see c)
Write-off of deferred financing costs................................ 1,660,815 (see c)
Distributions to Stockholder to satisfy affiliate notes receivable... 4,157,453 (see f)
------------
$ 13,618,268
------------
------------
</TABLE>
45
<PAGE>
SELECTED COMBINED FINANCIAL DATA
The selected combined financial data presented below should be read in
conjunction with the combined financial statements of The Radio and Newspaper
Businesses of Alan R. Brill and notes thereto included elsewhere in this
Prospectus and "Management's Discussion and Analysis of Financial Condition and
Results of Operations." The selected combined financial data (except for the
other financial and operating data) of The Radio and Newspaper Businesses of
Alan R. Brill (i) as of and for the years ended February 28, 1993 and 1994 have
been derived from schedules which primarily include information from the
separate audited combined financial statements of The Broadcasting Businesses of
Alan R. Brill and the separate audited consolidated financial statements of
Central Michigan Newspapers, Inc., (ii) as of and for the years ended February
28, 1995, February 29, 1996 and February 28, 1997 have been derived from the
audited combined financial statements of The Radio and Newspaper Businesses of
Alan R. Brill and (iii) as of and for the six months ended August 31, 1996 and
1997 have been derived from the unaudited condensed combined financial
statements of The Radio and Newspaper Businesses of Alan R. Brill. The selected
pro forma data presented below should be read in conjunction with the
information contained in the historical financial statements included elsewhere
herein and "Pro Forma Financial Information."
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
------------------------------------------------------------------------------- ------------
SIX MONTHS SIX MONTHS YEAR
FISCAL YEAR ENDED FEBRUARY 28 OR 29 ENDED ENDED ENDED
----------------------------------------------------- AUGUST 31, AUGUST 31, FEBRUARY 28,
1993 1994 1995 1996 1997 1996 1997 1997 (A)
--------- --------- --------- --------- --------- ----------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
STATEMENT OF OPERATIONS DATA:
Revenues:
Radio................... $ 9,764 $ 10,961 $ 12,650 $ 13,096 $ 13,596 $ 6,852 $ 8,005 $ 11,644
Newspapers.............. 10,877 10,499 10,537 12,217 13,440 6,854 7,095 15,771
--------- --------- --------- --------- --------- ----------- ----------- ------------
Total revenues...... 20,641 21,460 23,187 25,313 27,036 13,706 15,100 27,415
Operating expenses:
Operating departments... 16,644 16,352 17,530 18,640 19,043 9,540 10,104 19,010
Incentive plan.......... 25 176 634 1,467 628 316 485 628
Other................... -- -- -- 37 86 (48) 142 --
Management fees......... 897 1,521 1,679 1,833 1,945 980 1,072 1,869
Depreciation and
amortization.......... 1,306 1,277 1,111 1,312 1,395 670 749 1,358
--------- --------- --------- --------- --------- ----------- ----------- ------------
Total operating
expenses.......... 18,872 19,326 20,954 23,289 23,097 11,458 12,552 22,865
--------- --------- --------- --------- --------- ----------- ----------- ------------
Operating income.......... 1,769 2,134 2,233 2,024 3,939 2,248 2,548 4,550
Other income (expense):
Interest expense, net..... (4,484) (4,645) (5,842) (7,130) (7,432) (3,686) (3,981) (12,550)
Other, net................ (148) 3,463 (144) (80) 1,007 1,035 (31) (47)
--------- --------- --------- --------- --------- ----------- ----------- ------------
Total other income
(expense)......... (4,632) (1,182) (5,986) (7,210) (6,425) (2,651) (4,012) (12,597)
--------- --------- --------- --------- --------- ----------- ----------- ------------
Income (loss) before
income taxes and
extraordinary item...... (2,863) 952 (3,753) (5,186) (2,486) (403) (1,464) (8,048)
Income tax provision
(benefit)............... 112 168 68 (39) 286 84 78 272
--------- --------- --------- --------- --------- ----------- ----------- ------------
Income (loss) before
extraordinary item...... (2,975) 784 (3,821) (5,147) (2,772) (487) (1,542) (8,320)
Extraordinary item (b).... -- 245 -- 6,915 -- -- -- --
--------- --------- --------- --------- --------- ----------- ----------- ------------
Net income (loss)......... $ (2,975) $ 1,029 $ (3,821) $ 1,768 $ (2,772) $ (487) $ (1,542) $ (8,320)
--------- --------- --------- --------- --------- ----------- ----------- ------------
--------- --------- --------- --------- --------- ----------- ----------- ------------
OTHER FINANCIAL AND
OPERATING DATA:
Media Cashflow (c)........ $ 3,997 $ 5,108 $ 5,657 $ 6,673 $ 7,993 $ 4,166 $ 5,560 $ 10,363
EBITDA (c)................ 3,075 3,411 3,344 3,336 5,334 2,918 3,297 5,908
Capital expenditures
excluding
acquisitions............ 410 833 974 977 1,269 304 408 1,336
Net interest expense
(d)..................... 12,688
Net cash interest
expense (e)............. 7,329
Net debt (f).............. 78,743
Ratio of Media Cashflow to
net interest expense.... 0.82x
Ratio of Media Cashflow to
net cash interest
expense................. 1.41x
Ratio of net debt to Media
Cashflow (f)............ 7.60x
Ratio of earnings to fixed
charges (h)............. -- 1.20x -- -- -- -- -- --
<CAPTION>
SIX MONTHS
ENDED
AUGUST 31,
1997 (A)
-----------
<S> <C>
STATEMENT OF OPERATIONS DA
Revenues:
Radio................... $ 6,800
Newspapers.............. 8,168
-----------
Total revenues...... 14,968
Operating expenses:
Operating departments... 9,891
Incentive plan.......... 485
Other................... --
Management fees......... 1,017
Depreciation and
amortization.......... 744
-----------
Total operating
expenses.......... 12,137
-----------
Operating income.......... 2,831
Other income (expense):
Interest expense, net..... (6,276)
Other, net................ (26)
-----------
Total other income
(expense)......... (6,302)
-----------
Income (loss) before
income taxes and
extraordinary item...... (3,471)
Income tax provision
(benefit)............... 86
-----------
Income (loss) before
extraordinary item...... (3,557)
Extraordinary item (b)....
-----------
Net income (loss)......... $ (3,557)
-----------
-----------
OTHER FINANCIAL AND
OPERATING DATA:
Media Cashflow (c)........ $ 6,056
EBITDA (c)................ 3,575
Capital expenditures
excluding
acquisitions............ 411
Net interest expense
(d)..................... 6,347
Net cash interest
expense (e)............. 3,667
Net debt (f).............. 78,743
Ratio of Media Cashflow to
net interest expense.... 0.95x
Ratio of Media Cashflow to
net cash interest
expense................. 1.65x
Ratio of net debt to Media
Cashflow (f)............ 6.50x(g)
Ratio of earnings to fixed
charges (h)............. --
</TABLE>
- ----------------------------------
46
<PAGE>
<TABLE>
<CAPTION>
PRO FORMA
-----------
AS OF AS OF AS OF
AS OF FEBRUARY 28 OR 29 AUGUST 31, AUGUST 31, AUGUST 31,
----------------------------------------------------- ----------- ----------- -----------
1993 1994 1995 1996 1997 1996 1997 1997 (A)
--------- --------- --------- --------- --------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF FINANCIAL POSITION
DATA:
Cash and cash equivalents....... $ 104 $ 202 $ 550 $ 2,075 $ 775 $ 955 351 $ 23,991
Working capital (deficit)....... (3,469) (1,881) (334) 2,398 1,014 1,860 (1,303) 25,511
Intangible assets............... 4,103 5,219 5,099 7,374 7,583 7,631 10,207 17,474
Total assets.................... 16,454 21,938 21,784 26,011 26,442 25,800 42,569 70,251
Total debt including due to
affiliates (i)................ 49,796 55,160 58,715 61,636 50,475 50,245 68,046 107,374
Net capital deficiency.......... (37,153) (36,302) (40,123) (38,354) (26,610) (26,944) (31,150) (39,517)(j)
</TABLE>
- ------------------------
(a) The pro forma statement of operations and other financial and operating data
for the year ended February 28, 1997 and for the six months ended August 31,
1997 give effect to the Transactions as if they occurred March 1, 1996. The
pro forma statement of financial position data give effect to the
Transactions as if they had occurred on August 31, 1997. See "Pro Forma
Financial Information."
(b) The extraordinary item in fiscal 1996 reflects an adjustment of accrued
interest in the amount of $7.0 million related to subordinated debt for
which contingent interest had been accrued at the maximum rate but was
reduced at maturity pursuant to terms of an alternative valuation formula,
as defined in the agreement. The gain was offset by the write-off of certain
previously deferred financing fees of $131,000.
(c) "EBITDA" is defined as operating income before depreciation and amortization
expenses. "Media Cashflow" is defined as EBITDA plus management fees,
incentive plan expense, time brokerage agreement fees, acquisition related
consulting expense and interest income from loans made by the Company to
Managed Affiliates. Management fees payable to BMCLP are subordinated, to
the extent provided in the Indenture, to the prior payment of the Issuer's
obligations on the Notes. Although Media Cashflow and EBITDA are not
measures of performance calculated in accordance with GAAP, management
believes that these measures are useful to an investor in evaluating the
Company because these measures are widely used in the media industry to
evaluate a media company's operating performance. However, Media Cashflow
and EBITDA should not be considered in isolation or as substitutes for net
income, cash flows from operating activities and other income or cash flow
statements prepared in accordance with GAAP as measures of liquidity or
profitability.
(d) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively. Net interest expense is also net of expected interest income,
calculated at 5.5% on excess proceeds from the Transactions estimated to be
$23 million at August 31, 1997, of $1,265,000 and $633,000 for the year
ended February 28, 1997 and the six months ended August 31, 1997,
respectively.
(e) Reflects interest expense on the Notes and Appreciation Notes and on other
debt and capitalized leases. Net cash interest expense excludes $555,000 and
$275,000 in non-cash amortization of deferred financing fees for the year
ended February 28, 1997 and six months ended August 31, 1997, respectively
and also excludes interest accrued at the assumed effective rate of 12.2%,
which is in excess of the assumed current pay rate of 7.5% in each of years
one and two by $4,960,000 ($2,480,000 per six months) and excludes interest
on the Appreciation Notes accreted at 17% totaling $399,000 for the year
ended February 28, 1997 ($200,000 for six months). Net cash interest expense
is also net of expected interest income, calculated at 5.5% on excess
proceeds from the Transactions estimated to be $23 million at August 31,
1997, of $1,265,000 and $633,000 for the year ended February 28, 1997 and
six months ended August 31, 1997, respectively.
(f) Net debt includes total debt less the incentive plan liability and less cash
and cash equivalents, all as of August 31, 1997, as significant portions of
the cash and cash equivalents are held for future acquisitions.
(g) For purposes of this ratio the Media Cashflow for the six months ended
August 31, 1997 has been doubled to estimate an annualized amount. No
assurance can be provided that such results will be achieved.
(h) For purposes of this calculation, earnings are defined as income (loss)
before income taxes and extraordinary item and fixed charges. Fixed charges
are the sum of (i) interest costs (including the interest portion of
operating leases) and (ii) amortization of deferred financing costs.
Earnings were inadequate to cover fixed charges by approximately $2,863,000,
$3,753,000, $5,186,000, $2,486,000, $403,000, $1,464,000, $8,048,000 and
$3,471,000 for the historical fiscal years 1993, 1995, 1996, 1997, the
historical six months ended August 31, 1996 and 1997, the pro forma year
ended February 28, 1997 and the pro forma six months ended August 31, 1997,
respectively.
(i) Total debt including due to affiliates includes the senior note, obligations
under capital leases, unsecured and subordinated obligations, debt due to
affiliates and, on a pro forma basis, the Notes and Appreciation Notes.
(j) The net capital deficiency as of August 31, 1997 reflects the declaration of
a distribution in the amount of $3.0 million which was subsequently paid in
cash. The pro forma net capital deficiency as of August 31, 1997 reflects,
in part, the subsequent declaration and payment of distributions in the
amount of $9.2 million, $5.0 million in cash and $4.2 million for purposes
of satisfaction of affiliate notes receivable.
47
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
The following discussion and analysis of the financial condition and results
of operations of the Company should be read in conjunction with the combined
financial statements of The Radio and Newspaper Businesses of Alan R. Brill and
notes thereto included elsewhere in this Prospectus. This Prospectus contains
forward-looking statements, including statements regarding, among other items,
(i) the realization of the Company's business strategy, (ii) the sufficiency of
cashflow to fund the Company's debt service requirements and working capital
needs and (iii) anticipated trends in the radio broadcasting and newspaper
industries. Forward-looking statements are typically identified by the words
"believe," "expect," "anticipate," "intend," "estimate" and similar expressions.
These forward-looking statements are subject to a number of risks and
uncertainties, many of which are beyond the Company's control. Actual results
could differ materially from those contemplated by these forward-looking
statements as a result of factors including those described herein. In light of
these risks and uncertainties, there can be no assurance that the results and
events contemplated by the forward-looking information contained in this
Prospectus will in fact transpire. Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as of their
dates. The Company undertakes no obligation to update or revise any
forward-looking statements. See "Risk Factors."
BMC was organized in 1997 to be an Issuer of the Notes and to own numerous
companies (C-corporations, S-corporations, limited partnerships and limited
liability companies) that were previously owned separately by Mr. Brill. The
Subsidiaries include various radio, newspaper and related businesses. The
Stations own and operate FM and AM radio stations in Pennsylvania, Colorado,
Indiana/Kentucky, Minnesota/Wisconsin, and Missouri. The Newspapers own and
operate a daily and numerous weekly publications in Michigan along with printing
and advertising distribution businesses. The historical financial statements of
The Radio and Newspaper Businesses of Alan R. Brill included elsewhere in this
Offering Memorandum include the financial position and results of operations of
the Subsidiaries on a combined basis.
The Stations' revenues are derived primarily from advertising revenues. In
general, each Station receives revenues for advertising sold for placement
within the Station's programming. Advertising is sold in time increments and is
priced primarily based on a Station's program's popularity within the
demographic group an advertiser desires to reach, as well as quality of service
provided to the customer, creativity in marketing the client's products and
services, the personal relationship between the Station's account executive and
the client, and the client's view of the popularity of the Station among its
target customer base. In addition, advertising rates are affected by the number
of advertisers competing for available time, the size and demographic make-up of
the markets served by the Stations and the availability of alternative
advertising media in the market area. Rates are highest during the most
desirable listening hours, with corresponding reductions during other hours.
During the year ended February 28, 1997, over 90% of the Stations' revenues
were generated from local advertising, which is sold primarily by a Station's
sales staff. The remainder of the advertising revenues represent national
advertising and network compensation payments. In addition to any commissions
paid to its sales staff, the Stations generally pay commissions to advertising
agencies on local and national advertising and to sales representation firms on
national advertising. The advertising revenues of a Station generally are
highest in the second and fourth calendar quarters of each year, due in part to
increases in consumer advertising in the spring and retail advertising in the
period leading up to and including the holiday season. During the year ended
February 28, 1997, no single customer in any of the Stations' markets provided
more than 2% of the Company's revenues.
48
<PAGE>
In the broadcasting industry, radio stations often utilize trade (or barter)
agreements to exchange advertising time for goods or services (such as other
media advertising, travel or lodging), in lieu of cash. In order to preserve
most of its on-air inventory for cash advertising, the Company generally enters
into trade agreements only if the goods or services bartered to the Company will
be used in the Company's business. The Company has minimized its use of trade
agreements and has sold over 90% of its advertising time for cash for the year
ended February 28, 1997. In addition, it is the Company's general policy not to
pre-empt advertising spots paid for in cash with advertising spots paid for in
trade.
Each Station's financial results depend on a number of factors, including
the general strength of the local and national economies, population growth, the
ability to provide popular programming, local market and regional competition,
the relative efficiency of radio broadcasting compared to other advertising
media, signal strength and government regulation and policies.
The Newspapers' revenues are derived primarily from advertising and
subscription revenues and to a lesser extent, from printing revenues. In
general, newspaper publications receive revenue for advertising sold to reach
readership within its geographical distribution area and its customers'
marketing areas. The combined coverage and timing of the numerous weekly
publications and the daily publications provide the Newspapers with flexibility
and efficiencies to create a competitive advantage in attracting advertisers. As
an inducement to its customers, the Newspapers offer advertisers more efficient
buys when they purchase ad placement in multiple publications. The Newspapers
have a widely diversified customer base, and for the year ended February 28,
1997, no single customer of the Newspapers represented more than 2% of the
Company's revenues. The Newspapers' financial results are dependent on a number
of factors, particularly those that impact local retail sales, including the
general strength of the local and national economies, population growth, local
and regional market competition and the perceived relative efficiency of
newspapers compared to other advertising media.
The following table sets forth the percentage of revenues generated by the
Company's Stations and Newspapers.
<TABLE>
<CAPTION>
YEAR ENDED FEBRUARY 28 OR 29,
---------------------------------------------------------------
REVENUES 1993 1994 1995 1996 1997
- --------------------------------------------------------- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Stations................................................. 47% 51% 55% 52% 50%
Newspapers............................................... 53 49 45 48 50
--- --- --- --- ---
100 100 100 100 100
--- --- --- --- ---
--- --- --- --- ---
<CAPTION>
SIX MONTHS ENDED
REVENUES AUGUST 31, 1997
- --------------------------------------------------------- -------------------
<S> <C>
Stations................................................. 53%
Newspapers............................................... 47
---
100
---
---
</TABLE>
The primary operating expenses incurred in the ownership and operation of
the Stations include employee salaries and commissions, programming expenses and
advertising and promotion expenses. For the Newspapers the primary operating
expenses are employee salaries and commissions, newsprint and delivery charges.
The Company also incurs and will continue to incur significant depreciation,
amortization and interest expense as a result of completed and future
acquisitions of radio stations and newspapers and due to existing borrowings and
future borrowings, including the Notes and any borrowings under the New Credit
Facility. The combined financial statements of The Radio and Newspaper
Businesses of Alan R. Brill tend not to be directly comparable from period to
period due to the Company's acquisition activity.
INCOME TAXES
The Company includes "C" corporations, "S" corporations, limited
partnerships and limited liability companies. The taxable income or loss for
federal and state income tax purposes of the S Corporations, limited
partnerships and limited liability companies is passed through to the
stockholders, partners and members, respectively. The "C" corporations are in
loss carryforward positions at February 28, 1997 for income tax purposes.
Accordingly, the Company will not have a statutory rate income tax provision for
the entire group due to the tax consequences of the individual companies.
49
<PAGE>
RESULTS OF OPERATIONS
SIX MONTHS ENDED AUGUST 31, 1997 COMPARED TO SIX MONTHS ENDED AUGUST 31, 1996.
Revenues for the six months ended August 31, 1997 totaled $15.1 million, a
10.2% increase over $13.7 million for the six months ended August 31, 1996. Of
this $1.4 million increase, the Stations contributed $1.2 million and the
Newspapers contributed $241,000. The Stations' revenues for the six months ended
August 31, 1997 totaled $8.0 million, a 16.8% increase compared to the six
months ended August 31, 1996, due to the development of new Stations in
Minnesota, Missouri and Colorado, which increased revenues by approximately
$820,000 and revenue growth of the existing Stations which increased by $330,000
due to increased demand for advertising at those Stations.
Operating expenses for the six months ended August 31, 1997 totaled $12.6
million, an increase of $1.1 million or 9.5% over $11.5 million for the six
months ended August 31, 1996, primarily due to increases in operating department
expenses, incentive plan expenses, other operating expenses and management fees.
Operating department expenses increased $564,000 largely due to the commencement
of operations at the newly acquired Stations described above and a newly
acquired Newspaper. Incentive plan expenses increased $169,000 in connection
with improvements in performance at certain Subsidiaries which increased
incentive plan accruals under the performance incentive plan. Other operating
expenses increased $190,000 due to consulting and Time Brokerage Agreement
payments for a radio station in Colorado partially offset by other operating
income in connection with a Time Brokerage Agreement for radio stations in
Fargo, North Dakota and Moorhead, Minnesota ("Fargo/Moorhead"), which were sold
in August 1996. Management fees increased $92,000 due to increased revenues
during the period.
Operating income for the six months ended August 31, 1997 totaled
approximately $2.5 million, a 13.3% increase over $2.2 million for the six
months ended August 31, 1996, primarily due to increased revenues.
Interest expense, net for the six months ended August 31, 1997 totaled $4.0
million, an increase of $295,000 or 8.0% over $3.7 million for the six months
ended August 31, 1996, due to increased borrowing levels to fund acquisitions
and capital expenditures as well as higher effective interest rates during the
period.
Other income, net for the six months ended August 31, 1996 of $1.0 million
includes the $1.1 million gain on the sale of the Fargo/Moorhead stations.
YEAR ENDED FEBRUARY 28, 1997 COMPARED TO YEAR ENDED FEBRUARY 29, 1996.
Revenues for the year ended February 28, 1997 totaling $27.0 million
increased $1.7 million or 6.8% from $25.3 million for the year ended February
29, 1996. The Stations' revenues totaled $13.6 million, an increase of $500,000
or 3.8% from $13.1 million for the prior period, and the Newspapers' revenues
totaled $13.4 million, an increase of $1.2 million or 10% from $12.2 million for
the prior period. The increase in the Stations' revenues can be attributed
primarily to overall revenue growth of $1.4 million or 11.4% in connection with
continuing operations which was partially offset by the loss of revenues of
$895,000 for stations in Fargo/Moorhead which were sold in 1996.
Operating expenses for the year ended February 28, 1997 totaled $23.1
million, a decrease of $192,000 or 0.8% from $23.3 million for the year ended
February 29, 1996. This decrease was primarily attributed to a $839,000 decrease
in incentive plan expense in connection with a lower rate of operating
performance growth at certain Subsidiaries, offset by increased operating
department expenses of $403,000 due primarily to additional operating expenses
of acquired companies which more than offset the reductions of operating
expenses on the other companies including the Fargo/Moorhead stations sold in
1996 and increased management fees of $112,000, resulting from increased
revenues.
50
<PAGE>
Operating income for the year ended February 28, 1997 totaling $3.9 million
increased $1.9 million or 94.6% from $2.0 million for the year ended February
29, 1996. This increase was due primarily to increased operating revenues and
decreased charges for incentive plan expense as noted previously.
Interest expense, net for the year ended February 28, 1997 totaled $7.4
million, an increase of $302,000 or 4.2% over $7.1 million for the year ended
February 29, 1996, due to increased borrowing levels to fund the acquisition of
Stations located in Missouri and Minnesota and the acquisition of a Newspaper in
Michigan as well as higher effective interest rates during the period.
Other income, net for the six months ended August 31, 1996 of $1.0 million
includes the $1.1 million gain on the sale of the Fargo/Moorhead stations.
The extraordinary item in fiscal 1996 reflects an adjustment of accrued
interest in the amount of $7.0 million related to subordinated debt for which
contingent interest had been accrued at the maximum rate but was reduced at
maturity pursuant to terms of an alternative valuation formula, as defined in
the agreement. The gain was partially offset by the write-off of certain
previously deferred financing fees of $131,000.
YEAR ENDED FEBRUARY 29, 1996 COMPARED TO YEAR ENDED FEBRUARY 28, 1995
Revenues for the year ended February 29, 1996 totaling $25.3 million
increased $2.1 million, or 9.2% from $23.2 million for the year ended February
28, 1995. The Stations' revenues increased $446,000 or 3.5% from $12.7 million
for the prior period, and the Newspapers' revenues increased $1.7 million, or
15.9% from $10.5 million for the prior period. The net increase in the Stations'
revenues was composed primarily of additional revenues from the acquisition of
Stations in Missouri and Minnesota. The increase in the Newspapers' revenues
resulted primarily from operating growth and price increases passed through to
customers due to increased newsprint costs.
Operating expenses for the year ended February 29, 1996 totaled $23.3
million, an increase of $2.3 million or 11.1% over $21.0 million for the year
ended February 28, 1995 primarily due to increases in operating department
expenses, incentive plan expenses and management fees. Operating department
expenses for fiscal 1996 increased $1.1 million, or 6.3%, from $17.5 million for
fiscal 1995. This increase results primarily from increased newsprint costs,
additional operating expenses of three new Stations and increased promotional
and other expenses due to a new direct competitor in Duluth, Minnesota.
Incentive plan expense for fiscal 1996 increased $833,000 from $634,000 for
fiscal 1995, in connection with improvements in the performance at certain
Subsidiaries which increased incentive plan accruals under the performance
incentive plan. Management fees in fiscal 1996 increased $154,000 or 9.2% from
$1.7 million in fiscal 1995 due to a corresponding increase in operating
revenues in fiscal 1996. Depreciation and amortization for the year ended
February 29, 1996 totaled $1.3 million, a $201,000 increase over $1.1 million
for the year ended February 28, 1995 due to the acquisitions of stations in
Minnesota and Missouri and increased capital expenditures in fiscal 1995.
Operating income for fiscal 1996 totaled $2.0 million, a decrease of
$209,000, or 9.4% from $2.2 million in fiscal 1995. This decrease was due
primarily to increased charges for incentive plan expense noted above.
Interest expense for the year ended February 29, 1996 increased $1.3
million, or 22.1%, over $5.8 million for the year ended February 28, 1995 due to
increased borrowings to finance the acquisitions in Missouri and Minnesota and
an increase in interest accruals on subordinated debt.
The extraordinary item in fiscal 1996 reflects an adjustment of accrued
interest in the amount of $7.0 million related to subordinated debt, for which
contingent interest had been accrued at the maximum rate but was reduced at
maturity pursuant to the terms of an alternative valuation formula, as defined
in the agreement. The gain was partially offset by a write-off of certain
previously deferred financing fees of $131,000.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's primary liquidity needs are to fund capital expenditures,
provide working capital, meet debt service requirements and make acquisitions.
The Company's principal sources of liquidity are expected to be cashflow from
operations, excess proceeds from borrowings under the Notes and the New Credit
Facility, and consummation of the sale of the Missouri Properties.
Generally the Company's operating expenses are paid more quickly than its
advertising revenues are collected. As a result of this time lag, working
capital requirements have increased as the Company has grown and will likely
increase further in the future.
The sale of the Original Securities resulted in refinancing the Company's
indebtedness with Amresco and Goldman Sachs. Because of a reduction in the
interest rate, the Company's cash interest requirements will increase only
marginally for each of the first two years following the sale of the Securities,
even with a substantial increase in the Company's overall debt. Additionally,
the added borrowings and completion of the Transactions will result in
approximately $23 million of excess cash.
In addition to its debt service obligations, the Company will require
liquidity for capital expenditures and working capital needs. Capital
expenditures in fiscal 1997 totaled approximately $1,269,000 of which
approximately $337,000 related to existing Station operations and approximately
$932,000 related to existing Newspaper operations. The Newspaper expenditures,
which were financed with insurance proceeds, included approximately $500,000 to
replace fire damaged property. The Company has budgeted $900,000 for capital
expenditures of existing operations in fiscal 1998, approximately $408,000 of
which had been expended as of August 31, 1997. Of the budgeted fiscal 1998
expenditures, approximately $450,000 are dedicated to Stations and $450,000 to
Newspapers. The Company anticipates that capital expenditures in fiscal 1999 and
fiscal 2000 will approximate $600,000 each year for existing properties.
The Indenture limits the Company's ability to incur additional indebtedness.
In addition to certain other permitted Indebtedness, the Indenture permits the
Company to incur Indebtedness under revolving credit facilities. Limitations in
the Indenture on the Company's ability to incur additional Indebtedness,
together with the highly leveraged nature of the Company, could limit operating
activities, including the Company's ability to respond to market conditions, to
provide for unanticipated capital investments or to take advantage of business
opportunities. However, the Company believes that its significant cash balances
will currently enable it to continue significant growth through acquisitions as
well as provide ample working capital for contingencies. See "Description of
Notes--Certain Covenants."
The Company believes that its cash on hand and cashflow from operations will
be sufficient to enable the Company to meet all of its cash operating
requirements for the next twelve months.
SEASONALITY
The advertising revenues of the Company generally are lowest in the first
calendar quarter and highest in the second and fourth calendar quarters of each
year, due in part to increases in consumer advertising in the spring and retail
advertising in the period leading up to and including the holiday season.
INFLATION
The Company believes that inflation affects its business no more than it
generally affects other similar businesses.
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BUSINESS
THE COMPANY
The Company is a diversified media enterprise that acquires, develops,
manages, and operates radio stations, newspapers and related businesses in
middle markets. The Company presently owns, operates, or manages fifteen radio
stations serving five markets located in Pennsylvania, Kentucky/Indiana,
Colorado, Minnesota/Wisconsin, and Missouri, including three radio stations
located in the Kentucky/Indiana market that are owned by Managed Affiliates. The
group of Stations and Managed Affiliates' stations operated by the Company in
each market holds a first or second ranking in both combined audience ratings
and combined revenues, compared to other groups, in such market. In addition, in
each of its markets, the Stations and Managed Affiliates' stations individually
have at least one of the top two rankings in both audience ratings and revenues.
The Newspapers operate integrated newspaper publishing, printing and print
advertising distribution operations, providing total-market print advertising
coverage throughout a seventeen-county area in central Michigan. This operation
offers a two-edition daily newspaper, thirteen weekly publications, a web offset
printing operation for Newspapers' publications and outside customers, and a
private distribution company. The Company, each of its Subsidiaries, BMCLP and
the Managed Affiliates are wholly owned directly or indirectly by Mr. Brill, who
founded the business and began its operations in 1981.
For the year ended February 28, 1997, the Company's pro forma combined
revenues and Media Cashflow, excluding the Missouri Properties which are under
contract to be sold (see "Transactions"), were $27.4 million and $10.4 million,
respectively. For the six months ended August 31, 1997, such pro forma combined
revenues and Media Cashflow were $15.0 million and $6.1 million, respectively.
The financial statements of the Managed Affiliates are not combined with those
of the Company.
Historically, the Company has focused on media properties located in middle
markets, which the Company believes offer greater opportunities than larger
markets to build and maintain consistently high market and revenue shares at
reasonable costs. The Company believes its markets are generally less
competitive than major markets and are characterized by a limited number of
direct competitors, local owner/operators that are less sophisticated and have
less financial resources, and fewer alternative advertising media. In such
markets, the Company is able to target broader demographic groups and to sell
its advertising to a wider customer base than in major markets. The Company
believes that, relative to larger markets, a higher percentage of revenues in
middle markets is derived from local advertising and therefore a correspondingly
higher portion of its revenues can be directly generated by its own sales
efforts. The Company believes that local advertisers in middle markets often
make advertising decisions based primarily on customer relationships and service
and advertising results. The Company's primary focus is to provide high-quality
customer service with promotional activities that yield results for advertisers
and to build and maintain superior local advertiser relationships.
The Company's overall operations, including its sales and marketing
strategy, long-range planning, and management support services are managed by
BMCLP, a limited partnership indirectly owned by Mr. Brill (see "Certain
Transactions"). The management support provided by BMCLP has been a key element
in the Company's ability to achieve significant increases in Media Cashflow at
each of its properties following their acquisition. Each of the Company's
properties is managed on a day-to-day basis by an experienced local
president/general manager. As of September 30, 1997, the Company had a workforce
of approximately 340 full-time and 100 part-time employees, none of whom is
unionized.
The principal executive offices of the Company are located at 420 N.W. Fifth
Street, Evansville, Indiana 47708, and its telephone number is (812) 423-6200.
RADIO PROPERTY OVERVIEW
In each of its markets, the Company's Stations and the Managed Affiliates'
stations as a group hold at least one of the top two rankings in both combined
audience ratings and combined revenues. Furthermore,
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in each of its markets the Company's Stations and the Managed Affiliates'
stations individually hold at least one of the top two audience and revenues
rankings. Set forth below is a list of the Stations and the Managed Affiliates'
stations specifying their broadcasting frequency, FCC class, format, control,
market, market rank and group rank by ratings and revenues.
<TABLE>
<CAPTION>
STATION GROUP
STATION ARBITRON RANK
FCC OWNED/ MARKET --------------------------
FREQUENCY CLASS FORMAT MANAGED MARKET(S) RANK RATINGS REVENUES
- ---------------------- --------- ----------- ------------ --------------------- ----------- --------- ---------------
- ----------------------
<C> <S> <C> <C> <C> <C> <C> <C>
WIOV-FM 105.1 FM-B Country Owned Lancaster, PA(1) 110 1 1
Reading, PA 130 2 2
WBKR-FM 92.5 FM-C Country Owned Evansville, IN 125(2) 1 1
WKDQ-FM 99.5 FM-C Country Managed(3) and Owensboro/
WSTO-FM 96.1 FM-C Adult Hits Managed(3) Henderson, KY
WOMI-AM 1490 AM-C News/Talk Owned
WVJS-AM 1420 AM-B News/Talk Managed(3)
KTRR-FM 102.5 FM-C2 Adult Hits Managed(4) Fort Collins/ 135 1 1
KUAD-FM 99.1 FM-C1 Country Owned Greeley/
Loveland, CO
KKCB-FM 105.1 FM-C1 Country Owned Duluth, MN/ 207 1 1
KLDJ-FM 101.7 FM-C2 Oldies Owned Superior, WI
WEBC-AM 560 AM-B News/Talk Owned
KATI-FM 94.3 FM-C2 Country Owned(5) Jefferson City/ NR(6) 2 2
KTXY-FM 106.9 FM-C Adult Hits Owned(5) Columbia/
KLIK-AM 950 AM-B Country Owned(5) Lake of the
Ozarks, MO
</TABLE>
- --------------------------
(1) WIOV-FM serves both Lancaster and Reading. The Company also owns and
operates WIOV-AM, an AM-C station in Reading. Ratings and revenues ranks for
WIOV-FM include WIOV-AM.
(2) The Company estimates that on a combined basis the
Evansville/Owensboro/Henderson market would have an Arbitron rank of 125
based on separate rankings of 151 and 255 for Evansville and Owensboro,
respectively.
(3) WKDQ-FM, WSTO-FM and WVJS-AM are owned by Managed Affiliates.
(4) The Company manages KTRR-FM pursuant to a Time Brokerage Agreement pending
completion of its acquisition.
(5) The Missouri Properties are under contract for sale. See "Certain
Transactions." Accordingly, the pro forma financial statements presented
herein do not include the operating results of such stations.
(6) The Jefferson City/Columbia/Lake of the Ozarks, Missouri market is not
ranked by Arbitron. Columbia separately is ranked 237 by Arbitron, and
KTXY-FM is the top-rated station by audience ranking in such market.
LANCASTER AND READING, PENNSYLVANIA, which the Company estimates combined
would have an Arbitron rank of 60, are served by WIOV-FM and WIOV-AM. WIOV-FM
programs a Country music format and consistently is one of the region's top
rated stations. WIOV-FM is the top-ranked radio station based on combined
revenues in the Lancaster market. WIOV-AM serves the Reading market with a
News/Talk format.
EVANSVILLE, INDIANA, AND OWENSBORO/HENDERSON, KENTUCKY, which the Company
estimates combined would have an Arbitron rank of 125, are served by WBKR-FM and
WOMI-AM. These stations broadcast to the Tri-State area of southwestern Indiana,
southern Illinois, and western Kentucky, which the Company believes is
undergoing significant economic expansion. WBKR-FM is the region's most powerful
and most listened to radio station. The five stations operated by the Company
(including the Managed Affiliates' stations, WKDQ-FM, WSTO-FM and WVJS-AM) rank
first in the market in terms of both their combined
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revenues and their combined ratings, and individually hold three of the top four
audience and revenues rankings in the market.
FORT COLLINS/GREELEY/LOVELAND, COLORADO, which has recently been designated
as a market by Arbitron and is ranked 135, is served by KUAD-FM and KTRR-FM.
KUAD-FM is northern Colorado's leading radio station in terms of audience
ratings and advertising revenues, and in the seventeen months since the Company
began operating it pursuant to a Time Brokerage Agreement, KTRR-FM has
established a significant presence in the market. These Stations primarily serve
Larimer and Weld counties in northern Colorado, which comprise a distinct market
approximately 65 miles north of Denver. The Company believes that radio
advertising in the area is significantly underutilized by potential advertisers
based on national norms. The Stations focus on the Fort Collins/Greeley/Loveland
"triangle," and reach a listener base that the Company believes is
well-educated, has significant disposable income, and is served locally by few
other radio stations.
DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN, which have a combined Arbitron
rank of 207, are served by KKCB-FM, KLDJ-FM and WEBC-AM, which the Company
believes is the premier combination of radio stations in this market based on
revenues and audience ratings. KKCB-FM, which operates a Country format, is the
highest-rated station in its market.
JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI, is served by KATI-FM,
KTXY-FM and KLIK-AM. These stations are currently under contract for sale and
pending closing are being operated by the purchaser under the terms of a Time
Brokerage Agreement. See "--Transactions."
PUBLICATIONS OVERVIEW
Set forth below is a list of the Newspaper publications specifying the
location and circulation of each.
<TABLE>
<CAPTION>
NEWSPAPER LOCATION CIRCULATION
- ------------------------------------------------- ------------------- -----------
<S> <C> <C> <C>
MORNING SUN...................................... Mt. Pleasant, MI 12,700
MT. PLEASANT BUYERS GUIDE........................ Mt. Pleasant, MI 28,400
CLARE COUNTY BUYERS GUIDE........................ Clare, MI 13,000
ALMA REMINDER.................................... Alma, MI 20,600
CADILLAC BUYERS GUIDE............................ Cadillac, MI 21,700
CARSON CITY REMINDER............................. Carson City, MI 11,000
EDMORE ADVERTISER................................ Edmore, MI 17,500
HEMLOCK SHOPPERS GUIDE........................... Hemlock, MI 12,500
GLADWIN BUYERS GUIDE............................. Gladwin, MI 16,800
ISABELLA COUNTY HERALD........................... Mt. Pleasant, MI 16,200
MIDLAND BUYERS GUIDE............................. Midland, MI 28,000
ST. JOHNS REMINDER............................... St. Johns, MI 16,200
THE NORTHEASTERN SHOPPER
(NORTH EDITION)................................ Tawas City, MI 24,400
THE NORTHEASTERN SHOPPER
(SOUTH EDITION)................................ Tawas City, MI 15,600
-----------
Total Circulation 254,600
</TABLE>
The Newspapers serve a seventeen county area of small communities in central
Michigan , where there are few other newspapers, no local television stations,
and few radio stations. The Company has central offices and production
facilities in Mt. Pleasant, Michigan and leads the central Michigan market in
media billings.
The Company's daily newspaper, the MORNING SUN, has a paid subscription base
of 12,700 readers and is the only daily newspaper published in Gratiot, Isabella
and southern Clare counties. The Company's weekly newspaper and twelve weekly
shopping guides are delivered free to more than 240,000 households
55
<PAGE>
in the central Michigan area. The Company's multiple products and private
delivery system permit advertisers to buy customized advertising coverage for
the portion of the local market that best reaches their potential customers. The
Company also publishes numerous niche publications such as vacation guides and a
monthly business report. The Newspapers have a widely diversified base of
advertising and printing customers and during the year ended February 28, 1997
no one customer represented more than 2% of the Company's revenues.
STRUCTURE AND GOVERNANCE
In anticipation of the Offering, the ownership of the Stations and
Newspapers was restructured to preserve certain historical tax benefits while
permitting Mr. Brill the flexibility required to continue growing the business
through acquisitions.
Set forth below is a chart outlining the ownership of the Company and its
principal affiliates. Certain intermediate entities have been omitted.
[The chart, which is on file with the Issuer, shows that Mr. Brill is the
sole ultimate owner of (i) BMCLP, (ii) the Managed Affiliates, (iii) the
Subsidiaries (indirectly through BMC and Holdings) and (iv) Media (indirectly
through BMC).]
The Exchange Securities will be issued jointly by the Issuer. BMC through
Subsidiaries directly and indirectly owns radio and newspaper properties,
including those previously identified. The historical financial statements of
The Radio and Newspaper Businesses of Alan R. Brill included elsewhere in this
Prospectus include the financial position and results of operations of the radio
and newspaper Subsidiaries on a combined basis.
The Managed Affiliates are not subsidiaries of the Company, but are managed
by the Company pursuant to Managed Affiliates Management Agreements. As of the
date of this Prospectus, the Managed Affiliates operate radio stations WKDQ-FM,
WSTO-FM and WVJS-AM in Evansville, Indiana and Owensboro/Henderson, Kentucky,
which were acquired by Mr. Brill in 1997. While subject to a Managed Affiliate
Management Agreement, funds may be advanced from time to time to these and
future Managed Affiliates by the Company or its Subsidiaries in the form of
unsecured loans subject to certain limitations. See "Description of
Notes--Limitations on Affiliate Transactions."
Local general managers operate the Stations and Newspapers on a day-to-day
basis. Other management services, including benefit plan administration, risk
management, finance, tax management, and strategic planning and operations
oversight are provided to the Subsidiaries and the affiliates by BMCLP, which is
owned indirectly by Mr. Brill. The fees charged by BMCLP are established on a
contractual basis and, as set forth more fully under "Certain Transactions,"
such fees are payable to the extent set forth in the Description of the Notes.
A table setting forth the revenues, operating income, identifiable assets,
depreciation and amortization expense and capital expenditures of the Company's
two business segments is included in Note 11 of the Combined Financial
Statements included in this Prospectus.
BUSINESS STRENGTHS
MIDDLE MARKET FOCUS. The Company operates media businesses in middle
markets which generally are less competitive than larger markets and are
characterized by a limited number of direct competitors, local owner/operators
which are less sophisticated and have less financial resources, and fewer
alternative media. The Company believes that in its markets the majority of its
revenues are directly generated by its own sales efforts.
STRONG AND GROWING MARKET SHARE. In each of its radio markets the Company's
Stations or the Managed Affiliates' stations hold at least one of the top two
rankings in both audience ratings and revenues. The Company believes that it is
the leading advertising provider in its newspaper markets. The
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Company believes the Stations and Newspapers have strong community support and
work to build and maintain strong middle market franchises.
SUCCESSFUL ACQUISITION HISTORY. Mr. Brill has a history of identifying
acquisition opportunities, initiating negotiations to buy such properties and
developing creative structures by which to meet the requirements of the sellers
of such properties. Mr. Brill and the management team have successfully
developed acquired radio stations and newspapers and have improved Media
Cashflow at each of the Company's properties following their acquisition.
CONSISTENT CASHFLOWS. The Company's Subsidiaries have a history of
consistent cashflows. The Company's Subsidiaries generated Media Cashflow
margins (on a combined basis) of approximately 24%, 26%, and 30% for the
one-year periods ended February 28, 1995, February 29, 1996, and February 28,
1997, respectively, and 37% for the six-month period ended August 31, 1997. The
Company believes that its Media Cashflow will continue to be strong and will
enable the Company to continue its acquisition strategy. Furthermore, the
Company's continuing operations currently require relatively small capital
expenditures.
EXPERIENCED AND COMMITTED MANAGEMENT TEAM. The Company's senior management
team, provided by BMCLP, is highly experienced in the radio and newspaper
industries. BMCLP has experienced little management turnover, and BMCLP's four
senior operating executives have an average of 22 years each of experience in
the media industry and have worked together since 1988. The Company has a
decentralized management structure in which general managers make the key local
operating decisions for each station or newspaper with support from BMCLP
management.
STRONG LOCAL ADVERTISER RELATIONSHIPS. Historically, the Company has
created and maintained relationships directly with local advertisers in its
markets, which enable the Company to respond immediately and creatively to meet
customer needs. The Company believes that its marketing approach and customer
relationships enable the Stations to generate greater revenues and margins than
comparably ranked stations in their markets and enable the Newspapers to
increase revenues and margins. To further strengthen its relationships with
advertisers, the Company also offers and markets its ability to create customer
traffic through on-site events staged at, and broadcast from, an advertiser's
business.
ACQUISITION STRATEGY
The Company seeks to acquire underperforming middle market media businesses
whose acquisition costs are low relative to potential revenues and cashflow. The
Company focuses on developing significant long-term franchises in middle
markets. The Company then seeks to improve revenues and cashflow, using its
particular promotional, marketing, sales, programming and editorial approaches.
The Company targets businesses that it believes operate in underdeveloped market
segments with a low level of competition and a strong economic base, as well as
stations with competitive technical facilities and businesses that are located
in areas deemed desirable for relocation in terms of personnel recruitment.
The Company believes that its acquisition strategy, properly implemented,
has a number of specific benefits, including (i) diversification of revenues and
cashflow across a broader base of industries, properties and markets, (ii)
geographic clustering which has allowed improved cashflow margins through the
consolidation of facilities, centralized newsgathering, cross-selling of
advertising, elimination of redundant expenses, (iii) improved access to
consultants and other industry resources, (iv) greater appeal to qualified
industry management talent and (v) efficiencies from economies of scale.
OPERATING STRATEGY
In order to appeal to advertising customers and maximize the revenues and
cashflow of its properties, the Company's strategy is as follows:
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<PAGE>
MARKETING PARTNERSHIPS. The Company believes that advertisers in its
markets are attracted and retained through value-added customer services. While
the Company seeks and achieves audience ratings and circulation as a means of
attracting advertisers, its operations are distinguished by a particular
emphasis on soliciting advertisers directly. The Company believes that in many
middle markets the decision to advertise on a given radio station or in a given
newspaper is driven in large measure by direct customer relationships and the
level of customer success with past advertising programs and the marketing and
sales effectiveness of the station or newspaper staff.
The Company believes that building and solidifying marketing partnerships
with advertisers and retaining such customers through effective results and high
quality customer service are significant factors in maintaining leading revenue
shares in its markets.
OWNERSHIP OF STRONG MEDIA GROUPS. In each of its markets, the Company seeks
to maintain and enhance its position as a market leader through its ownership of
groups of stations or publications. Its ownership of groups of stations and
publications allows the Company a variety of sales opportunities and customer
demographics. By strategically coordinating customized programming, publishing,
promotional, and selling strategies among a group of local stations or
newspapers, the Company attempts to reach a wide range of demographic groups
that appeal to advertisers. The Company believes that its wide range of
advertising options permits it to offer pricing choices to suit customer needs
and strengthen advertiser relationships.
AGGRESSIVE SALES AND MARKETING. The Company seeks to maximize its share of
local advertising revenues in each of its markets by implementing and
maintaining strong direct sales and marketing programs. The Company tends to
maintain separate sales forces for each of its Stations or Newspapers. The
Company's Stations strive to maximize revenues by managing the on-air inventory
of advertising time and adjusting prices based on local market conditions.
Through its marketing efforts, the Company provides advertisers with an
effective means of reaching a targeted demographic group. To further strengthen
its relationships with radio advertisers, the Company also offers and markets
its ability to create customer traffic through on-site events staged at, and
broadcast from, an advertiser's place of business and promotions in which
listeners are encouraged to participate by visiting such place of business.
EXPERIENCED LOCAL MANAGEMENT. The Company believes that each of its
Stations and Newspapers is primarily a local business and that much of its
success is the result of the efforts of local management and staff. Accordingly,
the Company decentralizes its operations. Each of the Company's local media
groups is managed by a team of experienced managers who understand the trends,
demographics, and competitive opportunities of the particular market. Local
managers are responsible for developing annual operating budgets, and a major
portion of their compensation is linked to performance against operating
targets. BMCLP approves each station or newspaper group's annual operating
budgets and imposes strict financial reporting requirements to track performance
and monitor operating trends. The Company seeks and motivates managers who
thrive on the challenges presented by such autonomy. Its success in finding and
developing such managers has enabled the Company to compete successfully in each
of its local markets.
CENTRALIZED SUPPORT AND OVERSIGHT. The Company believes that its ability to
utilize existing senior management and sales resources of its media groups
enhances the growth potential of both acquired start-up and underperforming
properties. Additionally, this support reduces the risks associated with
undertaking new means of improving performance, such as launching new formats.
Furthermore, the Company seeks to achieve substantial cost savings through the
consolidation of facilities, management and administrative personnel and human
resources, as well as through the reduction of redundant expenses. BMCLP
personnel regularly visit the Stations and Newspapers to review performance,
assist local management with their programming, editorial, sales, recruiting and
training efforts, and to develop and verify overall operating and marketing
strategies, including cost management, designed to improve cashflow. These
visits enable the Company to remain aware of developments in each Station's and
Newspaper's market and to control and monitor costs while providing useful input
to each local manager.
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COMMUNITY INVOLVEMENT. The Company believes that its marketing, sales and
promotion efforts create direct relationships with its advertisers and
audiences, making its Stations and Newspapers significant participants in the
middle markets they serve. Each of the Company's Newspapers and Stations
participates in numerous community programs, fund-raisers and activities that
benefit a wide variety of organizations and produce revenues for the Company.
RADIO INDUSTRY OVERVIEW
Radio stations generate the majority of their revenue from the sale of
advertising time to local and national spot advertisers and national network
advertisers. Radio serves primarily as a medium for local advertising. During
the past decade, local advertising revenue as a percentage of total radio
advertising revenue has ranged from approximately 74% to 78%. The growth in
total radio advertising revenue tends to be fairly stable and has generally
grown at a rate faster than the Gross Domestic Product. Total radio advertising
revenue in 1996 of $12.4 billion represented an 8.2% increase over 1995, as
reported by the Radio Advertising Bureau ("RAB").
Radio is considered an efficient means of reaching specifically identified
demographic groups. Stations are typically classified by their on-air format,
such as country, adult contemporary, oldies or news/ talk. A station's format
and style of presentation enable it to target certain demographic and geographic
groups. By capturing a specific listening audience share of a market's radio
audience, with particular concentration in a targeted demographic group, a
station is able to market its broadcasting time to advertisers seeking to reach
a specific audience. Advertisers and stations utilize data published by audience
measuring services, such as Arbitron, to estimate how many people within
particular geographic markets and demographic groups listen to specific
stations.
Stations determine the number of advertisements broadcast hourly that will
maximize available revenue dollars without jeopardizing listening levels.
Although the number of advertisements broadcast during a given time period may
vary, the total number of advertisements broadcast on a particular station
generally does not vary significantly from year to year.
A station's local sales staff generates the majority of its local and
regional advertising sales through direct solicitations of local advertising
agencies and businesses. To generate national advertising sales, a station will
engage a firm that specializes in soliciting radio advertising sales on a
national level. National sales representatives obtain advertising principally
from advertising agencies located outside the station's market and receive
commissions based on the revenue from the advertising obtained.
According to the RAB'S RADIO MARKETING GUIDE AND FACT BOOK FOR ADVERTISERS,
1997, radio reaches approximately 95% of all Americans over the age of 12 each
week. More than one-half of all radio listening is done outside the home, in
contrast to other advertising media, and three out of four adults are reached by
car radio each week. Industry studies indicate that the average listener spends
approximately three hours and 20 minutes per day listening to radio. The highest
portion of radio listenership occurs during the morning, particularly between
the time a listener wakes up and the time the listener reaches work. This
morning "drive time" period reaches more than 80% of people over 12 years of age
and, as a result, radio advertising sold during this period commands premium
advertising rates.
Radio listeners have gradually shifted over the years from AM (amplitude
modulation) to FM (frequency modulation) stations. FM reception, as compared to
AM, is generally clearer and provides greater tonal range and higher fidelity.
FM's listener share is now in excess of 75%, despite the fact that the number of
AM and FM commercial stations in the United States is approximately equal.
While this description is representative of the radio industry as a whole on
a national basis, the Company believes that the description characterizes
particularly that portion of the industry that operates in major markets. It
believes that the radio business in middle markets differs significantly from
that of the major markets.
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This distinction is characterized by the fewer number of radio stations in
smaller markets, the fewer number of advertising alternatives, the greater
relevance of any single business (or radio station) to the market's life, the
greater proportion of advertising that is sold locally as opposed to national
accounts and the much smaller proportion of advertising that is controlled by
agencies. For these reasons, in middle markets a radio station has greater
flexibility in competitive and sales strategy and has greater control, through
its own direct marketing efforts, on its own outcome, as compared to major
markets.
With fewer competitors in a middle market a station can pursue listeners on
a broader basis and serve a broader spectrum of advertisers, be less subject to
competitive changes of competitors and, most importantly, deal directly with
customers and around agencies if necessary to demonstrate and convince
advertisers of the effectiveness of advertising on the station. The station does
not have to wait for programming to be successful to draw customers when it can
deal with potential clients directly on an effectiveness basis.
As a result of ownership deregulation (see "--Federal Regulation of Radio
Broadcasting" and "Risk Factors--Governmental Regulation"), middle market owners
also can achieve the mass and efficiencies of major market operations through
multiple station ownership. Such deregulation has greatly increased
opportunities for ownership of stations in middle markets and has greatly
increased the liquidity of station trading in the marketplace and, therefore,
the liquidity that the financing markets are willing to offer.
The Company believes that these factors and distinctions have greatly
enhanced the ability of middle market broadcasters to achieve very favorable
operating margins with attractive revenue levels on a reasonable cost basis and
with fewer disruptions caused by radio competitors and other advertising
alternatives. Furthermore, the greater relevance in a middle market of a single
radio business offers great opportunities for the radio station to interact
directly with its potential customers.
NEWSPAPER INDUSTRY OVERVIEW
Newspaper publishing is one of the oldest and largest segments of the media
industry. Newspapers are an important medium for local advertising. The
newspaper industry in the United States is comprised of the following segments:
national and major metropolitan dailies; small metropolitan suburban dailies;
suburban and community non-dailies; and free circulation "total market coverage"
publications and shoppers ("Shoppers").
In many communities, the local newspapers provide a combination of social
and economic linkages which make it attractive for readers and advertisers
alike. The Company believes that small metropolitan and suburban dailies as well
as suburban and community non-dailies and Shoppers are generally effective in
addressing the needs of local readers and advertisers under widely varying
economic conditions. The Company believes that because small metropolitan and
suburban daily newspapers rely on a broad base of local retail and local
classified advertising rather than more volatile national and major account
advertising, their advertising revenues tend to be relatively stable. In
addition, the Company believes such newspapers tend to publish information which
is of particular interest to the local reader and which national and major
metropolitan newspapers, television and radio generally do not report to the
same extent. Most small metropolitan and suburban daily newspapers are the only
daily local newspaper in the communities they serve. The Company believes that
relatively few daily newspapers have been established in recent years due to the
high cost of starting a daily newspaper operation and building a franchise
identity.
Shoppers provide nearly 100% penetration in their areas of distribution and
generally derive revenues solely from advertising. These publications have
limited or no news or editorial content.
The newspaper industry, as represented by larger markets at one end and
smaller markets on the other, is composed of two distinct sub-industries. They
differ particularly because of the influences of size, alternative claims on
readers' attention, alternative advertising vehicles, alternative newspaper
competitors, methods and costs of distribution, labor costs and flexibility,
other cost structures, and significance of
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the product to its readers and customers. In all of these parameters the Company
believes that in middle markets, these factors are more favorable to the
financial results and stability of a newspaper business. These factors also
create a more vital product for the readers in a middle market than newspapers
may be in a major market, which typically has numerous and diverse information
and entertainment sources.
DESCRIPTION OF THE STATIONS AND THEIR MARKETS
LANCASTER AND READING, PENNSYLVANIA. The Company owns and operates one FM
and one AM radio station serving Lancaster and Reading, Pennsylvania.
<TABLE>
<CAPTION>
STATION
PROGRAMMING YEAR
STATION CALL LETTERS FORMAT ACQUIRED/LMA
- ----------------------------------------------------------------------------- ------------------- ---------------
<S> <C> <C>
WIOV-FM...................................................................... Country 1984
WIOV-AM...................................................................... News/Talk 1981
</TABLE>
Lancaster has an Arbitron rank of 110 and Reading has an Arbitron rank of
130. The Company estimates that combined, Lancaster and Reading would have an
Arbitron rank of 60, with an age 12+ metro population of 663,600. Lancaster and
Reading had market revenues of approximately $20.0 million in 1996, an increase
of approximately 7.0% over 1995. There are 18 stations in the Lancaster and
Reading market, but only (by the Company's estimates) two fully competitive FM
stations in Reading and 6 fully competitive FM stations in Lancaster. The two
stations owned and operated by the Company rank first in Lancaster in audience
ratings and revenues and second in Reading in such categories.
The licensed location of WIOV-FM in Ephrata, Pennsylvania provides the
Station with the unique capability to broadcast with a "city grade" signal into
both Lancaster and Reading from its transmitter site. Due to the limited
availability of frequencies in the Pennsylvania area, such opportunity is not
available to the Company's competitors. Nevertheless, mountains between the two
markets hamper the Station's signal in Reading. The Station is now building a
booster transmitter to establish a parity signal in the Reading market.
WIOV-AM in 1994 took the call letters of its sister FM station to exploit
the popularity of the FM station. Also in 1994, WIOV changed its format from
Country to News/Talk.
WIOV-FM has achieved a high level of recognition by listeners and
advertisers in the Lancaster and Reading community through numerous promotional
activities, including its sponsorship of an annual free Country music concert,
which in 1997 was attended by approximately 55,000 people. The Company believes
the Lancaster region represents one of the best middle markets in the country
due to the region's strong and vibrant economy, attractive demographics, and
desirable competitive environment.
EVANSVILLE, INDIANA AND OWENSBORO/HENDERSON, KENTUCKY. The Company owns and
operates one FM and one AM radio station and manages two FM radio stations and
one AM radio station in the region of southwestern Indiana, western Kentucky and
southern Illinois, surrounding Evansville, Indiana and Owensboro, Kentucky (the
"Tri-State Region").
<TABLE>
<CAPTION>
STATION
PROGRAMMING YEAR
STATION CALL LETTERS FORMAT ACQUIRED/LMA
- ----------------------------------------------------------------------------- ------------------- ---------------
<S> <C> <C>
WBKR-FM...................................................................... Country 1993
WSTO-FM...................................................................... Adult Hits 1997
WKDQ-FM...................................................................... Country 1997
WOMI-AM...................................................................... News/Talk 1993
WVJS-AM...................................................................... News/Talk 1997
</TABLE>
Evansville has an Arbitron rank of 151 and Owensboro has an Arbitron rank of
255. The Company believes that the Tri-State Region comprises a single economic
market, and estimates that the combined
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Tri-State Region would have an Arbitron rank of 125, with an age 12+ metro
population of 310,600. The Tri-State Region had market revenues of approximately
$17.1 million in 1996, an approximate 3.6% increase over 1995. There are 33
stations in the Tri-State Region market of which, the Company estimates, 8 to 10
are fully competitive commercial FM stations. The five stations operated by the
Company (including the Managed Affiliates WKDQ-FM, WSTO-FM and WVJS-AM) rank
first in the market in terms of both combined gross revenues and combined
ratings, and individually hold three of the top four ratings ranking in the
market.
The Company entered the market in 1993 with the purchase of WBKR-FM and
WOMI-AM, and more than tripled the Media Cashflow of those Stations by the end
of its first full fiscal year of ownership, principally by implementing its
aggressive direct sales strategies.
In addition, the Company has entered into Managed Affiliate Management
Agreements with the Managed Affiliates, and had loaned, as of August 31, 1997,
$14.3 million to them. See "Certain Transactions."
The Company believes that the Managed Affiliates complement its existing
strengths in the Tri-State Region. WBKR-FM ranks first in the Owensboro metro
and regional markets and in the Evansville regional market, while such
affiliated stations rank first in the Evansville metro market. Management
believes that WBKR-FM, WSTO-FM and WKQD-FM have the best technical facilities in
the greater Evansville and Owensboro market, providing strong regional signal
coverage to the Tri-State Region.
FORT COLLINS/GREELEY/LOVELAND, COLORADO. The Company owns and operates one
FM radio station and manages one FM radio station in the area of Fort Collins,
Greeley and Loveland, Colorado ("Fort Collins/ Greeley/Loveland"), approximately
65 miles north of Denver.
<TABLE>
<CAPTION>
STATION
PROGRAMMING YEAR
STATION CALL LETTERS FORMAT ACQUIRED/LMA
- ------------------------------------------------------------------------------------ ------------ ---------------
<S> <C> <C>
KUAD-FM............................................................................. Country 1988
KTRR-FM............................................................................. Adult Hits 1996
</TABLE>
Fort Collins/Greeley/Loveland has recently been designated an Arbitron
market and ranked 135. The Company believes that there are only four fully
competitive local commercial FM stations in the market. While market information
has not been published for this market, the Company believes that KUAD-FM would
be ranked first in the market in ratings and revenues, and that its Stations as
a group would be ranked first in ratings and revenues in the market.
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The Company entered the market in 1988 with the purchase of KUAD-FM, and
shortly afterward changed the format of that Station to Country in order to
distinguish it from a number of competing stations in the market. The Company
found a high level of resistance to the use of radio advertising among potential
advertisers in Fort Collins/Greeley/Loveland, which the Company believes
resulted from a failure of other radio station operators in the region to
develop trust and recognition of the effectiveness of radio among the market's
retailers. To address such resistance, the Company has sponsored seminars,
educational programs and media consultants for potential advertisers,
distributed newsletters to potential advertisers and persistently pursued
advertiser relationships. In part because of such customer education efforts,
the Company has increased the Media Cashflow of KUAD-FM by more than ten times
since its acquisition. The Company began to program KTRR-FM of Loveland,
Colorado, in August, 1996 under a Time Brokerage Agreement and has developed it
from a "stick" into a significant station in the market. The Company has
exercised an option to purchase the assets of KTRR-FM, and expects to close the
transaction in the near future (subject to the timely receipt of necessary
regulatory approvals). The level of radio advertising revenue in the Fort
Collins/Greeley/Loveland market, as a percentage of retail sales, remains
significantly below national levels, and the Company believes that significant
increases in market radio revenue are possible as it develops the market.
The license location of KUAD-FM in Windsor, Colorado, enables the Station to
broadcast into all of Fort Collins, Greeley and Loveland without being
identified with any one of such communities to the exclusion of the others.
DULUTH, MINNESOTA AND SUPERIOR, WISCONSIN. The Company owns and operates
two FM radio stations and one AM radio station in Duluth, Minnesota.
<TABLE>
<CAPTION>
STATION
PROGRAMMING YEAR
STATION CALL LETTERS FORMAT ACQUIRED/LMA
- ------------------------------------------------------------------------------------ ------------ ---------------
<S> <C> <C>
KKCB-FM............................................................................. Country 1984
KLDJ-FM............................................................................. Oldies 1995
WEBC-AM............................................................................. News/Talk 1984
</TABLE>
The market of Duluth, Minnesota and Superior, Wisconsin ("Duluth") has an
Arbitron rank of 207. Duluth had market revenue of approximately $6.6 million in
1996, an approximate 4.8% increase over 1995. There are 24 stations in the
Duluth market, of which, the Company believes, only 8 are fully competitive
commercial FM stations. The three stations owned and operated by the Company
rank first in the market in terms of their combined ratings and revenues, and
KKCB-FM ranks first in the market in ratings and revenues.
The Company entered the market in 1984 with the purchase of KKCB-FM and
WEBC-AM, and additionally acquired KLDJ in 1995, which it has developed from a
"stick." By aggressively implementing its strategies of developing marketing
partnerships with advertisers, assembling an experienced local management team
and providing centralized support and oversight, the Company has built the
Stations into the leading stations in the Duluth market according to revenue
share and ratings.
JEFFERSON CITY/COLUMBIA/LAKE OF THE OZARKS, MISSOURI. The Company has
entered into definitive agreements to sell substantially all of the Missouri
Properties (including market-leading KTXY-FM) for a net cash purchase price of
$7,419,000, plus $256,000 of assumed liabilities. See "Certain Transactions."
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THE NEWSPAPER OPERATIONS
GENERAL.
Central Michigan Newspapers, Inc. and its affiliates ("CMN," or
"Newspapers") own and operate an integrated newspaper publishing, printing, and
advertising distribution operation in central Michigan. CMN was founded in 1981,
and the Company believes that CMN is the leading media company in its central
Michigan market. CMN offers a two-edition daily newspaper, thirteen weekly
publications, a web offset printing operation for Newspapers' publications and
outside customers, and a private distribution company for its products and those
of varied customers. Due to the close integration of all its operations and its
private distribution system, CMN can provide customized market coverage to its
advertisers to efficiently reach any of the more than 240,000 homes in its 120
mile by 140 mile market through its multiple product advertising buys.
CMN relies on aggressively selling comprehensive total-market advertising
coverage through its multiple publications and seeks to support its products
with an aggressive operating strategy which emphasizes quality, consistency,
creativity and integrity. The Newspapers operate in an attractive market with
very favorable economic conditions and trends and a favorable competitive
environment.
CMN's superior operating capabilities were demonstrated in February 1994,
when a fire destroyed its printing equipment, yet all the publications were
printed and delivered on time the next day, even though CMN was forced to use
outside printers. Another key to CMN's success is the strength of its
distribution system, providing on-time, reliable and independently audited
delivery service to more than 240,000 homes in its market place at a fraction of
the cost of the U.S. post office. The distribution system includes several
hundred well-supervised independent contractor delivery personnel and enables an
advertiser to buy any part of the company's distribution area that best serves
the advertiser's needs.
The economic recession and loss of a major client had a dampening effect on
financial results during the early 1990s. Although a major customer representing
several million dollars of revenues went out of business, management was able to
maintain overall Newspaper revenues and results, delivering increased cash flow
in that year and the following year. No single customer of the Newspapers
represented more than 2% of the Company's revenues, for the year ended February
28, 1997. Further, its cash flow has steadily increased from its fiscal 1993
low.
Recently purchased printing and production equipment as a result of the fire
loss has added new production and press capacity and doubled the printing speed
of CMN, providing the Newspapers with much greater scheduling and technical
flexibility and cost competitiveness. The new equipment has lead to increased
printing jobs produced more efficiently for the Newspapers and their customers.
DESCRIPTION OF NEWSPAPERS
MORNING SUN. The MORNING SUN, published every day except Saturday, is
delivered in Gratiot, Isabella and southern Clare counties. The service area has
a combined household count of approximately 32,000. The MORNING SUN appears in
two editions for each of the area's primary communities, Mt. Pleasant and Alma.
According to an audit by Audit Bureau of Circulations, paid circulation is
approximately 12,000 daily and 13,000 Sunday. As the area's only local, daily
newspaper, the MORNING SUN is the local community's principal medium for news
and information. Although approximately 80 percent of its articles, written by
staff writers, concern matters of local interest, the Newspaper carries articles
from the Associated Press, as well as syndicated features, including Clarence
Page, Andy Rooney, and George Will.
The MORNING SUN is staffed by 42 employees, including 18 in the editorial
department and 14 in the display and classified advertising department. The
Newspaper is established in the area and is widely recognized as the source for
local news, sports, and coverage of a variety of opinions. It has won numerous
awards, including awards from the Associated Press and Michigan Press
Association, such as first place for sports coverage and second place for local
news reporting and photography, and first place in the overall newspaper awards
for the last two years.
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WEEKLY SHOPPERS AND WEEKLY NEWSPAPER. The Newspapers publish thirteen
weekly publications in contiguous markets, including twelve weekly shopping
guides ("Shoppers") and a weekly newspaper, the ISABELLA COUNTY HERALD. The
Shoppers provide advertisers weekly contact with many households at the lowest
possible cost. While the Shoppers contain minimal news content, consumers rely
mainly on them for retail information, given the absence of other media. The
Shoppers are delivered free to more than 224,000 households in the Newspapers'
market area. The ISABELLA COUNTY HERALD offers local news and information and is
delivered free to approximately 16,200 households in the Mt. Pleasant area.
By pooling together numerous Shoppers in contiguous areas, Newspapers derive
economies of scale in printing, publishing, sales, and distribution to benefit
both itself and its customers.
ST. JOHNS REMINDER. ST. JOHNS REMINDER, published continuously since
September 1947, was acquired by the Company in 1996. The ST. JOHNS REMINDER is
distributed free each Sunday to 16,200 homes primarily in Clinton County and
serves a growing agrarian market near Michigan's state capital, Lansing.
Benefitting from an already strong retail business base, the ST. JOHNS REMINDER
is positioned to capture the considerable retail growth taking place between
Lansing and St. Johns.
Significant revenues are expected to come from cross sales to existing
advertisers of other Newspapers into St. Johns, because of its proximity to
other Company markets and publications. Additionally, St. Johns is included in
the Newspapers' classified and telemarketing network, offering its advertisers
up to 240,000 Michigan households.
NORTHEASTERN SHOPPER (NORTH AND SOUTH EDITION). In October 1997 the Company
acquired the NORTHEASTERN SHOPPER, expanding the Newspapers' core market area by
40,000 households to the northeast. Established in 1954, these shopping guides,
in separate northern and southern editions, are delivered free each Sunday in
the central Michigan counties of Iosco, Ogemaw, Alcona, Arenac, and a portion of
Bay County. The NORTHEASTERN SHOPPER serves an area with a flourishing retail
market and strong year-round tourism appeal and fits strategically with the
Company's other properties in the region.
OTHER PUBLICATIONS. The Company also publishes COUNTRY ROADS, a monthly
publication focusing on agriculture, and CENTRAL MICHIGAN BUSINESS, a monthly
publication which is delivered to area businesses and which reports on
activities and events of particular interest to the business community.
The Newspapers use state-of-the-art web printing capabilities to perform
commercial printing for third parties, typically in press runs of 30,000 to
200,000 copies. Much of this commercial printing is performed for the
publications' advertising customers. Other commercial printing customers include
other publishers of newspapers and shopping guides, specialty publications such
as real estate guides, entertainment publications, and publications of national
associations and schools. Examples of third party printing are CENTRAL MICHIGAN
UNIVERSITY LIFE, a school newspaper, and AUTO SHOPPER, a weekly classified
paper.
MARKET OVERVIEW. The Newspapers' market covers an area approximately 120
miles by 140 miles, containing a total population in excess of 700,000 people.
The area's relatively low population density makes print the only medium to
serve the market efficiently. The Newspapers' market coverage consists of a
seventeen-county area in central Michigan with Isabella and Gratiot counties at
its core and includes the Michigan counties of Clare, Gladwin, Midland, Saginaw,
Montcalm, Mecosta, Osceola, Wexford, Missaukee, Iosco, Clinton, Arenac, Ogemaw,
Alcona, and part of Bay.
With a population in excess of 100,000, the area of Isabella and Gratiot
counties enjoys a thriving economy and a high quality of life. Mt. Pleasant, a
city of 25,000 is home to Central Michigan University and its 17,000 students
and has enjoyed steady population growth over the past two decades. Alma, a
small college community of nearly 10,000 people in Gratiot County, is
approximately 20 miles south of Mt. Pleasant. The area is diversified
economically and industrially, including major employers in retail trade,
agriculture, oil and gas production and field service, diversified
manufacturing, tourism, and education. Traditionally, unemployment in the area
has been much lower than average for the State of Michigan.
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CUSTOMER BASE. The Newspapers are well-positioned to prosper in the future,
particularly with an improving economy and increasing advertising spending. The
customer base is diversified and dispersed with both local and regional
businesses, including retail, food, automotive, furniture, lumber companies, and
education industries. The Company's reputation for service and quality is
evidenced by the long-term and expanding relationships it has with many of its
customers, as well as the numerous awards the Newspapers have received.
SALES AND PROMOTION. The Newspapers currently employ 43 sales
representatives who are responsible for generating display and supplement
advertising sales from customers. Each Shopper has at least one salesperson
located in the area where the weekly is distributed. Each salesperson seeks to
maximize advertising revenues by maintaining a local presence and establishing
relationships with area businesses. In addition to a significant promotion
budget the Company also participates in over 20 county fairs, the United Way,
the Downtown Business Association, and numerous Chambers of Commerce.
FACILITIES. As a result of a fire in 1994, the Newspapers had to purchase a
full line of new equipment. The printing operation was moved to a temporary
facility in Mt. Pleasant that has several truck docks for shipping and receiving
and is used to store paper and finished goods.
The Newspapers' office in Mt. Pleasant is located in leased space, which
houses management, sales, marketing, editorial, composition, accounting, and
other administrative functions. The Company believes that major savings can be
achieved annually by relocating to a single plant, gaining efficiency in
operations, improving communications and interaction among the departments, and
saving by elimination of duplicate staffs and supervisory functions, and has
identified a prospective facility for such a plant. See "Certain Transactions."
EQUIPMENT. The Newspapers have new state-of-the-art press, editorial,
classified, composing, and camera equipment. An investment of approximately $3
million was made in 1994 to acquire a new Goss Community press line and new
production equipment. The web press doubles the speed at which the Newspapers
can print jobs, thereby making the Newspapers much more competitive for contract
printing opportunities. This new equipment has resulted in reduced labor
requirements and greatly improved efficiency and financial performance.
DISTRIBUTION. In addition to delivering its publications, the Newspapers
also deliver over 60 million advertising insert pieces per year to residents in
central Michigan. Customized delivery to a particular zone can be specifically
created for an advertiser to reach as few as 150 households or more than 240,000
households on a given day at less than half the cost charged by the post office.
MANAGEMENT AND STAFF. Under the Company's guidance, the Newspapers operate
autonomously, with their staff directly responsible for most managerial,
operating, and administrative decisions and functions. The Newspapers'
activities are organized into approximately sixteen profit centers participating
in a fully integrated print marketing operation. Each management team is
experienced, capable, and committed to the growth and profitability of the
company. In addition to experience gained in growing a highly successful
company, most managers have substantial prior experience in the newspaper
business.
As of September 30, 1997, the Newspapers had 194 full-time employees and 51
part-time employees. This number does not include the several hundred
independent contractor delivery personnel that distribute the Newspapers'
publications.
The Company has not experienced problems in securing qualified labor from
the central Michigan area. There are no unions at the Newspapers, and all sales
representatives and department heads are under non-competition agreements. The
Company believes the salary and benefit structure has been effective in reducing
supervisory costs and improving productivity.
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ADVERTISING SALES
Virtually all of the Company's revenue is generated from local, regional and
national advertising for its Stations and Newspapers. During the year ended
February 28, 1997, approximately 90% of the Company's revenues were generated
from the sale of local and regional advertising. Additional revenue is generated
from the sale of national advertising, network compensation payments and other
miscellaneous transactions. The major categories of the Company's advertisers
include retailers, restaurants, fast food, automotive and grocery. Each local
sales staff solicits advertising either directly from the local advertiser or
indirectly through an advertising agency with emphasis placed on direct contact.
In so doing, the Company seeks to address individual advertiser needs and more
effectively design an advertising campaign to help the advertiser sell its
product. The Company employs personnel in each of its markets to produce
advertisements for the customers. National sales are made by a firm specializing
in advertising sales on the national level in exchange for a commission from the
Company that is based on the Company's gross revenues from the advertising
obtained. Regional and local sales, which the Company defines as sales in
regions surrounding the Company's markets to companies that advertise in the
Company's markets, are generally made by the Company's local sales staff.
RADIO STATIONS. The Company's Stations strive to maximize revenue by
managing the on-air inventory of advertising time and adjusting prices based on
local market conditions and by utilizing the Company's ability, through its
marketing efforts, to provide advertisers with an effective means of reaching a
targeted demographic group. Each of the Company's stations has a general target
level of on-air inventory that it makes available for advertising. This target
level of inventory for sale may vary at different times of the day but tends to
remain stable over time. Much of the Company's radio advertising pricing is
based on demand for its radio stations' on-air inventory and, in general, the
Company responds to this demand by varying prices rather than by varying its
target inventory level for a particular station. Therefore, most changes in
revenue in a mature station are explained by demand-driven pricing changes
rather than by changes in the available inventory.
The Company believes that radio is one of the most efficient and
cost-effective means for advertisers to reach specific demographic groups.
Advertising rates charged by radio stations are based primarily on (i) the
effectiveness of a station's sales staff, (ii) the station's share of audiences
in the demographic groups targeted by advertisers (as measured by ratings
surveys estimating the number of listeners tuned to the station at various
times), (iii) the number of stations in the market competing for the same
demographic groups, (iv) the supply of and demand for radio advertising time and
(v) certain qualitative factors. Rates are generally highest during morning and
afternoon commuting hours.
A station's listenership is reflected in ratings surveys that estimate the
number of listeners tuned to the station and the time they spend listening. Each
station's ratings may be used by its advertisers and advertising representatives
to consider advertising with the station and are used by the Company to chart
audience growth, set advertising rates and adjust programming. The radio
broadcast industry's principal ratings service is Arbitron, which publishes
periodic ratings surveys for significant domestic radio markets. These surveys
are the Company's primary source of ratings data. While the Company seeks and
achieves ratings as a means of attracting advertisers, its operations are
distinguished by a particular emphasis on soliciting advertisers directly.
NEWSPAPERS. The Company believes that the combined coverage of the
Newspapers is an important competitive advantage in attracting advertisers
because it permits them to cover the entire market area or specifically target
any part of the market in central Michigan. The Company offers discounts on
combination buys and coordination of all orders through one central office. The
Newspapers are recognized as the number one medium for advertising throughout
central Michigan, and the marketing focus is to generate revenues from each
potential advertiser. The Company is focused on raising rates when appropriate,
increasing volume, generating new business, and gaining additional market share.
Some of the Newspapers have been in existence for over 50 years, with the ALMA
REMINDER beginning in 1938, the MT. PLEASANT BUYERS GUIDE in 1946, and ST.
JOHN'S REMINDER in 1947.
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COMPETITION
GENERAL. Each of the Company's Stations and Newspapers competes in varying
degrees with radio, television, newspapers, direct marketing and other
communications and advertising media having local, regional or national
audiences.
RADIO. The radio broadcasting industry is highly competitive. The success
of each of the Company's Stations in its middle markets depends largely upon its
direct marketing and sales efforts supported by its audience ratings and its
share of the overall advertising revenue within its market. The Company's
audience ratings and advertising revenues are subject to change, and any adverse
change in a particular market affecting advertising expenditures or in the
relative market positions of the stations located in that market could have a
material adverse effect on the revenue of the Company's Stations located in that
market. There can be no assurance that any one of the Company's Stations will be
able to maintain or increase its current audience ratings or advertising revenue
market share.
The Company's Stations compete for listeners and advertising revenue
directly with other radio stations within their respective markets. Radio
stations compete for listeners primarily on the basis of program content that
appeals to a particular demographic group. By building a strong listener base
consisting of a specific demographic group in each of its markets, the Company
provides support to its sales and marketing efforts to attract advertisers
seeking to reach those listeners. Operators of radio stations must be alert to
the possibility of another station changing its format to compete directly for
listeners and advertisers. Another station's decision to convert to a format
similar to that of one of the Company's radio stations in the same geographic
area may result in lower ratings and advertising revenue, increased promotion
and other expenses and, consequently, lower broadcast cashflow for the Company,
but in middle markets with fewer stations the frequency of such events may be
less than in major markets.
Factors that are material to a radio station's competitive position include
management experience, the effectiveness of its marketing plan and sales force,
the Station's local audience rank in its market, transmitter power, assigned
frequency, audience characteristics, local program acceptance and the number and
characteristics of other radio stations in the market area. The Company attempts
to improve its competitive position in each market by constantly building its
sales staff, researching its Stations' programming, by implementing advertising
campaigns aimed at the demographic groups for which its Stations program and by
managing its sales efforts to attract a larger share of advertising dollars.
However, the Company competes with some organizations that have greater
financial resources than the Company.
Recent changes in the FCC's policies and rules permit increased ownership
and operation of multiple local radio stations. Management believes that radio
stations that operate under common management or elect to take advantage of
joint arrangements such as LMAs or JSAs may in certain circumstances have lower
operating costs and may be able to offer advertisers more attractive rates and
services. Although the Company currently operates multiple stations in each of
its markets and intends to pursue the creation of additional multiple station
groups, the Company's competitors in certain markets include operators of
multiple stations or operators who already have entered into LMAs or JSAs. The
Company also competes with other radio station groups to purchase additional
stations. Some of these groups are owned or operated by companies that have
substantially greater financial and other resources than the Company.
Although the radio broadcasting industry is highly competitive, some
barriers to entry exist (which can be mitigated to some extent by changing
existing radio station formats and upgrading power, among other actions). The
operation of a radio broadcast station requires a license from the FCC, and the
number of radio stations that can operate in a given market is limited by the
availability of FM and AM radio frequencies allotted by the FCC to communities
in that market, as well as by the FCC's multiple ownership rules regulating the
number of stations that may be owned and controlled by a single entity. The
FCC's multiple ownership rules have changed significantly as a result of the
Telecommunications Act. For a discussion of FCC regulation and the provisions of
the Telecommunications Act, see "--Federal Regulation of Radio Broadcasting."
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<PAGE>
The Company's stations also compete for advertising revenue with other
media, including newspapers, broadcast television, cable television, magazines,
direct mail, coupons and outdoor advertising. In addition, the radio
broadcasting industry is subject to competition from new media technologies that
are being developed or introduced, such as the delivery of audio programming by
cable television systems, by satellite and by digital audio broadcasting
("DAB"). DAB may deliver by satellite to nationwide and regional audiences,
multi-channel, multi-format, digital radio services with sound quality
equivalent to compact discs. The delivery of information through the presently
unregulated Internet also could create a new form of competition. The radio
broadcasting industry historically has grown despite the introduction of new
technologies for the delivery of entertainment and information, such as
broadcast television, cable television, audio tapes and compact disks. A growing
population and greater availability of radios, particularly car and portable
radios, have contributed to this growth. There can be no assurance, however,
that the development or introduction in the future of any new media technology
will not have an adverse effect on the radio broadcasting industry.
The FCC has recently authorized a spectrum for the use of a new technology,
satellite digital audio radio services ("DARS"), to deliver audio programming.
DARS may provide a medium for the delivery by satellite or terrestrial means of
multiple new audio programming formats to local and national audiences. It is
not known at this time whether this digital technology also may be used in the
future by existing radio broadcast stations either on existing or alternate
broadcasting frequencies.
The Company cannot predict what other matters might be considered in the
future by the FCC, nor can it assess in advance what impact, if any, the
implementation of any of these proposals or changes might have on its business.
See "--Federal Regulation of Radio Broadcasting."
NEWSPAPERS. The Company's Newspapers compete primarily with other daily and
weekly newspapers, shoppers, shared mail packages and other local advertising
media. The Newspapers also compete in varying degrees for advertisers and
readers with magazines, radio, broadcast television, directories and other
communications media that operate in their markets. The Company believes that
its production systems and technologies, which enable it to publish separate
editions in narrowly targeted zones, allow it to compete effectively in its
markets.
FEDERAL REGULATION OF RADIO BROADCASTING
GENERAL. The ownership, operation and sale of broadcast stations, including
those licensed to the Company, are subject to the jurisdiction of the FCC, which
acts under authority derived from the Communications Act. The Communications Act
was amended in 1996 by the Telecommunications Act to make changes in several
broadcast laws. Among other things, the FCC assigns frequency bands for
broadcasting; issues station licenses; determines whether to approve changes in
ownership or control of station licensees; regulates equipment used by stations;
adopts and implements regulations and policies that directly or indirectly
affect the ownership, operation and employment practices of stations; and has
the power to impose penalties for violations of its rules under the
Communications Act.
The following is a brief summary of certain provisions of the Communications
Act and of specific FCC regulations and policies. Failure to observe these or
other rules and policies can result in the imposition of various sanctions,
including monetary forfeitures, the grant of "short" (less than the maximum)
license renewal terms or, for particularly egregious violations, the denial of a
license renewal application, the revocation of a license or the denial of FCC
consent to acquire additional broadcast properties. Reference should be made to
the Communications Act, FCC rules and the public notices and rulings of the FCC
for further information concerning the nature and extent of federal regulation
of broadcast stations.
LICENSE GRANT AND RENEWAL. Until recently, radio broadcast licenses were
granted for maximum terms of seven years but, acting under the authority of the
Telecommunications Act, the FCC recently revised its rules to extend the maximum
term for future renewals to eight years. Licenses may be renewed through an
application to the FCC. Prior to the Telecommunications Act, during certain
periods when a
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<PAGE>
renewal application was pending, competing applicants could file for the radio
frequency being used by the renewal applicant. The Telecommunications Act
prohibits the FCC from considering such competing applications if the FCC finds
that the station has served the public interest, convenience and necessity, that
there have been no serious violations by the licensee of the Communications Act
or the rules and regulations of the FCC, and that there have been no other
violations by the licensee of the Communications Act or the rules and
regulations of the FCC that, when taken together, would constitute a pattern of
abuse.
Petitions to deny license renewals can be filed by interested parties,
including members of the public. Such petitions may raise various issues before
the FCC. The FCC is required to hold hearings on renewal applications if the FCC
is unable to determine that renewal of a license would serve the public
interest, convenience and necessity, or if a petition to deny raises a
"substantial and material question of fact" as to whether the grant of the
renewal application would be prima facie inconsistent with the public interest,
convenience and necessity. Also, during certain periods when a renewal
application is pending, the transferability of the applicant's license is
restricted. Such a petition presently is pending against KUAD-FM, one of the
Company's Stations, which broadcasts from Windsor, Colorado. The Company is not
currently aware of any facts that would prevent the timely renewal of its
licenses to operate any of its other Stations and Managed Affiliates, although
there can be no assurance that the Company's licenses will be renewed.
The FCC classifies each AM and FM station. An AM station operates on either
a clear channel, regional channel or local channel. A clear channel is one on
which AM stations are assigned to serve wide areas. Clear channel AM stations
are classified as either: Class A stations, which operate on an unlimited time
basis and are designated to render primary and secondary service over an
extended area; Class B stations, which operate on an unlimited time basis and
are designed to render service only over a primary service area; and Class D
stations, which operate either during daytime hours only, during limited times
only or on an unlimited time basis with low nighttime power. A regional channel
is one on which Class B and Class D AM stations may operate and serve primarily
a principal center of population and the rural areas contiguous to it. A local
channel is one on which AM stations operate on an unlimited time basis and serve
primarily a community and the suburban and rural areas immediately contiguous
thereto. Class C AM stations operate on a local channel and are designed to
render service only over a primary service area that may be reduced as a
consequence of interference.
The minimum and maximum facilities requirements for an FM station are
determined by its class. FM class designations depend upon the geographic zone
in which the transmitter of the FM station is located. In general, commercial FM
stations are classified as follows, in order of increasing power and antenna
height: Class A, B1, B, C3, C2, C1 and C. The parameters for each classification
are as follows:
<TABLE>
<CAPTION>
MAXIMUM ANTENNA HEIGHT
MAXIMUM (HAAT)*
CLASS POWER IN METERS
----- ----------- ---------------------------
<S> <C> <C>
A 6 kw 100
B1 25 kw 100
B 50 kw 150
C3 25 kw 100
C2 50 kw 150
C1 100 kw 299
C 100 kw 600
</TABLE>
- ------------------------
* Height Above Average Terrain
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The following table sets forth the market, call letters, FCC license
classification, HAAT, power and frequency of each of the stations owned,
operated or managed by the Company, assuming the consummation of the Pending
Transactions, and the date on which each station's FCC license expires.
<TABLE>
<CAPTION>
HAAT EXPIRATION
FCC IN POWER IN DATE OF
MARKET STATION CLASS METERS KILOWATTS FREQUENCY FCC LICENSE
- ------------------------------------- ---------------- --------- ------------- ----------------- ------------- --------------
<S> <C> <C> <C> <C> <C> <C>
Lancaster/Reading WIOV-FM B 212 25 105.1 mhz 8/1/98
Pennsylvania WIOV-AM C NA 1 1240 khz 8/1/98
Evansville, Indiana/ WBKR-FM C 320 100 92.5 mhz 8/1/04
Owensboro/Henderson, WOMI-AM C NA 1 1490 khz 8/1/04
Kentucky WVJS-AM B NA 5 1420 khz 8/1/03
WSTO-FM C 303 100 96.1 mhz 8/1/03
WKDQ-FM C 300 100 99.5 mhz 8/1/03
Fort Collins/Greeley/Loveland, KUAD-FM C1 200 100 99.1 mhz 4/1/97*
Colorado KTRR-FM C2 150 50 102.5 mhz 8/2/04
Duluth, WEBC-AM B NA 5 560 khz 4/1/05
Minnesota/Superior, KKCB-FM C1 240 100 105.1 mhz 4/1/05
Wisconsin KLDJ-FM C2 251 25 101.7 mhz 4/1/05
</TABLE>
- ------------------------
* Renewal application pending
OWNERSHIP MATTERS. The Communications Act prohibits the assignment of a
broadcast license or the transfer of control of a broadcast licensee without the
prior approval of the FCC. In determining whether to assign, transfer, grant or
renew a broadcast license, the FCC considers a number of factors pertaining to
the licensee, including compliance with various rules limiting common ownership
of media properties, the "character" of the licensee and those persons holding
"attributable" interests therein, compliance with the Communications Act,
including the limitation on alien ownership, as well as compliance with other
FCC rules and policies, including equal employment opportunity requirements.
Once a station purchase agreement has been signed, an application for FCC
consent to assignment of license or transfer of control (depending upon whether
the underlying transaction is an asset purchase or stock acquisition) is filed
with the FCC. Approximately 10 to 15 days after this filing, the FCC publishes a
notice assigning a file number to the application and advising that the
application has been "accepted for filing." This notice begins a 30-day
statutory waiting period, which provides the opportunity for third parties to
file formal petitions to deny the transaction; informal objections may be filed
any time prior to grant of an application. The FCC staff will normally review
the application in this period and seek further information and amendments to
the application if it has questions.
Once the 30-day public notice period ends, the FCC's staff will complete its
processing, assuming that no formal petitions or informal objections were
received and that the application is otherwise consistent with FCC rules. The
staff often grants the application by delegated authority approximately 10 days
after the public notice period ends. At this point, the parties are legally
authorized to close the purchase, although the FCC action is not legally a
"final order." If there is a backlog of applications, the 10-day period can
extend to 30 days or more.
Public notice of the FCC staff grant is usually issued about a week after
the grant is made, stating that the grant was effective when the staff made the
grant. On the date of this notice, another 30-day period begins, within which
time interested parties can file petitions seeking either staff reconsideration
or full FCC review of the staff action. During this time the grant can still be
modified, set aside or stayed, and is not a "final order." In the absence of a
stay, however, the seller and buyer are not prevented from closing, at their own
risk, despite the absence of a final order. Also, within 40 days after the
public notice of the grant, the full FCC can review and reconsider the staff's
grant on its own motion. Thus, during the additional 10 days beyond the 30-day
period available to third parties, the grant is still not "final." In the event
that review by the full FCC is requested and the FCC subsequently affirms the
staff's grant of the
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application, interested parties may thereafter seek judicial review in the
United States Court of Appeals for the District of Columbia Circuit within
thirty days of public notice of the full FCC's action. In the event the Court
affirms the FCC's action, further judicial review may be sought by seeking
rehearing en banc from the Court of Appeals or by certiorari from the United
States Supreme Court.
In the absence of the submission of a timely request for reconsideration,
administrative review or judicial review, the FCC staff's grant of an
application becomes final by operation of law. Upon the occurrence of that
event, counsel is able to deliver an opinion that the FCC's grant is no longer
subject to administrative or judicial review, although such action can
nevertheless be set aside in rare circumstances, such as fraud on the agency by
a party to the application.
The pendency of a license renewal application will alter the aforementioned
timetables because the FCC will not issue an unconditional assignment grant if
the station's license renewal is pending.
The Communications Act and FCC rules also generally restrict the common
ownership, operation or control of radio broadcast stations serving the same
local market, of a radio broadcast station and a television broadcast station
serving the same local market, and of a radio broadcast station and a daily
newspaper serving the same local market. Under these "cross-ownership" rules,
absent waivers, the Company would not be permitted to acquire any daily
newspaper or television broadcast station (other than low power television) in a
local market where it then owned any radio broadcast station. The FCC's rules
provide for the liberal grant of a waiver of the rule prohibiting common
ownership of radio and television stations in the same geographic market in the
top 25 television markets if certain conditions are satisfied. The
Telecommunications Act extends this waiver policy to stations in the top 50
television markets, although the FCC has not yet implemented this change.
In response to the Telecommunications Act, the FCC amended its multiple
ownership rules to eliminate the national limits on ownership of AM and FM
stations. The FCC's broadcast multiple ownership rules restrict the number of
radio stations one person or entity may own, operate or control on a local
level. These limits are:
(i) in a market with 45 or more commercial radio stations, an entity may
own up to eight commercial radio stations, not more than five of which are
in the same service (FM or AM);
(ii) in a market with between 30 and 44 (inclusive) commercial radio
stations, an entity may own up to seven commercial radio stations, not more
than four of which are in the same service;
(iii) in a market with between 15 and 29 (inclusive) commercial radio
stations, an entity may own up to six commercial radio stations, not more
than four of which are in the same service;
(iv) in a market with 14 or fewer commercial radio stations, an entity
may own up to five commercial radio stations, not more than three of which
are in the same service, except that an entity may not own more than 50% of
the stations in such market.
None of these multiple ownership rules requires any change in the Company's
current ownership of radio broadcast stations or precludes consummation of the
Transactions. However, these rules will limit the number of additional stations
which the Company may acquire in the future in its markets.
The FCC generally applies its television/radio/newspaper cross-ownership
rules and its broadcast multiple ownership rules by considering the
"attributable," or cognizable interests held by a person or entity. A person or
entity can have an attributable interest in a radio station, television station
or daily newspaper by being an officer, director, partner or shareholder of a
company that owns that station or newspaper. Whether that interest is cognizable
under the FCC's ownership rules is determined by the FCC's attribution rules. If
an interest is attributable, the FCC treats the person or entity who holds that
interest as the "owner" of the radio station, television station or daily
newspaper in question, and therefore subject to the FCC's ownership rules.
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With respect to a corporation, officers and directors and persons or
entities that directly or indirectly can vote 5% or more of the corporation's
stock (10% or more of such stock in the case of insurance companies, investment
companies, bank trust departments and certain other "passive investors" that
hold such stock for investment purposes only) generally are attributed with
ownership of whatever radio stations, television stations and daily newspapers
the corporation owns.
With respect to a partnership, the interest of a general partner is
attributable, as is the interest of any limited partner who is "materially
involved" in the media-related activities of the partnership. Debt instruments,
nonvoting stock, options and warrants for voting stock that have not yet been
exercised, limited partnership interests where the limited partner is not
"materially involved" in the media-related activities of the partnership, and
minority (under 5%) voting stock, generally do not subject their holders to
attribution. However, the FCC is currently reviewing its rules on attribution of
broadcast interests, and it may modify its criteria. See "--Proposed Changes"
below.
Since under the doctrine of attributed ownership all of the Company's
Stations are deemed to be owned by Alan R. Brill, the FCC multiple ownership
rules could serve to limit to some extent the ability of the Company to acquire
additional stations in some markets.
PROGRAMMING AND OPERATION. The Communications Act requires broadcasters to
serve the "public interest." Since 1981, the FCC gradually has relaxed or
eliminated many of the more formalized procedures it developed to promote the
broadcast of certain types of programming responsive to the needs of a station's
community of license. However, licensees continue to be required to present
programming that is responsive to community problems, needs and interests and to
maintain records demonstrating such responsiveness. Complaints from listeners
concerning a station's programming will be considered by the FCC when it
evaluates the licensee's renewal application, but such complaints also may be
filed and considered at any time.
Stations also must pay regulatory and application fees and follow various
FCC rules that regulate, among other things, political advertising, the
broadcast of obscene or indecent programming, sponsorship identification and
technical operations (including limits on radio frequency radiation). In
addition, licensees must develop and implement programs designed to promote
equal employment opportunities for women and minorities and must submit reports
to the FCC on these matters annually and in connection with a renewal
application. The broadcast of contests and lotteries is regulated by FCC rules.
Failure to observe these or other rules and policies can result in the
imposition of various sanctions, including monetary forfeitures, the grant of
"short" (less than the maximum) renewal terms or, for particularly egregious
violations, the denial of a license renewal application or the revocation of a
license.
In 1985, the FCC adopted rules regarding human exposures to levels of radio
frequency radiation. These rules require applicants for new broadcast stations,
renewals of broadcast licenses or modifications of existing licenses to inform
the FCC at the time of filing such applications whether a new or existing
broadcast facility would expose people to radio frequency radiation in excess of
certain guidelines. More restrictive radiation limits became effective on
October 15, 1997. The Company anticipates that such regulations will not have a
material effect on its business.
LOCAL MARKETING AGREEMENTS. Over the past five years, a number of radio
stations, including certain of the Company's stations, have entered into what
commonly are referred to as "local marketing agreements" ("LMAs") or "time
brokerage agreements." These agreements take various forms. Separately-owned and
licensed stations may agree to function cooperatively in terms of programming,
advertising sales and other matters, subject to compliance with the antitrust
laws and the FCC's rules and policies, including the requirement that the
licensee of each station maintain independent control over the programming and
other operations of its own station. The FCC has held that such agreements do
not violate the Communications Act as long as the licensee of the station that
is being substantially programmed by another entity maintains complete
responsibility for, and control over, operations of its broadcast station and
otherwise
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ensures compliance with applicable FCC rules and policies and that the entity
providing the programming is in compliance with the FCC local ownership rules.
A station that brokers substantial time on another station in its market or
engages in an LMA with a station in the same market will be considered to have
an attributable ownership interest in the brokered station for purposes of the
FCC's ownership rules, discussed above. As a result, a broadcast station may not
enter into an LMA that allows it to program more than 15% of the broadcast time,
on a weekly basis, of another local station that it could not own under the
FCC's local multiple ownership rules. FCC rules also prohibit the broadcast
licensee from simulcasting more than 25% of its programming on another station
in the same broadcast service (i.e., AM-AM or FM-FM) where the two stations
serve substantially the same geographic area, whether the licensee owns the
stations or owns one and programs the other through an LMA arrangement.
Another example of a cooperative agreement between differently owned radio
stations in the same market is a joint sales agreement ("JSA"), whereby one
station sells advertising time in combination, both on itself and on a station
under separate ownership. In the past, the FCC has determined that issues of
joint advertising sales should be left to antitrust enforcement. Currently, JSAs
are not deemed by the FCC to be attributable for the purpose of its multiple
ownership rules. However, the FCC has outstanding a notice of proposed
rulemaking, which, if implemented, could require certain radio station operators
to terminate any JSA it might have with a radio station with which such operator
could not have an LMA.
PROPOSED CHANGES. In December, 1994, the FCC initiated a proceeding to
solicit comment on whether it should revise its radio and television ownership
"attribution" rules by among other proposals (i) raising the basic benchmark for
attributing ownership in a corporate licensee from 5% to 10% of the licensee's
voting stock, (ii) increasing from 10% to 20% of the licensee's voting stock the
attribution benchmark for "passive investors" in corporate licensees, (iii)
restricting the availability of the attribution exemption when a single party
controls more than 50% of the voting stock; and (iv) considering LMAs, JSAs,
debt and non-voting stock interests to be attributable under certain
circumstances. No decision has been made by the FCC in these matters. At this
time, no determination can be made as to what effect, if any, this proposed
rulemaking will have on the Company.
EMPLOYEES
At September 30, 1997, the Company employed approximately 340 persons
full-time and 100 persons part-time. None of such employees is covered by
collective bargaining agreements, and the Company considers its relations with
its employees to be good.
The Company employs several on-air personalities with large loyal audiences
in their respective markets. The Company generally enters into employment
agreements with these personalities to protect its interests in those
relationships that it believes to be valuable. The loss of one of these
personalities could result in a short-term loss of audience share, but the
Company does not believe that any such loss would have a material adverse effect
on the Company's financial condition or results of operations.
PROPERTIES AND FACILITIES
The types of properties required to support the Stations include offices,
studios, transmitter sites and antenna sites. A Station's studios are generally
housed with its offices in business districts, while transmitter sites and
antenna sites are generally located so as to provide maximum market coverage.
After giving effect to the Transactions, the Company will own studio
facilities in Ephrata, Pennsylvania; Owensboro, Kentucky; Windsor, Colorado; and
Duluth, Minnesota; and own transmitter and antenna sites in Reading,
Pennsylvania; Owensboro; and Duluth. The Company leases its remaining studio and
office facilities, and leases certain transmitter and antenna sites. The Company
does not anticipate any difficulties in renewing any facility leases or in
leasing alternative or additional space, if required. The Company owns
substantially all of its other equipment, consisting principally of transmitting
antennae, transmitters, studio equipment and general office equipment.
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Substantially all of the Company's properties and equipment may be
encumbered and serve as collateral for the Company's obligations hereinafter
incurred by the Company under the New Credit Facility.
No one property is material to the Company's operations. The Company
believes that its properties are generally in good condition and suitable for
its operations; however, it continually looks for opportunities to upgrade its
properties and intends to upgrade studios, office space, and transmission
facilities in certain markets.
LEGAL PROCEEDINGS
Currently and from time to time the Company is involved in litigation
incidental to the conduct of its business, but it is not a party to any lawsuit
or proceeding that, in the opinion of the Company, is likely to have a material
adverse effect on the Company.
MANAGEMENT
Directors of the Company's corporate manager, Brill Media Management, Inc.
("Media"), are elected annually by its sole shareholder, Alan R. Brill.
Executive officers of Media are elected by, and serve at the pleasure of,
Media's board of directors. The following table sets forth certain information
with regard to Media's principal executive officers and directors as of the date
of this Offering Memorandum:
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------------------ --- ------------------------------------------------
<S> <C> <C>
Alan R. Brill 55 Director, President, Chief Executive Officer and
Treasurer
Robert M. Leich 54 Director
Philip C. Fisher 59 Director
Clifton E. Forrest 49 Director, Vice President (Newspapers), and
Assistant Secretary
Charles W. Laughlin 69 Director
Alan L. Beck 46 Vice President (Radio)
Donald C. TenBarge 40 Vice President, Controller, Secretary and
Assistant Treasurer
</TABLE>
Information concerning the experience and affiliations of the directors and
executive officers of Media is as set forth below.
ALAN R. BRILL, DIRECTOR, PRESIDENT, CHIEF EXECUTIVE OFFICER AND TREASURER.
Mr. Brill founded the Company's predecessor beginning in 1981 and has worked in
the media industry for 24 years. Prior to starting the Company, after Peace
Corps service in Ecuador, Mr. Brill joined Arthur Young & Co. in New York City
where he practiced as a CPA with a diversified clientele. In 1972, he joined a
new, publicly-traded real estate investment trust in Atlanta as a senior
financial and administrative executive. The trust was involved in short and
long-term real estate loans, primarily to proprietary hospitals. In 1973, he was
recruited by Worrell Newspapers, Inc., a large, privately-owned newspaper group
headquartered in Charlottesville, Virginia, as its chief financial officer and
named to the company's Board of Directors. As a senior executive in the company,
Mr. Brill was involved in or responsible for all the company's numerous
acquisitions and financings, had a role in most significant operating matters
and built a small television group for the company. Soon after the founder
transferred his ownership interest to his son and withdrew from the business,
Mr. Brill left Worrell to form Brill Media Company, Inc. in 1981. Mr. Brill
earned a B.A. in economics and mathematics from DePauw University and an M.B.A.
from Harvard Business School. Mr. Brill is a Certified Public Accountant.
ROBERT M. LEICH, DIRECTOR. Mr. Leich is President of Diversified Healthcare,
Inc., successor to Charles Leich & Co., one of the country's largest independent
drug distributors. He is a director of Old National
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<PAGE>
Bank, Evansville, Indiana and of the National Wholesale Druggists Association.
He has served on the board of numerous civic and business organizations. Mr.
Leich graduated from Yale University and received his M.B.A. degree from Indiana
University at Bloomington.
PHILIP C. FISHER, DIRECTOR. Dr. Fisher is Dean of Business, University of
Southern Indiana and has published extensively on the case study method for
entrepreneurial businesses. He has held numerous civic and business posts,
including the board of the Evansville Chamber of Commerce and the executive
committee of the Indiana Council for Economic Education. He received his
undergraduate degree from Wayne State College, an M.B.A. from the University of
South Dakota, and a Ph.D. from the Graduate School of Business of Stanford
University.
CLIFTON E. FORREST, DIRECTOR, VICE PRESIDENT (NEWSPAPERS) AND ASSISTANT
SECRETARY. Mr. Forrest joined the Company's predecessors in 1981 as publisher of
CMN. In 1987, he moved to Evansville to become a senior officer of BMCLP. His
responsibilities consist of managing the publishing, printing and distribution
areas and overseeing employee benefit plans, risk management programs, personnel
issues, and certain other matters. Mr. Forrest has 33 years of industry
experience including 10 years at Worrell Newspapers, Inc. where he served in
various roles publishing daily and weekly newspapers in five different states.
Mr. Forrest earned a B.A. degree with an emphasis in journalism, marketing,
advertising and industrial sociology from Wichita State University.
CHARLES W. LAUGHLIN, DIRECTOR. Mr. Laughlin is a lawyer and presently of
counsel to Thompson & McMullan, P.C., a law firm in Richmond, Virginia. Mr.
Laughlin received his undergraduate degree from the College of William & Mary
and his J.D. from the University of Virginia. After completing a clerkship with
the United States Court of Appeals for the Fourth Circuit, he has practiced law
in Richmond, Virginia since 1956 and has served as counsel to the Company since
its inception.
ALAN L. BECK, VICE PRESIDENT (RADIO). Mr. Beck joined the Company's
predecessor in 1985 as President/General Manager of the Pennsylvania Stations.
After two years, he moved to the BMCLP where he became Vice President-Radio
Group Operations. Currently, his major responsibilities include supervising the
Stations and promotional companies through the general managers, and acting as a
resource for other operations. Mr. Beck has 22 years of experience in all facets
of the radio and television industries. Mr. Beck earned a B.A. degree in
marketing from Southern Illinois University.
DONALD C. TENBARGE, VICE PRESIDENT, CONTROLLER, SECRETARY AND ASSISTANT
TREASURER. Mr. TenBarge joined BMCLP in 1988. He is responsible for the
financial management and reporting of all operations and companies. In addition
to managing the information systems, Mr. TenBarge also participates in financing
activities and acquisitions. Prior to joining BMCLP, Mr. TenBarge was a manager
in a regional CPA firm where he spent nine years engaged in many aspects of
audit, tax, systems, and financial planning. Mr. TenBarge earned a B.S. in
Accounting from the University of Evansville and is a Certified Public
Accountant.
To the full extent permitted by applicable Virginia law, Media is obligated
to indemnify its officers and directors for liabilities and expenses incurred by
them because of their status as officers or directors of Media.
EXECUTIVE COMPENSATION
During fiscal 1995, fiscal 1996 and fiscal 1997, fees to BMCLP were
approximately $1.7 million, $1.8 million and $1.9 million, respectively, for
services provided to the Company pursuant to Administrative Management
Agreements. See "Certain Transactions."
The Company has entered into performance incentive plan agreements (the
"Plans") with Clifton E. Forrest with respect to the Newspapers business and
Alan L. Beck with respect to the Stations' business (the "Executives") in their
capacities as officers of Company affiliates. The Plans accumulate increments
annually based on certain defined performance criteria. As of February 28, 1997,
vested interests of the
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Executives in the Plans totaled $1,785,000 for Mr. Forrest, and $1,700,000 for
Mr. Beck. Payments under the Plans will commence only upon fulfillment of
certain contingencies, including the Executive's death, disability, retirement,
or employment termination and can be paid, at each affiliate's option, in
amounts
not to exceed quarterly payments of 2.5% of the Executive's vested amount. A
Company affiliate also maintains a defined contribution profit sharing plan to
which all Company employees may make voluntary contributions.
In the year ended February 28, 1997, Thompson & McMullan, P.C. (to which Mr.
Laughlin is of counsel) received approximately $170,000 in fees from the
Company.
CERTAIN TRANSACTIONS
Alan R. Brill directly or indirectly owns and controls the Issuer, the
Company and each of the Company's Subsidiaries, Managed Affiliates and other
affiliates.
Brill Media Company, L.P. ("BMCLP"), an affiliate, is a limited partnership
whose limited partners are Alan R. Brill and Northwest Radio, Inc., an affiliate
owned by Mr. Brill. The general partner of BMCLP is Brill Media Company, Inc.,
also an affiliate of the Company. Since their organization or acquisition, each
Subsidiary or affiliate owner of a Newspaper or Station has paid management fees
to BMCLP pursuant to management agreements (the "Administrative Management
Agreements"). Acting pursuant to such Administrative Management Agreements,
BMCLP is responsible for and provides to the Stations and Newspapers long-range
strategic planning, management support and oversight, establishment of primary
policies and procedures, resource allocation, accounting and auditing,
regulatory and legal compliance and support, license renewals and the evaluation
of potential acquisitions. In addition, executives of BMCLP visit the Company's
Stations and Newspapers on a frequent basis to review performance, to assist
local management with programming, production, sales, and recruiting efforts, to
develop, implement, and verify overall Station and Newspaper operating and
marketing strategies, and, most importantly, to remain aware of developments in
each market. The executives of BMCLP are the same persons that are executives of
BMC (see "Management"), for which they presently receive no compensation from
the Issuer or the Company. None of these executives has any interest in such
Administrative Management Agreements, except for Alan R. Brill's indirect
interest as owner of BMCLP, as indicated.
Pursuant to such Administrative Management Agreements, BMCLP earns an annual
fee, paid monthly, equal to ten percent of each Station's net cash revenues and
five percent of each of the Newspapers' net cash revenues. Non-operating
Subsidiaries and affiliates pay a nominal flat fee for any such service
received. For the Company's year ended February 28, 1997, the aggregate amount
of such Administrative Management Agreement fees charged to Subsidiaries was
approximately $1.9 million. As and to the extent provided in the Indenture, the
future payment of such fees will be subordinate to the prior payment of the
Company's obligations on the Notes. See "Description of Notes--Certain
Covenants--Limitations on Restricted Payments."
Pursuant to reimbursement agreements, from time to time third-party services
or products (such as insurance coverage) may be provided to one or more of the
Company, its Subsidiaries, or their affiliates, in which case such costs are
reimbursed on a ratable basis to the provider, which may be BMCLP, the Company,
or another Subsidiary or affiliate.
Pursuant to Managed Affiliate Management Agreements from time to time one or
more of the Subsidiaries may provide management services to a Managed Affiliate
on an agreed fee basis for services rendered. Such fees generally consist of a
nominal fixed fee plus a variable additional fee based upon the Managed
Affiliate's performance. One of the Company's Subsidiaries, Tri-State
Broadcasting, Inc. ("Tri-State") has entered into such Managed Affiliate
Management Agreements (the "Tri-State Agreements") with two Managed Affiliates,
TSB III, LLC, the owner and operator of radio stations WSTO-FM and WVJS-AM
licensed to Owensboro, Kentucky and TSB IV, LLC, the owner and operator of radio
station
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WKDQ-FM, licensed to Henderson, Kentucky, each an entity wholly owned by Mr.
Brill. Pursuant to the Tri-State Agreements, Tri-State will receive from each of
the Managed Affiliates a monthly fee of $10,000 and an additional annual fee
based upon such Managed Affiliate's financial performance.
As of August 31, 1997, Holdings or other Subsidiaries, directly or
indirectly, have loaned approximately $14.3 million in the aggregate to the
Managed Affiliates. It is anticipated that similar relationships may be
initiated with other affiliates in the future.
Prior to August 31, 1997, the Company declared a distribution of $3.0
million in cash, which thereafter was paid to Mr. Brill. Subsequently, the
Company declared and paid a distribution of $5.0 million in cash to Mr. Brill
and $4.2 million for purposes of satisfaction of affiliate notes receivable and
owing from Mr. Brill. See "Capitalization."
Pursuant to Member Management Agreements, Huron Management, Inc., an
affiliate owned and controlled by Mr. Brill, acts as member-manager of two of
the Company's Subsidiaries, Huron P.S., LLC, and Huron Newspapers, LLC. Nominal
charges are made by the management company for this management oversight and for
the costs associated therewith. In a like arrangement, Northland Management,
Inc., an affiliate controlled by Mr. Brill, is manager on a fee basis to another
Subsidiary, Northland Broadcasting, LLC.
On a temporary basis, at a present cost of approximately $70,000 per year, a
Subsidiary, Central Michigan Newspapers, Inc. ("CMN"), presently leases space
from the current owner of a facility that will be owned by CMR Investments, L.P.
("CMR") a limited partnership affiliate of the Company (in which BMCLP's and the
Company's executives, Mr. Brill, Clifton E. Forrest, and Alan L. Beck each has
an interest as a limited partner) after closing of the purchase of such property
by CMR. CMN has advanced to CMR the sum of $500,000 (a portion of the insurance
proceeds resulting from a fire loss at CMN's prior production facilities) for
CMN's share of the "build out" costs of new quarters that CMN will lease from
CMR and will occupy after CMR has acquired and renovated the property. After
renovation is complete, CMR and CMN will effect the long-term lease for
occupancy of the improved property for use as the Newspapers' main office and
production facility, all at a cost no greater than that required for comparable
space elsewhere in that market, if available, and CMN will be relieved of its
present several facility commitments.
DRI, LLC, an affiliate owned indirectly by Mr. Brill, recently acquired
title to a building in Duluth, Minnesota (the "Duluth Building"). It is
anticipated that DRI, LLC will enter into a lease on market rental terms with
the Subsidiaries Northland Broadcasting, LLC and NBII, Inc. for use of a portion
of the Duluth Building as a studio facility for the Duluth, Minnesota/Superior
Wisconsin Stations.
From time to time various Company Subsidiaries and affiliates have entered
into loan transactions between themselves, which transactions are duly recorded
in the appropriate Company books and records and the annual effects of which are
fully reflected in the Company's financial statements.
The Missouri Properties have entered into agreements for the sale of
substantially all of the assets of the Missouri Properties for a net cash
purchase price of approximately $7.4 million, plus assumed liabilities of
$256,000. Pursuant to the terms of a Time Brokerage Agreement which provides for
monthly payments of $50,000 to the Missouri Properties, the purchaser is
operating and managing the Missouri Properties pending closing of the purchase.
Closing of the sale and purchase is expected to occur immediately upon the FCC
granting requisite approval for transfer of the broadcast licenses associated
with these Stations. Applications for transfer of broadcast licenses of the
Missouri Properties have been filed with the FCC by the purchasers. A local
market competitor has objected to the transfer of the licenses and on December
12, 1997, filed with the FCC a Petition to Deny the license transfers and to
terminate the Time Brokerage Agreement. No action has been taken on the Petition
to Deny by the FCC, and the Company believes that even if the Petition to Deny
were granted, the consequences would not be material to the Company.
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The Company's Subsidiary, NCR II Inc., presently manages and programs radio
station KTRR-FM in Loveland, Colorado pursuant to a Time Brokerage Agreement
with Onyx Broadcasting, Inc., has executed an option to purchase substantially
all of the assets of KTRR-FM for a purchase price of $2.0 million, and will
enter into a covenant not to compete with the sellers, with a stated
consideration of $500,000, payable over its five year term. It is expected that
closing of the purchase of KTRR-FM will occur shortly after execution of a
definitive asset purchase agreement for this transaction and required approval
for transfer of the broadcast licenses by the FCC.
Certain of the Subsidiaries and other affiliates were indebted under the
terms of certain senior secured obligations guaranteed by Mr. Brill and payable
to AMRESCO Funding Corporation ("Amresco") and Goldman Sachs Credit Partners
L.P. ("Goldman Sachs"). These obligations, including sums borrowed after August
31, 1997, a portion of which was used to pay dividends to Mr. Brill, were paid,
along with accrued interest thereon, and applicable prepayment premiums, as
appropriate, from the proceeds of the Offering, as reflected in the pro forma
combined financial statements contained in this Prospectus. Certain of the
proceeds of the Offering were used to pay certain related fees and expenses
associated therewith.
On October 1, 1997 two of the Company's newspaper Subsidiaries acquired the
assets of Huron and Northeastern, newspapers located on the coast of Lake Huron,
Michigan, for a total consideration of $2.8 million.
The Company loaned approximately $2.0 million of the proceeds of the
Offering to Managed Affiliates on an unsecured basis at a rate of interest of
12% per annum. Such amounts are in addition to the $14.3 million already loaned
by the Company to the Managed Affiliates at August 31, 1997.
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THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
The Original Securities were originally sold by the Issuer on December 30,
1997 in transactions exempt from the registration requirements of the Securities
Act. The $3,000,000 aggregate principal amount of the Original Appreciation
Notes and $105,000,000 aggregate principal amount of the Original Notes were
sold to the Initial Purchaser pursuant to the Purchase Agreement. The Initial
Purchaser subsequently resold such Securities. The Issuer, the Subsidiary
Guarantors, and the Initial Purchaser entered into the Registration Rights
Agreements pursuant to which the Issuer and the Subsidiary Guarantors agreed,
for the benefit of the holders, that they would, at their own expense, (i) file
within 60 days after December 30, 1997, the original issue date of the
Securities (the "Issue Date"), one or more registration statements (the
"Exchange Offer Registration Statement") with the Commission with respect to the
Exchange Offer for the Exchange Securities and (ii) use their reasonable best
efforts to cause the Exchange Offer Registration Statement to be declared
effective by the Commission under the Securities Act within 150 days after the
Issue Date and (iii) use their reasonable best efforts to cause such Exchange
Offer Registration Statement to remain effective until the closing of the
Exhange Offer and (iv) use their reasonable best efforts to consummate the
Exchange Offer no later than 180 days after the Issue Date. Upon the Exchange
Offer Registration Statement being declared effective, the Issuer will commence
the Exchange Offer. The Issuer will keep the Exchange Offer open for not less
than 20 business days (or longer if required by applicable law) after the date
that notice of the Exchange Offer is mailed to the holders of the Securities.
For each Original Note surrendered pursuant to the Exchange Offer, the holder
who surrendered such Original Note will receive an Exchange Note having a
principal amount equal to that of the surrendered Original Note. Interest on
each Exchange Note will accrue from the last date on which interest was paid on
the Original Note surrendered in exchange therefor or, if no interest has been
paid on such Original Note, from the Issue Date. For each Original Appreciation
Note surrendered pursuant to the Exchange Offer, the holder who surrendered such
Original Appreciation Note will receive an Exchange Appreciation Note having a
principal amount equal to that of the surrendered Original Appreciation Note.
Under existing interpretations of the staff to the Commission contained in
several no-action letters to third parties, the Exchange Securities would
generally be freely transferable by holders thereof other than Affiliates of the
Issuer after the Exchange Offer without further registration under the
Securities Act only if (i) the Exchange Securities were acquired in the ordinary
course of business of such holder or such other person, (ii) neither such holder
nor such other person is engaging in or intends to engage in a distribution of
the Exchange Securities and (iii) neither such holder nor such other person has
an arrangement or understanding with any person to participate in the
distribution of the Exchange Securities. However, any purchaser of Securities
who is an Affiliate of the Issuer or who intends to participate in the Exchange
Offer for the purpose of distribution of the Exchange Securities (i) will not be
able to rely on the position of the staff of the Commission, (ii) will not be
able to tender its Securities in the Exchange Offer and (iii) must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any sale or transfer of the Securities, unless such sale or
transfer is made pursuant to an exemption from such requirements.
Each holder of the Original Securities that wishes to exchange such Original
Securities for Exchange Securities in the Exchange Offer will be required to
represent in the Letters of Transmittal that (i) the Exchange Securities are to
be acquired by the holder or the person receiving such Exchange Securities,
whether or not such person is the holder, in the ordinary course of business,
(ii) the holder or any such other person (other than a broker-dealer referred to
in the next sentence) is not engaging, and does not intend to engage, in the
distribution of the Exchange Securities, (iii) the holder or any such other
person has no arrangement or understanding with any person to participate in the
distribution of the Exchange Securities, (iv) neither the holder nor any such
other person is an "affiliate" of the Issuer within the meaning of Rule 405
under the Securities Act and (v) the holder or any such other person
acknowledges that if such holder or other person participates in the Exchange
Offer for the purpose of distributing the
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Exchange Securities it must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale of the Exchange
Securities and cannot rely on those no-action letters. As indicated above, in
connection with any resales of Exchange Securities, any broker-dealer (a
"Participating Broker-Dealer") that acquired the Original Securities for its own
account as a result of market-making or other trading activities must deliver a
prospectus meeting the requirements of the Securities Act. Based on existing
interpretations of the staff of the Commission, the Company believes that
Participating Broker-Dealers may fulfill their prospectus delivery requirements
with respect to the Exchange Securities (other than a resale of an unsold
allotment from the original sale of the Securities) with this Prospectus. Under
the Registration Rights Agreements, the Issuer is required to make this
Prospectus available to Participating Broker-Dealers and other persons, if any,
with similar prospectus delivery requirements, for a period of 180 days after
consummation of the Exchange Offer for use in connection with the resale of
Exchange Securities. See "Plan of Distribution."
In the event that (i) applicable law or interpretations of the staff of the
Commission do not permit the Company to effect such an Exchange Offer, (ii) for
any other reason the Exchange Offer is not consummated within 180 days after the
Issue Date, (iii) under certain circumstances upon the request of the Inital
Purchaser or (iv) any holder of Original Securities (other than the Initial
Purchaser) is not eligible to participate in the Exchange Offer, the Issuer
will, at its expense, (a) as promptly as reasonably practicable file a
registration statement (the "Shelf Registration Statement") relating to the
offer and sale of the then outstanding Original Securities, (b) use its
reasonable best efforts to cause the Shelf Registration Statement to be declared
effective under the Securities Act by the 180th day after the Issue Date (or
promptly in the event of a request by the Initial Purchaser pursuant to clause
(iii) above) and (c) use its reasonable best efforts to keep the Shelf
Registration Statement effective until the earlier of two years from the Issue
Date (or one year from the date the Shelf Registration Statement is declared
effective if such Shelf Registration Statement is filed upon the request of the
Initial Purchaser pursuant to clause (iii) above) or such shorter period which
will terminate when all of the Original Securities become eligible for resale
pursuant to Rule 144 under the Securities Act without volume restriction (the
"Effectiveness Period").
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letters of Transmittal, the Issuer will accept any and all Original
Securities validly tendered and not withdrawn prior to 5:00 p.m., New York City
time, on the Expiration Date. The Issuer will issue an equal principal amount of
Exchange Notes in exchange for such principal amount of outstanding Original
Notes accepted in the Exchange Offer and an equal principal amount of Exchange
Appreciation Notes in exchange for such principal amount of outstanding Original
Appreciation Notes accepted in the Exchange Offer. Holders may tender some or
all of their Original Securities pursuant to the Exchange Offer. Notes may be
tendered only in integral multiples of $1,000; provided, however, that a holder
holding any Original Note in a denomination of other than an integral multiple
of $1,000 may tender the principal amount of such Original Note that is not an
integral multiple of $1,000 in addition to tendering, in integral multiples of
$1,000, the remaining principal amount, if any, of such Original Note.
The form and terms of the Exchange Notes are the same as the form and terms
of the Original Notes and the form and terms of the Exchange Appreciation Notes
are the same as the form and terms of the Original Appreciation Notes except
that (i) the Exchange Notes and the Exchange Appreciation Notes will bear a
"Series B" designation and different CUSIP Numbers from the Securities, (ii) the
Exchange Notes and the Exchange Appreciation Notes will have been registered
under the Securities Act and hence will not bear legends restricting the
transfer thereof and (iii) the holders of the Exchange Notes and the Exchange
Appreciation Notes will not be entitled to certain rights of holders of Notes
and Appreciation Notes under the Registration Rights Agreements, which rights
will terminate as to holders of the Exchange Securities when the Exchange Offer
is consummated. The Exchange Notes will evidence the same debt as
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the Original Notes and will be entitled to the benefits of the Notes Indenture.
The Exchange Appreciation Notes will evidence the same debt as the Original
Appreciation Notes and will be entitled to the benefits of the Appreciation
Notes Indenture.
As of the date of this Prospectus, $105,000,000 aggregate principal amount
of Original Notes are outstanding and $3,000,000 aggregate principal amount of
Original Appreciation Notes are outstanding. The Issuer has fixed the close of
business on , 1998 as the date for purposes of determining the persons to whom
this Prospectus and the Letters of Transmittal will be mailed initially.
The Issuer shall be deemed to have accepted validly tendered Original
Securities when, as and if the Issuer has given oral or written notice thereof
to the Exchange Agent. The Exchange Agent will act as agent for the tendering
holders for the purpose of receiving the Exchange Securities from the Issuer.
If any tendered Original Securities are not accepted for exchange because of
an invalid tender, the occurrence of certain other events set forth herein or
otherwise, the certificates for any such unaccepted Original Securities will be
returned, without expense, to the tendering holder thereof as promptly as
practicable after the Expiration Date.
Holders who tender Original Securities in the Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letters of Transmittal, transfer taxes with respect to the exchange of
Original Securities pursuant to the Exchange Offer. The Issuer will pay all
charges and expenses, other than transfer taxes in certain circumstances, in
connection with the Exchange Offer. See "--Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1998, unless the Issuer, in its sole discretion, extends the Exchange
Offer, in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Issuer will notify the Exchange
Agent of any extension by written notice and will mail to the registered holders
an announcement thereof, each prior to 9:00 a.m., New York City time, on the
next business day after the previously scheduled Expiration Date.
The Issuer reserves the right, in its sole discretion, (i) to delay
accepting any Original Securities, to extend the Exchange Offer or to terminate
the Exchange Offer if any of the conditions set forth below under "--Conditions"
shall not have been satisfied, by giving written notice of such delay, extension
or termination to the Exchange Agent or (ii) to amend the terms of the Exchange
Offer in any manner. Any such delay in acceptance, extension, termination or
amendment will be followed as promptly as practicable by written notice thereof
to the registered holders.
INTEREST ON THE EXCHANGE SECURITIES
Interest on each Exchange Note will accrue from the last date on which
interest was paid on the Original Note surrendered in exchange therefor or, if
no interest has been paid on such Original Note, from the Issue Date. Holders
whose Original Notes are accepted for exchange will be deemed to have waived the
right to receive interest accrued on such Original Notes. Accordingly, holders
who exchange their Original Notes will receive the same interest payment on the
next interest payment date (expected to be June 15, 1998) that they would have
received had they not accepted the Exchange Offer. Interest on the Exchange
Notes is payable semi-annually on each June 15 and December 15 commencing on
June 15, 1998.
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PROCEDURES FOR TENDERING
Only a holder of Original Securities may tender such Original Securities in
the Exchange Offer. To tender in the Exchange Offer, a holder must complete,
sign and date the appropriate Letter of Transmittal, or a facsimile thereof,
have the signatures thereon guaranteed if required by the Letter of Transmittal
and mail or otherwise deliver such Letter of Transmittal, or such facsimile,
together with the Original Securities and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date. A
separate Letter of Transmittal is required for the tender of Original Notes and
for the tender of Original Appreciation Notes. To be tendered effectively, the
Original Securities, Letters of Transmittal and other required documents must be
completed and received by the Registrar at the address set forth below under
"--Exchange Agent" prior to 5:00 p.m., New York City time, on the Expiration
Date. Delivery of the Original Securities may be made by book-entry transfer in
accordance with the procedures described below. Confirmation of such book-entry
transfer must be received by the Exchange Agent prior to the Expiration Date.
Notwithstanding the foregoing, DTC Participants tendering through ATOP will be
deemed to have made valid delivery where the Exchange Agent receives an Agent's
Message (defined below) prior to the Expiration Date.
By executing a Letter of Transmittal, each holder will make to the Issuer
the representations set forth above in the second paragraph under the heading
"--Purpose and Effect of the Exchange Offer."
The tender by a holder and the acceptance thereof by the Issuer will
constitute the agreement between such holder and the Issuer in accordance with
the terms and subject to the conditions set forth herein and in the Letters of
Transmittal.
THE METHOD OF DELIVERY OF ORIGINAL SECURITIES AND THE LETTERS OF TRANSMITTAL
AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
SOLE RISK OF THE HOLDER. AS AN ALTERNATIVE TO DELIVERY BY MAIL, HOLDERS MAY WISH
TO CONSIDER OVERNIGHT OR HAND DELIVERY SERVICE. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ASSURE DELIVERY TO THE EXCHANGE AGENT BEFORE THE EXPIRATION
DATE. NO LETTER OF TRANSMITTAL OR SECURITIES SHOULD BE SENT TO THE ISSUER.
HOLDERS MAY REQUEST THEIR RESPECTIVE BROKERS, DEALERS, COMMERCIAL BANKS, TRUST
COMPANIES OR NOMINEES TO EFFECT THE ABOVE TRANSACTIONS FOR SUCH HOLDERS.
ORIGINAL SECURITIES HELD THROUGH DTC. Each beneficial owner holding
Original Securities through a DTC Participant must instruct such DTC Participant
to cause its Original Securities to be tendered in accordance with the
procedures set forth in this Prospectus.
Pursuant to an authorization given by DTC to the DTC Participants, each DTC
Participant holding Original Securities through DTC must (i) electronically
transmit its acceptance through ATOP, and DTC will then edit and verify the
acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC
and send an Agent's Message to the Exchange Agent for its acceptance, or (ii)
comply with the guaranteed delivery procedures set forth below and in the Notice
of Guaranteed Delivery. See "--Guaranteed Delivery Procedures."
The Exchange Agent will (promptly after the date of this Prospectus)
establish accounts at DTC for purposes of the Exchange Offer with respect to
Original Securities held through DTC, and any financial institution that is a
DTC Participant may make book-entry delivery of interests in Original Securities
into the Exchange Agent's account through ATOP. However, although delivery of
interests in the Original Securities may be effected through book-entry transfer
into the Exchange Agent's account through ATOP, an Agent's Message in connection
with such book-entry transfer, and any other required documents, must be, in any
case, transmitted to and received by the Exchange Agent at its address set forth
under "--Exchange Agent," or the guaranteed delivery procedures set forth below
must be complied with, in each case, prior to the Expiration Date. Delivery of
documents to DTC does not constitute delivery to the
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Exchange Agent. The confirmation of a book-entry transfer into the Exchange
Agent's account at DTC as described above is referred to herein as a "Book-Entry
Confirmation."
The term "Agent's Message" means a message transmitted by DTC to, and
received by, the Exchange Agent and forming a part of the Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
each DTC Participant tendering through ATOP that such DTC Participants have
received a Letter of Transmittal and agree to be bound by the terms of the
Letter of Transmittal and that the Issuer may enforce such agreement against
such DTC Participants.
Cede & Co., as the Holder of the global certificates representing the
Original Notes and the Original Appreciation Notes (each a "Global Security," or
together, the "Global Securities"), will tender a portion of each of the Global
Securities equal to the aggregate principal amount due at the stated maturity or
number of shares for which instructions to tender are given by DTC Participants.
ORIGINAL SECURITIES HELD BY HOLDERS. Any beneficial owner whose Original
Securities are registered in the name of a broker, dealer, commercial bank,
trust company or other nominee and who wishes to tender should contact such
registered holder promptly and instruct such registered holder to tender on such
beneficial owner's behalf. See "Instructions to Registered Holder and/or
Book-Entry Transfer Facility Participant from Beneficial Owner" included with
the Letters of Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the case
may be, must be guaranteed by an Eligible Institution (as defined) unless the
Original Securities tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled "Special Delivery Instructions" on
the Letter of Transmittal or (ii) for the account of an Eligible Institution. In
the event that signatures on a Letter of Transmittal or a notice of withdrawal,
as the case may be, are required to be guaranteed, such guarantee must be by a
member firm of the Medallion System (an "Eligible Institution").
If a Letter of Transmittal is signed by a person other than the registered
holder of any Original Securities listed therein, such Original Securities must
be endorsed or accompanied by a properly completed bond power for both the
Original Notes and Original Appreciation Notes, signed by such registered holder
as such registered holder's name appears on such Original Securities with the
signature thereon guaranteed by an Eligible Institution.
If a Letter of Transmittal or any Original Securities or bond powers are
signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should so indicate when signing, and evidence
satisfactory to the Issuer of their authority to so act must be submitted with
the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptance of tendered Original Securities and withdrawal of
tendered Original Securities will be determined by the Issuer in its sole
discretion, which determination will be final and binding. The Issuer reserves
the absolute right to reject any and all Original Securities not properly
tendered or any Original Securities the Issuer's acceptance of which would, in
the opinion of counsel for the Issuer, be unlawful. The Issuer also reserves the
right in its sole discretion to waive any defects, irregularities or conditions
of tender as to particular Original Securities. The Issuer's interpretation of
the terms and conditions of the Exchange Offer (including the instructions in
the Letters of Transmittal) will be final and binding on all parties. Unless
waived, any defects or irregularities in connection with tenders of Original
Securities must be cured within such time as the Issuer shall determine.
Although the Issuer intends to notify holders of defects or irregularities with
respect to tenders of Original Securities, neither the Issuer, the Exchange
Agent nor any other person shall incur any liability for failure to give such
notification. Tenders of Original Securities will not be deemed to have been
made until such defects or irregularities have been cured or waived. Any
Original Securities received by the Exchange Agent that are not properly
tendered and as to which the defects or irregularities have not been cured or
waived will be returned by the Exchange Agent to the
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tendering holders, unless otherwise provided in the Letters of Transmittal, as
soon as practicable following the Expiration Date.
GUARANTEED DELIVERY PROCEDURES
ORIGINAL SECURITIES HELD THROUGH DTC. DTC Participants holding Original
Securities through DTC who wish to cause their Original Securities to be
tendered, but who cannot transmit their acceptances through ATOP prior to the
Expiration Date, may cause a tender to be effected if:
(a) guaranteed delivery is made by or through an Eligible Institution;
(b) prior to 5:00 p.m., New York City time on the Expiration Date, the
Exchange Agent receives from such Eligible Institution a properly completed
and duly executed Notice of Guaranteed Delivery (by mail, hand delivery,
facsimile transmission or overnight courier) substantially in the form
provided by the Company herewith; and
(c) Book-Entry Confirmation and an Agent's Message in connection
therewith (as described above) are received by the Exchange Agent within
three NYSE trading days after the date of the execution of the Notice of
Guaranteed Delivery.
ORIGINAL SECURITIES HELD BY HOLDERS. Holders who wish to tender their
Original Securities and (i) whose Original Securities are not immediately
available, (ii) who cannot deliver their Original Securities, the Letters of
Transmittal or any other required documents to the Exchange Agent or (iii) who
cannot complete the procedures for book-entry transfer, prior to the Expiration
Date, may effect a tender if:
(a) the tender is made through an Eligible Institution;
(b) prior to the Expiration Date, the Registrar receives from such
Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder, the certificate number(s)
of such Original Securities and the principal amount of Original Notes
and/or principal amount of Original Appreciation Notes tendered, stating
that the tender is being made thereby and guaranteeing that, within five New
York Stock Exchange trading days after the Expiration Date, the Letters of
Transmittal (or facsimiles thereof) together with the certificate(s)
representing the Original Securities, and any other documents required by
the Letters of Transmittal will be deposited by the Eligible Institution
with the Registrar; and
(c) such properly completed and executed Letters of Transmittal (or
facsimiles thereof), as well as the certificate(s) representing all tendered
Original Securities in proper form for transfer, and all other documents
required by the Letters of Transmittal are received by the Exchange Agent
within five New York Stock Exchange trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Original Securities according to the
guaranteed delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Original Securities may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date.
To withdraw a tender of Original Securities in the Exchange Offer, a letter
or facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m., New York City time, on
the Expiration Date. Any such notice of withdrawal by a DTC Participant must
contain the name and number of the DTC Participant, the principal amount due at
the stated maturity of Original Appreciation Notes to which such withdrawal
relates and the signature of the DTC
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Participant. Any such notice of withdrawal by a Holder of Original Securities
must (i) specify the name of the person having deposited the Original Securities
to be withdrawn (the "Depositor"), (ii) identify the Original Securities to be
withdrawn (including the certificate number(s) and principal amount of Original
Notes and/ or principal amount of Original Appreciation Notes) (iii) be signed
by the holder in the same manner as the original signature on the Letters of
Transmittal by which such Original Securities were tendered (including any
required signature guarantees) or be accompanied by documents of transfer
sufficient to have the Exchange Agent with respect to the Original Notes and the
Original Appreciation Notes register the transfer of such Original Securities
into the name of the person withdrawing the tender and (iv) specify the name in
which any such Original Securities are to be registered, if different from that
of the Depositor. All questions as to the validity, form and eligibility
(including time of receipt) of such notices will be determined by the Issuer,
whose determination shall be final and binding on all parties. Any Original
Securities so withdrawn will be deemed not to have been validly tendered for
purposes of the Exchange Offer, and no Exchange Securities will be issued with
respect thereto unless the Original Securities so withdrawn are validly
retendered. Any Original Securities which have been tendered but which are not
accepted for exchange will be returned to the holder thereof without cost to
such holder as soon as practicable after withdrawal, rejection of tender or
termination of the Exchange Offer. Properly withdrawn Original Securities may be
retendered by following one of the procedures described above under
"--Procedures for Tendering" at any time prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, the Issuer shall not
be required to accept for exchange, or exchange Exchange Securities for, any
Original Securities, and may terminate or amend the Exchange Offer as provided
herein before the acceptance of such Original Securities, if the Exchange Offer,
or the making of any exchange by a holder of Original Securities, violates
applicable law or any applicable interpretation of the staff of the Commission.
EXCHANGE AGENT
The United States Trust Company of New York has been appointed as Exchange
Agent for the Exchange Offer. Questions and requests for assistance, requests
for additional copies of this Prospectus or of the Letters of Transmittal and
requests for Notice of Guaranteed Delivery should be directed to the Exchange
Agent addressed as follows:
<TABLE>
<S> <C>
For Information by Telephone:
1-800-548-6565
By Registered or Certified Mail: By Hand Before 4:30 p.m.:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 843 Cooper Station 111 Broadway
New York, New York 10276 New York, New York 10006
Attention: Corporate Trust Services Attention: Lower Level Corporate
Trust Window
By Overnight Courier and By Facsimile Transmission:
By Hand After 4:30 p.m.: (212) 780-0592
United States Trust Company of New York Attention: Customer Service
770 Broadway, 13th Floor
New York, New York 10003 Confirm by Telephone to:
(800) 548-6565
</TABLE>
Originals of all documents sent by facsimile should be sent promptly by
registered or certified mail, by hand, or by overnight delivery service.
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Delivery to an address or transmission of instructions via facsimile other
than as set forth above will not constitute a valid delivery.
The United States Trust Company of New York also acts as Trustee under the
Note Indenture and as Appreciation Note Indenture and as Registrar and Paying
Agent with regard to the Notes and the Appreciation Notes.
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Issuer.The principal
solicitation is being made by mail; however, additional solicitation may be made
by telegraph, telecopy, telephone or in person by officers and regular employees
of the Issuer and its affiliates.
The Issuer has not retained any dealer-manager in connection with the
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptances of the Exchange Offer. The Issuer, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Issuer. Such expenses include fees and expenses of the Exchange
Agent, Trustee, Registrar and Paying Agent, accounting and legal fees and
printing costs, among others.
ACCOUNTING TREATMENT
The Exchange Notes and the Exchange Appreciation Notes will be recorded at
the same carrying value as the Original Notes and the Original Appreciation
Notes as reflected in the Issuer's accounting records on the date of exchange.
Accordingly, no gain or loss for accounting purposes will be recognized by the
Issuer. The expenses of the Exchange Offer will be amortized over the term of
the Securities.
CONSEQUENCES OF FAILURE TO EXCHANGE
Original Securities that are not exchanged for Exchange Securities pursuant
to the Exchange Offer will remain restricted securities. Accordingly, such
Original Securities may be resold only (i) to the Issuer (upon redemption
thereof or otherwise), (ii) so long as the Securities are eligible for resale
pursuant to Rule 144A under the Securities Act, to a person inside the United
States whom the seller reasonably believes is a qualified institutional buyer
within the meaning of Rule 144A in a transaction meeting the requirements of
Rule 144A, (iii) in accordance with Rule 144 under the Securities Act, or
pursuant to another exemption from the registration requirements of the
Securities Act (and based upon an opinion of counsel reasonably acceptable to
the Issuer), (iv) outside the United States to a foreign person in a transaction
meeting the requirements of Rule 904 under the Securities Act or (v) pursuant to
an effective registration statement under the Securities Act, in each case in
accordance with any applicable securities laws of any state of the United
States.
RESALE OF THE EXCHANGE SECURITIES
With respect to resales of Exchange Securities, based on no-action letters
issued by the staff of the Commission to third parties, the Issuer believes that
a holder or other person who receives Exchange Securities, whether or not such
person is the holder (other than a person who is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities Act), who receives Exchange
Securities in exchange for Original Securities in the ordinary course of
business and who is not participating, does not intend to participate, and has
no arrangement or understanding with any person to participate, in the
distribution of the Exchange Securities, will be allowed to resell the Exchange
Notes and Exchange Appreciation Notes to the public without further registration
under the Securities Act and without delivering to the purchasers of the
Exchange Securities a prospectus that satisfies the requirements of Section 10
of the Securities Act.
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However, if any holder acquires Exchange Securities in the Exchange Offer for
the purpose of distributing or participating in a distribution of Exchange
Securities, such holder cannot rely on the position of the staff of the
Commission enunciated in such no-action letters, and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction, unless an exemption from registration is
otherwise available. Further, each Participating Broker-Dealer that receives
Exchange Securities for its own account in exchange for Original Securities
where such Original Securities were acquired by such Participating Broker-Dealer
as a result of market-making activities or other trading activities, may be a
statutory underwriter and must acknowledge that it will deliver a prospectus in
connection with any resale of such Exchange Securities. The Letters of
Transmittal state that by so acknowledging and by delivering a prospectus, a
Participating Broker-Dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.
As contemplated by these no-action letters and the Registration Rights
Agreements, each holder accepting the Exchange Offer is required to represent to
the Issuer in the Letter of Transmittal that (i) the Exchange Securities are to
be acquired by the holder or the person receiving such Exchange Securities,
whether or not such person is the holder, in the ordinary course of business,
(ii) the holder or any such other person (other than a broker-dealer referred to
in the next sentence) is not engaging, and does not intend to engage, in the
distribution of the Exchange Securities, (iii) the holder or any such other
person has no arrangement or understanding with any person to participate in the
distribution of the Exchange Securities, (iv) neither the holder nor any such
other person is an "affiliate" of the Issuer within the meaning of Rule 405
under the Securities Act and (v) the holder or any such other person
acknowledges that if such holder or other person participates in the Exchange
Offer for the purpose of distributing the Exchange Securities it must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with any resale of the Exchange Securities and cannot rely on
those no-action letters. As indicated above, each Participating Broker-Dealer
that receives Exchange Securities for its own account in exchange for Original
Securities must acknowledge that it will deliver a prospectus in connection with
any resale of such Exchange Securities. For a description of the procedures for
such resales by Participating Broker-Dealers, see "Plan of Distribution."
The Issuer, will, in the event of the filing of the Shelf Registration
Statement, provide to each holder of the Original Notes copies of the prospectus
which is a part of the Shelf Registration Statement, notify each such holder
when the Shelf Registration Statement has become effective and take certain
other actions as are required to permit unrestricted resales of the Original
Notes. A holder of Original Notes that sells its Original Notes pursuant to the
Shelf Registration Statement generally will be required to be named as a selling
securityholder in the related prospectus and to deliver such prospectus to
purchasers, will be subject to certain of the civil liability provisions under
the Securities Act in connection with such sales and will be bound by the
provisions of the Registration Rights Agreement that are applicable to such a
holder (including certain indemnification rights and obligations thereunder).
If the Issuer and the Subsidiary Guarantors fail to comply with the above
provisions or if such registration statements fail to become effective, then, as
the sole liquidated damages for such failure by the Issuer and the Subsidiary
Guarantors, additional interest (the "Additional Interest") shall become payable
with respect to the Securities as follows:
(i) if the Exchange Offer Registration Statement or Shelf Registration
Statement is not declared effective within 150 days following the Issue
Date, Additional Interest shall accrue on the Notes over and above the
stated interest, and Appreciation Notes Additional Interest shall accrue on
$3,000,000, in each case at a rate of 0.50% per annum for the first 120 days
commencing on the 151st day after the Issue Date, such Additional Interest
rate and Appreciation Notes Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each subsequent 30-day
period; or
(ii) if (A) the Issuer has not exchanged all Securities validly tendered
in accordance with the terms of the Exchange Offer on or prior to 180 days
after the Issue Date or (B) the Exchange Offer
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Registration Statement ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or (C) if applicable, the Shelf
Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective at any time prior to the
second anniversary of the Issue Date (unless all the Securities have been
sold thereunder) then Additional Interest shall accrue on the Notes over and
above the stated interest, and Appreciation Notes Additional Interest shall
accrue on $3,000,000, in each case at a rate of 0.50% per annum for the
first 30 days commencing on (x) the 181st day after the Issue Date with
respect to the Notes or Appreciation Notes, as the case may be, validly
tendered and not exchanged by the Issuer, in the case of (A) above, or (y)
the day the Exchange Offer Registration ceases to be effective or usable for
its intended purpose in the case of (B) above, or (z) the day such Shelf
Registration Statement ceases to be effective in the case of (C) above, such
Additional Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period;
PROVIDED HOWEVER, that in no event may the rate of interest for any Additional
Interest on the Notes or Appreciation Notes Additional Interest on the
Appreciation Notes exceed, in the aggregate, 1.5% per annum; and PROVIDED
FURTHER, that (1) upon the effectiveness of the Exchange Offer Registration
Statement or Shelf Registration Statement (in the case of (i) above), or (2)
upon the exchange of Exchange Offer Notes for all Notes tendered (in the case of
clause (ii)(A) above), or upon the effectiveness of the Exchange Offer
Registration Statement which had ceased to remain effective in the case of
clause (ii)(B) above, or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause (ii)(C)
above), Additional Interest on the Notes as a result of such clause or the
relevant subclause thereof, as the case may be, shall cease to accrue.
Any amounts of Additional Interest due pursuant to clauses (i) or (ii) above
will be payable and will be determined by multiplying the applicable Additional
Interest rate by the principal amount of the Notes multiplied by a fraction, the
numerator of which is the number of days such Additional Interest rate was
applicable during such period (determined on the basis of a 360-day year
comprised of twelve 30-day months), and the denominator of which is 360.
The foregoing summary of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by, all the provisions of the Registration Rights Agreement, a copy
of which will be made available upon request to the Issuer.
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DESCRIPTION OF NOTES
GENERAL
The Original Notes were issued, and the Exchange Notes are to be issued,
under an indenture, dated as of December 30, 1997 (the "Indenture"), between the
Issuer and United States Trust Company of New York, as trustee (the "Trustee"),
a copy of which is available upon request to the Issuer. The following is a
summary of certain provisions of the Indenture and the Notes and does not
purport to be complete and is subject to, and is qualified in its entirety by
reference to, all the provisions of the Indenture (including the definitions of
certain terms therein and those terms made a part thereof by the Trust Indenture
Act of 1939, as amended) and the Notes. The definition of certain capitalized
terms used in the following summary are set forth below under "Certain
Definitions".
Principal of, premium, if any, and interest on the Notes will be payable,
and the Notes may be exchanged or transferred, at the office or agency of the
Issuer in the Borough of Manhattan, The City of New York (which initially shall
be the corporate trust office of the Trustee in New York, New York), except
that, at the option of the Issuer, payment of interest may be made by check
mailed to the address of the holders of the Notes as such address appears in the
Note Register. Initially, the Trustee will act as Paying Agent and Registrar for
the Notes. The Notes may be presented for registration of transfer and exchange
at the offices of the Registrar, which initially will be the Trustee's corporate
trust office. The Issuer may change any Paying Agent and Registrar without
notice to holders of the Notes.
The Notes will be issued only in fully registered form, without coupons, in
denominations of $1,000 and any integral multiple of $1,000. No service charge
will be made for any registration of transfer or exchange of Notes, but the
Issuer may require payment of a sum sufficient to cover any transfer tax or
other similar governmental charge payable in connection therewith.
TERMS OF NOTES
The Notes are limited to $105.0 million in aggregate principal amount and
will mature on December 15, 2007. The Notes will bear cash interest at a rate of
7 1/2% per annum from the date of original issuance until December 15, 1999, and
at a rate of 12% per annum from and including December 15, 1999 until maturity.
Interest on each Note will be payable semiannually on June 15 and December 15 of
each year (each an "Interest Payment Date"), commencing on June 15, 1998, to
holders of record at the close of business on the June 1st or December 1st
immediately preceding the Interest Payment Date. In addition, prior to December
15, 1999, original issue discount will accrete on the Notes such that the yield
to maturity will be 12% per annum, compounded on the basis of semi-annual
compounding. The interest rate on the Notes is subject to increase under certain
circumstances. Interest will be computed on the basis of a 360-day year
comprised of twelve 30-day months. Any Original Notes that remain outstanding
after consummation of the Exchange Offer and any Exchange Notes issued in
connection with the Exchange Offer will be treated as a single class of
securities under the Note Indenture. The Notes will not be entitled to the
benefit of any mandatory sinking fund.
OPTIONAL REDEMPTION
Except as set forth below, the Notes will not be redeemable at the option of
the Issuer prior to December 15, 2002. On and after such date, the Notes will be
redeemable, at the Issuer's option, in whole or in part, at any time upon not
less than 30 nor more than 60 days' prior notice mailed by first-class mail to
each holder's registered address, at the following redemption prices (expressed
in percentages of principal amount), if redeemed during the 12-month period
commencing on December 15th of the years
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set forth below, plus accrued and unpaid interest to the redemption date
(subject to the right of holders of record on the relevant record date to
receive interest due on the relevant Interest Payment Date):
<TABLE>
<CAPTION>
REDEMPTION
PERIOD PRICE
- --------------------------------------------------------------------------------- -----------
<S> <C>
2002............................................................................. 106.00%
2003............................................................................. 104.00%
2004............................................................................. 102.00%
2005 and thereafter.............................................................. 100.00%
</TABLE>
OPTIONAL REDEMPTION UPON EQUITY OFFERING. In addition, in the event of the
sale by the Issuer prior to December 15, 2000 of its Capital Stock (other than
Disqualified Stock) in one or more Public Equity Offerings the Net Cash Proceeds
of which are at least $25.0 million in the aggregate, the Issuer may, at its
option, use the Net Cash Proceeds of such sale or sales of Capital Stock to
redeem up to 25% of the aggregate principal amount of the Notes at a redemption
price in the case of a redemption date prior to December 15, 1999, equal to
112.0% of the Accreted Value thereof plus accrued and unpaid interest thereon,
if any, to the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date) and for any redemption date on or after December 15, 1999, at a redemption
price equal to 112.0% of the principal amount thereof plus accrued and unpaid
interest thereon, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on the
relevant Interest Payment Date); PROVIDED, HOWEVER, that after any such
redemption the aggregate principal amount of the Notes outstanding must equal at
least $79.0 million. In order to effect the foregoing redemption with the
proceeds of any such sale of Capital Stock, the Issuer shall make such
redemption not more than 90 days after the consummation of any such sale or
sales of Capital Stock.
SELECTION. In the case of any partial redemption, selection of the Notes
for redemption will be made by the Trustee on a PRO RATA basis, by lot or by
such other method as the Trustee in its sole discretion shall deem to be fair
and appropriate; PROVIDED, HOWEVER, that if a partial redemption is made with
proceeds of a sale of Capital Stock, selection of the Notes or portion thereof
for redemption shall be made by the Trustee only on a PRO RATA basis, unless
such method is otherwise prohibited. Notes may be redeemed in part in multiples
of $1,000 principal amount only. Notice of redemption will be sent, by first
class mail, postage prepaid, at least 30 but not more than 60 days (unless a
shorter period is acceptable to the Trustee) prior to the date fixed for
redemption to each holder whose Notes are to be redeemed at the last address for
such holder then shown on the registry books. If any Note is to be redeemed in
part only, the notice of redemption that relates to such Note shall state the
portion of the principal amount thereof to be redeemed. A new Note in principal
amount equal to the unredeemed portion thereof will be issued in the name of the
holder thereof upon cancellation of the original Note. On and after any
redemption date, interest will cease to accrue on the Notes or part thereof
called for redemption as long as the Issuer has deposited with the Paying Agent
funds in satisfaction of the redemption price pursuant to the Indenture.
RANKING
The Notes will be senior unsecured obligations of the Issuer. The Notes will
rank PARI PASSU in right of payment with all existing and future senior
unsecured indebtedness of the Issuer and will rank senior in right of payment to
any subordinated indebtedness of the Issuer (including the Appreciation Notes).
The Notes and the Subsidiary Guarantees will be effectively subordinated in
right of payment to secured debt of the Issuer and the Subsidiary Guarantors to
the extent of the assets serving as security therefor. As of August 31, 1997 on
a pro forma basis, after giving effect to the Transactions, the Issuer had no
outstanding secured indebtedness to which the Notes would have been effectively
subordinated, and the aggregate amount of the Subsidiary Guarantors' outstanding
senior secured indebtedness to which the Subsidiary Guarantees would have been
effectively subordinated was approximately $4.9 million.
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SUBSIDIARY GUARANTEES
Each Subsidiary Guarantor unconditionally guarantees, jointly and severally,
to each holder and the Trustee, on a senior basis, the full and prompt payment
of principal of and interest on the Notes, and of all other obligations of the
Issuer under the Indenture.
The obligations of each Subsidiary Guarantor are limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor under
its Subsidiary Guarantee or pursuant to its contribution obligations under the
Indenture, result in the obligations of such Subsidiary Guarantor under its
Subsidiary Guarantee not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law. Each Subsidiary Guarantor that makes a
payment or distribution under a Subsidiary Guarantee shall be entitled to a
contribution from each other Subsidiary Guarantor in a PRO RATA amount based on
the Adjusted Net Assets of each Subsidiary Guarantor.
Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Issuer or another Subsidiary Guarantor without limitation. Upon
the sale or disposition of a Subsidiary Guarantor (or all or substantially all
of its assets) to a Person which is not a Subsidiary Guarantor, which sale or
disposition is otherwise in compliance with the Indenture (including the
covenant described under "Certain Covenants--Limitations on Sales of Assets and
Subsidiary Stock"), such Subsidiary Guarantor shall be deemed released from all
its obligations under the Indenture and its Subsidiary Guarantee and such
Subsidiary Guarantee shall terminate; PROVIDED, HOWEVER, that any such
termination shall occur only to the extent that all obligations of such
Subsidiary Guarantor under all of its Subsidiary Guarantors of, and under all of
its pledges of assets or other security interests which secure any other
Indebtedness of the Issuer shall also terminate upon such release, sale or
transfer.
Subsequent to the Issue Date, separate financial information for the
Subsidiary Guarantors will not be provided except to the extent required by
Regulation S-X under the Securities Act.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder will have the right
to require the Issuer to purchase all or any part of such holder's Notes, in the
case of a repurchase date prior to December 15, 1999, at a purchase price in
cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date) and for any repurchase date on or after December 15,
1999, at a purchase price in cash equal to 101% of the principal amount thereof
plus accrued and unpaid interest, if any, to the date of repurchase (subject to
the right of holders of record on the relevant record date to receive interest
due on the relevant Interest Payment Date) (such applicable purchase price being
here in after referred to as the "Change of Control Purchase Price").
Within 30 days following any Change of Control, unless the Issuer has mailed
a redemption notice with respect to all the outstanding Notes in connection with
such Change of Control, the Issuer shall mail a notice to each holder with a
copy to the Trustee stating: (1) that a Change of Control has occurred and that
such holder has the right to require the Issuer to repurchase such holder's
Notes at a purchase price in cash equal to the Change of Control Purchase Price;
(2) the repurchase date (which shall be no earlier than 30 days nor later than
60 days from the date such notice is mailed); and (3) the procedures determined
by the Issuer, consistent with the Indenture, that a holder must follow in order
to have its Notes repurchased.
The Issuer shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the repurchase of Notes pursuant to this covenant. To the
extent that the provisions of any securities laws or regulations conflict
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with provisions of the Indenture, the Issuer will comply with the applicable
securities laws and regulations and shall not be deemed to have breached its
obligations described in the Indenture by virtue thereof.
The definition of "Change of Control" includes, among other transactions, a
disposition of all or substantially all of the property and assets of the Issuer
and its Subsidiaries. With respect to the disposition of property or assets, the
phrase "all or substantially all" as used in the Indenture varies according to
the facts and circumstances of the subject transaction, has no clearly
established meaning under New York law (which is the law which governs the
Indenture) and is subject to judicial interpretation. Accordingly, in certain
circumstances there may be a degree of uncertainty in ascertaining whether a
particular transaction would involve a disposition of "all or substantially all"
of the property or assets of a Person, and therefore it may be unclear as to
whether a Change of Control has occurred and whether the Issuer is required to
make an offer to repurchase the Notes as described above.
There can be no assurance that the Issuer will have sufficient funds
available at the time of any Change of Control to make any debt payment
(including repurchases of Notes) required under the Indenture upon a Change of
Control (as well as may be required pursuant to other securities of the Issuer
which might be outstanding at the time). The above provisions requiring the
Issuer to repurchase the Notes pursuant to a Change of Control will, unless
consents are obtained, require the Issuer to repay all indebtedness then
outstanding which by its terms would prohibit such Note repurchase, either prior
to or concurrently with such Note repurchase.
CERTAIN COVENANTS
The Indenture contains certain covenants including, among others, the
following:
LIMITATION ON INDEBTEDNESS.
(a) The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, Incur any Indebtedness; PROVIDED, HOWEVER, that: (i) the Issuer
and its Restricted Subsidiaries may Incur Indebtedness which is expressly
subordinated to the Notes and the Subsidiary Guarantees if no Default or Event
of Default shall have occurred and be continuing at the time of such Incurrence
or would occur as a consequence of such Incurrence and the Consolidated Leverage
Ratio would not be greater than 7.00 to 1.00 and (ii) the Issuer and its
Restricted Subsidiaries may Incur unsecured Indebtedness ranking on a parity
with the Notes if no Default or Event of Default shall have occurred and be
continuing at the time of such Incurrence or would occur as a consequence of
such Incurrence and the Consolidated Senior Leverage Ratio would not be greater
than 6.50 to 1.00, PROVIDED, HOWEVER, that as provided in the definition of
Permitted Liens Indebtedness Incurred pursuant to this clause (ii) may be
secured by a Lien if at the time of such Incurrence the Consolidated Senior
Secured Leverage Ratio would not be greater than 3.00 to 1.00.
(b) Notwithstanding the foregoing paragraph (a), the Issuer and its
Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred which does not exceed $15.0 million at any
time outstanding, less the aggregate principal amount thereof permanently
repaid with the net proceeds of Asset Dispositions;
(ii) Indebtedness of the Issuer owing to and held by any Wholly-Owned
Subsidiary or Indebtedness of a Restricted Subsidiary owing to and held by
the Issuer or any Wholly-Owned Subsidiary; PROVIDED, HOWEVER, that any
subsequent issuance or transfer of any Capital Stock or any other event
which results in any such Wholly-Owned Subsidiary ceasing to be a
Wholly-Owned Subsidiary or any subsequent transfer of any such Indebtedness
(except to the Issuer or any Wholly-Owned Subsidiary) shall be deemed, in
each case, to constitute the Incurrence of such Indebtedness by the issuer
thereof;
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(iii) Indebtedness represented by (A) the Notes and the Subsidiary
Guarantees, (B) the Appreciation Notes and the Guarantees thereof, (C)
Existing Indebtedness and (D) any Refinancing Indebtedness Incurred in
respect of any Indebtedness described in this clause (iii) (other than
clause (B)) or Incurred pursuant to paragraph (a) above.
(iv) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on the date on which such Restricted Subsidiary was acquired ,
directly or indirectly, by the Issuer (other than Indebtedness Incurred in
anticipation of, or to provide all or any portion of the funds or credit
support utilized to consummate the transaction or series of related
transactions pursuant to which such Restricted Subsidiary became a
Subsidiary or was otherwise acquired by the Issuer); PROVIDED, HOWEVER, that
at the time such Restricted Subsidiary is acquired by the Issuer, the Issuer
would have been able to Incur $1.00 of additional Indebtedness pursuant to
clause (ii) of paragraph (a) above after giving effect to the Incurrence of
such Indebtedness pursuant to this clause (iv) and (B) Refinancing
Indebtedness Incurred by a Restricted Subsidiary in respect of Indebtedness
Incurred by such Restricted Subsidiary pursuant to this clause (iv);
(v) Indebtedness (A) in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Issuer or any of its
Restricted Subsidiaries to their customers in the ordinary course of their
business, (B) in respect of performance bonds or similar obligations of the
Issuer or any of its Restricted Subsidiaries for or in connection with
pledges, deposits or payments made or given in the ordinary course of
business in connection with or to secure statutory, regulatory or similar
obligations, including obligations under health, safety or environmental
obligations and (C) arising from Guarantees to suppliers, lessors,
licensees, contractors, franchises or customers of obligations (other than
Indebtedness) incurred in the ordinary course of business;
(vi) Indebtedness under Currency Agreements and Interest Rate
Agreements; PROVIDED, HOWEVER, that such Currency Agreements and Interest
Rate Agreements are entered into for BONA FIDE hedging purposes of the
Issuer or its Restricted Subsidiaries (as determined in good faith by the
Board of Directors of the Issuer) and correspond in terms of notional
amount, duration, currencies and interest rates as applicable, to
Indebtedness of the Issuer or its Restricted Subsidiaries Incurred without
violation of the Indenture or to business transactions of the Issuer or its
Restricted Subsidiaries on customary terms entered into in the ordinary
course of business;
(vii) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations, or
from Guarantees or letters of credit, surety bonds or performance bonds
securing any obligations of the Issuer or any of its Restricted Subsidiaries
pursuant to such agreements, in each case Incurred in connection with the
disposition of any business assets or Restricted Subsidiary of the Issuer or
(other than Guarantees of Indebtedness or other obligations incurred by any
Person acquiring all or any portion of such business assets or Restricted
Subsidiary of the Issuer for the purpose of financing such acquisition) in a
principal amount not to exceed the gross proceeds actually received by the
Issuer or any of its Restricted Subsidiaries in connection with such
disposition; PROVIDED, HOWEVER, that the principal amount of any
Indebtedness Incurred pursuant to this clause (vii) when taken together with
all Indebtedness Incurred pursuant to this clause (vii) and then
outstanding, shall not exceed $1.0 million;
(viii) Indebtedness consisting of (A) Guarantees by the Issuer (so long
as the Issuer could have Incurred such Indebtedness directly without
violation of the Indenture) and (B) Guarantees by a Restricted Subsidiary of
Indebtedness Incurred by the Issuer without violation of the Indenture (so
long as such Restricted Subsidiary could have Incurred such Indebtedness
directly without violation of the Indenture);
(ix) Indebtedness arising from the honoring by a bank or other financial
institution of a check, draft or similar instrument issued by the Issuer or
any of its Subsidiaries drawn against insufficient
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funds in the ordinary course of business in an amount not to exceed $250,000
at any time, PROVIDED, HOWEVER that such Indebtedness is extinguished within
two business days of its incurrence; and
(x) Indebtedness (other than Indebtedness described in clauses (i)-(ix))
in a principal amount which, when taken together with the principal amount
of all other Indebtedness Incurred pursuant to this clause (x) and then
outstanding, will not exceed $5.0 million (it being understood that any
Indebtedness Incurred under this clause (x) shall cease to be deemed
Incurred or outstanding for purposes of this clause (x) (but shall be deemed
to be Incurred for purposes of paragraph (a)) from and after the first date
on which the Issuer or its Restricted Subsidiaries could have Incurred such
Indebtedness under the foregoing paragraph (a) without reliance upon this
clause (x)).
(c) Notwithstanding the foregoing, neither the Issuer nor any Restricted
Subsidiary shall Incur any Indebtedness under paragraph (b) above if the
proceeds thereof are used, directly or indirectly, to refinance any Subordinated
Obligations of the Issuer or a Restricted Subsidiary unless such Indebtedness
shall be subordinated to the Notes to at least the same extent as such
Subordinated Obligations.
(d) Notwithstanding the foregoing, no Restricted Subsidiary shall incur any
Indebtedness under clause (i) of paragraph (a) if such Indebtedness is sold
pursuant to Rule 144A under the Securities Act or a public offering registered
under the Securities Act.
(e) The Issuer will not permit any Unrestricted Subsidiary to Incur any
Indebtedness other than Non-Recourse Debt.
(f) For purposes of determining any particular amount of Indebtedness under
the "Limitation on Indebtedness" covenant, Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in the
determination of such particular amount shall not be included. For purposes of
determining compliance with the "Limitation on Indebtedness" covenant, in the
event that an item of Indebtedness meets the criteria of more than one of the
types of Indebtedness described in the above clauses, the Issuer, in its sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
LIMITATION ON RESTRICTED PAYMENTS. (a) The Issuer shall not, and shall not
permit any of its Restricted Subsidiaries, directly or indirectly, to (i)
declare or pay any dividend or make any distribution on or in respect of its
Capital Stock (including any payment in connection with any merger or
consolidation involving the Issuer or any of its Restricted Subsidiaries) except
(A) dividends or distributions payable in its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock and (B) dividends or distributions payable to the Issuer or a
Restricted Subsidiary of the Issuer which holds any equity interest in the
paying Restricted Subsidiary (and if the Restricted Subsidiary paying the
dividend or making the distribution is not a Wholly-Owned Subsidiary, to its
other holders of Capital Stock on a PRO RATA basis), (ii) purchase, redeem,
retire or otherwise acquire for value any Capital Stock of the Issuer held by
Persons other than a Wholly-Owned Subsidiary of the Issuer or any Capital Stock
of a Restricted Subsidiary of the Issuer held by any Affiliate of the Issuer,
other than a Wholly-Owned Subsidiary (in either case, other than in exchange for
its Capital Stock (other than Disqualified Stock)), (iii) purchase, repurchase,
redeem, defease or otherwise acquire or retire for value, prior to scheduled
maturity, scheduled repayment or scheduled sinking fund payment, any
Subordinated Obligations (other than the purchase, repurchase or other
acquisition of Subordinated Obligations purchased in anticipation of satisfying
a sinking fund obligation, principal installment or final maturity, in each case
due within one year of the date of purchase, repurchase or acquisition), (iv)
make any Investment (other than a Permitted Investment) in any Person, (v) make
any payment under any Performance Compensation Agreement or (vi) make any
payment to Alan R. Brill (including under a Performance Compensation Agreement
or in his capacity as an employee of the Issuer or any Subsidiary) except for
reimbursement for
advances or other out-of-pocket costs and expenses incurred in the ordinary
course of business (any such dividend, distribution, purchase, redemption,
repurchase, defeasance, other acquisition, retirement, Investment or payment as
described in preceding clauses (i) through (vi) being referred to as a
"Restricted
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Payment"); if at the time the Issuer or such Restricted Subsidiary makes such
Restricted Payment: (1) a Default shall have occurred and be continuing (or
would result therefrom); or (2) the Issuer is not able to incur an additional
$1.00 of Indebtedness pursuant to paragraph (a) (ii) under "--Limitation on
Indebtedness"; or (3) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the Issue Date would
exceed the sum of (A) 50% of (x) the Consolidated Net Income accrued during the
period (treated as one accounting period) from the first day of the fiscal
quarter beginning on or after the Issue Date to the end of the most recent
fiscal quarter ending prior to the date of such Restricted Payment as to which
financial results are available (but in no event ending more than 135 days prior
to the date of such Restricted Payment) (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit) less (y) the aggregate
amount of Restricted Payments made pursuant to clause (v) of paragraph (b); (B)
the aggregate Net Cash Proceeds received by the Issuer from the issue or sale of
its Capital Stock (other than Disqualified Stock) or other capital contributions
subsequent to the Issue Date (other than net proceeds received from an issuance
or sale of such Capital Stock to (x) a Subsidiary of the Issuer, (y) an employee
stock ownership plan or similar trust or (z) management employees of the Issuer
or any Subsidiary of the Issuer (other than sales of Capital Stock (other than
Disqualified Stock) to management employees of the Issuer pursuant to BONA FIDE
employee stock option plans of the Issuer); PROVIDED, HOWEVER, that the value of
any non-cash net proceeds shall be as determined by the Board of Directors in
good faith, except that in the event the value of any non-cash net proceeds
shall be $1.0 million or more, the value shall be as determined in writing by an
independent investment banking firm of nationally recognized standing; (C) the
amount by which Indebtedness of the Issuer is reduced on the Issuer's balance
sheet upon the conversion or exchange (other than by a Restricted Subsidiary of
the Issuer) subsequent to the Issue Date of any Indebtedness of the Issuer
convertible or exchangeable for Capital Stock (other than Disqualified Stock) of
the Issuer (less the amount of any cash, or other property, distributed by the
Issuer upon such conversion or exchange); and (D) the amount equal to the net
reduction in Investments (other than Permitted Investments) made after the Issue
Date by the Issuer or any of its Restricted Subsidiaries in any Person resulting
from (i) repurchases or redemptions of such Investments by such Person, proceeds
realized upon the sale of such Investment to an unaffiliated purchaser,
repayments of loans or advances or other transfers of assets by such Person to
the Issuer or any Restricted Subsidiary of the Issuer or (ii) the redesignation
of Unrestricted Subsidiaries as Restricted Subsidiaries (valued in each case as
provided in the definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously included in the
calculation of the amount of Restricted Payments; PROVIDED, HOWEVER, that no
amount shall be included under this clause (D) to the extent it is already
included in Consolidated Net Income.
(b) The provisions of paragraph (a) shall not prohibit: (i) any purchase or
redemption of Capital Stock or Subordinated Obligations (including, without
limitation, the Appreciation Notes) of the Issuer made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Capital Stock of the
Issuer (other than Disqualified Stock and other than Capital Stock issued or
sold to a Subsidiary, an employee stock ownership plan or similar trust for
management employees of the Issuer or any Subsidiary of the Issuer); PROVIDED,
HOWEVER, that (A) such purchase or redemption shall be excluded in the
calculation of the aggregate amount of Restricted Payments for purposes of
clause (3) of paragraph (a) and (B) the Net Cash Proceeds from such sale shall
be excluded in the calculation of the amount of aggregate Net Cash Proceeds from
clause (3) (B) of paragraph (a); (ii) any purchase or redemption of Subordinated
Obligations of the Issuer made by exchange for, or out of the proceeds of the
substantially concurrent sale of, Subordinated Obligations of the Issuer in
compliance with the "Limitation on Indebtedness" covenant; PROVIDED, HOWEVER,
that such purchase or redemption shall be excluded in the calculation of the
aggregate amount of Restricted Payments for purposes of clause (3) of paragraph
(a); (iii) any purchase or redemption of Subordinated Obligations from Net
Available Cash to the extent permitted under "-- Limitation on Sales of Assets
and Subsidiary Stock" below; PROVIDED, HOWEVER, that such purchase or redemption
shall be excluded in the calculation of the aggregate amount of Restricted
Payments for
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purposes of clause (3) of paragraph (a); (iv) dividends paid within 60 days
after the date of declaration if at such date of declaration such dividend would
have complied with this provision; PROVIDED, HOWEVER, that such dividend shall
be included in the calculation of the amount of Restricted Payments for purposes
of clause (3) of paragraph (a); (v) for so long as the Issuer is not treated for
tax purposes as a corporation or an association taxable as a corporation or
other entity that is subject to an entity level tax for income tax purposes,
distributions to each Member, as soon as practicable after the end of each
calendar quarter, of an amount reasonably determined to be necessary to permit
such Member to pay any federal, state or local income taxes imposed on such
Member's allocable share of income from the Issuer; PROVIDED, HOWEVER, that in
no event shall any distribution to a Member exceed the Tax Allowance Amount for
such Member in respect of such quarter and the Issuer shall cause the
Accountants to deliver to the Trustee a certificate setting forth the
determination of each Member's Tax Allowance Amount within 60 days of the end of
each fiscal year; (vi) payments under the Performance Compensation Agreements
(other than any Performance Compensation Agreement with Alan R. Brill) not
exceeding in the aggregate $500,000 in any fiscal year PROVIDED, HOWEVER, that
any such payment pursuant to this clause (vi) shall be included in the
calculation of the aggregate amount of Restricted Payments for purposes of
clause 3 of paragraph (a); and (vii) payments in respect of the redemption of
the Appreciation Notes under the Appreciation Note Indenture, PROVIDED, HOWEVER,
that the Issuer is able to Incur an additional $1.00 of Subordinated
Indebtedness pursuant to (a) (i) under "--Limitation on Indebtedness", and
PROVIDED, FURTHER, that such payments shall be included in the calculation of
the aggregate amount of Restricted Payments for purposes of clause (3) of
paragraph (a); and PROVIDED, FURTHER, that in the case of clauses (i), (ii),
(iii) and (vii) and clause (vi) with respect to Performance Compensation
Agreements entered into after the Issue Date, no Event of Default shall have
occurred or be continuing at the time of such payment or as a result thereof.
(c) For purposes of determining compliance with the foregoing covenant,
Restricted Payments may be made with cash or non-cash assets, PROVIDED, HOWEVER,
that any Restricted Payment made other than in cash shall be valued at the fair
market value (determined, subject to the additional requirements of the
immediately succeeding proviso, in good faith by the Board of Directors) of the
assets so utilized in making such Restricted Payment, PROVIDED, FURTHER, that
(i) in the case of any Restricted Payment made with Capital Stock or
Indebtedness, such Restricted Payment shall be deemed to be made in an amount
equal to the greater of the fair market value thereof and the liquidation
preference (if any) or principal amount of the Capital Stock or Indebtedness, as
the case may be, so utilized, and (ii) in the case of any Restricted Payment in
an aggregate amount in excess of $1.0 million, a written opinion as to the
fairness of the valuation thereof (as determined by the Issuer) for purposes of
determining compliance with the "Limitation on Restricted Payments" covenant in
the Indenture shall be issued by an independent investment banking firm of
national standing.
(d) Not later than the date of making any Restricted Payment or Permitted
Investment described in clause (xii) of the definition thereof, the Issuer shall
deliver to the Trustee an Officer's Certificate stating that such Restricted
Payment or Permitted Investment, as the case may be, complies with the Indenture
and setting forth in reasonable detail the basis upon which the required
calculations were computed, which calculations may be based upon the Issuer's
latest available quarterly financial statements and a copy of any required
investment banker's opinion.
LIMITATION ON LIENS. The Issuer will not and will not permit any Restricted
Subsidiary to, directly or indirectly, create or permit to exist any Liens
except for Permitted Liens.
LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES. The Issuer shall not, and shall not permit any of its Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any such Restricted Subsidiary to
(i) pay dividends or make any other distributions on its Capital Stock or pay
any Indebtedness or other obligation owed to the Issuer or another Restricted
Subsidiary, (ii) make any loans or advances to the Issuer or another Restricted
Subsidiary or (iii) transfer any of its property or assets to the Issuer or
another Restricted Subsidiary, except: (a) any encumbrance or restriction
pursuant to an agreement in effect at or entered
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into on the Issue Date; (b) any encumbrance or restriction with respect to a
Restricted Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary on or prior to the date on which such
Restricted Subsidiary was acquired by the Issuer and outstanding on such date
(other than Indebtedness Incurred in anticipation of, or to provide all or any
portion of the funds or credit support utilized to consummate, the transaction
or series of related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary of the Issuer or was acquired by the Issuer); (c)
any encumbrance or restriction with respect to a Restricted Subsidiary pursuant
to an agreement evidencing Indebtedness Incurred without violation of the
Indenture or effecting a refinancing of Indebtedness issued pursuant to an
agreement referred to in clauses (a) or (b) or this clause (c) or contained in
any amendment to an agreement referred to in clauses (a) or (b) or this clause
(c); PROVIDED, HOWEVER, that the encumbrances and restrictions with respect to
such Restricted Subsidiary contained in any of such agreement, refinancing
agreement or amendment, taken as a whole, are no less favorable to the holders
of the Notes in any material respect, as determined in good faith by the Board
of Directors of the Issuer, than encumbrances and restrictions with respect to
such Restricted Subsidiary contained in agreements in effect at, or entered into
on, the Issue Date; (d) in the case of clause (iii), any encumbrance or
restriction (A) that restricts in a customary manner the subletting, assignment
or transfer of any property or asset that is a lease, license, conveyance or
contract or similar property or asset, (B) by virtue of any transfer of,
agreement to transfer, option or right with respect to, or Lien on, any property
or assets of the Issuer or any Restricted Subsidiary not otherwise prohibited by
the Indenture, (C) that is included in a licensing agreement to the extent such
restrictions limit the transfer of the property subject to such licensing
agreement or (D) arising or agreed to in the ordinary course of business and
that does not, individually or in the aggregate, detract from the value of
property or assets of the Issuer or any of its Restricted Subsidiaries in any
manner material to the Issuer or any such Restricted Subsidiary; (e) in the case
of clause (iii) above, restrictions contained in security agreements, mortgages
or similar documents securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject to such
security agreements; (f) in the case of clause (iii) above, any instrument
governing or evidencing Indebtedness of a Person acquired by the Issuer or any
Restricted Subsidiary of the Issuer at the time 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 so acquired; PROVIDED, HOWEVER, that
such Indebtedness is not incurred in connection with or in contemplation of such
acquisition; (g) any restriction with respect to a Restricted Subsidiary imposed
pursuant to an agreement entered into for the sale or disposition of all or
substantially all the Capital Stock or assets of such Restricted Subsidiary
pending the closing of such sale or disposition; and (h) encumbrances or
restrictions arising or existing by reason of applicable law.
LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK. (a)The Issuer shall
not, and shall not permit any of its Restricted Subsidiaries to, make any Asset
Disposition unless (i) the Issuer or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to the fair
market value, as determined in good faith by the Issuer's Board of Directors
(including as to the value of all non-cash consideration), of the shares and
assets subject to such Asset Disposition, (ii) at least 80% of the consideration
thereof received by the Issuer or such Restricted Subsidiary is in the form of
cash or Cash Equivalents other than in the case where the Issuer or a Restricted
Subsidiary is exchanging all or substantially all of the assets of one or more
broadcast stations operated by the Issuer or such Restricted Subsidiary, as the
case may be, (including by way of the transfer of Capital Stock) for all or
substantially all of the assets (including by way of the transfer of Capital
Stock) constituting one or more broadcast stations operated by another Person
(an "Asset Swap"), PROVIDED, HOWEVER, that at least 80% of the consideration, if
any, received by the Issuer and its Restricted Subsidiaries in such Asset Swap,
other than the stock and assets of broadcast station(s), is in the form of cash
or Cash Equivalents and (iii) an amount equal to 100% of the Net Available Cash
from such Asset Disposition is applied by the Issuer (or such Restricted
Subsidiary, as the case may be) (A) FIRST, to the extent the Issuer or any
Restricted Subsidiary elects (or is required by the terms of any Senior Secured
Indebtedness), (x) to prepay, repay or purchase senior
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secured indebtedness in each case owing to a Person other than the Issuer or any
of its Subsidiaries or (y) to the investment in or acquisition of Additional
Assets within 365 days from the later of the date of such Asset Disposition or
the receipt of such Net Available Cash; (B) SECOND, within 365 days from the
receipt of such Net Available Cash, to the extent of the balance of such Net
Available Cash after application in accordance with clause (A), to make an offer
to purchase Notes, at 100% of Accreted Value thereof if such purchase date
occurs prior to December 15, 1999, and at 100% of the principal amount thereof
if such purchase date occurs on or after December 15, 1999, in each case plus
accrued and unpaid interest, if any, thereon; (C) THIRD, within 90 days after
the later of the application of Net Available Cash in accordance with clauses
(A) and (B) and the date that is 365 days from the receipt of such Net Available
Cash, to the extent of the balance of such Net Available Cash after application
in accordance with clauses (A) and (B), to prepay, repay or repurchase
Indebtedness (other than Preferred Stock) of a Wholly-Owned Subsidiary (in each
case other than Indebtedness owed to the Issuer or a Subsidiary); and (D)
FOURTH, to the extent of the balance of such Net Available Cash after
application in accordance with clauses (A), (B) and (C), to (w) the investment
in or acquisition of Additional Assets, (x) the making of Temporary Cash
Investments, (y) the prepayment, repayment or purchase of Indebtedness of the
Issuer (other than Indebtedness owing to any Subsidiary of the Issuer) or
Indebtedness of any Subsidiary (other than Indebtedness owed to the Issuer or
any of its Subsidiaries) or (z) any other purpose otherwise permitted under the
Indenture, in each case within the later of 45 days after the application of Net
Available Cash in accordance with clauses (A), (B) and (C) or the date that is
365 days from the receipt of such Net Available Cash; PROVIDED, HOWEVER, that,
in connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (A), (B), (C) or (D) above, the Issuer or such Restricted
Subsidiary shall retire such Indebtedness and shall cause the related loan
commitment (if any) to be permanently reduced in an amount equal to the
principal amount so prepaid, repaid or purchased. Notwithstanding the foregoing
provisions, the Issuer and its Restricted Subsidiaries shall not be required to
apply any Net Available Cash in accordance herewith except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this covenant at any time exceeds $10.0 million. The
Issuer shall not be required to make an offer for Notes pursuant to this
covenant if the Net Available Cash available therefor (after application of the
proceeds as provided in clause (A)) is less than $10.0 million for any
particular Asset Disposition (which lesser amounts shall be carried forward for
purposes of determining whether an offer is required with respect to the Net
Available Cash from any subsequent Asset Disposition). Notwithstanding the
foregoing, the Issuer will not be required to comply with the terms of this
covenant to the extent such Asset Disposition consists of a sale of the Missouri
Properties; PROVIDED, HOWEVER, that if the Net Available Cash from such Asset
Disposition exceeds $7.5 million, the Issuer will be required to apply the
amount of such excess in accordance with the provision of this covenant.
For the purposes of this covenant, the following will be deemed to be cash:
(x) the assumption by the transferee of Senior Secured Indebtedness of the
Issuer, or Senior Secured Indebtedness of any Restricted Subsidiary of the
Issuer and the release of the Issuer or such Restricted Subsidiary from all
liability on such Senior Secured Indebtedness in connection with such Asset
Disposition (in which case the Issuer shall, without further action, be deemed
to have applied such assumed Indebtedness in accordance with clause (A) of the
preceding paragraph) and (y) securities received by the Issuer or any Restricted
Subsidiary of the Issuer from the transferee that are promptly (and in any event
within 60 days) converted by the Issuer or such Restricted Subsidiary into cash.
(b) In the event of an Asset Disposition that requires the purchase of Notes
pursuant to clause (a) (iii) (B), the Issuer will be required to purchase Notes
tendered pursuant to an offer by the Issuer for the Notes at a purchase price of
101% of the Accreted Value thereof or 101% of the principal amount thereof, as
applicable under clause (a)(iii)(B), and in each case plus accrued and unpaid
interest, if any, to the purchase date in accordance with the procedures
(including prorating in the event of oversubscription) set forth in the
Indenture. If the aggregate purchase price of the Notes tendered pursuant to the
offer is less than the Net Available Cash allotted to the purchase of the Notes,
the Issuer will apply the remaining Net Available Cash in accordance with
clauses (a) (iii) (C) or (D) above.
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(c) The Issuer will comply, to the extent applicable, with the requirements
of Section 14(e) of the Exchange Act and any other securities laws or
regulations in connection with the repurchase of Notes pursuant to the
Indenture. To the extent that the provisions of any securities laws or
regulations conflict with provisions of this covenant, the Issuer will comply
with the applicable securities laws and regulations and will not be deemed to
have breached its obligations under the Indenture by virtue thereof.
LIMITATION ON AFFILIATE TRANSACTIONS. (a) The Issuer shall not, and shall
not permit any of its Restricted Subsidiaries to, directly or indirectly, enter
into or conduct any transaction or series of related transactions (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with or for the benefit of any Affiliate of the Issuer, other than a
Wholly-Owned Subsidiary (an "Affiliate Transaction") unless: (i) the terms of
such Affiliate Transaction are no less favorable to the Issuer or such
Restricted Subsidiary, as the case may be, than those that could be obtained at
the time of such transaction in arm's length dealings with a Person who is not
such an Affiliate; (ii) in the event such Affiliate Transaction involves an
aggregate amount in excess of $200,000, the terms of such transaction have been
approved by a majority of the members of the Board of Directors of the Issuer
and by a majority of the disinterested members of such Board, if any (and such
majority or majorities, as the case may be, determines that such Affiliate
Transaction satisfies the criteria in (i) above); and (iii) in the event such
Affiliate Transaction involves an aggregate amount in excess of $1.0 million,
the Issuer has received a written opinion from an independent investment banking
firm of nationally recognized standing that such Affiliate Transaction is fair
to the Issuer or such Restricted Subsidiary, as the case may be, from a
financial point of view.
(b) The foregoing paragraph (a) shall not apply to (i) any Restricted
Payment permitted to be made pursuant to the covenant described under
"--Limitation on Restricted Payments," (ii) any issuance of securities, or other
payments, awards or grants in cash, securities or otherwise pursuant to, or the
funding of, employment arrangements, or any stock options and stock ownership
plans for the benefit of employees, officers and directors, consultants and
advisors approved by the Board of Directors of the Issuer, (iii) loans or
advances to employees in the ordinary course of business of the Issuer or any of
its Restricted Subsidiaries in aggregate amount outstanding not to exceed
$250,000 to any employee or $1.0 million in the aggregate at any time, (iv) any
transaction between Wholly-Owned Subsidiaries, (v) indemnification agreements
with, and the payment of fees and indemnities to, directors, officers and
employees of the Issuer and the Issuer's Restricted Subsidiaries and
indemnification agreements with, or for the benefit of, officers and employees
of BMCLP to the extent related to the performance of management services for the
Issuer or any of its Subsidiaries, in each case in the ordinary course of
business, (vi) transactions pursuant to agreements in existence on the Issue
Date (other than with BMCLP) which are (x) described in this Offering Memorandum
or (y) otherwise, in the aggregate, immaterial to the Issuer and its Restricted
Subsidiaries taken as a whole, (vii) any employment, non-competition or
confidentiality agreements entered into by the Issuer or any of its Restricted
Subsidiaries with its employees in the ordinary course of business, (viii) the
issuance of Capital Stock of the Issuer (other than Disqualified Stock); (ix)
the acquisition of Managed Affiliate Notes provided that the aggregate principal
amount thereof (including the Managed Affiliate Notes outstanding on the Issue
Date) does not exceed $20 million at any time outstanding ; (x) the Managed
Affiliate Management Agreements; and (xi) provided that no Default or Event of
Default shall have occurred and be continuing, payments to BMCLP for services
rendered to the Issuer and the Restricted Subsidiaries under the Administrative
Management Agreements not to exceed in any fiscal year in the aggregate the
remainder of (A) the lesser of (1) the greater of $2 million or 15% of Media
Cashflow for such fiscal year or (2) $5 million over (B) the payments to BMCLP
under management agreements between BMCLP and Managed Affiliates in such fiscal
year provided that the obligations to make such payments to BMCLP under the
Administrative Management Agreements constitute Subordinated Obligations and the
terms of such subordination are no less favorable to the holders of senior
indebtedness (including the Notes) than the terms set forth in the
Administrative Management Agreements between the Issuer and BMCLP on the Issue
Date.
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LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED SUBSIDIARIES. The
Issuer shall not permit any of its Restricted Subsidiaries to issue any Capital
Stock to any Person (other than to the Issuer or a Wholly-Owned Subsidiary of
the Issuer) or permit any Person (other than the Issuer or a Wholly-Owned
Subsidiary of the Issuer) to own any Capital Stock of a Restricted Subsidiary of
the Issuer, if in either case as a result thereof such Restricted Subsidiary
would no longer be a Restricted Subsidiary of the Issuer; PROVIDED, HOWEVER,
that this provision shall not prohibit (x) the Issuer or any of its Restricted
Subsidiaries from selling, leasing or otherwise disposing of all of the Capital
Stock of any Restricted Subsidiary or (y) the designation of a Restricted
Subsidiary as an Unrestricted Subsidiary in compliance with the Indenture.
LIMITATION ON SALE/LEASEBACK TRANSACTIONS. Issuer shall not, and shall not
permit any Restricted Subsidiary to, directly or indirectly, enter into,
Guarantee or otherwise become liable with respect to any Sale/Leaseback
Transaction with respect to any property or assets unless (i) the Issuer or such
Restricted Subsidiary, as the case may be, would be entitled, pursuant to the
Indenture, to Incur Indebtedness secured by a Permitted Lien on such property or
assets in an amount equal to the Attributable Indebtedness with respect to such
Sale/Leaseback Transaction, (ii) the net cash proceeds from such Sale/Leaseback
Transaction are at least equal to the fair market value of the property or
assets subject to such Sale/Leaseback Transaction (such fair market value
determined, in the event such property or assets have a fair market value in
excess of $1.0 million, no more than 30 days prior to the effective date of such
Sale/Leaseback Transaction, by the Board of Directors of the Issuer as evidenced
by a resolution of such Board) and (iii) the net cash proceeds of such
Sale/Leaseback Transaction are applied in accordance with the provisions
described under "--Limitation on Sales of Assets and Subsidiary Stock."
SEC REPORTS. The Issuer will file with the Trustee and provide to the
holders of the Notes, within 15 days after it files them with the Commission,
copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may by
rules and regulations prescribe) which the Issuer files with the Commission
pursuant to Section 13 or 15(d) of the Exchange Act. In the event that the
Issuer is not required to file such reports with the Commission pursuant to the
Exchange Act, the Issuer will nevertheless deliver such Exchange Act information
to the holders of the Notes within 15 days after it would have been required to
file it with the Commission.
LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES. The Issuer may
designate any Subsidiary of the Issuer (other than a Subsidiary of the Issuer
which owns Capital Stock of a Restricted Subsidiary) as an "Unrestricted
Subsidiary" under the Indenture (a "Designation") only if:
(a) no Default shall have occurred and be continuing at the time of or
after giving effect to such Designation; and
(b) the Issuer would be permitted under the Indenture to make an
Investment in Unrestricted Subsidiaries at the time of Designation (assuming
the effectiveness of such Designation) in an amount (the "Designation
Amount") equal to the sum of (i) fair market value of the Capital Stock of
such Subsidiary owned by the Issuer and the Restricted Subsidiaries on such
date and (ii) the aggregate amount of other Investments of the Issuer and
the Restricted Subsidiaries in such Subsidiary on such date; and
(c) except in the case of a newly formed or a newly acquired Subsidiary,
the Issuer would be permitted to incur $1.00 of additional Indebtedness
pursuant to clause (a)(ii) of the covenant described under "--Limitation on
Indebtedness" at the time of Designation (assuming the effectiveness of such
Designation).
In the event of any such Designation, the Issuer shall be deemed to have
made an Investment constituting a Restricted Payment pursuant to the covenant
described under "--Limitation on Restricted Payments" for all purposes of the
Indenture (including, without limitation, the definition of Permitted
Investment) in the Designation Amount. The Indenture will further provide that
the Issuer shall not, and
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shall not permit any Restricted Subsidiary to, at any time (x) provide direct or
indirect credit support for or a guarantee of any Indebtedness of any
Unrestricted Subsidiary (including of any undertaking, agreement or instrument
evidencing such Indebtedness), (y) be directly or indirectly liable for any
Indebtedness of any Unrestricted Subsidiary or (z) be directly or indirectly
liable for any Indebtedness which provides that the holder thereof may (upon
notice, lapse of time or both) declare a default thereon or cause the payment
thereof to be accelerated or payable prior to its final scheduled maturity upon
the occurrence of a default with respect to any Indebtedness of any Unrestricted
Subsidiary (including any right to take enforcement action against such
Unrestricted Subsidiary), except, in the case of clause (x) or (y), to the
extent permitted under the covenant described under "--Limitation on Restricted
Payments."
The Issuer may revoke any Designation of a Subsidiary as an Unrestricted
Subsidiary (a "Revocation"), whereupon such Subsidiary shall then constitute a
Restricted Subsidiary, if:
(a) no Default shall have occurred and be continuing at the time of and
after giving effect to such Revocation; and
(b) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred at such
time, have been permitted to be Incurred for all purposes of the Indenture.
All Designations and Revocations must be evidenced by Board Resolutions of
the Issuer delivered to the Trustee certifying compliance with the foregoing
provisions.
FUTURE NOTE GUARANTORS. The Issuer will cause each newly organized or
acquired Restricted Subsidiary to execute and deliver to the Trustee a
Subsidiary Guarantee.
LIMITATION ON BUSINESS. The Issuer will not and will not permit any of its
Restricted Subsidiaries to directly or indirectly engage in any business other
than a Permitted Business.
MERGER AND CONSOLIDATION. The Issuer shall not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its
assets to, any Person, unless: (i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor Company
(if not the Issuer) shall expressly assume, by supplemental indenture, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Issuer under the Notes and the Indenture; (ii) immediately
after giving effect to such transaction (and treating any Indebtedness that
becomes an obligation of the Successor Company or any Subsidiary of the
Successor Company as a result of such transaction as having been incurred by the
Successor Company or such Restricted Subsidiary at the time of such
transaction), no Default or Event of Default shall have occurred and be
continuing; (iii) immediately after giving effect to such transaction, the
Successor Company (A) shall have a Consolidated Net Worth equal or greater to
the Consolidated Net Worth of the Issuer immediately prior to such transaction
and (B) shall be able to incur at least an additional $1.00 of Indebtedness
pursuant to paragraph (a)(ii) of the covenant described under "Limitation on
Indebtedness"; (iv) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such consolidation,
merger or transfer and such supplemental indenture (if any) comply with the
Indenture; and (v) there has been delivered to the Trustee an Opinion of Counsel
to the effect that holders of Notes will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such consolidation, merger,
conveyance, transfer or lease and will be subject to U.S. federal income tax on
the same amount and in the same manner and at the same times as would have been
the case if such consolidation, merger, conveyance, transfer or lease had not
occurred.
The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under the Indenture, but, in the
case of a lease of all or substantially all its assets, the Issuer will not be
released from the obligation to pay the principal of and interest on the Notes.
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Notwithstanding the foregoing clauses (ii) and (iii), any Restricted
Subsidiary of the Issuer may consolidate with, merge into or transfer all or
part of its properties and assets to the Issuer or any other Restricted
Subsidiary.
EVENTS OF DEFAULT
Each of the following constitutes an Event of Default under the Indenture:
(i) a default in any payment of interest on any Note when due, continued for 30
days, (ii) a default in the payment of principal or premium of any Note when due
at its Stated Maturity, upon optional or mandatory redemption, upon required
repurchase, upon declaration or otherwise, (iii) the failure by the Issuer to
comply with its obligations under the "--Mergers and Consolidations" covenant
described under "--Certain Covenants" above or the failure to make or consummate
an offer to purchase the Notes in accordance with the "-- Change of Control" or
"--Limitations on Sale of Assets and Subsidiary Stock" covenants described under
"--Certain Covenants" above, (iv) the failure by the Issuer to comply for 30
days after notice with any of its obligations under the covenants described
under "--Certain Covenants" above, other than "Merger and Consolidation," (v)
the failure by the Issuer to comply for 60 days after notice with its other
agreements contained in the Indenture, (vi) Indebtedness of the Issuer or any
Restricted Subsidiary is not paid within any applicable grace period after final
maturity or is accelerated by the holders thereof because of a default and the
total amount of such Indebtedness unpaid or accelerated exceeds $1.0 million and
such default shall not have been cured after a 10-day period, (vii) certain
events of bankruptcy, insolvency or reorganization of the Issuer or a
Significant Subsidiary (the "bankruptcy provisions"), (viii) any judgment or
decree for the payment of money in excess of $1.0 million (to the extent not
covered by insurance) is rendered against the Issuer or a Significant Subsidiary
and such judgment or decree shall remain undischarged or unstayed for a period
of 60 days after such judgment becomes final and non-appealable (the "judgment
default provision") or (ix) any Subsidiary Guarantee by a Significant Subsidiary
ceases to be in full force and effect (except as contemplated by the terms of
the Indenture) or any Subsidiary Guarantor that is a Significant Subsidiary
denies or disaffirms its obligations under the Indenture or its Subsidiary
Guarantee and such Default continues for 10 days. However, a default under
clause (iv) or (v) will not constitute an Event of Default until the Trustee or
the holders of 25% in principal amount of all outstanding series of Notes,
voting as a single class, notify the Issuer of the default and the Issuer does
not cure such default within the time specified in clause (iv) or (v) after
receipt of such notice.
If an Event of Default occurs and is continuing, the Trustee or the holders
of at least 25% in principal amount of all outstanding series of Notes, voting
as a single class, by notice to the Issuer may declare to be immediately due and
payable, (i) in the case of a declaration that occurs prior to December 15,
1999, the Accreted Value of all the Notes then outstanding plus accrued interest
on the Notes to the date of acceleration, and (ii) in the case of a declaration
that occurs on or after December 15, 1999, the entire principal amount of all
the Notes then outstanding plus accrued interest to the date of acceleration.
Upon such a declaration, such principal and premium and accrued and unpaid
interest shall be due and payable immediately. If an Event of Default relating
to certain events of bankruptcy, insolvency or reorganization of the Issuer
occurs, the principal of and premium and accrued and unpaid interest on all the
Notes will become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any holders. Under certain
circumstances, the holders of a majority in principal amount of all outstanding
series of Notes, voting as a single class, may rescind any such acceleration
with respect to the Notes and its consequences.
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Subject to the provisions of the Indenture relating to the duties of the
Trustee, if an Event of Default occurs and is continuing, the Trustee will be
under no obligation to exercise any of the rights or powers under the Indenture
at the request or direction of any of the holders unless such holders have
offered to the Trustee reasonable indemnity or security against any loss,
liability or expense. Except to enforce the right to receive payment of
principal, premium (if any) or interest when due, no holder may pursue any
remedy with respect to the Indenture or the Notes unless (i) such holder has
previously given the Trustee notice that an Event of Default is continuing, (ii)
holders of at least 25% in principal amount of all outstanding series of Notes,
voting as a single class, have requested the Trustee to pursue the remedy, (iii)
such holders have offered the Trustee reasonable security or indemnity against
any loss, liability or expense, (iv) the Trustee has not complied with such
request within 60 days after the receipt of the request and the offer of
security or indemnity and (v) the holders of a majority in principal amount of
all series of outstanding Notes, acting as a single class, have not given the
Trustee a direction that, in the opinion of the Trustee, is inconsistent with
such request within such 60-day period. Subject to certain restrictions, the
holders of a majority in principal amount of all outstanding series of Notes,
voting as a single class, are given the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Notes. The Trustee, however, may
refuse to follow any direction that conflicts with law or the Indenture or that
the Trustee determines is unduly prejudicial to the rights of any other holder
or that would involve the Trustee in personal liability. Prior to taking any
action under the Indenture, the Trustee shall be entitled to indemnification
satisfactory to it in its sole discretion against all losses and expenses caused
by taking or not taking such action.
The Indenture provides that if a Default occurs and is continuing and is
known to the Trustee, the Trustee must mail to each holder notice of the Default
within 90 days after it occurs. Except in the case of a Default in the payment
of principal of, premium (if any) or interest on any Note, the Trustee may
withhold notice if and so long as its board of directors, a committee of its
board of directors or a committee of its Trust officers in good faith determines
that withholding notice is in the interests of the Noteholders. In addition, the
Issuer is required to deliver to the Trustee, within 90 days after the end of
each fiscal year, a certificate indicating whether the signers thereof know of
any Default that occurred during the previous year. The Issuer also is required
to deliver to the Trustee, within 30 days after the occurrence thereof, written
notice of any events which would constitute certain Defaults.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Indenture may be amended with the consent
of the holders of a majority in principal amount of all outstanding series of
Notes, voting as a single class, then outstanding and any past default or
compliance with any provisions may be waived with the consent of the holders of
a majority in principal amount of all outstanding series of Notes, voting as a
single class. However, without the consent of each holder of an outstanding Note
affected, no amendment may, among other things, (i) reduce the amount of Notes
whose holders must consent to an amendment, (ii) reduce the stated rate of or
extend the stated time for payment of interest on any Note, (iii) reduce the
principal of or extend the Stated Maturity of any Note, (iv) reduce the premium
payable upon the redemption or repurchase of any Note or change the time at
which any Note may be redeemed as described under "--Optional Redemption" above,
(v) make any note payable in money other than that stated in the Note, (vi)
impair the right of any holder to receive payment of principal of and interest
on such holder's Notes on or after the due dates therefor or to institute suit
for the enforcement of any payment on or with respect to such holder's Notes or
(vii) make any change in the amendment provisions which require each holder's
consent or in the waiver provisions.
Without the consent of any holder, the Issuer and the Trustee may amend the
Indenture to cure any ambiguity, omission, defect or inconsistency, to provide
for the assumption by a successor corporation, partnership, trust or limited
liability company of the obligations of the Issuer under the Indenture (provided
that there has been delivered to the Trustee an Opinion of Counsel to the effect
that holders of
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Notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such assumption and will be subject to U.S. federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such assumption had not occurred), to provide for
uncertificated Notes in addition to or in place of certificated Notes (provided
that the uncertificated Notes are issued in registered form for purposes of
Section 163(f) of the Code, or in a manner such that the uncertificated Notes
are described in Section 163 (f) (2) (B) of the Code), to the Notes, to secure
the Notes, to add to the covenants of the Issuer for the benefit of the holders
or to surrender any right or power conferred upon the Issuer, to make any change
that does not adversely affect the rights of any holder or to comply with any
requirement of the Commission in connection with the qualification of the
Indenture under the Trust Indenture Act.
The consent of the holders is not necessary under the Indenture to approve
the particular form of any proposed amendment. It is sufficient if such consent
approves the substance of the proposed amendment.
After an amendment under the Indenture becomes effective, the Issuer is
required to mail to the holders a notice briefly describing such amendment.
However, the failure to give such notice to all the holders or any defect
therein, will not impair or affect the validity of the amendment.
DEFEASANCE
The Issuer at any time may terminate all its obligations under the Notes and
the Indenture ("legal defeasance"), except for certain obligations, including
those respecting the defeasance trust and obligations to register the transfer
or exchange of the Notes, to replace mutilated, destroyed, lost or stolen Notes
and to maintain a registrar and paying agent in respect of the Notes. The Issuer
at any time may terminate its obligations under covenants described under
"--Certain Covenants" (other than "Merger and Consolidation"), the operation of
the cross acceleration provision, the bankruptcy provisions with respect to
Significant Subsidiaries and the judgment default provision described under
"--Events of Default" above and the limitations contained in clauses (iii) and
(iv) under "--Certain Covenants--Merger and Consolidation" above ("covenant
defeasance").
The Issuer may exercise its legal defeasance option notwithstanding its
prior exercise of its covenant defeasance option. If the Issuer exercises its
legal defeasance option, payment of the Notes may not be accelerated because of
an Event of Default with respect thereto. If the Issuer exercises its covenant
defeasance option, payment of the Notes may not be accelerated because of an
Event of Default specified in clause (iv), (vi), (vii) (with respect only to
Significant Subsidiaries), (viii) or (ix) under "--Events of Default" above or
because of the failure of the Issuer to comply with clause (iii) or (iv) under
"--Certain Covenants--Merger and Consolidation" above.
In order to exercise either defeasance option, the Issuer must irrevocably
deposit in trust (the "defeasance trust") with the Trustee money or U.S.
Government Obligations for the payment of principal, premium (if any) and
interest on the Notes to redemption or maturity, as the case may be, and must
comply with certain other conditions, including delivery to the Trustee of an
Opinion of Counsel to the effect that holders of the Notes will not recognize
income, gain or loss for Federal income tax purposes as a result of such deposit
and defeasance and will be subject to Federal income tax on the same amount and
in the same manner and at the same times as would have been the case if such
deposit and defeasance had not occurred (and, in the case of legal defeasance
only, such Opinion of Counsel must be based on a ruling of the Internal Revenue
Service or other change in applicable Federal income tax law).
SATISFACTION AND DISCHARGE OF THE INDENTURE
The Indenture will cease to be of further effect (except as otherwise
expressly provided for in the Indenture) when either (i) all outstanding Notes
have been delivered (other than lost, stolen or destroyed Notes which have been
replaced) to the Trustee for cancellation or (ii) all outstanding Notes have
become due and payable, whether at maturity or as a result of the mailing of a
notice of redemption pursuant to the
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terms of the Indenture and the Issuer has irrevocably deposited with the Trustee
funds sufficient to pay at maturity or upon redemption all outstanding Notes,
including interest thereon (other than lost, stolen, mutilated or destroyed
Notes which have been replaced), and, in either case, the Issuer has paid all
other sums payable under the Indenture. The Trustee is required to acknowledge
satisfaction and discharge of the Indenture on demand of the Issuer accompanied
by an Officer's Certificate and an Opinion of Counsel at the cost and expense of
the Issuer.
TRANSFER AND EXCHANGE
Upon any transfer of a Note, the registrar may require a holder, among other
things, to furnish appropriate endorsements and transfer documents, and to pay
any taxes and fees required by law or permitted by the Indenture. The registrar
is not required to transfer or exchange any Notes selected for redemption nor is
the registrar required to transfer or exchange any Notes for a period of 15 days
before a selection of Notes to be redeemed. The registered holder of a Note may
be treated as the owner of it for all purposes.
CONCERNING THE TRUSTEE
United States Trust Company of New York is the Trustee under the Indenture
and has been appointed by the Issuer as Registrar and Paying Agent with regard
to the Notes. The Trustee's current address is 114 West 47th Street, New York,
New York.
The Indenture contains certain limitations on the rights of the Trustee,
should it become a creditor of the Issuer, to obtain payment of claims in
certain cases, or to realize on certain property received in respect of any such
claim, as security or otherwise. The Trustee will be permitted to engage in
other transactions; however, if it acquires any conflicting interest (as
defined) it must eliminate such conflict or resign.
The holders of a majority in aggregate principal amount of the then
outstanding Notes issued under the Indenture will have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee. The Indenture provides that in case an Event of
Default shall occur (which shall not be cured) the Trustee will be required, in
the exercise of its power, to use the degree of care that a prudent man in the
conduct of his own affairs would use. Subject to such provisions, the Trustee
will be under no obligation to exercise any of its rights or powers under the
Indenture at the request of any of the holders of the Notes issued thereunder
unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
GOVERNING LAW
The Indenture provides that it and the Notes will be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to applicable principles of conflicts of law to the extent that the
application of the law of another jurisdiction would be required thereby.
CERTAIN DEFINITIONS
"Accountants" means Ernst & Young LLP or such other nationally recognized
firm of independent certified public accountants that is reasonably acceptable
to the Trustee.
"Accreted Value" means, as of any date, with respect to each $1,000
principal amount at maturity of Notes: (A) if such date is prior to December 15,
1999, the sum of (1) the initial offering price of such Notes and (2) the
portion of the original issue discount for such Notes (which for this purpose
shall be deemed to be the excess of the principal amount over such initial
offering price) which shall be amortized with respect to such Notes to but not
including such date, such original issue discount to be so amortized at a rate,
which together with cash interest paid on the Notes, represents a yield to
maturity of 12% per annum using semiannual compounding of such rate on each June
15 and December 15, commencing June 15, 1998 (the
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"Semi-Annual Accrual Date") from the Issue Date but not including the date of
determination (the following table indicates the Accreted Value at the
semiannual compounding dates of the Notes:
<TABLE>
<CAPTION>
SEMI-ANNUAL ACCRETED
ACCRUAL DATE VALUE
- ------------------------------------------------------------------------------- -------------
<S> <C>
June 15, 1998.................................................................. $ 939.82
December 15, 1998.............................................................. $ 958.71
June 15, 1999.................................................................. $ 978.73
December 15, 1999.............................................................. $ 1,000.00
</TABLE>
and (B) if such date occurs on or after December 15, 1999, $1,000.
At any time prior to December 15, 1999 and between two Semi-Annual Accrual
Dates, the Accreted Value will be the sum of (1) the Accreted Value for the
Semi-Annual Accrual Date immediately preceding the date of determination, and
(2) the Proportionate Share (as defined below). The "Proportionate Share" is an
amount equal to the product of (i) the Accreted Value for the immediately
following Semi-Annual Accrual Date less the Accreted Value for the immediately
preceding Semi-Annual Date times (ii) a fraction, the numerator of which is the
number of days from the immediately preceding Semi-Annual Accrual Date to the
date of such determination, using a 360-day year of twelve 30-day months, and
the denominator of which is 180.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital Stock
of a Person that becomes a Restricted Subsidiary as a result of the acquisition
of such Capital Stock by the Issuer or a Restricted Subsidiary of the Issuer;
(iii) Capital Stock constituting a minority interest in any person that at such
time is a Restricted Subsidiary of the Issuer; or (iv) Permitted Investments of
the type and in the amounts described in clause (viii) of the definition
thereof; provided, however, that, in the case of clauses (ii) and (iii), such
Restricted Subsidiary is primarily engaged in a Permitted Business.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date means the lesser
of the amount by which (x) the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Subsidiary Guarantor with respect to
its contingent liabilities (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date), but excluding
liabilities under the Subsidiary Guarantee of such Subsidiary Guarantor at such
date and (y) the present fair salable value of the assets of such Subsidiary
Guarantor at such date exceeds the amount that will be required to pay the
probable liability of such Subsidiary Guarantor on its debts (after giving
effect to all other fixed and contingent liabilities incurred or assumed on such
date and after giving effect to any collection from any Subsidiary by such
Subsidiary Guarantor in respect of the obligations of such Subsidiary under the
Subsidiary Guarantee), excluding debt in respect of the Subsidiary Guarantee, as
they become absolute and matured.
"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. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"Appreciation Notes" means the Appreciation Notes due 2007.
"Appreciation Note Indenture" means the Indenture, dated as of the Issue
Date, between the Issuer and the United States Trust Company of New York
relating to the Appreciation Notes as in effect on the Issue Date and without
giving effect to any modification or amendment thereto made after the Issue
Date.
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"Asset Acquisition" means (i) an investment by the Issuer or any of its
Restricted Subsidiaries in any other Person pursuant to which such Person shall
become a Restricted Subsidiary or shall be merged into or consolidated with the
Issuer or any of its Restricted Subsidiaries or (ii) an acquisition by the
Issuer or any of its Restricted Subsidiaries of the property and assets of any
Person other than the Issuer or any of its Restricted Subsidiaries that
constitute substantially all of a division or line of business of such Person.
"Asset Disposition" means any sale, lease, transfer, issuance or other
disposition (or series of related sales, leases, transfers, issuances or
dispositions that are part of a common plan) of shares of Capital Stock of (or
any other equity interests in) a Restricted Subsidiary (other than directors'
qualifying shares) or of any other property or other assets (each referred to
for the purposes of this definition as a "disposition") by the Issuer or any of
its Restricted Subsidiaries (including any disposition by means of a merger,
consolidation or similar transaction) other than (i) a disposition by a
Restricted Subsidiary to the Issuer or by the Issuer or a Restricted Subsidiary
to a Wholly-Owned Subsidiary, (ii) a disposition of inventory in the ordinary
course of business, (iii) a disposition of obsolete or worn out equipment or
equipment that is no longer useful in the conduct of the business of the Issuer
and its Restricted Subsidiaries and that is disposed of in each case in the
ordinary course of business, (iv) dispositions of property for net proceeds
which, when taken collectively with the net proceeds of any other such
dispositions under this clause (iv) that were consummated since the beginning of
the calendar year in which such disposition is consummated, do not exceed $1.0
million, and (v) transactions permitted under "--Certain Covenants-- Merger and
Consolidation" above. Notwithstanding anything to the contrary contained above,
a Restricted Payment made in compliance with the "Limitation on Restricted
Payments" covenant shall not constitute an Asset Disposition except for purposes
of determinations of the Consolidated Leverage Ratio.
"Average Life" means, as of the date of determination, with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the product of
the numbers of years (rounded upwards to the nearest month) from the date of
determination to the dates of each successive scheduled principal payment of
such Indebtedness or redemption multiplied by the amount of such payment by (ii)
the sum of all such payments.
"Board of Directors" means, as to the Issuer (i) so long as BMC or any
successor to BMC is a limited liability company or partnership, the board of
directors of Brill Media Management, Inc. which is the manager of BMC and (ii)
at any other time the Board of Directors of the Issuer.
"Capital Stock" of any Person means any and all shares, membership and other
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date such lease may be terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, (iii) certificates of deposit, time
deposits 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 commercial bank having
capital and surplus in excess of $500 million, (iv) repurchase obligations for
underlying securities of the types described in clauses (ii) and (iii) entered
into with any financial institution meeting the qualifications specified in
clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by
Moody's or S&P and in each case maturing within one year after the date of
acquisition, (iv) investment funds investing 95% of their assets in securities
of the types
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described in clauses (i)-(v) above, (vii) readily marketable direct obligations
issued by any state of the United States of America or any political subdivision
thereof having one of the two highest rating categories obtainable from either
Moody's or S&P and (viii) Indebtedness or preferred stock issued by Persons with
a rating of "A" or higher from S&P or "A2" or higher from Moody's.
"Change of Control" means, (i) any sale, lease, exchange or other transfer
(collectively, a "Transfer") (in one transaction or a series of related
transactions) of all or substantially all of the assets of the Issuer or the
Issuer and its Restricted Subsidiaries on a consolidated basis or (ii) a
majority of the Board of Directors of the Issuer or of any direct or indirect
holding company thereof shall consist of Persons who are not Continuing
Directors of the Issuer; or (iii) the acquisition by any Person or Group (other
than Alan R. Brill or any Related Brill Party) of the power, directly or
indirectly, to vote or direct the voting of securities having more than 35% of
the ordinary voting power for the election of directors of the Issuer, or any
direct or indirect holding company thereof; PROVIDED, HOWEVER that no Change of
Control shall be deemed to occur pursuant to this clause (iii), so long as Alan
R. Brill and the Related Brill Parties collectively own an amount of securities
representing the power, directly or indirectly, to vote or direct the voting of
securities having more than 50% of the ordinary voting power for the election of
directors of the Issuer or of any direct or indirect holding company thereof.
"Consolidated EBITDA" means, for any period an amount equal to Consolidated
Net Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) the provision for taxes for such
period based on income or profits and any provision for taxes utilized in
computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense (including the amortization of debt issuance
costs), (v) all other non-cash items reducing Consolidated Net Income for such
period (excluding any non-cash item to the extent it represents an accrual of or
reserve for cash disbursements for any subsequent period prior to the Stated
Maturity of the Notes or amortization of a pre-paid cash expense that was paid
in a prior period), minus (b) all non-cash items increasing Consolidated Net
Income for such period, in each case for the Issuer and its Restricted
Subsidiaries for such period determined in accordance with GAAP, PROVIDED,
HOWEVER, that, for purposes of calculating Consolidated EBITDA during any fiscal
quarter, cash income from a particular Investment (other than a Managed
Affiliate Note) of such Person shall be included only (x) if cash income has
been received by such Person with respect to such Investment during each of the
previous four fiscal quarters, or (y) if the cash income derived from such
Investment is attributable to Temporary Cash Investments.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Issuer and its Restricted Subsidiaries determined in accordance
with GAAP, PLUS, to the extent not included in such interest expense (i)
interest expense attributable to Capitalized Lease Obligations, (ii) capitalized
interest, (iii) non-cash interest expense, (iv) commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers' acceptance
financing, (v) interest actually paid by the Issuer or any such Restricted
Subsidiary under any Guarantee of Indebtedness or other obligation of any other
Person, (vi) net payments (whether positive or negative) pursuant to Interest
Rate Agreements, (vii) the cash contributions to any employee stock ownership
plan or similar trust to the extent such contributions are used by such plan or
trust to pay interest or fees to any Person (other than the Issuer) in
connection with Indebtedness Incurred by such plan or trust and (viii) cash and
Disqualified Stock dividends in respect of all Preferred Stock of Subsidiaries
and Disqualified Stock of the Issuer held by Persons other than the Issuer or a
Wholly-Owned Subsidiary and less (a) to the extent included in such interest
expense, the amortization of capitalized debt issuance costs and (b) interest
income. Notwithstanding the foregoing, the Consolidated Interest Expense with
respect to any Restricted Subsidiary of the Issuer, that was not a Wholly-Owned
Subsidiary, shall be included only to the extent (and in the same proportion)
that the net income of such Restricted Subsidiary was included in calculating
Consolidated Net Income.
"Consolidated Leverage Ratio" means, on any Transaction Date, the ratio of
(i) the aggregate amount of Indebtedness of the Issuer and its Restricted
Subsidiaries on a consolidated basis outstanding on such Transaction Date (other
than Indebtedness under the Appreciation Notes) less the cash and Cash
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Equivalents held by the Issuer and its Restricted Subsidiaries on a consolidated
basis on such Transaction Date to (ii) the amount of Media Cashflow for the then
most recent four fiscal quarters for which financial statements of the Issuer
have been filed with the Commission or provided to the Trustee pursuant to the
"SEC Reports" covenant described in the Indenture (such four fiscal quarter
period being the "Four Quarter Period"); PROVIDED, HOWEVER that, in making the
foregoing calculation, (A) PRO FORMA effect shall be given to any Indebtedness
to be Incurred or repaid on the Transaction Date; (B) PRO FORMA effect shall be
given to Asset Dispositions and Asset Acquisitions (including giving PRO FORMA
effect to the application of proceeds of any Asset Disposition) that occur from
the beginning of the Four Quarter Period through and including the Transaction
Date (the "Reference Period"), as if they had occurred and such proceeds had
been applied on the first day of such Reference Period; and (C) PRO FORMA effect
shall be given to asset dispositions and asset acquisitions (including giving
PRO FORMA effect to the application of proceeds of any asset disposition) that
have been made by any Person that has become a Restricted Subsidiary or has been
merged with or into the Issuer or any Restricted Subsidiary during such
Reference Period and that would have constituted Asset Dispositions or Asset
Acquisitions had such transactions occurred when such Person was a Restricted
Subsidiary as if such asset disposition or asset acquisitions were Asset
Dispositions or Asset Acquisitions that occurred on the first day of such
Reference Period; PROVIDED, FURTHER that to the extent that clause (B) or (C) of
this sentence requires that PRO FORMA effect be given to an Asset Acquisition or
Asset Disposition, such PRO FORMA calculation shall be based upon the four full
fiscal quarters immediately preceding the Transaction Date of the Person, or
division or line of business of the Person, that is acquired or disposed of for
which financial information is available.
"Consolidated Net Income" means, for any period, the consolidated net income
(loss) of the Issuer and its consolidated Restricted Subsidiaries determined in
accordance with GAAP; PROVIDED, HOWEVER, that there shall not be included in
such Consolidated Net Income: (i) any net income (loss) of any person acquired
by the Issuer or any of its Restricted Subsidiaries in a pooling of interests
transaction for any period prior to the date of such acquisition, (ii) any net
income of any Restricted Subsidiary of the Issuer if such Restricted Subsidiary
is subject to restrictions, directly or indirectly, on the payment of dividends
or the making of distributions by such Restricted Subsidiary, directly or
indirectly, to the Issuer (other than restrictions in effect on the Issue Date
with respect to a Restricted Subsidiary of the Issuer and other than
restrictions that are created or exist in compliance with the "Limitation on
Restrictions on Distributions from Restricted Subsidiaries" covenant), (iii) any
gain or loss realized upon the sale or other disposition of any assets of the
Issuer or its consolidated Restricted Subsidiaries (including pursuant to any
Sale/ Leaseback Transaction) which are not sold or otherwise disposed of in the
ordinary course of business and any gain or loss realized upon the sale or other
disposition of any Capital Stock of any Person, (iv) any extraordinary gain or
loss, (v) the cumulative effect of a change in accounting principles, (vi) the
net income of any Person, other than a Restricted Subsidiary, except to the
extent of the lesser of (A) cash dividends or distributions actually paid to the
Issuer or any of its Restricted Subsidiaries by such Person and (B) the net
income of such Person (but in no event less than zero), and the net loss of such
Person (other than an Unrestricted Subsidiary) shall be included only to the
extent of the aggregate Investment of the Issuer or any of its Restricted
Subsidiaries in such Person and (vii) any non-cash expenses attributable to
grants or exercises of employee stock options. Notwithstanding the foregoing,
for the purpose of the covenant described under "--Certain Covenants--Limitation
on Restricted Payments" only, (x) there shall be excluded from Consolidated Net
Income any dividends, repayments of loans or advances or other transfers of
assets from Unrestricted Subsidiaries to the Issuer or a Restricted Subsidiary
to the extent such dividends, repayments or transfers increase the amount of
Restricted Payments permitted under such covenant pursuant to clause (a) (3) (D)
thereof and (y) there shall be added to Consolidated Net Income the amount of
any accruals under the Performance Compensation Agreements to the extent
deducted in determining such Consolidated Net Income.
"Consolidated Net Worth" means the total of the amounts shown on the balance
sheet of the Issuer and its consolidated Restricted Subsidiaries, determined on
a consolidated basis in accordance with GAAP, as of the end of the most recent
fiscal quarter of the Issuer ending prior to the taking of any action for the
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purpose of which the determination is being made and for which financial
statements are available (but in no event ending more than 135 days prior to the
taking of such action), as (i) the par or stated value of all outstanding
Capital Stock of the Issuer plus (ii) paid in capital or capital surplus
relating to such Capital Stock plus (iii) any retained earnings or earned
surplus less (A) any accumulated deficit and (B) any amounts attributable to
Disqualified Stock.
"Consolidated Senior Leverage Ratio" means, on any Transaction Date, the
Consolidated Leverage Ratio on such Transaction Date; PROVIDED, HOWEVER, that
the reference to "Indebtedness" in clause (i) of the definition of Consolidated
Leverage Ratio shall be deemed to be a reference to "Senior Indebtedness."
"Consolidated Senior Secured Leverage Ratio" means, on any Transaction Date,
the Consolidated Leverage Ratio on such Transaction Date; PROVIDED, HOWEVER,
that the reference to "Indebtedness" in clause (i) of the definition of
Consolidated Leverage Ratio shall be deemed to be a reference to "Senior Secured
Indebtedness."
"Consolidated Unrestricted Subsidiary Advance Leverage Ratio" means, on any
Transaction Date, the Consolidated Leverage Ratio on such Transaction Date;
PROVIDED, HOWEVER, that clause (i) of the definition of Consolidated Leverage
Ratio shall be deemed to be a reference to "Unrestricted Subsidiary Advances."
"Continuing Director" of any Person means, as of the date of determination,
any Person who (i) was a member of the Board of Directors of such Person on the
date of the Indenture or (ii) was nominated for election or elected to the Board
of Directors of such Person with the affirmative vote of a majority of the
Continuing Directors of such Person who were members of such Board of Directors
at the time of such nomination or election.
"Currency Agreement" means in respect of a Person any foreign exchange
contract, currency swap agreement or other similar agreement as to which such
Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of time or
both would be, an Event of Default.
"Disqualified Stock" means any Capital Stock which, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event (other than an event which
would constitute a Change of Control), (i) matures (excluding any maturity as
the result of an optional redemption by the issuer thereof) or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the option of the holder thereof, in whole or in part, on or prior to the
final Stated Maturity of the Notes, or (ii) is convertible into or exchangeable
(unless at the sole option of the issuer thereof) for (a) debt securities or (b)
any Capital Stock referred to in (i) above, in each case at any time prior to
the final Stated Maturity of the Notes.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, or any
successor statute or statutes thereto.
"Existing Indebtedness" means Indebtedness of the Issuer or its Restricted
Subsidiaries in existence on the Issue Date, plus interest accrued thereon,
after application of the net proceeds of the Notes as described in this Offering
Memorandum.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Issuer acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Issuer delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Indenture, including those set
forth in the opinions and pronouncements of the
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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 approved by
a significant segment of the accounting profession. All ratios and computations
based on GAAP contained in the Indenture shall be computed in conformity with
GAAP.
"Group" means any "group" for purposes of Section 13(d) of the Exchange Act.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Incur" means issue, assume, guarantee, incur or otherwise become liable
for; PROVIDED, HOWEVER, that any Indebtedness or Capital Stock of a Person
existing at the time such person becomes a Restricted Subsidiary (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v) ) entered into in the
ordinary course of business of such Person to the extent that such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third business day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit), (iv)
all obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except (x) trade payables and accrued expenses (including
accrued management fees under the Administrative Managment Agreements) incurred
in the ordinary course of business and (y) contingent or "earnout" payment
obligations in respect of any Permitted Business acquired by the Issuer or any
Restricted Subsidiary), which purchase price is due more than six months after
the date of placing such property in service or taking delivery and title
thereto or the completion of such services, (v) all Capitalized Lease
Obligations and all Attributable Indebtedness of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset of such Person,
whether or not such Indebtedness is assumed by such Person, (vii) all
Indebtedness of other Persons to the extent Guaranteed by such Person, (viii)
the amount of all obligations of such Person with respect to the redemption,
repayment or other repurchase of any Disqualified Stock or, with respect to any
Restricted Subsidiary of the Issuer, any Preferred Stock of such Restricted
Subsidiary to the extent such obligation arises on or before the final Stated
Maturity of the Notes (but excluding, in each case, accrued dividends) with the
amount of Indebtedness represented by such Disqualified Stock or Preferred
Stock, as the case may be, being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price;
PROVIDED, HOWEVER, that, for purposes hereof the "maximum fixed repurchase
price" of any Disqualified Stock or Preferred Stock, as the case may be, which
does not have a fixed repurchase price shall be calculated in accordance with
the terms of such Disqualified Stock or Preferred Stock, as the case may be, as
if such Disqualified Stock or Preferred Stock, as the case may be, were
purchased on any date on which Indebtedness shall be required to be determined
pursuant to the Indenture, and if such price is based on the fair market value
of such Disqualified Stock or Preferred Stock, as the case may be, such fair
market
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value shall be determined in good faith by the Board of Directors of the Issuer
and (ix) to the extent not otherwise included in this definition, obligations
under Currency Agreements and Interest Rate Agreements. Unless specifically set
forth above, the amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations as described
above, as such amount would be reflected on a balance sheet prepared in
accordance with GAAP, and the maximum liability of such Person, upon the
occurrence of the contingency giving rise to the obligation, of any contingent
obligations described above at such date. Notwithstanding the foregoing,
Indebtedness shall not include any accrued obligations under Performance
Compensation Agreements.
"Interest Rate Agreement" means with respect to any Person any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Investment" in any Person means any direct or indirect advance, loan (other
than advances to customers in the ordinary course of business that are recorded
as accounts payable on the balance sheet of such Person) or other extension of
credit (including by way of Guarantee or similar arrangement, but excluding any
debt or extension of credit represented by a bank deposit other than a time
deposit) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition of Capital Stock, Indebtedness or
other similar instruments issued by such Person. For purposes of the "Limitation
on Restricted Payments" covenant, (i) "Investment" shall include the portion
(proportionate to the Issuer's equity interest in a Restricted Subsidiary to be
designated as an Unrestricted Subsidiary) of the fair market value of the net
assets of such Restricted Subsidiary of the Issuer at the time that such
Restricted Subsidiary is designated an Unrestricted Subsidiary; PROVIDED,
HOWEVER, that upon a redesignation of such Subsidiary as a Restricted
Subsidiary, the Issuer shall be deemed to continue to have a permanent
"Investment" in an Unrestricted Subsidiary in an amount (if positive) equal to
(x) the Issuer's "Investment" in such Subsidiary at the time of such
redesignation less (y) the portion (proportionate to the Issuer's equity
interest in such Subsidiary) of the fair market value of the net assets of such
Subsidiary at the time that such Subsidiary is so redesignated a Restricted
Subsidiary; and (ii) any property transferred to or from an Unrestricted
Subsidiary shall be valued at its fair market value at the time of such
transfer, in each case as determined in good faith by the Board of Directors and
evidenced by a resolution of such Board of Directors certified in an Officers'
Certificate to the Trustee.
"Issue Date" means the date on which the Notes are originally issued.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien or
charge of any kind (including any conditional sale or other title retention
agreement or lease in the nature thereof).
"Managed Affiliate", solely for purposes of this Description of Notes, means
a Person at least 90% of the Capital Stock of which is owned, directly or
indirectly, by Alan R. Brill; PROVIDED HOWEVER, that (i) such Person is engaged
solely in a Permitted Business, (ii) such Person is a party to a Managed
Affiliate Management Agreement and (iii) except in the case of TSB III, LLC and
TSB IV, LLC the business of such Person is acquired by Alan R. Brill, directly
or indirectly, after the Issue Date.
"Managed Affiliate Notes" mean any promissory notes of a Managed Affiliate,
issued to the Issuer or a Restricted Subsidiary, each of which promissory notes
shall (i) mature on a day no later than the third anniversary of the date of
issuance thereof, (ii) become immediately due and payable upon (w) the default
by such Managed Affiliate under the Managed Affiliate Management Agreement to
which it is party or (x) the issuer thereunder ceasing to constitute a Managed
Affiliate or (y) the acceleration of the Notes or (z) on the bankruptcy,
insolvency or reorganization of the Issuer and (iii) bear interest payable in
cash no less often than semi-annually at a rate per annum no less than the rate
of interest payable on the Notes. Each Managed Affiliate Note shall provide that
the payment of any management fee by the relevant Managed
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Affiliate pursuant to any management agreement (other than a Managed Affiliate
Management Agreement) with an Affiliate of the Issuer or such Managed Affiliate
shall be subordinated to the obligations of the relevant Managed Affiliate under
such Managed Affiliate Note to the same extent as the obligations of the Issuer
and the Subsidiary Guarantors under the Administrative Management Agreements are
subordinated to the obligations of such persons under the Notes and the
Subsidiary Guarantees.
"Managed Affiliate Management Agreement" means any agreement between a
Restricted Subsidiary, on the one hand, and a Managed Affiliate, on the other
hand, providing for the payment by such Managed Affiliate to one or more
Restricted Subsidiaries of a cash management fee payable at least semi annually
equal to a specified percentage of the excess cash flow of such Managed
Affiliate as defined in such agreement.
"Media Cashflow" for any period means for any Person an amount equal to
Consolidated EBITDA for such period plus interest income received in respect of
the Managed Affiliate Notes during such period and the following to the extent
deducted in calculating such Consolidated EBITDA (i) management fees charged by
BMCLP under the Administrative Management Agreements, (ii) expenses accruing
under Performance Compensation Agreements , (iii) consulting fees payable in
connection with acquisitions and (iv) fees paid under Time Brokerage Agreements.
"Member" means any Person who holds a membership interest in the Issuer.
"Missouri Properties" means the radio stations KLIK-AM, KTXY-FM and KATI-FM
serving Jefferson City, MO.
"Net Available Cash" from an Asset Disposition means cash payments received
(including any cash payments received by way of deferred payment of principal
pursuant to a note or installment receivable or otherwise, but only as and when
received, but excluding any other consideration received in the form of
assumption by the acquiring Person of Indebtedness or other obligations relating
to the properties or assets subject to such Asset Disposition) therefrom in each
case net of (i) all legal, title and recording tax expenses, commissions and
other fees and expenses incurred, and all Federal, state, foreign and local
taxes required to be paid or accrued as a liability under GAAP, as a consequence
of such Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with the
terms of any Lien upon such assets, or which must by its terms, or in order to
obtain a necessary consent to such Asset Disposition or by applicable law, be
repaid out of the proceeds from such Asset Disposition, (iii) all distributions
and other payments required to be made to any Person owning a beneficial
interest in assets subject to sale or minority interest holders in Subsidiaries
or joint ventures as a result of such Asset Disposition, (iv) the deduction of
appropriate amounts to be provided by the seller as a reserve, in accordance
with GAAP, against any liabilities associated with the assets disposed of in
such Asset Disposition and retained by the Issuer or any Restricted Subsidiary
of the Issuer after such Asset Disposition, PROVIDED, HOWEVER, that upon any
reduction in such reserves (other than to the extent resulting from payments of
the respective reserved liabilities), Net Available Cash shall be increased by
the amount of such reduction to reserves, and (v) any portion of the purchase
price from an Asset Disposition placed in escrow (whether as a reserve for
adjustment of the purchase price, for satisfaction of indemnities in respect of
such Asset Disposition or otherwise in connection with such Asset Disposition);
PROVIDED, HOWEVER, that upon the termination of such escrow, Net Available Cash
shall be increased by any portion of funds therein released to the Issuer or any
Restricted Subsidiary.
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"Net Cash Proceeds," with respect to any issuance or sale of Capital Stock,
means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees or expenses actually
incurred in connection with such issuance or sale and net of taxes paid or
payable as a result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither the Issuer
nor any Restricted Subsidiary (a) provides any guarantee or credit support of
any kind (including any undertaking, guarantee, indemnity, agreement or
instrument that would constitute Indebtedness) or (b) is directly or indirectly
liable (as a guarantor, general partner or otherwise) and (ii) no default with
respect to which (including any rights that the holders thereof 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 of the
Issuer or any Restricted Subsidiary to declare a default under such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its Stated Maturity.
"Officer" means the Chairman of the Board, the Vice-Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice-President, the Treasurer or the Secretary of the Issuer.
"Officer's Certificate" means a certificate signed by two Officers of the
Issuer at least one of whom shall be the principal executive, financial or
accounting officer of the Issuer.
"Opinion of Counsel" means a written opinion, in form and substance
acceptable to the Trustee, from legal counsel who is acceptable to the Trustee.
"Paying Agent" means United States Trust Company of New York.
"Performance Compensation Agreement" means any agreements between the Issuer
or any Restricted Subsidiary and any executive officer of such Subsidiary
pursuant to which such Subsidiary provides deferred compensation to such officer
by crediting amounts (as determined under a formula set forth in such agreement)
to an identified account for the benefit of such executive officer. Future
Performance Compensation Agreements shall provide that no payment shall be
required to be made by the Issuer or any Restricted Subsidiary thereunder if
such payment is not permitted under the Indenture and that the Issuer's and the
Restricted Subsidiary's obligations to make payments thereunder shall be
subordinated to (i) the obligations of the Issuer and the Subsidiary Guarantors
under the Notes and the Subsidiary Guarantees and (ii) the obligations of the
Issuer and the Subsidiary Guarantors under the Appreciation Notes and the
Guarantees thereof.
"Permitted Business" means any business which is the same as or related,
ancillary or complementary to any of the businesses of the Issuer and its
Restricted Subsidiaries on the date of the Indenture, as reasonably determined
by the Issuer's Board of Directors.
"Permitted Investment" means an Investment by the Issuer or any of its
Restricted Subsidiaries in (i) a Wholly-Owned Subsidiary of the Issuer;
PROVIDED, HOWEVER, that the primary business of such Wholly-Owned Subsidiary is
a Permitted Business; (ii) another Person if as a result of such Investment such
other Person becomes a Wholly-Owned Subsidiary of the Issuer or is merged or
consolidated with or into, or transfers or conveys all or substantially all its
assets to, the Issuer or a Wholly-Owned Subsidiary of the Issuer; PROVIDED,
HOWEVER, that in each case such Person's primary business is a Permitted
Business; (iii) Temporary Cash Investments; (iv) receivables owing to the Issuer
or any of its Restricted Subsidiaries, created or acquired in the ordinary
course of business and payable or dischargeable in accordance with customary
trade terms; (v) payroll, travel and similar advances to cover matters that are
expected at the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business; (vi)
loans and advances to employees made in the ordinary course of business
consistent with past practices of the Issuer or such Restricted Subsidiary in an
aggregate amount outstanding at any one time not to exceed $250,000 to any one
employee or $1.0 million in the aggregate; (vii) stock, obligations or
securities received in settlement of debts created in the ordinary course of
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<PAGE>
business and owing to the Issuer or any of its Restricted Subsidiaries or in
satisfaction of judgments or claims; (viii) a Person engaged in a Permitted
Business or a loan or advance by the Issuer the proceeds of which are used
solely to make an investment in a Person engaged in a Permitted Business or a
Guarantee by the Issuer of Indebtedness of any Person in which such Investment
has been made PROVIDED, HOWEVER, that no Permitted Investments may be made
pursuant to this clause (viii) to the extent the amount thereof would, when
taken together with all other Permitted Investments made pursuant to this clause
(viii), exceed $5.0 million in the aggregate (plus, to the extent not previously
reinvested, any return of capital realized on Permitted Investments made
pursuant to this clause (viii), or any release or other cancellation of any
Guarantee constituting such Permitted Investment); (ix) Persons to the extent
such Investment is received by the Issuer or any Restricted Subsidiary as
consideration for asset dispositions effected in compliance with the covenant
described under "Certain Covenants--Limitations on Sales of Assets and
Subsidiary Stock"; (x) prepayments and other credits to suppliers made in the
ordinary course of business consistent with the past practices of the Issuer and
its Restricted Subsidiaries, (xi) the Managed Affiliate Note; PROVIDED, HOWEVER,
that the aggregate principal amount thereof (including any Managed Affiliate
Notes outstanding on the Issue Date) does not exceed $20 million at any time
outstanding, (xii) loans to Unrestricted Subsidiaries; PROVIDED, HOWEVER, that
(1) no Default or Event of Default shall have occurred and be continuing at the
time of the Incurrence thereof by the relevant Unrestricted Subsidiary or would
occur as a consequence thereof and the Consolidated Unrestricted Subsidiary
Advance Leverage Ratio would not be greater than 2.00 to 1.00, (2) such advances
are senior to all other Indebtedness of the relevant Unrestricted Subsidiary
other than Capitalized Lease Obligations, mortgage financing or purchase money
obligations outstanding on the date on which such Unrestricted Subsidiary was
acquired, directly or indirectly, by the Issuer or the date such Subsidiary was
designated an Unrestricted Subsidiary (other than Indebtedness Incurred in
anticipation of, or to provide all or any portion of the funds or credit support
utilized to consummate the transaction or series of related transactions
pursuant to which such Unrestricted Subsidiary became a Subsidiary or was
otherwise acquired by the Issuer or was designated as an Unrestricted
Subsidiary) and (3) such Unrestricted Subsidiary is engaged primarily in a
Permitted Business; and (xiii) Investments in connection with pledges, deposits,
payments or performance bonds made or given in the ordinary course of business
in connection with or to secure statutory, regulatory or similar obligations,
including obligations under health, safety or environmental obligations.
"Permitted Liens" means: (i) pledges or deposits by the Issuer or any
Restricted Subsidiary under workmen's compensation laws, unemployment insurance
laws, other types of social security benefits or similar legislation, or good
faith deposits in connection with bids, tenders or contracts (other than for the
payment of Indebtedness) or leases to which the Issuer or any Restricted
Subsidiary is a party, or deposits to secure public or statutory obligations or
deposits of cash or United States government bonds to secure surety or appeal
bonds to which the Issuer or any Restricted Subsidiary is a party, or deposits
as security for contested taxes or import duties or for the payment of rent, in
each case incurred by the Issuer or any Restricted Subsidiary in the ordinary
course of business consistent with past practice; (ii) Liens imposed by law,
such as carriers', warehousemen's and mechanics' Liens, in each case for sums
not yet due from the Issuer or any Restricted Subsidiary or being contested in
good faith by appropriate proceedings by the Issuer or any Restricted
Subsidiary, as the case may be, or other Liens arising out of judgments or
awards against the Issuer or any Restricted Subsidiary with respect to which the
Issuer or such Restricted Subsidiary, as the case may be, will then be
prosecuting an appeal or other proceedings for review; (iii) Liens for property
taxes or other taxes, assessments or governmental charges of the Issuer or any
Restricted Subsidiary not yet due or payable or subject to penalties for
nonpayment or which are being contested by the Issuer or such Restricted
Subsidiary, as the case may be, in good faith by appropriate proceedings; (iv)
Liens in favor of issuers of performance bonds and surety bonds issued pursuant
to clause (b)(v) under "--Certain Covenants--Limitation on Indebtedness"; (v)
survey exceptions, encumbrances, easements or, reservations of, or rights of
others for, licenses, rights-of-way, sewers, electric lines, telegraph and
telephone lines and other similar purposes or zoning or other restrictions as to
the use of real property of the Issuer or any Restricted Subsidiary incidental
to the ordinary course of conduct of the business of
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the Issuer or such Restricted Subsidiary or as to the ownership of properties of
the Issuer or any Restricted subsidiary, which, in either case, were not
incurred in connection with Indebtedness and which do not in the aggregate
materially adversely affect the value of said properties or materially impair
their use in the operation of the business of the Issuer or any Restricted
subsidiary; (vi) Liens to secure Indebtedness permitted under clause (b)(i)
under "--Certain Covenants--Limitation on Indebtedness"; (vii) Liens outstanding
immediately after the Issue Date as set forth on Schedule II to the Indenture
(and not otherwise permitted by clause (vi)); (viii) Liens on property, assets
or shares of stock of any Restricted Subsidiary at the time such Restricted
Subsidiary became a Subsidiary of the Issuer; PROVIDED, HOWEVER, that (A) if any
such Lien has been Incurred in anticipation of such transaction, such property,
assets or shares of stock subject to such Lien will have a fair market value at
the date of the acquisition thereof not in excess of the lesser of (1) the
aggregate purchase price paid or owed by the Issuer in connection with the
acquisition of such Restricted Subsidiary and (2) the fair market value of all
property and assets of such Restricted Subsidiary and (B) any such Lien will not
extend to any other assets owned by the Issuer or any Restricted Subsidiary;
(ix) Liens on property or assets at the time the Issuer or any Restricted
Subsidiary acquired such assets, including any acquisition by means of a merger
or consolidation with or into the Issuer or such Restricted Subsidiary;
PROVIDED, HOWEVER, that (A) if any such Lien is Incurred in anticipation of such
transaction, such property or assets subject to such Lien will have a fair
market value at the date of the acquisition thereof not in excess of the lesser
of the aggregate purchase price paid or owed by the Issuer or such Restricted
Subsidiary in connection with the acquisition thereof and of any other property
and assets acquired simultaneously therewith and (2) the fair market value of
all such property and assets acquired by the Issuer or such Restricted
Subsidiary and (B) any such Lien will not extend to any other property or assets
owned by the Issuer or any Restricted Subsidiary; (x) Liens securing
Indebtedness or other obligations of a Restricted Subsidiary owing to the Issuer
or a Wholly Owned Subsidiary; (xi) Liens to secure any extension, renewal,
refinancing, replacement or refunding (or successive extensions, renewals,
refinancings, replacements or refundings), in whole or in part, of any
Indebtedness secured by Liens referred to in any of clauses (vii), (viii) and
(ix); PROVIDED, HOWEVER, that any such Lien will be limited to all or part of
the same property or assets that secured the original Lien (plus improvements on
such property) and the aggregate principal amount of Indebtedness that is
secured by such Lien will not be increased to an amount greater than the sum of
(A) the outstanding principal amount, or, if greater, the committed amount, of
the Indebtedness described under clauses (vii), (viii) and (ix) at the time the
original Lien became a Permitted Lien under the Indenture and (B) an amount
necessary to pay any premiums, fees and other expenses Incurred by the Issuer in
connection with such refinancing, refunding, extension, renewal or replacement;
(xii) Liens on property or assets of the Issuer securing Interest Rate
Agreements and Currency Agreements, permitted under "--Certain
Covenants--Limitation on Indebtedness", so long as the related Indebtedness is
secured by a Lien on the same property securing the relevant Interest Rate
Agreement or Currency Agreement; (xiii) Liens on property or assets of the
Issuer or any Restricted Subsidiary securing Indebtedness under Sale/Leaseback
Transactions permitted under "--Certain Covenants--Limitation on Sale/Leaseback
Transactions"; PROVIDED, HOWEVER, that (A) the amount of Indebtedness Incurred
in any specific case does not, at the time such Indebtedness is Incurred, exceed
the lesser of the cost or fair market value of the property or asset subject to
such Sale/Leaseback Transaction, (B) such Lien will attach to such property or
asset upon commencement of such Sale/Leaseback Transaction and (C) no property
or asset of the Issuer or any Restricted Subsidiary (other than the property
subject to such Sale/Leaseback Transaction) are subject to any Lien securing
such Indebtedness; and (ix) Liens securing Indebtedness permitted to be secured
pursuant to the proviso to clause (ii) of paragraph (a) under "-- Certain
Covenants--Limitation on Indebtedness."
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Preferred Stock," as applied to the Capital Stock of any corporation, means
Capital Stock of any class or classes (however designated) which is preferred as
to the payment of dividends, or as to the
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distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other class
of such corporation.
"Public Equity Offering," means underwritten public offerings or quotations
or placements of Capital Stock of the Issuer (other than Disqualified Stock)
which has been registered with the Commission under the Securities Act.
"Refinancing Indebtedness" means Indebtedness that refunds, refinances,
replaces, renews, repays or extends (including pursuant to any defeasance or
discharge mechanism) (collectively, "refinances," and "refinanced" shall have a
correlative meaning) any Indebtedness existing on the date of the Indenture or
Incurred in compliance with the Indenture (including Indebtedness of the Issuer
that refinances Indebtedness of any Restricted Subsidiary and Indebtedness of
any Restricted Subsidiary that refinances Indebtedness of another Restricted
Subsidiary) including Indebtedness that refinances Refinancing Indebtedness;
PROVIDED, HOWEVER, that (i) the Refinancing Indebtedness has a Stated Maturity
no earlier than the earlier of (A) the first anniversary of the Stated Maturity
of the Notes and (B) Stated Maturity of the Indebtedness being refinanced, (ii)
the Refinancing Indebtedness has an Average Life at the time such Refinancing
Indebtedness is Incurred that is equal to or greater than the lesser of (A) the
Average Life of the Notes and (B) the Average Life of the Indebtedness being
refinanced; and (iii) the Refinancing Indebtedness is in an aggregate principal
amount (or if issued with original issue discount, an aggregate issue price)
that is equal to (or 101% of, in the case of a refinancing of the Notes in
connection with a Change of Control) or less than the sum of the aggregate
principal amount (or if issued with original issue discount, the aggregate
accreted value) then outstanding of the Indebtedness being refinanced (plus the
amount of any premium required to be paid in connection therewith and reasonable
fees and expenses therewith); PROVIDED, HOWEVER, that if the Indebtedness being
refinanced is Existing Indebtedness which was a purchase money obligation,
mortgage or Capital Lease the Refinancing Indebtedness is an aggregate principal
amount that is equal to or less than the lesser of the original principal amount
of such Existing Indebtedness and the fair market value (determined on the date
of such Refinancing Indebtedness is Incurred) of the personal property securing
such Existing Indebtedness or the personal property of similar nature and
quality replacing such personal property; PROVIDED, FURTHER, that Refinancing
Indebtedness shall not include Indebtedness of a Subsidiary which refinances
Indebtedness of the Issuer.
"Related Brill Party" means (A) the spouse or immediate family member of
Alan R. Brill or (B) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, members, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of Alan R. Brill
and/or such other Persons referred to in the immediately preceding clause (A).
"Restricted Subsidiary" means any Subsidiary of the Issuer other than an
Unrestricted Subsidiary.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Issuer or a Restricted Subsidiary
transfers such property to a Person and the Issuer or a Subsidiary leases it
from such Person.
"Senior Indebtedness" means all Indebtedness of the Issuer and its
Restricted Subsidiaries other than Subordinated Obligations.
"Senior Secured Indebtedness" means Indebtedness of the Issuer and its
Restricted Subsidiaries which is secured by a Lien; PROVIDED, HOWEVER, that for
purposes of the Consolidated Senior Secured Leverage Ratio the full amount of
Senior Secured Indebtedness permitted to be outstanding under clause (i) of
paragraph (b) under "--Certain Covenants--Limitation on Indebtedness" shall be
deemed to be outstanding.
"Significant Subsidiary" means any Restricted Subsidiary that would be a
"Significant Subsidiary" of the Issuer within the meaning of Rule 1-02 under
Regulation S-X promulgated by the SEC.
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"Stated Maturity" means, with respect to any security, the date specified in
such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision.
"Subordinated Obligation" means any Indebtedness of the Issuer or a
Restricted Subsidiary (whether outstanding on the Issue Date or thereafter
Incurred) which is subordinate or junior in right of payment to the Notes and
the Subsidiary Guarantees pursuant to a written agreement.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person. Unless otherwise specified herein, each reference to a Subsidiary shall
refer to a Subsidiary of the Issuer.
"Subsidiary Guarantee" means the Guarantee of the Notes by a Subsidiary
Guarantor.
"Subsidiary Guarantor" means each Subsidiary of the Issuer on the Issue Date
and each newly organized or acquired Restricted Subsidiary.
"Tax Allowance Amount" means, with respect to any Member, for any calendar
quarter, (i) forty percent (40%) of the excess of (a) the estimated taxable
income allocable to such Member arising from its ownership of an interest in the
Issuer for the fiscal year through such calendar quarter over (b) any losses of
the Issuer for prior fiscal years and such fiscal year that are allocable to
such Member that were not previously utilized in the calculation of Tax
Allowance Amounts for any period minus (ii) prior distributions of Tax Allowance
Amounts for such fiscal year, all as determined by the Accountants in good
faith. The amount so determined by the Accountants shall be the Tax Allowance
Amount for such period and shall be final and binding on all Members.
"Temporary Cash Investments" means any of the following: (i) any Investment
in direct obligations of the United States of America or any agency thereof or
obligations Guaranteed by the United States of America or any agency thereof,
(ii) Investments in time deposit accounts, certificates of deposit and money
market deposits maturing within 365 days of the date of acquisition thereof
issued by a bank or trust company which is organized under the laws of the
United States of America, any state thereof or any foreign country recognized by
the United States of America having capital surplus and undivided profits
aggregating in excess of $250 million (or the foreign currency equivalent
thereof) and whose long-term debt, or whose parent holding company's long-term
debt, is rated "A" (or such similar equivalent rating) or higher by at least one
nationally recognized statistical rating organization (as defined in Rule 436
under the Securities Act), (iii) repurchase obligations with a term of not more
than 30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in clause
(ii) above, (iv) Investments in commercial paper, maturing not more than 365
days after the date of acquisition, issued by a corporation (other than an
Affiliate of the Issuer) organized and in existence under the laws of the United
States of America or any foreign country recognized by the United States of
America with a rating at the time as of which any investment therein is made of
"P-1" (or higher) according to Moody's Investors Service, Inc. or "A-1" (or
higher) according to Standard and Poor's Ratings Group, (v) Investments in
securities with maturities of six months or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority thereof,
and rated at least "A" by Standard & Poor's Ratings Group or "A" by Moody's
Investors Service, Inc. and (vi) Investments in mutual funds whose investment
guidelines restrict such funds' investments to those satisfying the provisions
of clauses (i) through (v) above.
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"Transaction Date" means, with respect to the Incurrence of any Indebtedness
by the Issuer or any of its Subsidiaries, the date such Indebtedness is to be
Incurred.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Issuer that at the
time of determination shall be designated an Unrestricted Subsidiary by the
Board of Directors in the manner provided below and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Subsidiary of
the Issuer (including any newly acquired or newly formed Subsidiary of the
Issuer) to be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds any
Lien on any property of, the Issuer or any Restricted Subsidiary of the Issuer
that is not a Subsidiary of the Subsidiary to be so designated; PROVIDED,
HOWEVER, that each Subsidiary to be so designated and each of its Subsidiaries
has not at the time of such designation, and does not thereafter create, Incur,
issue, assume, guarantee or otherwise becomes liable with respect to any
Indebtedness other than Non-Recourse Debt and either (A) the Subsidiary to be so
designated has total consolidated assets of $10,000 or less or (B) if such
Subsidiary has consolidated assets greater than $10,000, then such designation
would be permitted under "--Certain Covenants--Limitation on Restricted
Payments." The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary subject to the limitations contained in "--Certain
Covenants--Limitation on Designations of Unrestricted Subsidiaries."
"Unrestricted Subsidiary Advance" means loans made by the Issuer and its
Restricted Subsidiaries to Unrestricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or certificates
representing an ownership interest in such obligations) of the United States of
America (including any agency or instrumentality thereof) for the payment of
which the full faith and credit of the United States of America is pledged and
which are not callable or redeemable at the issuer's option.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of the Issuer, at
least 95% of the Capital Stock of which (other than directors' qualifying
shares) is owned by the Issuer or another Wholly-Owned Subsidiary.
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DESCRIPTION OF APPRECIATION NOTES
GENERAL
The Original Appreciation Notes were issued, and the Exchange Appreciation
Notes are to be issued, under an indenture, dated as of December 30, 1997 (the
"Appreciation Note Indenture"), between the Issuer and United States Trust
Company of New York, as trustee (the "Trustee"), a copy of which is available
upon request to the Issuer. The following is a summary of certain provisions of
the Appreciation Note Indenture and the Appreciation Notes and does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Appreciation Note Indenture (including the
definitions of certain terms therein and those terms made a part thereof by the
Trust Indenture Act of 1939, as amended) and the Appreciation Notes. The
definition of certain capitalized terms used in the following summary are set
forth below under "Certain Definitions".
Principal of, and interest and premium, if any, on the Appreciation Notes
will be payable, and the Appreciation Notes may be exchanged or transferred, at
the office or agency of the Issuer in the Borough of Manhattan, The City of New
York (which initially shall be the corporate trust office of the Trustee in New
York, New York). Initially, the Trustee will act as Paying Agent and Registrar
for the Appreciation Notes. The Appreciation Notes may be presented for
registration of transfer and exchange at the offices of the Registrar, which
initially will be the Trustee's corporate trust office. The Issuer may change
any Paying Agent and Registrar without notice to holders of the Appreciation
Notes.
The Appreciation Notes will be issued only in fully registered form, without
coupons, in denominations of any integral multiple of approximately $28.57. No
service charge will be made for any registration of transfer or exchange of
Appreciation Notes, but the Issuer may require payment of a sum sufficient to
cover any transfer tax or other similar governmental charge payable in
connection therewith.
TERMS OF APPRECIATION NOTES
The Appreciation Notes will mature on December 15, 2007 (the "Maturity
Date"). Each Appreciation Note will entitle the holder thereof to receive on the
Maturity Date a cash payment of principal and interest in the amount equal to
(i) the principal amount thereof plus (ii) the amount by which the Specified
Percentage (as defined) of the Value (as defined) of BMC on the Maturity Date
exceeds the principal amount of such Appreciation Note. "Specified Percentage"
of an Appreciation Note with a principal amount of $28.57 means
.0000004761904761% (or 5% in the aggregate for all Appreciation Notes). The
"Value" of BMC on the Maturity Date means an amount equal to 12 times Media
Cashflow for the then most recent four fiscal quarters for which financial
statements of BMC are available plus the cash and Cash Equivalents of BMC and
its Subsidiaries on the Maturity Date less the aggregate amount of Indebtedness
(as defined) of BMC and its Subsidiaries on a consolidated basis outstanding on
the Maturity Date. Any Original Appreciation Notes that remain outstanding after
consummation of the Exchange Offer and any Exchange Appreciation Notes issued in
connection with the Exchange Offer will be treated as a single class of
securities under the Appreciation Note Indenture.
The Appreciation Notes will not be entitled to the benefit of any mandatory
sinking fund.
OPTIONAL REDEMPTION
Except as set forth below, the Appreciation Notes will not be redeemable at
the option of the Issuer prior to June 15, 1999. Thereafter, if an Initial
Public Offering has not occurred on or before a date set forth below, the
Appreciation Notes will be redeemable, at the Issuer's option, in whole but not
in part, on such date upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each holder's registered address, at a redemption
price equal to the Pro Rata Percentage of each Appreciation
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Note of the amount set forth below opposite such redemption date (which amount,
in each case, represents payment in full of all prinicipal and interest on the
Appreciation Notes):
<TABLE>
<CAPTION>
DATE AMOUNT
- ----------------------------------------------------------------------------- ---------------
<S> <C>
June 15, 1999................................................................ $ 3.0 million
June 15, 2000................................................................ $ 8.3 million
June 15, 2001................................................................ $ 12.8 million
June 15, 2002................................................................ $ 18.0 million
June 15, 2003................................................................ $ 24.0 million
June 15, 2004................................................................ $ 31.0 million
June 15, 2005................................................................ $ 39.0 million
June 15, 2006................................................................ $ 48.0 million
June 15, 2007................................................................ $ 58.0 million
</TABLE>
"Pro Rata Percentage" of an Appreciation Note means the Specified Percentage
of such Appreciation Note divided by 5%.
MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS UPON THE OCCURRENCE OF CERTAIN
EVENTS
Upon the occurrence of an Initial Public Offering, a Sale of the Company or
the liquidation of the Issuer (each such event, a "Specified Event"), each
holder will have the right to require the Issuer to redeem all or any part of
such holder's Appreciation Notes at the relevant Specified Event Purchase Price
(as defined below) (which amount, in each case, represents payment in full of
all principal and interest on the Appreciation Notes).
Within 30 days following any Specified Event, unless the Issuer has mailed a
redemption notice with respect to all the outstanding Appreciation Notes in
connection with such Specified Event, the Issuer shall mail a notice to each
holder with a copy to the Trustee stating: (1) that a Specified Event has
occurred and that such holder has the right to require the Issuer to redeem such
holder's Appreciation Notes at a purchase price in cash equal to the relevant
Specified Event Purchase Price; (2) the redemption date (which shall be no
earlier than 30 days nor later than 60 days from the date such notice is
mailed); and (3) the procedures determined by the Issuer, consistent with the
Appreciation Note Indenture, that a holder must follow in order to have its
Appreciation Notes redeemed.
The Issuer shall comply, to the extent applicable, with the requirements of
Section 14(e) of the Exchange Act and any other securities laws or regulations
in connection with the redemption of Appreciation Notes pursuant to this
covenant. To the extent that the provisions of any securities laws or
regulations conflict with provisions of the Appreciation Note Indenture, the
Issuer will comply with the applicable securities laws and regulations and shall
not be deemed to have breached its obligations described in the Appreciation
Note Indenture by virtue thereof.
The definition of "Sale of Company" includes, among other transactions, a
disposition of all or substantially all of the property and assets of the Issuer
and its Subsidiaries. With respect to the disposition of property or assets, the
phrase "all or substantially all" as used in the Appreciation Note Indenture
varies according to the facts and circumstances of the subject transaction, has
no clearly established meaning under New York law (which is the law which
governs the Appreciation Note Indenture) and is subject to judicial
interpretation. Accordingly, in certain circumstances there may be a degree of
uncertainty in ascertaining whether a particular transaction would involve a
disposition of "all or substantially all" of the property or assets of a Person,
and therefore it may be unclear as to whether a Sale of the Company has occurred
and whether the Issuer is required to make an offer to redeem the Appreciation
Notes as described above.
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MANDATORY REDEMPTION AT THE OPTION OF THE HOLDERS ON SPECIFIED DATES
In addition, if an Initial Public Offering has not occurred on or before a
date set forth below, the holders may require the Issuer to redeem its
Appreciation Notes, in whole or in part, on such date at a redemption price
equal to the Pro Rata Percentage of such Appreciation Note of the amount set
forth below opposite such date (which amount, in each case, represents payment
in full of all principal and interest thereon):
<TABLE>
<CAPTION>
DATE AMOUNT
- ----------------------------------------------------------------------------- ---------------
<S> <C>
June 30, 2003................................................................ $ 24.0 million
June 30, 2004................................................................ $ 20.0 million
June 30, 2005................................................................ $ 13.0 million
</TABLE>
A holder may exercise its rights to require the redemption of the
Appreciation Notes held by such holder by mailing a notice to the Trustee on or
before a date as set forth above stating that such holder is demanding that the
Issuer redeem the Appreciation Notes and the portion of the Appreciation Notes
to be redeemed. Upon receipt of such notice the Issuer shall redeem the
Appreciation Notes for which such notice has been received by no later than the
90th day following the relevant date.
There can be no assurance that the Issuer shall have sufficient funds
available at the time of any mandatory redemption of the Appreciation Notes to
make any debt payment (including repurchases of Appreciation Notes) required
under the Appreciation Note Indenture (as well as may be required pursuant to
the other securities of the Issuer which might be outstanding at the time). The
exercise by the holders of their right to require the Issuer to redeem the
Appreciation Notes could cause a default under Senior Indebtedness of the Issuer
and its Subsidiaries.
RANKING AND SUBORDINATION
The payment of the principal on the Appreciation Notes is subordinated in
right of payment, as set forth in the Appreciation Note Indenture, to the
payment when due of all existing and future Senior Indebtedness of the Issuer,
including the Notes. As of August 31, 1997, on a pro forma basis after giving
effect to the Offering and the Transaction, the outstanding Senior Indebtedness
and Guarantor Senior Indebtedness of the Issuer and the Subsidiary Guarantors to
which the Appreciation Notes and the Guarantees thereof would have been
subordinated would have been $99.358 million. The Appreciation Note Indenture
does not contain any limitation on the amount of additional Indebtedness that
the Issuer may incur.
The Issuer may not pay the Appreciation Notes and may not otherwise
purchase, redeem or otherwise retire any Appreciation Note (collectively, "pay
the Appreciation Notes") if (i) any Designated Senior Indebtedness is not paid
when due or (ii) any other default on Designated Senior Indebtedness occurs and
the maturity of such Designated Senior Indebtedness is accelerated in accordance
with its terms unless, in either case, the default has been cured or waived and
any such acceleration has been rescinded or such Designated Senior Indebtedness
has been paid in full in cash. However, the Issuer may pay the Appreciation Note
without regard to the foregoing if the Issuer and the Trustee receive written
notice approving such payment from the Representative of the Designated Senior
Indebtedness with respect to which either of the events set forth in clause (i)
or (ii) of the immediately preceding sentence has occurred and is continuing.
By reason of such subordination provisions contained in the Appreciation
Note Indenture, in the event of insolvency, creditors who are holders of Senior
Indebtedness (including holders of the Notes) may recover more, ratably, than
the holders of the Appreciation Notes, and creditors who are not holders of
Senior Indebtedness (including holders of the Appreciation Notes) may recover
less, ratably, than holders of Senior Indebtedness.
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SUBSIDIARY GUARANTEES
Each Subsidiary Guarantor unconditionally guarantees, jointly and severally,
to each holder and the Trustee, on a subordinated basis, the full and prompt
payment of principal of and interest on the Appreciation Notes, and of all other
obligations of the Issuer under the Appreciation Note Indenture.
The Indebtedness evidenced by each Guarantee of the Appreciation Notes will
be subordinated to Guarantor Senior Indebtedness on substantially the same basis
as the Appreciation Notes are subordinated to Senior Indebtedness. The
Appreciation Note Indenture does not contain any limitations on the amount of
additional Indebtedness that the Issuer's Subsidiaries may incur.
The obligations of each Subsidiary Guarantor under its Guarantee of the
Appreciation Notes are limited to the maximum amount as will, after giving
effect to all other contingent and fixed liabilities of such Subsidiary
Guarantor and after giving effect to any collections from or payments made by or
on behalf of any other Subsidiary Guarantor in respect of the obligations of
such other Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to
its contribution obligations under the Appreciation Note Indenture, result in
the obligations of such Subsidiary Guarantor under its Guarantee of the
Appreciation Notes not constituting a fraudulent conveyance or fraudulent
transfer under federal or state law. Each Subsidiary Guarantor that makes a
payment or distribution under a Guarantee of the Appreciation Notes shall be
entitled to a contribution from each other Subsidiary Guarantor in a PRO RATA
amount based on the Adjusted Net Assets of each Subsidiary Guarantor.
Each Subsidiary Guarantor may consolidate with or merge into or sell its
assets to the Issuer or another Subsidiary Guarantor without limitation. Upon
the sale or disposition of a Subsidiary Guarantor (or all or substantially all
of its assets) to a Person which is not a Subsidiary Guarantor, such Subsidiary
Guarantor shall be deemed released from all its obligations under the
Appreciation Note Indenture and its Guarantee of the Appreciation Notes and such
Guarantee shall terminate; PROVIDED, HOWEVER, that any such termination shall
occur only to the extent that all obligations of such Subsidiary Guarantor under
all of its Guarantees of, and under all of its pledges of assets or other
security interests which secure any other Indebtedness of the Issuer shall also
terminate upon such release, sale or transfer.
Subsequent to the Issue Date, separate financial information for the
Subsidiary Guarantors will not be provided except to the extent required by
Regulation S-X under the Securities Act.
CERTAIN COVENANTS
The Appreciation Note Indenture contains certain covenants including, among
others, the following:
MERGER AND CONSOLIDATION. The Issuer shall not consolidate with or merge
with or into, or convey, transfer or lease all or substantially all of its
assets to, any Person, unless: (i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation, partnership, trust or limited
liability company organized and existing under the laws of the United States of
America, any State thereof or the District of Columbia and the Successor Company
(if not the Issuer) shall expressly assume, by supplemental indenture, executed
and delivered to the Trustee, in form satisfactory to the Trustee, all the
obligations of the Issuer under the Appreciation Notes and the Appreciation Note
Indenture; (ii) immediately after giving effect to such transaction, the
Successor Company shall have a Consolidated Net Worth equal or greater to the
Consolidated Net Worth of the Issuer immediately prior to such transaction;
(iii) the Issuer shall have delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger or
transfer and such supplemental indenture (if any) comply with the Appreciation
Note Indenture; and (iv) there has been delivered to the Trustee an Opinion of
Counsel to the effect that holders of Appreciation Notes will not recognize
income, gain or loss for U.S. federal income tax purposes as a result of such
consolidation, merger, conveyance, transfer or lease and will be subject to U.S.
federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such consolidation, merger, conveyance,
transfer or lease had not occurred.
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The Successor Company will succeed to, and be substituted for, and may
exercise every right and power of, the Issuer under the Appreciation Note
Indenture, but, in the case of a lease of all or substantially all its assets,
the Issuer will not be released from the obligation to pay the principal of and
interest on the Appreciation Notes.
AMENDMENTS AND WAIVERS
Subject to certain exceptions, the Appreciation Note Indenture may be
amended with the consent of the holders of a majority in principal amount of all
outstanding series of Appreciation Notes then outstanding and any past default
or compliance with any provisions may be waived with the consent of the holders
of a majority in principal amount of all outstanding series of Appreciation
Notes. However, without the consent of each holder of an outstanding
Appreciation Note affected, no amendment may, among other things, (i) reduce the
amount of Appreciation Notes whose holders must consent to an amendment, (ii)
reduce the stated rate of or extend the stated time for payment of interest on
any Appreciation Note, (iii) reduce the principal of or extend the Stated
Maturity of any Appreciation Note, (iv) reduce the premium payable upon the
redemption or repurchase of any Appreciation Note or change the time at which
any Appreciation Note may be redeemed as described above, (v) make any
Appreciation Note payable in money other than that stated in the Appreciation
Note, (vi) impair the right of any holder to receive payment of principal of and
interest on such holder's Appreciation Notes on or after the due dates therefor
or to institute suit for the enforcement of any payment on or with respect to
such holder's Appreciation Notes or (vii) make any change in the amendment
provisions which require each holder's consent or in the waiver provisions.
Without the consent of any holder, the Issuer and the Trustee may amend the
Appreciation Note Indenture to cure any ambiguity, omission, defect or
inconsistency, to provide for the assumption by a successor corporation,
partnership, trust or limited liability company of the obligations of the Issuer
under the Appreciation Note Indenture (provided that there has been delivered to
the Trustee an Opinion of Counsel to the effect that holders of Appreciation
Notes will not recognize income, gain or loss for U.S. federal income tax
purposes as a result of such assumption and will be subject to U.S. federal
income tax on the same amount and in the same manner and at the same times as
would have been the case if such assumption had not occurred), to provide for
uncertificated Appreciation Notes in addition to or in place of certificated
Appreciation Notes (provided that the uncertificated Appreciation Notes are
issued in registered form for purposes of Section 163(f) of the Code, or in a
manner such that the uncertificated Appreciation Notes are described in Section
163 (f) (2) (B) of the Code), to the Appreciation Notes, to secure the
Appreciation Notes, to add to the covenants of the Issuer for the benefit of the
holders or to surrender any right or power conferred upon the Issuer, to make
any change that does not adversely affect the rights of any holder or to comply
with any requirement of the Commission in connection with the qualification of
the Appreciation Note Indenture under the Trust Indenture Act.
The consent of the holders is not necessary under the Appreciation Note
Indenture to approve the particular form of any proposed amendment. It is
sufficient if such consent approves the substance of the proposed amendment.
After an amendment under the Appreciation Note Indenture becomes effective,
the Issuer is required to mail to the holders a notice briefly describing such
amendment. However, the failure to give such notice to all the holders or any
defect therein, will not impair or affect the validity of the amendment.
SATISFACTION AND DISCHARGE OF THE APPRECIATION NOTE INDENTURE
The Appreciation Note Indenture will cease to be of further effect (except
as otherwise expressly provided for in the Appreciation Note Indenture) when
either (i) all outstanding Appreciation Notes have been delivered (other than
lost, stolen or destroyed Appreciation Notes which have been replaced) to the
Trustee for cancellation or (ii) all outstanding Appreciation Notes have become
due and payable, whether
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at maturity or as a result of the mailing of a notice of redemption pursuant to
the terms of the Appreciation Note Indenture and the Issuer has irrevocably
deposited with the Trustee funds sufficient to pay at maturity or upon
redemption all outstanding Appreciation Notes, including interest thereon (other
than lost, stolen, mutilated or destroyed Appreciation Notes which have been
replaced), and, in either case, the Issuer has paid all other sums payable under
the Appreciation Note Indenture. The Trustee is required to acknowledge
satisfaction and discharge of the Appreciation Note Indenture on demand of the
Issuer accompanied by an Officer's Certificate and an Opinion of Counsel at the
cost and expense of the Issuer.
TRANSFER AND EXCHANGE
Upon any transfer of an Appreciation Note, the registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents, and to pay any taxes and fees required by law or permitted by the
Appreciation Note Indenture. The registrar is not required to transfer or
exchange any Appreciation Notes selected for redemption nor is the registrar
required to transfer or exchange any Appreciation Notes for a period of 15 days
before a selection of Appreciation Notes to be redeemed. The registered holder
of an Appreciation Note may be treated as the owner of it for all purposes.
CONCERNING THE TRUSTEE
United States Trust Company of New York is to be the Trustee under the
Appreciation Note Indenture and has been appointed by the Issuer as Registrar
and Paying Agent with regard to the Appreciation Notes. The Trustee's current
address is 114 West 47th Street, New York, New York.
The Appreciation Note Indenture contains certain limitations on the rights
of the Trustee, should it become a creditor of the Issuer, to obtain payment of
claims in certain cases, or to realize on certain property received in respect
of any such claim, as security or otherwise. The Trustee will be permitted to
engage in other transactions; however, if it acquires any conflicting interest
(as defined) it must eliminate such conflict or resign.
The holders of a majority in aggregate principal amount of the then
outstanding Appreciation Notes issued under the Appreciation Note Indenture will
have the right to direct the time, method and place of conducting any proceeding
for exercising any remedy available to the Trustee. The Appreciation Note
Indenture provides that in case a default shall occur (which shall not be cured)
the Trustee will be required, in the exercise of its power, to use the degree of
care of a prudent man in the conduct of his own affairs would use. Subject to
such provisions, the Trustee will be under no obligation to exercise any of its
rights or powers under the Appreciation Note Indenture at the request of any of
the holders of the Appreciation Notes issued thereunder unless they shall have
offered to the Trustee security and indemnity satisfactory to it.
GOVERNING LAW
The Appreciation Note Indenture provides that it and the Appreciation Notes
will be governed by, and construed in accordance with, the laws of the State of
New York without giving effect to applicable principles of conflicts of law to
the extent that the application of the law of another jurisdiction would be
required thereby.
CERTAIN DEFINITIONS
"Board of Directors" means, as to the Issuer (i) so long as BMC or any
successor to BMC is a limited liability company or partnership, the board of
directors of Brill Media Management, Inc. which is the manager of BMC and (ii)
at any other time the Board of Directors of the Issuer.
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"Capital Stock" of any Person means any and all shares, membership and other
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt securities convertible
into such equity.
"Capitalized Lease Obligations" means an obligation that is required to be
classified and accounted for as a capitalized lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP, and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date such lease may be terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii) securities issued
or directly and fully guaranteed or insured by the United States government or
any agency or instrumentality thereof, (iii) certificates of deposit, time
deposits 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 commercial bank having
capital and surplus in excess of $500 million, (iv) repurchase obligations for
underlying securities of the types described in clauses (ii) and (iii) entered
into with any financial institution meeting the qualifications specified in
clause (iii) above, (v) commercial paper rated A-1 or the equivalent thereof by
Moody's or S&P and in each case maturing within one year after the date of
acquisition, (vi) investment funds investing 95% of their assets in securities
of the types described in clauses (i)-(v) above, (vii) readily marketable direct
obligations issued by any state of the United States of America or any political
subdivision thereof having one of the two highest rating categories obtainable
from either Moody's or S&P and (viii) Indebtedness or preferred stock issued by
Persons with a rating of "A" or higher from S&P or "A2" or higher from Moody's.
"Consolidated EBITDA" means, for any period an amount equal to Consolidated
Net Income for such period, plus the following to the extent deducted in
calculating such Consolidated Net Income: (i) the provision for taxes for such
period based on income or profits and any provision for taxes utilized in
computing net loss, (ii) Consolidated Interest Expense, (iii) depreciation
expense, (iv) amortization expense (including the amortization of debt issuance
costs), (v) all other non-cash items reducing Consolidated Net Income for such
period (excluding any non-cash item to the extent it represents an accrual of or
reserve for cash disbursements for any subsequent period prior to the Stated
Maturity of the Appreciation Notes or amortization of a pre-paid cash expense
that was paid in a prior period), minus (b) all non-cash items increasing
Consolidated Net Income for such period, in each case for the Issuer and its
Subsidiaries for such period determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, the total interest
expense of the Issuer and its Subsidiaries determined in accordance with GAAP,
PLUS, to the extent not included in such interest expense (i) interest expense
attributable to Capitalized Lease Obligations, (ii) capitalized interest, (iii)
non-cash interest expense, (iv) commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance
financing, (v) interest actually paid by the Issuer or any such Subsidiary under
any Guarantee of Indebtedness or other obligation of any other Person, (vi) net
payments (whether positive or negative) pursuant to Interest Rate Agreements and
(vii) the cash contributions to any employee stock ownership plan or similar
trust to the extent such contributions are used by such plan or trust to pay
interest or fees to any Person (other than the Issuer) in connection with
Indebtedness incurred by such plan or trust and less (a) to the extent included
in such interest expense, the amortization of capitalized debt issuance costs
and (b) interest income.
"Consolidated Net Income" means, for any period, the consolidated net income
(loss) of the Issuer and its consolidated Subsidiaries determined in accordance
with GAAP.
"Consolidated Net Worth" means the total of the amounts shown on the balance
sheet of the Issuer and its consolidated Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the
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end of the most recent fiscal quarter of the Issuer ending prior to the taking
of any action for the purpose of which the determination is being made and for
which financial statements are available (but in no event ending more than 135
days prior to the taking of such action), as (i) the par or stated value of all
outstanding Capital Stock of the Issuer plus (ii) paid in capital or capital
surplus relating to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any amounts attributable
to Disqualified Stock.
"Designated Senior Indebtedness" means any Senior Indebtedness in the case
of the Issuer, or Guarantor Senior Indebtedness in the case of a Subsidiary
Guarantor which, at the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of determination, the holders
thereof, are committed to lend up to, at least $5 million and is specifically
designated by the Issuer or such Subsidiary Guarantor in the instrument
evidencing or governing such Senior Indebtedness or Guarantor Senior
Indebtedness as "Designated Senior Indebtedness" for purposes of the
Appreciation Note Indenture; PROVIDED, HOWEVER, that the Indebtedness of the
Company under the Notes, and the Subsidiary Guarantee of each Subsidiary
Guarantor under its Subsidiary Guarantee, shall always constitute Designated
Senior Indebtedness.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder, or any
successor statute or statutes thereto.
"fair market value" means, with respect to any asset or property, the price
which could be negotiated in an arm's-length, free market transaction, for cash,
between a willing seller and a willing and able buyer, neither of whom is under
undue pressure or compulsion to complete the transaction. Fair market value
shall be determined by the Board of Directors of the Issuer acting reasonably
and in good faith and shall be evidenced by a Board Resolution of the Board of
Directors of the Issuer delivered to the Trustee.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect as of the date of the Appreciation Note Indenture,
including those 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 approved by a significant segment
of the accounting profession. All computations based on GAAP contained in the
Indenture shall be computed in conformity with GAAP.
"Group" means any "group" for purposes of Section 13(d) of the Exchange Act.
"Guarantee" means any obligation, contingent or otherwise, of any Person
directly or indirectly guaranteeing any Indebtedness of any other Person and any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness of such other Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for purposes of assuring in any
other manner the obligee of such Indebtedness of the payment thereof or to
protect such obligee against loss in respect thereof (in whole or in part);
PROVIDED, HOWEVER, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning.
"Guarantor Senior Indebtedness" means, with respect to a Subsidiary
Guarantor, whether outstanding on the Issue Date or thereafter issued, all
Guarantees by such Subsidiary Guarantor of Senior Indebtedness of the Issuer and
all other Indebtedness of such Subsidiary Guarantor, including interest and fees
thereon, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is expressly provided that the obligations
of such Subsidiary Guarantor in respect of such Indebtedness are not superior in
right of payment to the obligations of such Subsidiary Guarantor under the
Guarantee of the Appreciation Notes; PROVIDED, HOWEVER, that Guarantor Senior
Indebtedness shall not include (1) any obligations of such Subsidiary Guarantor
to the Issuer or any other Subsidiary of the Issuer
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or (2) any Indebtedness, Guarantee or obligation of such Subsidiary Guarantor
that is expressly subordinate or junior in right of payment to any other
Indebtedness, Guarantee or obligation of such Subsidiary Guarantor, including
any Guarantor Subordinated Indebtedness of such Subsidiary Guarantor.
"Guarantor Subordinated Indebtedness" means, with respect to a Subsidiary
Guarantor, the obligations of such Subsidiary Guarantor under the Guarantee of
the Appreciation Notes and any other Indebtedness of such Subsidiary Guarantor
that specifically provides that such Indebtedness is to rank PARI PASSU in right
of payment with the obligations of such Subsidiary Guarantor under the Guarantee
of the Appreciation Notes.
"Incur" means issue, assume, guarantee, incur or otherwise become liable
for.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if any)
in respect of indebtedness of such Person for borrowed money, (ii) the principal
of and premium (if any) in respect of obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person in respect of letters of credit or other similar instruments
(including reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing obligations (other than
obligations described in clauses (i), (ii) and (v) ) entered into in the
ordinary course of business of such Person to the extent that such letters of
credit are not drawn upon or, if and to the extent drawn upon, such drawing is
reimbursed no later than the third business day following receipt by such Person
of a demand for reimbursement following payment on the letter of credit), (iv)
all obligations of such Person to pay the deferred and unpaid purchase price of
property or services (except (x) trade payables and accrued expenses (including
accrued management fees under the Administrative Managment Agreements) incurred
in the ordinary course of business and (y) contingent or "earnout" payment
obligations in respect of any business acquired by the Issuer or any Restricted
Subsidiary), which purchase price is due more than six months after the date of
placing such property in service or taking delivery and title thereto or the
completion of such services, (v) all Capitalized Lease Obligations and all
Attributable Indebtedness of such Person, (vi) all Indebtedness of other Persons
secured by a lien on any asset of such Person, whether or not such Indebtedness
is assumed by such Person, (vii) all Indebtedness of other Persons to the extent
Guaranteed by such Person, (viii) the amount of all obligations of such Person
with respect to the redemption, repayment or other and (viii) to the extent not
otherwise included in this definition, obligations under Currency Agreements and
Interest Rate Agreements.
"Interest Rate Agreement" means with respect to any Person any interest rate
protection agreement, interest rate future agreement, interest rate option
agreement, interest rate swap agreement, interest rate cap agreement, interest
rate collar agreement, interest rate hedge agreement or other similar agreement
or arrangement as to which such Person is party or a beneficiary.
"Initial Public Offering" means an offering or offerings of Capital Stock of
the Issuer under one or more effective registration statements under the
Securities Act such that, after giving effect thereto, such offerings result in
aggregate cash proceeds being received by the Issuer and the persons selling
such Capital Stock of at least $25 million before deduction of underwriter's
discounts and other expenses, as a result of such Capital Stock is listed or
admitted to trading on a national securities exchange or quoted by NASDAQ.
"Issue Date" means the date on which the Appreciation Notes are originally
issued.
"Managed Affiliate," solely for purposes of this Description of Appreciation
Notes, means a Person at least 90% of the Capital Stock of which is owned,
directly or indirectly, by Alan R. Brill.
"Managed Affiliate Notes" mean any promissory notes of a Managed Affiliate,
issued to the Issuer or a Subsidiary.
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"Media Cashflow" for any period means for any Person an amount equal to
Consolidated EBITDA for such period plus interest income received in respect of
the Managed Affiliate Notes during such period and the following to the extent
deducted in calculating such Consolidated EBITDA (i) management fees charged by
BMCLP under the Administrative Management Agreements, (ii) expenses accruing
under Performance Compensation Agreements , (iii) consulting fees payable in
connection with acquisitions and (iv) fees paid under Time Brokerage Agreements.
"Officer" means the Chairman of the Board, the Vice-Chairman of the Board,
the Chief Executive Officer, the Chief Financial Officer, the President, any
Vice-President, the Treasurer or the Secretary of the Issuer.
"Officer's Certificate" means a certificate signed by two Officers of the
Issuer at least one of whom shall be the principal executive, financial or
accounting officer of the Issuer.
"Opinion of Counsel" means a written opinion, in form and substance
acceptable to the Trustee, from legal counsel who is acceptable to the Trustee.
"Paying Agent" means United States Trust Company of New York.
"Performance Compensation Agreement" means any agreements between the Issuer
or any Restricted Subsidiary and any executive officer of such Subsidiary
pursuant to which such Subsidiary provides deferred compensation to such officer
by crediting amounts (as determined under a formula set forth in such agreement)
to an identified account for the benefit of such executive officer.
"Person" means any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization, government or any agency or political subdivision thereof or any
other entity.
"Related Brill Party" means (A) the spouse or immediate family member of
Alan R. Brill or (B) any trust, corporation, partnership or other entity, the
beneficiaries, shareholders, partners, members, owners or Persons beneficially
holding an 80% or more controlling interest of which consist of Alan R. Brill
and/or such other Persons referred to in the immediately preceding clause (A).
"Representative" means the trustee, agent or representative (if any) for an
issue of Senior Indebtedness.
"Sale/Leaseback Transaction" means an arrangement relating to property now
owned or hereafter acquired whereby the Issuer or a Subsidiary transfers such
property to a Person and the Issuer or a Subsidiary leases it from such Person.
"Sale of the Company" means (i) any sale, lease, exchange or other transfer
(in one transaction or in a series of transactions) of all or substantially all
of the assets of the Issuer or the Issuer and its Subsidiaries on a consolidated
basis or (ii) the acquisition by any Person or Group (other than Alan R. Brill
or any Related Brill Party) of the power, directly or indirectly, to vote or
direct the voting of securities having more than 50% of the ordinary voting
power for the election of directors of the Issuer, or any direct or indirect
holding company thereof.
"Senior Indebtedness" in the case of the Appreciation Notes means, whether
outstanding on the Issue Date or thereafter issued, all obligations under the
Notes and all other Indebtedness of the Issuer, including interest and fees
thereon, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that the obligations in respect
of such Indebtedness are not superior in right of payment to the Appreciation
Notes; PROVIDED, HOWEVER, that Senior Indebtedness will not include any
obligation of the Issuer to any Subsidiary or any Subordinated Obligations.
"Specified Event Purchase Price" means for an Appreciation Note a redemption
price equal to (i) in the case of a redemption with respect to an Initial Public
Offering, the price at which Membership Interests are sold in such Initial
Public Offering (less underwriting discounts and commissions, if any),
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which represent a percentage interest in BMC equal to the Specified Percentage
of such Appreciation Note, (ii) in the case of a Sale of the Company as defined
in clause (i) of the definition thereof, the amount equal to the Specified
Percentage of such Appreciation Note of the sum of the aggregate fair market
value of all consideration received by the Issuer and its Subsidiaries, net of
any debt repaid therewith, net of ordinary and customary transaction expenses of
the related transfer and the fair market value of the Issuer as determined after
giving effect to such sale, and (iii) in the case of a redemption with respect
to Sale of the Company defined in clause (ii) of the definition thereof, the
price at which Membership Interests are sold in such Sale of the Company or in
the transaction which resulted in such Sale of the Company, which represent a
percentage interest in BMC equal to the Specified Percentage of such
Appreciation Notes, and (iv) in the case of a redemption with respect to a
liquidation of the Company, an amount equal to the fair market value of the
distribution received by Membership Interests in an amount equal to the
Specified Percentage of such Appreciation Note in connection with such
liquidation.
"Stated Maturity" means, with respect to any security, the date specified in
such security as the fixed date on which the payment of principal of such
security is due and payable, including pursuant to any mandatory redemption
provision.
"Subordinated Obligations" means, with respect to the Issuer or any
Subsidiary Guarantor, any Indebtedness of the Issuer or such Subsidiary
Guarantor, as the case may be (whether outstanding on the Issue Date or
thereafter incurred) which is expressly subordinate or junior in right of
payment to the Appreciation Notes or such Subsidiary Guarantor's Guarantee of
the Appreciation Notes, as the case may be, in each case pursuant to a written
agreement.
"Subsidiary" of any Person means any corporation, association, partnership
or other business entity of which more than 50% of the total voting power of
shares of Capital Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by (i) such Person, (ii) such Person and one
or more Subsidiaries of such Person or (iii) one or more Subsidiaries of such
Person. Unless otherwise specified herein, each reference to a Subsidiary shall
refer to a Subsidiary of the Issuer.
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CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary describes the material United States federal income
tax consequences of the ownership and disposition of the Securities. This
summary is based on the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), administrative pronouncements, judicial decisions and
existing and proposed United States Treasury Regulations, changes to any of
which subsequent to the date of this Prospectus may affect the tax consequences
described herein (possibly retroactively). This summary discusses only
Securities held as capital assets within the meaning of Section 1221 of the
Code. It does not discuss all of the tax consequences that may be relevant to a
holder in light of its particular circumstances or to holders subject to special
rules such as certain financial institutions, insurance companies, tax-exempt
organizations, dealers or traders in securities or currencies, holders who hold
Securities as a position in a "straddle" or as part of a "hedging," "conversion"
or "integrated" transaction, holders whose functional currency is other than the
U.S. dollar or holders that are not U.S. Holders (as defined below). Persons
considering the Exchange Offer should consult their own tax advisors with regard
to the application of the United States federal income tax laws to their
particular situations as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.
As used herein, the term "U.S. Holder" means a holder of a Note or
Appreciation Note, as the case may be, that for United States federal income tax
purposes is (i) a citizen or resident of the United States, (ii) a corporation
or partnership created or organized in or under the laws of the United States or
of any State thereof (including the District of Columbia), (iii) an estate the
income of which is subject to United States federal income taxation regardless
of its source or (iv) a trust if (A) a U.S. court is able to exercise primary
supervision over the trust's administration and (B) one or more United States
persons have the authority to control all of the trust's substantial decisions.
Notwithstanding the preceding sentence, to the extent provided in United States
Treasury Regulations, certain trusts in existence on August 20, 1996, and
treated as United States persons prior to such dates, that elect to continue to
be treated as United States persons also will be U.S. Holders.
ALLOCATION OF THE ISSUE PRICE BETWEEN A NOTE AND AN APPRECIATION NOTE
The Original Notes and Original Appreciation Notes initially were issued
together as units (the "Units"). The "issue price" of a Unit for United States
federal income tax purposes was $922. the Company intends to treat $899.63 of
the issue price of a Unit as allocable to the Note (which amount the Company
will therefore treat as its "issue price" for United States federal income tax
purposes) and $22.37 as allocable to the Appreciation Note (which amount the
Company will therefore treat as its "issue price" for United States federal
income tax purposes). The Company intends to file information returns with the
Internal Revenue Service (the "IRS") based on such allocation.
The Company's allocation of the issue price is binding on a U.S. Holder for
United States federal income tax purposes unless the holder discloses the use of
a different allocation in its United States federal income tax return for the
year in which the Unit was acquired. However, the Company's allocation is not
binding on the IRS, and there can be no assurance that the IRS will not
challenge such allocation.
EXCHANGE OFFER
The exchange of Original Securities for Exchange Securities by a U.S. Holder
pursuant to the Exchange Offer should not constitute a taxable exchange for
United States federal income tax purposes. A U.S. Holder should not recognize
gain or loss upon the receipt of an Exchange Security pursuant to the Exchange
Offer and should be required to continue to include interest on the Exchange
Security in gross income for United States federal income tax purposes in the
manner and to the extent described below. A U.S. Holder's holding period for an
Exchange should include the holding period for the original note exchanged
pursuant to the Exchange Offer and such holder's adjusted basis in an Exchange
Security should be the same as such holder's adjusted basis in such Original
Security.
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ORIGINAL ISSUE DISCOUNT
BMC agrees, and each holder of an Appreciation Note by acceptance of an
Appreciation Note will agree, to treat the Appreciation Notes as indebtedness
for all United States federal income tax purposes and the following discussion
assumes that the classification of the Appreciation Notes as indebtedness will
be respected for United States federal income tax purposes. See "--Potential
Classification as Membership Interests."
Solely for purposes of the rules regarding original issue discount ("OID"),
as such term is defined in the Internal Revenue Code of 1986, as amended, and
the U.S. Treasury Regulations issued thereunder, the Notes and the Appreciation
Notes will likely be aggregated and treated as a single debt instrument (the
"Aggregated Note"). For all other purposes under the Code, the Notes and the
Appreciation Notes will be treated as separate instruments.
The Aggregated Note will be considered to be issued with OID. As a result, a
U.S. Holder generally will be required to include in gross income (as interest)
the sum of the "daily portions" of OID on such Aggregated Note calculated under
a constant yield method for all days during the taxable year that the U.S.
Holder owns such Note. In addition, a U.S. Holder will be required to include
"qualified stated interest" (defined below) on such Aggregated Note in gross
income (as interest) under such U.S. Holder's regular method of tax accounting.
The amount of OID on the Aggregated Note allocable to an accrual period
generally is determined by multiplying the "adjusted issue price" (as defined
below) of such Note at the beginning of the accrual period by the yield to
maturity of such Note (adjusting the yield to take into account the length of
the particular accrual period) and subtracting from that product the amount
payable as qualified stated interest during such accrual period. Generally, an
accrual period is any period elected by a U.S. Holder, provided that each
accrual period is no longer than one year and that each interest payment date is
the first or last day of the accrual period. The "adjusted issue price" of the
Aggregated Note at the beginning of any accrual period will be the sum of its
issue price and the amount of OID allocable to all prior accrual periods,
reduced by the amount of all payments other than qualified stated interest
payments made with respect to such Note in all prior accrual periods. The "issue
price" of the Aggregated Note for this purpose generally is the first price at
which a substantial amount of the Units are sold to the public (excluding bond
houses, brokers or similar persons or organizations acting in the capacity of
underwriters, placement agents or wholesalers). "Qualified stated interest"
generally is stated interest that is unconditionally payable in cash or property
(other than debt instruments of the issuer) at least annually at a single fixed
rate during the entire term of the debt instrument. The "stated redemption price
at maturity" of the Aggregated Note will be the sum of all payments provided for
under such Note other than qualified stated interest payments.
Accordingly, a U.S. Holder will be required to include in gross income (as
interest), in the manner set forth above, (i) qualified stated interest payments
on the Aggregated Note and (ii) OID accruing on such Note. Stated interest on
the Aggregated Note should be treated as qualified stated interest for United
States federal income tax purposes to the extent of 7.5% per annum on the Note
("QSI"). The total amount of OID on the Aggregated Note will equal the total of
(i) the amount by which the issue price of the Note is less than the principal
amount thereof and (ii) the amount by which stated interest payments payable
under the Aggregated Note exceed QSI. BMC believes that it is significantly more
likely than not that the call option on the Appreciation Notes will be exercised
on June 15, 1999. Accordingly, the yield to maturity of the Aggregated Note will
be determined as if such option were exercised on such date, thus ignoring
possible payments in excess of $3 million. If such call is not exercised, solely
for purposes of the OID rules, the Appreciation Notes would be treated as
retired and then reissued on such date at the adjusted issue price thereof and
the amount of OID on the Aggregated Note would increase substantially. Moreover,
due to the interaction of the put and call provisions, if an Appreciation Note
remains outstanding after June 15, 2002, a deemed disposition of such Note could
occur for U.S. federal income tax purposes.
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A U.S. Holder's tax basis in a Note will be increased by the amount of any
OID included in the U.S. Holder's gross income with respect to such Note under
the rules discussed above and decreased by the amount of any payment with
respect to such Note other than qualified stated interest payments.
While each U.S. Holder will be required to accrue OID income under a
constant yield method, as described above, a U.S. Holder may also elect to
include in gross income all income that accrues on the Aggregated Note
(including stated interest and OID) under a constant yield method.
It is possible that the Internal Revenue Service (the "IRS") could assert
that the Additional Interest which BMC would be obligated to pay if the Exchange
Offer Registration Statement is not filed or declared effective within the time
periods set forth herein (or certain other actions are not taken) (as described
above under "Exchange Offer and Registration Rights") are "contingent payments"
for United States federal income tax purposes. If so treated, the Aggregated
Note would be treated as a contingent payment debt instrument and certain
adverse United States federal income tax consequences could result. However, the
United States Treasury Regulations issued by the IRS regarding debt instruments
that provide for one or more contingent payments provide that, for purposes of
determining whether a debt instrument is a contingent payment debt instrument,
remote or incidental contingencies are ignored. BMC believes that the
possibility of the payment of Additional Interest is remote and, accordingly,
does not intend to treat the Aggregated Note as a contingent payment debt
instrument.
BMC does not intend to treat the possibility of an optional or provisional
redemption or repurchase of the Notes or the Appreciation Notes as giving rise
to any additional accrual of OID or recognition of ordinary income upon
redemption, sale of exchange.
SALE, EXCHANGE OR RETIREMENT
Subject to the discussion of the Exchange Offer below, upon the sale,
exchange or retirement of a Note or an Appreciation Note (other than a
redemption of an Appreciation Note by BMC), a U.S. Holder would recognize gain
or loss, if any, equal to the difference between the amount realized on the
sale, exchange or retirement and the holder's adjusted tax basis in such Note.
Gain or loss recognized on the sale, exchange or retirement of such a Note will
generally be capital gain or loss. In the case of a noncorporate U.S. Holder,
the maximum marginal United States federal income tax rate applicable to such
gain will be lower than the maximum marginal United States federal income tax
rate applicable to ordinary income if such U.S. Holder's holding period for such
Notes exceeds one year and will be further reduced if such Notes were held for
more than 18 months. The use of capital losses by a U.S. Holder may be limited.
POTENTIAL CLASSIFICATION AS EQUITY INTERESTS
As indicated above, the IRS may assert that an Appreciation Note represents
an equity interest in BMC. In such case, a U.S. Holder of an Appreciation Note
would be required to include in gross income such U.S. Holder's distributive
share of income, gain, loss or deduction of BMC. Any amount so included in such
U.S. Holder's gross income will increase its adjusted tax basis in its equity
interest and any amount distributed to such U.S. Holder will reduce its adjusted
tax basis. Alternatively, payments under an Appreciation Note may be treated as
a "guaranteed payment" within the meaning of Section 707(c) of the Code. A
member receiving a "guaranteed payment" must include in gross income as ordinary
income the amount of such payment. U.S. Holders should consult their tax
advisors regarding the complex rules addressing United States federal income
taxation regarding interests in a partnership.
Holders of Appreciation Notes that are tax-exempt entities should note that
if the Appreciation Notes are treated as an equity interest in BMC for United
States federal income tax purposes that, as holders of a membership interest,
they may be subject to United States federal income tax on their distributive
share of BMC's income due to the application of Section 512 of the Code.
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BACKUP WITHHOLDING AND INFORMATION REPORTING
A 31% backup withholding tax and information reporting requirements apply to
certain payments of principal of, and premium, if any, and interest on, a
security and to the proceeds of the sale or redemption of an obligation, to
certain non-corporate U.S. Holders. Backup withholding will apply only if a U.S.
Holder (other than an exempt recipient, such as a corporation) (i) fails to
furnish its Taxpayer Identification Number ("TIN") which, in the case of an
individual, would be his or her Social Security number, (ii) furnishes an
incorrect TIN, (iii) is notified by the IRS that is has failed to properly
report payments of interest and dividends or (iv) under certain circumstances,
fails to certify, under penalty of perjury, that it has furnished a correct TIN
and has not been notified by the IRS that it is subject to backup withholding.
The amounts withheld under the backup withholding rules are not an additional
tax and may be refunded, or credited against the U.S. Holder's United States
federal income tax liability provided that the required information is furnished
to the IRS.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. HOLDERS OF
ORIGINAL SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO SPECIFIC
CONSEQUENCES TO SUCH PURCHASER OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF
SECURITIES INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND
FOREIGN TAX LAWS.
PLAN OF DISTRIBUTION
Each Participating Broker-Dealer that receives Exchange Securities for its
own account pursuant to the Exchange Offer must acknowledge that it will deliver
a prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a Participating Broker-Dealer in connection with resales of Exchange
Securities received in exchange for Original Securities where such Original
Securities were acquired as a result of market-making activities or other
trading activities. The Issuer has agreed that, for a period of 180 days after
consummation of the Exchange Offer, it will make this Prospectus, as amended or
supplemented, available to any Participating Broker-Dealer for use in connection
with any such resale. In addition, for a period of 90 days after the date of
this Prospectus, all dealers effecting transactions in the Exchange Securities
may be required to deliver a prospectus.
The Issuer will not receive any proceeds from any sales of Exchange
Securities by Participating Broker-Dealers. Exchange Securities received by
Participating Broker-Dealers for their own account pursuant to the Exchange
Offer may be sold from time to time in one or more transactions in the over-the-
counter market, in negotiated transactions, through the writing of options on
the Exchange Securities or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such Participating Broker-Dealer
and/or the purchasers of any such Exchange Securities. Any Participating
Broker-Dealer that resells the Exchange Securities that were received by it for
its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Securities may be deemed to be
an "underwriter" within the meaning of the Securities Act, and any profit on any
such resale of Exchange Securities and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letters of Transmittal state that, by acknowledging that it
will deliver and by delivering a prospectus, a Participating Broker-Dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the Expiration Date, the Issuer will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any Participating Broker-Dealer that requests such documents
in the Letters of Transmittal.
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BOOK-ENTRY; DELIVERY AND FORM
The Original Securities were each issued in part as single, permanent global
certificates in definitive, fully registered form (the "Original Global
Securities") and in part in registered certificated form ("Certificated
Securities"). Except for Exchange Securities issued to Non-Global Purchasers (as
defined below), the Exchange Securities will each initially be issued in the
form of one or more global certificates (collectively, the "Exchange Global
Securities"). The Original Global Securities were deposited on the date of the
closing of the Offering, and the Exchange Global Securities will be deposited on
the date of closing of the Exchange Offer with, or on behalf of, the Depository
and registered in the name of a nominee of DTC.
Securities (i) originally purchased by or transferred to foreign purchasers
or Accredited Investors who are not QIBs or (ii) held by QIBs who elect to take
physical delivery of their certificates instead of holding their interest
through Global Securities (and which are thus ineligible to trade through DTC)
(collectively referred to herein as the "Non-Global Purchasers") will be issued
as Certificated Securities. Upon the transfer to a QIB of any Certificated
Security initially issued to a Non-Global Purchaser, such Certificated Security
will, unless the transferee requests otherwise or such Global Security has
previously been exchanged in whole for Certificated Securities, be exchanged for
an interest in such Global Security. "Global Securities" means the Original
Global Securities or the Exchange Global Securities, as the case may be.
THE GLOBAL SECURITIES
The Company expects that pursuant to procedures established by DTC (i) upon
the issuance of the Global Securities, DTC or its custodian will credit, on its
internal system, the principal amount of Notes or Appreciation Notes, as the
case may be, of the individual beneficial interest represented by such Global
Security to the respective accounts for persons who have accounts with DTC and
(ii) ownership of beneficial interests in the Global Securities will be shown
on, and the transfer of such ownership will be effected only through, records
maintained by DTC or its nominee (with respect to interests of persons who have
accounts with DTC ("Participants")) and the records of Participants (with
respect to interests of persons other than Participants). Ownership of
beneficial interests in the Global Securities will be limited to Participants or
persons who hold interests through Participants. QIBs may hold their interests
in the Global Securities directly through DTC, if they are Participants in such
system, or indirectly through organizations which are Participants in such
system.
So long as DTC or its nominee is the registered owner or holder of any of
the Global Securities, DTC or such nominee, as the case may be, will be
considered the sole owner or holder of the Note or Appreciation Note represented
by the applicable Global Security for all purposes under the Indenture or
Appreciation Note Indenture, as the case may be. No beneficial owner of an
interest in the Global Securities will be able to transfer that interest except
in accordance with DTC's procedures, in addition to those provided for under the
Indenture or Appreciation Note Indenture, as the case may be.
Payments on the Global Securities will be made to DTC or its nominee, as the
case may be, as the registered owner thereof. None of the Company, the Trustee
or the Transfer Agent will have any responsibility or liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests in the Global Security or for maintaining, supervising or reviewing
any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any payment in
respect of a Global Security, will credit Participants' accounts with payments
in amounts proportionate to their respective beneficial interests in the
applicable Global Security as shown on the records of DTC or its nominee. The
Company also expects that payments by Participants to owners of beneficial
interests in the Global Securities held through such Participants will be
governed by standing instructions and customary practice,
136
<PAGE>
as is now the case with securities held for the accounts of customers registered
in the names of nominees for such customers. Such payments will be the
responsibility of such Participants.
Transfers between Participants in DTC will be effected in the ordinary way
in accordance with DTC rules and will be settled in clearinghouse funds. If a
holder requires physical delivery of a Certificated Security for any reason,
including to sell such Security to persons in states which require physical
delivery of Certificated Securities, or to pledge such securities, such holder
must transfer its interest in the applicable Global Security in accordance with
the normal procedures of DTC.
DTC has advised the Company that it will take any action permitted to be
taken by a holder of Securities (including the presentation of the Securities
for exchange as described below) only at the direction of one or more
Participants to whose account the DTC interests in the Global Securities are
credited and only in respect of such portion of the Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Indenture, DTC will exchange the Global
Securities representing Notes for Certificated Securities, which it will
distribute to its Participants.
DTC has advised the Company as follows: DTC is a limited purpose trust
company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its Participants and facilitate the clearance and settlement of
securities transactions between Participants through electronic book-entry
changes in accounts of its Participants, thereby eliminating the need for
physical movement of certificates. Participants include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Indirect access to the DTC system is available to others such as
banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the Global Securities among Participants of DTC, it is
under no obligation to perform such procedures, and such procedures may be
discontinued at any time. None of the Company, the Initial Purchaser or any
other person will have any responsibility for the performance by DTC or its
Participants or indirect participants of their respective obligations under the
rules and procedures governing their operations.
CERTIFICATED SECURITIES
If DTC is at any time unwilling or unable to continue as depositary for the
Global Securities and a successor depositary is not appointed by the Company
within 90 days, Certificated Securities will be issued in exchange for the
Global Securities.
LEGAL MATTERS
Certain legal matters with respect to the Exchange Notes and the Exchange
Appreciation Notes offered hereby, including federal income tax consequences,
will be passed upon for the Issuer by Carter, Ledyard & Milburn, New York, New
York. As to matters of Virginia law, Carter, Ledyard & Milburn will rely upon
the opinion of Thompson & McMullan, P.C., Richmond, Virginia.
EXPERTS
The combined financial statements of The Radio and Newspaper Businesses of
Alan R. Brill at February 28, 1997 and February 29, 1996, and for each of the
three years in the period ended February 28, 1997, appearing in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon appearing elsewhere herein, and
are included in reliance upon such report given upon the authority of such firm
as experts in accounting and auditing.
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AVAILABLE INFORMATION
The Issuer has filed with the Commission a Registration Statement on Form
S-4 (together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Exchange Securities
offered hereby. This Prospectus does not contain all the information set forth
in the Registration Statement, certain parts of which are omitted in accordance
with the rules and regulations of the Commission, and to which reference is
hereby made. Statements contained in this Prospectus as to the contents of any
contract, agreement or any other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statement, reference is made to such exhibit
to the Registration Statement for a more complete description of the matter
involved, and each such statement shall be deemed qualified in its entirety by
such reference.
The Registration Statement can be inspected and copied at the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549, and at the Commission's regional offices at Seven World Trade Center,
Suite 1300, New York, New York 10048, and 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of the Registration Statement can be obtained
from the Public Reference Section of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20459, at prescribed rates. The Issuer is filing
the Registration Statement with the Commission electronically. The Commission
maintains a web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of that Web site is http://www.sec.gov.
The Issuer intends, and is required by the terms of the Indenture and the
Appreciation Note Indenture to furnish the holders of the Exchange Notes and
Exchange Appreciation Notes, respectively, with annual reports containing
consolidated financial statements audited by its independent certified public
accountants and with quarterly reports containing unaudited condensed
consolidated financial statements for each of the first three quarters of each
fiscal year.
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THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
INDEX OF FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
CONDENSED COMBINED FINANCIAL STATEMENTS--AUGUST 31, 1996 AND 1997 (UNAUDITED)
Condensed Combined Statements of Financial Position........................................................ F-2
Condensed Combined Statements of Operations................................................................ F-3
Condensed Combined Statement of Stockholder's and Members' Deficiency...................................... F-4
Condensed Combined Statements of Cash Flows................................................................ F-5
Notes to Condensed Combined Financial Statements........................................................... F-6
COMBINED FINANCIAL STATEMENTS--FEBRUARY 28, 1995, FEBRUARY 29, 1996 AND FEBRUARY 28, 1997
Report of Independent Auditors............................................................................. F-7
Combined Statements of Financial Position.................................................................. F-8
Combined Statements of Operations.......................................................................... F-9
Combined Statements of Stockholder's and Members' Deficiency............................................... F-10
Combined Statements of Cash Flows.......................................................................... F-11
Notes to Combined Financial Statements..................................................................... F-12
</TABLE>
F-1
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
CONDENSED COMBINED STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
FEBRUARY 28, AUGUST 31,
1997 1997
---------------- --------------
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents (including $100,000 deposit at August 31, 1997).... $ 775,363 $ 351,057
Accounts receivable, net..................................................... 3,165,668 4,037,687
Inventories.................................................................. 323,483 318,638
Other current assets......................................................... 208,598 392,588
---------------- --------------
Total current assets........................................................... 4,473,112 5,099,970
Notes receivable from managed affiliates....................................... 412,007 14,315,962
Property and equipment......................................................... 16,398,115 16,854,777
Less: Accumulated depreciation................................................. 7,831,300 8,318,276
---------------- --------------
Net property and equipment..................................................... 8,566,815 8,536,501
Goodwill and FCC licenses, net................................................. 5,407,598 5,375,217
Covenants not to compete, net.................................................. 284,414 3,190,391
Other assets, net.............................................................. 1,891,090 1,641,981
Other.......................................................................... 271,553 251,956
---------------- --------------
7,854,655 10,459,545
Due from affiliates............................................................ 5,135,648 4,157,453
---------------- --------------
$ 26,442,237 $ 42,569,431
---------------- --------------
---------------- --------------
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Short-term note.............................................................. $ 500,000 $ 500,000
Notes payable to stockholder and affiliates.................................. 378,637 617,950
Accounts payable............................................................. 701,826 897,985
Accrued expenses............................................................. 996,319 657,525
Distributions payable........................................................ -- 3,000,000
Current maturities of long-term obligations.................................. 882,439 729,315
---------------- --------------
Total current liabilities...................................................... 3,459,221 6,402,775
Long-term obligations.......................................................... 49,592,989 67,316,850
Capital deficiency:
Capital...................................................................... 4,960 6,750
Additional paid-in capital................................................... 15,984,309 1,792,852
Accumulated deficit.......................................................... (42,599,242) (32,949,796)
---------------- --------------
Net capital deficiency......................................................... (26,609,973) (31,150,194)
---------------- --------------
$ 26,442,237 $ 42,569,431
---------------- --------------
---------------- --------------
</TABLE>
See accompanying note.
F-2
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
CONDENSED COMBINED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31
----------------------------
<S> <C> <C>
1996 1997
------------- -------------
Revenues........................................................................... $ 13,706,763 $ 15,100,057
Operating expenses:
Operating departments............................................................ 9,539,845 10,104,343
Incentive plan................................................................... 316,500 485,000
Management fees.................................................................. 979,792 1,071,714
Time brokerage agreement fee, net................................................ (78,500) 24,000
Consulting....................................................................... 30,665 117,996
Depreciation..................................................................... 494,038 508,312
Amortization..................................................................... 176,049 240,715
------------- -------------
11,458,389 12,552,080
------------- -------------
Operating income................................................................... 2,248,374 2,547,977
Other income (expense):
Interest--managed affiliates..................................................... -- 563,582
Interest--stockholder and affiliates, net........................................ 53,975 128,078
Interest--other, net............................................................. (3,396,210) (4,390,195)
Amortization of deferred financing costs......................................... (343,993) (282,876)
Gain (loss) on sale of assets, net............................................... 1,066,215 (8,948)
Other, net....................................................................... (30,969) (21,963)
------------- -------------
(2,650,982) (4,012,322)
------------- -------------
Loss before income taxes........................................................... (402,608) (1,464,345)
Income tax provision............................................................... 84,000 77,866
------------- -------------
Net loss........................................................................... $ (486,608) $ (1,542,211)
------------- -------------
------------- -------------
</TABLE>
See accompanying note.
F-3
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
CONDENSED COMBINED STATEMENT OF STOCKHOLDER'S AND MEMBERS' DEFICIENCY
(UNAUDITED)
SIX MONTHS ENDED AUGUST 31, 1997
<TABLE>
<CAPTION>
ADDITIONAL NET
PAID-IN ACCUMULATED CAPITAL
CAPITAL CAPITAL DEFICIT DEFICIENCY
--------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance at February 28, 1997........................... $ 4,960 $ 15,984,309 $ (42,599,242) $ (26,609,973)
Capital contributions.................................. 1,990 -- -- 1,990
Net loss............................................... -- -- (1,542,211) (1,542,211)
Liquidation of subsidiaries............................ (200) (14,191,457) 14,191,657 --
Dividends.............................................. -- -- (3,000,000) (3,000,000)
--------- -------------- -------------- --------------
Balance at August 31, 1997............................. $ 6,750 $ 1,792,852 $ (32,949,796) $ (31,150,194)
--------- -------------- -------------- --------------
--------- -------------- -------------- --------------
</TABLE>
See accompanying note.
F-4
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
CONDENSED COMBINED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31
----------------------------
1996 1997
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss............................................................................ $ (486,608) $ (1,542,211)
Adjustments to reconcile net loss to net cash provided by (used in) operating
activities:
Depreciation and amortization.................................................... 1,014,080 1,031,903
Management fees accrual.......................................................... (820,647) 471,197
Affiliate interest accrual....................................................... (61,285) (128,079)
Additional interest accrual...................................................... 721,109 1,122,611
Incentive plan accrual........................................................... 316,500 485,000
(Gain) loss on sale of assets, net............................................... (1,066,215) 8,948
Changes in operating assets and liabilities:
Accounts receivable............................................................. (505,307) (872,019)
Other current assets............................................................ 72,320 (178,155)
Accounts payable................................................................ (192,695) 196,159
Other accrued expenses.......................................................... (400,560) (338,795)
------------- -------------
Net cash provided by (used in) operating activities................................. (1,409,308) 256,559
INVESTING ACTIVITIES
Purchase of property and equipment.................................................. (304,005) (408,373)
Purchase of newspaper, net of cash acquired......................................... (17,222) --
Proceeds from sale of radio station................................................. 1,917,544 --
Proceeds from sale of assets........................................................ 12,190 30,915
Payment for non-competition agreement............................................... -- (3,000,000)
Increase in other assets............................................................ (438,853) (37,676)
Loans to managed affiliates......................................................... -- (13,903,955)
------------- -------------
Net cash provided by (used in) investing activities................................. 1,169,654 (17,319,089)
FINANCING ACTIVITIES
Increase (decrease) in amounts due to stockholder and affiliates.................... (293,586) 867,862
Increase in deferred financing costs................................................ (181,041) (85,266)
Principal payments on long-term obligations......................................... (482,117) (349,437)
Proceeds from long-term borrowings.................................................. 76,504 16,203,075
Capital contributions............................................................... 200 1,990
------------- -------------
Net cash provided by (used in) financing activities................................. (880,040) 16,638,224
------------- -------------
Net decrease in cash and cash equivalents........................................... (1,119,694) (424,306)
Cash and cash equivalents at beginning of period.................................... 2,074,739 775,363
------------- -------------
Cash and cash equivalents at end of period.......................................... $ 955,045 $ 351,057
------------- -------------
------------- -------------
Supplemental disclosures of cash flow information:
Interest paid..................................................................... $ 3,261,776 $ 3,695,734
Income taxes paid................................................................. 91,000 70,000
</TABLE>
See accompanying note.
F-5
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTE TO CONDENSED COMBINED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed combined financial statements as of August 31,
1996 and 1997 and for the periods then ended are unaudited. These statements
have been prepared in accordance with the rules and regulations of the
Securities and Exchange Commission. These statements should be read in
conjunction with the Company's audited combined financial statements for the
year ended February 28, 1997, and the notes therein included elsewhere herein.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations. In the
opinion of the Company's management, the condensed combined financial statements
for the unaudited interim periods presented include all adjustments of a normal
recurring nature necessary to fairly present the results of such interim periods
and the financial position as of the end of said periods. Results for such
interim periods are not necessarily indicative of the results for the respective
entire years.
F-6
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Alan R. Brill
We have audited the accompanying combined statements of financial position
of The Radio and Newspaper Businesses of Alan R. Brill as of February 28, 1997
and February 29, 1996, and the related combined statements of operations,
stockholder's and members' deficiency, and cash flows for each of the three
years in the period ended February 28, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the combined financial statements referred to above present
fairly, in all material respects, the combined financial position of The Radio
and Newspaper Businesses of Alan R. Brill at February 28, 1997 and February 29,
1996, and the combined results of their operations and their cash flows for each
of the three years in the period ended February 28, 1997, in conformity with
generally accepted accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
November 14, 1997,
except for Note 2 as to which
the date is December 12, 1997
and Note 10 and Note 12,
as to which the date is
December 30, 1997
F-7
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
COMBINED STATEMENTS OF FINANCIAL POSITION
<TABLE>
<CAPTION>
FEBRUARY 29 FEBRUARY 28
1996 1997
------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents........................................................ $ 2,074,739 $ 775,363
Accounts receivable, net of allowance for doubtful accounts of 1996-- $184,902
and 1997--$112,192............................................................. 2,967,540 3,165,668
Inventories...................................................................... 443,678 323,483
Other current assets............................................................. 193,249 208,598
------------- -------------
Total current assets............................................................... 5,679,206 4,473,112
Notes receivable from managed affiliates........................................... -- 412,007
Property and equipment............................................................. 17,991,335 16,398,115
Less: Accumulated depreciation..................................................... 9,177,746 7,831,300
------------- -------------
Net property and equipment......................................................... 8,813,589 8,566,815
Goodwill and FCC licenses, net of accumulated amortization of 1996-- $1,619,481 and
1997--$1,779,785................................................................. 5,298,744 5,407,598
Covenants not to compete, net of accumulated amortization of 1996-- $147,714 and
1997--$236,706................................................................... 247,575 284,414
Other assets, net of accumulated amortization of 1996--$831,843 and
1997--$1,250,740................................................................. 1,827,844 1,891,090
Other.............................................................................. 37,032 271,553
------------- -------------
7,411,195 7,854,655
Due from affiliates................................................................ 4,106,551 5,135,648
------------- -------------
$ 26,010,541 $ 26,442,237
------------- -------------
------------- -------------
LIABILITIES AND NET CAPITAL DEFICIENCY
Current liabilities:
Short-term note.................................................................. $ 500,000 $ 500,000
Notes payable to stockholder..................................................... 209,000 378,637
Accounts payable................................................................. 1,122,273 701,826
Accrued payroll and related expenses............................................. 397,362 399,131
Accrued interest................................................................. 327,853 372,394
Other accrued expenses........................................................... 172,516 224,794
Current maturities of long-term obligations...................................... 552,358 882,439
------------- -------------
Total current liabilities.......................................................... 3,281,362 3,459,221
Long-term obligations:
Senior notes..................................................................... 42,253,160 44,502,075
Obligations under capital leases................................................. 906,905 971,966
Unsecured and subordinated obligations........................................... 915,555 846,387
Incentive plan liability......................................................... 3,527,034 4,155,000
Less:Current maturities of long-term obligations................................. (552,358) (882,439)
------------- -------------
47,050,296 49,592,989
Due to affiliates.................................................................. 14,033,350 --
Capital deficiency:
Capital.......................................................................... 3,750 4,960
Additional paid-in capital....................................................... 948,852 15,984,309
Accumulated deficit.............................................................. (39,307,069) (42,599,242)
------------- -------------
Net capital deficiency............................................................. (38,354,467) (26,609,973)
------------- -------------
$ 26,010,541 $ 26,442,237
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
F-8
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
COMBINED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
YEAR ENDED
----------------------------------------------
<S> <C> <C> <C>
FEBRUARY 28 FEBRUARY 29 FEBRUARY 28
1995 1996 1997
-------------- -------------- --------------
Revenues......................................................... $ 23,186,957 $ 25,312,931 $ 27,036,215
Operating expenses:
Operating departments.......................................... 17,530,406 18,639,701 19,042,885
Incentive plan................................................. 633,688 1,467,034 627,966
Management fees................................................ 1,678,771 1,832,703 1,944,699
Time brokerage agreement fee, net.............................. -- -- (54,500)
Consulting..................................................... -- 37,493 140,992
Depreciation................................................... 896,885 995,414 1,025,543
Amortization................................................... 214,223 316,558 369,484
-------------- -------------- --------------
20,953,973 23,288,903 23,097,069
-------------- -------------- --------------
Operating income................................................. 2,232,984 2,024,028 3,939,146
Other income (expense):
Interest--stockholder and affiliates, net...................... (348,399) (293,956) 246,909
Interest--other, net........................................... (5,287,211) (6,338,941) (7,190,504)
Amortization of deferred financing costs....................... (205,851) (497,198) (488,712)
Gain (loss) on sale of assets, net............................. (55,783) 3,780 1,076,181
Other, net..................................................... (88,419) (84,067) (68,689)
-------------- -------------- --------------
(5,985,663) (7,210,382) (6,424,815)
-------------- -------------- --------------
Loss before income taxes and extraordinary item.................. (3,752,679) (5,186,354) (2,485,669)
Income tax provision (benefit)................................... 68,324 (38,869) 286,504
-------------- -------------- --------------
Loss before extraordinary item................................... (3,821,003) (5,147,485) (2,772,173)
Extraordinary item............................................... -- 6,915,435 --
-------------- -------------- --------------
Net income (loss)................................................ $ (3,821,003) $ 1,767,950 $ (2,772,173)
-------------- -------------- --------------
-------------- -------------- --------------
</TABLE>
See accompanying notes.
F-9
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
COMBINED STATEMENTS OF STOCKHOLDER'S AND MEMBERS' DEFICIENCY
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
<TABLE>
<CAPTION>
ADDITIONAL NET
PAID-IN ACCUMULATED CAPITAL
CAPITAL CAPITAL DEFICIT DEFICIENCY
--------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Balance at February 28, 1994............................ $ 3,550 $ 948,852 $ (37,254,016) $ (36,301,614)
Capital contribution.................................... 100 -- -- 100
Net loss................................................ -- -- (3,821,003) (3,821,003)
--------- ------------- -------------- --------------
Balance at February 28, 1995............................ 3,650 948,852 (41,075,019) (40,122,517)
Capital contribution.................................... 100 -- -- 100
Net income.............................................. -- -- 1,767,950 1,767,950
--------- ------------- -------------- --------------
Balance at February 29, 1996............................ 3,750 948,852 (39,307,069) (38,354,467)
Capital contributions................................... 1,210 15,035,457 -- 15,036,667
Net loss................................................ -- -- (2,772,173) (2,772,173)
Dividends............................................... -- -- (520,000) (520,000)
--------- ------------- -------------- --------------
Balance at February 28, 1997............................ $ 4,960 $ 15,984,309 $ (42,599,242) $ (26,609,973)
--------- ------------- -------------- --------------
--------- ------------- -------------- --------------
</TABLE>
See accompanying notes.
F-10
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
COMBINED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------------
FEBRUARY 28 FEBRUARY 29 FEBRUARY 28
1995 1996 1997
----------- ----------- -----------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income (loss)......................................................... ($3,821,003) $ 1,767,950 ($2,772,173)
Adjustments to reconcile net income (loss) to net cash provided by (used
in) operating activities:
Depreciation and amortization........................................... 1,111,108 1,311,972 1,395,027
Amortization of deferred financing costs................................ 205,851 313,481 488,712
Management fees accrual................................................. 590,851 293,806 (620,451)
Affiliate interest accrual.............................................. 599,216 463,594 1,842
Additional interest accrual............................................. 1,864,997 2,215,159 1,817,674
Incentive plan accrual.................................................. 633,688 1,467,034 627,966
(Gain) loss on sale of assets, net...................................... 55,783 (3,780) (1,076,181)
Extraordinary item...................................................... -- (6,915,435) --
Changes in operating assets and liabilities:
Accounts receivable................................................... (190,587) (251,820) (135,593)
Other current assets.................................................. (260,546) (192,561) 109,418
Accounts payable...................................................... 304,899 (480,039) (440,686)
Other accrued expenses................................................ (174,393) 47,805 91,521
----------- ----------- -----------
Net cash provided by (used in) operating activities....................... 919,864 37,166 (512,924)
INVESTING ACTIVITIES
Change in restricted cash................................................. 1,157,955 -- --
Insurance proceeds on destroyed assets.................................... 2,674,326 -- 244,293
Purchase of replacement assets............................................ (2,654,623) -- --
Purchase of property and equipment........................................ (973,805) (976,938) (1,268,847)
Purchase of newspaper, net of cash acquired............................... -- -- (17,222)
Purchase of radio stations................................................ -- (55,000) --
Proceeds from sale of radio station....................................... -- -- 1,917,544
Proceeds from sale of assets.............................................. 25,096 13,280 44,003
Loans to managed affiliates............................................... -- -- (408,401)
Increase in other assets.................................................. (349,225) (147,904) (452,554)
----------- ----------- -----------
Net cash provided by (used in) investing activities....................... (120,276) (1,166,562) 58,816
FINANCING ACTIVITIES
Increase (decrease) in amounts due to stockholder and affiliates.......... (592,216) 32,254 (79,309)
Increase in deferred financing costs...................................... -- (1,616,923) (491,168)
Principal payments on long-term obligations............................... (1,038,824) (36,241,465) (742,698)
Proceeds from long-term borrowings........................................ 1,179,247 40,479,877 142,697
Capital contributions..................................................... 100 100 845,210
Dividends................................................................. -- -- (520,000)
----------- ----------- -----------
Net cash provided by (used in) financing activities....................... (451,693) 2,653,843 (845,268)
----------- ----------- -----------
Net increase (decrease) in cash and cash equivalents...................... 347,895 1,524,447 (1,299,376)
Cash and cash equivalents at beginning of year............................ 202,397 550,292 2,074,739
----------- ----------- -----------
Cash and cash equivalents at end of year.................................. $ 550,292 $ 2,074,739 $ 775,363
----------- ----------- -----------
----------- ----------- -----------
Supplemental disclosures of cash flow information:
Interest paid........................................................... $4,099,643 $ 4,161,993 $6,116,898
Income taxes paid:
Federal............................................................... -- 646 80,000
State................................................................. 68,085 117,485 136,046
</TABLE>
See accompanying notes.
F-11
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
1. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The combined financial statements include the accounts of the following
radio and newspaper businesses (collectively referred to herein as the Company)
which are owned directly or indirectly by Alan R. Brill (Stockholder). The radio
businesses (collectively referred to herein as Radio) include: Brill Radio, Inc.
(BRI) and its subsidiary, Reading Radio, Inc. (RRI); Northland Broadcasting,
Inc. (NBI); Northland Broadcasting, LLC (NBL); Northland Holdings, LLC (NHL); NB
II, Inc. (NB2); Fargo-Moorhead Radio, Inc. (FMR); Central Missouri Broadcasting,
Inc. (CMB); CMB II, Inc. (CB2); Northern Colorado Radio, Inc. (NCR); NCR II,
Inc. (NR2); and Tri-State Broadcasting, Inc. (TSB). The newspaper businesses
(collectively referred to herein as News) include St. Johns Newspapers, Inc.
(SJN); Brill Newspapers, Inc. (BNI) and its subsidiaries, which include CMN
Holdings, Inc. (CMNH), Central Michigan Distribution Co., L.P. (CMDLP), and
Central Michigan Newspapers, Inc. (CMN) and its subsidiaries which include
Cadillac Newspapers, Inc.; CMN Associated Publications, Inc.; Gladwin
Newspapers, Inc.; Midland Buyer's Guide, Inc.; Central Michigan Distribution
Co., Inc.; and Graph Ads Printing, Inc. News publishes one daily newspaper with
circulation of approximately 12,000 and eleven separate weekly publications with
circulation exceeding 185,000. All significant intercompany balances and
transactions have been eliminated in combination.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with a
maturity of three months or less to be cash equivalents.
INVENTORIES
Inventories, consisting primarily of newsprint, are stated at the lower of
cost (first in, first out) or market.
PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation is provided under
the straight-line method over the estimated useful lives of the various assets
as follows:
<TABLE>
<S> <C>
10 to 40
Buildings and improvements................................... years
10 to 40
Leasehold improvements....................................... years
Towers and antennae.......................................... 20 years
Machinery and equipment...................................... 3 to 12 years
Broadcast equipment.......................................... 3 to 13 years
Furniture and fixtures....................................... 3 to 10 years
</TABLE>
INTANGIBLE ASSETS
Goodwill and FCC licenses are being amortized as required by generally
accepted accounting principles. Amortization is calculated on the straight-line
basis over a period of 40 years.
Covenants not to compete are being amortized on the straight-line basis over
the agreements' terms of three to five years.
F-12
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
1. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred financing costs and favorable leasehold rights are being amortized
on the straight-line basis over the terms of the underlying debt (36 to 44
months) or leases (3-20 years).
LONG-LIVED ASSETS
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of,"
requires, among other things, that companies consider whether indicators of
impairment of long-lived assets held for use are present, that if such
indicators are present the companies determine whether the sum of the estimated
undiscounted future cash flows attributable to such assets is less than their
carrying amounts, and if so, the companies recognize an impairment loss based on
the excess of the carrying amount of the assets over their fair value.
Accordingly, the Company evaluated the ongoing value of its property and
equipment and other long-lived assets as of February 28, 1997. From this
evaluation, the Company determined that there were no indications of impairment
and as such, no impairment loss has been recognized for the year ended February
28, 1997.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements and
accompanying notes. Actual results could differ from those estimates.
ADVERTISING
Advertising costs are expensed as incurred and totaled $783,879, $801,356,
and $838,534 for the years ended February 28, 1995, February 29, 1996, and
February 28, 1997, respectively.
REVENUE RECOGNITION
The Company recognizes advertising revenue when an ad is aired by Radio or
printed by News. Radio also receives fees under time brokerage agreements, which
are recognized based on a stated amount per month.
RECLASSIFICATIONS
Certain amounts in the 1995 and 1996 financial statements have been
reclassified to conform to the 1997 presentation.
2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS
The businesses of the Company are operating entities affiliated with Brill
Media Company, L.P. (BMCLP), a group executive management operation which
provides supervisory activities and certain corporate-wide services to the
operating units. The management operation is compensated on a fee basis by the
operating units under standard contractual arrangements. The Company was
organized by the Stockholder in 1980 to own and operate media properties
including radio stations, television stations,
F-13
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS (CONTINUED)
newspapers and related businesses, with a medium-market emphasis. The Company is
structured with each operating unit self-contained in its own entity with
respect to its assets, operations, and management.
On May 1, 1995, CB2, a newly formed corporation owned by the Stockholder,
acquired radio station KZMO-FM located in California, Missouri. CB2 paid cash of
$25,000 and entered into note payable agreements with the seller of $250,000 and
$149,500. CB2 also entered into a covenant not to compete agreement with the
previous owner for $300,000, discounted at 11% to $165,290 for financial
statement purposes -- see Note 7. The acquisition was accounted for as a
purchase. Assets acquired include goodwill, FCC license, and tower lease of
$50,000, $274,500, and $100,000, respectively. The financial statements include
the results of operations of CB2 from May 1, 1995.
On November 1, 1995, NB2, a newly formed corporation owned by the
Stockholder, acquired radio station KLXK-FM located in Duluth, Minnesota. NB2
paid cash of $30,000 and entered into a note payable with the seller of
$670,000. The acquisition was accounted for as a purchase. Assets acquired
include goodwill, FCC license, and equipment of $50,000, $550,000, and $100,000,
respectively. The financial statements include the results of operations of NB2
from November 1, 1995.
On July 9, 1996, SJN, a newly formed corporation owned by the Stockholder,
acquired the common stock of Clinton Distribution, Inc. (Clinton), which owned
and operated the St. Johns Reminder, a weekly newspaper located in St. Johns,
Michigan. SJN paid cash of $50,000 and entered into a note payable with the
seller of $340,704. SJN also entered into a covenant not to compete with the
Seller for $200,000, discounted at 12% to $127,430 for financial statement
purposes -- see Note 7. On July 31, 1996, Clinton was merged into SJN under a
tax-free liquidation. The acquisition of Clinton was accounted for as a
purchase. The financial statements include the results of operations of
Clinton/SJN from July 9, 1996.
Pro forma combined operating results reflecting these acquisitions as if
they had occurred at the beginning of the respective periods would not have been
materially different from reported amounts.
In February, 1996, FMR entered into a contract to sell all operating assets
of its radio stations KQWB-FM and KQFN-AM located in Fargo, North Dakota, and
Moorhead, Minnesota, for $2,000,000 in cash. The pretax gain was approximately
$1,065,000, net of related expenses. FMR further contracted to lease the
programming of the radio stations to the buyer under a time brokerage agreement
(TBA) beginning March 1, 1996, for $15,000 per month, until transfer of the FCC
license on August 13, 1996. Accordingly, no broadcast revenue or operating
expense is recorded for FMR subsequent to February 29, 1996.
On June 27, 1996, NR2, a newly formed corporation owned by the Stockholder
executed a TBA effective August 5, 1996, to operate radio station KTRR-FM
located in Loveland, Colorado. The financial statements include the results of
operations of NR2 from August 5, 1996. The TBA also gives the Company an option
to purchase KTRR-FM. In connection with this option, NR2 made a nonrefundable
deposit of $200,000 to the owner of KTRR-FM.
In May 1997, NR2 exercised its option to purchase KTRR-FM for $2,000,000.
The purchase price includes the $200,000 already on deposit, $550,000 in cash
payable at closing, and a note payable to the seller in the amount of
$1,250,000. NR2 will also enter into a five-year, $500,000 covenant not to
compete. The purchase is pending various approvals.
F-14
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
2. DESCRIPTION OF THE COMPANY, ACQUISITIONS AND DISPOSITIONS (CONTINUED)
On July 25, 1997 the Company paid $3,000,000 for a non-competition agreement
among the Company, one of the managed affiliates (see Note 10) and the seller of
the related radio stations.
On October 1, 1997, Huron P.S., LLC (HPL) and Huron Newspapers, LLC (HNL),
newly formed limited liability companies owned principally by the Stockholder,
entered into contracts to purchase the assets of Huron Postal Service, Inc.,
which owned and operated a 40,000-household distribution system for advertising
supplements, newspapers, and shopping guides located in Tawas City, Michigan,
and Northeastern Printers, Inc., which owned and operated two editions of the
Northeastern Shopper, distributed to 40,000 households located in Tawas City,
Michigan (collectively, Tawas) for $1,600,000. HPL and HNL paid combined cash of
$900,000 at closing and entered into notes payable with the seller totaling
$700,000. The notes bear interest at 10% and are due in October 2004. HPL and
HNL also entered into six-year covenants not to compete, totaling $1,200,000.
On October 24, 1997, CMB and CB2 entered into contracts to sell the
operating assets of radio stations KTXY-FM and KLIK-AM located in Jefferson
City, Missouri, and radio station KATI-FM located in California, Missouri, (the
Missouri Properties) for a net cash price of $7,419,000, plus assumed
liabilities of $256,000. The expected pretax gain will be approximately $5
million, net of related expenses. CMB and CB2 further contracted to lease the
programming of the combined radio stations to the buyer under a TBA beginning
November 1, 1997, for $50,000 per month, until transfer of the FCC licenses is
complete. Accordingly, no broadcast revenue or operating expenses will be
recorded for CMB or CB2 subsequent to October 31, 1997. The gain will be
recognized upon transfer of the FCC licenses. Applications for transfer of the
broadcast licenses of the Missouri Properties have been filed with the FCC by
the buyers. A local market competitor has objected to the transfer of the
licenses and on December 12, 1997, filed with the FCC a Petition to Deny the
license transfers and to terminate the TBA. No action has been taken on the
Petition to Deny by the FCC, and the Company believes that, even if the Petition
to Deny were granted, the consequences to the Company would not be material.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at February 29, 1996 and
February 28, 1997:
<TABLE>
<CAPTION>
1996 1997
------------- -------------
<S> <C> <C>
Land............................................................................... $ 748,255 $ 646,647
Buildings and improvements......................................................... 2,564,698 1,604,922
Leasehold improvements............................................................. 846,826 989,586
Towers and antennae................................................................ 1,939,158 1,962,264
Machinery and equipment............................................................ 3,771,769 4,162,151
Broadcast equipment................................................................ 4,968,828 4,106,725
Furniture and fixtures............................................................. 2,907,508 2,425,820
Construction in progress........................................................... 244,293 500,000
------------- -------------
$ 17,991,335 $ 16,398,115
------------- -------------
------------- -------------
</TABLE>
F-15
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
3. PROPERTY AND EQUIPMENT (CONTINUED)
Property and equipment includes the following assets under capital leases at
February 28, 1997:
<TABLE>
<S> <C>
Buildings and improvements...................................................... $ 828,337
Towers and antennae............................................................. 1,050,000
Machinery and equipment......................................................... 277,661
Broadcast equipment............................................................. 212,168
Furniture and fixtures.......................................................... 180,559
---------
$2,548,725
---------
---------
</TABLE>
4. INCOME TAXES
The Company accounts for income taxes using the liability method. Under the
liability method, deferred tax assets and liabilities are determined based on
differences between financial reporting and tax basis of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse.
NCR, TSB, CB2, NB2, NR2, and SJN are "S" corporations whose taxable income
or loss for federal and state income tax purposes is passed through to the
Stockholder. NBL and NHL are limited liability companies whose taxable income or
loss for federal and state income tax purposes is passed through to their
members. CMDLP is a limited partnership whose taxable income or loss for federal
and state income tax purposes is passed through to its partners. BRI, RRI, NBI,
FMR, CMB, BNI, CMNH, and CMN are "C" corporations. RRI is included in the
consolidated income tax return of BRI. CMNH and CMN are included in the
consolidated income tax return of BNI. NBI and FMR are included in the
consolidated income tax return of their parent. The Company calculates its
current and deferred income tax provisions for NBI and FMR on a separate return
basis (i.e., as if the corporations had not been included in the consolidated
income tax return of their parent).
At February 28, 1997, the "C" corporations noted above had net operating
loss carryforwards of approximately $13 million for federal income tax purposes
which expire in fiscal years 1998 through 2012.
F-16
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
4. INCOME TAXES (CONTINUED)
As a result of net operating loss carryforwards and temporary differences,
the Company has net deferred tax assets and has established a valuation
allowance at February 29, 1996 and February 28, 1997, as follows:
<TABLE>
<CAPTION>
1996 1997
-------------- -------------
<S> <C> <C>
Gross deferred tax assets:
Incentive plan expense........................................................... $ 1,448,043 $ 1,685,877
Net operating loss carryforwards................................................. 9,720,061 5,281,599
Other............................................................................ 281,472 313,814
-------------- -------------
11,449,576 7,281,290
Gross deferred tax liabilities:
Deferred gain on replacement assets.............................................. (1,154,401) (1,154,401)
Other............................................................................ (255,113) (104,786)
-------------- -------------
(1,409,514) (1,259,187)
-------------- -------------
Net deferred tax asset............................................................. 10,040,062 6,022,103
Valuation allowance................................................................ (10,040,062) (6,022,103)
-------------- -------------
Net deferred tax asset recognized in the balance sheet............................. $ -- $ --
-------------- -------------
-------------- -------------
</TABLE>
Deferred income taxes reflect the net tax effect of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.
The provision (benefit) for income taxes for the "C" corporations differs
from the amount of income tax benefit computed by applying the United States
federal income tax rate to loss before income taxes and extraordinary item. A
reconciliation of the differences is as follows:
<TABLE>
<CAPTION>
YEAR ENDED
-------------------------------------------
<S> <C> <C> <C>
FEBRUARY 28 FEBRUARY 29 FEBRUARY 28
1995 1996 1997
------------- ------------- -------------
"C" corporations income tax benefit at statutory federal tax rate.... $ (1,366,137) $ (1,838,365) $ (870,606)
Increase (decrease) resulting from:
State income taxes, net of federal benefit......................... (195,989) (350,071) (17,343)
Change in valuation allowance...................................... 1,607,220 2,162,782 1,024,242
Other, net......................................................... 23,230 (13,215) 150,211
------------- ------------- -------------
Income tax provision (benefit)....................................... $ 68,324 $ (38,869) $ 286,504
------------- ------------- -------------
------------- ------------- -------------
</TABLE>
F-17
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
5. OTHER ASSETS
Other assets consist of the following at February 29, 1996 and February 28,
1997:
<TABLE>
<CAPTION>
1996 1997
------------ ------------
<S> <C> <C>
Deferred financing costs.............................................................. $ 1,614,046 $ 2,105,218
Broadcasting contracts................................................................ 120,000 --
Favorable leasehold rights............................................................ 434,728 384,728
Other................................................................................. 490,913 651,884
------------ ------------
2,659,687 3,141,830
Less:Accumulated amortization......................................................... 831,843 1,250,740
------------ ------------
$ 1,827,844 $ 1,891,090
------------ ------------
------------ ------------
</TABLE>
6. SHORT-TERM NOTE
Short-term note at February 29, 1996 and February 28, 1997, consists of the
following:
<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Note payable, interest payable annually at 6.85%.......................................... $ 500,000 $ 500,000
</TABLE>
F-18
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
7. LONG-TERM OBLIGATIONS
Senior notes payable at February 29, 1996 and February 28, 1997, consist of
the following:
<TABLE>
<CAPTION>
1996 1997
------------- -------------
<S> <C> <C>
Senior note, interest only payable monthly at 12%, due September 30, 1999. Includes
additional interest accrued at 5.5%, payable September 30, 1999.................. $ 40,000,000 $ 41,824,718
Mortgage note, payable in monthly installments of $7,645, including interest at 8%
through September 1, 1997, then interest adjusted to prime lending rate plus 2%,
due September 1, 2001............................................................ 723,500 688,367
Mortgage note, interest at 11%..................................................... 113,683 --
Senior note, payable in monthly installments of $3,033 including interest at 8%,
due May 1, 2005.................................................................. 237,369 219,307
Senior note, payable in monthly installments of $3,850, including interest at bank
prime lending rate plus 1%, due February 28, 2002................................ 197,690 168,870
Senior note, payable in monthly installments of $9,074, including interest at 9%,
due October 31, 2005............................................................. 670,000 653,622
Senior note, interest only payable monthly at 8% until July 9, 1997, thereafter
payable in monthly installments of $4,436, including interest, due July 9,
2006............................................................................. -- 340,010
Senior secured noncompetition agreement, payable in quarterly installments of
$6,250, including imputed interest at 12%, due July 1, 2004...................... -- 122,503
Other.............................................................................. 310,918 484,678
------------- -------------
$ 42,253,160 $ 44,502,075
------------- -------------
------------- -------------
</TABLE>
The bank prime lending rate at February 28, 1997, was 8.25%.
In February 1996, the Company and two managed affiliates under common
control (collectively referred to herein as the Borrowers) jointly entered into
a senior note agreement which provided $40 million of borrowings. In September
1996, the senior note was extended to September 1999. The note bears interest at
12%, payable monthly. Beginning May 1996, additional interest accrues at 5.5%
and is payable in September 1999. At February 28, 1997, $1,824,718 of additional
interest was accrued by the Company. On September 30, 1996, the Company entered
into a $16 million line of credit to provide acquisition financing. The line has
the same terms as the $41,824,718 senior note described above. In May 1997 and
July 1997, the Company borrowed against the $16 million line of credit.
On September 30, 1997, the Company refinanced its outstanding senior note
with its existing lender and received additional financing of $14 million. The
refinanced senior note bears interest at 10%, payable monthly. Additional
interest accrues at 7.5%. Principal and additional interest are payable in
September 1999. The Company is required to pay a 4% penalty in the event of
prepayment of the outstanding senior note.
The Borrowers are jointly and individually responsible for the full amount
of the senior note. Accordingly, the Company has recorded the entire amount of
the senior note in the accompanying statement of financial position and has
recorded notes receivable from managed affiliates for the managed
F-19
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
7. LONG-TERM OBLIGATIONS (CONTINUED)
affiliates' portion of the borrowings under the agreement. The note restricts
the Borrowers from the following: (a) sale or disposition of a subsidiary or
significant assets other than in the normal course of business; (b) incurring
additional indebtedness in excess of limitations; (c) payment of management
fees, dividends, and payments to affiliates in excess of certain limitations
and; (d) making aggregate capital expenditures or aggregate lease payments in
excess of annual limitations. The note also requires attaining minimum
cumulative operating cash flows, as defined. The common stock, membership
interest, and assets of each operating entity and ARB Finance-One, Inc. (an
affiliate) are pledged as security for the senior note. In addition, the
Company's Stockholder has personally guaranteed the senior note.
Obligations under capital leases relate to certain operating facilities and
equipment. The future minimum lease payments and the present value of capital
lease payments are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
- -------------------------------------------------------------------------------- ------------
<S> <C>
1998............................................................................ $ 394,202
1999............................................................................ 322,483
2000............................................................................ 259,862
2001............................................................................ 144,391
2002............................................................................ 62,979
------------
Total minimum obligations....................................................... 1,183,917
Less: Interest.................................................................. 211,951
------------
Present value of future minimum lease payments.................................. $ 971,966
------------
------------
</TABLE>
During fiscal 1997, the Company entered into new capital leases totaling
approximately $347,000. The present value of obligations under capital leases at
February 28, 1997, includes $606,884 in amounts due to affiliates of the
Company.
Unsecured and subordinated obligations at February 29, 1996 and February 28,
1997, consist of the following:
<TABLE>
<CAPTION>
1996 1997
---------- ----------
<S> <C> <C>
Subordinated notes, payable in monthly installments including interest at 9%, due November
3, 2000................................................................................. $ 458,131 $ 401,448
Unsecured noncompetition agreement, payable in monthly installments of $1,666 through May
1, 2000, then beginning June 1, 2000, payable in monthly installments of $3,333,
including imputed interest at 11%, due May 1, 2005...................................... 163,881 161,814
Unsecured note, payable in monthly installments of $3,790, including interest at 8%, due
October 1, 2004......................................................................... 200,717 170,192
Other..................................................................................... 92,826 112,933
---------- ----------
$ 915,555 $ 846,387
---------- ----------
---------- ----------
</TABLE>
In conjunction with the $40 million senior note refinancing in February
1996, the Company paid $3,250,000 to a subordinated note holder. This payment
reflected the original principal only, and $7,046,813 of contingent interest
which had been accrued at the maximum rate was reduced at maturity pursuant to
the terms of an alternative valuation formula, as defined in the agreement. The
Company also
F-20
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
7. LONG-TERM OBLIGATIONS (CONTINUED)
wrote off certain previously deferred financing costs at the time of the
refinancing totaling $131,378. The net gain of $6,915,435 related to these
transactions has been reflected as an extraordinary item in the accompanying
1996 statement of operations.
The Company has performance incentive plans with certain executives. Such
plans accumulate value based on certain defined performance factors. The
executives were vested to the extent of $3,527,034, and $4,155,000 as of
February 29, 1996 and February 28, 1997, respectively, which was recorded as a
long-term obligation. Payments under the terms of the plans would commence only
upon the death, disability, retirement, or termination of employment of an
executive, and can be made at the discretion of the Company in amounts and on
terms no less favorable to the executive than quarterly payments of 2.5% of the
vested amount.
Aggregate maturities of long-term obligations during the next five years are
as follows:
<TABLE>
<CAPTION>
OBLIGATIONS UNSECURED
UNDER AND
SENIOR CAPITAL SUBORDINATED
FISCAL YEAR NOTES LEASES OBLIGATIONS TOTAL
- -------------------------------------------------------- ------------- ----------- ------------ -------------
<S> <C> <C> <C> <C>
1998.................................................... $ 531,531 $ 279,576 $ 71,332 $ 882,439
1999.................................................... 349,219 246,617 74,310 670,146
2000.................................................... 41,363,333 220,314 81,290 41,664,937
2001.................................................... 285,949 125,329 220,481 631,759
2002.................................................... 246,736 53,655 98,697 399,088
</TABLE>
8. COMMITMENTS
The Company leases certain land, buildings, and equipment. Rent expense for
fiscal years 1995, 1996, and 1997 was $119,998, $210,998, and $247,328,
respectively. Future minimum lease payments under operating leases that have
initial or remaining noncancelable terms in excess of one year as of February
28, 1997, are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
- ---------------------------------------------------------------------------------- ----------
<S> <C>
1998.............................................................................. $ 181,388
1999.............................................................................. 127,789
2000.............................................................................. 40,477
2001.............................................................................. 16,093
2002.............................................................................. 8,792
----------
Total minimum payments required................................................... $ 374,539
----------
----------
</TABLE>
F-21
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
9. CAPITAL
The authorized and issued common stock and membership interest of the
individual companies included in the combined financial statements consists of
the following at February 28, 1997:
<TABLE>
<CAPTION>
NUMBER OF SHARES
-------------------------- ADDITIONAL
ISSUED AND PAID-IN
AUTHORIZED OUTSTANDING AMOUNT CAPITAL
----------- ------------- --------- -------------
<S> <C> <C> <C> <C>
Northland Broadcasting, Inc.:
Common, $1 par value......................................... 1,000 100 $ 100 $ 5,653,505
Northland Broadcasting, LLC:
Membership interest.......................................... N/A N/A 10 --
Northland Holdings, LLC:
Membership interest.......................................... N/A N/A 1,000 --
NB II, Inc.:
Common, $1 par value......................................... 1,000 100 100 63,000
Fargo-Moorhead Radio, Inc.:
Common, $1 par value......................................... 1,000 100 100 8,537,952
Central Missouri Broadcasting, Inc.:
Common, $1 par value......................................... 1,000 1,000 1,000 --
CMB II, Inc.:
Common, $1 par value......................................... 1,000 100 100 --
Northern Colorado Radio, Inc.:
Common, $1 par value......................................... 1,000 100 100 1,064,500
NCR II, Inc.:
Common, $1 par value......................................... 5,000 100 100 16,000
St. Johns Newspapers, Inc.:
Common, $1 par value......................................... 5,000 100 100 --
Tri-State Broadcasting, Inc.:
Common, $1 par value......................................... 5,000 100 100 40,000
Brill Radio, Inc.:
Common, $1 par value......................................... 1,000 1,000 1,000 --
Brill Newspapers, Inc.:
Class A common stock, $1 par value, voting................... 1,000 1,000 1,000 --
Class B common stock, $1 par value, nonvoting................ 2,000 150 150 609,352
--------- -------------
$ 4,960 $ 15,984,309
--------- -------------
--------- -------------
</TABLE>
CMB II, Inc. was organized during the year ended February 28, 1995; NB II,
Inc. was organized during the year ended February 29, 1996, Northland
Broadcasting, LLC, Northland Holdings, LLC, NCR II, Inc., and St. Johns
Newspapers, Inc. were organized during the year ended February 28, 1997.
During the year ended February 28, 1997, the Company received capital
contributions of $15,036,667 (Northland Broadcasting, LLC--$10, Northland
Holdings, LLC--$1,000, NBII, Inc.--$63,000, Northern Colorado Radio,
Inc.--$725,000, NRII, Inc.--$16,100, Tri-State Broadcasting, Inc.--$40,000, St.
Johns Newspapers, Inc.--$100, Northland Broadcasting, Inc.--$5,653,505, and
Fargo-Moorhead Radio, Inc.-- $8,537,952), primarily from BMCLP, of which
$14,191,457 were outstanding affiliate receivables owed to
F-22
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
9. CAPITAL (CONTINUED)
BMCLP and were offset by affiliate payables to Media. During 1997, Brill
Newspapers, Inc. paid dividends of $520,000.
There were no other changes to capital for each of the three years in the
period ended February 28, 1997.
10. TRANSACTIONS WITH AFFILIATES
BMCLP provides certain administrative services to the Company for which it
receives a management fee based on a percentage of revenue. The Company incurred
management fees to BMCLP in fiscal years 1995, 1996, and 1997 of approximately
$1,679,000, $1,833,000, and $1,945,000, respectively.
The Company has operating management agreements and loans with managed
affiliates who operate radio stations in the same markets as the Company. In
accordance with the operating management agreements, the managed affiliates pay
management fees based on a fixed amount plus a variable fee based on
performance, as defined. The Company earned $40,000 in management fees from
these managed affiliates for the year ended February 28, 1997, which is included
in due from affiliates in the accompanying statement of financial position.
At February 28, 1997, notes receivable from these managed affiliates include
notes totaling $408,401 plus additional accrued interest of $3,606. The notes
receivable bear interest at 12%, payable monthly. Additional interest accrues at
5.5%. Principal and additional interest are payable in September 1999.
In connection with the borrowings under the $16 million line of credit
subsequent to February 28, 1997--see Note 7, the Company made additional loans
to managed affiliates totaling $13,903,955. In connection with the Company's
refinancing of its outstanding senior note on September 30, 1997--see Note 7,
the Company refinanced the outstanding notes receivable from managed affiliates.
The refinanced notes receivable from managed affiliates bear interest at 10%,
payable monthly. Additional interest accrues at 7.5%. Principal and additional
interest are payable in September 1999.
Through December 1997, the Company made additional loans to managed
affiliates totaling $2 million. On December 30, 1997, the Company refinanced
notes receivable from managed affiliates totaling approximately $16.3 million.
The refinanced notes receivable from managed affiliates bear interest at 12%,
payable semi-annually, and are due January 1, 2001.
At February 29, 1996 and February 28, 1997, notes payable to stockholder
include notes payable of $206,000 and $374,779, respectively, plus accrued
interest of $3,000 and $3,858, respectively. At February 28, 1997, notes
totaling $74,779 bear interest at 12% and notes totaling $300,000 bear interest
at prime plus 1%. Notes payable to stockholder are subordinated to the notes
payable to the respective senior lenders.
At February 29, 1996 and February 28, 1997, due from affiliates includes
notes receivable from stockholder totaling $4,106,551 and $3,966,194,
respectively, plus accrued interest of $84,244 at February 28, 1997. The notes
receivable bear interest at 5.5% and are due at various dates through 2001.
At February 28, 1997, due from affiliates also includes $1,886,909 of
affiliate notes receivable plus accrued interest of $28,840, accrued management
fees payable of $144,153, and operating payables due to affiliates of $726,386.
F-23
<PAGE>
THE RADIO AND NEWSPAPER BUSINESSES OF ALAN R. BRILL
NOTES TO COMBINED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED FEBRUARY 28, 1995, FEBRUARY 29, 1996, AND FEBRUARY 28, 1997
10. TRANSACTIONS WITH AFFILIATES (CONTINUED)
At February 29, 1996, due to affiliates includes accrued management fees
payable of $2,972,870, various notes payable of $8,821,031 plus accrued interest
on these notes totaling $4,923,144, affiliate notes receivable of $1,888,909
plus accrued interest on these notes of $115,541, and operating receivables due
from affiliates of $679,245.
11. BUSINESS SEGMENTS
The Company has been engaged in two principal businesses: operation of AM
and FM radio stations (Radio) and publication of daily and weekly newspapers and
shoppers (News).
Information for the years ended February 28, 1995, February 29, 1996, and
February 28, 1997, regarding the Company's major business segments is presented
in the following table:
<TABLE>
<CAPTION>
RADIO NEWS TOTAL
------------- ------------- -------------
<S> <C> <C> <C>
Revenues:
1995.............................................................. $ 12,649,594 $ 10,537,363 $ 23,186,957
1996.............................................................. 13,095,663 12,217,268 25,312,931
1997.............................................................. 13,595,820 13,440,395 27,036,215
Operating income:
1995.............................................................. 999,703 1,233,281 2,232,984
1996.............................................................. 883,897 1,140,131 2,024,028
1997.............................................................. 1,897,712 2,041,434 3,939,146
Identifiable assets:
1995.............................................................. 11,195,756 10,588,032 21,783,788
1996.............................................................. 14,499,338 11,511,203 26,010,541
1997.............................................................. 11,074,545 15,367,692 26,442,237
Depreciation and amortization expense:
1995.............................................................. 751,407 359,701 1,111,108
1996.............................................................. 807,917 504,055 1,311,972
1997.............................................................. 917,438 477,589 1,395,027
Capital expenditures:
1995.............................................................. 276,427 697,378 973,805
1996.............................................................. 819,440 157,498 976,938
1997.............................................................. 336,952 931,895 1,268,847
</TABLE>
12. SUBSEQUENT EVENT
Effective December 30, 1997, the radio and newspaper businesses were
contributed, at historical cost, to a newly formed limited liability company,
BMC Holdings, LLC, which is a wholly-owned subsidiary of Brill Media Company,
LLC (BMC). BMC is indirectly owned by the Stockholder.
F-24
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED IN CONNECTION
WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY TO ANY
PERSON OR BY ANYONE IN ANY JURISDICTION IN WHICH IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary.................... 1
Risk Factors.......................... 22
Use of Proceeds....................... 34
Capitalization........................ 35
Pro Forma Financial Information....... 36
Selected Combined Financial Data...... 46
Management's Discussion and Analysis
of Financial Condition and Results
of Operations....................... 48
Business.............................. 53
Legal Proceedings..................... 75
Management............................ 75
Executive Compensation................ 76
Certain Transactions.................. 77
The Exchange Offer.................... 80
Description of Notes.................. 90
Description of Appreciation Notes..... 121
Certain Federal Income Tax
Considerations...................... 132
Plan of Distribution.................. 135
Book-Entry; Delivery and Form......... 136
Legal Matters......................... 137
Experts............................... 137
Available Information................. 138
Index of Financial Statements......... F-1
</TABLE>
[LOGO]
BRILL MEDIA COMPANY, LLC
BRILL MEDIA MANAGEMENT, INC.
OFFER TO EXCHANGE
12% SENIOR NOTES DUE 2007
FOR
12% SERIES B SENIOR NOTES DUE 2007
AND APPRECIATION NOTES DUE 2007
FOR
SERIES B APPRECIATION NOTES DUE 2007
------------------------
PROSPECTUS
---------------------
, 1998
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 13.1-697 of the Virginia Stock Corporation Act (the "SCA") empowers
a corporation to indemnify an individual made a party to a proceeding because he
is or was a director against liability incurred in the proceeding if: (i) he
conducted himself in good faith; and (ii) he believed: (a) in the case of
conduct in his official capacity with the corporation, that his conduct was in
its best interests; and (b) in all other cases, that his conduct was at least
not opposed to its best interests; and (iii) in the case of any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful.
The termination of a proceeding by judgment, order, settlement or conviction
is not, of itself, determinative that the director did not act in good faith and
believed that his conduct was not in the corporation's best interests or that
his conduct was opposed to the corporation's best interests, or with respect to
any criminal proceeding, that he had reasonable cause to believe his conduct was
unlawful.
A corporation may not indemnify a director in connection with a proceeding
by or in the right of the corporation in which the director was adjudged liable
to the corporation or in connection with any other proceeding charging improper
personal benefit to him, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal benefit was
improperly received by him.
Indemnification with respect to a proceeding by or in the right of the
corporation is limited to reasonable expenses incurred in connection with the
proceeding.
Section 13.1-698 of the SCA also requires a corporation, unless limited by
its articles of incorporation, to indemnify a director who entirely prevails in
the defense of any proceeding to which he was a party because he is or was a
director of the corporation against reasonable expenses incurred by him in
connection with the proceeding.
Section 13.1-699 of the SCA provides that a corporation may pay for or
reimburse the reasonable expenses incurred by a director who is a party to a
proceeding in advance of final disposition of the proceeding if: (i) the
director furnishes the corporation a written statement of his good faith belief
that he has met the standard of conduct described in SCA Section 13.1-697 above;
(ii) the director furnishes the corporation a written undertaking, executed
personally or on his behalf, to repay the advance if it is ultimately determined
that he did not meet the standard of conduct; and (iii) a determination is made
that the facts then known to those making the determination would not preclude
indemnification under this article.
The undertaking required in clause (ii) above shall be an unlimited general
obligation of the director but need not be secured and may be accepted without
reference to financial ability to make repayment. Furthermore, determinations
and authorizations of payments under this Section 13.1-699 shall be made in the
manner specified in SCA Section 13.1-701 below.
Section 13.1-700.1 provides that an individual who is made a party to a
proceeding because he is or was a director of a corporation may apply to a court
for an order directing the corporation to make advances or reimbursement for
expenses or to provide indemnification. Such application may be made to the
court conducting the proceeding or to another court of competent jurisdiction.
The court shall order the corporation to make advances and/or reimbursement
for expenses or to provide indemnification if it determines that the director is
entitled to such advances, reimbursement or indemnification and shall also order
the corporation to pay the director's reasonable expenses incurred to obtain the
order.
With respect to a proceeding by or in the right of the corporation, the
court may (i) order indemnification of the director to the extent of his
reasonable expenses if it determines that, considering all the relevant
circumstances, the director is entitled to indemnification even though he was
adjudged liable
II-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (CONTINUED)
to the corporation and (ii) also order the corporation to pay the director's
reasonable expenses incurred to obtain the order of indemnification.
Neither (i) the failure of the corporation, including its board of
directors, its independent legal counsel and its shareholders, to have made an
independent determination prior to the commencement of any action permitted by
this section that the applying director is entitled to receive advances and/or
reimbursement nor (ii) the determination by the corporation, including its board
of directors, its independent legal counsel and its shareholders, that the
applying director is not entitled to receive advances and/or reimbursement or
indemnification shall create a presumption to that effect or otherwise of itself
be a defense to that director's application for advances for expenses,
reimbursement or indemnification.
Section 13.1-701 of the SCA provides that a corporation may not indemnify a
director unless authorized in the specific case after a determination has been
made that indemnification of the director is permissible in the circumstances
because he has conducted himself in good faith and he believed: (a) in the case
of conduct in his official capacity with the corporation, that his conduct was
in its best interests; and (b) in all other cases, that his conduct was at least
not opposed to its best interests; and in the case of any criminal proceeding,
he had no reasonable cause to believe his conduct was unlawful.
Such determination shall be made: (i) by the board of directors by a
majority vote of a quorum consisting of directors not at the time parties to the
proceeding; (ii) if a quorum cannot be obtained under paragraph 1 of this
subsection, by majority vote of a committee duly designated by the board of
directors (in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to the
proceeding; (iii) by special legal counsel: (a) selected by the board of
directors or its committee in the manner prescribed in paragraph 1 or 2 of this
subsection; or (b) if a quorum of the board of directors cannot be obtained
under paragraph 1 of this subsection and a committee cannot be designated under
paragraph 2 of this subsection, selected by majority vote of the full board of
directors, in which selection directors who are parties may participate; or (iv)
by the shareholders, but shares owned by or voted under the control of directors
who are the time parties to the proceeding may not be voted on the
determination.
Authorization of indemnification and evaluation as to reasonable-ness of
expenses shall be made in the same manner as the determination that
indemnification is permissible except that if the determination is made by
special legal counsel, authorization or indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under clause (a) and
(b) above to select counsel.
Section 13.01-702 of the SCA provides that unless limited by a corporation's
articles of incorporation, (i) an officer of the corporation is entitled to
mandatory indemnification under Section 13.1-698, and is entitled to apply for
court-ordered indemnification under Section 13.1-700, in each case to the same
extent as a director; and (ii) the corporation may indemnify and advance
expenses under this article to an officer, employee, or agent of the corporation
to the same extent as to a director.
Section 13.1-703 of the SCA provides that a corporation may purchase and
maintain insurance on behalf of an individual who is or was a director, officer,
employee, or agent of the corporation, or who, while a director, officer,
employee, or agent of the corporation, is or was serving at the request of the
corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint venture, trust,
employee benefit plan, or other enterprise, against liability asserted against
or incurred by him in that capacity or arising from his status as a director,
officer, employee, or agent, whether or not the corporation would have power to
indemnify him against the same liability under Section 13.1-697 or Section
13.1-698 above.
Section 13.1-704 of the SCA provides that any corporation shall have power
to make any further indemnity, including indemnity with respect to a proceeding
by or in the right of the corporation, and to
II-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS. (CONTINUED)
make additional provision for advances and reimbursement of expenses, to any
director, officer, employee or agent that may be authorized by the articles of
incorporation or any bylaw made by the shareholders or any resolution adopted,
before or after the event, by the shareholders, except an indemnity against (i)
his willful misconduct, or (ii) a knowing violation of the criminal law. Unless
the articles of incorporation, or any such bylaw or resolution expressly provide
otherwise, any determination as to the right to any further indemnity shall be
made in accordance with Section13.1-701B. Each such indemnity may continue as to
a person who has ceased to have the capacity referred to above and may inure to
the benefit of the heirs, executors and administrators of such a person.
Article X of the Bylaws of Brill Media Management, Inc. provides as follows:
Any person (the "indemnitee") who, because he is or was an officer or
director of the corporation, is, was, or is threatened to be made a party to
any threatened, pending, or completed action, suit, proceeding, or appeal
whether civil, criminal, administrative, or investigative and whether formal
or informal (the "proceeding") (including any proceeding by or in the right
of the corporation) shall be indemnified by the corporation against all
liability (including the obligation to pay all or any part of a judgment,
decree, settlement, penalty, fine or other such obligation) and reasonable
expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others)
incurred in or as a result of the proceeding except such liability and
expenses as are incurred because of his willful misconduct or a knowing
violation of the criminal law. The corporation shall pay for or reimburse
the reasonable expenses incurred by any indemnitee in advance of final
disposition of any proceeding upon receipt of an unsecured undertaking from
him to repay the sums if ultimately it is determined that he is not entitled
to indemnification. A director shall be so indemnified without the necessity
of any further determination or authorization, but in the case of an
officer, the determination that indemnification is permissible and an
evaluation as to the reasonableness of expenses in a specific case shall be
made as authorized from time to time by general or specific actions of the
board of directors. The termination of a proceeding by a judgment, decree,
order, settlement, or conviction, or upon a plea of NOLO CONTENDERE or its
equivalent shall not of itself create a presumption that an indemnitee acted
in such a manner as to make him ineligible for indemnification.
In any proceeding brought by a shareholder in the right of the
corporation or brought by or on behalf of shareholders of the corporation,
the aggregate amount of all damages that may be assessed against an officer
or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw
is adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if
the officer or director engaged in willful misconduct or a knowing violation
of the criminal law or of any state securities law.
This Article shall be applicable in and to all proceedings commenced
after its adoption even though arising, in whole or in part, from conduct,
actions, or events occurring or taken before its adoption. No amendment,
modification, or repeal of this Article shall diminish the rights provided
hereby with respect to any claim, issue, or matter in any then pending or
subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or
officer, as the case may be, and his heirs, executors, and administrators.
The corporation may purchase and maintain insurance to indemnify it against
all or any part of the liability to indemnify assumed by it in accordance
with this Article.
II-3
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 22. UNDERTAKINGS.
The Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission (the "Commission") pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price represent no
more than 20 percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities act, each such post-effective amendment shall be deemed to be a
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of other securities being registered which remain unsold at the
termination of the offering.
(4) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11 or 13 of Form
S-4, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the Registration Statement through the date of responding
to the request.
(5) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the Registration Statement when
it became effective.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrants of expenses incurred or
paid by a director, officer or controlling person of the Registrants in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
registered, the Registrants will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, BRILL MEDIA COMPANY, LLC
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
BRILL MEDIA COMPANY, LLC
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-5
<PAGE>
Pursuant to the requirements of the Securities Act, BRILL MEDIA MANAGEMENT,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
BRILL MEDIA MANAGEMENT, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-6
<PAGE>
Pursuant to the requirements of the Securities Act, BMC HOLDINGS, LLC has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
BMC HOLDINGS, LLC
By: BRILL MEDIA COMPANY, LLC,
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-7
<PAGE>
Pursuant to the requirements of the Securities Act, READING RADIO, INC. has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
READING RADIO, INC.,
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer
------------------------------------------ (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-8
<PAGE>
Pursuant to the requirements of the Securities Act, TRI-STATE BROADCASTING,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
TRI-STATE BROADCASTING, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof. Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement and the foregoing Power of Attorney has been signed
by the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-9
<PAGE>
Pursuant to the requirements of the Securities Act, NORTHERN COLORADO RADIO,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
NORTHERN COLORADO RADIO, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-10
<PAGE>
Pursuant to the requirements of the Securities Act, NCR II, INC. has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
NCR II, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-11
<PAGE>
Pursuant to the requirements of the Securities Act, CENTRAL MISSOURI
BROADCASTING, INC. has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Evansville, in the State of Indiana, on January 12, 1998.
CENTRAL MISSOURI BROADCASTING, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof. Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement and the foregoing Power of Attorney has been signed
by the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-12
<PAGE>
Pursuant to the requirements of the Securities Act, CMB II, INC. has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
CMB II, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-13
<PAGE>
Pursuant to the requirements of the Securities Act, NORTHLAND BROADCASTING,
LLC has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
NORTHLAND BROADCASTING, LLC
By: NORTHLAND HOLDINGS, LLC,
Manager
By: BMC HOLDINGS, LLC,
Manager
By: BRILL MEDIA COMPANY, LLC,
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-14
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-15
<PAGE>
Pursuant to the requirements of the Securities Act, NB II, INC. has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
NB II, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-16
<PAGE>
Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN
NEWSPAPERS, INC. has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Evansville,
in the State of Indiana, on January 12, 1998.
CENTRAL MICHIGAN NEWSPAPERS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-17
<PAGE>
Pursuant to the requirements of the Securities Act, CADILLAC NEWSPAPERS,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
CADILLAC NEWSPAPERS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-18
<PAGE>
Pursuant to the requirements of the Securities Act, CMN ASSOCIATED
PUBLICATIONS, INC. has duly caused this Registration Statement to be signed on
its behalf by the undersigned, thereunto duly authorized, in the City of
Evansville, in the State of Indiana, on January 12, 1998.
CMN ASSOCIATED PUBLICATIONS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-19
<PAGE>
Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN
DISTRIBUTION CO., L.P. has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Evanville, in the State of Indiana, on January 12, 1998.
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
By: CENTRAL MICHIGAN DISTRIBUTION CO., INC.
General Partner
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-20
<PAGE>
Pursuant to the requirements of the Securities Act, CENTRAL MICHIGAN
DISTRIBUTION CO., INC. has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized, in the City of
Evansville, in the State of Indiana, on January 12, 1998.
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-21
<PAGE>
Pursuant to the requirements of the Securities Act, GLADWIN NEWSPAPERS, INC.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
GLADWIN NEWSPAPERS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-22
<PAGE>
Pursuant to the requirements of the Securities Act, GRAPH ADS PRINTING, INC.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
GRAPH ADS PRINTING, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-23
<PAGE>
Pursuant to the requirements of the Securities Act, MIDLAND BUYERS GUIDE,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
MIDLAND BUYERS GUIDE, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-24
<PAGE>
Pursuant to the requirements of the Securities Act, ST. JOHNS NEWSPAPERS,
INC. has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Evansville, in the
State of Indiana, on January 12, 1998.
ST. JOHNS NEWSPAPERS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-25
<PAGE>
Pursuant to the requirements of the Securities Act, HURON P.S. LLC has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
HURON P.S., LLC
By: HURON HOLDINGS, LLC
Manager
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-26
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-27
<PAGE>
Pursuant to the requirements of the Securities Act, HURON NEWSPAPERS, LLC
has dulycaused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
HURON NEWSPAPERS, LLC
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC., Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-28
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-29
<PAGE>
Pursuant to the requirements of the Securities Act, HURON HOLDINGS, LLC has
dulycaused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
HURON HOLDINGS, LLC
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-30
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-31
<PAGE>
Pursuant to the requirements of the Securities Act, NORTHERN COLORADO
HOLDINGS, LLC has dulycaused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Evansville,
in the State of Indiana, on January 12, 1998.
NORTHERN COLORADO HOLDINGS, LLC
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-32
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-33
<PAGE>
Pursuant to the requirements of the Securities Act, NCR III, LLC has
dulycaused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
NCR III, LLC
By: NCH II, LLC
Manager
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-34
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-35
<PAGE>
Pursuant to the requirements of the Securities Act, NCH II, LLC has
dulycaused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
NCH II, LLC
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-36
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-37
<PAGE>
Pursuant to the requirements of the Securities Act, NORTHLAND HOLDINGS, LLC
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
NORTHLAND HOLDINGS, LLC
By: BMC HOLDINGS, LLC
Manager
By: BRILL MEDIA COMPANY, LLC
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
Manager
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, PRESIDENT, CHIEF EXECUTIVE
OFFICER AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
II-38
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, President, Chief Executive Officer and
------------------------------------------ Treasurer (Principal Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Vice President, Controller, Secretary and Assistant
------------------------------------------ Treasurer (Principal Financial and Accounting Officer)
Donald C. TenBarge
By /s/ ROBERT M. LEICH Director
------------------------------------------
Robert M. Leich
By /s/ PHILIP C. FISHER Director
------------------------------------------
Philip C. Fisher
By /s/ CLIFTON E. FORREST Director, Vice President, and Assistant Secretary
------------------------------------------
Clifton E. Forrest
By /s/ CHARLES W. LAUGHLIN Director
------------------------------------------
Charles W. Laughlin
</TABLE>
II-39
<PAGE>
Pursuant to the requirements of the Securities Act, CMN HOLDING, INC. has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
CMN HOLDING, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-40
<PAGE>
Pursuant to the requirements of the Securities Act, BRILL RADIO, INC. has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
BRILL RADIO, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-41
<PAGE>
Pursuant to the requirements of the Securities Act, BRILL NEWSPAPERS, INC.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Evansville, in the State
of Indiana, on January 12, 1998.
BRILL NEWSPAPERS, INC.
By /s/ ALAN R. BRILL
------------------------------------------
Alan R. Brill
DIRECTOR, VICE PRESIDENT AND TREASURER
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Alan R.
Brill his true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any or all amendments (including post-effective
amendments) to this Registration Statement, and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorney-in-fact and
agent, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorney-in-fact and agent
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement and the foregoing Power of Attorney has been signed by
the following persons in the capacities indicated on January 12, 1998.
<TABLE>
<CAPTION>
SIGNATURE TITLE
- ----------------------------------------------------------------- ------------------------------------------------------
<S> <C> <C>
By /s/ ALAN R. BRILL Director, Vice President and Treasurer (Principal
------------------------------------------ Executive Officer)
Alan R. Brill
By /s/ DONALD C. TENBARGE Assistant Treasurer (Principal Financial and
------------------------------------------ Accounting Officer)
Donald C. TenBarge
</TABLE>
II-42
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------------- --------------------------------------------------------------------------------------------------
<S> <C>
3(i)(a) Articles of Organization of Brill Media Company, LLC*
3(i)(b) Articles of Incorporation of Brill Media Management, Inc.*
3(i)(c) Articles of Organization of BMC Holdings, LLC*
3(i)(d) Articles of Incorporation of Reading Radio, Inc.*
3(i)(e) Articles of Incorporation of Tri-State Broadcasting, Inc.*
3(i)(f) Articles of Incorporation of Northern Colorado Radio, Inc.*
3(i)(g) Articles of Incorporation of NCR II, Inc.*
3(i)(h) Articles of Incorporation of Central Missouri Broadcasting, Inc.*
3(i)(i) Articles of Incorporation of CMB II, Inc.*
3(i)(j) Articles of Organization of Northland Broadcasting, LLC*
3(i)(k) Articles of Incorporation of NB II, Inc.*
3(i)(l) Articles of Incorporation of Central Michigan Newspapers, Inc.*
3(i)(m) Articles of Incorporation of Cadillac Newspapers, Inc.*
3(i)(n) Articles of Incorporation of CMN Associated Publications, Inc.*
3(i)(o) Articles of Limited Partnership of Central Michigan Distribution Co., L.P.*
3(i)(p) Articles of Incorporation of Central Michigan Distribution Co., Inc.*
3(i)(q) Articles of Incorporation of Gladwin Newspapers, Inc.*
3(i)(r) Articles of Incorporation of Graph Ads Printing, Inc.*
3(i)(s) Articles of Incorporation of Midland Buyers Guide, Inc.*
3(i)(t) Articles of Incorporation of St. Johns Newspapers, Inc.*
3(i)(u) Articles of Organization of Huron P.S., LLC*
3(i)(v) Articles of Organization of Huron Newspapers, LLC*
3(i)(w) Articles of Organization of Huron Holdings, LLC*
3(i)(x) Articles of Organization of Northern Colorado Holdings, LLC*
3(i)(y) Articles of Organization of NCR III, LLC*
3(i)(z) Articles of Organization of NCH II, LLC*
3(i)(aa) Articles of Organization of Northland Holdings, LLC*
3(i)(bb) Articles of Incorporation of CMN Holding, Inc.*
3(i)(cc) Articles of Incorporation of Brill Radio, Inc.*
3(i)(dd) Articles of Incorporation of Brill Newspapers, Inc.*
3(ii)(a) Operating Agreement of Brill Media Company, LLC*
3(ii)(b) By-laws of Brill Media Management, Inc.*
3(ii)(c) Operating Agreement of BMC Holdings, LLC*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------------- --------------------------------------------------------------------------------------------------
<S> <C>
3(ii)(d) By-laws of Reading Radio, Inc.*
3(ii)(e) By-laws of Tri-State Broadcasting, Inc.*
3(ii)(f) By-laws of Northern Colorado Radio, Inc.*
3(ii)(g) By-laws of NCR II, Inc.*
3(ii)(h) By-laws of Central Missouri Broadcasting, Inc.*
3(ii)(i) By-laws of CMB II, Inc.*
3(ii)(j) Operating Agreement of Northland Broadcasting, LLC*
3(ii)(k) By-laws of NB II, Inc.*
3(ii)(l) By-laws of Central Michigan Newspapers, Inc.*
3(ii)(m) By-laws of Cadillac Newspapers, Inc.*
3(ii)(n) By-laws of CMN Associated Publications, Inc.*
3(ii)(o) Partnership Agreement of Central Michigan Distribution Co., L.P.*
3(ii)(p) By-laws of Central Michigan Distribution Co., Inc.*
3(ii)(q) By-laws of Gladwin Newspapers, Inc.*
3(ii)(r) By-laws of Graph Ads Printing, Inc.*
3(ii)(s) By-laws of Midland Buyers Guide, Inc.*
3(ii)(t) By-laws of St. Johns Newspapers, Inc.*
3(ii)(u) Operating Agreement of Huron P.S., LLC*
3(ii)(v) Operating Agreement of Huron Newspapers, LLC*
3(ii)(w) Operating Agreement of Huron Holdings, LLC*
3(ii)(x) Operating Agreement of Northern Colorado Holdings, LLC*
3(ii)(y) Operating Agreement of NCR III, LLC*
3(ii)(z) Operating Agreement of NCH II, LLC*
3(ii)(aa) Operating Agreement of Northland Holdings, LLC*
3(ii)(bb) By-laws of CMN Holding, Inc.*
3(ii)(cc) By-laws of Brill Radio, Inc.*
3(ii)(dd) By-laws of Brill Newspapers, Inc.*
4.1 Indenture dated as of December 30, 1997 among Brill Media Company, LLC, Brill Media Management,
Inc., the Subsidiary Guarantors named therein, and United States Trust Company of New York, as
Trustee, with the forms of 12% Senior Notes due 2007 and Series B 12% Senior Notes due 2007
included therein*
4.2 Indenture dated as of December 30, 1997 among Brill Media Company, LLC, Brill Media Management,
Inc., the Subsidiary Guarantors named therein, and United States Trust Company of New York, as
Trustee, with the forms of Appreciation Notes due 2007 and Series B Appreciation Notes due 2007
included therein*
5.1 Opinion of Carter, Ledyard & Milburn including consent*
5.2 Opinion of Thompson & McMullan, P.C. including consent*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------------- --------------------------------------------------------------------------------------------------
<S> <C>
8 Opinion of Carter, Ledyard & Milburn regarding certain Federal income tax matters, including
consent*
10.1(a) Performance Incentive Plan Agreement dated November 26, 1985 between Central Michigan Newspapers,
Inc. and Clifton E. Forrest*
10.1(b) Performance Incentive Plan Agreement dated November 26, 1985 between WIOV, Inc. and Alan L. Beck*
10.2 Managed Affiliates Subordination Agreement dated December 30, 1997 among Brill Media Company, L.P.
and certain Subsidiaries
10.3 Management Agreements dated December 30, 1987 between various subsidiaries of Brill Media Company,
LLC and Brill Media Company, L.P.*
10.4(a) Managed Affiliate Management Agreement dated December 30, 1997 between Tri-State Broadcasting,
Inc. and TSB III, LLC*
10.4(b) Managed Affiliate Management Agreement dated December 30, 1997 between Tri-State Broadcasting,
Inc. and TSB IV, LLC*
10.5(a) Managed Affiliate Promissory Note dated December 30, 1997 of TSB III, LLC in favor of Tri-State
Broadcasting, Inc.*
10.5(b) Managed Affiliate Promissory Note dated December 30, 1997 of TSB IV, LLC in favor of Tri-State
Broadcasting, Inc.*
10.6(a) Asset Purchase Agreement dated October 24, 1997 between CMBH, Inc. and MVP Radio, Inc.*
10.6(b) Asset Purchase Agreement dated October 24, 1997 between Central Missouri Broadcasting, Inc. and
Zimmer Radio of Mid-Missouri, Inc.*
10.7 Amended and Restated Credit Agreement dated as of September 30, 1997 by and among the Borrowers
named therein, Amresco Funding Corporation and Goldman Sachs Credit Partners L.P.**
10.8(a) Time Brokerage Agreement dated November 1, 1997 between CMB II, Inc. and MVP Radio, Inc.*
10.8(b) Time Brokerage Agreement dated November 1, 1997 between Central Missouri Broadcasting, Inc. and
Zimmer Radio of Mid-Missouri, Inc.*
10.8(c) Time Brokerage Agreement dated June 27, 1996 between NCR II, Inc. and Onyx, Inc.*
10.9 Purchase Agreement dated December 22, 1997 by and among Brill Media Company, LLC, Brill Media
Management, Inc., the Subsidiary Guarantors named therein, and NatWest Capital Markets Limited*
10.10(a) Registration Rights Agreement dated as of December 30, 1997 by and among Brill Media Company, LLC,
Brill Media Management, Inc., the Subsidiary Guarantors named therein, and NatWest Capital Markets
Limited*
10.10(b) Appreciation Notes Registration Rights Agreement dated as of December 30, 1997 by and among Brill
Media Company, LLC, Brill Media Management, Inc., the Subsidiary Guarantors named therein, and
NatWest Capital Markets Limited*
10.11(a) Revolving Credit Agreement dated December 30, 1997 between various Subsidiary Guarantors and BMC
Holdings, LLC*
10.11(b) Revolving Credit Note dated December 30, 1997 between various Subsidiary Guarantors and BMC
Holdings, LLC*
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION OF EXHIBIT
- -------------- --------------------------------------------------------------------------------------------------
<S> <C>
10.11(c) Promissory Note dated December 30, 1997 between BMC Holdings, LLC and Brill Media Company, LLC*
12.1 Ratio of Earnings to Fixed Charges*
21 Subsidiaries of Brill Media Company, LLC*
23.1 Consent of Carter, Ledyard & Milburn (included in its opinions to be filed as Exhibits 5.1 and 8)*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Thompson & McMullan, P.C. (included in its opinion to be filed as Exhibit 5.2)
24 Power of Attorney (included on signature page)
25.1 Statement of Eligibility on Form T-1 of Trustee (Series B 12% Senior Notes Due 2007)*
25.2 Statement of Eligibility on Form T-1 of Trustee (Series B Appreciation Notes Due 2007)*
27 Financial Data Schedule*
99.1 Form of Letter of Transmittal to Tender for Exchange 12% Senior Notes due 2007*
99.2 Form of Letter of Transmittal to Tender for Exchange Appreciation Notes due 2007*
99.3 Form of Exchange Agency Agreement among Brill Media Company, LLC, Brill Media Management, Inc.,
the Subsidiary Guarantors named therein and United States Trust Company of New York, as Exchange
Agent**
</TABLE>
- ------------------------
* Filed herewith
** To be filed by amendment
<PAGE>
EX-3.(i)(a)
ARTICLES OF ORGANIZATION
OF
BRILL MEDIA COMPANY, LLC
The undersigned sets forth the following as the Articles of Organization
of BRILL MEDIA COMPANY, LLC, a Virginia limited liability company (the
"Company"):
1. NAME. The name of the Company shall be "Brill Media Company, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the Company shall have a term of fifty (50) years from the date of its
organization.
Witness the following signature of the undersigned member of the Company
who is the person forming the Company.
-----------------------------
Organizer
<PAGE>
EX-3.(i)(b)
ARTICLES OF INCORPORATION
OF
BRILL MEDIA MANAGEMENT, INC.
1. The name of the corporation is "Brill Media Management, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
Brill Media Management, Inc.
Date: By:
---------- --------------------------------
Charles W. Laughlin, Incorporator
<PAGE>
EX-3.(i)(c)
ARTICLES OF ORGANIZATION
OF
BMC HOLDINGS, LLC
The undersigned sets forth the following as the Articles of Organization
of BMC HOLDING, LLC, a Virginia limited liability company (the "Company"):
1. NAME. The name of the Company shall be "BMC Holdings, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the Company shall have a term of fifty (50) years from the date of its
organization.
Witness the following signature of the undersigned member of the Company
who is the person forming the Company.
-----------------------------
Organizer
<PAGE>
EX-3.(i)(d)
ARTICLES OF INCORPORATION
OF
READING RADIO, INC.
FIRST: Name. The corporation's name is Reading Radio, Inc.
SECOND: Purpose. The corporation's purposes shall be to transact any or
all lawful business, not required to be stated in the articles of incorporation,
for which corporations may be incorporated, and the corporation shall have all
powers not prohibited by law or required to be stated in the articles of
incorporation.
THIRD: Capital Stock. The aggregate number of shares which the corporation
shall have the authority to issue is 1,000 shares of common stock, each such
share to have a par value of $1.00.
FOURTH: Stated Capital. The stated capital of the corporation may be
reduced in any manner provided by law without the assent of the stockholders of
the corporation.
FIFTH: Registered Office and Agent. The post office address of the initial
registered office is 1200 Mutual Building, in the City of Richmond, and the
initial registered agent at that address is Charles W. Laughlin, who is a
resident of the State of Virginia and a member of the Virginia State Bar.
SIXTH: Board of Directors. The number of directors shall not be less than
the minimum number prescribed law and shall be fixed by the by-laws of the
corporation. Initially all shares of the corporation will be owned of record by
one stockholder, and the first board of directors shall consist of one director
whose name
<PAGE>
and address is:
Name Address
---- -------
Alan R. Brill 1162 Woodberry Road
Charlottesville, VA 22901
SEVENTH: Indemnity. The corporation shall indemnify each director and
officer against liabilities (including judgments and fines and reasonable
attorney's fees, costs and expenses) incurred by him in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (any of which is hereinafter
referred to as a "proceeding") to which he may be made a party by reason of his
being or having been a director or officer of the corporation, except in
relation to any proceeding in which he has been adjudged liable because of
willful misconduct, bad faith or gross negligence involved in the conduct of his
office or, in relation to any criminal proceeding, in which he had reasonable
cause to believe his conduct was unlawful (any of which behavior is hereinafter
referred to as "misfeasance"), provided, however, that even if he is guilty of
misfeasance he shall be entitled to such indemnification as shall be finally
ordered by a court. In the event of the disposition of any proceeding in which
no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a quorum
<PAGE>
consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Dated: February 3, 1981
-------------------------------
Charles W. Laughlin Incorporator
<PAGE>
ARTICLES OF MERGER
of
WIOV, INC.
into
READING RADIO, INC.
1. The plan of merger ("Plan of Merger") pursuant to which WIOV, Inc., a
Virginia corporation ("WIOV"), will merge into Reading Radio, Inc., a Virginia
corporation (the "Surviving Corporation"), which will be the surviving
corporation, is attached hereto and made a part hereof as Exhibit A.
2. The Plan of Merger was duly adopted by the unanimous consent of all
directors and all shareholders of WIOV and of the surviving corporation.
READING RADIO, INC., a Virginia corporation
By:
-------------------------------
Alan R. Brill, Vice President
<PAGE>
PLAN OF MERGER
1. This is the plan of merger pursuant to which WIOV, INC., a Virginia
corporation, (the "Merging Corporation") shall be merged into READING RADIO,
INC., a Virginia corporation, (the "surviving corporation").
2. Effective as of date of issuance of a certificate of merger by the
State Corporation Commission of Virginia (the "Effective Date"):
(a) the Merging Corporation shall be merged into the surviving corporation
(b) the name of the Surviving Corporation shall continue to be Reading
Radio, Inc.;
(c) each then outstanding share of capital stock of the Merging
corporation shall thereupon be converted into and become ten (10) shares of the
capital stock of the surviving Corporation, fully paid and nonassessable; each
shareholder of a share or shares of the outstanding capital stock of the Merging
Corporation upon surrender of the certificate representing such share or shares
shall be entitled to receive a certificate for the full number of shares of
capital stock of the Surviving corporation into which the capital stock so
surrendered shall have been converted, and until such surrender and cancellation
shall have been accomplished each outstanding certificate representing issued
and outstanding shares of the capital stock of the Merging Corporation shall be
deemed for all corporate purposes to evidence the ownership of the number of
shares of the capital stock of the Surviving Corporation into which, such shares
of the Merging Corporation were converted as herein provided;
(d) the Third Article of the articles of incorporation of the surviving
Corporation shall be and is hereby amended to read in full as follows:
THIRD: Capital Stock. The aggregate number
of shares which the corporation shall have
authority to issue is 2,000 shares of common
stock, each said share to have a par value of
$1.00.
3. The board of directors of each corporation a party hereto may amend
this plan of merger at any time prior to issuance of the certificate of merger
as and to the extent permitted by Section 13.1-718 of the Code of Virginia.
<PAGE>
EX-3.(i)(e)
ARTICLES OF INCORPORATION
OF
TRI-STATE BROADCASTING, INC.
1. The name of the corporation is "Tri-State Broadcasting, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The address of the corporation's initial registered office is 100
Shockoe Slip, Third Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
Tri-State Broadcasting, Inc.
March 25, 1993
----------------------------------
Alison V. Fauls, Incorporator
<PAGE>
EX-3.(i)(f)
ARTICLES OF INCORPORATION
OF
NORTHERN COLORADO RADIO, INC.
1. The name of the corporation is "Northern Colorado Radio, Inc."
2. The corporation is authorized to issue 1,000 shares of common stock at
a par value of $1.00.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, Third Floor, Richmond, Virginia 23219, in the City of
Richmond, Virginia, and its initial registered agent at that office is Charles
W. Laughlin, who is a resident of Virginia and a member of the Virginia State
Bar.
June 21, 1988
Northern Colorado Radio, Inc.
By:
-------------------------------
Charles W. Laughlin,
Incorporator
<PAGE>
EX-3.(i)(g)
ARTICLES OF INCORPORATION
OF
NCR II, INC.
1. The name of the corporation is "NCR II, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
May 14, 1996
NCR II, INC.
By:
--------------------------------
Alison V. Fauls, Incorporator
<PAGE>
EX-3.(i)(h)
ARTICLES OF INCORPORATION
of
CENTRAL MISSOURI RADIO, INC.
FIRST: Name. The corporation's name is "Central Missouri Radio, INC".
SECOND: Purpose. The corporation's purposes shall be to transact any or
all lawful business, not required to be stated in the articles of incorporation,
for which corporations may be incorporated, and the corporation shall have all
powers not prohibited by law or required to be stated in the articles of
incorporation.
THIRD: Capital Stock. The aggregate number of shares which the corporation
shall have the authority to issue is 1,000 shares of common stock, each such
share to have a par value of $1.00.
FOURTH: Stated Capital. The stated capital of the corporation may be
reduced in any manner provided by law without the assent of the stockholders of
the corporation.
FIFTH: Registered Office and Agent. The post office address of the initial
registered office is 1200 Mutual Building, in the City of Richmond, and the
initial registered agent at that address is Charles W. Laughlin, who is a
resident of the State of Virginia and a member of the Virginia State Bar.
SIXTH: Board of Directors. The number of directors shall not be less than
the minimum number prescribed law and shall be fixed by the by-laws of the
corporation. Initially all shares of the corporation will be owned of record by
one stockholder, and the
<PAGE>
first board of directors shall consist of one director whose name and address
is:
Name Address
---- -------
Alan R. Brill 1162 Woodberry Road
Charlottesville, VA 22901
SEVENTH: Indemnity. The corporation shall indemnify each director and
officer against liabilities (including judgments and fines and reasonable
attorney's fees, costs and expenses) incurred by him in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (any of which is hereinafter
referred to as a "proceeding") to which he may be made a party by reason of his
being or having been a director or officer of the corporation, except in
relation to any proceeding in which he has been adjudged liable because of
willful misconduct, bad faith or gross negligence involved in the conduct of his
office or, in relation to any criminal proceeding, in which he had reasonable
cause to believe his conduct was unlawful (any of which behavior is hereinafter
referred to as "misfeasance"), provided, however, that even if he is guilty of
misfeasance he shall be entitled to such indemnification as shall be finally
ordered by a court. In the event of the disposition of any proceeding in which
no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made
<PAGE>
(i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such proceeding, (ii) by independent legal
counsel in a written opinion if such a quorum is not obtainable, or, even if
obtainable, if a majority of disinterested directors so directs, or (iii) by the
shareholders. Directors eligible to make any such determination or to -refer any
such determination to independent legal counsel must act with reasonable
promptness when indemnificaiton is sought by any director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the corporation and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so
<PAGE>
indemnify them if directed to do so by the stockholders.
Dated: November 21, 1980
--------------------------------
Douglas R. Maxwell, Incorporator
<PAGE>
Articles of Amendment
Of The Articles of Incorporation Of
CENTRAL MISSOURI RADIO. INC
By a consent in writing setting forth the resolution, signed by all of the
directors of the corporation before the resolution was submitted to a vote of
the stockholders, the board of directors of Central Missouri Radio, Inc.
adopted a resolution finding that the following proposed amendment of the
articles of incorporation of Central Missouri Radio Inc. was in the best
interests of the corporation and directing that it be submitted to a vote of the
stockholders:
"RESOLVED, that the articles of incorporation of Central Missouri
Radio, Inc. be and they hereby are amended by striking therefrom Article
First in its entirety and by substituting in lieu thereof the following:
FIRST: Name. The corporation's name is "Central Missouri
Broadcasting. Inc."
2. Said proposed amendment was adopted by all the stockholders by a
consent in writing which set forth said proposed amendment and which was signed
by all the stockholders entitled to vote thereon.
3. The number of shares of stock of the corporation outstanding on the
record date, the number of shares entitled to vote on the proposed amendment and
the number of shares voted for and against the amendment were as follows, there
being no shares entitled to vote as a class or series thereon:
A. Shares outstanding 1,000
B. Shares entitled to Vote 1,000
C. Shares voted: FOR, 1,000, AGAINST, 0.
<PAGE>
EXECUTED this 3rd day of February, 1981 in the name of the corporation by
its President and Secretary.
CENTRAL MISSOURI RADIO, INC.
-----------------------------
Alan R. Brill, President
-----------------------------
Alan R. Brill Secretary
<PAGE>
EX-3.(i)(i)
ARTICLES OF INCORPORATION
OF
CMB II, INC.
1. The name of the corporation is "CMB II, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
February 3, 1994
CMB II, INC.
By:
--------------------------------
Alison V. Fauls, Incorporator
<PAGE>
EX-3.(i)(j)
ARTICLES OF ORGANIZATION
OF
NORTHLAND BROADCASTING, LLC
The undersigned sets forth the following as the Articles of Organization
of NORTHLAND BROADCASTING, LLC (the "Company"), a Virginia limited liability
company:
1. NAME. The name of the Company shall be "Northland Broadcasting, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 2nd day of January, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(k)
ARTICLES OF INCORPORATION
OF
NB II, INC.
1. The name of the corporation is "NB II, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
February 9, 1995
NB II, INC.
By:
--------------------------------
Alison V. Fauls, Incorporator
<PAGE>
EX-3.(i)(l)
ARTICLES OF INCORPORATION
OF
CENTRAL MICHIGAN NEWSPAPERS, INC.
FIRST: The name of the corporation is Central Michigan Newspapers, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 2,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall not be less than the minimum number
prescribed law and shall be fixed by the by-laws of
<PAGE>
the corporation. Initially all shares of the corporation will be owned of record
by one stockholder, and the initial board of directors shall consist of one
director whose name and address is:
Name Address
---- -------
Gloria S. Tiller 8418 Freestone Avenue
Richmond, VA 23229
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such
<PAGE>
payments or obligations arc reasonable. Such determination shall be made (i)
by-the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such proceeding, (ii) by independent legal counsel in a
written opinion if such a quorum is not obtainable, or, even if obtainable, if a
majority of disinterested directors so directs, or (iii) by the shareholders.
Directors eligible to make any such determination or to -refer any such
determination to independent legal counsel must act with reasonable promptness
when indemnificaiton is sought by any director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and
<PAGE>
director in any other manner permitted by law, and shall so indemnify them if
directed to do so by the stockholders. Dated: April 24, 1981
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(m)
ARTICLES OF INCORPORATION
OF
CADILLAC NEWSPAPERS, INC.
FIRST: The name of the corporation is Cadillac Newspapers, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 2,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall not be less than the minimum number
prescribed law and shall be fixed by the by-laws of
<PAGE>
the corporation. Initially all shares of the corporation will be owned of record
by one stockholder, and the initial board of directors shall consist of one
director whose name and address is:
Name Address
---- -------
Bonnie P. Brill 1162 Woodberry Road
Charlottesville, VA 22901
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such
<PAGE>
payments or obligations arc reasonable. Such determination shall be made (i)
by-the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such proceeding, (ii) by independent legal counsel in a
written opinion if such a quorum is not obtainable, or, even if obtainable, if a
majority of disinterested directors so directs, or (iii) by the shareholders.
Directors eligible to make any such determination or to -refer any such
determination to independent legal counsel must act with reasonable promptness
when indemnificaiton is sought by any director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and
<PAGE>
director in any other manner permitted by law, and shall so indemnify them if
directed to do so by the stockholders.
Dated: April 23, 1981
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(n)
ARTICLES OF INCORPORATION
OF
CMN ASSOCIATED PUBLICATIONS, INC.
FIRST: The name of the corporation is CMN Associated Publications, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 1,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall be fixed by the by-laws of the
corporation. In the absence of a bylaw fixing the
<PAGE>
number it shall be one. The initial director shall be Alan R. Brill, whose
address is 7417 East Olive Street, Evansville, Indiana 47715.
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a
<PAGE>
quorum consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Given under by hand this 17th day of December, 1982.
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(o)
Certificate of Limited Partnership
of
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
1. The name of the limited partnership ("Partnership")is "Central Michigan
Distribution Co., L.P."
2. The post office address of the office at which the records required to
be maintained by the Partnership are kept is P.O. Box 447, 215 North Main
Street, in the City of Mount Pleasant (County of Isabella), Michigan 48858.
3. The name of the initial registered agent of the Partnership is Charles
W. Laughlin, who is a resident of Virginia member of the Virginia State Bar, and
the business and post office address of the Partnership's registered agent is
100 Shockoe Slip, Richmond, Virginia 23219, located in the City of Richmond.
4. The name and post office address of each general partner of the
Partnership is:
Central Michigan P.0. Box 447
Distribution Co., Inc. 215 North Main Street
Mount Pleasant, MI 48858
5. The latest date upon which the Partnership is to be dissolved and its
affairs wound up is February 28, 2090.
Central Michigan. Distribution Co.,
Inc., the General Partner
of Central Michigan Distribution
Co. L.P.
by:
--------------------------------
Alison V. Fauls, Assistant
Secretary of Central Michigan
Distribution Co., Inc.
STATE OF VIRGINIA
CITY OF RICHMOND, to-wit:\
The foregoing instrument was acknowledged before me on this the 13th day
of January, 1989, by Alison V. Fauls as Assistant Secretary of Central Michigan
Distribution Co., Inc., General Partner of Central Michigan Distribution Co.,
L.P., in the City of Richmond, State of Virginia.
<PAGE>
-----------------------------
Notary Public
My Commission expires:
<PAGE>
EX-3.(i)(p)
ARTICLES OF INCORPORATION
OF
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
FIRST: The name of the corporation is Central Michigan Distribution Co.,
Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 1,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall be fixed by the by-laws of the
corporation. In the absence of a bylaw fixing the
<PAGE>
number it shall be one. The initial director shall be Alan R. Brill, whose
address is 7417 East Olive Street, Evansville, Indiana 47715.
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a
<PAGE>
quorum consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Given under by hand this 17th day of December, 1982.
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(q)
ARTICLES OF INCORPORATION
OF
GLADWIN NEWSPAPERS, INC.
FIRST: The name of the corporation is Gladwin Newspapers, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 2,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall not be less than the minimum number
prescribed law and shall be fixed by the by-laws of
<PAGE>
the corporation. Initially all shares of the corporation will be owned of record
by one stockholder, and the initial board of directors shall consist of one
director whose name and address is:
Name Address
---- -------
Bonnie P. Brill 1162 Woodberry Road
Charlottesville, VA 22901
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such
<PAGE>
payments or obligations arc reasonable. Such determination shall be made (i)
by-the Board of Directors by a majority vote of a quorum consisting of directors
who were not parties to such proceeding, (ii) by independent legal counsel in a
written opinion if such a quorum is not obtainable, or, even if obtainable, if a
majority of disinterested directors so directs, or (iii) by the shareholders.
Directors eligible to make any such determination or to -refer any such
determination to independent legal counsel must act with reasonable promptness
when indemnificaiton is sought by any director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and
<PAGE>
director in any other manner permitted by law, and shall so indemnify them if
directed to do so by the stockholders.
Dated: April 23, 1981
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(r)
ARTICLES OF INCORPORATION
OF
GRAPH ADS PRINTING, INC.
FIRST: The name of the corporation is Graph Ads Printing, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 1,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall be fixed by the by-laws of the
corporation. In the absence of a bylaw fixing the
<PAGE>
number it shall be one. The initial director shall be Alan R. Brill, whose
address is 7417 East Olive Street, Evansville, Indiana 47715.
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a
<PAGE>
quorum consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Given under by hand this 17th day of December, 1982.
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(s)
ARTICLES OF INCORPORATION
OF
MIDLAND BUYER'S GUIDE, INC.
FIRST: The name of the corporation is Midland Buyer's Guide, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 1,000
shares of Class A common stock, each such share to have a par value of $1.00. No
holder of shares of common stock or any other securities of the corporation
shall be entitled to the preemptive right to subscribe to additional shares of
common stock, to warrants or rights for the purchase of such shares or to
securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the initial registered agent at
that address is Charles W. Laughlin, who is a resident of the State of Virginia
and a member of the Virginia State Bar.
SIXTH: The number of directors shall be fixed in the by-laws of the
corporation. In the absence of a bylaw fixing the
<PAGE>
number it shall be one. The initial director shall be Alan R. Brill, whose
address is 7417 East Olive Street, Evansville, Indiana 47715.
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had reasonable cause to believe his conduct was unlawful (any of which behavior
is hereinafter referred to as "misfeasance"), provided, however, that even if he
is guilty of misfeasance he shall be entitled to such indemnification as shall
be finally ordered by a court. In the event of the disposition of any proceeding
in which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a
<PAGE>
quorum consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Given under by hand this 21st day of December, 1982.
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
EX-3.(i)(t)
ARTICLES OF INCORPORATION
OF
ST. JOHNS NEWSPAPERS, INC.
1. The name of the corporation is "St. Johns Newspapers, Inc."
2. The number of shares that the corporation is authorized to issue is
5,000 shares of common stock.
3. The post office address of the corporation's initial registered office
is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219, located in the City of
Richmond, Virginia, and the name of the corporation's initial registered agent
at the aforesaid office is Charles W. Laughlin, who is a resident of Virginia
and a member of the Virginia State Bar.
June 6, 1996
ST. JOHNS NEWSPAPERS, INC.
By:
--------------------------------
Alison V. Fauls, Incorporator
<PAGE>
ARTICLES OF MERGER
OF
CLINTON DISTRIBUTION, INC.
INTO
ST. JOHNS NEWSPAPERS, INC.
1. The plan of merger ("Plan of Merger") pursuant to which Clinton
Distribution, Inc., a corporation organized under the laws of the State of
Michigan ("Clinton"), will merge into St. Johns Newspapers, Inc., a corporation
organized under the laws of the Commonwealth of Virginia (the "Surviving
Corporation"), which will be the surviving corporation, is attached hereto and
made a part hereof as Exhibit A.
2. The Plan of Merger was duly adopted by the unanimous consent of all of
the directors of Clinton and the Surviving Corporation.
3. In accordance with Section 13.1-719.A of the Code of Virginia (1950),
as amended, shareholder approval was not required by Clinton or the Surviving
Corporation because the Surviving Corporation owns one hundred percent (100%) of
the outstanding shares of all of the stock of Clinton, and the Surviving
Corporation waives the mailing requirement.
ST. JOHNS NEWSPAPERS, INC., a
Virginia corporation
By:
--------------------------------
Alan R. Brill, President
<PAGE>
EXHIBIT A
PLAN OF MERGER
1. This is the plan of merger pursuant to which CLINTON DISTRIBUTION,
INC., a corporation organized under the laws of the State of Michigan (the
"Merging Corporation"), shall be merged into ST. JOHNS NEWSPAPERS, INC., a
corporation organized under the laws of the Commonwealth of Virginia (the
"Surviving Corporation").
2. The Surviving Corporation owns all of the outstanding stock of the
Merging Corporation.
3. Effective as of date of issuance of a certificate of merger by the
State Corporation Commission of Virginia (the "Effective Date"):
(a) the Merging Corporation shall be merged into the Surviving
Corporation;
(b) the name of the Surviving Corporation shall continue to be St.
Johns Newspapers, Inc.; and
(c) each then outstanding share of capital stock of the Merging
Corporation shall be cancelled. Each shareholder of the Merging Corporation
shall upon the Effective Date surrender each certificate representing a share or
shares of the Merging Corporation to the Secretary of the Surviving Corporation,
and until such surrender and cancellation shall have been accomplished, each
outstanding certificate representing issued and outstanding shares of the
capital stock of the Merging Corporation shall be deemed for all corporate
purposes to be null and void and of no force and effect.
<PAGE>
EX-3.(i)(u)
ARTICLES OF ORGANIZATION
OF
HURON P.S., LLC
The undersigned sets forth the following as the Articles of Organization
of Huron P.S., LLC (the "Company"), a Virginia limited liability company:
1. NAME. The name of the Company shall be "Huron P.S., LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 4th day of September, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(v)
ARTICLES OF ORGANIZATION
OF
HURON NEWSPAPERS, LLC
The undersigned sets forth the following as the Articles of Organization
of Huron Newspapers, LLC (the "Company"), a Virginia limited liability company:
1. NAME. The name of the Company shall be "Huron Newspapers, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 4th day of September, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(w)
ARTICLES OF ORGANIZATION
OF
HURON HOLDINGS, LLC
The undersigned sets forth the following as the Articles of Organization
of Huron Holdings, LLC (the "Company"), a Virginia limited liability company:
1. NAME. The name of the Company shall be "Huron Holdings, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 4th day of September, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(x)
ARTICLES OF ORGANIZATION
OF
NORTHERN COLORADO HOLDINGS, LLC
The undersigned sets forth the following as the Articles of Organization
of NORTHERN COLORADO HOLDINGS, LLC, a Virginia limited liability company (the
"Company"):
1. NAME. The name of the Company shall be "Northern Colorado Holdings,
LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 8th day of May, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(y)
ARTICLES OF ORGANIZATION
OF
NCR III, LLC
The undersigned sets forth the following as the Articles of Organization
of NCR III, LLC (the "Company"), a Virginia limited liability company:
1. NAME. The name of the Company shall be "NCR III, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 22nd day of May, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(z)
ARTICLES OF ORGANIZATION
OF
NCH II, LLC
The undersigned sets forth the following as the Articles of Organization
of NCH II, LLC (the "Company"), a Virginia limited liability company:
1. NAME. The name of the Company shall be "NCH II, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this 22nd day of May, 1997.
-----------------------------
Alison V. Fauls, Organizer
<PAGE>
EX-3.(i)(aa)
ARTICLES OF ORGANIZATION
OF
NORTHLAND HOLDINGS, LLC
The undersigned sets forth the following as the Articles of Organization
of NORTHLAND HOLDINGS, LLC, a Virginia limited liability company (the
"Company"):
1. NAME. The name of the Company shall be "Northland Holdings, LLC".
2. REGISTERED AGENT AND ADDRESS. The initial registered office of the
Company is 100 Shockoe Slip, 3rd Floor, Richmond, Virginia 23219 located in the
City of Richmond, Virginia, and the name of the initial registered agent of the
Company at the foregoing address is Charles W. Laughlin, an individual who is a
resident of the Commonwealth of Virginia and a member of the Virginia State Bar.
3. PRINCIPAL OFFICE. The principal office of the Company is 420 N.W. Fifth
Street, Suite 3-B, Evansville, Indiana 47708, located in the City of Evansville,
Indiana.
4. DURATION. Unless sooner terminated by operation of law or otherwise,
the latest date on which the Company shall be dissolved, its existence
terminated, and its affairs wound up is fifty (50) years from the date of
issuance of the Company's Certificate of Organization by the State Corporation
Commission of Virginia.
Witness the following signature this ____ day of February, 1997.
-----------------------------
Lee N. Kump, Organizer
<PAGE>
EX-3.(i)(bb)
ARTICLES OF AMENDMENT
OF THE ARTICLES OF INCORPORATION OF
CMN HOLDING, INC.
1. By a written consent in lieu of a special meeting setting forth a
resolution, signed by all of the directors of the corporation before the
resolution was submitted to & vote of the sole stockholder entitled to vote
thereon, the directors adopted a resolution finding that the following proposed
amendments of the Articles Incorporation of CMN Holding, Inc. were in the best
interests of the corporation and directing that they be submitted to a vote of
the sole stockholder entitled to vote thereon:
That the Articles of Incorporation be amended by striking therefrom
Paragraph 1.1 of THIRD, Division A, Section 1 in its entirety and by
substituting in lieu thereof the following:
1.1. Senior Preferred. The holders of shares of the Senior Preferred
shall be entitled to receive, when and as declared by the board of
directors out of funds legally available for such purpose, dividends in
lawful money of the United States of America at the rate of $12.00 per
share per annum prior to July 1, 1984 and at the rate of $17.00 per share
per annum on and after July 1, 1984, payable quarterly on the last
business day of February, May, August and November in each year,
commencing November 30, 1981, in equal installments. To the extent not
then inconsistent with law or contrary to the then provisions of the
Virginia Stock Corporation Act, the foregoing dividends shall be declared
by the board of directors of the corporation, and when declared shall so
paid to the then holders of the Senior Preferred. As to each issued and
outstanding share of the Senior Preferred such dividends shall accumulate
if not paid whether or not declared, from and after the date of the
original issue of such share.
So long as any share of the Senior Preferred is outstanding, no sums
shall be applied to the payment of any dividend or the making of any other
distribution in respect of the Convertible Preferred or of any other
<PAGE>
class of stock ranking junior to the Senior Preferred in respect of
dividends or of the amounts payable upon any voluntary liquidation,
dissolution, or winding up of the corporation (other than a distribution
payable in stock ranking junior to the Senior Preferred, with cash
adjustments for fractional shares), unless a full dividend on each of the
then outstanding shares of Senior Preferred, for all quarterly dividend
periods and for the then current quarterly dividend period, shall
theretofore have been paid at the applicable dividend rate set forth
above. Holders of the Senior Preferred shall be entitled to no
participation rights in any other dividend declared and paid by the
Corporation.
* * *
That the Articles of Incorporation be amended by striking therefrom
Paragraph 1.2 of Article THIRD, Division A, Section 1 in its entirety and
by substituting in lieu thereof the following:
1.2. Convertible Preferred. The holders of shares of the Convertible
Preferred shall be entitled to receive, when and as declared by the board
of directors out of funds legally available for such purpose, dividends in
lawful money of the United States of America at the rate of $10.00 per
share per annum, payable quarterly on the last business day of February,
May, August and November in each year, commencing November 30, 1981 in
equal installments. To the extent not then inconsistent with law or
contrary to the then provisions of the Virginia Stock Corporation Act, the
foregoing dividends shall be declared by the board of directors of the
corporation, and when declared shall be paid to the then holders of the
Convertible Preferred. As to each issued and outstanding share of the
Convertible Preferred such dividends shall accumulate if not paid, whether
or not declared, from and after the date of the original issue of such
share.
So long as any share of the Convertible Preferred is outstanding, no
sums shall be applied to the payment of any dividend or the making of any
other distribution in respect of any class of stock ranking junior to the
Convertible Preferred in respect of dividends or of the amounts payable
upon any voluntary liquidation, dissolution, or winding up of the
Corporation (other than a distribution payable in stock ranking junior to
the Convertible Preferred, with cash adjustment for any fractional
shares), unless a full dividend on each of the
<PAGE>
then outstanding shares of the Convertible Preferred, for all quarterly
dividend periods and for the then current quarterly dividend period, shall
theretofore have been paid at the rate set forth above. Holders of the
Convertible Preferred shall be entitled to no participation rights in any
other dividend declared and paid by the Corporation.
2. Said proposed amendments were adopted by the sole stockholder entitled
to vote thereon by a written consent in lieu of a special meeting which set
forth said proposed amendments and which was signed by said sole stockholder.
3. The number of shares of each class of stock of the corporation
outstanding on the record date, the number of shares entitled to vote on each
proposed amendment and the number of shares voted for and against each proposed
amendment were as follows:
A. Shares outstanding, all classes:
Class Shares Outstanding
----- ------------------
Senior Cumulative Preferred Stock 5,000
Junior Convertible Preferred Stock 1,000
Class A Common Stock 1,000
Class B Common Stock 0
B. Shares entitled to vote:
Amendment No. 1: 1,000 shares of Class A Common
Amendment No. 2: 1,000 shares of Class A Common
C. Shares voted:
Amendment No. 1: FOR - 1,000 AGAINST: 0
Amendment No. 2: FOR - 1,000 AGAINST: 0
<PAGE>
Executed in the name of the corporation by its President and its Secretary
who declare under penalties of perjury that the facts stated herein are true.
Dated: July 20, 1981 CMN HOLDING, INC.
By
----------------------------
Alan R. Brill, President
By
----------------------------
Bonnie P. Brill, Secretary
<PAGE>
ARTICLES OF INCORPORATION
of
CMN HOLDING, INC.
FIRST: Name. The corporation's name is "CMN Holding, Inc.
SECOND: Purpose. The corporation's purposes shall be to transact any or
all lawful business, not required to be stated in the articles of incorporation,
for which corporations may be incorporated, and the corporation shall have all
powers not prohibited by law or required to be stated in the articles of
incorporation.
THIRD: Capital Stock. The corporation is authorized to issue four classes
of stock. The aggregate number of shares which the corporation shall have the
authority to issue, the maximum number of shares of each class that the
corporation is authorized to issue, and the par value of each share of each
class are as follows:
The aggregate number of shares which the corporation shall have the
authority to issue is 8,000, divided as follows:
Name of Class Number of Shares Par Value
------------- ---------------- ---------
Senior Cumulative
Preferred Stock 5,000 $1.00
Junior Convertible
Preferred Stock 1,000 1.00
Class A Common Stock 1,000 1.00
Class B Common Stock 1,000 1.00
A description of the designations, preferences, limitations, voting rights
and relative rights in respect of the shares of
<PAGE>
each class is as follows:
As used in these Articles, (a) the term "Preferred Stock" shall refer to
both the Senior Cumulative Preferred Stock, $1.00 par value (the "Senior
Preferred") and the Junior Convertible Preferred Stock, $1.00 par value (the
"Convertible Preferred"); and (b) the term "Common Stock" shall refer to both
the Class A Common Stock, $1 .00 par value (the "Class A Common") and the Class
B Common Stock, $1.00 par value (the "Class B Common"). Certain other terms used
in this Article 3 are defined elsewhere herein.
A. PREFERRED STOCK
1. Dividends.
1.1. Senior Preferred. The holders of shares of the Senior Preferred shall
be entitled to receive, when and as declared by the board of directors out of
funds legally available for such purpose, dividends in lawful money of the
United States of America at the rate of $12.00 per share per annum prior to July
1, 1984 and at the rate of $17.00 per share per annum on and after July 1, 1984,
payable semi-annually on the last business day of May and November in each year,
commencing November 30, 1981, in equal installments. To the extent not then
inconsistent with law or contrary to the then provisions of the Virginia Stock
Corporation Act, the foregoing dividends shall be declared by the board of
directors of the corporation, and when declared shall be paid to the then
holders of the Senior Preferred. As to each
<PAGE>
issued and outstanding share of the Senior Preferred such dividends shall
accumulate if not paid, whether or not declared, from and after the date of
original issue of such share.
So long as any share of the Senior Preferred is outstanding, no sums shall
be applied to the payment of any dividend or the making of any other
distribution in respect of the Convertible Preferred or of any other class of
stock ranking junior to the Senior Preferred in respect of dividends or of the
amounts payable upon any voluntary liquidation, dissolution, or winding. up of
the corporation (other than a distribution payable in stock ranking junior to
the Senior Preferred, with cash adjustments for fractional shares), unless a
full dividend on each of the then outstanding shares of Senior Preferred, for
all semi-annual dividend periods and for the then current semi-annual dividend
period, shall theretofore have been paid at the applicable dividend rate set
forth above. Holders of the Senior Preferred shall be entitled to no
participation rights in any other dividend declared and paid by the Corporation.
1.2. Convertible Preferred. The holders of shares of the Convertible
Preferred shall be entitled to receive, when and as declared by the board of
directors out of funds legally available for such purpose, dividends in lawful
money of the United States of America at the rate of $10.00 per share per annum,
payable semi-annually on the last business day of May and November in each year,
commencing November 30, 1981 in equal installments.
<PAGE>
To the extent not then inconsistent with law or contrary to the then provisions
of the Virginia Stock Corporation Act, the foregoing dividends shall be declared
by the board of directors of the corporation, and when declared shall be paid to
the then holders of the Convertible Preferred. As to each issued and outstanding
share of the Convertible Preferred such dividends shall accumulate if not paid,
whether or not declared, from and after the date of original issue of such
share.
So long as any share of the Convertible Preferred is outstanding, no sums
shall be applied to the payment of any dividend or the making of any other
distribution in respect of any class of stock ranking junior to the Convertible
Preferred in respect of dividends or of the amounts payable upon any voluntary
liquidation, dissolution, or winding up of the Corporation (other than a
distribution payable in stock ranking junior to the Convertible Preferred, with
cash adjustment for any fractional shares), unless a full dividend on each of
the then outstanding shares of the Convertible Preferred, for all semi-annual
dividend periods and for the then current semi-annual dividend period shall
theretofore have been paid at the rate set forth above. Holders of the
Convertible Preferred shall be entitled to no participation rights in any other
dividend declared and paid by the Corporation.
2. Redemption.
2.1. Redemption of Senior Preferred. The Senior Preferred
<PAGE>
shall be redeemable in whole at any time or in part from time to time upon
resolution of the corporation's board of directors upon payment out of funds
legally available therefor in lawful money of the United States of America in
respect of each share redeemed of the sum of $100.00 plus an amount equal to all
dividends accumulated but unpaid on each such redeemed share to the date fixed
for redemption ("Senior Preferred Redemption Price"). Not less than 30 days'
prior written notice shall be given by certified mail, postage prepaid, to each
holder of record of the shares of Senior Preferred to be redeemed, at his post
office address as shown in the records of the corporation. Said notice e shall
specify the redemption price and the place at which and the date, which date
shall not be a legal holiday in The Commonwealth of Massachusetts or The
Commonwealth of Virginia, on which the shares called for redemption will be
redeemed.
2.2. Redemption of Convertible Preferred. The Convertible Preferred shall
be redeemable in whole at any time or in part from time to time upon resolution
of the corporation's board of directors upon payment out of funds legally
available therefor in lawful money of the United States of America in respect of
each share redeemed (a) of the sum of $3,500.00 for the period through April 30,
1985, increasing by $250.00 on the last day of each succeeding period of three
consecutive calendar months thereafter, or (b) after May 30, 1984 the greater of
(i) such value described in (a), or (ii) .00050 times an amount equal to
<PAGE>
the then appraised value of corporation reduced by $100.00 per share for each
share of Senior Preferred then outstanding (for an aggregate redemption price if
all 1,000 shares of the Convertible Preferred is then issued and outstanding of
.50 times such reduced appraised value) such appraised value to be determined on
a consolidated basis for corporation and its subsidiaries, as at the end of the
then most recent financial reporting quarter for the corporation at the time of
any such redemption, plus, in either case, an amount equal to all dividends
accumulated but unpaid on each such redeemed share to the date fixed for
redemption, which greater price and any such accumulated but unpaid dividends
shall be the redemption price ("Convertible Preferred Redemption Price"). Not
less than 30 days' prior written notice shall be given by certified mail,
postage prepaid, to each holder of record of the shares of Convertible Preferred
to be redeemed, at his post office address as shown in the records of the
corporation. Said notice shall specify the redemption, price and the place at
which and the date, which date shall not be a legal holiday in The Commonwealth
of Massachusetts or The Commonwealth of Virginia, on which the shares called for
redemption will be redeemed.
2.3. Notice of Redemption. If written notice of redemption of Preferred
Stock shall have been duly given and a sum sufficient for such redemption shall
have been deposited with a bank or trust company with irrevocable instructions
and authority
<PAGE>
to pay the Senior Preferred Redemption Price or the Convertible Preferred
Redemption Price, as the case may be, to the then holders of shares of Preferred
Stock so called for redemption upon surrender of certificates therefor, then,
notwithstanding that any certificate for shares so called for redemption shall
not have been surrendered for cancellation, on and after the date which is the
later of the date of mailing such notice of redemption or deposit of the Senior
Preferred Redemption Price or the Convertible Preferred Redemption Price, as the
case may be, the shares so called for redemption shall no longer be deemed
outstanding, any dividends then payable thereon shall cease to accumulate, and
all rights (including without limitation, with respect to the Convertible
Preferred the right to convert into shares of Class B Common pursuant to Section
5 hereof) with respect to the shares so called for redemption shall forthwith
cease and determine, excepting only the right of the holders thereof to receive
the amount payable upon redemption thereof, without interest.
2.4. Manner of Redemption. Subject to the provisions hereof, the board of
directors shall have authority to prescribe the manner in which the Preferred
Stock shall be redeemed from time to time; provided, however, that in the case
of the redemption of only a part of the outstanding shares of either the Senior
Preferred or Convertible Preferred, there shall be so redeemed from each
registered holder thereof in whole shares, as
<PAGE>
nearly as practicable to the nearest share, the proportion of all of the shares
of such class to be redeemed which the number of shares held of record by such
holder bears to the total number of shares of such class at the time
outstanding.
2.5. Interest; Escheat. From time to time any bank or trust company
holding any funds deposited for redemption of any shares of Preferred Stock
shall pay to the corporation any interest accrued on such deposited funds; any
funds so deposited and unclaimed at the end of the period of time prescribed by
ss. 55-210.6 of the Code of Virginia, or any successor provision, as from time
to time amended, shall be disposed of in accordance with the then existing laws
of the Commonwealth of Virginia, and each holder of a share of Preferred Stock
so called for redemption who shall not have received the applicable redemption
price therefor prior to such disposition shall have only such rights as are
accorded such a stockholder under the then existing laws of the Commonwealth of
Virginia.
2.6. Redeemed, Converted, or Otherwise Acquired Shares to be Retired. Any
shares of the Preferred Stock redeemed pursuant to this Section 2 or of the
Convertible Preferred surrendered for conversion pursuant to Section 5 of this
Subdivision A or otherwise acquired by the corporation in any manner whatsoever
shall be permanently retired and shall not under any circumstances be reissued,
and the corporation shall from time to time take such appropriate corporate
action as may be necessary
<PAGE>
to reduce the authorized Preferred Stock accordingly.
3. Voting Rights of Preferred Stock. Except as voting rights may be
expressly conferred upon any such shares by the laws of the Commonwealth of
Virginia as in effect at the time, the holders of shares of Preferred Stock
shall have no right to vote on any matter.
4. Voluntary Liquidation. Upon any voluntary dissolution, liquidation, or
winding up of the corporation, after provision for payment and discharge of (or
making adequate provision for) all known debts, obligations, and liabilities of
the corporation, (a) the holders of the shares of the Senior Preferred shall be
entitled, before any distribution or payment is made upon any shares of the
Convertible Preferred or the Common Stock, to be paid in cash for each such
share an amount equal to the Senior Preferred Redemption Price (the "Senior
Preferred Liquidation Price") and (b) the holders of the shares of the
Convertible Preferred shall be entitled, before any distribution or payment is
made upon the Common Stock, to be paid in case for each such share then issued
and outstanding an amount equal :0 the Convertible Preferred Redemption Price
("Convertible Preferred Liquidation Price"), such amounts being hereinafter
sometime. referred to as "Liquidation Payments."
If upon any voluntary liquidation, dissolution, or winding up, after
payment and discharge of, or making adequate provision for, all known debts,
obligations, and liabilities of the
<PAGE>
corporation, the corporation's then assets shall be insufficient to permit
payment to said holders of the Senior Preferred Liquidation Price, then all of
the assets of the corporation then remaining shall be distributed ratably among
the then holders of the shares of Senior Preferred. If upon such voluntary
liquidation, dissolution, or winding up, the assets to be distributed among the
then holders of the shares of Convertible Preferred, after any permitted payment
of the Senior Preferred Liquidation Price to the then holders of shares of
Senior Preferred, shall be insufficient to permit payment to said holders of
shares of Convertible Preferred of the Convertible Preferred Liquidation Price,
then all of the assets of the corporation then remaining shall be distributed
ratably among the holders of the shares of Convertible Preferred Written notice
of such voluntary liquidation, dissolution, or winding up, stating a payment
date, the amount of the Liquidation Payments and the place where said sums shall
be payable and, in the case of the Convertible Preferred, containing a statement
of or reference to the conversion right set forth in Section 5 of this
Subdivision A, shall be given by certified mail, postage prepaid, not less than
30 days prior to the payment date stated therein, to the holders of record of
the Preferred Stock, such notice to be addressed to each holder at his post
office address as shown by the records of the corporation. Neither consolidation
nor merger of the corporation into or with any other corporation or
<PAGE>
corporations, nor any other corporation's merger into the corporation, nor the
sale or transfer by the corporation of all or any part of its assets, nor the
reduction of the capital stock of the corporation, shall be deemed to be a
liquidation, dissolution or winding up of the corporation within the meaning of
any of the provisions of this Section 4.
5. Conversion of Convertible Preferred into Common Stock. Subject to the
terms and conditions of this Section 5, the holder of any share of Convertible
Preferred shall have the right at any time (except as otherwise may be
restricted by a written agreement executed by the corporation and the holder of
any share of Convertible Preferred upon issuance of such share, and except that
upon any liquidation of the corporation, such right to convert shall terminate
at the close of business on the last business day before the payment date
specified in the notice given pursuant to Section 4 of this Subdivision A), at
his option, to convert all or a portion of the shares of Convertible Preferred
held by him into the same number of shares of Class B Common. Such right of
conversion shall be exercised by the holder thereof by giving written notice to
the corporation that such holder elects to convert a stated number of shares of
the Convertible Preferred into shares of Class B Common Stock on the date
specified in such notice ("Conversion Date") and by surrender of the certificate
or certificates for the Convertible Preferred so to be converted to the
corporation, at the principal
<PAGE>
office of the corporation in Charlottesville, Virginia (or at such other office
as the corporation may designate by written notice, given by certified mail,
postage prepaid, to all holders of Convertible Preferred) at any time during its
usual business hours on or before the Conversion Date, duly endorsed or assigned
to the corporation (if requested by it), together with a statement of the name
or names (with addresses) of the person or persons to whom the certificates for
Class B Common shall be issued upon conversion.
Promptly after receipt of the written notice from said holder referred to
above and surrender of the certificate or certificates for the share or shares
of Convertible Preferred to be converted, the corporation shall issue and mail,
or cause to be issued and mailed, to said holder at the then address for such
stockholder appearing on the corporation's records, registered in such name or
names as such holder may direct, a certificate or certificates for then number
of full shares of Class B Common issuable upon the conversion of such share or
shares. To the extent permitted by law, such conversion shall be deemed to have
been effected as of the close of business on the Conversion Date, and at such
time the rights of the holder of such share or shares as such holder shall
cease, and the person or persons in whose name or names any certificate or
certificates for shares of Class B Common shall be issuable upon such conversion
shall be deemed to have become the holder or holders of record of the shares of
<PAGE>
Class B Common represented thereby.
B. COMMON STOCK
1. Dividend and Other Rights. The dividend and other rights of a holder of
one share of Class A Common shall be identical to the dividend and other rights
of a holder of one share of Class R Common, except as provided herein with
respect to voting. No purchase or other retirement by the corporation, directly
or indirectly through a Subsidiary or otherwise of any share of Class A Common,
nor any distribution on or payment in respect of any share of Class A Common,
nor any other benefit or preference of any sort whatsoever relating to any share
of Class A Common shall be made or accorded unless made or accorded ratably
among all holders of Common Stock in proportion to the number of shares of
Common Stock owned by each.
2. Voting Rights. The two classes of Common Stock shall vote as a single
class at all stockholders' meetings unless otherwise provided by law or by these
Articles of Incorporation. Every holder of record of shares of Class A Common
shall have the right, at every stockholders' meeting, to one vote for every
share of Class A Common standing in his name on the books of the corporation.
Every holder of record of Class B Common shall have the right, at every
stockholders' meeting, to such number of votes as would cause the aggregate vote
possessed by all holders of Class B Common to equal 10% of the aggregate vote
possessed by all holders of the Common Stock.
<PAGE>
3. Reservation. The corporation will at all times reserve and keep
available all of its authorized but unissued shares of Class B Common, solely
for the purpose of issue upon the conversion of the shares of the Convertible
Preferred as herein provided. The corporation covenants that all shares of the
Class B Common which shall be so issuable shall, when issued, be duly and
validly issued, fully paid, and nonassessable.
The issuance of certificates for Class B Common upon such conversion as
hereinabove set forth shall be made without charge to the holders of such Class
B Common for any issuance tax in respect thereof, provided that the corporation
shall not be required to pay any taxes which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the holder of shares converted.
C. CERTAIN OTHER PROVISIONS
1. Preemptive Rights. No holder of any share of Preferred Stock or Common
Stock shall have any preemptive right to subscribe for additional shares of any
class of capital stock or to receive warrants or rights for the purchase of
shares of any class of stock or to receive securities convertible into shares of
any class of stock.
2. Dissolution; Liquidation. Upon any involuntary dissolution of the
corporation, after provision for payment and discharge of (or making adequate
provision for) all known debts, obligations, and liabilities of the corporation,
the then
<PAGE>
remaining net assets of the corporation shall be distributed ratably among the
then holders of any then issued and outstanding shares of Preferred Stock in
proportion to the number of shares of Preferred Stock then owned by each. If
upon such involuntary dissolution no share of Preferred Stock is then issued and
outstanding, the remaining net assets of the corporation shall be distributed
ratably among the then holders of shares of the corporation's Common Stock in
proportion to the number of shares of Common Stock then owned by each. Upon any
involuntary dissolution no share of Preferred Stock shall be entitled to any
preferential payment, Liquidation Payment, or any prior right in the assets of
the corporation.
FOURTH: Stated Capital. The stated capital of the corporation may be
reduced in any manner provided by law without the assent of the stockholders of
the corporation.
FIFTH: Transfer of Shares. Transfer of any share of the capital stock of
the corporation shall be made only on the stock transfer books of the
corporation by the holder of record thereof or by his legal representative, who
shall furnish proper evidence of authority to transfer, or by his attorney
thereunto authorized by power of attorney duly executed and filed with the
Secretary of the corporation, and on surrender for cancellation of the
certificate for such share. The person in whose name any share of capital stock
of the corporation stands on the books of the corporation shall be deemed by the
corporation to be the owner of
<PAGE>
such share for all purposes.
SIXTH: Registered Office and Agent. The post office address of the initial
registered agent is 1200 Mutual Building, in the City of Richmond, Virginia, and
the initial registered agent at that address is Charles W. Laughlin who is a
resident of the State of Virginia and a member of the Virginia State Bar.
SEVENTH: Board of Directors. The number of directors shall not be less
than the minimum number prescribed by law and, except for the initial board of
directors, shall be fixed by the bylaws of the corporation. Initially all shares
of the corporation will be owned of record by one stockholder, and the initial
board of directors shall consist of one director whose name and address is:
Name: Address:
----- --------
Alan R. Brill 1162 Woodberry Road
Charlottesville, VA 22901
EIGHTH: Indemnity. The corporation shall indemnify each director and
officer against liabilities (including judgments and fines and reasonable
attorney's fees, costs and expenses) incurred by him in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative, (any of which is hereinafter
referred to as a "proceeding") to which he may be made a party by reason of his
being or having been a director or officer of the corporation, except in
relation to any proceeding in which he has been adjudged liable because of
willful
<PAGE>
misconduct, bad faith or gross negligence involved in the conduct of his office,
or in relation to any criminal proceeding, in which he had reasonable cause to
believe his conduct was unlawful (any of which behavior is hereinafter referred
to as "misfeasance"), provided, however, that even if he is guilty of
misfeasance he shall be entitled to such indemnification as shall be finally
ordered by a court. In the event of the disposition of any proceeding in which
no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations are
reasonable. Such determination shall be made (i) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
proceeding, (ii) by independent legal counsel in a written opinion if such a
quorum is not obtainable, or, even if obtainable, if a majority of disinterested
directors so directs, or (iii) by the shareholders. Directors eligible to make
any such determination or to refer any such determination to independent legal
counsel must act with reasonable promptness when indemnification is sought by
any director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on
<PAGE>
behalf of the director or officer to repay such amount unless it shall
ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or former director officer of the corporation and every person who may have
served at the request of the corporation or one of its subsidiaries as a
director or officer or in a similar capacity and, in all such cases, the heirs,
executors, and administrators of such officer or director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
Dated: May 21, 1981
--------------------------------
Douglas R. Maxwell, Incorporator
<PAGE>
EX-3.(i)(cc)
ARTICLES OF INCORPORATION
of
BRILL RADIO, INC.
FIRST: Name. The corporation's name is "BRILL RADIO, INC".
SECOND: Purpose. The corporation's purposes shall be to transact any or
all lawful business, not required to be stated in the articles of incorporation,
for which corporations may be incorporated, and the corporation shall have all
powers not prohibited by law or required to be stated in the articles of
incorporation.
THIRD: Capital Stock. The aggregate number of shares which the corporation
shall have the authority to issue is 1,000 shares of common stock, each such
share to have a par value of $1.00.
FOURTH: Stated Capital. The stated capital of the corporation may be
reduced in any manner provided by law without the assent of the stockholders of
the corporation.
FIFTH: Registered Office and Agent. The post office address of the initial
registered office is 1200 Mutual Building, in the City of Richmond, and the
initial registered agent at that address is Charles W. Laughlin, who is a
resident of the State of Virginia and a member of the Virginia State Bar.
SIXTH: Board of Directors. The number of directors shall not be less than
the minimum number prescribed law and shall be fixed by the by-laws of the
corporation. Initially all shares of the corporation will be owned of record by
one stockholder, and the first board of directors shall consist of one director
whose name
<PAGE>
and address is:
Name Address
---- -------
Alan R. Brill 1162 Woodberry Road
Charlottesville, VA 22901
SEVENTH: Indemnity. The corporation shall indemnify each director and
officer against liabilities (including judgments and fines and reasonable
attorney's fees, costs and expenses) incurred by him in connection with any
actual or threatened action, suit or proceeding, whether civil, criminal,
administrative, arbitrative or investigative (any of which is hereinafter
referred to as a "proceeding") to which he may be made a party by reason of his
being or having been a director or officer of the corporation, except in
relation to any proceeding in which he has been adjudged liable because of
willful misconduct, bad faith or gross negligence involved in the conduct of his
office or, in relation to any criminal proceeding, in which he had reasonable
cause to believe his conduct was unlawful (any of which behavior is hereinafter
referred to as "misfeasance"), provided, however, that even if he is guilty of
misfeasance he shall be entitled to such indemnification as shall be finally
ordered by a court. In the event of the disposition of any proceeding in which
no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a quorum
<PAGE>
consisting of directors who were not parties to such proceeding, (ii) by
independent legal counsel in a written opinion if such a quorum is not
obtainable, or, even if obtainable, if a majority of disinterested directors so
directs, or (iii) by the shareholders. Directors eligible to make any such
determination or to -refer any such determination to independent legal counsel
must act with reasonable promptness when indemnificaiton is sought by any
director or officer.
Expenses incurred in defending any proceeding may be paid by the
corporation in advance of the final disposition of such proceeding, if
authorized in the manner set forth in the preceding paragraph, upon receipt of
an undertaking by or on behalf of the director or officer to repay such amount
unless it shall ultimately be determined that he is entitled to indemnification.
Every reference herein to director or officer shall include every director
or officer or former director or officer of the cor-poration and every person
who may have served at the request of the corporation or one of its subsidiaries
as a director or officer or in a similar capacity of another corporation (stock
or non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director.
The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
<PAGE>
Dated: August 12, 1980
--------------------------------
Douglas R. Maxwell, Incorporator
<PAGE>
EX-3.(i)(dd)
ARTICLES OF INCORPORATION
OF
BRILL NEWSPAPERS, INC.
FIRST: The name of the corporation is Brill Newspapers, Inc.
SECOND: The corporation is organized for the purpose of transacting any or
all lawful business, not required to be specifically stated herein, for which
corporations may be incorporated under Virginia law.
THIRD: The corporation shall have the authority to issue up to 1,000
shares of Class A common stock of the par value of $1.00 each and up to 150
shares of Class B common stock of the par value of $1.00 each. Shares of Class A
common stock and Class B common stock shall be alike in all respects, provided
that holders of Class B com-mon stock shall have no right to vote with respect
to such stock except as may be required under Virginia law. No holder of shares
of either class of common stock or any other securities of the corrporation
shall be entitled to the pre-emptive right to subscribe to additional shares of
either class of common stock to warrants or rights for the purchase of such
shares or to securities convertible into such shares.
FOURTH: The stated capital of the corporation may be reduced in any manner
provided by law without the assent of the stockholders of the corporation.
FIFTH: The post office address of the initial registered office is 1200
Mutual Building, in the City of Richmond, and the
<PAGE>
initial registered agent at that address is Charles W. Laughlin, who is a
resident of the State of Virginia and a member of the Virginia State Bar.
SIXTH: The number of directors shall not be less than the minimum number
prescribed by law and shall be fixed by the by-laws of the corporation. The
initial board of directors shall consist of the following directors whose names
and addresses are:
NAME ADDRESS
---- -------
Alan R. Brill 1162 Woodberry Road
Charlottesville, Va. 22901
Bonnie P. Brill 1162 Woodberry Road
Charlottesville, Va. 22901
Charles W. Laughlin 6609 Three Chopt Road
Richmond, Va .23226
SEVENTH: The corporation shall indemnify each director and officer against
liabilities (including judgments and fines and reasonable attorney's fees, costs
and expenses and reasonable amounts paid in settlement) incurred by him in
connection with any actual or threatened action, suit or proceeding, whether
civil, criminal, administrative, arbitrative or investigative (any of which is
hereinafter referred to as a "proceeding") to which he may be made a party by
reason of his being or having been a director or officer of the cor-poration,
except in relation to any proceeding in which he has been adjudged liable
because of willful misconduct, bad faith or gross negligence involved in the
conduct of his office or, in relation to any criminal proceeding, in which he
had
<PAGE>
reasonable cause to believe his conduct was unlawful (any of which behavior is
hereinafter referred to as "misfeasance"), provided, however, that even if he is
guilty of misfeasance he shall be entitled to such indemnification as shall be
finally ordered by a court. In the event of the disposition of any proceeding in
which no determination of misfeasance has been made, such indemnity shall be
conditioned upon a prior determination that the director or officer acted in
good faith and without misfeasance, and that such payments or obligations arc
reasonable. Such determination shall be made (i) by-the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to such
proceeding, (ii) by independent legal counsel in a written opinion if such a
quorum is not obtainable, or, even if obtainable, if a majority of disinterested
directors so directs, or (iii) by the shareholders. Directors eligible to make
any such determination or to -refer any such determination to independent legal
counsel must act with reasonable promptness when indemnificaiton is sought by
any director or officer. Expenses incurred in defending any proceeding may be
paid by the corporation in advance of the final disposition of such proceeding,
if authorized in the manner set forth in the preceding paragraph, upon receipt
of an undertaking by or on behalf of the director or officer to repay such
amount unless it shall ultimately be determined that he is entitled to
indemnification. Every reference herein to director or officer shall include
every director or
<PAGE>
officer or former director or officer of the cor-poration and every person who
may have served at the request of the corporation or one of its subsidiaries as
a director or officer or in a similar capacity of another corporation (stock or
non-stock), partnership. joint venture, trust or other enterprise and, in all
such cases, the heirs, executors, and administrators of such officer or
director. The corporation may further indemnify each officer and director in any
other manner permitted by law, and shall so indemnify them if directed to do so
by the stockholders.
Dated: May 5, 1981
-------------------------------
Douglas R. Maxwell Incorporator
<PAGE>
Articles of Amendment of
The Articles of Incorporation of
BRILL NEWSPAPERS INC.
1. In lieu of a special meeting by a written consent setting forth the
resolution and signed by all directors of the corporation before the resolution
was submitted to a vote of the stockholders entitled to vote thereon, the
directors of Brill Newspapers, Inc. adopted a resolution finding that the
following proposed amendment of the Articles of Incorporation of BRILL
NEWSPAPERS, INC. was in the best interests of the corporation and directing that
it be submitted to a vote of the corporation's stockholders entitled to vote
thereon:
That Section 2.2(n) ("Redemption of Convertible Preferred") of
Subdivision A of Article "Third" of the Articles of Incorporation be
amended by changing "January 31, 1990" appearing in the first sentence
thereof to read: "January 31, 1993".
2. The proposed amendment was adopted by the stockholders entitled to vote
thereon by a written consent in lieu of a special meeting, which consent set
forth the proposed amendment and was signed by all such stockholders.
3. The number of shares of each class of stock of the corporation
outstanding on the record date, the number of shares entitled to vote on the
proposed amendment, and the number of shares voted for and against the proposed
amendment were as follows:
A. Shares outstanding all classes:
Class Shares Outstanding
----- ------------------
<PAGE>
Class A Common Stock 1,000
Class B Common Stock 150
B. Shares entitled to vote:
1,000 shares of Class A Common
150 shares of Class B Common
C. Shares voted:
FOR - 1,000 shares of Class A Common
- 150 shares of Class B Common
AGAINST - 0
Executed in the name of the corporation by its President and its Secretary
who declare under penalties of perjury that the facts stated herein are true.
Dated: January 26, 1982 BRILL NEWSPAPERS, INC.
BY
------------------------
Alan R. Brill, President
---------------------------
Bonnie P. Brill, Secretary
<PAGE>
Articles of Amendment
of the Articles of Incorporation of
BRILL NEWSPAPERS, INC.
1. In lieu of a special meeting, by a written consent setting forth the
resolution and signed by all directors of the corporation, before the resolution
was submitted to a vote of the stockholders entitled to vote thereon, the
directors of Brill Newspapers, Inc adopted a resolution finding that the
following pro\-posed amendment of the Articles of Incorporation of Brill
Newspapers Inc. was in the best interests of the corporation and directing that
it be submitted to a vote of the corporation's stockholders entitled to vote
thereon:
That Section 2 ("Involuntary Dissolution") of Subdivision C of
Article "Third" of the Articles of Incorporation be amended to read as
follows:
2. Involuntary Dissolution. Upon any involuntary dissolution of the
corporation, after provision for payment and discharge of (or making
adequate provision for) all known debts, obligations, and liabilities of
the corporation, there shall be no "amount payable" (within the meaning of
Section 13.1-62 of the Code of Virginia) out of the corporation's net
assets to the then holder of any share of the corporation's Preferred
Stock or Common Stock, and the then remaining assets of the corporation
shall be distributed ratably among the then holders of any then issued and
outstanding shares of Preferred Stock in proportion to the number of
shares of Preferred Stock then owned by each and the holders of shares of
Common Stock shall have no right to any part of such remaining assets. If
upon such involuntary dissolution no share of Preferred Stock is then
issued and outstanding, the remaining assets of the corporation shall be
distributed ratably among the then holders of shares of the corporation's
Common Stock in proportion to the number of shares of Common Stock then
owned by each.
2. The proposed amendment was adopted by the stockholders entitled to vote
thereon by a written consent in lieu of a special
<PAGE>
meeting, which consent set forth the proposed amendments and was signed by all
such stockholders.
3. The number of shares of each class of stock of the corporation
outstanding on the record date, the number of shares entitled to vote on the
proposed amendment, and the number of shares voted for and against the proposed
amendment were as follows:
A. Shares outstanding, all classes:
Class Shares Outstanding
----- ------------------
Class A Common Stock 1,000
Class B Common Stock 150
B. Shares entitled to vote:
1,000 shares of Class A Common
150 shares of Class B Common
C. Shares voted:
FOR - 1,000 shares of Class A Common
- 150 shares of Class B Common
AGAINST - 0
Executed in the name of the corporation by its President and its Secretary
who declare under penalties of perjury that the facts stated herein are true.
Dated: January 27, 1982 BRILL NEWSPAPERS, INC.
BY
-----------------------------
Alan R. Brill, President
--------------------------------
Bonnie P. Brill, Secretary
<PAGE>
Articles of Amendment
of the Articles of Incorporation of
BRILL NEWSPAPERS, INC.
1. In lieu of a special meeting, by a written consent setting forth the
resolution and signed by all directors of the corporation before the resolution
was submitted to a vote of the stockholders entitled to vote thereon, the
directors of Brill Newspapers, Inc. adopted a resolution finding that the
following proposed amendment of the Articles of Incorporation of Brill
Newspapers Inc. was in the best interests of the corporation and directing that
it be submitted to a vote of the corporation's stockholders entitled to vote
thereon:
That Subsection 2.2 ("Redemption of Convertible Preferred") of
Section 2 of Subdivision A of Article "Third of the Articles of
Incorporation be amended to read as follows:
2.2. Redemption of Convertible Preferred. (m) During any time when
the corporation is contractually obligated then to purchase or redeem any
share of the Convertible Preferred, or (n) during and after such time
after January 31, 1993 as the Senior Preferred is or has been redeemed or
repurchased in whole by the corporation the Convertible Preferred shall be
redeemable in whole at any time or in part from time to time upon
resolution of the corporation's board of directors upon payment out of
funds legally available to the corporation therefor in lawful money of the
United States of America in respect of each share of the Convertible
Preferred then redeemed of the redemption price per share determined as
follows: first (a) there shall be determined a sum equal to a percentage
[which percentage shall be the greater of (p) 18.5% or (q) that percentage
determined by dividing the number of shares of the corporation's Common
Stock into which the then outstanding shares of the corporation's
Convertible Preferred would then be convertible (regardless of whether
such Convertible Preferred is in fact then convertible by the total number
of all shares, of the corporation's Common Stock of all classes then
outstanding and which would then be outstanding if all
<PAGE>
shares of Convertible Preferred were then converted (regardless of whether
such Convertible Preferred then in fact convertible] of the higher of (x)
the then fair market value of corporation, determined by an appraiser
selected by corporation and (y) a value determined by (i) multiplying a
sum representing the corporation's earnings as determined from its
financial statement, on a consolidated basis with all of its then
subsidiaries, for the corporation's then most recently concluded full
fiscal year, without deduction for interest expense, taxes, non cash
expense items, or non-recurring extraordinary expenses, but reduced by any
contribution to corporation's cash flow theretofore arising from
properties divested by the corporation during such fiscal year, by it and
(ii) deducting from such product all of corporation's then liabilities
(including as a liability all then out standing shares of the Senior
Preferred) in excess of the corporation's then current assets, in each
case as reflected in and determinable from corporation's financial
statements, on a consolidated basis with all of its then subsidiaries, for
such fiscal year, then (b) the sum determined pursuant to (a) shall be
divided by the higher of (i) the number of shares Of Convertible Preferred
then outstanding or (ii) twenty-one (21) and then (c) the result of (b)
shall have added to it an amount equal to the sum of all accumulated but
unpaid quarterly dividends with respect to such share of Convertible
Preferred then being redeemed, as of the Redemption Date. The sum so
achieved shall be the "Convertible Preferred Redemption Price" as to each
such share.
2. The proposed amendment was adopted by the stockholders entitled to vote
thereon by a written consent in lieu of a special meeting, which consent set
forth the proposed amendment and was signed by all such stockholders.
3. The number of shares of stock of the corporation outstanding on the
record date, the number of shares entitled to vote on the proposed amendment,
the number of shares voted for and against such amendment, the number of shares
of each class or series entitled to vote as a class and the number of shares of
each
<PAGE>
such class or series voted for or against such amendment were as follows:
A. Shares outstanding all classes:
Class Shares Outstanding
----- ------------------
Class A Common Stock 1,000
Class B Common Stock 150
Senior Cumulative Preferred Stock 70
Convertible Preferred Stock 21
B. Shares entitled to Vote, all classes:
1,000 shares of Class A Common
150 shares of Class B Common
70 shares of Senior Cumulative Preferred
21 shares of Convertible Preferred
C. Shares, classes, voted:
FOR - 1,241
AGAINST - 0
D. Shares entitled to vote and voted as a class:
Number Voted Voted
Class or Series Outstanding For Against
--------------- ----------- --- -------
Class A Common 1,000 1,000 0
Class B Common 150 150 0
Senior Cumulative
Preferred 70 70 0
Convertible
Preferred 21 21 0
Executed in the name of the corporation by its President and its Secretary
who declare under penalties of perjury that the facts
<PAGE>
stated herein are true.
Dated: June 21, 1982 BRILL NEWSPAPERS, INC.
By:
---------------------------
Alan R. Brill, President
By:
----------------------------
Bonnie P. Brill, Secretary
<PAGE>
Articles of Amendment
of the Articles of Incorporation of
BRILL NEWSPAPERS, INC.
1. In lieu of a special meeting, by a written consent setting forth the
resolution and signed by all directors of the corporation, before the resolution
was submitted to a vote of the stockholders entitled to vote thereon the
directors of Brill Newspapers, Inc. adopted a resolution finding that the
following proposed amendment of the Articles of Incorporation of Brill
Newspapers, Inc. was in the best interests of the corporation and directing that
it be submitted to a vote of the corporation's stockholders entitled to vote
thereon:
That the Articles of Incorporation be amended by striking therefrom
Article "THIRD" in its entirety and substituting in lieu thereof the
following:
"THIRD: Capital Stock. The corporation is authorized to issue four classes
of stock. The aggregate number of shares which the corporation shall have
authority to issue, the maximum number of shares of each class which the
corporation is authorized to issue, and the par value of each share of
each class are as follows:
The aggregate number of shares which the corporation shall have
authority to issue is 3,270, divided as follows:
Name of Class Number of Shares Par Value
------------- ---------------- ---------
Senior Cumulative
Preferred Stock 70 $1.00
Convertible
Preferred Stock 200 1.00
Class A Common Stock 1,000 1.00
<PAGE>
Class B Common Stock 2,000 1.00
A description of the designations, preferences, limitations, voting
rights, and relative rights in respect of the shares of each class is as
follows:
As used in these Articles the term "Common Stock" shall refer to
both the Class A Common Stock, $1.00 par value (the "Class A Common") and
the Class B Common Stock, $1.00 par value (the "Class B Common"), and the
term "Preferred" shall refer to both the Senior Cumulative Preferred Stock
(the "Senior Preferred") and the Convertible Preferred Stock (the
"Convertible Preferred").
A. PREFERRED STOCK
1. Dividends.
1.1 Senior Preferred. The holders of shares of the Senior Preferred
shall be entitled to receive, when and as declared by the board of
directors and paid, out of funds legally available for such purpose in
accordance with the laws of the Commonwealth of Virginia, dividends in
lawful money of the United States of America at the rate of $1,200.00 per
share per annum, playable, when declared and paid, quarterly on the last
business day of April (beginning April, 1982), July, October, and January
of each year in equal quarterly installments of $300.00 each. As to each
issued and outstanding share of the Senior Preferred such dividends shall
accumulate if not paid, whether or not declared.
1.2 Convertible Preferred. The holders of shares of the Convertible
Preferred shall be entitled to receive, when and as declared by the board
of directors out of funds legally available for such purpose in accordance
with the laws of the Commonwealth of Virginia, dividends in lawful money
of the United States of America at the rate of $.12 (US) per share per
annum, payable quarterly on the last business day of March, June,
September, and December of each year in equal installments. As to each
issued and outstanding share of the Convertible Preferred such dividends
shall accumulate if not paid, whether or not declared.
1.3 Preference. So long as any share of the Preferred is
outstanding, no dividend in respect of any Common Stock or other class of
stock ranking junior to the Preferred in respect of dividends or of the
amounts
<PAGE>
payable upon any voluntary liquidation, dissolution, or winding up of the
corporation shall be paid unless and until a full dividend on each of the
then outstanding shares of Preferred, for the applicable annual dividend
period, and any and all then accumulated but unpaid dividends with respect
to the Preferred, shall theretofore have been paid at the dividend rates
set forth above. Holders of the Preferred shall be entitled to no
participation rights.
2. Redemption.
2.1 Redemption of Senior Preferred. The Senior Preferred shall be
redeemable in whole at any time or in part from time to time upon
resolution of the corporation's board of directors upon payment out of
funds legally available to the corporation therefor in lawful money of the
United States of America in respect of each share of Senior Preferred
redeemed of $10,000.00 plus an amount equal to the sum of (i) all
accumulated but unpaid quarterly dividends with respect to such share of
Senior Preferred as of the Redemption Date, and (ii) any interest accrued
thereon as, and to the extent, provided in Section 1.1. ("Senior Preferred
Redemption Price").
2.2. Redemption of Convertible Preferred. (m) During any time when
the corporation is contractually obligated then to purchase or redeem any
share of the Convertible Preferred, during and after such time after
January 31, 1990 as the Senior Preferred is or has been redeemed or
repurchased in whole by the corporation, the Convertible Preferred shall
be redeemable in whole at any time or in part from time to time upon
resolution of the corporation's board of directors upon payment out of
funds legally available to the corporation therefor in lawful money of the
United States of America in respect of each share of the Convertible
Preferred then redeemed of the redemption price per share determined as
follows: (a) first there shall be determined a sum equal to a percentage
[which percentage shall be determined by dividing the number of shares of
the corporation's Common Stock into which the then outstanding shares of
the corporation's Convertible Preferred would then be convertible
(regardless of whether such Convertible Preferred is in fact then
convertible) by the total number of all shares of the corporation's Common
Stock of all classes then outstanding and which would then be outstanding
if all shares of Convertible Preferred were then converted (regardless of
whether such Convertible Preferred is
<PAGE>
then in fact convertible)I of the higher of (x) the then fair market of
corporation, determined by an appraiser selected by corporation and (y) a
value determined by (i) multiplying a sum representing the corporation's
earnings as determined from its financial statement, on a consolidated
basis with all of its then subsidiaries, for the corporation's then most
recently concluded full fiscal year, without deduction for interest
expense, taxes, non-cash expense items, or non-recurring extraordinary
expenses, but reduced by any contribution to corporation's cash flow
theretofore arising from properties divested by the corporation during
such fiscal year, by and (ii) deducting from such product all of
corporation's then liabilities (including as a liability all then
outstanding shares of the Senior Preferred) in excess of the corporation's
then current assets, in each case as reflected in and determinable from
corporation's financial statements, on a consolidated basis with all of
its then subsidiaries, for such fiscal year, then (b) the sum determined
pursuant to (a) shall be multiplied by a fraction equal to (i) the number
of shares of Convertible Preferred then outstanding divided by (ii) the
higher of (x) the number of shares of convertible Preferred then
outstanding, or (y) twenty-one (21); then (c) the product determined by
(b) shall be divided by the number of shares of Convertible Preferred then
issued and outstanding; and (d) the result of (c) shall have added to it
an amount equal to the sum of all accumulated but unpaid quarterly
dividends with respect to such share of Convertible Preferred then being
redeemed, as of the Redemption Date; and the sum so achieved shall be the
"Convertible Preferred Redemption Price" as to each such share.
2.3. Notice. Not less than 30 days' prior written notice ("Notice of
Redemption") shall be given by certified mail, postage prepaid, to each
holder of record of the shares of Preferred to be redeemed, at the
holder's post office address as shown in the records of the corporation.
Said notice shall specify the amount of the redemption price and the place
at which and the date, which date shall not be a legal holiday in the
Commonwealth of Virginia, on which the shares called for redemption will
be redeemed ("Redemption Date").
2.4 Notice of Redemption. If Notice of Redemption shall have been
duly given and a sum
<PAGE>
sufficient for such redemption shall have been deposited with a bank or
trust company with irrevocable instructions and authority to pay the
applicable redemption price to the then holders of shares of Preferred so
called for redemption upon surrender of certificates therefor, then,
notwithstanding that any certificate for shares so called for redemption
shall not have been surrendered for cancellation, on and after the later
of the date of mailing of the Notice of Redemption or such deposit of the
applicable redemption price, the shares so called for redemption shall no
longer be deemed outstanding, and all rights with respect to the shares so
called for redemption shall forthwith cease and determine (excepting only
the right of the holders thereof to receive the amount payable upon
redemption thereof, without interest thereon); provided, however, that the
right to convert any shares of Convertible Preferred called for redemption
into shares of Class B Common as provided by Section 5. of Subdivision A
hereof shall continue until the Redemption Date.
2.5. Manner of Redemption. Subject to the provisions hereof, the
board of directors shall have authority to prescribe the manner in which
the Preferred shall be redeemed from time to time; provided, however, that
in the case of the redemption of only a part of the outstanding shares of
the Preferred, there shall be redeemed from each registered holder thereof
in whole shares, as nearly as practicable to the nearest share, the
proportion of all of the shares of such class to be redeemed which the
number of shares held of record by such holder bears to the total number
of shares of such class at the time outstanding.
2.6 Interest; Escheat. From time to time any bank or trust company
holding any funds deposited for redemption of any shares of Preferred
shall pay to the corporation any interest accrued on such deposited funds;
any funds so deposited and unclaimed at the end of the period of time
prescribed by ss. 55-210.6 of the Code of Virginia, or any successor
provision, as from time to time amended, shall be disposed of in
accordance with the then existing laws of the Commonwealth of Virginia,
and each holder of a share of Preferred so called for redemption who shall
not have received the applicable redemption price therefor prior to such
disposition shall have only such rights as are accorded such a stockholder
under the then existing
<PAGE>
laws of the Commonwealth of Virginia.
2.7. Redeemed, Converted, or Otherwise Acquired Shares to be
Retired. Any shares of Preferred redeemed pursuant to this Section 2. or
surrendered for conversion pursuant to Section 5. of this Subdivision A,
or otherwise acquired by the corporation in any manner whatsoever, shall
be permanently retired and shall not under any circumstances be reissued,
and the corporation shall from time to time take such appropriate
corporate action as may be necessary to reduce the authorized Preferred
accordingly.
3. Voting Rights of Preferred. Except as voting rights may be expressly
conferred upon any such shares by the laws of the Commonwealth of Virginia
as in effect at the time, the holders of shares of Preferred shall have no
right to vote on any matter.
4. Voluntary Dissolution, Liquidation, etc. Upon any voluntary
dissolution, liquidation, or winding up of the corporation, after
provision for payment and discharge of (or making adequate provision for)
all known debts, obligations, and liabilities of the corporation, the then
holders of the shares of the Preferred shall be entitled, before any
distribution or payment is made upon any shares of the Common Stock, to be
paid in cash for each such share an amount equal to the redemption price
applicable to such share (the "Preferred Liquidation Price"). If upon any
voluntary liquidation, dissolution, or winding up, after payment and
discharge of, or making adequate provision for, all known debts,
obligations, and on liabilities of the corporation, the corporation's then
assets shall be insufficient to permit payment to said holders of the
Preferred Liquidation Price, then all of the assets of the corporation
then remaining shall be distributed ratably among the then holders of the
shares of Preferred. Written notice of such voluntary liquidation,
dissolution, or winding up, stating a payment date, the amount of the
Preferred Liquidation Price, the place where said sums shall be payable,
and containing a statement of or reference to the conversion right set
forth in Section 5. of this Subdivision A, shall be given by certified
mail, postage prepaid, not less than 30 days prior to the payment date
stated therein, to the holders of record of the Preferred, such notice to
be addressed to each holder at his post office address as shown by the
records of the corporation. Neither consolidation nor
<PAGE>
merger of the corporation into or with any other corporation or
corporations, nor any other corporation's merger into the corporation, nor
the sale or transfer by the corporation of all or any part of its assets,
nor the reduction of the capital stock of the corporation, shall be deemed
to be a liquidation, dissolution, or winding up of the corporation within
the meaning of any provision of these Articles.
5. Conversion.
5.1 Conversion of the Convertible Preferred into Class B Common.
Subject to the terms and conditions of this Section 5. and of Section
2.2., the holder of any share of Convertible Preferred then outstanding,
shall have the right during any period (a) after the giving of a Notice of
Redemption and until the Redemption Date as established by such notice, as
to shares of the Convertible Preferred called for redemption by such
notice, (b) when Alan R. Brill owns less than a majority of the voting
common stock of this corporation, as to shares of Convertible Preferred,
or (c) during any period when more than thirty holders are record owners
of shares of the corporation's Class A Common Stock, the periods described
in (a)-(c) hereinafter being severally and collectively referred to as the
"Conversion Period". Upon compliance with provisions of this Section 5,9
each eligible share of Convertible Preferred then outstanding which is
properly delivered for conversion during a Conversion Period shall be then
converted into 12.48 shares of Class B Common. Such right of conversion
may be exercised during a Conversion Period, and only during a Conversion
Period, by the holder of a share or shares of Convertible Preferred then
eligible for conversion by (i) giving written notice to the corporation
that such holder elects to convert a stated number of shares of the
Convertible Preferred into shares of Class B Common on the date specified
in such notice ("Conversion Date"). which date shall not be less than
twenty (20) days after the date of such written notice, and (ii) by
delivering and surrendering the certificate or certificates for the
Convertible Preferred so to be converted to the corporation, at the office
of the corporation at 1200 Mutual Building, Richmond, Virginia 23219,
Attention: Charles W. Laughlin, Esquire, (or at such other office as the
corporation may designate by written notice, given by certified mail,
postage prepaid, to all holders of Convertible Preferred) at any time
during its usual business hours on or before
<PAGE>
the Conversion Date, duly endorsed or assigned to the corporation, or in
blank, together with a statement of the name or names (with addresses) of
the person or persons to whom the certificates for Class B Common shall be
issued upon conversion.
On or before the Conversion Date, upon receipt of the written notice
referred to above and surrender of the certificate or certificates for the
share or shares of Convertible Preferred to be converted, the corporation
shall issue and mail, or cause to be issued and mailed, to the holder
giving such notice at the then address for such stockholder appearing on
the corporation's records, registered in such name or names as such holder
shall have directed in said notice, a certificate or certificates for the
number of full shares of Class B Common issuable upon conversion of such
Convertible Preferred share or shares and a check or other order for the
amount of any cash payable in respect of any fractional share of Class B
Common.
5.2 Antidilution. The conversion rate provided in Section 5.1 above
shall only be adjusted as follows: (a) If the corporation shall issue
s additional shares of Common Stock (other than shares of Class B Common
Stock issued upon conversion of shares of Convertible Preferred) or
securities convertible into shares of Common Stock (except for shares of
Convertible Preferred issued upon the exercise of warrants therefor), or
shall pay a dividend in shares of Common Stock (or in securities
convertible into Common Stock) the conversion rate applicable to the
Convertible Preferred shall be proportionately increased (so that the
ratio of (u) the number of shares of Class B Common into which all the
outstanding Convertible Preferred Stock is convertible (regardless of
whether such securities are then convertible), to (v) the total number of
shares of all Common Stock outstanding, and which would then be
outstanding if all securities convertible into shares of Common Stock had
been converted (regardless of whether such securities were then
convertible), remains the same], effective immediately before the opening
of business on the next full business day after the record date fixed for
determination of the stockholders entitled to such dividend; and (b) If
the corporation shall split up the outstanding shares of either class of
its Common Stock into a greater number of shares or if it shall combine
the outstanding shares of either class into a smaller
<PAGE>
number, the conversion rate applicable to the Convertible Preferred shall
be proportionately (based on the ratio described above) increased in the
case of a split or decreased in the case of a combination, effective
immediately before the opening of business on the full business day next
following the day such action becomes effective. Upon (i) any
reclassification or change in the outstanding shares of Common Stock
(other than a stock dividend or a Split-up or combination of shares), or
(ii) any consolidation or merger to which the corporation is a party
(except a merger in which the corporation is the surviving corporation and
which does not result in any reclassification of or change in any class of
the outstanding Common Stock other than a split-up or combination of
shares). or (iii) any sale or conveyance to another corporation of all or
substantially all of the property of the corporation for securities of
another corporation, effective provision shall be made by the corporation
(or by the successor or purchasing corporation) so that holders of
Convertible Preferred then outstanding shall thereafter have the right to
convert such shares into the kind and amount of stock and other securities
and property receivable upon such reclassification, change, consolidation,
merger, sale, or conveyance by a holder of the number of shares of Class B
Common into which such shares of Preferred Stock might have been converted
immediately prior thereto. The provisions of this subparagraph shall
similarly apply to successive reclassifications, changes, consolidations,
mergers, sales, or conveyances. Any provision that shall be made for the
purposes specified in this subparagraph which shall have been approved by
a resolution or resolutions of the Board of Directors of the corporation,
and which, in the opinion of independent certified public accountants
selected by the corporation, are fair and equitable, shall be binding and
conclusive upon all holders of shares of the Convertible Preferred then
outstanding.
5.3 Fractional Share. The corporation shall not issue any fractional
share of Class B Common upon conversion of any share or shares of
Convertible preferred but shall pay for any such fractional share in cash
based on the fair value of one share of Class B Common as of the date of
conversion as then determined by the Board of Directors.
B. COMMON STOCK
<PAGE>
1. Dividends, Voting, and Other Rights. The dividend and other rights of a
holder of one share of Class A Common shall be identical to the dividend
and other rights of a holder of one share of Class B Common, except that
holders of the Class B Common shall have no right to vote except as may be
required under Virginia law.
2. Reservation. Hereafter the corporation will at all times reserve and
keep available such shares of its Class B Common as are authorized but
unissued as of the effective date of this amendment, solely for the
purpose of issue upon conversion of the shares of the Convertible
Preferred as herein provided. The corporation covenants that all shares of
the Class B Common which shall be so issuable shall, when issued, be duly
and validly issued, fully paid, and nonassessable.
The Issuance of certificates for Class B Common upon such conversion
as hereinabove set forth shall be made without charge to the holders of
such Class B Common for any issuance tax in respect thereof, provided that
the corporation shall not be required to pay any taxes which may be
payable in respect of any transfer involved in the issuance and delivery
of any certificate in a name other than that of the holder of shares
converted.
C. CERTAIN OTHER PROVISIONS
1. Preemptive Rights. No holder of any share of Preferred Stock or Common
Stock shall have any preemptive right to subscribe for additional shares
of any class of capital stock or to receive warrants or rights for the
purchase of shares of any class of stock or to receive securities
convertible into shares of any class of stock.
2. Involuntary Dissolution. Upon any involuntary dissolution of the
corporation, after provision for payment and discharge of (or making
adequate provision for) all known debts, obligations, and liabilities of
the corporation, there shall be no " amount payable" (within the meaning
of Section 13.1-62 of the Code of Virginia) out of the corporation's net
assets to the then holder of any share of the corporation's Preferred
Stock or Common Stock, and the then remaining assets of the corporation
shall be distributed ratably among the
<PAGE>
then holders of any then issued and outstanding shares of Common Stock and
Preferred Stock in pro-portion to the number of shares of Common Stock and
Preferred Stock then owned by each. If upon such involuntary dissolution
no share of Preferred Stock is then issued and outstanding, the remaining
assets of the corporation shall be distributed ratably among the then
holders of shares of the corporation's Common Stock In proportion to the
number of shares of Common Stock then owned by each.
2. The proposed amendment was adopted by the stockholders entitled to vote
thereon of a written consent in lieu of a special meeting, which consent set
forth the proposed amendments and was signed by all such stockholders.
3. The number of shares of each class of stock of the corporation
outstanding on the record date, the number of shares entitled to vote on the
proposed amendment, and the number of shares voted for and against the proposed
amendment were as follows:
A. Shares outstanding, all classes:
Class Shares Outstanding
----- ------------------
Class A Common Stock 1,000
Class B Common Stock 150
B. Shares entitled to vote:
1,000 shares of Class A Common
150 shares of Class B Common
C. Shares voted:
FOR - 1,000 shares of Class A Common
150 shares of Class B Common
AGAINST - 0
Executed in the name of the corporation by its President and its Secretary
who declare under penalties of perjury that the
<PAGE>
facts stated herein are true.
Dated: January 20, 1982 BRILL NEWSPAPERS, INC.
BY
----------------------------
Alan R. Brill, President
------------------------------
Bonnie P Brill, Secretary
<PAGE>
EX-3.(ii)(a)
OPERATING AGREEMENT
of
BRILL MEDIA COMPANY, LLC
This is the Operating Agreement of Brill Media Company, LLC, a Virginia
limited liability company (the "Company"), made as of this 19th day of
November, 1997, by and between BH ONE, LLC, a Virginia limited liability
company, and BH TWO, LLC, a Virginia limited liability company, who hereby
become the Company's members [each (and each other person or entity while
hereafter admitted as a Member) a "Member", and collectively with each other
Member, the "Members"] and agree to form a limited liability company upon the
following terms and conditions.
1. Name. The name of the Company is Brill Media Company, LLC. The business
of the Company may be conducted under such trade or fictitious name or names as
the Manager (hereinafter designated) may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located, and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept, shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or such other place
or places as the Manager may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of each Member's capital
contribution is as set forth on Exhibit A; such Members shall not be required to
lend or make any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated
<PAGE>
(but not distributed) to such Member pursuant to this Section 3, and
any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
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<PAGE>
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as rapidly as is possible, from
time to time such Member's share of the Company's income and gain,
if any, shall be separately allocated to such Member's Capital
Account until such time as such Member's Capital Account deficit is
eliminated.
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior, written consent of all then Members. The time of admission of
any such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before. The Members shall have no right to
control or manage, nor shall they, as Members, take any part in the control or
management of the Company's business, but each may exercise any other rights and
powers of a Member under this agreement. Any Member, or any employee or
affiliate thereof, also may be an employee, officer, or director of the Manager.
Unless expressly specified to the contrary at the time of such act, all actions
taken with respect to the Company by any of such persons while acting for the
Manager shall be deemed to have been taken solely in their capacity as
employees, officers, or directors of the Manager and not as Members.
5. Transfer of Interests. Other than with the prior, written consent of
all then Members pursuant to Section 4, an assignee or other transferee of an
interest in the Company (by operation of law or otherwise) shall not thereby
become a Member of the Company nor thereby acquire any proprietary right in nor
right to become a Member or to participate in the affairs or
3
<PAGE>
management of the Company. Without such prior, written consent, by any written
assignment, pledge, encumbrance, or other transfer (jointly and severally, a
"Transfer") a Member may assign and transfer to and entitle the assignee or
transferee to receive only (as and to the extent expressly so assigned or
transferred) any share of the profits or losses or asset distributions of the
Company that the assignor or transferor Member thereafter otherwise would have
been or become entitled to hereunder, and nothing more. As to the Company, any
such Transfer shall be effective only if in a writing executed by both the
transferor and transferee in a form acceptable to the Company as evidenced by
the Company's prior written acknowledgment thereof. Any attempted assignment or
other transfer of a Member's rights in violation of this agreement shall be
void.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
7. Voting Rights of Members. In voting by the Members, each Member shall
be entitled to cast the number of votes indicated for such Member on Exhibit A.
8. Manager. The Company's business shall be managed by a manager (the
"Manager"), which initially shall be Brill Media Management, Inc., a Virginia
corporation, whose address is 420 NW Fifth Street, Suite 3-B, Evansville,
Indiana 47708. If the Manager also is a Member it shall have all the rights of
any other Member and also shall direct and manage the operation of the Company's
business, devoting so much of its time thereto as it deems appropriate. From
time to time, the Manager may delegate prescribed functions to any employee,
person, or agent and may contract with other person(s) to assist in management
of the Company's affairs, including any Member or any officer, agent, employee,
or affiliate of a Member. The Manager may submit its resignation as Manager at
any time, but such resignation shall become effective only when the Manager's
successor shall have been selected and duly qualified to serve. Any successor
Manager shall be selected only by a majority vote of the then Members.
9. Management. The Manager shall have the sole and
4
<PAGE>
exclusive right to manage the Company and to make all decisions regarding the
Company's business, including the right, power, and authority to do in the name
of, and acting solely on behalf of and for, the Company all lawful things that
the Company might do that in the Manager's sole good faith business judgment of
the best interests of the Company are necessary, proper, convenient, or
desirable to carry out the purposes of the Company, including, but not limited
to, the right, power, and authority at any time or from time to time acting in
the name of, on behalf of, and for the Company to do for the Company each or any
one or more of the following:
(a) to own, acquire by lease or purchase, develop, maintain,
improve, grant options with respect to, sell, convey, finance, assign, mortgage,
or lease real estate and/or personal property and to cause to have constructed
improvements upon any real estate necessary, convenient, or incidental to the
accomplishment of the Company's purposes;
(b) to execute on behalf of the Company any and all agreements,
contracts, documents, certifications, and instruments necessary, proper, or
convenient in connection with the development, management, maintenance, and
operation of the Company or of any properties or other assets in which the
Company has an interest, including without limitation, necessary easements to
public or quasi-public bodies or public utilities;
(c) to borrow money and issue evidences of the Company's
indebtedness in furtherance of any or all of the Company's purposes, and to
secure the repayment thereof by deed of trust, mortgage, security interest,
pledge, or other lien or encumbrance on the Company's properties or assets;
(d) to prepay in whole or in part, negotiate, refinance, recast,
increase, renew, modify, amend, or extend any secured or other indebtedness (or
the evidence thereof) for or on behalf of the Company or affecting Company
properties or assets and in connection therewith to execute any extensions,
renewals, amendments, or modifications of any evidences of indebtedness secured
by deeds of trust, mortgages, security interests, pledges, or other encumbrances
covering such properties or assets;
(e) to enter into any kind of contract or activity and to cause the
Company to perform and carry out activities or contracts of any kind necessary
to, or in connection with, or incidental to the accomplishment of the Company's
purposes, so long as those activities and contracts may lawfully be carried on
5
<PAGE>
or performed by a limited liability company under then applicable laws, rules,
and regulations;
(f) to lend money to the Company, as a creditor of the Company and
not as an additional capital contribution to the Company, or to borrow money
from the Company; provided that the terms of any such loan or loans, including
the terms and interest rate thereof, shall be at least as favorable to the
Company as those then available to the Company on the same type of loan if made
to or received from a disinterested third party; and
(g) to institute, conduct, defend, or prosecute any litigation,
arbitration, or ADR proceeding on behalf of the Company (and to employ attorneys
and experts in connection therewith), including the filing of all appropriate
pleadings or petitions in any proceeding in bankruptcy.
10. Execution of Documents, etc. The Manager may execute and deliver any
document or instrument for, by, or on behalf of the Company, including any deed,
deed of trust, note, or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument
purporting to convey or encumber, in whole or in part, any or all of the
property or assets of the Company, or any receipt or compromise or settlement
agreement with respect to the Company's accounts receivable or claims; no other
signature shall be required for any such document or instrument to be valid,
binding, and enforceable against the Company in accordance with its terms, and
all persons may rely thereon and shall be exonerated from any and all liability
if they deal with the Company and the Manager on the basis of any document or
instrument executed by the Manager for and on behalf of the Company. Any person
dealing with the Company, its Manager, or its Members may rely upon a
certificate signed by the Manager as to: (a) the then identity of the Members or
of the Manager; (b) the performance of any act by the Company, its Members, or
the Manager; (c) any act or failure to act by the Company or (d) any other
matter whatsoever involving the Company, the Manager, or any Member. All actions
taken by the Manager on behalf of the Company from the date of its organization
to the date of this agreement are hereby ratified and confirmed.
11. Certain Actions, Taxes. On the Company's behalf, the Manager may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property. The Manager shall cause the Company's federal,
state, and local tax returns to be prepared and timely filed as and when
required and shall promptly notify the Members of any proposed
6
<PAGE>
audit or adjustments of any Company tax return. Until a successor is chosen by
the Members, the Manager shall be the designated "tax matters partner" for the
Company, and the Manager shall select the Company's independent auditor and
shall determine the method of accounting upon which the Company's books are
maintained.
12. Manager's Compensation, Expenses. The Manager may contract with the
Company for its services and may receive such compensation as may be agreed upon
from time to time for the value of its services rendered to the Company as
Manager. The Manager also shall be entitled to have the Company pay or reimburse
all expenses reasonably incurred by the Manager in connection with its
management of the Company's affairs.
13. Authority of the Manager and Members to Engage in Other Businesses.
The Manager, any Member, or any affiliate of a Member may engage in and/or
possess an interest in other business ventures of any nature and description,
independently or with others, including but not limited to the ownership,
financing, leasing, operation, management, and development of businesses that
may compete with the Company; and neither the Company nor the Members shall have
any right by virtue of this agreement in or to any other venture or to any
income or profits derived therefrom. No Manager, Member, or any affiliate of any
Member shall be obligated to present any particular investment opportunity to
the Company even if such opportunity is of a character that, if presented to the
Company, could be taken by the Company, and each of them shall have the right to
take for its own account (individually or otherwise) or to recommend to others
any such particular investment opportunity.
14. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not a Member or affiliate.
15. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) Profits and Losses. As and to the extent permitted and not
prohibited by the Act, and as determined by a majority vote of the Members, the
Company's profits and losses and any then distributions of the Company's cash or
other assets shall be allocated and distributed among the Members at least
annually in proportion to their then Capital Accounts as
7
<PAGE>
reflected in the Company's records.
(b) Maintenance of Books. The Company shall maintain and keep at its
principal office described in Section 2 complete and accurate books of account
as required pursuant to the Act. Each Member shall have access thereto at all
reasonable times and the right to inspect and copy such books and records either
directly or through a person designated by such Member.
(c) Annual Reports. The Manager shall send to all Members an annual
report, containing a balance sheet, income statement, and statement of changes
in financial position, and all information necessary for each Member to prepare
its federal income tax return.
16. Exculpation. Except by reason of acts or omissions of the Member or
the Manager found by a court of competent jurisdiction upon entry of a final
judgment to have been due to such Member's or the Manager's bad faith, fraud,
willful misconduct, or knowing violation of the criminal law, in any proceeding
brought by or in the right of the Company or by or on behalf of any Member,
neither the Manager nor any Member shall be liable, responsible, or accountable
in damages or otherwise to the Company or to any Member, or to any successor,
assignee or transferee of the Company or any Member, for any losses, claims,
damages, or liabilities arising from or based on (i) any act performed, or the
omission to perform any act, within the scope of the authority conferred on any
Member or on the Manager by this agreement; (ii) the performance by any Member
or the Manager of, or the omission to perform, any act on advice of legal
counsel, accountants, or other professional consultants to the Company; or (iii)
the negligence, dishonesty, or bad faith of any employee, officer, or agent of
the Company selected, engaged, or consulted in good faith by any Member or by
the Manager.
17. Exoneration. No Member, Manager, or agent of the Company, jointly or
severally, shall be liable or have any obligation for any liability of the
Company, whether arising in contract, tort, or otherwise solely by reason of
being such Member, Manager, or agent of the Company.
18. Indemnification and Advances.
(a) As and to the full extent permitted by law and by ss. 13.1-1009
of the Act, the Company intends to and shall, indemnify, defend and hold each
Member (including by the use of such term for purposes of this Section, the
Manager in its capacity as such and, if the Manager also is a Member, also
8
<PAGE>
separately in its capacity as a Member) harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend, and hold the
Company's and each such Member's respective affiliates, agents, employees,
advisors, consultants, or independent contractors, (hereinafter, collectively,
"Agents"; singly, an "Agent") harmless from and against, any loss, liability,
damage, fine, judgment, penalty, attachment, cost, or expense, including
reasonable attorneys' fees, arising from any demands, claims, or suits against
each or any Member, the Manager, the Company, or any Agent, arising from or
relating to the capacity, actions, or omissions of the Company, or of any
Member, or of the Manager, or of an Agent, or arising from or relating to
activities undertaken on behalf of the Company in the ordinary course of the
Company's business, including, without limitation, any demands, claims, or
lawsuits initiated by a Member, unless the acts or omissions of any Member, the
Manager, the Company, or any Agent seeking indemnification are found by a court
of competent jurisdiction upon entry of a final judgment to have been the result
of bad faith, fraud, willful misconduct, or a knowing violation of the criminal
law by the person or entity seeking indemnification, or to have violated any
lesser standard of conduct that under applicable law affirmatively prevents
indemnification hereunder. The termination of any action, suit, or proceeding by
judgment, order, settlement, plea of nolo contendere (or its equivalent), or
conviction shall not, of itself, create a presumption that a Member, the
Manager, the Company, or any Agent shall not be entitled to indemnification
hereunder or that such Member, the Manager, or the Company, or such Agent did
not act in good faith and in a manner that each reasonably believed to be in or
not opposed to the best interests of the Company.
(b) Upon approval by a majority vote of the Members, any person
entitled to receive indemnity hereunder shall be entitled to receive advances
from the Company to cover the costs (including all attorneys' and experts' fees)
of defending any claim or action against them subject to indemnity hereunder;
provided, however, that any such advances shall be repaid to the Company (with
interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law) if such recipient of an advance is found by a court
of competent jurisdiction upon entry of a final judgment to have violated any of
the standards set forth above in (a) as standards that preclude indemnification
hereunder. All rights of indemnity hereunder shall survive dissolution of the
Company or the death, resignation, expulsion, incompetency, dissolution,
liquidation, or bankruptcy of any Member or any Agent, and shall
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<PAGE>
inure to the benefit of their heirs, personal representatives, successors, and
assigns.
(c) If the indemnification provisions of this Section shall be
deemed unenforceable to any extent by a court of competent jurisdiction, such
unenforceable portion shall be modified or stricken so as to give effect to this
Section to the fullest extent permitted by law.
(d) The right of indemnification hereby provided for shall not be
exclusive of or affect any other rights that a Member, the Manager, or any Agent
otherwise may have. Nothing contained in this Section shall limit any lawful
right to indemnification existing independently of this Section.
(e) Notwithstanding anything contained herein to the contrary, any
amount of indemnity payable hereunder shall be payable only out of and to the
extent of the Company's then assets, including any insurance proceeds then
available to the Company for such purposes. No Member shall be liable for the
payment of any indemnity amount payable hereunder, nor to make any capital
contribution to the Company, nor to return any capital distribution made to it
by the Company, nor to restore any negative capital account balance of that
Member in order to enable the Company to make any payment under this Section.
19. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
20. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way
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define, limit, extend, or describe the scope or intent of this agreement or any
Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine, feminine, or neuter
forms, and the singular form of each noun or pronoun shall include the plural,
and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is determined to be illegal,
invalid, or unenforceable for any reason whatsoever, such illegality,
invalidity, or unenforceability shall not affect the validity of the remaining
terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the successors,
heirs, and assigns (including an assignee of all or part of an interest in the
Company) of the respective parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that its interest in the Company is being
acquired by it for its own account for investment and not with a view to resale
or distribution thereof and that it is fully aware that each other Member and
the Company are relying upon the truth and accuracy of this representation and
warranty.
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(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's business. No amendment or modification of this agreement shall be
effective unless approved in writing as provided herein.
21. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
22. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed by their duly authorized officers as of the day, month, and year first
above written.
Member:
BH ONE, LLC, a Virginia
limited liability company
By:
-------------------------------
Alan R. Brill, Member
Member:
BH TWO, LLC, a Virginia
limited liability company
By:
-------------------------------
Alan R. Brill, Member
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EXHIBIT A
(1) (2) (3) (4)
Number Capital
Name Interest of Votes Contribution
- ---- -------- -------- ------------
BH ONE, LLC 50% 50 $500.00
BH TWO, LLC 50% 50 $500.00
This is Exhibit A to the Operating Agreement of Brill Media Company, LLC
as of the 19th day of November, 1997.
Member:
BH ONE, LLC, a Virginia
limited liability company
By:
------------------------------
Alan R. Brill, Member
Member:
BH TWO, LLC, a Virginia
limited liability company
By:
------------------------------
Alan R. Brill, Member
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<PAGE>
EX-3.(ii)(b)
Exhibit A
BYLAWS OF
Brill Media Management, Inc.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determi nation it shall be the calendar
year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided in Article IV, Section 8) shall
be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the
thirtieth (30th) day prior to the date of the meeting or action then requiring a
determination of shareholders. A determination of shareholders entitled to
notice of and to vote at a shareholders' meeting shall be effective for any
adjournment of the meeting unless the board of directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second (2nd) Tuesday in February of each year
commencing at 10:00 o'clock a.m. local time at the meeting place. If the
aforesaid date shall fall on a legal holiday, the annual shareholders' meeting
shall be held on the next following business day, and if for any other reason
the annual shareholders' meeting shall not be held on such day, it
<PAGE>
may be called in accordance with the provisions of Article IV, Section 3, and a
meeting called and held with this as a purpose shall be specifically designated
as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia (1950), as amended (the "Code")) the holders of not less
than twenty percent (20%) of all votes entitled to be cast on any issue proposed
to be considered at the special meeting. Only business within the purpose or
purposes described in the required meeting notice may be conducted at a special
shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders' meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president, the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail, postage prepaid, addressed to a shareholder at such shareholder's
address as it appears on the share transfer records of the corporation.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code, shall be given in the form and manner provided above for a
special meeting but not less than twenty-five (25) nor more than sixty (60) days
before the meeting date.
Section 5. Adjournment - If an annual or special sharehold ers' meeting is
adjourned to a different date, time, or place, notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any
<PAGE>
purpose at a shareholders' meeting, it is deemed present for quorum purposes for
the remainder of that meeting and for any adjournment of that meeting unless a
new record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, redeemable shares (after a notice of redemption has been
mailed and a deposit made as provided in such section) shall not vote and shall
not be outstanding shares. Shares of the corporation held by another
corporation, domestic or foreign, shall not be entitled to vote at any meeting
and shall not be counted in determining the total number of outstand ing shares
at any given time entitled to vote if a majority of the shares entitled to vote
for the election of directors of the other corporation is owned, directly or
indirectly, by this corporation. A shareholder entitled to vote may vote his
shares in person or by a proxy and may appoint such a proxy to vote or otherwise
act for him by signing an appointment form, either personally or by his
attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describ ing the action taken,
at least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.1-657D of the Code nonvoting share-
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<PAGE>
holders shall be given at least ten (10) days written notice of any proposed
action before the action is taken by unanimous consent of the voting
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A share holder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorpo ration, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corpo ration for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meeting the share holder
objects to holding the meeting or to transacting business at the meeting, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
present ed.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and
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affairs of the corporation shall be managed under the direction of, its board of
directors, subject to any limitation set forth in its articles of incorporation.
Section 2. Number, Term, and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different number, the number of directors
of the corporation shall be one (1). The term of each director shall expire at
the next annual shareholders' meeting following his election, but despite the
expiration of a director's term, he shall continue to serve until his successor
is duly elected and qualifies or until there is a decrease in the number of
directors. A decrease in the number of directors shall not shorten an incumbent
director's term. A director need not be a resident of the Commonwealth of
Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under the conditions
described in Sections 4 and 5 of this Article V, the board of directors shall be
elected annually at the annual share-holders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held the number of votes cast to
remove him constitutes a majority of the votes then entitled to be cast and
counted together in an election of such director at a shareholders' meeting.
Notice of such a meeting must state that the purpose, or a purpose, of the
meeting is removal of the director. If any director is so removed, a new
director may be elected in his place at the same shareholders' meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office consti tute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then direc tors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may
5
<PAGE>
be filled only by the affirmative vote of a majority of the shareholders in such
voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
ARTICLE VI - MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings, Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Common wealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days or telegraphed or telefaxed at least two (2)
days prior to the date of the meeting. Unless otherwise required by these
bylaws, the notice need not describe the purpose of a special meeting of the
board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a
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<PAGE>
board of directors' meeting, or of the sole director if the corporation shall
have but one director, shall be the act of the board of directors unless the
vote of a greater number of direc tors is required by the articles of
incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the corporate minutes or filed with the corporate records reflecting
the action taken. Any action taken by such unanimous, written consent shall be
effective when the last director of the board of directors signs an approving
consent, unless such consents all specify the same effective date and each
specifies the date of execution by each executing director, in which event the
action taken shall be effective as of the effective date so specified. Such
unanimous consent shall have the effect of a unanimous vote at a duly called and
held meeting of the board of directors and may be described as such in any
document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or partici pation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the begin ning of the meeting or promptly upon his arrival objects
to holding the meeting or transacting business at the meeting and thereafter
does not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
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Section 1. Election, Removal, and Duties - Promptly after its election in
each year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appoint ment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corpora tion owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president or a vice president and by its secretary or an assistant secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assign ment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
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Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate, a duplicate certificate may be issued upon such terms
not in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "pro ceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obliga tion) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation of the criminal law.
The corporation shall pay for or reimburse the reasonable expenses incurred by
any indemnitee in advance of final disposition of any proceeding upon receipt of
an unsecured undertaking from him to repay the sums if ultimately it is
determined that he is not entitled to indemnification. A direc tor shall be so
indemnified without the necessity of any further determination or authorization,
but in the case of an officer, the determination that indemnification is
permissible and an evaluation as to the reasonableness of expenses in a specific
case shall be made as authorized from time to time by general or specific
actions of the board of directors. The termination of a proceeding by a
judgment, decree, order, settlement, or convic tion, or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that an
indemnitee acted in such a manner as to make him ineligible for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on
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behalf of shareholders of the corporation, the aggregate amount of all damages
that may be assessed against an officer or direc tor of the corporation arising
out of any single transaction, occurrence, or course of conduct shall be limited
to one dollar. This bylaw is adopted by the shareholders as a limitation on the
liability of the corporation's officers and directors, and this limitation shall
not apply if the officer or director engaged in willful misconduct or a knowing
violation of the criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occur ring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liabili ty to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws may be made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made, by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia,
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
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Each use of a masculine pronoun herein shall be read to include both the
feminine and neuter pronouns as applicable.
Adopted by the Shareholders;
As of ________________________
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EX-3.(ii)(c)
Amended Operating Agreement
AMENDED
OPERATING AGREEMENT
of
BMC HOLDINGS, LLC
This is the Amended Operating Agreement of BMC Holdings, LLC, a
Virginia limited liability company (the "Company"), entered into as of this
10th day of December, 1997, by Brill Media Company, LLC, a Virginia limited
liability company, the Company's member [each (and each other person or entity
while hereafter admitted as a Member) a "Member", and collectively with each
other Member, the "Members"].
1. Name. The name of the Company is BMC Holdings, LLC. The business of the
Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3, and any items in the nature of income or gain that are
<PAGE>
specially allocated (but not distributed) to such Member, and (iii)
the amount of any Company liabilities assumed by such Member or
secured by any property of the Company distributed to such Member,
and (b) shall be decreased by (i) the cash amount or agreed fair
market value of all actual or deemed distributions of cash or
property made to such Member pursuant to this agreement, (ii) any
net loss allocated to such Member pursuant to this Section 3, and
any items in the nature of expenses or losses that are specially
allocated to such Member, and (iii) the amount of any liabilities of
such Member assumed or secured by the Company. In determining the
amount of any such liabilities, there shall be taken into account
the provisions of ss. 752(c), and any other applicable provisions,
of the Internal Revenue Code as amended from time to time (the
"Code") and any applicable regulations (the "Regulations"; singly, a
"Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as rapidly as is possible, from
time to time such Member's
2
<PAGE>
share of the Company's income and gain, if any, shall be separately
allocated to such Member's Capital Account until such time as such
Member's Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 19th day of November, 1997 is hereby amended in
its entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Brill Media Company, LLC
By: Brill Media Management, Inc.
Its Manager
By:
---------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Brill Media Company, LLC $1,000.00
This is Exhibit A to the Amended Operating Agreement of BMC Holdings, LLC
as of the 10th day of December, 1997.
Member:
Brill Media Company, LLC,
By: Brill Media Management, Inc.
Manager
By:
---------------------------
a duly authorized officer
13
<PAGE>
BMC HOLDINGS, LLC
CERTIFICATE REGISTER
<TABLE>
<CAPTION>
===========================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Brill Media Company,
1 LLC 1,000 12/22/97
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------
===========================================================================================
</TABLE>
14
<PAGE>
EX-3.(ii)(d)
Exhibit A
BYLAWS
OF
READING RADIO, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
September 4, 1987
<PAGE>
EX-3.(ii)(e)
Exhibit A
BYLAWS
OF
TRI-STATE BROADCASTING, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or the secretary of this corporation, either in
person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
March 27, 1993
<PAGE>
EX-3.(ii)(f)
Exhibit A
BYLAWS
OF
NORTHERN COLORADO RADIO, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact. Any
shareholder desiring to transfer (by sale, gift, pledge, hypothecation, or
otherwise) or to have the corporation register a transfer of any share or shares
of the corporation ("Transferor") shall first notify the corporation's president
in writing setting forth in such reasonable detail as the corporation may
require the terms ("Terms") upon which such transfer is proposed, including,
without limitation, the number of each class of shares proposed to be
transferred ("Offered Shares"), the identity of the proposed transferee
("Transferee"), the price per share proposed to be paid or received for the
Offered Shares, and the terms of payment and shall attach, as a part thereof, a
complete copy of each agreement applicable to such proposed transfer
(collectively, "Notice") . For the period of thirty (30) consecutive calendar
days ("Option Period") next following the corporation's receipt of Notice, the
corporation shall have the right, but shall not be obligated, to acquire all,
but not less than all, of
<PAGE>
the Offered Shares upon the Terms set forth in the Notice. If during the Option
Period the corporation shall not have notified the Transferor in writing of its
decision to acquire all of the Offered Shares upon the Terms specified in the
Notice, then for the period of fourteen (14) consecutive calendar days next
following expiration of the Option Period the Transferor may transfer all, but
not less than all, of the Offered Shares to the Transferee upon the Terms
specified in the Notice, and the corporation will register such transfer upon
satisfactory proof that such transfer was made within such period upon such
Terms . Upon expiration of the fourteen (14) day period, the Offered Shares may
not thereafter be transferred by the Transferor except upon a new Notice. The
corporation shall be obligated to transfer or to register a transfer of its only
upon compliance with the provisions of this Section. Each certificate issued or
to be issued for any share or shares of the corporation shall bear a legend on
its front or back conspicuously noting the existence of this restriction on
transferability.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obligation) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation of the criminal law.
The corporation shall pay for or reimburse the reasonable expenses incurred by
any indemnitee in advance of final disposition of any proceeding upon receipt of
an unsecured undertaking from him to repay the sums if ultimately it is
determined that he is not entitled to indemnification. A director shall be so
indemnified without the necessity of any further determination or authorization,
but in the case of an officer, the determination that indemnification is
permissible and an evaluation as to the reasonableness of expenses in a specific
case shall be
<PAGE>
made as authorized from time to time by general or specific actions of the board
of directors. The termination of a proceeding by a judgment, decree, order,
settlement, or conviction, or upon a plea of nolo contendre or its equivalent
shall not of itself create a presumption that an indemnitee acted in such a
manner as to make him ineligible for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
<PAGE>
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
July 1, 1988
<PAGE>
EX-3.(ii)(g)
BYLAWS OF
NCR II, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determi nation it shall be the calendar
year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided in Article IV, Section 8) shall
be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the
thirtieth (30th) day prior to the date of the meeting or action then requiring a
determination of shareholders. A determination of shareholders entitled to
notice of and to vote at a shareholders' meeting shall be effective for any
adjournment of the meeting unless the board of directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second (2nd) Tuesday in February of each year
commencing at 10:00 o'clock a.m. local time at the meeting place. If the
aforesaid date shall fall on a legal holiday, the annual shareholders' meeting
shall be held on the next following business day, and if for any other reason
the annual shareholders' meeting shall not be held on such day, it may be called
in accordance with the provisions of Article IV, Section 3, and a meeting called
and held with this as a purpose shall be specifically designated as the annual
meeting.
<PAGE>
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia (1950), as amended (the "Code")) the holders of not less
than twenty percent (20%) of all votes entitled to be cast on any issue proposed
to be considered at the special meeting. Only business within the purpose or
purposes described in the required meeting notice may be conducted at a special
shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders' meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president, the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail, postage prepaid, addressed to a shareholder at such shareholder's
address as it appears on the share transfer records of the corporation.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code, shall be given in the form and manner provided above for a
special meeting but not less than twenty-five (25) nor more than sixty (60) days
before the meeting date.
Section 5. Adjournment - If an annual or special sharehold ers' meeting is
adjourned to a different date, time, or place, notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the
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act of the voting group, unless the affirmative vote of a greater number is
required by law or by the articles of incorporation, and except that in any
election of directors those receiving a plurality of the votes cast by the
shares entitled to vote in the election shall be elected, though not receiving a
majority. Less than a quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, redeemable shares (after a notice of redemption has been
mailed and a deposit made as provided in such section) shall not vote and shall
not be outstanding shares. Shares of the corporation held by another
corporation, domestic or foreign, shall not be entitled to vote at any meeting
and shall not be counted in determining the total number of outstand ing shares
at any given time entitled to vote if a majority of the shares entitled to vote
for the election of directors of the other corporation is owned, directly or
indirectly, by this corporation. A shareholder entitled to vote may vote his
shares in person or by a proxy and may appoint such a proxy to vote or otherwise
act for him by signing an appointment form, either personally or by his
attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describ ing the action taken,
at least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.1-657D of the Code nonvoting share
holders shall be given at least ten (10) days written notice of any proposed
action before the action is taken by unanimous consent of the voting
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect
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of a unanimous vote of voting shareholders at a duly called and held
shareholders' meeting and may be described as such in any document filed with
the State Corporation Commission. A share holder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorpo ration, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corpo ration for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meeting the share holder
objects to holding the meeting or to transacting business at the meeting, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
present ed.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term, and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different number, the number of directors
of the corporation shall be one (1). The term of each director shall expire at
the next annual shareholders' meeting following his election, but despite the
expiration of a director's term, he shall continue to serve until his successor
is duly elected and qualifies or until there is a decrease in the number of
directors. A decrease in the number of directors shall not shorten an incumbent
director's term. A
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director need not be a resident of the Commonwealth of Virginia or a shareholder
of the corporation.
Section 3. Election of Board of Directors - Except under the conditions
described in Sections 4 and 5 of this Article V, the board of directors shall be
elected annually at the annual share-holders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held the number of votes cast to
remove him constitutes a majority of the votes then entitled to be cast and
counted together in an election of such director at a shareholders' meeting.
Notice of such a meeting must state that the purpose, or a purpose, of the
meeting is removal of the director. If any director is so removed, a new
director may be elected in his place at the same shareholders' meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office consti tute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then direc tors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
ARTICLE VI - MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings, Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting.
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Any such regular meeting of the board of directors shall be held at the place
where the immediately preceding shareholders' meeting was held. Special meetings
of the board of directors may be called by any member of the board of directors.
Any meeting of the board of directors may be held in or out of the Common wealth
of Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days or telegraphed or telefaxed at least two (2)
days prior to the date of the meeting. Unless otherwise required by these
bylaws, the notice need not describe the purpose of a special meeting of the
board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of direc tors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the corporate minutes or filed with the corporate records reflecting
the action taken. Any action taken by such unanimous, written consent shall be
effective when the last director of the board of directors signs an approving
consent, unless such consents all specify the same effective date and each
specifies the date of execution by each executing director, in which event the
action taken shall be effective as of the effective date so specified. Such
unanimous consent shall have the effect of a unanimous vote at a duly called and
held
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meeting of the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or partici pation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the begin ning of the meeting or promptly upon his arrival objects
to holding the meeting or transacting business at the meeting and thereafter
does not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after its election in
each year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appoint ment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the
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faithful performance of the duties of his office or position and upon compliance
with such other conditions as may from time to time be imposed by the board of
directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corpora tion owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assign ment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate, a duplicate certificate may be issued upon such terms
not in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "pro ceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obliga tion) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation
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of the criminal law. The corporation shall pay for or reimburse the reasonable
expenses incurred by any indemnitee in advance of final disposition of any
proceeding upon receipt of an unsecured undertaking from him to repay the sums
if ultimately it is determined that he is not entitled to indemnification. A
direc tor shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or convic tion, or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or direc tor of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occur ring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liabili ty to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws may be made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made, by the shareholders, and the shareholders may
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provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia,
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
Each use of a masculine pronoun herein shall be read to include both the
feminine and neuter pronouns as applicable.
Adopted by the Shareholders;
As of May 16, 1996
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EX-3.(ii)(h)
Exhibit A
BYLAWS
OF
CENTRAL MISSOURI BROADCASTING, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
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filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
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judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
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ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(i)
BYLAWS OF
CMB II, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determi nation it shall be the calendar
year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided in Article IV, Section 8) shall
be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the
thirtieth (30th) day prior to the date of the meeting or action then requiring a
determination of shareholders. A determination of shareholders entitled to
notice of and to vote at a shareholders' meeting shall be effective for any
adjournment of the meeting unless the board of directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second (2nd) Tuesday in February of each year
commencing at 10:00 o'clock a.m. local time at the meeting place. If the
aforesaid date shall fall on a legal holiday, the annual shareholders' meeting
shall be held on the next following business day, and if for any other reason
the annual shareholders' meeting shall not be held on such day, it may be called
in accordance with the provisions of Article IV, Section 3, and a meeting called
and held with this as a purpose shall be specifically designated as the annual
meeting.
<PAGE>
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia (1950), as amended (the "Code")) the holders of not less
than twenty percent (20%) of all votes entitled to be cast on any issue proposed
to be considered at the special meeting. Only business within the purpose or
purposes described in the required meeting notice may be conducted at a special
shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders' meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president, the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail, postage prepaid, addressed to a shareholder at such shareholder's
address as it appears on the share transfer records of the corporation.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code, shall be given in the form and manner provided above for a
special meeting but not less than twenty-five (25) nor more than sixty (60) days
before the meeting date.
Section 5. Adjournment - If an annual or special sharehold ers' meeting is
adjourned to a different date, time, or place, notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the
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act of the voting group, unless the affirmative vote of a greater number is
required by law or by the articles of incorporation, and except that in any
election of directors those receiving a plurality of the votes cast by the
shares entitled to vote in the election shall be elected, though not receiving a
majority. Less than a quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, redeemable shares (after a notice of redemption has been
mailed and a deposit made as provided in such section) shall not vote and shall
not be outstanding shares. Shares of the corporation held by another
corporation, domestic or foreign, shall not be entitled to vote at any meeting
and shall not be counted in determining the total number of outstand ing shares
at any given time entitled to vote if a majority of the shares entitled to vote
for the election of directors of the other corporation is owned, directly or
indirectly, by this corporation. A shareholder entitled to vote may vote his
shares in person or by a proxy and may appoint such a proxy to vote or otherwise
act for him by signing an appointment form, either personally or by his
attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describ ing the action taken,
at least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.1-657D of the Code nonvoting share
holders shall be given at least ten (10) days written notice of any proposed
action before the action is taken by unanimous consent of the voting
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect
3
<PAGE>
of a unanimous vote of voting shareholders at a duly called and held
shareholders' meeting and may be described as such in any document filed with
the State Corporation Commission. A share holder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorpo ration, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corpo ration for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meeting the share holder
objects to holding the meeting or to transacting business at the meeting, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
present ed.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term, and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different number, the number of directors
of the corporation shall be one (1). The term of each director shall expire at
the next annual shareholders' meeting following his election, but despite the
expiration of a director's term, he shall continue to serve until his successor
is duly elected and qualifies or until there is a decrease in the number of
directors. A decrease in the number of directors shall not shorten an incumbent
director's term. A
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director need not be a resident of the Commonwealth of Virginia or a shareholder
of the corporation.
Section 3. Election of Board of Directors - Except under the conditions
described in Sections 4 and 5 of this Article V, the board of directors shall be
elected annually at the annual share-holders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held the number of votes cast to
remove him constitutes a majority of the votes then entitled to be cast and
counted together in an election of such director at a shareholders' meeting.
Notice of such a meeting must state that the purpose, or a purpose, of the
meeting is removal of the director. If any director is so removed, a new
director may be elected in his place at the same shareholders' meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office consti tute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then direc tors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
ARTICLE VI - MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings, Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting.
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Any such regular meeting of the board of directors shall be held at the place
where the immediately preceding shareholders' meeting was held. Special meetings
of the board of directors may be called by any member of the board of directors.
Any meeting of the board of directors may be held in or out of the Common wealth
of Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days or telegraphed or telefaxed at least two (2)
days prior to the date of the meeting. Unless otherwise required by these
bylaws, the notice need not describe the purpose of a special meeting of the
board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of direc tors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the corporate minutes or filed with the corporate records reflecting
the action taken. Any action taken by such unanimous, written consent shall be
effective when the last director of the board of directors signs an approving
consent, unless such consents all specify the same effective date and each
specifies the date of execution by each executing director, in which event the
action taken shall be effective as of the effective date so specified. Such
unanimous consent shall have the effect of a unanimous vote at a duly called and
held
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meeting of the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or partici pation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the begin ning of the meeting or promptly upon his arrival objects
to holding the meeting or transacting business at the meeting and thereafter
does not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after its election in
each year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appoint ment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the
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faithful performance of the duties of his office or position and upon compliance
with such other conditions as may from time to time be imposed by the board of
directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corpora tion owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assign ment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate, a duplicate certificate may be issued upon such terms
not in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "pro ceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obliga tion) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation
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of the criminal law. The corporation shall pay for or reimburse the reasonable
expenses incurred by any indemnitee in advance of final disposition of any
proceeding upon receipt of an unsecured undertaking from him to repay the sums
if ultimately it is determined that he is not entitled to indemnification. A
direc tor shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or convic tion, or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or direc tor of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occur ring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liabili ty to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws may be made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made, by the shareholders, and the shareholders may
9
<PAGE>
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia,
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
Each use of a masculine pronoun herein shall be read to include both the
feminine and neuter pronouns as applicable.
Adopted by the Shareholders;
February 7, 1994
10
<PAGE>
EX-3.(ii)(j)
AMENDED
OPERATING AGREEMENT
of
NORTHLAND BROADCASTING, LLC
This is the Amended Operating Agreement of Northland Broadcasting, LLC, a
Virginia limited liability company (the "Company"), entered into as of this
10th day of December, 1997, by Northland Holdings, LLC, a Virginia limited
liability company, and Northland Management, Inc., a Virginia corporation, the
Company's members [each (and each other person or entity while hereafter
admitted as a Member) a "Member", and collectively with each other Member, the
"Members"].
1. Name. The name of the Company is Northland Broadcasting, LLC. The
business of the Company may be conducted under such trade or fictitious name or
names as the Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3,
<PAGE>
and any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as
2
<PAGE>
rapidly as is possible, from time to time such Member's share of the
Company's income and gain, if any, shall be separately allocated to
such Member's Capital Account until such time as such Member's
Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 24th day of February 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Northland Holdings, LLC,
By: Northland Management, Inc.
Manager
By:
---------------------------
a duly authorized officer
Member:
Northland Management, Inc.
By:
---------------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Northland Holdings, LLC $990.00
Northland Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Northland
Broadcasting, LLC as of the 10th day of December, 1997.
Member:
Northland Holdings, LLC,
By: Northland Management, Inc.
Manager
By: /s/ Alan R. Brill
---------------------------
a duly authorized officer
Member:
Northland Management, Inc.
By: /s/ Alan R. Brill
---------------------------------
a duly authorized officer
13
<PAGE>
NORTHLAND BROADCASTING, LLC
CERTIFICATE REGISTER
<TABLE>
<CAPTION>
==========================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Northland Holdings,
1 LLC 990 12/22/297
- ------------------------------------------------------------------------------------------
2 Northland Management 10 12/22/97
- ------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------
==========================================================================================
</TABLE>
14
<PAGE>
EX-3.(ii)(k)
BYLAWS OF
NB II, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determi nation it shall be the calendar
year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided in Article IV, Section 8) shall
be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the
thirtieth (30th) day prior to the date of the meeting or action then requiring a
determination of shareholders. A determination of shareholders entitled to
notice of and to vote at a shareholders' meeting shall be effective for any
adjournment of the meeting unless the board of directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second (2nd) Tuesday in February of each year
commencing at 10:00 o'clock a.m. local time at the meeting place. If the
aforesaid date shall fall on a legal holiday, the annual shareholders' meeting
shall be held on the next following business day, and if for any other reason
the annual shareholders' meeting shall not be held on such day, it may be called
in accordance with the provisions of Article IV, Section 3, and a meeting called
and held with this as a purpose shall be specifically designated as the annual
meeting.
<PAGE>
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia (1950), as amended (the "Code")) the holders of not less
than twenty percent (20%) of all votes entitled to be cast on any issue proposed
to be considered at the special meeting. Only business within the purpose or
purposes described in the required meeting notice may be conducted at a special
shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders' meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president, the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail, postage prepaid, addressed to a shareholder at such shareholder's
address as it appears on the share transfer records of the corporation.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code, shall be given in the form and manner provided above for a
special meeting but not less than twenty-five (25) nor more than sixty (60) days
before the meeting date.
Section 5. Adjournment - If an annual or special sharehold ers' meeting is
adjourned to a different date, time, or place, notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the
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act of the voting group, unless the affirmative vote of a greater number is
required by law or by the articles of incorporation, and except that in any
election of directors those receiving a plurality of the votes cast by the
shares entitled to vote in the election shall be elected, though not receiving a
majority. Less than a quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, redeemable shares (after a notice of redemption has been
mailed and a deposit made as provided in such section) shall not vote and shall
not be outstanding shares. Shares of the corporation held by another
corporation, domestic or foreign, shall not be entitled to vote at any meeting
and shall not be counted in determining the total number of outstand ing shares
at any given time entitled to vote if a majority of the shares entitled to vote
for the election of directors of the other corporation is owned, directly or
indirectly, by this corporation. A shareholder entitled to vote may vote his
shares in person or by a proxy and may appoint such a proxy to vote or otherwise
act for him by signing an appointment form, either personally or by his
attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describ ing the action taken,
at least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.1-657D of the Code nonvoting share
holders shall be given at least ten (10) days written notice of any proposed
action before the action is taken by unanimous consent of the voting
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect
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of a unanimous vote of voting shareholders at a duly called and held
shareholders' meeting and may be described as such in any document filed with
the State Corporation Commission. A share holder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorpo ration, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corpo ration for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meeting the share holder
objects to holding the meeting or to transacting business at the meeting, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
present ed.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term, and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different number, the number of directors
of the corporation shall be one (1). The term of each director shall expire at
the next annual shareholders' meeting following his election, but despite the
expiration of a director's term, he shall continue to serve until his successor
is duly elected and qualifies or until there is a decrease in the number of
directors. A decrease in the number of directors shall not shorten an incumbent
director's term. A
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director need not be a resident of the Commonwealth of Virginia or a shareholder
of the corporation.
Section 3. Election of Board of Directors - Except under the conditions
described in Sections 4 and 5 of this Article V, the board of directors shall be
elected annually at the annual share-holders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held the number of votes cast to
remove him constitutes a majority of the votes then entitled to be cast and
counted together in an election of such director at a shareholders' meeting.
Notice of such a meeting must state that the purpose, or a purpose, of the
meeting is removal of the director. If any director is so removed, a new
director may be elected in his place at the same shareholders' meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office consti tute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then direc tors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
ARTICLE VI - MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings, Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting.
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Any such regular meeting of the board of directors shall be held at the place
where the immediately preceding shareholders' meeting was held. Special meetings
of the board of directors may be called by any member of the board of directors.
Any meeting of the board of directors may be held in or out of the Common wealth
of Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days or telegraphed or telefaxed at least two (2)
days prior to the date of the meeting. Unless otherwise required by these
bylaws, the notice need not describe the purpose of a special meeting of the
board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of direc tors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the corporate minutes or filed with the corporate records reflecting
the action taken. Any action taken by such unanimous, written consent shall be
effective when the last director of the board of directors signs an approving
consent, unless such consents all specify the same effective date and each
specifies the date of execution by each executing director, in which event the
action taken shall be effective as of the effective date so specified. Such
unanimous consent shall have the effect of a unanimous vote at a duly called and
held
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meeting of the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or partici pation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the begin ning of the meeting or promptly upon his arrival objects
to holding the meeting or transacting business at the meeting and thereafter
does not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after its election in
each year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appoint ment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the
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faithful performance of the duties of his office or position and upon compliance
with such other conditions as may from time to time be imposed by the board of
directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corpora tion owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assign ment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate, a duplicate certificate may be issued upon such terms
not in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "pro ceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obliga tion) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation
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of the criminal law. The corporation shall pay for or reimburse the reasonable
expenses incurred by any indemnitee in advance of final disposition of any
proceeding upon receipt of an unsecured undertaking from him to repay the sums
if ultimately it is determined that he is not entitled to indemnification. A
direc tor shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or convic tion, or upon a
plea of nolo contendere or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or direc tor of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occur ring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liabili ty to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws may be made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made, by the shareholders, and the shareholders may
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provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia,
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
Each use of a masculine pronoun herein shall be read to include both the
feminine and neuter pronouns as applicable.
Adopted by the Shareholders;
As of February 14, 1995
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EX-3.(ii)(l)
Exhibit A
BYLAWS
OF
CENTRAL MICHIGAN NEWSPAPERS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(m)
Exhibit A
BYLAWS
OF
CADILLAC NEWSPAPERS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(n)
Exhibit A
BYLAWS
OF
CMN ASSOCIATED PUBLICATIONS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(o)
LIMITED PARTNERSHIP AGREEMENT
This agreement ("Agreement") is entered into as of January 1, 1989, by and
between CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia corporation (the
"General Partner", or a "Partner"), and BRILL NEWSPAPERS, INC., a Virginia
corporation, c/o Charles W. Laughlin, Esquire, 100 Shockoe Slip, Richmond,
Virginia 23219, (the Limited Partner", or a "Partner", and collectively with the
General Partner, the "Partners").
1. Formation; Certificate. The parties hereto agree to form a partnership,
which shall be named "Central Michigan Distribution Co., L.P." (the "Limited
Partnership"), and the Partners are hereby admitted to the Limited Partnership.
A certificate of limited partnership (as in effect from time to time, the
"Certificate") initially Containing the form and substance of Exhibit A attached
hereto shall be filed with the State Corporation Commission of Virginia, and the
General Partner shall not be required to deliver or mail a copy of the
Certificate, or of any certificate of amendment or cancellation thereof, or of
any restated certificate of limited partnership, to any Limited Partner.
2. Specified Office. The Limited Partnership shall continuously maintain a
specified office (the "Specified Office"), which initially shall be at 215 North
Main Street, Mount Pleasant, Michigan 48858, the present address of the General
Partner. At all times the Limited Partnership shall keep at the Specified Office
those records required to be kept there by ss.50-73.8 of the Virginia Revised
Uniform Limited Partnership Act (the "Act"), and such records shall be subject
to inspection and copying at the reasonable request, and at the expense, of any
Partner during ordinary business hours.
3. Powers. The Limited Partnership shall do business only under the name
stated in the Certificate and will conduct only such business activities as the
General Partner shall determine. The Limited Partner shall have no vote on any
matter and shall not participate in or in the control of the business of the
Limited Partnership, which control shall be vested exclusively in the General
Partner. The General Partner shall have full and exclusive authority to act for
and bind the Limited Partnership in all partnership matters under applicable
laws.
4. Initial Contributions. A statement of the amount of cash and a
description and statement of the agreed value of any other property contributed
to the Limited Partnership by each Partner as its initial capital contribution,
receipt of which by the Limited Partnership is hereby acknowledged, is and shall
remain on file with the Limited Partnership at the Specified Office. No interest
shall accrue or be paid on the amount of such contributions.
<PAGE>
5. Additional Contributions. As of the date hereof, no Partner has agreed
to make any additional contribution to the Limited Partnership. A Limited
Partner shall be obligated to contribute additional cash or property to or to
perform services for the Limited Partnership only as and to the extent expressly
set out in an enforceable agreement in writing, if any, hereafter entered into
and executed by that Limited Partner and the Limited Partnership, and no other
contribution to the Limited Partnership shall or may be required of any Limited
Partner.
6. Interim Distributions. No Partner shall have any right to receive and
the Limited Partnership shall not make any interim distributions to the Partners
except in distributive shares determined in accordance with the allocations set
forth in Paragraph 7 and the provisions of this Agreement, and any such
distribution shall be made only as and when determined by the General Partner.
In no event shall the Limited Partnership make or shall a Partner receive a
distribution from the Limited Partnership if, after giving effect to such
distribution, the then liabilities of the Limited Partnership, other than any
liabilities to the Partners on account of their interests in the Partnership,
exceed the then fair value of the Limited Partnership's assets.
7. Allocations; Capital Accounts. Subject to the remaining provisions of
this paragraph, the Limited Partnership's income, gains, losses, deductions, or
credits (and any items thereof) for the period shall be allocated among the
Partners annually as of the close of business on the last day of each fiscal
year of the Limited Partnership, as follows:
General Partner 3%
Limited Partner 97%
Total 100%
For each Partner the Limited Partnership shall establish, determine, and
maintain a separate account (the "Capital Account") consisting initially of such
Partner's capital contribution and reflecting all interests of the Partner in
the Limited Partnership, which Capital Account shall be determined and
maintained throughout the full term of the Limited Partnership as required by
and in accordance with ss.1.704-1(b)(2)(iv) of the Treasury Regulations (as in
effect from time to time, the "Regulations"). Any items of income, gain, loss,
deduction, or credit shall first be allocated so that each Partner is allocated
such items of the Limited Partnership only to the extent that such Partner
receives a corresponding economic benefit or bears a corresponding economic
burden. No loss shall be allocated to any Partner, however, if such allocation
would cause or increase a deficit balance in such Partner's Capital Account,
after making reductions in such
<PAGE>
Partner's Capital Account as required by ss.1.704-1(b)(2)(ii)(d)(3) et seq. of
the Regulations. If such reductions unexpectedly cause or increase a deficit
balance in a Partner's Capital Account such Partner's Capital Account shall be
allocated items of income and gain in an amount and manner sufficient to
eliminate such deficit as quickly as possible. Any funds to be distributed to
the Partners upon a liquidation of the Limited Partnership or a Partner's
interest therein shall be distributed only in accordance with the positive
Capital Account balances of the Partners as then determined in accordance with
the Regulations after allocating all gains or losses from the sale, exchange, or
abandonment of the Limited Partnership's properties, and it is agreed that no
Partner shall be liable to the Limited Partnership to restore any deficit
balance that may exist in its Capital Account upon liquidation. If the Limited
Partnership at any time incurs nonrecourse debt, the provisions of
ss.1.704-1(b)(4)(iv) of the Regulations shall control in determining allocations
of loss, deduction, or other partnership items, and a minimum gain charge-back
shall be made in accordance with the Regulations.
8. Withdrawal. The General Partner agrees that it will not withdraw from
the Limited Partnership. It is agreed that the Limited Partner may withdraw from
the Limited Partnership at any time upon not less than five (5) days written
notice given to the General Partner. Upon its withdrawal the Limited Partner
shall be entitled to receive from the Limited Partner-ship the fair value of its
then interest in the Limited Partnership as of the date of its withdrawal based
upon its right to share in distributions from the Limited Partnership. Such
liquidating distribution may be made in kind, in whole or in part, as determined
by the General Partner.
9. Additional Partners. No new or additional partner shall be admitted to
the Limited Partnership except upon the prior written agreement of all Partners
hereafter entered into.
10. Transferability. No Partner may assign, encumber, pledge, sell,
mortgage, hypothecate, or otherwise transfer any rights or interest hereunder or
in the Limited Partnership, in whole or in part, whether voluntarily or by
operation of law, and no assignee or other transferee of any such rights or
interest shall thereby become or obtain any right or interest as a partner of
the Limited Partnership, or otherwise.
11. Disability of a Partner. If any Partner is adjudicated a bankrupt,
dissolved, liquidated, or otherwise terminated such action shall be considered a
withdrawal of the Partner from the Limited Partnership.
12. Partition. Each Partner hereby waives any and all rights to a
partition of any or all of the property of the Limited
<PAGE>
Partnership.
13. Dissolution and Winding Up. Unless sooner terminated by law the
Limited Partnership shall be terminated and dissolved and its affairs wound up
upon the first to occur of: (a) February 28, 2090; (b) the written consent of
all Partners; (c) express written notice of such termination, dissolution, and
winding up received by the General Partner from the Limited Partner; (d) the
withdrawal of any Partner, unless, within ninety (90) days after a withdrawal of
the General Partner, the then remaining Partner(s) agree(s) in writing to
continue the business of the Limited Partnership and to the appointment of one
or more additional General Partners if necessary or desired, or (e) entry of a
decree of judicial dissolution under ss.50-73.50. of the Act. Upon dissolution
and winding up the Limited Partnership's assets shall be distributed as required
by the Act and this Agreement.
14. Amendment. This Agreement shall inure to the benefit of and be binding
upon the parties hereto and their successors and assigns and may be amended only
by a written agreement executed by all parties hereto.
IN WITNESS WHEREOF, the Partners have executed this Agreement on the day,
month, and year first above written.
General Partner
Central Michigan Distribution Co. Inc.
by /s/ Bonnie P. Brill
--------------------------------
a duly authorized officer
Limited Partner
Brill Newspapers, Inc.
by
-------------------------
a duly authorized officer
<PAGE>
EXHIBIT A
Certificate of Limited Partnership
of
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
1. The name of the limited partnership ("Partnership")is "Central Michigan
Distribution Co., L.P."
2. The post office address of the office at which the records required to
be maintained by the Partnership are kept is P.0. Box 447, 215 North Main
Street, in the City of Mount Pleasant (County of Isabella), Michigan 48858.
3. The name of the initial registered agent of the Partnership is Charles
W. Laughlin, who is a resident of Virginia member of the Virginia State Bar, and
the business and post office address of the Partnership's registered agent is
100 Shockoe Slip, Richmond, Virginia 23219, located in the City of Richmond.
4. The name and post office address of each general partner of the
Partnership is:
Central Michigan P.0. Box 447
Distribution Co., Inc. 215 North Main Street
Mount Pleasant, MI 48858
5. The latest date upon which the Partnership is to be dissolved and its
affairs wound up is February 28, 2090.
Central Michigan. Distribution Co.,
Inc., the General Partner
of Central Michigan Distribution
Co. L.P.
by:
----------------------------------
(officer) of Central Michigan
Distribution Co., Inc.
STATE OF VIRGINIA
CITY OF RICHMOND, to-wit:\
The foregoing instrument was acknowledged before me on this the ____ day
of _____ ____, by _______________________ as ________________ of
____________________________________________.
<PAGE>
-----------------------------
Notary Public
My Commission expires:
<PAGE>
EX-3.(ii)(p)
Exhibit A
BYLAWS
OF
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
<PAGE>
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(q)
Exhibit A
BYLAWS
OF
GLADWIN NEWSPAPERS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(r)
Exhibit A
BYLAWS
OF
GRAPH ADS PRINTING, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(s)
Exhibit A
BYLAWS
OF
MIDLAND BUYER'S GUIDE, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(t)
Exhibit A
BYLAWS OF
ST. JOHNS NEWSPAPERS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determi nation it shall be the calendar
year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided in Article IV, Section 8) shall
be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that is the
thirtieth (30th) day prior to the date of the meeting or action then requiring a
determination of shareholders. A determination of shareholders entitled to
notice of and to vote at a shareholders' meeting shall be effective for any
adjournment of the meeting unless the board of directors fixes a new record
date, which it shall do if the meeting is adjourned to a date more than one
hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second (2nd) Tuesday in February of each year
commencing at 10:00 o'clock a.m. local time at the meeting place. If the
aforesaid date shall fall on a legal holiday, the annual shareholders' meeting
shall be held on the next following business day, and if for any other reason
the annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Article IV, Section 3, and a meeting called and held with this as
a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia (1950), as amended (the "Code")) the holders of not less
than twenty percent (20%) of all votes entitled to be cast on any issue proposed
to be considered at the special meeting. Only business within the purpose or
purposes described in the required meeting notice may be conducted at a special
shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders' meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president, the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail, postage prepaid, addressed to a shareholder at such shareholder's
address as it appears on the share transfer records of the corporation.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code, shall be given in the form and manner provided above for a
special meeting but not less than twenty-five (25) nor more than sixty (60) days
before the meeting date.
Section 5. Adjournment - If an annual or special sharehold ers' meeting is
adjourned to a different date, time, or place, notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any
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purpose at a shareholders' meeting, it is deemed present for quorum purposes for
the remainder of that meeting and for any adjournment of that meeting unless a
new record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, redeemable shares (after a notice of redemption has been
mailed and a deposit made as provided in such section) shall not vote and shall
not be outstanding shares. Shares of the corporation held by another
corporation, domestic or foreign, shall not be entitled to vote at any meeting
and shall not be counted in determining the total number of outstand ing shares
at any given time entitled to vote if a majority of the shares entitled to vote
for the election of directors of the other corporation is owned, directly or
indirectly, by this corporation. A shareholder entitled to vote may vote his
shares in person or by a proxy and may appoint such a proxy to vote or otherwise
act for him by signing an appointment form, either personally or by his
attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describ ing the action taken,
at least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.1-657D of the Code nonvoting share-
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holders shall be given at least ten (10) days written notice of any proposed
action before the action is taken by unanimous consent of the voting
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A share holder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorpo ration, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corpo ration for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meeting the share holder
objects to holding the meeting or to transacting business at the meeting, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
present ed.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and
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affairs of the corporation shall be managed under the direction of, its board of
directors, subject to any limitation set forth in its articles of incorporation.
Section 2. Number, Term, and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different number, the number of directors
of the corporation shall be one (1). The term of each director shall expire at
the next annual shareholders' meeting following his election, but despite the
expiration of a director's term, he shall continue to serve until his successor
is duly elected and qualifies or until there is a decrease in the number of
directors. A decrease in the number of directors shall not shorten an incumbent
director's term. A director need not be a resident of the Commonwealth of
Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under the conditions
described in Sections 4 and 5 of this Article V, the board of directors shall be
elected annually at the annual share-holders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held the number of votes cast to
remove him constitutes a majority of the votes then entitled to be cast and
counted together in an election of such director at a shareholders' meeting.
Notice of such a meeting must state that the purpose, or a purpose, of the
meeting is removal of the director. If any director is so removed, a new
director may be elected in his place at the same shareholders' meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office consti tute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then direc tors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may
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be filled only by the affirmative vote of a majority of the shareholders in such
voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
ARTICLE VI - MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings, Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Common wealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days or telegraphed or telefaxed at least two (2)
days prior to the date of the meeting. Unless otherwise required by these
bylaws, the notice need not describe the purpose of a special meeting of the
board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a
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board of directors' meeting, or of the sole director if the corporation shall
have but one director, shall be the act of the board of directors unless the
vote of a greater number of direc tors is required by the articles of
incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the corporate minutes or filed with the corporate records reflecting
the action taken. Any action taken by such unanimous, written consent shall be
effective when the last director of the board of directors signs an approving
consent, unless such consents all specify the same effective date and each
specifies the date of execution by each executing director, in which event the
action taken shall be effective as of the effective date so specified. Such
unanimous consent shall have the effect of a unanimous vote at a duly called and
held meeting of the board of directors and may be described as such in any
document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or partici pation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the begin ning of the meeting or promptly upon his arrival objects
to holding the meeting or transacting business at the meeting and thereafter
does not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
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Section 1. Election, Removal, and Duties - Promptly after its election in
each year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appoint ment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be filled by the board of directors. Each officer of the corporation shall
have such authority and shall perform such duties as generally pertain to his
office, as well as such other authority and duties as may be prescribed for such
officer from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corpora tion owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assign ment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
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Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate, a duplicate certificate may be issued upon such terms
not in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "pro ceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a judgment, decree,
settlement, penalty, fine or other such obliga tion) and reasonable expenses
(including counsel fees, expert witness fees, and costs of investigation,
litigation, and appeal, as well as any amounts expended in asserting any
counterclaim or claim for indemnification from others) incurred in or as a
result of the proceeding except such liability and expenses as are incurred
because of his willful misconduct or a knowing violation of the criminal law.
The corporation shall pay for or reimburse the reasonable expenses incurred by
any indemnitee in advance of final disposition of any proceeding upon receipt of
an unsecured undertaking from him to repay the sums if ultimately it is
determined that he is not entitled to indemnification. A direc tor shall be so
indemnified without the necessity of any further determination or authorization,
but in the case of an officer, the determination that indemnification is
permissible and an evaluation as to the reasonableness of expenses in a specific
case shall be made as authorized from time to time by general or specific
actions of the board of directors. The termination of a proceeding by a
judgment, decree, order, settlement, or convic tion, or upon a plea of nolo
contendere or its equivalent shall not of itself create a presumption that an
indemnitee acted in such a manner as to make him ineligible for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on
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behalf of shareholders of the corporation, the aggregate amount of all damages
that may be assessed against an officer or direc tor of the corporation arising
out of any single transaction, occurrence, or course of conduct shall be limited
to one dollar. This bylaw is adopted by the shareholders as a limitation on the
liability of the corporation's officers and directors, and this limitation shall
not apply if the officer or director engaged in willful misconduct or a knowing
violation of the criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occur ring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liabili ty to indemnify assumed by it in accordance with this
Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws may be made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made, by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia,
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by the president or secretary of this corporation, either in person
or by proxy.
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Each use of a masculine pronoun herein shall be read to include both the
feminine and neuter pronouns as applicable.
Adopted by the Shareholders;
As of June 10, 1996
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EX-3.(ii)(u)
AMENDED
OPERATING AGREEMENT
of
HURON P.S., LLC
This is the Amended Operating Agreement of Huron P.S., LLC, a Virginia
limited liability company (the "Company"), entered into as of this 10th day of
December, 1997, by Huron Holdings, LLC, a Virginia limited liability
company, and Huron Management, Inc., a Virginia corporation, the Company's
members [each (and each other person or entity while hereafter admitted as a
Member) a "Member", and collectively with each other Member, the "Members"].
1. Name. The name of the Company is Huron P.S., LLC. The business of the
Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3, and any items in the nature of income or gain that are
<PAGE>
specially allocated (but not distributed) to such Member, and (iii)
the amount of any Company liabilities assumed by such Member or
secured by any property of the Company distributed to such Member,
and (b) shall be decreased by (i) the cash amount or agreed fair
market value of all actual or deemed distributions of cash or
property made to such Member pursuant to this agreement, (ii) any
net loss allocated to such Member pursuant to this Section 3, and
any items in the nature of expenses or losses that are specially
allocated to such Member, and (iii) the amount of any liabilities of
such Member assumed or secured by the Company. In determining the
amount of any such liabilities, there shall be taken into account
the provisions of ss. 752(c), and any other applicable provisions,
of the Internal Revenue Code as amended from time to time (the
"Code") and any applicable regulations (the "Regulations"; singly, a
"Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as rapidly as is possible, from
time to time such Member's
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share of the Company's income and gain, if any, shall be separately
allocated to such Member's Capital Account until such time as such
Member's Capital Account deficit is eliminated.
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(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
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7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 15th day of September 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Huron Holdings, LLC,
By: Huron Management, Inc.
Manager
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
Member:
Huron Management, Inc.
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Huron Holdings, LLC $990.00
Huron Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Huron P.S., LLC as
of the 10th day of December, 1997.
Member:
Huron Holdings, LLC,
By: Huron Management, Inc.
Manager
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
Member:
Huron Management, Inc.
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
13
<PAGE>
HURON P.S., LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 Huron Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
Huron Management,
2 Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(v)
AMENDED
OPERATING AGREEMENT
of
HURON NEWSPAPERS, LLC
This is the Amended Operating Agreement of Huron Newspapers, LLC, a
Virginia limited liability company (the "Company"), entered into as of this
10th day of December, 1997, by Huron Holdings, LLC, a Virginia limited
liability company, and Huron Management, Inc., a Virginia corporation, the
Company's members [each (and each other person or entity while hereafter
admitted as a Member) a "Member", and collectively with each other Member, the
"Members"].
1. Name. The name of the Company is Huron Newspapers, LLC. The business of
the Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3,
<PAGE>
and any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as
2
<PAGE>
rapidly as is possible, from time to time such Member's share of the
Company's income and gain, if any, shall be separately allocated to
such Member's Capital Account until such time as such Member's
Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 15th day of September 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Huron Holdings, LLC,
By: Huron Management, Inc.
Manager
By:___________________________
a duly authorized officer
Member:
Huron Management, Inc.
By:_________________________________
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Huron Holdings, LLC $990.00
Huron Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Huron Newspapers,
LLC as of the 10th day of December, 1997.
Member:
Huron Holdings, LLC,
By: Huron Management, Inc.
Manager
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
Member:
Huron Management, Inc.
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
13
<PAGE>
HURON NEWSPAPERS, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 Huron Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
Huron Management,
2 Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(w)
AMENDED
OPERATING AGREEMENT
of
HURON HOLDINGS, LLC
This is the Amended Operating Agreement of Huron Holdings, LLC, a Virginia
limited liability company (the "Company"), entered into as of this 10th day of
December, 1997, by and among Brill Media Holdings, LLC, a Virginia
limited liability company, and Huron Management, Inc., a Virginia corporation,
the Company's members [each (and each other person or entity while hereafter
admitted as a Member) a "Member", and collectively with each other Member, the
"Members"].
1. Name. The name of the Company is Huron Holdings, LLC. The business of
the Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3,
<PAGE>
and any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as
2
<PAGE>
rapidly as is possible, from time to time such Member's share of the
Company's income and gain, if any, shall be separately allocated to
such Member's Capital Account until such time as such Member's
Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 15th day of September 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
Member:
Huron Management, Inc.
By: /s/ Alan R. Brill
--------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Brill Media Holdings, LLC $990.00
Huron Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Huron Holdings,
LLC as of the 10th day of December, 1997.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
--------------------------
a duly authorized officer
Member:
Huron Management, Inc.
By: /s/ Alan R. Brill
---------------------------
a duly authorized officer
13
<PAGE>
HURON HOLDINGS, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 BMC Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
2 Huron Management,
Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(x)
AMENDED
OPERATING AGREEMENT
of
NORTHERN COLORADO HOLDINGS, LLC
This is the Amended Operating Agreement of Northland Holdings, LLC, a
Virginia limited liability company (the "Company"), entered into as of this
10th day of December, 1997, by and among BMC Holdings, LLC, a Virginia
limited liability company, and Northern Colorado Management, Inc., a Virginia
corporation, the Company's members [each (and each other person or entity while
hereafter admitted as a Member) a "Member", and collectively with each other
Member, the "Members"].
1. Name. The name of the Company is Northern Colorado Holdings, LLC. The
business of the Company may be conducted under such trade or fictitious name or
names as the Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3,
<PAGE>
and any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as
2
<PAGE>
rapidly as is possible, from time to time such Member's share of the
Company's income and gain, if any, shall be separately allocated to
such Member's Capital Account until such time as such Member's
Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 24th day of February 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
BMC Holdings, LLC
By: Brill Media Company, LLC
Manager
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
Member:
Northern Colorado Management, Inc.
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
BMC Holdings, LLC $990.00
Northern Colorado Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Northern Colorado
Holdings, LLC as of the 10th day of December, 1997.
Member:
BMC Holdings, LLC
By: Brill Media Company, LLC
Manager
By: /s/ Alan R. Brill
--------------------------
a duly authorized officer
Member:
Northern Colorado Management, Inc., a
Virginia corporation
By: /s/ Alan R. Brill
---------------------------
a duly authorized officer
13
<PAGE>
NORTHERN COLORADO HOLDINGS, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 BMC Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
Northern Colorado
2 Management, Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(y)
AMENDED
OPERATING AGREEMENT
of
NCR III, LLC
This is the Amended Operating Agreement of NCR III, LLC, a Virginia
limited liability company (the "Company"), entered into as of this 10th day of
December, 1997, by and among NCH II, LLC, a Virginia limited liability
company, and NCR II, Inc., a Virginia corporation, the Company's members
[each (and each other person or entity while hereafter admitted as a Member) a
"Member", and collectively with each other Member, the "Members"].
1. Name. The name of the Company is NCR III, LLC. The business of the
Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3, and any items in the nature of income or gain that are
<PAGE>
specially allocated (but not distributed) to such Member, and (iii)
the amount of any Company liabilities assumed by such Member or
secured by any property of the Company distributed to such Member,
and (b) shall be decreased by (i) the cash amount or agreed fair
market value of all actual or deemed distributions of cash or
property made to such Member pursuant to this agreement, (ii) any
net loss allocated to such Member pursuant to this Section 3, and
any items in the nature of expenses or losses that are specially
allocated to such Member, and (iii) the amount of any liabilities of
such Member assumed or secured by the Company. In determining the
amount of any such liabilities, there shall be taken into account
the provisions of ss. 752(c), and any other applicable provisions,
of the Internal Revenue Code as amended from time to time (the
"Code") and any applicable regulations (the "Regulations"; singly, a
"Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as rapidly as is possible, from
time to time such Member's
2
<PAGE>
share of the Company's income and gain, if any, shall be separately
allocated to such Member's Capital Account until such time as such
Member's Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
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<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 23rd day of May 1997 is hereby amended in its entirety to
read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
NCH II, LLC
By: NCR II, Inc.
Manager
By:___________________________
a duly authorized officer
Member:
NCR II, Inc.
By:________________________________
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
NCH II, LLC $990.00
NCR II, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of NCR III, LLC as of
the 10th day of December, 1997.
Member:
NCH II, LLC
By: NCR II, Inc.
Manager
By: /s/ Alan R. Brill
---------------------------
a duly authorized officer
Member:
NCR II, Inc.
By: /s/ Alan R. Brill
--------------------------------
a duly authorized officer
13
<PAGE>
NCR III, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 NCH II, LLC 990 12/22/97
- --------------------------------------------------------------------------------
2 NCR II, Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(z)
AMENDED
OPERATING AGREEMENT
of
NCH II, LLC
This is the Amended Operating Agreement of NCH II, LLC, a Virginia limited
liability company (the "Company"), entered into as of this 10th day of
December, 1997, by and among Brill Media Holdings, LLC, a Virginia
limited liability company, and NCR II, Inc., a Virginia corporation, the
Company's members [each (and each other person or entity while hereafter
admitted as a Member) a "Member", and collectively with each other Member, the
"Members"].
1. Name. The name of the Company is NCH II, LLC. The business of the
Company may be conducted under such trade or fictitious name or names as the
Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3, and any items in the nature of income or gain that are
<PAGE>
specially allocated (but not distributed) to such Member, and (iii)
the amount of any Company liabilities assumed by such Member or
secured by any property of the Company distributed to such Member,
and (b) shall be decreased by (i) the cash amount or agreed fair
market value of all actual or deemed distributions of cash or
property made to such Member pursuant to this agreement, (ii) any
net loss allocated to such Member pursuant to this Section 3, and
any items in the nature of expenses or losses that are specially
allocated to such Member, and (iii) the amount of any liabilities of
such Member assumed or secured by the Company. In determining the
amount of any such liabilities, there shall be taken into account
the provisions of ss. 752(c), and any other applicable provisions,
of the Internal Revenue Code as amended from time to time (the
"Code") and any applicable regulations (the "Regulations"; singly, a
"Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as rapidly as is possible, from
time to time such Member's
2
<PAGE>
share of the Company's income and gain, if any, shall be separately
allocated to such Member's Capital Account until such time as such
Member's Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 23rd day of May 1997 is hereby amended in its entirety to
read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
Member:
NCR II, Inc.
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Brill Media Holdings, LLC $990.00
NCR II, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of NCH II, LLC as of
the 10th day of December, 1997.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
Member:
NCR II, Inc.
By: /s/ Alan R. Brill
-------------------------
a duly authorized officer
13
<PAGE>
NCH II, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 BMC Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
2 NCR II, Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(aa)
AMENDED
OPERATING AGREEMENT
of
NORTHLAND HOLDINGS, LLC
This is the Amended Operating Agreement of Northland Holdings, LLC, a
Virginia limited liability company (the "Company"), entered into as of this
10th day of December, 1997, by and among Brill Media Holdings, LLC, a
Virginia limited liability company, and Northland Management, Inc., a Virginia
corporation, the Company's members [each (and each other person or entity while
hereafter admitted as a Member) a "Member", and collectively with each other
Member, the "Members"].
1. Name. The name of the Company is Northland Holdings, LLC. The business
of the Company may be conducted under such trade or fictitious name or names as
the Members may select from time to time.
2. Principal Office. The Company's principal office, where the Company's
principal executive offices are located and at which the records required to be
maintained by the Act (hereinafter defined) are to be kept shall be located at
420 NW Fifth Street, Suite 3-B, Evansville, Indiana 47708, or at such other
place or places as the Members may determine from time to time.
3. Capital Accounts.
(a) Capital Contributions. The amount of the Members' capital
contributions (to be made simultaneously with their execution of this agreement)
are set forth on Exhibit A; such Members shall not be required to lend or make
any additional capital contribution.
(b) Capital Accounts; Allocations. A separate capital account
(singly, a "Capital Account"; collectively, the "Capital Accounts"), shall be
established and maintained for each Member. As of any date, the amount of a
Member's Capital Account shall be adjusted and any allocations of the Company's
income, gain, loss, deductions, or credits (or items thereof) shall be
determined and made as hereinafter provided and in accordance with the Company's
records and, to the extent consistent herewith, applicable provisions of the
Virginia Limited Liability Company Act as it may be amended or superseded from
time to time (the "Act"):
(i) Each Member's Capital Account (a) shall be increased by
(i) the cash amount or agreed fair market value of all contributions
hereafter made by such Member to the Company, (ii) any net income
allocated (but not distributed) to such Member pursuant to this
Section 3,
<PAGE>
and any items in the nature of income or gain that are specially
allocated (but not distributed) to such Member, and (iii) the amount
of any Company liabilities assumed by such Member or secured by any
property of the Company distributed to such Member, and (b) shall be
decreased by (i) the cash amount or agreed fair market value of all
actual or deemed distributions of cash or property made to such
Member pursuant to this agreement, (ii) any net loss allocated to
such Member pursuant to this Section 3, and any items in the nature
of expenses or losses that are specially allocated to such Member,
and (iii) the amount of any liabilities of such Member assumed or
secured by the Company. In determining the amount of any such
liabilities, there shall be taken into account the provisions of ss.
752(c), and any other applicable provisions, of the Internal Revenue
Code as amended from time to time (the "Code") and any applicable
regulations (the "Regulations"; singly, a "Regulation") thereunder.
(ii) In accordance with Regulation ss. 1.704, at appropriate
times, the Capital Accounts of all Members and the carrying values
of all Company properties shall be adjusted upwards or downwards to
reflect any unrealized gain or loss attributable to each Company
property, as if such unrealized gain or loss had been recognized
upon an actual sale of each such property at such time and had been
allocated to the Members pursuant to this Section 3. Similarly, in
accordance with such Regulation, immediately prior to the
distribution in kind of any Company property to a Member (including
pursuant to a liquidation of the Company) the Capital Accounts of
the Members shall be adjusted to reflect any unrealized gain or loss
attributable to such property as if such unrealized gain or loss had
been recognized upon an actual sale of such property at such time
and had been allocated to the Members pursuant to this Section 3.
Such unrealized gain or loss shall be determined using such methods
of valuation as the Members in their sole discretion deem
appropriate.
(iii) For purposes of this agreement, net income, gross income
and net loss shall be computed in the same manner as determined for
federal income tax purposes, with the modifications set forth in
Regulation ss. 1.704.
(iv) Should any Member's adjusted capital account balance
become negative as a result of any adjustment, allocation, or
distribution, thereafter, acting as
2
<PAGE>
rapidly as is possible, from time to time such Member's share of the
Company's income and gain, if any, shall be separately allocated to
such Member's Capital Account until such time as such Member's
Capital Account deficit is eliminated.
3
<PAGE>
(v) Non-recourse deductions shall be allocated in a manner
that is reasonably consistent with other allocations of items of
income, gain, or loss attributable to the property securing the
non-recourse liabilities. In the first year in which the Company has
non-recourse deductions or makes distributions attributable to an
increase in minimum gain as defined in the Regulations, this
agreement shall be deemed to include a "minimum gain chargeback" in
accordance with the Regulations.
4. Members. No person or entity shall be or become a Member of the Company
unless named as a Member herein or hereafter admitted as a Member of the Company
with the prior written consent of all then Members. The time of admission of any
such new Member shall begin when such Member's status is first reflected in
writing in the Company's records, and not before. Any Member may resign, but
(unless the Members agree otherwise in writing) any such resignation shall first
become effective thirty (30) calendar days after the Company shall have received
written notice thereof, and not before.
5. Transfer of Interests. Other than with the prior, written consent of
all Members, an assignee or other transferee of an interest in the Company (by
operation of law or otherwise) shall not thereby become a Member of the Company
nor thereby acquire any proprietary right in nor right to become a Member or to
participate in the affairs or management of the Company. Any attempted
assignment or other transfer of a Member's rights in violation of this agreement
shall be void. Without such prior written consent, by any written assignment,
pledge, encumbrance, or other transfer (jointly and severally, a "Transfer") a
Member may assign and transfer to and entitle the assignee or transferee to
receive only (as and to the extent expressly so assigned or transferred) any
share of the profits or losses or asset distributions of the Company that the
assignor or transferor Member thereafter otherwise would have been or become
entitled to hereunder, and nothing more.
6. Ceasing to be a Member. Upon any Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy, such person or entity
shall cease to be a Member. Any payment made to a Member's successor in
interest, personal representative, executor, or administrator shall acquit the
Company of any and all liability to such Member and to any such person as may be
interested in any such payment by reason of such Member's death, expulsion,
resignation, dissolution, incompetency, or bankruptcy.
4
<PAGE>
7. Certificate; Membership; Voting Rights of Members; Transfer. Each
Member shall be entitled to a membership certificate (the "Certificate")
evidencing such Member's interest in the Company and the number of votes
entitled to be cast by such Member in voting by the Members, which Certificate
shall be in such form and contain such substance as may be agreed upon by the
Members or required by law. The Company shall maintain a Certificate register
(the "Certificate Register") recording ownership of all Certificates then
outstanding and the number of votes entitled to be cast by each Member in voting
by the Members, which register, at all times, shall be conclusive evidence of
each Member's interest in the Company and voting rights. Any transfer of a
Member's interest in the Company, in whole or in part, other than a Transfer of
an interest in a Member's share of the Company's profits or losses or assets on
distribution as provided for in Section 5, shall become effective only upon (i)
surrender of each Certificate representing the Member's interest then being
transferred accompanied by a written assignment applicable thereto, all in form
and substance satisfactory to the Company, and duly executed by the transferor,
and (ii) recordation of such transfer on the Company's Certificate Register.
8. Management. The Company's business is to be managed by the Members, who
shall have the exclusive right to manage the Company in their capacity as
Members. The Members shall, however, have the authority from time to time to
delegate specific day-to-day management functions to one or more of such
persons, employees, agents, or consultants (including any affiliate of a Member)
as they unanimously shall select at any time, or from time to time. Any
instrument or agreement may be executed and delivered on behalf of the Company
by a Member or by the Company's agent or delegate as expressly designated in
writing by the Members for such purpose, including any deed or deed of trust
purporting to convey or encumber, in whole or in part, any or all of the assets
of the Company, any note or other evidence of indebtedness, lease agreement,
security agreement, financing statement, contract of sale, or other instrument,
and no other signature shall be required for any such instrument, conveyance, or
agreement to be valid, binding and enforceable against the Company in accordance
with its terms.
9. Compensation and Reimbursement of Members. Members may receive
compensation for the reasonable value of any services rendered in managing the
Company, and the Company shall pay, or reimburse all expenses reasonably
incurred by any Member in connection with managing the Company.
5
<PAGE>
10. Certain Actions, Taxes. On the Company's behalf, the Members may make
any election permitted by Section 754 of the Code with respect to adjustments to
basis of the Company's property.
11. Authority of the Members to Engage in Other Businesses. Any Member, or
any affiliate of a Member may engage in and/or possess an interest in other
business ventures of any nature and description, independently or with others,
including but not limited to the ownership, financing, leasing, operation,
management, and development of businesses that may compete with the Company; and
neither the Company nor the Members shall have any right by virtue of this
agreement in or to any other venture or to any income or profits derived
therefrom. No Member, or any affiliate of any Member shall be obligated to
present any particular investment opportunity to the Company even if such
opportunity is of a character that, if presented to the Company, could be taken
by the Company, and each of them shall have the right to take for its own
account (individually or otherwise) or to recommend to others any such
particular investment opportunity.
12. Authority of Persons to Deal with the Company. The Company may, but
shall not be required to, transact business with, borrow money from, or lend
money to any Member, or any affiliate thereof, and such person or entity shall,
subject to applicable law, have the same rights and obligations with respect
thereto as would a person who was not such a Member or affiliate.
13. Profits and Losses, Distributions, Books, Records, Reports, etc.
(a) As and to the extent permitted and not prohibited by the Act,
and as determined by a majority vote of the Members, the Company's profits and
losses (and any then distributions of the Company's cash or other assets) shall
be allocated and distributed among the Members at least annually in proportion
to their then Capital Accounts as reflected in the Company's records.
(b) The Company shall maintain and keep at its principal office
described in Section 2 complete and accurate books of account as required
pursuant to the Act. Each Member shall have access thereto at all reasonable
times and the right to inspect and copy such books and records either directly
or through a person designated by such Member.
(c) The Company shall send to all Members an annual report,
containing a balance sheet, income statement, and statement
6
<PAGE>
of changes in financial position, and all information necessary for each Member
to prepare its federal income tax return.
14. Exculpation. Except by reason of acts or omissions of the Member found
by a court of competent jurisdiction upon entry of a final judgment to be due to
bad faith, fraud, willful misconduct or a knowing violation of the criminal law,
in any proceeding brought by or in the right of the Company or by or on behalf
of any Member, no Member shall be liable, responsible, or accountable in damages
or otherwise to the Company or to any Member, or to any successor, assignee or
transferee of the Company or of any Member, for any losses, claims, damages or
liabilities arising from (i) any act performed, or the omission to perform any
act, within the scope of the authority conferred on the Member by this
agreement, (ii) the performance by the Member of, or the omission to perform,
any acts on advice of legal counsel, accountants or other professional
consultants to the Company; or (iii) the negligence, dishonesty or bad faith of
any consultant, employee, or agent of the Company selected or engaged by the
Member in good faith.
15. Exoneration. No Member or agent of the Company, jointly or severally,
shall be liable or have any obligation for any liability of the Company, whether
arising in contract, tort, or otherwise, solely by reason of being such Member
or agent of the Company.
16. Indemnification and Advances.
(a) To the full extent permitted by law, the Company shall
indemnify, defend and hold each Member harmless from and against, and may, with
the approval of a majority vote of the Members, indemnify, defend and hold the
Company's and the Member's respective affiliates, agents, employees, advisors,
consultants and other independent contractors, harmless from and against, any
loss, liability, damage, fine, judgment, penalty, attachment, cost or expense,
including reasonable attorneys' fees, arising from any demands, claims or
lawsuits against the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors, in or as a result of or relating to its capacity, actions or
omissions as Member, or as an affiliate, agent, employee, advisor, consultant or
other independent contractor of the Company, or arising from or relating to the
business or activities undertaken on behalf of the Company, including, without
limitation, any demands, claims or lawsuits initiated by a Member; provided that
the acts or omissions of the Member or the Company's or the Member's affiliate,
agent, employee, advisor, consultant or other independent contractor seeking
indemnification are not found by a court of competent jurisdiction
7
<PAGE>
upon entry of a final judgment to be the result of bad faith, fraud, willful
misconduct, or a knowing violation of the criminal law by the person seeking
indemnification, or to have violated such a lesser standard of conduct as under
applicable law affirmatively prevents indemnification hereunder. The termination
of any action, suit or proceeding by judgment, order, settlement, plea of nolo
contendere or its equivalent, or conviction shall not, of itself, create a
presumption that the Member or the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall not be entitled to indemnification hereunder or that the
Member or the Company's or the Member's respective affiliates, agents,
employees, advisors, consultants or other independent contractors did not act in
good faith and in a manner that it or they reasonably believed to be in or not
opposed to the best interests of the Company.
(b) Subject to the limitations herein, a Member shall be entitled to
receive, upon application therefor, and the Company's or the Member's respective
affiliates, agents, employees, advisors, consultants or other independent
contractors shall be entitled to receive, with the approval of a majority vote
of the Members, advances from the Company to cover the costs of defending any
claim or action against them relating to their acts or omissions as a Member, or
as an affiliate, agent, employee, advisor, consultant or other independent
contractor of the Company or a Member or otherwise relating to the Company;
provided, however, that such advances shall be repaid to the Company (with
Interest thereon at an annual rate equal to the prime rate in effect from time
to time as reflected in The Wall Street Journal but not to exceed the maximum
permitted by applicable law), if the Member or the Company's or the Member's
affiliate, agent, employee, advisor, consultant or other independent contractor
that receives such advance is found by a court of competent jurisdiction upon
entry of a final judgment to have violated any of the standards that preclude
indemnification hereunder. All rights of the Member or the Company's or the
Member's respective affiliates, agents, employees, advisors, consultants or
other independent contractors to indemnification as herein provided shall
survive the dissolution of the Company and the death, resignation, expulsion,
incompetency, dissolution, liquidation or Bankruptcy of the Member or any such
other person, and shall inure to the benefit of their heirs, personal
representatives, successors and assigns.
(c) In the event the indemnification obligation of this Section
shall be deemed unenforceable to any extent by a court of competent
jurisdiction, such unenforceable portion shall be modified or stricken so as to
give effect to this Section to the fullest extent permitted by law.
8
<PAGE>
(d) The right of indemnification hereby provided shall not be
exclusive of or affect any other rights that the Member or any of its affiliates
may have. Nothing contained in this Section shall limit any lawful right to
indemnification existing independently of this Section.
(e) Any amount that a Member or the Company's or the Member's
respective affiliates, agents, employees, advisors, consultants or other
independent contractors is entitled to receive hereunder shall be paid only out
of and to the extent of the Company's then assets, including any insurance
proceeds available to the Company for such purposes. No Member shall be liable
for the payment of any amount that a Member or an affiliate, agent, employee,
advisor, consultant, or other independent contractor of the Company or the
Member is entitled to receive hereunder, nor to make any capital contribution to
the Company, or return any capital distribution made to such person or entity by
the Company, nor to restore any negative capital account balance of that Member
in order to enable the Company to make any payment hereunder.
17. Dissolution. The Company shall be dissolved upon the earliest to occur
of (i) the Members' unanimous written consent, (ii) entry of a decree of
judicial dissolution under the Act, or (iii) the date set forth in the Articles
of Organization. The death, expulsion, resignation, dissolution, incompetency,
or bankruptcy of a Member or any other event that terminates the continued
membership of a Member shall not cause a dissolution of the Company, because the
remaining Members hereby unanimously consent to continue the business of the
Company upon the happening of such event. Upon any dissolution, the Company's
business shall be wound up, its liabilities satisfied, and any balance, less
reasonable reserves, shall be distributed to the Members in accordance with
their positive capital accounts.
18. Miscellaneous Provisions.
(a) Governing Law. This agreement and the rights and liabilities of
the parties shall be determined in accordance with the laws of the Commonwealth
of Virginia.
(b) Captions. Captions contained in this agreement are inserted only
as a matter of convenience and in no way define, limit, extend, or describe the
scope or intent of this agreement or any Section or provision hereof.
(c) Construction. Whenever the context may require, each pronoun
used herein shall include the corresponding masculine,
9
<PAGE>
feminine, or neuter forms, and the singular form of each noun or pronoun shall
include the plural, and vice versa.
(d) Severability. Every provision of this agreement is intended to
be severable. If any term or provision hereof is illegal or invalid for any
reason whatsoever, such illegality or invalidity shall not affect the validity
of the remainder of the terms or provisions of this agreement.
(e) Successors. Subject to the limitations on transferability
contained herein, each and all of the terms, provisions and agreements herein
contained shall be binding upon and inure to the benefit of the personal
representatives, successors, heirs, and assigns (including an assignee of all or
part of any interest in the Company) of the parties hereto.
(f) Execution and Counterparts. This agreement and any amendment
hereto may be executed in multiple counterparts, each of which shall be deemed
an original and all of which together shall constitute but one agreement. In
addition, this agreement may be executed through the use of counterpart
signature pages. The signature of any party on any counterpart agreement or
counterpart signature page shall be deemed to be a signature to, and may be
appended to, one document.
(g) Third Party Beneficiary. No provision of this agreement is
intended to be for the benefit of any creditor or other person to which any
debt, liability, or obligation is owed by (or that otherwise has any claim
against) the Company or any Member, and no creditor or other person shall obtain
any right under any of the foregoing provisions, nor shall any such person
solely by reason of any of the foregoing provisions make any claim in respect of
any debt, liability, or obligation (or otherwise) against the Company or any
Member.
(h) Investment Representation. By executing this agreement, each
Member represents and warrants that such Member's interest in the Company is
being acquired by it for its own account for investment and not with a view to
resale or distribution thereof and that the Member is fully aware that each
other Member and the Company are relying upon the truth and accuracy of this
representation and warranty.
(i) Entire Agreement. This agreement constitutes the sole operating
agreement among the Members, and supersedes and cancels any prior agreements,
representations, warranties, or communications, whether oral or written, among
the Members relating to the affairs of the Company and the conduct of the
Company's
10
<PAGE>
business. No amendment or modification of this agreement shall be effective
unless approved in writing as provided herein.
19. Notices; Consents, etc. Any notice, consent, election, approval,
payment, demand, or communication required or permitted to be given by this
agreement shall be in writing and shall be deemed to have been sufficiently
given or served for all purposes only when delivered personally to or actually
received by the party or an officer of the entity to which directed or ten (10)
days after having been sent by registered or certified mail, postage and charges
prepaid, addressed to the address for the notified party contained in the
Company's records. Any Member may change its address for purposes of this
agreement by giving the Company and each other Member notice of such change, in
the manner set forth above.
20. Amendment. This agreement may be amended at any time upon a unanimous
vote of the Members, but such amendment shall be effective only when reduced to
writing and signed by all Members.
21. This Amendment. The Operating Agreement of the Company previously
entered into as of the 24th day of February 1997 is hereby amended in its
entirety to read as above, effective as of the date of this agreement.
11
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this agreement to be
executed as of the day, month, and year first above written.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
Member:
Northland Management, Inc.
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
12
<PAGE>
EXHIBIT A
Capital
Name Contribution
- ---- ------------
Brill Media Holdings, LLC $990.00
Northland Management, Inc. $ 10.00
This is Exhibit A to the Amended Operating Agreement of Northland
Holdings, LLC as of the 10th day of December, 1997.
Member:
Brill Media Holdings, LLC
By: Brill Media Holdings, Inc.
Manager
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
Member:
Northland Management, Inc., a
Virginia corporation
By: /s/ Alan R. Brill
----------------------------
a duly authorized officer
13
<PAGE>
NORTHLAND HOLDINGS, LLC
CERTIFICATE REGISTER
================================================================================
Certi- Number
ficate Shares/ Date Transfer To Whom
Number Owner Votes Issued Date Transferred
- --------------------------------------------------------------------------------
1 BMC Holdings, LLC 990 12/22/97
- --------------------------------------------------------------------------------
Northland
2 Management, Inc. 10 12/22/97
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
================================================================================
14
<PAGE>
EX-3.(ii)(bb)
Exhibit A
BYLAWS
OF
CMN HOLDING, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(cc)
Exhibit A
BYLAWS
OF
BRILL RADIO, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the meeting place. If for any reason the
annual shareholders' meeting
<PAGE>
shall not be held on such day, it may be called in accordance with the
provisions of Section 3. of this Article IV, and a meeting called and held with
this as a purpose shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders' meeting. Once a share is represented for any purpose
at a
<PAGE>
shareholders' meeting, it is deemed present for quorum purposes for the
remainder of that meeting and for any adjournment of that meeting unless a new
record date is set for that adjourned meeting pursuant to Article III. If a
quorum exists the affirmative vote of a majority of the votes cast within a
voting group on the matter being voted upon shall be the act of the voting
group, unless the affirmative vote of a greater number is required by law or by
the articles of incorporation, and except that in any election of directors
those receiving a plurality of the votes cast by the shares entitled to vote in
the election shall be elected, though not receiving a majority. Less than a
quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before the action is taken by unanimous consent of the voting
<PAGE>
shareholders. Any action taken by such unanimous written consent shall be
effective according to its terms when a signed consent for each shareholder
entitled to vote thereon is in the possession of the corporation, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing shareholder, in which event the action taken shall
be effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote of voting shareholders at a duly called and
held shareholders' meeting and may be described as such in any document filed
with the State Corporation Commission. A shareholder may withdraw a consent
theretofore delivered to the corporation only by delivering to the corporation a
written notice of withdrawal as to such consent prior to the time that all other
like consents are in possession of the corporation. Unless otherwise required by
law, the record date for determining shareholders entitled to take action
without a meeting is the date the first shareholder signs a consent as to such
action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time as this bylaw
shall be amended to specify or fix a different
<PAGE>
number, the number of directors of the corporation shall be three (3). The term
of each director shall expire at the next annual shareholders' meeting following
his election, but despite the expiration of a director's term, he shall continue
to serve until his successor is duly elected and qualifies or until there, is a
decrease in the number of directors. A decrease in the number of directors shall
not shorten an incumbent director's term. A director need not be a resident of
the Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by one or more written consents stating the action
taken, signed by
<PAGE>
each director either before or after the action taken, and included in the
corporate minutes or filed with the corporate records reflecting the action
taken. Any action taken by such unanimous, written consent shall be effective
when the last director of the board of directors signs an approving consent,
unless such consents all specify the same effective date and each specifies the
date of execution by each executing director, in which event the action taken
shall be effective as of the effective date so specified. Such unanimous consent
shall have the effect of a unanimous vote at a duly called and held meeting of
the board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such resignation or removal. Each vacancy among the officers
shall be
<PAGE>
filled by the board of directors. Each officer of the corporation shall have
such authority and shall perform such duties as generally pertain to his office,
as well as such other authority and duties as may be prescribed for such officer
from time to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all liability
(including the obligation to pay all or any part of a
<PAGE>
judgment, decree, settlement, penalty, fine or other such obligation) and
reasonable expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it in accordance with this
Article.
<PAGE>
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EX-3.(ii)(dd)
Exhibit A
BYLAWS
OF
BRILL NEWSPAPERS, INC.
ARTICLE I - CORPORATE SEAL
The corporation need not have a seal. Should the secretary of the
corporation determine that a seal is desirable, the seal of the corporation
shall be circular and shall have inscribed thereon, within and around the
circumference, the corporation's name, and in the center shall be the word
"SEAL".
ARTICLE II - FISCAL YEAR
The fiscal year of the corporation shall be determined by the board of
directors, but in the absence of such a determination it shall be the twelve
months ending at midnight on the last day of February in each year.
ARTICLE III - RECORD DATE
Unless the board of directors shall have fixed some other future date as
the record date, the record date for determining the corporation's shareholders
entitled to a distribution or to a share dividend shall be the date and time the
board of directors authorizes the distribution or share dividend. The record
date for any other determination of the corporation's shareholders (except for
actions taken by consent as hereinafter provided for by Section 8. of Article
IV) shall be 5:00 o'clock p.m. local time in Richmond, Virginia on the date that
is the thirtieth (30th) day prior to the date of the meeting or action then
requiring a determination of shareholders. A determination of shareholders
entitled to notice of and to vote at a shareholders' meeting shall be effective
for any adjournment of the meeting unless the board of directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more than
one hundred twenty (120) days after the date fixed for the original meeting.
ARTICLE IV - SHAREHOLDERS' MEETINGS
Section 1. Place of Meetings - Each shareholders' meeting shall be held at
such place, in or out of the Commonwealth of Virginia, as may be provided in the
meeting notice.
Section 2. Annual Meeting - The corporation shall hold the annual
shareholders' meeting on the second Tuesday in February of each year commencing
at 10:00 o'clock a.m. local time at the
<PAGE>
meeting place. If for any reason the annual shareholders' meeting shall not be
held on such day, it may be called in accordance with the provisions of Section
3. of this Article IV, and a meeting called and held with this as a purpose
shall be specifically designated as the annual meeting.
Section 3. Special Meetings - The corporation shall hold a special
shareholders' meeting on call of the chairman of the board of directors, the
president, the board of directors, or (upon due execution and delivery of one or
more written demands as required by and in compliance with Section 13.1-655 of
the Code of Virginia) the holders of not less than twenty percent (20%) of all
votes entitled to be cast on any issue proposed to be considered at the special
meeting. Only business within the purpose or purposes described in the required
meeting notice may be conducted at a special shareholders' meeting.
Section 4. Notice of Meeting - For each shareholders meeting, not less
than ten (10) nor more than sixty (60) days before the meeting date (except as a
different time is specified in the second paragraph of this Section or by
Virginia law), written notice stating the date, time, and place of the meeting
and, in case of a special shareholders' meeting, the purpose or purposes for
which the meeting is called, shall be given to each shareholder entitled to vote
at such meeting either personally or by mail by or at the direction of the
president the secretary, or the persons calling the meeting. If mailed, each
such notice shall be deemed to have been given when deposited in the United
States mail addressed to a shareholder at such shareholder's address as it
appears on the share transfer records of the corporation, with postage thereon
prepaid.
Notice of a shareholders' meeting to act on an amendment of the articles
of incorporation, on a plan of merger or share exchange, or on dissolution of
the corporation, or to authorize a proposed sale of assets pursuant to Section
13.1-724 of the Code of Virginia (hereinafter "the Code"), shall be given in the
form and manner provided above for a special meeting but not less than
twenty-five (25) nor more than sixty (60) days before the meeting date.
Section 5. Adjournment - If an annual or special shareholders' meeting is
adjourned to a different date, time, or place notice need not be given if the
new date, time, and place are announced at the meeting before adjournment.
Section 6. Quorum - Shareholders may take action on a matter at a
shareholders' meeting only if a quorum exists with respect to that matter. A
majority of the votes entitled to be cast by the shareholders in any voting
group shall constitute a quorum as to each matter considered by such voting
group at each shareholders'
<PAGE>
meeting. Once a share is represented for any purpose at a shareholders' meeting,
it is deemed present for quorum purposes for the remainder of that meeting and
for any adjournment of that meeting unless a new record date is set for that
adjourned meeting pursuant to Article III. If a quorum exists the affirmative
vote of a majority of the votes cast within a voting group on the matter being
voted upon shall be the act of the voting group, unless the affirmative vote of
a greater number is required by law or by the articles of incorporation, and
except that in any election of directors those receiving a plurality of the
votes cast by the shares entitled to vote in the election shall be elected,
though not receiving a majority. Less than a quorum may adjourn a meeting.
Section 7. Voting - Except as may otherwise be provided in the articles of
incorporation or by Section 13.1-662 of the Code, each outstanding share of the
corporation, regardless of class, is entitled to one vote on each matter to be
voted on at a shareholders' meeting. As and to the extent provided by Section
13.1-662 of the Code, treasury shares and redeemable shares (after a notice of
redemption has been mailed and a deposit made as provided in such section) shall
not vote and shall not be outstanding shares. Shares of the corporation held by
another corporation, domestic or foreign, shall not be entitled to vote at any
meeting and shall not be counted in determining the total number of outstanding
shares at any given. time entitled to vote if a majority of the shares entitled
to vote for the election of directors of the other corporation is owned,
directly or indirectly, by this corporation. A shareholder entitled to vote may
vote his shares in person or by a proxy and may appoint. .such a proxy to vote
or otherwise act for him by signing an appointment form, either personally or by
his attorney-in-fact, and filing the appointment form with the secretary of the
corporation. Any proxy may be revoked as permitted by law and, unless sooner
revoked, shall be valid for eleven (11) months from the date the appointment
form is received by the secretary of the corporation, unless a longer period is
expressly provided for in the appointment form.
Section 8. Shareholders' Action Without a Meeting - Any action required or
permitted to be taken at a shareholders' meeting may be taken without such a
meeting, without notice to voting shareholders, and without action by the board
of directors if the action is taken by all shareholders entitled to vote thereon
and is evidenced by one or more written consents describing the action taken, at
least one such approving consent to have been signed by each shareholder
entitled to vote on the action, and delivered to the secretary of the
corporation for inclusion in the minutes or for filing with the corporate
records. As and when required by Section 13.l-657D of the Code nonvoting
shareholders shall be given at least ten (10) days written notice of any
proposed action before
<PAGE>
the action is taken by unanimous consent of the voting shareholders. Any action
taken by such unanimous written consent shall be effective according to its
terms when a signed consent for each shareholder entitled to vote thereon is in
the possession of the corporation, unless such consents all specify the same
effective date and each specifies the date of execution by each executing
shareholder, in which event the action taken shall be effective as of the
effective date so specified. Such unanimous consent shall have the effect of a
unanimous vote of voting shareholders at a duly called and held shareholders'
meeting and may be described as such in any document filed with the State
Corporation Commission. A shareholder may withdraw a consent theretofore
delivered to the corporation only by delivering to the corporation a written
notice of withdrawal as to such consent prior to the time that all other like
consents are in possession of the corporation. Unless otherwise required by law,
the record date for determining shareholders entitled to take action without a
meeting is the date the first shareholder signs a consent as to such action.
Section 9. Waiver of Notice - Any other provision of these bylaws
notwithstanding, a shareholder may waive any notice required by these bylaws,
the corporation's articles of incorporation, or any law by signing a written
waiver of such notice (whether such waiver is executed before or after the date
and time of the event that is the subject of such required notice) and
delivering such signed waiver to the secretary of the corporation for inclusion
in the minutes or filing with the corporate records. A shareholder who attends a
shareholders' meeting (i) waives all objections to lack of notice or defective
notice of that meeting, unless at the beginning of the meetings the shareholder
objects to holding the meeting or to transacting business at the meetings, and
(ii) waives all objection to consideration at that meeting of a particular
matter that is not within the purpose or purposes described in the meeting
notice, unless that shareholder objects to considering the matter when it is
presented.
Section 10. Minutes - The corporation shall keep as a permanent record
minutes of all meetings of its shareholders and a record of all actions taken by
its shareholders without a meeting.
ARTICLE V - BOARD OF DIRECTORS
Section 1. General Powers - All corporate powers shall be exercised by or
under the authority of, and the business and affairs of the corporation shall be
managed under the direction of, its board of directors, subject to any
limitation set forth in its articles of incorporation.
Section 2. Number, Term. and Qualification - Until such time
<PAGE>
as this bylaw shall be amended to specify or fix a different number, the number
of directors of the corporation shall be three (3). The term of each director
shall expire at the next annual shareholders' meeting following his election,
but despite the expiration of a director's term, he shall continue to serve
until his successor is duly elected and qualifies or until there, is a decrease
in the number of directors. A decrease in the number of directors shall not
shorten an incumbent director's term. A director need not be a resident of the
Commonwealth of Virginia or a shareholder of the corporation.
Section 3. Election of Board of Directors - Except under conditions
provided for in Sections 4. and 5. of this Article V, the board of directors
shall be elected annually at the annual shareholders' meeting.
Section 4. Removal - Any director may be removed, with or without cause,
if at a shareholders' meeting duly called and held with this as a stated purpose
the number of votes voted to remove him constitutes a majority of the votes then
entitled to be cast and counted together in an election of such director at a
shareholders' meeting. Notice of such a meeting must state that the purpose, or
a purpose, of the meeting is removal of the director. If any director is so
removed, a new director may be elected in his place at the same shareholders'
meeting.
Section 5. Resignation - A director may resign at any time by delivering
written notice thereof to the board of directors, its chairman, the
corporation's president, or the corporation's secretary. Such resignation is
effective when the notice is delivered unless the notice specifies a later
effective date, in which case the board of directors may fill the pending
vacancy before the effective date, but a successor so elected shall not take
office until the effective date.
Section 6. Vacancies - Any vacancy occurring in the board of directors
(including a vacancy resulting from an increase in the number of directors) may
be filled by a vote of the board of directors (and if the directors then
remaining in office constitute fewer than a quorum the board of directors may
fill the vacancy by the affirmative vote of a majority of the then directors)
unless the vacant office was held by a director elected by a voting group of
shareholders, in which event such vacancy may be filled only by the affirmative
vote of a majority of the shareholders in such voting group.
Section 7. Compensation - The board of directors may compensate each
director for his service as such and may provide for the payment of all expenses
incurred by each director in attending meetings of the board of directors.
<PAGE>
ARTICLE VI MEETINGS OF THE
BOARD OF DIRECTORS
Section 1. Meetings; Minutes - Regular meetings of the board of directors
shall be held annually (immediately following each annual shareholders' meeting)
to elect officers and to carry on such other business as may properly come
before such meeting and immediately following each special shareholders' meeting
to carry on such business as may properly come before such meeting. Any such
regular meeting of the board of directors shall be held at the place where the
immediately preceding shareholders' meeting was held. Special meetings of the
board of directors may be called by any member of the board of directors. Any
meeting of the board of directors may be held in or out of the Commonwealth of
Virginia. The corporation shall keep as a permanent record minutes of all
meetings of the board of directors, a record of all actions taken by the board
of directors without a meeting, and a record of all actions taken on behalf of
the corporation by each committee of the board of directors.
Section 2. Method of Meeting - Any or all directors may participate in any
regular or special meeting of the board of directors by, or may conduct the
meeting through the use of, any means of communication by which all
participating directors may simultaneously hear each other during the meeting.
Section 3. Notice - No notice need be given of any regular meeting of the
board of directors. Notice of each special meeting of the board of directors
stating the date, time, and place of the meeting shall be mailed to each
director at least three (3) days (or telegraphed at least two (2) days) prior to
the date of the meeting. Unless otherwise required by these bylaws, the notice
need not describe the purpose of a special meeting of the board of directors.
Section 4. Quorum - A majority of the number of directors fixed herein, or
one director if that is the number of directors fixed herein, shall constitute
the quorum for each meeting of the board of directors. If a quorum is present
when a vote is taken, the affirmative vote of a majority of the directors
present at a board of directors' meeting, or of the sole director if the
corporation shall have but one director, shall be the act of the board of
directors unless the vote of a greater number of directors is required by the
articles of incorporation.
Section 5. Action Without a Meeting - Any action required or permitted to
be taken at a meeting of the board of directors may be taken without such a
meeting and without notice if the action is taken by all members of the board of
directors and is evidenced by
<PAGE>
one or more written consents stating the action taken, signed by each director
either before or after the action taken, and included in the corporate minutes
or filed with the corporate records reflecting the action taken. Any action
taken by such unanimous, written consent shall be effective when the last
director of the board of directors signs an approving consent, unless such
consents all specify the same effective date and each specifies the date of
execution by each executing director, in which event the action taken shall be
effective as of the effective date so specified. Such unanimous consent shall
have the effect of a unanimous vote at a duly called and held meeting of the
board of directors and may be described as such in any document.
Section 6. Waiver of Notice - Any other provision of these bylaws
notwithstanding, whenever any notice is required to be given to a director, a
waiver thereof in writing signed by the director entitled to such notice,
whether executed before or after the time stated therein, and filed with the
corporate minutes or records shall be equivalent to the giving of such notice to
such director. A director's attendance at or participation in a board of
directors' meeting waives any required notice to him of the meeting unless that
director at the beginning of the meeting or promptly upon his arrival objects to
holding the meeting or transacting business at the meeting and thereafter does
not vote for or assent to action taken at the meeting.
ARTICLE VII - COMMITTEES
From time to time the board of directors may create one or more committees
(comprised only of members of the board of directors) that may exercise powers
of the board of directors as and to the extent provided in the creating
resolution, except as may be limited by Section 13.1-689 of the Code.
ARTICLE VIII - OFFICERS
Section 1. Election, Removal, and Duties - Promptly after election in each
year the board of directors shall appoint a president (who need not be a
director) and a secretary. From time to time the board of directors may appoint
such other officers as it may deem proper, as evidenced by their appointment. A
duly appointed officer may appoint or remove (at any time and with or without
cause) one or more assistant officers for his office. Any officer may
simultaneously hold more than one office in the corporation. Each officer shall
be appointed for a term continuing, unless sooner terminated, until the date of
the next ensuing annual meeting of the board of directors and until his
successor is appointed; provided, however, that any officer may resign, and any
officer may be removed by the board of directors, in each case, at any time, and
with or without cause, and such officer's then term shall terminate effective
with the date of such
<PAGE>
resignation or removal. Each vacancy among the officers shall be filled by the
board of directors. Each officer of the corporation shall have such authority
and shall perform such duties as generally pertain to his office, as well as
such other authority and duties as may be prescribed for such officer from time
to time by the board of directors.
Section 2. Bonds - The board of directors may require that each officer,
agent, or employee of the corporation give bond to the corporation, with
sufficient surety, conditioned on the faithful performance of the duties of his
office or position and upon compliance with such other conditions as may from
time to time be imposed by the board of directors.
ARTICLE IX - SHARE CERTIFICATES; RECORDS
Section 1. Form - Each shareholder shall be entitled to a share
certificate evidencing the share or shares in the corporation owned by such
shareholder, which certificate shall be in such form as may be required by law
and shall be approved by the board of directors and signed by the corporation's
president and secretary.
Section 2. Transfers - A transfer of any share or shares of the
corporation may be made only upon registration of the share transfer in the
share transfer records of the corporation, and then only upon surrender of each
certificate for each share then being transferred accompanied by a satisfactory
written assignment applicable thereto duly executed by the then shareholder
thereof or by such shareholder's duly authorized attorney-in-fact.
Section 3. Replacements - In case of the loss, mutilation, or destruction
of a share certificate a duplicate certificate may be issued upon such terms not
in conflict with law as the board of directors may prescribe.
Section 4. Records - The corporation or its agent shall maintain a record
of the corporation's shareholders in the manner required by law, and the
corporation's share transfer records shall constitute conclusive proof of the
ownership of the then issued and outstanding shares of the corporation at any
given time.
ARTICLE X - INDEMNITY
Section 1. Indemnity - Any person (hereinafter in this Article,
"indemnitee") who, because he is or was an officer or director of the
corporation, is, was, or is. threatened to be made a party to any threatened,
pending, or completed action, suit, proceeding, or appeal whether civil,
criminal, administrative, or investigative and whether formal or informal
(hereinafter "proceeding") (including any proceeding by or in the right of the
corporation) shall be indemnified by the corporation against all
<PAGE>
liability (including the obligation to pay all or any part of a judgment,
decree, settlement, penalty, fine or other such obligation) and reasonable
expenses (including counsel fees, expert witness fees, and costs of
investigation, litigation, and appeal, as well as any amounts expended in
asserting any counterclaim or claim for indemnification from others) incurred in
or as a result of the proceeding except such liability and expenses as are
incurred because of his willful misconduct or a knowing violation of the
criminal law. The corporation shall pay for or reimburse the reasonable expenses
incurred by any indemnitee in advance of final disposition of any proceeding
upon receipt of an unsecured undertaking from him to repay the sums if
ultimately it is determined that he is not entitled to indemnification. A
director shall be so indemnified without the necessity of any further
determination or authorization, but in the case of an officer, the determination
that indemnification is permissible and an evaluation as to the reasonableness
of expenses in a specific case shall be made as authorized from time to time by
general or specific actions of the board of directors. The termination of a
proceeding by a judgment, decree, order, settlement, or conviction, or upon a
plea of nolo contendre or its equivalent shall not of itself create a
presumption that an indemnitee acted in such a manner as to make him ineligible
for indemnification.
Section 2. Limitation - In any proceeding brought by a shareholder in the
right of the corporation or brought by or on behalf of shareholders of the
corporation, the aggregate amount of all damages that may be assessed against an
officer or director of the corporation arising out of any single transaction,
occurrence, or course of conduct shall be limited to one dollar. This bylaw is
adopted by the shareholders as a limitation on the liability of the
corporation's officers and directors, and this limitation shall not apply if the
officer or director engaged in willful misconduct or a knowing violation of the
criminal law or of any state securities law.
Section 3. Application - This Article shall be applicable in and to all
proceedings commenced after its adoption even though arising, in whole or in
part, from conduct, actions, or events occurring or taken before its adoption.
No amendment, modification, or repeal of this Article shall diminish the rights
provided hereby with respect to any claim, issue, or matter in any then pending
or subsequent proceeding that is based in any material respect on any alleged
action or failure to act occurring prior to such amendment, modification, or
repeal. Reference herein to any director or officer shall include a former
director or officer who has ceased to have the capacity of director or officer,
as the case may be, and his heirs, executors, and administrators. The
corporation may purchase and maintain insurance to indemnify it against all or
any part of the liability to indemnify assumed by it
<PAGE>
in accordance with this Article.
ARTICLE XI - AMENDMENTS
Section 1. New Bylaws and Repeal - These bylaws may be amended or repealed
and new bylaws maybe made by the board of directors or the shareholders at any
time. Each bylaw made by the board of directors, however, may be amended or
repealed, and a new bylaw made by the shareholders, and the shareholders may
provide that any bylaw made by them shall not be amended or repealed by the
board of directors, which proviso shall control.
Section 2. Legislative Amendment - If any portion of these bylaws is
subsequently rendered invalid by an Act of the General Assembly of Virginia
those portions hereof that are not affected by such legislation shall remain in
full force and effect until and unless amended or repealed in accordance with
the terms hereof.
ARTICLE XII - MISCELLANEOUS
Shares in another corporation held in the name of this corporation may be
voted only by Alan R. Brill, either in person or by proxy.
Each use of a masculine pronoun herein shall be read as if both a
masculine and feminine pronoun had been used in the alternative.
Adopted by the Shareholders:
December 30, 1987
<PAGE>
EXECUTION COPY
_______________________________________________________________________________
_________________________________
BRILL MEDIA COMPANY, LLC.,
and
BRILL MEDIA MANAGEMENT, INC.
as Issuers,
and
The SUBSIDIARY GUARANTORS
named herein
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
$105,000,000
12% SENIOR NOTES DUE 2007, SERIES A
12% SENIOR NOTES DUE 2007, SERIES B
_________________________________
____________________
INDENTURE
Dated as of December 30, 1997
____________________
_______________________________________________________________________________
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)........................................... 7.10
(a)(2)........................................... 7.10
(a)(3)........................................... N.A.
(a)(4)........................................... N.A.
(a)(5)........................................... 7.10
(b).............................................. 7.10
(c).............................................. N.A.
311(a).............................................. 7.11
(b).............................................. 7.11
(c).............................................. N.A.
312(a).............................................. 2.05
(b).............................................. 11.03
(c).............................................. 11.03
313(a).............................................. 7.06
(b)(1)........................................... 7.06
(b)(2)........................................... 7.06
(c).............................................. 7.06
(d).............................................. 7.06
314(a).............................................. 4.04
(b).............................................. N.A.
(c)(1)........................................... 11.05
(c)(2)........................................... 11.05
(c)(3)........................................... N.A.
(d).............................................. N.A.
(e).............................................. 11.05
(f).............................................. N.A.
315(a).............................................. 7.01
(b).............................................. 7.05
(c).............................................. 7.01
(d).............................................. 6.05;7.01
(e).............................................. 6.11
316(a).............................................. 1.01
(a)(1)(A)........................................ 6.02
(a)(1)(B)........................................ 6.04
<PAGE>
(a)(2)........................................... N.A.
(b).............................................. 6.07
(c).............................................. 2.19
317(a)(1)........................................... 6.08
(a)(2)........................................... 6.09
(b).............................................. 2.04
318(a).............................................. 11.01
(b).............................................. N.A.
(c).............................................. 11.01
_______________________
*This Cross-Reference Table is not part of the Indenture.
N.A. means not applicable.
(2)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . 1
SECTION 1.01. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONS. . . . . . . . . . . . . . . . . . . . 26
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. . . . 27
SECTION 1.04. RULES OF CONSTRUCTION. . . . . . . . . . . . . . . . . . 28
ARTICLE 2 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.01. FORM AND DATING. . . . . . . . . . . . . . . . . . . . . 28
SECTION 2.02. EXECUTION AND AUTHENTICATION . . . . . . . . . . . . . . 29
SECTION 2.03. REGISTRAR AND PAYING AGENT . . . . . . . . . . . . . . . 30
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. . . . . . . . . . . 30
SECTION 2.05. SECURITYHOLDER LISTS . . . . . . . . . . . . . . . . . . 31
SECTION 2.06. TRANSFER AND EXCHANGE. . . . . . . . . . . . . . . . . . 31
SECTION 2.07. REPLACEMENT SECURITIES . . . . . . . . . . . . . . . . . 32
SECTION 2.08. OUTSTANDING SECURITIES . . . . . . . . . . . . . . . . . 32
SECTION 2.09. TREASURY SECURITIES. . . . . . . . . . . . . . . . . . . 33
SECTION 2.10. TEMPORARY SECURITIES . . . . . . . . . . . . . . . . . . 33
SECTION 2.11. CANCELLATION . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.12. DEFAULTED INTEREST . . . . . . . . . . . . . . . . . . . 34
SECTION 2.13. CUSIP NUMBER . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.14. DEPOSIT OF MONEYS. . . . . . . . . . . . . . . . . . . . 34
SECTION 2.15. RESTRICTIVE LEGENDS. . . . . . . . . . . . . . . . . . . 34
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL
SECURITY . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.17. SPECIAL TRANSFER PROVISIONS. . . . . . . . . . . . . . . 38
SECTION 2.18. PERSONS DEEMED OWNERS. . . . . . . . . . . . . . . . . . 40
SECTION 2.19. ALLOCATION OF PURCHASE PRICE . . . . . . . . . . . . . . 41
ARTICLE 3 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.01. NOTICES TO TRUSTEE . . . . . . . . . . . . . . . . . . . 41
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED . . . . . . . . . 41
SECTION 3.03. NOTICE OF REDEMPTION . . . . . . . . . . . . . . . . . . 42
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION . . . . . . . . . . . . . 43
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. . . . . . . . . . . . . . . 43
SECTION 3.06. SECURITIES REDEEMED IN PART. . . . . . . . . . . . . . . 44
SECTION 3.07. OPTIONAL REDEMPTION. . . . . . . . . . . . . . . . . . . 44
SECTION 3.08. MANDATORY REDEMPTION . . . . . . . . . . . . . . . . . . 45
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF
<PAGE>
EXCESS PROCEEDS. . . . . . . . . . . . . . . . . . . . . 45
ARTICLE 4 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 4.01. PAYMENT OF SECURITIES. . . . . . . . . . . . . . . . . . 47
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY. . . . . . . . . . . . . 48
SECTION 4.03. SEC REPORTS. . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.04. COMPLIANCE CERTIFICATES. . . . . . . . . . . . . . . . . 49
SECTION 4.05. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 4.06. STAY, EXTENSION AND USURY LAWS . . . . . . . . . . . . . 51
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS. . . . . . . . . . . . 51
SECTION 4.08. LIMITATION ON RESTRICTIONS ON
DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES.. . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.09. LIMITATION ON INDEBTEDNESS . . . . . . . . . . . . . . . 57
SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK . . . 60
SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS . . . . . . . . . . 63
SECTION 4.12. LIMITATION ON LIENS. . . . . . . . . . . . . . . . . . . 64
SECTION 4.13. CORPORATE EXISTENCE. . . . . . . . . . . . . . . . . . . 65
SECTION 4.14. CHANGE OF CONTROL. . . . . . . . . . . . . . . . . . . . 65
SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL
STOCK OF RESTRICTED SUBSIDIARIES . . . . . . . . . . . . 66
SECTION 4.16. LIMITATION ON SALE/LEASEBACK
TRANSACTION. . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 4.17. LIMITATION ON DESIGNATIONS OF UNRESTRICTED
SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 4.18. FUTURE NOTE GUARANTORS . . . . . . . . . . . . . . . . . 68
SECTION 4.19. LIMITATION ON BUSINESS . . . . . . . . . . . . . . . . . 69
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS . . . . . . . . . . . . . . 69
ARTICLE 5 SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION
OR SALE OF ASSETS. . . . . . . . . . . . . . . . . . . . 69
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED. . . . . . . . . . . . 70
ARTICLE 6 DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.01. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . 70
SECTION 6.02. ACCELERATION . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.03. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.04. WAIVER OF PAST DEFAULTS. . . . . . . . . . . . . . . . . 74
SECTION 6.05. CONTROL BY MAJORITY. . . . . . . . . . . . . . . . . . . 74
SECTION 6.06. LIMITATION ON SUITS. . . . . . . . . . . . . . . . . . . 74
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT . . . . . . 75
(ii)
<PAGE>
SECTION 6.08. COLLECTION SUIT BY TRUSTEE . . . . . . . . . . . . . . . 75
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM . . . . . . . . . . . . 75
SECTION 6.10. PRIORITIES . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.11. UNDERTAKING FOR COSTS. . . . . . . . . . . . . . . . . . 77
ARTICLE 7 TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.01. DUTIES OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 77
SECTION 7.02. RIGHTS OF TRUSTEE. . . . . . . . . . . . . . . . . . . . 79
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE . . . . . . . . . . . . . . 80
SECTION 7.04. TRUSTEE'S DISCLAIMER . . . . . . . . . . . . . . . . . . 80
SECTION 7.05. NOTICE OF DEFAULTS . . . . . . . . . . . . . . . . . . . 80
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS. . . . . . . . . . 80
SECTION 7.07. COMPENSATION AND INDEMNITY . . . . . . . . . . . . . . . 81
SECTION 7.08. REPLACEMENT OF TRUSTEE . . . . . . . . . . . . . . . . . 82
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.. . . . . . . . . . . . 83
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. . . . . . . . . . . . . . 83
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE ISSUERS. . . . . . . . . . . . . . . . . . . 84
ARTICLE 8 DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE . . . . 84
SECTION 8.02. CONDITIONS TO DEFEASANCE . . . . . . . . . . . . . . . . 85
SECTION 8.03. APPLICATION OF TRUST MONEY . . . . . . . . . . . . . . . 87
SECTION 8.04. REPAYMENT TO THE ISSUERS . . . . . . . . . . . . . . . . 87
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS . . . . . . . . . . 88
SECTION 8.06. REINSTATEMENT. . . . . . . . . . . . . . . . . . . . . . 88
ARTICLE 9 AMENDMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS . . . . . . . . . . . 88
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS. . . . . . . . . . . . . 90
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. . . . . . . . . . . 92
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. . . . . . . . . . . . 92
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. . . . . . . . . . 92
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC. . . . . . . . . . . . . 93
ARTICLE 10 SUBSIDIARY GUARANTEE OF SECURITIES. . . . . . . . . . . . . . 93
SECTION 10.01. SUBSIDIARY GUARANTEE . . . . . . . . . . . . . . . . . . 93
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE . . . . . 95
SECTION 10.03. SUBSIDIARY GUARANTEE UNCONDITIONAL,
ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . 95
SECTION 10.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY . . . . . 96
(iii)
<PAGE>
SECTION 10.05. CONTRIBUTION . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 10.06. RELEASE. . . . . . . . . . . . . . . . . . . . . . . . . 97
SECTION 10.07. ADDITIONAL SUBSIDIARY GUARANTORS . . . . . . . . . . . . 97
SECTION 10.08. SUBSIDIARY GUARANTORS MAY
CONSOLIDATE, ETC., ON CERTAIN TERMS. . . . . . . . . . . 98
SECTION 10.09. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . 99
SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY
LAWS . . . . . . . . . . . . . . . . . . . . . . . . . . 99
ARTICLE 11 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . 99
SECTION 11.01. TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . . . . 99
SECTION 11.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 11.03. COMMUNICATION BY SECURITYHOLDERS
WITH OTHER SECURITYHOLDERS . . . . . . . . . . . . . . . 101
SECTION 11.04. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . 101
SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. . . . . . 101
SECTION 11.06. RULES BY TRUSTEE AND AGENTS. . . . . . . . . . . . . . . 102
SECTION 11.07. LEGAL HOLIDAYS . . . . . . . . . . . . . . . . . . . . . 102
SECTION 11.08. NO RECOURSE AGAINST OTHERS . . . . . . . . . . . . . . . 102
SECTION 11.09. DUPLICATE ORIGINALS. . . . . . . . . . . . . . . . . . . 103
SECTION 11.10. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . 103
SECTION 11.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS. . . . . . 103
SECTION 11.12. SUCCESSORS . . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 11.13. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . 103
SECTION 11.14. COUNTERPART ORIGINALS. . . . . . . . . . . . . . . . . . 103
SECTION 11.15. TABLE OF CONTENTS, HEADINGS, ETC.. . . . . . . . . . . . 104
EXHIBIT A - FORM OF INITIAL SECURITY WITH SUBSIDIARY
GUARANTEE
EXHIBIT B - FORM OF EXCHANGE SECURITY WITH SUBSIDIARY
GUARANTEE
EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS TO NON-QIB
ACCREDITED INVESTORS
EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN
CONNECTION WITH TRANSFERS PURSUANT TO
REGULATIONS
(iv)
<PAGE>
SCHEDULE I - SUBSIDIARY GUARANTORS
SCHEDULE II - EXISTING INDEBTEDNESS
(v)
<PAGE>
INDENTURE, dated as of December 30, 1997, among Brill Media
Company, LLC, a Virginia limited liability company ("BMC"), Brill Media
Management, Inc., a Virginia corporation ("Media" and, collectively with
BMC, the "Issuers"), the subsidiary guarantors listed on Schedule I
attached hereto as Subsidiary Guarantors (as defined) of the Issuers'
obligations hereunder, and United States Trust Company of New York, a
banking corporation organized and existing under the laws of the State of
New York, as Trustee (the "Trustee").
The Issuers have duly authorized the creation of an issue of 12%
Senior Notes due 2007, Series A (the "Initial Securities") and 12% Senior
Notes due 2007, Series B (the "Exchange Securities") and, to provide
therefor, the Issuers and the Subsidiary Guarantors have duly authorized
the execution and delivery of this Indenture. All things necessary to make
the Securities (as defined), when duly issued and executed by the Issuers,
and authenticated and delivered hereunder, the valid obligations of the
Issuers and the Subsidiary Guarantors, and to make this Indenture a valid
and binding agreement of the Issuers and the Subsidiary Guarantors, have
been done.
The Issuers, the Subsidiary 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) of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Accountants" means Ernst & Young LLP or such other nationally
recognized firm of independent certified public accountants that is
reasonably acceptable to the Trustee.
"Accreted Value" means, as of any date, with respect to each $1,000
principal amount at maturity of Securities: (A) if such date is prior to
December 15, 1999, the sum of (1) the initial offering price of such
Securities and (2) the portion of the original issue discount for such
Securities (which for this purpose shall be deemed to be the excess of the
principal amount over such initial offering price), which shall be
amortized with respect to the Securities to but not including such date,
such original issue discount to be so amortized at a rate which, together
with cash interest paid on the Securities, represents a yield to maturity
of 12% per annum using semiannual compounding of such rate on each June 15
and December 15, commencing June 15, 1998 (the "Semi-Annual Accrual Date"),
from the Issue Date to but not including the date of determination. The
following table indicates the Accreted Value with respect to each $1,000
<PAGE>
principal amount at maturity of Securities at the semiannual compounding
dates of the Securities:
Semi-Annual
Accrual Date Accreted Value
- ----------------- ---------------
June 15, 1998............................ $ 939.82
December 15, 1998........................ $ 958.71
June 15, 1998............................ $ 978.73
December 15, 1999........................ $1,000.00
and (B) if such date occurs on or after December 15, 1999, $1,000.
At any time prior to December 15, 1999 and between two Semi-Annual
Accrual Dates, the Accreted Value will be the sum of (1) the Accreted Value
for the Semi-Annual Accrual Date immediately preceding the date of
determination, and (2) the Proportionate Share (as defined below). The
"Proportionate Share" is an amount equal to the product of (i) the Accreted
Value for the immediately following Semi-Annual Accrual Date less the
Accreted Value for the immediately preceding Semi-Annual Date times (ii) a
fraction, the numerator of which is the number of days from the immediately
preceding Semi-Annual Accrual Date to the date of such determination, using
a 360-day year of twelve 30-day months, and the denominator of which is
180.
"Additional Assets" means (i) any property or assets (other than
Indebtedness and Capital Stock) in a Permitted Business; (ii) the Capital
Stock of a Person that becomes a Restricted Subsidiary as a result of the
acquisition of such Capital Stock by either of the Issuers or a Restricted
Subsidiary of either of the Issuers; (iii) Capital Stock constituting a
minority interest in any Person that at such time is a Restricted
Subsidiary of either of the Issuers; or (iv) Permitted Investments of the
type and in the amounts described in clause (viii) of the definition
thereof; provided, however, that, in the case of clauses (ii) and (iii),
such Restricted Subsidiary is primarily engaged in a Permitted Business.
"Administrative Management Agreement" means any management
agreements between either of the Issuers or any of the Subsidiary
Guarantors and BMCLP, pursuant to which BMCLP provides management services
to such Issuer or such Subsidiary Guarantors.
"Adjusted Net Assets" of a Subsidiary Guarantor at any date means
the lesser of the amount by which (x) the fair value of the property of
such Subsidiary Guarantor exceeds the total amount of liabilities,
including, without limitation, the probable liability of such Subsidiary
Guarantor with respect to its contingent liabilities (after giving effect
2
<PAGE>
to all other fixed and contingent liabilities incurred or assumed on such
date), but excluding liabilities under the Subsidiary Guarantee of such
Subsidiary Guarantor at such date and (y) the present fair salable value of
the assets of such Subsidiary Guarantor at such date exceeds the amount
that will be required to pay the probable liability of such Subsidiary
Guarantor on its debts (after giving effect to all other fixed and
contingent liabilities incurred or assumed on such date and after giving
effect to any collection from any Subsidiary by such Subsidiary Guarantor
in respect of the obligations of such Subsidiary under the Subsidiary
Guarantee), excluding debt in respect of the Subsidiary Guarantee, as they
become absolute and matured.
"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. For the purposes of
this definition, "control" when used with respect to any Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract
or otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or co-registrar.
"Appreciation Notes" means the Appreciation Notes due 2007 of the
Issuers.
"Appreciation Notes Indenture" means the Indenture, dated as of
the Issue Date, between the Issuers and the United States Trust Company of
New York relating to the Appreciation Notes as in effect on the Issue Date
and without giving effect to any modification or amendment thereto made
after the Issue Date.
"Asset Acquisition" means (i) an investment by either of the
Issuers or any of its Restricted Subsidiaries in any other Person pursuant
to which such Person shall become a Restricted Subsidiary or shall be
merged into or consolidated with such Issuer or any of its Restricted
Subsidiaries or (ii) an acquisition by either of the Issuer or any of its
Restricted Subsidiaries of the property and assets of any Person other than
either of the Issuers or any of their Restricted Subsidiaries that
constitute substantially all of a division or line of business of such
Person.
"Asset Disposition" means any sale, lease, transfer, issuance or
other disposition (or series of related sales, leases, transfers, issuances
or dispositions that are part of a common plan) of shares of Capital Stock
of (or any other equity interests in) a Restricted Subsidiary (other than
directors' qualifying shares) or of any other property or other assets
(each referred to for the purposes of this definition as a "disposition")
by either
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of the Issuers or any of their Restricted Subsidiaries (including
any disposition by means of a merger, consolidation or similar transaction)
other than (i) a disposition by a Restricted Subsidiary to either of the
Issuers or by either of the Issuers or a Restricted Subsidiary to a
Wholly-Owned Subsidiary, (ii) a disposition of inventory in the ordinary
course of business, (iii) a disposition of obsolete or worn out equipment
or equipment that is no longer useful in the conduct of the business of
either of the Issuers and their Restricted Subsidiaries and that is
disposed of in each case in the ordinary course of business, (iv)
dispositions of property for net proceeds which, when taken collectively
with the net proceeds of any other such dispositions under this clause (iv)
that were consummated since the beginning of the calendar year in which
such disposition is consummated, do not exceed $1.0 million, and (v)
transactions permitted under Section 5.01. Notwithstanding anything to the
contrary contained above, a Restricted Payment made in compliance with
Section 4.07 shall not constitute an Asset Disposition except for purposes
of determinations of the Consolidated Leverage Ratio.
"Attributable Indebtedness" in respect of a Sale/Leaseback
Transaction means, as at the time of determination, the present value
(discounted at the interest rate borne by the Securities, compounded
annually) of the total obligations of the lessee for rental payments during
the remaining term of the lease included in such Sale/Leaseback Transaction
(including any period for which such lease has been extended).
"Average Life" means, as of the date of determination, with
respect to any Indebtedness, the quotient obtained by dividing (i) the sum
of the product of the numbers of years (rounded upwards to the nearest
month) from the date of determination to the dates of each successive
scheduled principal payment of such Indebtedness or redemption multiplied
by the amount of such payment by (ii) the sum of all such payments.
"Bankruptcy Code" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.
"BMC" has the meaning set forth in the preamble to this Indenture
until a successor replaces such Person in accordance with Article 5 hereof
and thereafter means such successor.
"BMCLP" means Brill Media Company, L.P, a Virginia limited
partnership, and its successors.
"Board of Directors" means as to BMC (i) so long as BMC or any
successor to BMC is a limited liability company or a partnership, the board
of directors of Media, which is the manager of BMC and (ii) at any other
time, the board of directors of BMC, and as to Media, the board of
directors of Media.
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"Board Resolution" means, with respect to any Person, a copy of a
resolution certified by the Secretary or an Assistant Secretary of such
Person (or, in the case of BMC so long as it is a limited liability company
or a partnership, of Brill Media Management, Inc., which is the manager of
BMC) to have been duly adopted by the Board of Directors of such Person and
to be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means a day that is not a Legal Holiday.
"Capital Stock" of any Person means any and all shares,
membership and other interests, rights to purchase, warrants, options,
participations or other equivalents of or interests in (however designated)
equity of such Person, including any Preferred Stock, but excluding any
debt securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation that is
required to be classified and accounted for as a capitalized lease for
financial reporting purposes in accordance with GAAP, and the amount of
Indebtedness represented by such obligation shall be the capitalized amount
of such obligation determined in accordance with GAAP, and the stated
maturity thereof shall be the date of the last payment of rent or any other
amount due under such lease prior to the first date such lease may be
terminated without penalty.
"Cash Equivalents" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by the United
States government or any agency or instrumentality thereof, (iii)
certificates of deposit, time deposits 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 commercial bank having capital and surplus
in excess of $500 million, (iv) repurchase obligations for underlying
securities of the types described in clauses (ii) and (iii) entered into
with any financial institution meeting the qualifications specified in
clause (iii) above, (v) commercial paper rated A-1 or the equivalent
thereof by Moody's or S&P and in each case maturing within one year after
the date of acquisition, (vi) investment funds investing 95% of their
assets in securities of the types described in clauses (i)-(v) above, (vii)
readily marketable direct obligations issued by any state of the United
States of America or any political subdivision thereof having one of the
two highest rating categories obtainable either Moody's or S&P and (viii)
Indebtedness or Preferred Stock issued by Persons with a rating of "A" or
higher from S&P or "A2" or higher from Moody's.
"Change of Control" means, (i) any sale, lease, exchange or other
transfer (collectively, a "Transfer") (in one transaction or a series of
related transactions) of all or
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substantially all of the assets of either of the Issuers or either of the
Issuers and their Restricted Subsidiaries on a consolidated basis or (ii) a
majority of the Board of Directors of either of the Issuers or of any direct
or indirect holding company thereof shall consist of Persons who are not
Continuing Directors of such Issuer; or (iii) the acquisition by any Person
or Group (other than Alan R. Brill or any Related Brill Party) of the power,
directly or indirectly, to vote or direct the voting of securities having
more than 35% of the ordinary voting power for the election of directors of
either of the Issuers, or any direct or indirect holding company thereof;
provided, however, that no Change of Control shall be deemed to occur
pursuant to this clause (iii), so long as Alan R. Brill and the Related Brill
Parties collectively own an amount of securities representing the power,
directly or indirectly, to vote or direct the voting of securities having
more than 50% of the ordinary voting power for the election of directors of
such Issuer or of any direct or indirect holding company thereof.
"Commission" means the U.S. Securities and Exchange Commission or
its successor.
"Consolidated EBITDA" means, for any period an amount equal to
Consolidated Net Income for such period, plus the following to the extent
deducted in calculating such Consolidated Net Income: (i) the provision for
taxes for such period based on income or profits and any provision for
taxes utilized in computing net loss, (ii) Consolidated Interest Expense,
(iii) depreciation expense, (iv) amortization expense (including the
amortization of debt issuance costs), (v) all other non-cash items reducing
Consolidated Net Income for such period (excluding any non-cash item to the
extent it represents an accrual of or reserve for cash disbursements for
any subsequent period prior to the Stated Maturity of the Securities or
amortization of a pre-paid cash expense that was paid in a prior period),
minus (b) all non-cash items increasing Consolidated Net Income for such
period, in each case on a consolidated basis for the Issuers and their
respective Restricted Subsidiaries for such period determined in accordance
with GAAP, provided, however, that, for purposes of calculating
Consolidated EBITDA during any fiscal quarter, cash income from a
particular Investment (other than a Managed Affiliate Note) of such Person
shall be included only (x) if cash income has been received by such Person
with respect to such Investment during each of the previous four fiscal
quarters, or (y) if the cash income derived from such Investment is
attributable to Temporary Cash Investments.
"Consolidated Interest Expense" means, for any period, the total
interest expense of the Issuers and their respective Restricted
Subsidiaries determined on a consolidated basis in accordance with GAAP,
plus, to the extent not included in such interest expense, (i) interest
expense attributable to Capitalized Lease Obligations, (ii) capitalized
interest, (iii) non-cash interest expense, (iv) commissions, discounts and
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other fees and charges owed with respect to letters of credit and bankers'
acceptance financing, (v) interest actually paid by either Issuer or any
such Restricted Subsidiary under any Guarantee of Indebtedness or other
obligation of any other Person, (vi) net payments (whether positive or
negative) pursuant to Interest Rate Agreements, (vii) the cash
contributions to any employee stock ownership plan or similar trust to the
extent such contributions are used by such plan or trust to pay interest or
fees to any Person (other than an Issuer) in connection with Indebtedness
Incurred by such plan or trust and (viii) cash and Disqualified Stock
dividends in respect of all Preferred Stock of Subsidiaries and
Disqualified Stock of an Issuer held by Persons other than an Issuer or a
Wholly-Owned Subsidiary and less (a) to the extent included in such
interest expense, the amortization of capitalized debt issuance costs and
(b) interest income. Notwithstanding the foregoing, the Consolidated
Interest Expense with respect to any Restricted Subsidiary of an Issuer,
that was not a Wholly-Owned Subsidiary, shall be included only to the
extent (and in the same proportion) that the net income of such Restricted
Subsidiary was included in calculating Consolidated Net Income.
"Consolidated Leverage Ratio" means, on any Transaction Date, the
ratio of (i) the aggregate amount of Indebtedness of the Issuers and their
Restricted Subsidiaries on a consolidated basis outstanding on such
Transaction Date (other than Indebtedness under the Appreciation Notes)
less the cash and Cash Equivalents held by the Issuers and their respective
Restricted Subsidiaries on a consolidated basis on such Transaction Date to
(ii) the amount of Media Cashflow for the then most recent four fiscal
quarters for which financial statements of the Issuers have been filed with
the Commission or provided to the Trustee pursuant to Section 4.03 (such
four fiscal quarter period being the "Four Quarter Period"); provided,
however, that, in making the foregoing calculation, (A) pro forma effect
shall be given to any Indebtedness to be Incurred or repaid on the
Transaction Date; (B) pro forma effect shall be given to Asset Dispositions
and Asset Acquisitions (including giving pro forma effect to the
application of proceeds of any Asset Disposition) that occur from the
beginning of the Four Quarter Period through and including the Transaction
Date (the "Reference Period"), as if they had occurred and such proceeds
had been applied on the first day of such Reference Period; and (C) pro
forma effect shall be given to asset dispositions and asset acquisitions
(including giving pro forma effect to the application of proceeds of any
asset disposition) that have been made by any Person that has become a
Restricted Subsidiary or has been merged with or into an Issuer or any
Restricted Subsidiary during such Reference Period and that would have
constituted Asset Dispositions or Asset Acquisitions had such transactions
occurred when such Person was a Restricted Subsidiary as if such asset
disposition or asset acquisitions were Asset Dispositions or Asset
Acquisitions that occurred on the first day of such Reference Period;
provided, further, that to the extent that clause (B) or (C) of this
sentence requires that pro forma effect be given to an Asset Acquisition or
Asset Disposition, such pro forma calculation shall be based
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upon the four full fiscal quarters immediately preceding the Transaction Date
of the Person, or division or line of business of the Person, that is
acquired or disposed of for which financial information is available.
"Consolidated Net Income" means, for any period, the consolidated
net income (loss) of the Issuers and their respective consolidated
Restricted Subsidiaries determined in accordance with GAAP; provided,
however, that there shall not be included in such Consolidated Net Income:
(i) any net income (loss) of any Person acquired by an Issuer or any of its
Restricted Subsidiaries in a pooling of interests transaction for any
period prior to the date of such acquisition, (ii) any net income of any
Restricted Subsidiary of an Issuer if such Restricted Subsidiary is subject
to restrictions, directly or indirectly, on the payment of dividends or the
making of distributions by such Restricted Subsidiary, directly or
indirectly, to an Issuer (other than restrictions in effect on the Issue
Date with respect to a Restricted Subsidiary of such Issuer and other than
restrictions that are created or exist in compliance with Section 4.08),
(iii) any gain or loss realized upon the sale or other disposition of any
assets of an Issuer or its consolidated Restricted Subsidiaries (including
pursuant to any Sale Leaseback Transaction) which are not sold or otherwise
disposed of in the ordinary course of business and any gain or loss
realized upon the sale or other disposition of any Capital Stock of any
Person, (iv) any extraordinary gain or loss, (v) the cumulative effect of a
change in accounting principles, (vi) the net income of any Person, other
than a Restricted Subsidiary, except to the extent of the lesser of (A)
cash dividends or distributions actually paid to an Issuer or any of its
Restricted Subsidiaries by such Person and (B) the net income of such
Person (but in no event less than zero), and the net loss of such Person
(other than an Unrestricted Subsidiary) shall be included only to the
extent of the aggregate Investment of an Issuer or any of its Restricted
Subsidiaries in such Person and (vii) any non-cash expenses attributable to
grants or exercises of employee stock options. Notwithstanding the
foregoing, for the purpose of Section 4.07 only, (x) there shall be
excluded from Consolidated Net Income any dividends, repayments of loans or
advances or other transfers of assets from Unrestricted Subsidiaries to the
Issuer or a Restricted Subsidiary to the extent such dividends, repayments
or transfers increase the amount of Restricted Payments permitted under
such covenant pursuant to clause (a) (3) (D) thereof and (y) there shall be
added to Consolidated Net Income the amount of any accruals under the
Performance Compensation Agreements to the extent deducted in determining
such Consolidated Net Income.
"Consolidated Net Worth" means the total of the amounts shown on
the balance sheets of the Issuers and their consolidated Restricted
Subsidiaries, determined on a consolidated basis in accordance with GAAP,
as of the end of the most recent fiscal quarter of the Issuers ending prior
to the taking of any action for the purpose of which the determination is
being made and for which financial statements are available (but in no
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event ending more than 135 days prior to the taking of such action), as (i)
the par or stated value of all outstanding Capital Stock of an Issuer plus
(ii) paid in capital or capital surplus relating to such Capital Stock plus
(iii) any retained earnings or earned surplus less (A) any accumulated
deficit and (B) any amounts attributable to Disqualified Stock.
"Consolidated Senior Leverage Ratio" means, on any Transaction
Date, the Consolidated Leverage Ratio on such Transaction Date; provided,
however, that the reference to "Indebtedness" in clause (i) of the
definition of Consolidated Leverage Ratio shall be deemed to be a reference
to "Senior Indebtedness."
"Consolidated Senior Secured Leverage Ratio" means, on any
Transaction Date, the Consolidated Leverage Ratio on such Transaction Date;
provided, however, that the reference to "Indebtedness" in clause (i) of
the definition of Consolidated Leverage Ratio shall be deemed to be a
reference to "Senior Secured Indebtedness."
"Consolidated Unrestricted Subsidiary Advance Leverage Ratio"
means, on any Transaction Date, the Consolidated Leverage Ratio on such
Transaction Date; provided, however, that clause (i) of the definition of
Consolidated Leverage Ratio shall be deemed to be a reference to
"Unrestricted Subsidiary Advances."
"Continuing Director" of any Person means, as of the date of
determination, any Person who (i) was a member of the Board of Directors of
such Person on the date of this Indenture or (ii) was nominated for
election or elected to the Board of Directors of such Person with the
affirmative vote of a majority of the Continuing Directors of such Person
who were members of such Board of Directors at the time of such nomination
or election.
"Corporate Trust Office of the Trustee" shall be at the address
of the Trustee specified in Section 11.02 or such other address as to which
the Trustee may give notice to the Issuers.
"Currency Agreement" means in respect of a Person any foreign
exchange contract, currency swap agreement or other similar agreement as to
which such Person is a party or a beneficiary.
"Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.
"Depository" means The Depository Trust Company, its nominees and
successors.
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"Disqualified Stock" means any Capital Stock which, by its terms
(or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an
event which would constitute a Change of Control), (i) matures (excluding
any maturity as the result of an optional redemption by the issuer thereof)
or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, or is redeemable at the option of the holder thereof, in whole
or in part, on or prior to the final Stated Maturity of the Securities, or
(ii) is convertible into or exchangeable (unless at the sole option of the
issuer thereof) for (a) debt securities or (b) any Capital Stock referred
to in (i) above, in each case at any time prior to the final Stated
Maturity of the Securities.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder or any successor statute or statutes thereto.
"Exchange Offer" means the registration by the Issuers and the
Subsidiary Guarantors under the Securities Act pursuant to a registration
statement of the offer by the Issuers and the Subsidiary Guarantors to each
Securityholder of the Initial Securities to exchange all the Initial
Securities held by such Securityholder for the Exchange Securities in an
aggregate principal amount equal to the aggregate principal amount of the
Initial Securities held by such Securityholder, all in accordance with the
terms and conditions of the Registration Rights Agreement.
"Exchange Securities" has the meaning set forth in the preamble
to this Indenture.
"Existing Indebtedness" means Indebtedness of either of the
Issuers or their respective Restricted Subsidiaries in existence on the
Issue Date, plus interest accrued thereon, after application of the net
proceeds of the Securities as described in the Offering Memorandum.
"fair market value" means, with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market
transaction, for cash, between a willing seller and a willing and able
buyer, neither of whom is under undue pressure or compulsion to complete
the transaction. Fair market value shall be determined by the Board of
Directors of BMC acting reasonably and in good faith and shall be evidenced
by a Board Resolution of the Board of Directors of BMC delivered to the
Trustee.
"GAAP" means generally accepted accounting principles in the
United States of America as in effect as of the date of this Indenture,
including those set forth in the
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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 approved by a significant segment of the
accounting profession. All ratios and computations based on GAAP contained
in this Indenture shall be computed in conformity with GAAP.
"Group" means any "group" for purposes of Section 13(d) of the
Exchange Act.
"Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any other
Person and any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other Person (whether
arising by virtue of partnership arrangements, or by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or
(ii) entered into for purposes of assuring in any other manner the obligee
of such Indebtedness of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part); provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit in the ordinary course of business. The term "Guarantee" used as a
verb has a corresponding meaning.
"Incur" means issue, assume, guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such person becomes a Restricted Subsidiary
(whether by merger, consolidation, acquisition or otherwise) shall be
deemed to be Incurred by such Restricted Subsidiary at the time it becomes
a Restricted Subsidiary.
"Indebtedness" means, with respect to any Person on any date of
determination (without duplication), (i) the principal of and premium (if
any) in respect of indebtedness of such Person for borrowed money, (ii) the
principal of and premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person in respect of letters of credit or other
similar instruments (including reimbursement obligations with respect
thereto) (other than obligations with respect to letters of credit securing
obligations (other than obligations described in clauses (i), (ii) and (v))
entered into in the ordinary course of business of such Person to the
extent that such letters of credit are not drawn upon or, if and to the
extent drawn upon, such drawing is reimbursed no later than the third
Business Day following receipt by such Person of a demand for reimbursement
following payment on the letter of credit), (iv) all obligations of such
Person to pay the deferred and unpaid purchase price of property or
services (except (x) trade payables and accrued expenses (including accrued
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management fees under the Administrative Management Agreements) incurred in
the ordinary course of business and (y) contingent or "earnout" payment
obligations in respect of any Permitted Business acquired by an Issuer or
any Restricted Subsidiary), which purchase price is due more than six
months after the date of placing such property in service or taking
delivery and title thereto or the completion of such services, (v) all
Capitalized Lease Obligations and all Attributable Indebtedness of such
Person, (vi) all Indebtedness of other Persons secured by a Lien on any
asset of such Person, whether or not such Indebtedness is assumed by such
Person, (vii) all Indebtedness of other Persons to the extent Guaranteed by
such Person, (viii) the amount of all obligations of such Person with
respect to the redemption, repayment or other repurchase of any
Disqualified Stock or, with respect to any Restricted Subsidiary of an
Issuer, any Preferred Stock of such Restricted Subsidiary to the extent
such obligation arises on or before the final Stated Maturity of the
Securities (but excluding, in each case, accrued dividends) with the amount
of Indebtedness represented by such Disqualified Stock or Preferred Stock,
as the case may be, being equal to the greater of its voluntary or
involuntary liquidation preference and its maximum fixed repurchase price;
provided, however, that, for purposes hereof the "maximum fixed repurchase
price" of any Disqualified Stock or Preferred Stock, as the case may be,
which does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Disqualified Stock or Preferred Stock, as
the case may be, as if such Disqualified Stock or Preferred Stock, as the
case may be, were purchased on any date on which Indebtedness shall be
required to be determined pursuant to this Indenture, and if such price is
based on the fair market value of such Disqualified Stock or Preferred
Stock, as the case may be, such fair market value shall be determined in
good faith by the Board of Directors of BMC and (ix) to the extent not
otherwise included in this definition, obligations under Currency
Agreements and Interest Rate Agreements. Unless specifically set forth
above, the amount of Indebtedness of any Person at any date shall be the
outstanding principal amount of all unconditional obligations as described
above, as such amount would be reflected on a balance sheet prepared in
accordance with GAAP, and the maximum liability of such Person, upon the
occurrence of the contingency giving rise to the obligation, of any
contingent obligations described above at such date. Notwithstanding the
foregoing, Indebtedness shall not include any accrued obligations under
Performance Compensation Agreements.
"Indenture" means this Indenture, as amended or supplemented from
time to time.
"Initial Purchaser" means NatWest Capital Markets Limited.
"Initial Securities" has the meaning set forth in the preamble to
this Indenture.
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"Institutional Accredited Investor" means an institution that is
an "accredited investor" as that term is defined in Rule 501(a)(1), (2),
(3) or (7) under the Securities Act.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Interest Rate Agreement" means with respect to any Person any
interest rate protection agreement, interest rate future agreement,
interest rate option agreement, interest rate swap agreement, interest rate
cap agreement, interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to which such Person
is party or a beneficiary.
"Interest Record Date" means the record dates specified in the
Securities, whether or not a Legal Holiday.
"Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business
that are recorded as accounts payable on the balance sheet of such Person)
or other extension of credit (including by way of Guarantee or similar
arrangement, but excluding any debt or extension of credit represented by a
bank deposit other than a time deposit) or capital contribution to (by
means of any transfer of cash or other property to others or any payment
for property or services for the account or use of others), or any purchase
or acquisition of Capital Stock, Indebtedness or other similar instruments
issued by such Person. For purposes of Section 4.07, (i) "Investment"
shall include the portion (proportionate to an Issuer's equity interest in
a Restricted Subsidiary to be designated as an Unrestricted Subsidiary) of
the fair market value of the net assets of such Restricted Subsidiary of
such Issuer at the time that such Restricted Subsidiary is designated an
Unrestricted Subsidiary; provided, however, that upon a redesignation of
such Subsidiary as a Restricted Subsidiary, such Issuer shall be deemed to
continue to have a permanent "Investment" in an Unrestricted Subsidiary in
an amount (if positive) equal to (x) such Issuer's "Investment" in such
Subsidiary at the time of such redesignation less (y) the portion
(proportionate to such Issuer's equity interest in such Subsidiary) of the
fair market value of the net assets of such Subsidiary at the time that
such Subsidiary is so redesignated a Restricted Subsidiary; and (ii) any
property transferred to or from an Unrestricted Subsidiary shall be valued
at its fair market value at the time of such transfer, in each case as
determined in good faith by the Board of Directors of BMC and evidenced by
a Board Resolution delivered to the Trustee.
"Issue Date" means the date on which the Initial Securities are
originally issued.
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"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind (including any conditional sale or
other title retention agreement or lease in the nature thereof).
"Managed Affiliate" means a Person at least 90% of the Capital
Stock of which is owned, directly or indirectly, by Alan R. Brill;
provided, however, that (i) such Person is engaged solely in a Permitted
Business, (ii) such Person is a party to a Managed Affiliate Management
Agreement and (iii) except in the case of TSB III, LLC and TSB IV, LLC, the
business of such Person is acquired by Alan R. Brill, directly or
indirectly, after the Issue Date.
"Managed Affiliate Note" means any promissory notes of a Managed
Affiliate, issued to an Issuer or a Restricted Subsidiary, each of which
promissory notes shall (i) mature on a day no later than the third
anniversary of the date of issuance thereof, (ii) become immediately due
and payable upon (w) the default by such Managed Affiliate under the
Managed Affiliate Management Agreement to which it is party or (x) the
issuer thereunder ceasing to constitute a Managed Affiliate or (y) the
acceleration of the Securities or (z) the bankruptcy, insolvency or
reorganization of an Issuer and (iii) bear interest payable in cash no less
often than semi-annually at a rate per annum no less than the rate of
interest payable on the Securities. Each Managed Affiliate Note shall
provide that the payment of any management fee by the relevant Manager
Affiliate pursuant to any management agreement (other than a Managed
Affiliate Management Agreement) with an Affiliate of an Issuer or such
Managed Affiliate, shall be subordinated to the obligations of the relevant
Managed Affiliate under such Managed Affiliate Note to the same extent as
the obligations of the Issuers and the Subsidiary Guarantors under the
Administrative Management Agreements are subordinated to the obligations of
such Persons under the Securities and the Subsidiary Guarantees.
"Managed Affiliate Management Agreement" means any agreement
between a Restricted Subsidiary, on the one hand, and a Managed Affiliate,
on the other hand, providing for the payment by such Managed Affiliate to
one or more Restricted Subsidiaries of a cash management fee payable at
least semi annually equal to a specified percentage of the excess cash flow
of such Managed Affiliate as defined in such agreement.
"Maturity Date" means December 15, 2007.
"Media" has the meaning set forth in the preamble to this
Indenture until a Successor replaces such Person in accordance with Article
5 hereof and thereafter means such Successor.
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"Media Cashflow" for any period means for any Person an amount
equal to Consolidated EBITDA for such period plus interest income received
in respect of the Managed Affiliate Notes during such period and the
following to the extent deducted in calculating such Consolidated EBITDA
(i) management fees charged by BMCLP under the Administrative Management
Agreements, (ii) expenses accruing under Performance Compensation
Agreements , (iii) consulting fees payable in connection with acquisitions
and (iv) fees paid under time brokerage agreements.
"Member" means any Person who holds a membership interest in BMC.
"Missouri Properties" means the radio stations KLIK-AM, KTXY-FM
and KATI-FM serving Jefferson City, MO.
"Moody's" means Moody's Investors Service, Inc., or its
successors.
"Net Available Cash" from an Asset Disposition means cash
payments received (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or
otherwise, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to the properties or assets
subject to such Asset Disposition) therefrom in each case net of (i) all
legal, title and recording tax expenses, commissions and other fees and
expenses incurred, and all Federal, state, foreign and local taxes required
to be paid or accrued as a liability under GAAP, as a consequence of such
Asset Disposition, (ii) all payments made on any Indebtedness which is
secured by any assets subject to such Asset Disposition, in accordance with
the terms of any Lien upon such assets, or which must by its terms, or in
order to obtain a necessary consent to such Asset Disposition or by
applicable law, be repaid out of the proceeds from such Asset Disposition,
(iii) all distributions and other payments required to be made to any
Person owning a beneficial interest in assets subject to sale or minority
interest holders in Subsidiaries or joint ventures as a result of such
Asset Disposition, (iv) the deduction of appropriate amounts to be provided
by the seller as a reserve, in accordance with GAAP, against any
liabilities associated with the assets disposed of in such Asset
Disposition and retained by an Issuer or any Restricted Subsidiary of an
Issuer after such Asset Disposition, provided, however, that upon any
reduction in such reserves (other than to the extent resulting from
payments of the respective reserved liabilities), Net Available Cash shall
be increased by the amount of such reduction to reserves, and (v) any
portion of the purchase price from an Asset Disposition placed in escrow
(whether as a reserve for adjustment of the purchase price, for
satisfaction of indemnities in respect of such Asset Disposition or
otherwise in connection with such Asset Disposition); provided, however,
that upon the
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termination of such escrow, Net Available Cash shall be increased by any
portion of funds therein released to an Issuer or any Restricted Subsidiary.
"Net Cash Proceeds," with respect to any issuance or sale of
Capital Stock, means the cash proceeds of such issuance or sale net of
attorneys' fees, accountants' fees, underwriters' or placement agents'
fees, discounts or commissions and brokerage, consultant and other fees or
expenses actually incurred in connection with such issuance or sale and net
of taxes paid or payable as a result of such issuance or sale.
"Non-Recourse Debt" means Indebtedness (i) as to which neither an
Issuer nor any Restricted Subsidiary (a) provides any guarantee or credit
support of any kind (including any undertaking, guarantee, indemnity,
agreement or instrument that would constitute Indebtedness) or (b) is
directly or indirectly liable (as a guarantor, general partner or
otherwise) and (ii) no default with respect to which (including any rights
that the holders thereof 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 of an Issuer or any Restricted
Subsidiary to declare a default under such other Indebtedness or cause the
payment thereof to be accelerated or payable prior to its Stated Maturity.
"Non-U.S. Person" means a Person who is not a U.S. person, as
defined in Regulation S of the Securities Act.
"Obligations" means any principal, premium, interest, penalties,
fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Indebtedness.
"Offering Memorandum" means the Offering Memorandum dated
December 23, 1997, pursuant to which the Initial Securities were offered,
and any supplements thereto.
"Officer" means the Chairman of the Board, the Vice-Chairman of
the Board, the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice-President, the Treasurer or the Secretary of an Issuer
(or, in the case of BMC, so long as it is a limited liability company or as
partnership, of Brill Media Management, Inc., which is the manager of BMC).
"Officers' Certificate" means a certificate signed by two
Officers of an Issuer at least one of whom shall be the principal
executive, financial or accounting officer of such Issuer.
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"Opinion of Counsel" means a written opinion from legal counsel
who is acceptable to the Trustee, and which complies, if applicable, with
the provisions of Section 11.04 hereof. The counsel may be an employee of
or counsel to an Issuer or the Trustee.
"Performance Compensation Agreement" means any agreements between
an Issuer or any Restricted Subsidiary and any executive officer of such
Subsidiary pursuant to which such Subsidiary provides deferred compensation
to such officer by crediting amounts (as determined under a formula set
forth in such agreement) to an identified account for the benefit of such
executive officer. Performance Compensation Agreements entered into after
the Issue Date shall provide that no payment shall be required to be made
by an Issuer or any Restricted Subsidiary thereunder if such payment is not
permitted under this Indenture and that the Issuers' and the Restricted
Subsidiaries' obligations to make payments thereunder shall be subordinated
to (i) the obligations of the Issuers and the Subsidiary Guarantors under
the Securities and the Subsidiary Guarantees and (ii) the obligations of
the Issuers and the Subsidiary Guarantors under the Appreciation Notes and
the Guarantees thereof.
"Permitted Business" means any business which is the same as or
related, ancillary or complementary to any of the businesses of the Issuers
and their Restricted Subsidiaries on the date of this Indenture, as
reasonably determined by the Board of Directors of BMC.
"Permitted Investment" means an Investment by an Issuer or any of
its Restricted Subsidiaries in (i) a Wholly-Owned Subsidiary of such
Issuer; provided, however, that the primary business of such Wholly-Owned
Subsidiary is a Permitted Business; (ii) another Person if as a result of
such Investment such other Person becomes a Wholly-Owned Subsidiary of such
Issuer or is merged or consolidated with or into, or transfers or conveys
all or substantially all its assets to, such Issuer or a Wholly-Owned
Subsidiary of such Issuer; provided, however, that in each case such
Person's primary business is a Permitted Business; (iii) Temporary Cash
Investments; (iv) receivables owing to such Issuer or any of its Restricted
Subsidiaries, created or acquired in the ordinary course of business and
payable or dischargeable in accordance with customary trade terms; (v)
payroll, travel and similar advances to cover matters that are expected at
the time of such advances ultimately to be treated as expenses for
accounting purposes and that are made in the ordinary course of business;
(vi) loans and advances to employees made in the ordinary course of
business consistent with past practices of such Issuer or such Restricted
Subsidiary in an aggregate amount outstanding at any one time not to exceed
$250,000 to any one employee or $1.0 million in the aggregate; (vii) stock,
obligations or securities received in settlement of debts created in the
ordinary course of business and owing to such Issuer or any of its
Restricted Subsidiaries or in satisfaction of judgments or claims; (viii)
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a Person engaged in a Permitted Business or a loan or advance by such Issuer
the proceeds of which are used solely to make an investment in a Person
engaged in a Permitted Business or a Guarantee by such Issuer of
Indebtedness of any Person in which such Investment has been made provided,
however, that no Permitted Investments may be made pursuant to this clause
(viii) to the extent the amount thereof would, when taken together with all
other Permitted Investments made pursuant to this clause (viii), exceed
$5.0 million in the aggregate (plus, to the extent not previously
reinvested, any return of capital realized on Permitted Investments made
pursuant to this clause (viii), or any release or other cancellation of any
Guarantee constituting such Permitted Investment); (ix) Persons to the
extent such Investment is received by such Issuer or any Restricted
Subsidiary as consideration for asset dispositions effected in compliance
with Section 4.10; (x) prepayments and other credits to suppliers made in
the ordinary course of business consistent with the past practices of such
Issuer and its Restricted Subsidiaries, (xi) the Managed Affiliate Notes;
provided, however, that the aggregate principal amount thereof (including
any Managed Affiliate Notes outstanding on the Issue Date) does not exceed
$20 million at any time outstanding, (xii) loans to Unrestricted
Subsidiaries; provided, however, that (1) no Default or Event of Default
shall have occurred and be continuing at the time of the Incurrence thereof
by the relevant Unrestricted Subsidiary or would occur as a consequence
thereof and the Consolidated Unrestricted Subsidiary Advance Leverage Ratio
would not be greater than 2.00 to 1.00, (2) such advances are senior to all
other Indebtedness of the relevant Unrestricted Subsidiary other than
Capitalized Lease Obligations, mortgage financing or purchase money
obligations outstanding on the date on which such Unrestricted Subsidiary
was acquired, directly or indirectly, by such Issuer or the date such
Subsidiary was designated an Unrestricted Subsidiary (other than
Indebtedness Incurred in anticipation of, or to provide all or any portion
of the funds or credit support utilized to consummate the transaction or
series of related transactions pursuant to which such Unrestricted
Subsidiary became a Subsidiary or was otherwise acquired by such Issuer or
was designated as an Unrestricted Subsidiary) and (3) such Unrestricted
Subsidiary is engaged primarily in a Permitted Business; and (xiii)
Investments in connection with pledges, deposits, payments or performance
bonds made or given in the ordinary course of business in connection with
or to secure statutory, regulatory or similar obligations, including
obligations under health, safety or environmental obligations.
"Permitted Liens" means: (i) pledges or deposits by an Issuer or
any Restricted Subsidiary under workmen's compensation laws, unemployment
insurance laws, other types of social security benefits or similar
legislation, or good faith deposits in connection with bids, tenders or
contracts (other than for the payment of Indebtedness) or leases to which
an Issuer or any Restricted Subsidiary is a party, or deposits to secure
public or statutory obligations or deposits of cash or United States
government bonds to secure
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surety or appeal bonds to which an Issuer or any Restricted Subsidiary is a
party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred by an Issuer or any Restricted
Subsidiary in the ordinary course of business consistent with past practice;
(ii) Liens imposed by law, such as carriers', warehousemen's and mechanics'
Liens, in each case for sums not yet due from an Issuer or any Restricted
Subsidiary or being contested in good faith by appropriate proceedings by an
Issuer or any Restricted Subsidiary, as the case may be, or other Liens
arising out of judgments or awards against an Issuer or any Restricted
Subsidiary with respect to which such Issuer or such Restricted Subsidiary,
as the case may be, will then be prosecuting an appeal or other proceedings
for review; (iii) Liens for property taxes or other taxes, assessments or
governmental charges of an Issuer or any Restricted Subsidiary not yet due or
payable or subject to penalties for nonpayment or which are being contested
by such Issuer or such Restricted Subsidiary, as the case may be, in good
faith by appropriate proceedings; (iv) Liens in favor of issuers of
performance bonds and surety bonds issued pursuant to clause (b)(v) of
Section 4.09; (v) survey exceptions, encumbrances, easements or, reservations
of, or rights of others for, licenses, rights-of-way, sewers, electric lines,
telegraph and telephone lines and other similar purposes or zoning or other
restrictions as to the use of real property of an Issuer or any Restricted
Subsidiary incidental to the ordinary course of conduct of the business of
such Issuer or such Restricted Subsidiary or as to the ownership of
properties of such Issuer or any Restricted Subsidiary, which, in either
case, were not incurred in connection with Indebtedness and which do not in
the aggregate materially adversely affect the value of said properties or
materially impair their use in the operation of the business of such Issuer
or any Restricted Subsidiary; (vi) Liens to secure Indebtedness permitted
under clause (b)(i) of Section 4.09; (vii) Liens outstanding immediately
after the Issue Date as set forth on Schedule II to this Indenture (and not
otherwise permitted by clause (vi)); (viii) Liens on property, assets or
shares of stock of any Restricted Subsidiary at the time such Restricted
Subsidiary became a Subsidiary of an Issuer; provided, however, that (A) if
any such Lien has been Incurred in anticipation of such transaction, such
property, assets or shares of stock subject to such Lien will have a fair
market value at the date of the acquisition thereof not in excess of the
lesser of (1) the aggregate purchase price paid or owed by such Issuer in
connection with the acquisition of such Restricted Subsidiary and (2) the
fair market value of all property and assets of such Restricted Subsidiary
and (B) any such Lien will not extend to any other assets owned by such
Issuer or any Restricted Subsidiary; (ix) Liens on property or assets at the
time an Issuer or any Restricted Subsidiary acquired such assets, including
any acquisition by means of a merger or consolidation with or into such
Issuer or such Restricted Subsidiary; provided, however, that (A) if any such
Lien is Incurred in anticipation of such transaction, such property or assets
subject to such Lien will have a fair market value at the date of the
acquisition thereof not in excess of the lesser of the aggregate purchase
price paid or owed by such Issuer or such Restricted Subsidiary in connection
with the acquisition thereof and
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of any other property and assets acquired simultaneously therewith and (2)
the fair market value of all such property and assets acquired by such Issuer
or such Restricted Subsidiary and (B) any such Lien will not extend to any
other property or assets owned by such Issuer or any Restricted Subsidiary;
(x) Liens securing Indebtedness or other obligations of a Restricted
Subsidiary owing to an Issuer or a Wholly Owned Subsidiary; (xi) Liens to
secure any extension, renewal, refinancing, replacement or refunding (or
successive extensions, renewals, refinancings, replacements or refundings),
in whole or in part, of any Indebtedness secured by Liens referred to in any
of clauses (vii), (viii) and (ix); provided, however, that any such Lien will
be limited to all or part of the same property or assets that secured the
original Lien (plus improvements on such property) and the aggregate
principal amount of Indebtedness that is secured by such Lien will not be
increased to an amount greater than the sum of (A) the outstanding principal
amount, or, if greater, the committed amount, of the Indebtedness described
under clauses (vii), (viii) and (ix) at the time the original Lien became a
Permitted Lien under this Indenture and (B) an amount necessary to pay any
premiums, fees and other expenses Incurred by such Issuer in connection with
such refinancing, refunding, extension, renewal or replacement; (xii) Liens
on property or assets of an Issuer securing Interest Rate Agreements and
Currency Agreements permitted under Section 4.09, so long as the related
Indebtedness is secured by a Lien on the same property securing the relevant
Interest Rate Agreement or Currency Agreement; (xiii) Liens on property or
assets of an Issuer or any Restricted Subsidiary securing Indebtedness under
Sale/Leaseback Transactions permitted under Section 4.16; provided, however,
that (A) the amount of Indebtedness Incurred in any specific case does not,
at the time such Indebtedness is Incurred, exceed the lesser of the cost or
fair market value of the property or asset subject to such Sale/Leaseback
Transaction, (B) such Lien will attach to such property or asset upon
commencement of such Sale/Leaseback Transaction and (C) no property or asset
of such Issuer or any Restricted Subsidiary (other than the property subject
to such Sale/Leaseback Transaction) are subject to any Lien securing such
Indebtedness; and (xiv) Liens securing Indebtedness permitted to be secured
pursuant to the proviso to clause (ii) of paragraph (a) of Section 4.09.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock of any
corporation, means Capital Stock of any class or classes (however
designated) which is preferred as to the payment of dividends, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such corporation, over shares of Capital Stock of any other
class of such corporation.
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"Public Equity Offering" means underwritten public offerings or
quotations or placements of Capital Stock of an Issuer (other than
Disqualified Stock) which has been registered with the Commission under the
Securities Act.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Refinancing Indebtedness" means Indebtedness that refunds,
refinances, replaces, renews, repays or extends (including pursuant to any
defeasance or discharge mechanism) (collectively, "refinances," and
"refinanced" shall have a correlative meaning) any Indebtedness existing on
the date of this Indenture or Incurred in compliance with this Indenture
(including Indebtedness of an Issuer that refinances Indebtedness of any
Restricted Subsidiary and Indebtedness of any Restricted Subsidiary that
refinances Indebtedness of another Restricted Subsidiary) including
Indebtedness that refinances Refinancing Indebtedness; provided, however;
that (i) the Refinancing Indebtedness has a Stated Maturity no earlier than
the earlier of (A) the first anniversary of the Stated Maturity of the
Securities and (B) Stated Maturity of the Indebtedness being refinanced,
(ii) the Refinancing Indebtedness has an Average Life at the time such
Refinancing Indebtedness is Incurred that is equal to or greater than the
lesser of (A) the Average Life of the Securities and (B) the Average Life
of the Indebtedness being refinanced, and (iii) the Refinancing
Indebtedness is in an aggregate principal amount (or if issued with
original issue discount, an aggregate issue price) that is equal to (or
101% of, in the case of a refinancing of the Securities in connection with
a Change of Control) or less than the sum of the aggregate principal amount
(or if issued with original issue discount, the aggregate accreted value)
then outstanding of the Indebtedness being refinanced (plus the amount of
any premium required to be paid in connection therewith and reasonable fees
and expenses therewith); provided, however, that if the Indebtedness being
refinanced is Existing Indebtedness which was a purchase money obligation,
mortgage or Capital Lease, the Refinancing Indebtedness is an aggregate
principal amount that is equal to or less than the lesser of the original
principal amount of such Existing Indebtedness and the fair market value
(determined on the date of such Refinancing Indebtedness is Incurred) of
the personal property securing such Existing Indebtedness or the personal
property of similar nature and quality replacing such personal property;
provided, further, that Refinancing Indebtedness shall not include
Indebtedness of a Subsidiary which refinances Indebtedness of an Issuer.
"Registration Rights Agreement" means the Registration Rights
Agreement dated December 30, 1997 among the Issuers, the Subsidiary
Guarantors and the Initial Purchaser for the benefit of themselves and the
Securityholders, as the same may be amended or modified from time to time
in accordance with the terms thereof.
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"Related Brill Party" means (A) the spouse or immediate family
member of Alan R. Brill or (B) any trust, corporation, partnership or other
entity, the beneficiaries, shareholders, partners, members, owners or
Persons beneficially holding an 80% or more controlling interest of which
consist of Alan R. Brill and/or such other Persons referred to in the
immediately preceding clause (A).
"Responsible Officer" when used with respect to the Trustee,
means any officer within the corporate trust department of the Trustee (or
any successor group of the Trustee) with direct responsibility for the
administration of this Indenture 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.
"Restricted Investment" means any Investment other than a
Permitted Investment.
"Restricted Security" has the meaning assigned to such term in
Rule 144(a)(3) under the Securities Act.
"Restricted Subsidiary" means any Subsidiary of the Issuer other
than an Unrestricted Subsidiary.
"S&P" means Standard & Poor's Ratings Services, a division of The
McGraw-Hill Companies, Inc, or its successors.
"Sale/Leaseback Transaction" means an arrangement relating to
property now owned or hereafter acquired whereby an Issuer or a Restricted
Subsidiary transfers such property to a Person and such Issuer or a
Subsidiary of such Issuer leases it from such Person.
"Securities" means the Initial Securities and the Exchange
Securities treated as a single class of securities, as amended or
supplemented from time to time in accordance with the terms hereof, that
are issued pursuant to this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.
"Securityholder" or "Holder" means a registered holder of one or
more Securities.
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"Senior Indebtedness" means all Indebtedness of an Issuer and its
Restricted Subsidiaries other than Subordinated Obligations.
"Senior Secured Indebtedness" means Indebtedness of an Issuer and
its Restricted Subsidiaries which is secured by a Lien; provided, however,
that for purposes of the Consolidated Senior Secured Leverage Ratio, the
full amount of Senior Secured Indebtedness permitted to be outstanding
under clause (i) of paragraph (b) of Section 4.09 shall be deemed to be
outstanding.
"Significant Subsidiary" means any Restricted Subsidiary that
would be a "Significant Subsidiary" of an Issuer within the meaning of Rule
1-02 under Regulation S-X promulgated by the SEC.
"Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision.
"Subordinated Obligation" means any Indebtedness of an Issuer or
a Restricted Subsidiary (whether outstanding on the Issue Date or
thereafter Incurred) which is subordinate or junior in right of payment to
the Securities and the Subsidiary Guarantees pursuant to a written
agreement.
"Subsidiary" of any Person means any corporation, association,
partnership or other business entity of which more than 50% of the total
voting power of shares of Capital Stock or other interests (including
partnership interests) entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees
thereof is at the time owned or controlled, directly or indirectly, by (i)
such Person, (ii) such Person and one or more Subsidiaries of such Person
or (iii) one or more Subsidiaries of such Person. Unless otherwise
specified herein, each reference to a Subsidiary shall refer to a
Subsidiary of an Issuer.
"Subsidiary Guarantee" means the Guarantee of the Securities by a
Subsidiary Guarantor.
"Subsidiary Guarantor" means each Subsidiary of an Issuer on the
Issue Date and each newly organized or acquired Restricted Subsidiary that
executes and delivers a supplemental indenture pursuant to Section 10.07.
"Tax Allowance Amount" means, with respect to any Member, for any
calendar quarter, (i) forty percent (40%) of the excess of (a) the
estimated taxable income
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allocable to such Member arising from its ownership of an interest in BMC for
the fiscal year through such calendar quarter over (b) any losses of BMC for
prior fiscal years and such fiscal year that are allocable to such Member
that were not previously utilized in the calculation of Tax Allowance Amounts
for any period minus (ii) prior distributions of Tax Allowance Amounts for
such fiscal year, all as determined by the Accountants in good faith. The
amount so determined by the Accountants shall be the Tax Allowance Amount for
such period and shall be final and binding on all Members.
"Temporary Cash Investments" means any of the following: (i) any
Investment in direct obligations of the United States of America or any
agency thereof or obligations Guaranteed by the United States of America or
any agency thereof, (ii) Investments in time deposit accounts, certificates
of deposit and money market deposits maturing within 365 days of the date
of acquisition thereof issued by a bank or trust company which is organized
under the laws of the United States of America, any state thereof or any
foreign country recognized by the United States of America having capital
surplus and undivided profits aggregating in excess of $250 million (or the
foreign currency equivalent thereof) and whose long-term debt, or whose
parent holding company's long-term debt, is rated "A" (or such similar
equivalent rating) or higher by at least one nationally recognized
statistical rating organization (as defined in Rule 436 under the
Securities Act), (iii) repurchase obligations with a term of not more than
30 days for underlying securities of the types described in clause (i)
above entered into with a bank meeting the qualifications described in
clause (ii) above, (iv) Investments in commercial paper, maturing not more
than 365 days after the date of acquisition, issued by a corporation (other
than an Affiliate of the Issuer) organized and in existence under the laws
of the United States of America or any foreign country recognized by the
United States of America with a rating at the time as of which any
investment therein is made of "P-1" (or higher) according to Moody's or
"A-1" (or higher) according to S&P, (v) Investments in securities with
maturities of six months or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States of America, or by any political subdivision or taxing authority
thereof, and rated at least "A" by S&P or "A" by Moody's and (vi)
Investments in mutual funds whose investment guidelines restrict such
funds' investments to those satisfying the provisions of clauses (i)
through (v) above.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date on which this Indenture is
qualified under the TIA, except as provided in Section 9.03 hereof;
provided, however, that, in the event the Trust Indenture Act of 1939 is
amended after such date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
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"Transaction Date" means, with respect to the Incurrence of any
Indebtedness by an Issuer or any of its Subsidiaries, the date such
Indebtedness is to be Incurred.
"Trustee" means United States Trust Company of New York, a
banking corporation organized and existing under the laws of the State of
New York, until a successor replaces it in accordance with Article 7 and
thereafter means the successor serving hereunder.
"Unrestricted Subsidiary" means (i) any Subsidiary of an Issuer
that at the time of determination shall be designated an Unrestricted
Subsidiary by the Board of Directors of such Issuer in the manner provided
below and (ii) any Subsidiary of an Unrestricted Subsidiary. The Board of
Directors of an Issuer may designate any Subsidiary of such Issuer
(including any newly acquired or newly formed Subsidiary of such Issuer) to
be an Unrestricted Subsidiary unless such Subsidiary or any of its
Subsidiaries owns any Capital Stock or Indebtedness of, or owns or holds
any Lien on any property of, an Issuer or any Restricted Subsidiary of an
Issuer that is not a Subsidiary of the Subsidiary to be so designated;
provided, however, that each Subsidiary to be so designated and each of its
Subsidiaries has not at the time of such designation, and does not
thereafter create, Incur, issue, assume, Guarantee or otherwise becomes
liable with respect to any Indebtedness other than Non-Recourse Debt and
either (A) the Subsidiary to be so designated has total consolidated assets
of $10,000 or less or (B) if such Subsidiary has consolidated assets
greater than $10,000, then such designation would be permitted under
Section 4.07. The Board of Directors of an Issuer may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary subject to the
limitations contained in Section 4.17.
"Unrestricted Subsidiary Advance" means loans made by an Issuer
and its Restricted Subsidiaries to Unrestricted Subsidiaries.
"U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof)
for the payment of which the full faith and credit of the United States of
America is pledged and which are not callable or redeemable at the issuer's
option.
"Wholly-Owned Subsidiary" means a Restricted Subsidiary of an
Issuer, at least 95% of the Capital Stock of which (other than directors'
qualifying shares) is owned by such Issuer or another Wholly-Owned
Subsidiary.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"actual knowledge". . . . . . . . . . . . . . . . . . . . . . . . . . .7.02
"Affiliate Transaction" . . . . . . . . . . . . . . . . . . . . . . . .4.11
"Agent Members" . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.16
"Asset Disposition Offer" . . . . . . . . . . . . . . . . . . . . . . .3.09
"Asset Swap". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.10
"Bankruptcy Law". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Change of Control Purchase Price". . . . . . . . . . . . . . . . . . .4.14
"covenant defeasance option". . . . . . . . . . . . . . . . . . . . . .8.01
"Custodian" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Declaration" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02
"Default Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . .6.02
"Designation" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17
"Designated Amount" . . . . . . . . . . . . . . . . . . . . . . . . . .4.17
"Event of Default". . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Excess Proceeds" . . . . . . . . . . . . . . . . . . . . . . . . . . .4.10
"Funding Guarantor" . . . . . . . . . . . . . . . . . . . . . . . . . 10.05
"Global Note" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.01
"Guaranteed Obligations". . . . . . . . . . . . . . . . . . . . . . . 10.01
"judgment default provision". . . . . . . . . . . . . . . . . . . . . .6.01
"legal defeasance option" . . . . . . . . . . . . . . . . . . . . . . .8.01
"Legal Holiday" . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.07
"Notice of Default" . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Offer Amount". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Offer Period". . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Offshore Physical Securities". . . . . . . . . . . . . . . . . . . . .2.01
"Paying Agent". . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Payment Default" . . . . . . . . . . . . . . . . . . . . . . . . . . .6.01
"Physical Securities" . . . . . . . . . . . . . . . . . . . . . . . . .2.01
"Private Placement Legend". . . . . . . . . . . . . . . . . . . . . . .2.15
"Purchase Date" . . . . . . . . . . . . . . . . . . . . . . . . . . . .3.09
"Registrar" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.03
"Restricted Payment". . . . . . . . . . . . . . . . . . . . . . . . . .4.07
"Revocation". . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.17
"Successor Company" . . . . . . . . . . . . . . . . . . . . . . . . . .5.01
"U.S. Physical Securities". . . . . . . . . . . . . . . . . . . . . . .2.01
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SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this
Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"indenture securities" means the Securities and the Subsidiary
Guarantees;
"indenture security holder" means a Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the Securities means the Issuer, the Guarantors and
any successor obligor upon the Securities.
All other terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by Commission
rule under the TIA have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and in the plural
include the singular; and
(v) provisions apply to successive events and transactions.
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ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Initial Securities, the notation thereon relating to the
Subsidiary Guarantees and the Trustee's certificate of authentication
thereon shall be substantially in the form of Exhibit A hereto. The
Exchange Securities, the notation thereon relating to the Subsidiary
Guarantees and the Trustee's certificate of authentication thereon shall be
substantially in the form of Exhibit B hereto. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
Depository rule or usage. The Issuers, the Subsidiary Guarantors and the
Trustee shall approve the form of the Securities and any notation, legend
or endorsement on them. Each Security shall be dated the date of its
authentication.
The terms and provisions contained in the forms of the Securities
and the Subsidiary Guarantees, annexed hereto as Exhibits A and B, shall
constitute, and are hereby expressly made, a part of this Indenture and, to
the extent applicable, the Issuers, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree
to such terms and provisions and to be bound thereby.
Securities offered and sold in reliance on Rule 144A shall be
issued initially in the form of one or more permanent global notes in
registered form, in substantially the form set forth in Exhibit A (the
"Global Note"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Issuers and authenticated by the Trustee
as hereinafter provided. The aggregate principal amount of the Global Note
may from time to time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository, as hereinafter
provided.
Securities offered and sold in offshore transactions in reliance
on Regulation S shall be issued in the form of permanent certificated
Securities in registered form in substantially the form set forth in
Exhibit A (the "Offshore Physical Securities"). Securities offered and
sold in reliance on any other exemption from registration under the
Securities Act other than as described in the preceding paragraph shall be
issued, and Securities offered and sold in reliance on Rule 144A may be
issued, in the form of permanent certificated Securities in registered
form, in substantially the form set forth in Exhibit A (the "U.S. Physical
Securities"). The Offshore Physical Securities and the U.S. Physical
Securities are sometimes collectively herein referred to as the "Physical
Securities".
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers of each Issuer (each of whom shall, in each
case, have been duly authorized by all requisite corporate actions) shall
sign the Securities for such Issuer by manual or facsimile signature. If
an Officer whose signature is on a Security no longer holds that office at
the time the Security is authenticated, the Security shall nevertheless be
valid. Each Subsidiary Guarantor shall execute a Subsidiary Guarantee in
the manner set forth in Section 10.02.
(b) A Security shall not be valid until authenticated by the
manual signature of the Trustee. The signature of the Trustee shall be
conclusive evidence that the Security has been authenticated under this
Indenture.
(c) The Trustee shall authenticate (i) Initial Securities for
original issue in the aggregate principal amount not to exceed
$105,000,000, and (ii) Exchange Securities from time to time for issue only
in exchange for a like principal amount of Initial Securities, in each case
upon receipt of a written order of the Issuers.
(d) The Trustee may appoint an authenticating agent acceptable
to the Issuers to authenticate Securities. Unless limited by the terms of
such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as an Agent to deal with the
Issuers or an Affiliate.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Issuers shall maintain an office or agency (which shall be
located in the Borough of Manhattan in the City of New York, State of New
York) where (i) Securities may be presented for registration of transfer or
for exchange ("Registrar"), (ii) Securities may be presented for payment
("Paying Agent") and (iii) notices and demands to or upon the Issuers in
respect of the Securities and this Indenture may be served. The Registrar
shall keep a register of the Securities and of their transfer and exchange.
The Issuers may appoint one or more co-registrars and one or more additional
paying agents. The term "Paying Agent" includes any additional paying agent.
The Issuers may change any Paying Agent, Registrar or co-registrar without
prior notice to any Securityholder. The Issuers shall notify the Trustee and
the Trustee shall notify the Securityholders of the name and address of any
Agent not a party to this Indenture. If the Issuers fail to appoint or
maintain another entity as Registrar or Paying Agent, the Trustee shall act
as such. An Issuer or any
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Subsidiary Guarantor may act as Paying Agent, Registrar or co-registrar. The
Issuers shall enter into an appropriate agency agreement with any Agent not a
party to this Indenture, which shall incorporate the provisions of the TIA.
The agreement shall implement the provisions of this Indenture that relate to
such Agent. The Issuers shall notify the Trustee of the name and address of
any such Agent. If the Issuers fail to maintain a Registrar or Paying Agent,
or fail to give the foregoing notice, the Trustee shall act as such, and
shall be entitled to appropriate compensation in accordance with Section 7.07
hereof.
(b) The Issuers initially appoint the Trustee as Registrar,
Paying Agent and agent for service of notices and demands in connection
with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers, the Subsidiary Guarantors or any other obligor on
the Securities shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit
of the Securityholders or the Trustee all money held by the Paying Agent
for the payment of principal of, premium, if any, and interest on the
Securities, and shall notify the Trustee of any Default by the Issuers, any
of the Subsidiary Guarantors or any other obligor on the Securities 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
Issuers, the Subsidiary Guarantors or any other obligor on the Securities
at any time 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 Issuer or a Subsidiary Guarantor) shall have no further liability for
the money delivered to the Trustee. If an Issuer, any Subsidiary Guarantor
or any other obligor on the Securities acts as Paying Agent, it shall
segregate and hold in a separate trust fund for the benefit of the
Securityholders all money held by it as Paying Agent.
SECTION 2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Securityholders and shall otherwise comply with TIA Section 312(a). If
the Trustee is not the Registrar, the Issuers, the Subsidiary Guarantors or
any other obligor on the Securities shall 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 Securityholders, including the aggregate principal amount of the
Securities held by each thereof, and the Issuers, the Subsidiary Guarantors
or any other obligor on the Securities shall otherwise comply with TIA
Section 312(a).
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SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Where Securities are presented to the Registrar or a
co-registrar with a request to register the transfer thereof or exchange them
for an equal principal amount of Securities of other denominations, the
Registrar shall, subject to Section 2.17, register the transfer or make the
exchange if its requirements for such transactions are met; provided,
however, that any Security presented or surrendered for registration of
transfer or exchange shall be duly endorsed or accompanied by a written
instruction of transfer in form satisfactory to the Registrar and the Trustee
duly executed by the Securityholder thereof or his attorney duly authorized
in writing. To permit registrations of transfer and exchanges, the Issuers
shall issue and the Trustee shall authenticate Securities at the Registrar's
request.
(b) The Issuers shall not be required (i) to issue, to register
the transfer of or to exchange Securities during a period beginning at the
opening of business on a Business Day 15 days before the day of any
selection of Securities for redemption under Section 3.02 hereof and ending
at the close of business on the day of selection, (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or
in part, except the unredeemed portion of any Security being redeemed in
part or (iii) to register the transfer or exchange of a Security between
the Interest Record Date and the next succeeding Interest Payment Date.
(c) No service charge shall be made for any registration of a
transfer or exchange (except as otherwise expressly permitted herein), but
the Issuers may require payment by the Securityholder of a sum sufficient
to cover any transfer tax or similar governmental charge payable in
connection therewith (other than such transfer tax or similar governmental
charge payable upon exchanges pursuant to Section 2.10, 3.06 or 9.05
hereof).
(d) Any Holder of the Global Note shall, by acceptance of such
Global Note, agree that transfers of beneficial interests in such Global
Note may be effected only through a book entry system maintained by the
Holder of such Global Note (or its agent), and that ownership of a
beneficial interest in the Global Note shall be required to be reflected in
a book entry.
SECTION 2.07. REPLACEMENT SECURITIES.
(a) If any mutilated Security is surrendered to the Trustee, or the
Issuers and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Security, the
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Issuers shall issue and the Trustee, upon receipt by it of the written order
of the Issuers signed by two Officers of each of the Issuers, shall
authenticate a replacement Security if the Trustee's requirements for
replacements of Securities are met. If required by the Trustee or the
Issuers, an indemnity bond must be supplied by the Holder that is sufficient
in the judgment of the Trustee and the Issuers to protect the Issuers, the
Subsidiary Guarantors, the Trustee, any Agent or any authenticating agent
from any loss which any of them may suffer if a Security is replaced. The
Issuers and the Trustee may charge a Securityholder for reasonable
out-of-pocket expenses in replacing a Security.
(b) Every replacement Security is an obligation of each of the
Issuers and each of the Subsidiary Guarantors.
SECTION 2.08. OUTSTANDING SECURITIES.
(a) The Securities outstanding at any time are all the Securities
authenticated by the Trustee except for those cancelled by the Issuers or
by the Trustee, those delivered to the Trustee for cancellation and those
described in this Section as not outstanding.
(b) If a Security is replaced pursuant to Section 2.07 hereof,
it ceases to be outstanding unless the Trustee receives proof satisfactory
to it that the replaced Security is held by a bona fide purchaser.
(c) If the principal amount of any Security is considered paid
under Section 4.01 hereof, it ceases to be outstanding and interest on it
ceases to accrue.
(d) Subject to Section 2.09 hereof, a Security does not cease to
be outstanding because an Issuer or an Affiliate of an Issuer or a
Subsidiary Guarantor holds the Security.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required principal
amount of Securities have concurred in any direction, waiver or consent,
Securities owned by an Issuer, a Subsidiary Guarantor, or any of their
respective Affiliates shall be considered as though not outstanding, except
that for purposes of determining whether the Trustee shall be protected in
relying on any such direction, waiver or consent, only Securities which a
Responsible Officer knows to be so owned shall be so considered.
SECTION 2.10. TEMPORARY SECURITIES.
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Until definitive Securities are ready for delivery, the Issuers
may prepare and the Trustee shall authenticate temporary Securities.
Temporary Securities shall be substantially in the form of definitive
Securities but may have variations that the Issuers, the Subsidiary
Guarantors and the Trustee consider appropriate for temporary Securities.
Without unreasonable delay, the Issuers shall prepare and the Trustee, upon
receipt of the written order of the Issuers signed by two Officers of each
of the Issuers, shall authenticate definitive Securities in exchange for
temporary Securities. Until such exchange, temporary Securities shall be
entitled to the same rights, benefits and privileges as definitive
Securities.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Securities to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange
or payment. The Trustee shall cancel all Securities, if not already
cancelled, surrendered for registration of transfer, exchange, payment,
replacement or cancellation and shall destroy cancelled Securities (subject
to the record retention requirement of the Exchange Act), and deliver
certification of their destruction to the Issuers, unless by a written
order, signed by two Officers of each of the Issuers, the Issuers shall
direct that cancelled Securities be returned to them. The Issuers may not
issue new Securities to replace Securities that they have redeemed or paid
or that have been delivered to the Trustee for cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on the
Securities, they shall pay the defaulted interest in any lawful manner
plus, to the extent lawful, interest payable on the defaulted interest, to
the Persons who are Securityholders on a subsequent special record date,
which date shall be at the earliest practicable date but in all events at
least five Business Days prior to the payment date, in each case at the
rate provided in the Securities and in Section 4.01 hereof. The Issuers
shall, with the consent of the Trustee, fix or cause to be fixed each such
special record date and payment date. At least 15 days before the special
record date, the Issuers (or the Trustee, in the name of and at the expense
of the Issuers) shall mail to Securityholders a notice that states the
special record date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Issuers in issuing the Securities may use a "CUSIP" number,
and if so, the Trustee shall use the CUSIP number in notices of redemption
or exchange as a
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convenience to Securityholders; provided, however, that no representation
shall be deemed to be made by the Trustee as to the correctness or accuracy
of the CUSIP number printed in the notice or on the Securities, and that
reliance may be placed only on the other identification numbers printed on
the Securities. The Issuers shall promptly notify the Trustee of any change
in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 11:00 a.m. New York City time on each Interest Payment
Date and Maturity Date, the Issuers shall deposit with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any,
due on such Interest Payment Date or Maturity Date, as the case may be, in
a timely manner which permits the Paying Agent to remit payment to the
Securityholders on such Interest Payment Date or Maturity Date, as the case
may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Note and Physical Security that constitutes a
Restricted Security shall bear the following legend (the "Private Placement
Legend") unless otherwise agreed by the Issuers and the Securityholder
thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT, WITHIN THE TIME PERIOD REFERRED TO IN
RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO
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SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS NOTE EXCEPT (A)
TO AN ISSUER THEREOF, (B) INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO
THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN REPRESENTATIONS
AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
NOTE (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE),
AND IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE PRINCIPAL
AMOUNT OF NOTES OF LESS THAN $250,000, AN OPINION OF COUNSEL
ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN
COMPLIANCE WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE SECURITIES ACT (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3) AGREES
THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS NOTE IS
TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING AS
DESCRIBED IN CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF
THIS NOTE SHALL NOT BE PERMITTED TO TRANSFER THIS NOTE TO AN
INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION WITH ANY
TRANSFER OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE,
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON THE
REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED TRANSFEREE IS
AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT TO
CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE
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ISSUERS HEREOF SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT
SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN
A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE THE
MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS NOTE IN VIOLATION OF THE
FOREGOING RESTRICTIONS.
Each Global Note shall also bear the following legend on the face
thereof:
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 ANY
SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE
OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUERS OR THEIR AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
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CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
(a) The Global Note initially shall (i) be registered in the name
of the Depository or the nominee of such Depository, (ii) be delivered to the
Trustee as custodian for such Depository and (iii) bear legends as set forth
in Section 2.15.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Note
held on their behalf by the Depository, or the Trustee as its custodian, or
under the Global Note, and the Depository may be treated by the Issuers,
the Trustee and any agent of an Issuer or the Trustee as the absolute owner
of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Issuers, the Trustee or any
agent of an Issuer or the Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the operation of
customary practices governing the exercise of the rights of a Holder of any
Security.
(b) Transfers of the Global Note shall be limited to transfers
in whole, but not in part, to the Depository, its successors or their
respective nominees. Interest of beneficial owners in the Global Note may
be transferred or exchanged for Physical Securities in accordance with the
rules and procedures of the Depository and the provisions of Section 2.17.
In addition, Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in the Global Note if (i)
the Depository notifies the Issuers that it is unwilling or unable to
continue as Depository for the Global Note and a successor depository is
not appointed by the Issuer within 90 days of such notice or (ii) an Event
of Default has occurred and is continuing and the Registrar has received a
written request from the Depository or the Trustee to issue Physical
Securities.
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(c) In connection with any registration of transfer or exchange
of a portion of the beneficial interest in the Global Note to beneficial
owners pursuant to paragraph (b) above, the Registrar shall (if one or more
Physical Securities are to be issued) reflect on its books and records the
date and a decrease in the principal amount of the beneficial interest in
the Global Note to be transferred, and the Issuers shall execute, and the
Trustee shall authenticate and deliver, one or more Physical Securities of
like tenor and amount.
(d) In connection with the registration of transfer of the
entire Global Note to beneficial owners pursuant to paragraph (b), the
Global Note shall be deemed to be surrendered to the Trustee for
cancellation, and the Issuers shall execute, and the Trustee shall
authenticate and deliver, to each beneficial owner identified by the
Depository in exchange for its beneficial interest in the Global Note, an
equal aggregate principal amount of Physical Securities of authorized
denominations.
(e) Any Physical Security constituting a Restricted Security
delivered in exchange for an interest in the Global Note pursuant to
paragraph (b) or (c) above shall, except as otherwise provided by
paragraphs (a)(i)(x) and (c) of Section 2.17, bear the legend regarding
transfer restrictions applicable to the Physical Securities set forth in
Section 2.15.
(f) The Holder of the Global Note may grant proxies and
otherwise authorize any Person, including Agent Members and Persons that
may hold interests through Agent Members, to take any action which a
Securityholder is entitled to take under this Indenture or the Securities.
SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited Investors and
Non-U.S. Persons. The following provisions shall apply with respect to the
registration of any proposed transfer of a Security constituting a Restricted
Security to any Institutional Accredited Investor which is not a QIB or to
any Non-U.S. Person:
(i) the Registrar shall register the transfer of any
Security constituting a Restricted Security, whether or not such
Security bears the Private Placement Legend, if (x) the requested
transfer is after December 30, 1999 or (y) (1) in the case of a
transfer to an Institutional Accredited Investor which is not a
QIB (excluding Non-U.S.Persons), the proposed transferee has
delivered
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to the Registrar a certificate substantially in the
form of Exhibit C hereto or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferor has delivered to the
Registrar a certificate substantially in the form of Exhibit D
hereto; and
(ii) if the proposed transferor is an Agent Member holding a
beneficial interest in the Global Note, upon receipt by the
Registrar of (x) the certificate, if any, required by paragraph
(i) above and (y) instructions given in accordance with the
Depository's and the Registrar's procedures, (a) the Registrar
shall reflect on its books and records the date and (if the
transfer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of the Global Note
in an amount equal to the principal amount of the beneficial
interest in the Global Note to be transferred, and (b) the Issuer
shall execute and the Trustee shall authenticate and deliver one
or more Physical Securities of like tenor and amount.
(b) Transfers to QIBs. The following provisions shall apply with
respect to the registration of any proposed transfer of a Security
constituting a Restricted Security to a QIB (excluding transfers to Non-U.S.
Persons):
(i) the Registrar shall register the transfer if such
transfer is being made by a proposed transferor who has checked
the box provided for on the form of Security stating, or has
otherwise advised the Issuer and the Registrar in writing, that
the sale has been effected in compliance with the provisions of
Rule 144A to a transferee who has signed the certification
provided for on the form of Security stating, or has otherwise
advised the Issuers and the Registrar in writing, that it is
purchasing the Security for its own account or an account with
respect to which it exercises sole investment discretion and that
any such account is a QIB within the meaning of Rule 144A, and it
is aware that the sale to it is being made in reliance on Rule
144A and acknowledges that it has received such information
regarding the Issuers as it has requested pursuant to Rule 144A
or has determined not to request such information and that it is
aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A; and
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(ii) if the proposed transferee is an Agent Member and the
Securities to be transferred consist of Physical Securities which
after transfer are to be evidenced by an interest in the Global
Note, upon receipt by the Registrar of instructions given in
accordance with the Depository's and the Registrar's procedures,
the Registrar shall reflect on its books and records the date and
an increase in the principal amount of the Global Note in an
amount equal to principal amount of the Physical Securities to be
transferred, and the Trustee shall cancel the Physical Securities
so transferred.
(c) Private Placement Legend. Upon the registration of the
transfer, exchange or replacement of Securities not bearing the Private
Placement Legend, the Registrar shall deliver Securities that do not bear the
Private Placement Legend. Upon the registration of the transfer, exchange or
replacement of Securities bearing the Private Placement Legend, the Registrar
shall deliver only Securities that bear the Private Placement Legend unless
(i) the circumstance contemplated by paragraph (a)(i)(x) of this Section 2.17
exists or (ii) there is delivered to the Registrar an Opinion of Counsel
reasonably satisfactory to the Issuers and the Trustee to the effect that
neither such legend nor the related restrictions on transfer are required in
order to maintain compliance with the provisions of the Securities Act.
(d) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges the
restrictions on transfer of such Security set forth in this Indenture and in
the Private Placement Legend and agrees that it will transfer such Security
only as provided in this Indenture.
The Registrar shall retain for at least two years copies of all
letters, notices and other written communications received pursuant to
Section 2.16 or this Section 2.17. The Issuers shall have the right to
inspect and make copies of all such letters, notices or other written
communications at any reasonable time upon the giving of reasonable written
notice to the Registrar.
SECTION 2.18. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for registration of transfer
and subject to Section 2.12, the Issuers, the Trustee, any Paying Agent, any
Registrar and any co-registrar shall treat the Person in whose name any
Security shall be registered upon the register of Securities kept by the
Registrar as the absolute owner of such Security (whether or not such
Security shall be overdue and notwithstanding any notation of the ownership
or other writing thereon made by anyone other than the Issuers, any Registrar
or any co-
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registrar) for the purpose of receiving payments of principal of or
interest on such Security and for all other purposes; and none of the
Issuers, the Trustee, any Paying Agent, any Registrar or any co-registrar
shall be affected by any notice to the contrary.
SECTION 2.19. ALLOCATION OF PURCHASE PRICE.
Based on their estimate of the relative fair market values of the
Securities and the Appreciation Notes, the Issuers agree that of the initial
purchase price of $922.0 for each $1,000 of principal amount of Securities,
the Issuers agree that they shall treat for U.S. federal income tax purposes
$899.63 of such initial purchase price as allocable to the Securities and
$22.37 as allocable to the Appreciation Notes.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
(a) If the Issuers elect to redeem Securities pursuant to the
optional redemption provisions of Section 3.07 hereof, they shall furnish to
the Trustee, at least 45 days (unless a shorter period is acceptable to the
Trustee) but not more than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the Section of this Indenture pursuant to which
the redemption shall occur, (ii) the redemption date, (iii) the principal
amount of Securities to be redeemed and (iv) the redemption price.
(b) If the Issuers are required to make an offer to purchase
Securities pursuant to the provisions of Sections 3.09 or 4.14 hereof, they
shall furnish to the Trustee at least 30 days but not more than 60 days
before a purchase date an Officers' Certificate setting forth (i) the
Section of this Indenture pursuant to which the offer to purchase shall
occur, (ii) the proposed purchase date, (iii) the maximum principal amount
of Securities to be purchased , (iv) the purchase price and (v) further
setting forth a statement to the effect that (a) an Issuer or one of its
Subsidiaries has effected an Asset Disposition and the conditions set forth
in Section 4.10 have been satisfied or (b) a Change of Control has occurred
and the conditions set forth in Section 4.14 have been satisfied, as
applicable.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED.
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(a) If less than all of the Securities are to be redeemed, the
Trustee shall select the Securities to be redeemed among the Securityholders
on a pro rata basis, by lot or in accordance with any other method the
Trustee considers fair and appropriate (and in such manner as complies with
applicable legal and stock exchange requirements, if any); provided, however,
that if a partial redemption is made with the proceeds of a Public Equity
Offering, selection of the Securities or portion thereof for redemption shall
be made by the Trustee only on a pro rata basis to the extent practicable,
unless such method is otherwise prohibited. In the event of partial
redemption by lot, the particular Securities to be redeemed shall be
selected, unless otherwise provided herein, not less than 30 nor more than 60
days prior to the redemption date by the Trustee from the outstanding
Securities not previously called for redemption.
(b) The Trustee shall promptly notify the Issuers in writing of
the Securities selected for redemption and, in the case of any Security
selected for partial redemption, the principal amount thereof to be
redeemed. Securities may be redeemed in part in multiples of $1,000
principal amount only. Except as provided in the preceding sentence,
provisions of this Indenture that apply to Securities called for redemption
also apply to portions of Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
(a) At least 30 days before a redemption date, the Issuers shall
mail a notice of redemption by first class mail, postage prepaid to each
Holder whose Securities are to be redeemed at the last address for such
Holder then shown on the registry books.
The notice shall identify the Securities to be redeemed and shall
state:
(i) the redemption date;
(ii) the redemption price;
(iii) if any Security is being redeemed in part, the portion
of the principal amount of such Security to be redeemed and that,
after the redemption date upon surrender of such Security, a new
Security or Securities in principal amount equal to the unredeemed
portion shall be issued;
(iv) the name and address of the Paying Agent;
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(v) that Securities called for redemption must be surrendered to
the Paying Agent to collect the redemption price;
(vi) that, unless the Issuers default in making such redemption
payment, interest on Securities called for redemption ceases to accrue
on and after the redemption date;
(vii) the paragraph of the Securities and/or Section of this
Indenture pursuant to which the Securities called for redemption are
being redeemed; and
(viii) if fewer than all the Securities are to be redeemed,
the identification of the particular Securities (or portion thereof)
to be redeemed, as well as the aggregate principal amount of
Securities to be redeemed and the aggregate principal amount of
Securities to be outstanding after such partial redemption.
(b) At the Issuers' request, the Trustee shall give the notice
of redemption in the Issuers' names and at the Issuers' expense; provided,
however, that the Issuers shall have delivered to the Trustee at least 45
days (unless a shorter period is acceptable to the Trustee) prior to the
proposed redemption date an Officers' 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, Securities called for redemption become due and payable on the
redemption date at the redemption price plus accrued and unpaid interest,
if any.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) Prior to 11:00 a.m., New York City time, on the redemption
date, the Issuers shall deposit with the Trustee or with the Paying Agent
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date. The Trustee or the Paying Agent
shall promptly return to the Issuers any money deposited with the Trustee or
the Paying Agent by the Issuers in excess of the amounts necessary to pay the
redemption price of, and accrued interest on, all Securities to be redeemed.
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(b) On and after the redemption date, interest ceases to accrue
on the Securities or the portions of Securities called for redemption. If
a Security is redeemed 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 Security was registered at
the close of business on such record date. If any Security called for
redemption shall not be so paid upon surrender for redemption because of
the failure of the Issuers to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption 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 Securities
and in Section 4.01 hereof.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in part, the
Issuers shall issue and the Trustee shall authenticate for the
Securityholder at the expense of the Issuers a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
(a) Except as provided in Section 3.07(b), the Securities will not
be redeemable at the option of the Issuers prior to December 15, 2002. On
and after such date, the Securities will be redeemable, at the Issuers'
option, in whole or in part, at the following redemption prices (expressed in
percentages of principal amount), if redeemed during the 12-month period
commencing on December 15th of the years set forth below, plus accrued and
unpaid interest to the redemption date (subject to the right of holders of
record on the relevant record date to receive interest due on the relevant
Interest Payment Date):
Redemption
Period Price
------ ----------
2002........................ 106.00%
2003........................ 104.00%
2004........................ 102.00%
2005 and thereafter......... 100.000%
(b) In the event of the sale by either Issuer prior to December
15, 2000 of its Capital Stock (other than Disqualified Stock) in one or more
Public Equity Offerings the Net Cash Proceeds of which are at least $25.0
million in the aggregate, the Issuers may, at their option, use the Net Cash
Proceeds of such sale or sales of Capital Stock to redeem up to 25% of the
aggregate principal amount of the Securities at a redemption price in the
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case of a redemption date prior to December 15, 1999, equal to 112.0% of the
Accreted Value thereof plus accrued and unpaid interest thereon, if any, to
the redemption date (subject to the right of holders of record on the
relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date) and for any redemption date on or after December 15,
1999, at a redemption price equal to 112.0% of the principal amount thereof
plus accrued and unpaid interest thereon, if any, to the redemption date
(subject to the right of holders of record on the relevant Interest Record
Date to receive interest due on the relevant Interest Payment Date);
provided, however, that after any such redemption the aggregate principal
amount of the Securities outstanding must equal at least $79.0 million. In
order to effect the foregoing redemption with the proceeds of any such sale
of Capital Stock, the Issuers shall make such redemption not more than 90
days after the consummation of any such sale or sales of Capital Stock.
SECTION 3.08. MANDATORY REDEMPTION.
The Issuers are not required to make mandatory redemption or
sinking fund payments with respect to the Securities.
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF EXCESS PROCEEDS.
(a) In the event that, pursuant to Section 4.10 hereof, the
Issuers shall commence an offer to all Securityholders to purchase Securities
(an "Asset Disposition Offer"), they shall follow the procedures specified
below:
(i) The Asset Disposition Offer shall remain open for a period
of 30 Business Days following its commencement and no longer, 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 Issuers
shall purchase the principal amount of Securities required to be
purchased pursuant to Section 4.10 hereof (the "Offer Amount") or, if
less than the Offer Amount has been tendered, all Securities tendered
in response to the Asset Disposition Offer.
(ii) If the Purchase Date is on or after a Interest Record Date
and on or before the related Interest Payment Date, any accrued
interest shall be paid to the Person under whose name a Security is
registered at the close of business on such Interest Record Date, and
no additional interest shall be payable to Holders who tender
Securities pursuant to the Asset Disposition Offer.
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(iii) Upon the commencement of any Asset Disposition Offer,
the Issuers shall send, by first class mail, a notice to each
Securityholder, with a copy to the Trustee. The notice shall contain
all instructions and materials necessary to enable such Holders to
tender Securities pursuant to the Asset Disposition Offer. The
notice, which shall govern the terms of the Asset Disposition Offer,
shall state:
(1) that the Asset Disposition Offer is being made pursuant
to this Section 3.09 and Section 4.10 hereof and the length of
time the Asset Disposition Offer shall remain open;
(2) the Offer Amount, the purchase price and the Purchase
Date;
(3) that any Security not tendered or accepted for payment
shall continue to accrue interest;
(4) that any Security accepted for payment pursuant to the
Asset Disposition Offer shall cease to accrue interest after the
Purchase Date;
(5) that Holders electing to have a Security purchased
pursuant to any Asset Disposition Offer shall be required to
surrender the Security, with the form entitled "Option of
Securityholder to Elect Purchase" on the reverse of the Security
completed, to the Issuers, a depositary, if appointed by the
Issuers, or a Paying Agent at the address specified in the notice
at least three days before the Purchase Date;
(6) that Holders shall be entitled to withdraw their
election if the Issuers, depositary or 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
Security the Holder delivered for purchase and a statement that
such Holder is withdrawing his election to have the Security
purchased;
(7) that, if the aggregate principal amount of Securities
surrendered by Holders exceeds the Offer Amount, the Issuers
shall select the Securities to be purchased on a pro rata basis
(with such adjustments as may be deemed appropriate by the
Issuers so that only Securities in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
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(8) that Holders whose Securities were purchased only in
part shall be issued new Securities equal in principal amount to
the unpurchased portion of the Securities surrendered.
(iv) On or before the Purchase Date, the Issuers shall, to the
extent lawful, accept for payment, on a pro rata basis to the extent
necessary, the Offer Amount of Securities or portions thereof tendered
pursuant to the Asset Disposition Offer or, if less than the Offer
Amount has been tendered, all Securities or portions thereof tendered,
and deliver to the Trustee an Officers' Certificate stating that such
Securities or portions thereof were accepted for payment by the
Issuers in accordance with the terms of this Section 3.09. The
Issuers, depositary or Paying Agent, as the case may be, shall
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 Security tendered by such Holder and accepted by
the Issuers for purchase, and the Issuers shall promptly issue a new
Security, and the Trustee shall authenticate and mail or deliver such
new Security to such Holder equal in principal amount to any
unpurchased portion of the Security surrendered. Any Security not so
accepted shall be promptly mailed or delivered by the Issuers to the
Holder thereof. The Issuers shall publicly announce the results of
the Asset Disposition Offer on the Purchase Date.
(b) 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 SECURITIES.
(a) The Issuers shall pay the principal of, premium, if any, and
interest on the Securities on the dates and in the manner provided in the
Securities and in this Indenture. Principal, premium, if any, and interest
shall be considered paid on the date due if the Paying Agent, if other than
an Issuer or a Subsidiary Guarantor, holds as of 11:00 a.m. New York City
time on the due date money deposited by the Issuers in immediately available
funds and designated for and sufficient to pay all principal, premium, if
any, and interest then due. Such Paying Agent shall return to the Issuers,
no later than five days following the date of
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payment, any money (including accrued interest paid by the Issuers) that
exceeds such amount of principal, premium, if any, and interest paid on the
Securities.
(b) The Issuers shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue principal
at the rate equal to 2% per annum in excess of the then applicable interest
rate on the Securities to the extent lawful; it shall 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.
(a) The Issuers shall maintain in the Borough of Manhattan, in 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 Securities
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuers in respect of the Securities and this
Indenture may be served. The Issuers shall give prior written notice to the
Trustee of the location, and any change in the location, of such office or
agency. If at any time the Issuers shall fail to maintain any such required
office or agency or shall 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.
(b) The Issuers may also from time to time designate one or more
other offices or agencies where the Securities may be presented or
surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or
rescission shall in any manner relieve the Issuers of their obligation to
maintain an office or agency in the Borough of Manhattan, in the City of
New York for such purposes. The Issuers shall give prior 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.
(c) The Issuers hereby designate the Corporate Trust Office of
the Trustee as one such office or agency of the Issuers in accordance with
Section 2.03.
SECTION 4.03. SEC REPORTS.
(a) Upon consummation of the Exchange Offer and the issuance of
the Exchange Securities, each Issuer and each Subsidiary Guarantor (at its
own expense) shall file with
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the Commission and shall furnish to the Trustee and each Securityholder
within 15 days after it files them with the Commission copies of the
quarterly and annual reports and of the information, documents, and other
reports (or copies of such portions of any of the foregoing as the Commission
may by rules and regulations prescribe) to be filed pursuant to Section 13 or
15(d) of the Exchange Act (without regard to whether either of the Issuers is
subject to the requirements of such Section 13 or 15(d) of the Exchange Act).
Notwithstanding the foregoing, in the event that the Issuers are not required
to file such reports with the Commission pursuant to the Exchange Act, the
Issuers will nevertheless deliver such Exchange Act information to the
Holders of the Securities within 15 days after it would have been required to
file it with the Commission. Upon qualification of this Indenture under the
TIA, the Issuers and each of the Subsidiary Guarantors shall also comply with
the provisions of TIA Section 314(a).
(b) At the Issuers' expense, each Issuer and each of the
Subsidiary Guarantors, as applicable, shall cause an annual report if
furnished by it to stockholders generally and each quarterly or other
financial report if furnished by it to stockholders generally to be filed
with the Trustee and mailed to the Securityholders at their addresses
appearing in the register of Securities maintained by the Registrar at the
time of such mailing or furnishing to stockholders.
(c) Each Issuer and each of the Subsidiary Guarantors shall
provide to any Securityholder any information reasonably requested by such
Securityholder concerning the Issuers and the Subsidiary Guarantors
(including financial statements) necessary in order to permit such
Securityholder to sell or transfer Securities in compliance with Rule 144A
under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATES.
(a) Each of the Issuers and each Subsidiary Guarantor shall
deliver to the Trustee, within 90 days after the end of each fiscal year, an
Officers' Certificate signed by its principal executive officer, principal
financial officer or principal accounting officer stating that a review of
the activities of such Issuer and its Subsidiaries or such Subsidiary
Guarantor and its Subsidiaries, as the case may be, during the preceding
fiscal year has been made under the supervision of the signing Officers with
a view to determining whether each has kept, observed, performed and
fulfilled its Obligations under this Indenture, and further stating, as to
each such Officer signing such certificate, that to the best of his or her
knowledge each has kept, observed, performed and fulfilled each and every
covenant contained in this Indenture and is not in 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
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shall have occurred, describing all such Defaults or Events of Default of
which he or she may have knowledge and what action each is taking or proposes
to take with respect thereto).
(b) So long as not contrary to the then current recommendations
of the American Institute of Certified Public Accountants, the year-end
financial statements delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of (x) the Issuers' independent public
accountants (who shall be a firm of established national reputation) that
in making the examination necessary for certification of such financial
statements nothing has come to their attention which would lead them to
believe that either Issuer has violated any provisions of Article 4, 5 or 6
of this Indenture insofar as they relate to accounting matters or, if any
such violation has occurred, specifying the nature and period of existence
thereof, it being understood that such accountants shall not be liable
directly or indirectly to any Person for any failure to obtain knowledge of
any such violation and (y) if any Restricted Subsidiary's or Subsidiary
Guarantor's financial statements are not prepared on a consolidated basis
with the applicable Issuer's, such Restricted Subsidiary's or Subsidiary
Guarantor's independent public accountants (who shall be a firm of
established national reputation) that in making the examination necessary
for certification of such financial statements nothing has come to their
attention which would lead them to believe that any of the Restricted
Subsidiaries or Subsidiary Guarantors is in Default under this Indenture
or, if any such Default has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants shall not be
liable directly or indirectly to any Person for any failure to obtain
knowledge of any such violation.
(c) Each Issuer and each of the Subsidiary Guarantors shall, so
long as any of the Securities are outstanding, deliver to the Trustee,
forthwith upon any Officer becoming aware of (i) any Default or Event of
Default or (ii) any event of default under any other mortgage, indenture or
instrument to which either Issuer or a Restricted Subsidiary is a party, an
Officers' Certificate specifying such Default, Event of Default or event of
default and what action such Issuer or such Subsidiary Guarantor, as the
case may be, is taking or proposes to take with respect thereto.
(d) Each Issuer and each of the Subsidiary Guarantors shall also
comply with TIA Section 314(a)(4).
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SECTION 4.05. TAXES.
Each Issuer and each of the Subsidiary Guarantors shall pay, and
shall cause each of their respective Subsidiaries to pay, prior to
delinquency, all material taxes, assessments, and governmental levies except
as contested in good faith and by appropriate proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Issuers and the Subsidiary Guarantors covenants (to the
extent that it may lawfully do so) that it shall 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 (including, but not limited to, the payment of the principal of or
interest on the Securities); and each Issuer and each Subsidiary Guarantor
(to the extent that they may lawfully do so) hereby expressly waive all
benefit or advantage of any such law, and covenant that they shall not, by
resort to any such law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit the execution of
every such power as though no such law has been enacted.
SECTION 4.07. LIMITATION ON RESTRICTED PAYMENTS.
(a) The Issuers shall not, and shall not permit any of their
Restricted Subsidiaries, directly or indirectly, to (i) declare or pay any
dividend or make any distribution on or in respect of its Capital Stock
(including any payment in connection with any merger or consolidation
involving an Issuer or any of its Restricted Subsidiaries) except (A)
dividends or distributions payable in its Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock and (B) dividends or distributions payable to an Issuer or a
Restricted Subsidiary of an Issuer which holds any equity interest in the
paying Restricted Subsidiary (and if the Restricted Subsidiary paying the
dividend or making the distribution is not a Wholly-Owned Subsidiary, to its
other holders of Capital Stock on a pro rata basis), (ii) purchase, redeem,
retire or otherwise acquire for value any Capital Stock of an Issuer held by
Persons other than a Wholly-Owned Subsidiary of an Issuer or any Capital
Stock of a Restricted Subsidiary of an Issuer held by any Affiliate of such
Issuer, other than a Wholly-Owned Subsidiary (in either case, other than in
exchange for its Capital Stock (other than Disqualified Stock)), (iii)
purchase, repurchase, redeem, defease or otherwise acquire or retire for
value, prior to scheduled maturity, scheduled repayment or scheduled sinking
fund payment, any Subordinated Obligations (other than the purchase,
repurchase or other acquisition of Subordinated Obligations purchased in
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anticipation of satisfying a sinking fund obligation, principal installment
or final maturity, in each case due within one year of the date of purchase,
repurchase or acquisition), (iv) make any Investment (other than a Permitted
Investment) in any Person, (v) make any payment under any Performance
Compensation Agreement or (vi) make any payment to Alan R. Brill (including
under a Performance Compensation Agreement or in his capacity as an employee
of the Issuer or any Subsidiary) except for reimbursement for advances or
other out-of-pocket costs and expenses incurred in the ordinary course of
business (any such dividend, distribution, purchase, redemption, repurchase,
defeasance, other acquisition, retirement, Investment or payment as described
in preceding clauses (i) through (vi) being referred to as a "Restricted
Payment"); if at the time the Issuer or such Restricted Subsidiary makes such
Restricted Payment:
(1) a Default shall have occurred and be continuing (or would
result therefrom); or
(2) the Issuers are not able to incur an additional $1.00 of
Indebtedness pursuant to paragraph (a) (ii) of Section 4.09; or
(3) the aggregate amount of such Restricted Payment and all
other Restricted Payments declared or made subsequent to the Issue
Date would exceed the sum of (A) 50% of (x) the Consolidated Net
Income accrued during the period (treated as one accounting period)
from the first day of the fiscal quarter beginning on or after the
Issue Date to the end of the most recent fiscal quarter ending prior
to the date of such Restricted Payment as to which financial results
are available (but in no event ending more than 135 days prior to the
date of such Restricted Payment) (or, in case such Consolidated Net
Income shall be a deficit, minus 100% of such deficit) less (y) the
aggregate amount of Restricted Payments made pursuant to clause (v) of
paragraph (b); (B) the aggregate Net Cash Proceeds received by the
Issuer from the issue or sale of its Capital Stock (other than
Disqualified Stock) or other capital contributions subsequent to the
Issue Date (other than net proceeds received from an issuance or sale
of such Capital Stock to (x) a Subsidiary of an Issuer, (y) an
employee stock ownership plan or similar trust or (z) management
employees of an Issuer or any Subsidiary of an Issuer (other than
sales of Capital Stock (other than Disqualified Stock) to management
employees of an Issuer pursuant to bona fide employee stock option
plans of such Issuer); provided, however, that the value of any
non-cash net proceeds shall be as determined by the Board of Directors
of such Issuer in good faith, except that in the event the value of
any non-cash net proceeds shall be $1.0 million or more, the value
shall be as determined in writing by an independent investment banking
firm of nationally recognized standing; (C) the amount by which
Indebtedness of an Issuer is reduced
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on such Issuer's balance sheet upon the conversion or exchange (other
than by a Restricted Subsidiary of such Issuer) subsequent to the Issue
Date of any Indebtedness of such Issuer convertible or exchangeable for
Capital Stock (other than Disqualified Stock) of such Issuer (less the
amount of any cash, or other property, distributed by such Issuer upon
such conversion or exchange); and (D) the amount equal to the net
reduction in Investments (other than Permitted Investments) made after
the Issue Date by an Issuer or any of its Restricted Subsidiaries in any
Person resulting from (i) repurchases or redemptions of such Investments
by such Person, proceeds realized upon the sale of such Investment to an
unaffiliated purchaser, repayments of loans or advances or other
transfers of assets by such Person to the Issuer or any Restricted
Subsidiary of an Issuer or (ii) the redesignation of Unrestricted
Subsidiaries as Restricted Subsidiaries (valued in each case as provided
in the definition of "Investment") not to exceed, in the case of any
Unrestricted Subsidiary, the amount of Investments previously included
in the calculation of the amount of Restricted Payments; provided,
however, that no amount shall be included under this clause (D) to the
extent it is already included in Consolidated Net Income.
(b) The provisions of paragraph (a) shall not prohibit:
(i) any purchase or redemption of Capital Stock or
Subordinated Obligations (including, without limitation, the
Appreciation Notes) of the Issuers made by exchange for, or out
of the proceeds of the substantially concurrent sale of, Capital
Stock of the Issuers (other than Disqualified Stock and other
than Capital Stock issued or sold to a Subsidiary, an employee
stock ownership plan or similar trust or management employees of
the Issuers or any Subsidiary of the Issuers); provided, however,
that (A) such purchase or redemption shall be excluded in the
calculation of the aggregate amount of Restricted Payments for
purposes of clause (3) of paragraph (a) and (B) the Net Cash
Proceeds from such sale shall be excluded in the calculation of
the amount of aggregate Net Cash Proceeds from clause (3) (B) of
paragraph (a);
(ii) any purchase or redemption of Subordinated Obligations
of the Issuers made by exchange for, or out of the proceeds of
the substantially concurrent sale of, Subordinated Obligations of
the Issuers in compliance with the Section 4.09; provided,
however, that such purchase or redemption shall be excluded in
the calculation of the aggregate amount of Restricted Payments
for purposes of clause (3) of paragraph (a);
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(iii) any purchase or redemption of Subordinated
Obligations from Net Available Cash to the extent permitted under
Section 4.10 below; provided, however, that such purchase or
redemption shall be excluded in the calculation of the aggregate
amount of Restricted Payments for purposes of clause (3) of
paragraph (a);
(iv) dividends paid within 60 days after the date of
declaration if at such date of declaration such dividend would
have complied with this provision; provided, however, that such
dividend shall be included in the calculation of the amount of
Restricted Payments for purposes of clause (3) of paragraph (a);
(v) for so long as BMC is not treated for tax purposes as a
corporation or an association taxable as a corporation or other
entity that is subject to an entity level tax for income tax
purposes, distributions to each Member, as soon as practicable
after the end of each calendar quarter, of an amount reasonably
determined to be necessary to permit such Member to pay any
federal, state or local income taxes imposed on such Member's
allocable share of income from BMC; provided, however, that in no
event shall any distribution to a Member exceed the Tax Allowance
Amount for such Member in respect of such quarter and BMC shall
cause the Accountants to deliver to the Trustee a certificate
setting forth the determination of each Member's Tax Allowance
Amount within 60 days of the end of each fiscal year;
(vi) payments under the Performance Compensation Agreements
(other than any Performance Compensation Agreement with Alan R.
Brill) not exceeding in the aggregate $500,000 in any fiscal year
provided, however, that any such payment pursuant to this clause
(vi) shall be included in the calculation of the aggregate amount
of Restricted Payments for purposes of clause 3 of paragraph (a)
and;
(vii) payments in respect of the redemption of the
Appreciation Notes under the Appreciation Note Indenture,
provided, however, that the Issuers are able to incur an
additional $1.00 of Subordinated Indebtedness pursuant to clause
(i) of paragraph (a) under Section 4.09, and provided, further,
that such payments shall be included in the calculation of the
aggregate amount of Restricted Payments for purposes of clause
(3) of paragraph (a);
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and provided, further, that in the case of clauses (i), (ii), (iii) and (vii)
and clause (vi) with respect to Performance Compensation Agreements entered
into after the Issue Date, no Default or Event of Default shall have occurred
or be continuing at the time of such payment or as a result thereof.
(c) For purposes of determining compliance with this Section 4.07,
Restricted Payments may be made with cash or non-cash assets, provided,
however, that any Restricted Payment made other than in cash shall be valued
at the fair market value (determined, subject to the additional requirements
of the immediately succeeding proviso, in good faith by the Board of
Directors) of the assets so utilized in making such Restricted Payment,
provided, further, that (i) in the case of any Restricted Payment made with
Capital Stock or Indebtedness, such Restricted Payment shall be deemed to be
made in an amount equal to the greater of the fair market value thereof and
the liquidation preference (if any) or principal amount of the Capital Stock
or Indebtedness, as the case may be, so utilized, and (ii) in the case of any
Restricted Payment in an aggregate amount in excess of $1.0 million, a
written opinion as to the fairness of the valuation thereof (as determined by
the Issuers) for purposes of determining compliance with this Section 4.07
shall be issued by an independent investment banking firm of national
standing.
(d) Not later than the date of making any Restricted Payment or
Permitted Investment described in clause (xii) of the definition thereof, the
applicable Issuer shall deliver to the Trustee an Officer's Certificate
stating that such Restricted Payment or Permitted Investment, as the case may
be, complies with this Indenture and setting forth in reasonable detail the
basis upon which the required calculations were computed, which calculations
may be based upon the Issuers' latest available quarterly consolidated
financial statements and a copy of any required investment banker's opinion.
SECTION 4.08. LIMITATION ON RESTRICTIONS ON DISTRIBUTIONS FROM RESTRICTED
SUBSIDIARIES.
The Issuers shall not, and shall not permit any of their Restricted
Subsidiaries to, create or permit to exist or become effective any consensual
encumbrance or restriction on the ability of any such Restricted Subsidiary
to:
(i) pay dividends or make any other distributions on its Capital
Stock or pay any Indebtedness or other obligation owed to an Issuer or
another Restricted Subsidiary;
(ii) make any loans or advances to an Issuer or another
Restricted Subsidiary or
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(iii) transfer any of its property or assets to an Issuer or
another Restricted Subsidiary, except:
(a) any encumbrance or restriction pursuant to an agreement in
effect at or entered into on the Issue Date;
(b) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement relating to any Indebtedness
Incurred by such Restricted Subsidiary on or prior to the date on
which such Restricted Subsidiary was acquired by an Issuer and
outstanding on such date (other than Indebtedness Incurred in
anticipation of, or to provide all or any portion of the funds or
credit support utilized to consummate, the transaction or series of
related transactions pursuant to which such Restricted Subsidiary
became a Restricted Subsidiary of an Issuer or was acquired by an
Issuer);
(c) any encumbrance or restriction with respect to a Restricted
Subsidiary pursuant to an agreement evidencing Indebtedness Incurred
without violation of this Indenture or effecting a refinancing of
Indebtedness issued pursuant to an agreement referred to in clauses
(a) or (b) or this clause (c) or contained in any amendment to an
agreement referred to in clauses (a) or (b) or this clause (c);
provided, however, that the encumbrances and restrictions with respect
to such Restricted Subsidiary contained in any of such agreement,
refinancing agreement or amendment, taken as a whole, are no less
favorable to the holders of the Securities in any material respect, as
determined in good faith by the Board of Directors of the Issuers,
than encumbrances and restrictions with respect to such Restricted
Subsidiary contained in agreements in effect at, or entered into on,
the Issue Date;
(d) in the case of clause (iii) of this Section 4.08, any
encumbrance or restriction (A) that restricts in a customary manner
the subletting, assignment or transfer of any property or asset that
is a lease, license, conveyance or contract or similar property or
asset, (B) by virtue of any transfer of, agreement to transfer, option
or right with respect to, or Lien on, any property or assets of an
Issuer or any Restricted Subsidiary not otherwise prohibited by this
Indenture, (C) that is included in a licensing agreement to the extent
such restrictions limit the transfer of the property subject to such
licensing agreement or (D) arising or agreed to in the ordinary course
of business and that does not, individually or in the aggregate,
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detract from the value of property or assets of an Issuer or any of
its Restricted Subsidiaries in any manner material to an Issuer or any
such Restricted Subsidiary;
(e) in the case of clause (iii) of this Section 4.08,
restrictions contained in security agreements, mortgages or similar
documents securing Indebtedness of a Restricted Subsidiary to the
extent such restrictions restrict the transfer of the property subject
to such security agreements;
(f) in the case of clause (iii) of this Section 4.08, any
instrument governing or evidencing Indebtedness of a Person acquired
by an Issuer or any Restricted Subsidiary of an Issuer at the time 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 so acquired; provided, however, that such Indebtedness is
not incurred in connection with or in contemplation of such
acquisition;
(g) any restriction with respect to a Restricted Subsidiary
imposed pursuant to an agreement entered into for the sale or
disposition of all or substantially all the Capital Stock or assets of
such Restricted Subsidiary pending the closing of such sale or
disposition; and
(h) encumbrances or restrictions arising or existing by reason
of applicable law.
SECTION 4.09. LIMITATION ON INDEBTEDNESS.
(a) The Issuers shall not, and shall not permit any of their
Restricted Subsidiaries to, Incur any Indebtedness; provided, however, that:
(i) the Issuers and their Restricted Subsidiaries may Incur Indebtedness
which is expressly subordinated to the Securities and the Subsidiary
Guarantees if no Default or Event of Default shall have occurred and be
continuing at the time of such Incurrence or would occur as a consequence of
such Incurrence and the Consolidated Leverage Ratio would not be greater than
7.00 to 1.00 and (ii) the Issuers and their Restricted Subsidiaries may Incur
unsecured Indebtedness ranking on a parity with the Securities if no Default
or Event of Default shall have occurred and be continuing at the time of such
Incurrence or would occur as a consequence of such Incurrence and the
Consolidated Senior Leverage Ratio would not be greater than 6.50 to 1.00,
provided, however, that as provided in the definition of Permitted Liens
Indebtedness Incurred pursuant to this clause (ii) may be secured by a Lien
if at the time of such
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Incurrence the Consolidated Senior Secured Leverage Ratio would not be
greater than 3.00 to 1.00.
(b) Notwithstanding the foregoing paragraph (a), the Issuers and
their Restricted Subsidiaries may Incur the following Indebtedness:
(i) Indebtedness Incurred which does not exceed $15.0 million at
any time outstanding, less the aggregate principal amount thereof
permanently repaid with the net proceeds of Asset Dispositions;
(ii) Indebtedness of an Issuer owing to and held by any
Wholly-Owned Subsidiary or Indebtedness of a Restricted Subsidiary
owing to and held by an Issuer or any Wholly-Owned Subsidiary;
provided, however, that any subsequent issuance or transfer of any
Capital Stock or any other event which results in any such
Wholly-Owned Subsidiary ceasing to be a Wholly-Owned Subsidiary or any
subsequent transfer of any such Indebtedness (except to an Issuer or
any Wholly-Owned Subsidiary) shall be deemed, in each case, to
constitute the Incurrence of such Indebtedness by an issuer thereof;
(iii) Indebtedness represented by (A) the Securities and the
Subsidiary Guarantees, (B) the Appreciation Notes and the Guarantees
thereof, (C) Existing Indebtedness and (D) any Refinancing
Indebtedness Incurred in respect of any Indebtedness described in this
clause (iii) (other than clause B) or Incurred pursuant to paragraph
(a) above;
(iv) (A) Indebtedness of a Restricted Subsidiary Incurred and
outstanding on the date on which such Restricted Subsidiary was
acquired, directly or indirectly, by an Issuer (other than
Indebtedness Incurred in anticipation of, or to provide all or any
portion of the funds or credit support utilized to consummate the
transaction or series of related transactions pursuant to which such
Restricted Subsidiary became a Subsidiary or was otherwise acquired by
an Issuer); provided, however, that at the time such Restricted
Subsidiary is acquired by an Issuer, such Issuer would have been able
to Incur $1.00 of additional Indebtedness pursuant to clause (ii) of
paragraph (a) above after giving effect to the Incurrence of such
Indebtedness pursuant to this clause (iv) and (B) Refinancing
Indebtedness Incurred by a Restricted Subsidiary in respect of
Indebtedness Incurred by such Restricted Subsidiary pursuant to this
clause (iv);
(v) Indebtedness (A) in respect of performance bonds, bankers'
acceptances and surety or appeal bonds provided by the Issuers or any
of their
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Restricted Subsidiaries to their customers in the ordinary course of
their business, (B) in respect of performance bonds or similar
obligations of the Issuers or any of their Restricted Subsidiaries for
or in connection with pledges, deposits or payments made or given in the
ordinary course of business in connection with or to secure statutory,
regulatory or similar obligations, including obligations under health,
safety or environmental obligations and (C) arising from Guarantees to
suppliers, lessors, licensees, contractors, franchises or customers of
obligations (other than Indebtedness) incurred in the ordinary course of
business;
(vi) Indebtedness under Currency Agreements and Interest Rate
Agreements; provided, however, that such Currency Agreements and
Interest Rate Agreements are entered into for bona fide hedging
purposes of an Issuer or its Restricted Subsidiaries (as determined in
good faith by the Board of Directors of BMC) and correspond in terms
of notional amount, duration, currencies and interest rates as
applicable, to Indebtedness of such Issuer or its Restricted
Subsidiaries Incurred without violation of this Indenture or to
business transactions of the Issuers or their Restricted Subsidiaries
on customary terms entered into in the ordinary course of business;
(vii) Indebtedness arising from agreements providing for
indemnification, adjustment of purchase price or similar obligations,
or from Guarantees or letters of credit, surety bonds or performance
bonds securing any obligations of the Issuers or any of their
Restricted Subsidiaries pursuant to such agreements, in each case
Incurred in connection with the disposition of any business assets or
Restricted Subsidiary of the Issuers or (other than Guarantees of
Indebtedness or other obligations incurred by any Person acquiring all
or any portion of such business assets or Restricted Subsidiary of the
Issuers for the purpose of financing such acquisition) in a principal
amount not to exceed the gross proceeds actually received by the
Issuers or any of their Restricted Subsidiaries in connection with
such disposition; provided, however, that the principal amount of any
Indebtedness Incurred pursuant to this clause (vii) when taken
together with all Indebtedness Incurred pursuant to this clause (vii)
and then outstanding, shall not exceed $1.0 million;
(viii) Indebtedness consisting of (A) Guarantees by an Issuer
(so long as such Issuer could have Incurred such Indebtedness directly
without violation of this Indenture) and (B) Guarantees by a
Restricted Subsidiary of Indebtedness Incurred by an Issuer without
violation of this Indenture (so long as such Restricted Subsidiary
could have Incurred such Indebtedness directly without violation of
this Indenture);
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(ix) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument issued
by an Issuer or any of its Subsidiaries drawn against insufficient
funds in the ordinary course of business in an amount not to exceed
$250,000 at any time, provided, however, that such Indebtedness is
extinguished within two business days of its incurrence; and
(x) Indebtedness (other than Indebtedness described in clauses
(i) - (ix)) in a principal amount which, when taken together with the
principal amount of all other Indebtedness Incurred pursuant to this
clause (x) and then outstanding, will not exceed $5.0 million (it
being understood that any Indebtedness Incurred under this clause (x)
shall cease to be deemed Incurred or outstanding for purposes of this
clause (x) (but shall be deemed to be Incurred for purposes of
paragraph (a)) from and after the first date on which an Issuer or its
Restricted Subsidiaries could have Incurred such Indebtedness under
the foregoing paragraph (a) without reliance upon this clause (x)).
(c) Notwithstanding the foregoing, neither the Issuers nor any
Restricted Subsidiary shall Incur any Indebtedness under paragraph (b) of
this Section 4.09 if the proceeds thereof are used, directly or indirectly,
to refinance any Subordinated Obligations of an Issuer or a Restricted
Subsidiary unless such Indebtedness shall be subordinated to the Securities
to at least the same extent as such Subordinated Obligations.
(d) Notwithstanding the foregoing, no Restricted Subsidiary shall
incur any Indebtedness under clause (i) of paragraph (a) of this Section 4.09
if such Indebtedness is sold pursuant to Rule 144A of the Securities Act or a
public offering registered under the Securities Act.
(e) The Issuers will not permit any Unrestricted Subsidiary to
Incur any Indebtedness other than Non-Recourse Debt.
(f) For purposes of determining any particular amount of
Indebtedness under this Section 4.09, Guarantees, Liens or obligations with
respect to letters of credit supporting Indebtedness otherwise included in
the determination of such particular amount shall not be included. For
purposes of determining compliance with this Section 4.09, in the event that
an item of Indebtedness meets the criteria of more than one of the types of
Indebtedness described in the above clauses, the Issuers, in their sole
discretion, shall classify such item of Indebtedness and only be required to
include the amount and type of such Indebtedness in one of such clauses.
SECTION 4.10. LIMITATION ON SALES OF ASSETS AND SUBSIDIARY STOCK.
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(a) The Issuers shall not, and shall not permit any of their
Restricted Subsidiaries to, make any Asset Disposition unless:
(i) an Issuer or such Restricted Subsidiary receives
consideration at the time of such Asset Disposition at least equal to
the fair market value, as determined in good faith by BMC's Board of
Directors (including as to the value of all noncash consideration), of
the shares and assets subject to such Asset Disposition;
(ii) at least 80% of the consideration thereof received by the
Issuers or such Restricted Subsidiary is in the form of cash or Cash
Equivalents other than in the case where an Issuer or a Restricted
Subsidiary is exchanging all or substantially all of the assets of one
or more broadcast stations operated by an Issuer or such Restricted
Subsidiary, as the case may be, (including by way of the transfer of
Capital Stock), for all or substantially all of the assets (including
by way of the transfer of Capital Stock) constituting one or more
broadcast stations operated by another Person (an "Asset Swap"),
provided, however, that at least 80% of the consideration, if any,
received by the Issuers and their Restricted Subsidiaries in such
Asset Swap, other than the stock and assets of broadcast station(s),
is in the form of cash or Cash Equivalents; and
(iii) an amount equal to 100% of the Net Available Cash from
such Asset Disposition is applied by the Issuers (or such Restricted
Subsidiary, as the case may be) (A) first, to the extent an Issuer or
any Restricted Subsidiary elects (or is required by the terms of any
Senior Secured Indebtedness), (x) to prepay, repay or purchase Senior
Secured Indebtedness in each case owing to a Person other than the
Issuers or any of their Subsidiaries or (y) to the investment in or
acquisition of Additional Assets within 365 days from the later of the
date of such Asset Disposition or the receipt of such Net Available
Cash; (B) second, within 365 days from the receipt of such Net
Available Cash, to the extent of the balance of such Net Available
Cash after application in accordance with clause (A), to make an offer
to purchase Securities, at 100% of Accreted Value thereof if such
purchase date occurs prior to December 15, 1999, and at 100% of the
principal amount thereof if such purchase date occurs on or after
December 15, 1999, in each case plus accrued and unpaid interest, if
any, thereon; (C) third, within 90 days after the later of the
application of Net Available Cash in accordance with clauses (A) and
(B) and the date that is 365 days from the receipt of such Net
Available Cash, to the extent of the balance of such Net Available
Cash after application in accordance with clauses (A) and (B), to
prepay, repay or repurchase Indebtedness (other than Preferred Stock)
of a Wholly-Owned Subsidiary (in each case other than
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Indebtedness owed to an Issuer or a Subsidiary); and (D) fourth, to the
extent of the balance of such Net Available Cash after application in
accordance with clauses (A), (B) and (C), to (w) the investment in or
acquisition of Additional Assets, (x) the making of Temporary Cash
Investments, (y) the prepayment, repayment or purchase of Indebtedness
of an Issuer (other than Indebtedness owing to any Subsidiary of an
Issuer) or Indebtedness of any Subsidiary (other than Indebtedness owed
to an Issuer or any of its Subsidiaries) or (z) any other purpose
otherwise permitted under this Indenture, in each case within the later
of 45 days after the application of Net Available Cash in accordance
with clauses (A), (B) and (C) or the date that is 365 days from the
receipt of such Net Available Cash; provided, however, that, in
connection with any prepayment, repayment or purchase of Indebtedness
pursuant to clause (A), (B), (C) or (D) above, the applicable Issuer or
such Restricted Subsidiary shall retire such Indebtedness and shall
cause the related loan commitment (if any) to be permanently reduced in
an amount equal to the principal amount so prepaid, repaid or purchased.
Notwithstanding the foregoing provisions, the Issuers and their
Restricted Subsidiaries shall not be required to apply any Net Available
Cash in accordance herewith except to the extent that the aggregate Net
Available Cash from all Asset Dispositions which are not applied in
accordance with this covenant at any time exceeds $10.0 million. The
Issuers shall not be required to make an offer for Securities pursuant
to this covenant if the Net Available Cash available therefor (after
application of the proceeds as provided in clause (A)) is less than
$10.0 million for any particular Asset Disposition (which lesser amounts
shall be carried forward for purposes of determining whether an offer is
required with respect to the Net Available Cash from any subsequent
Asset Disposition). Notwithstanding the foregoing, the Issuers will not
be required to comply with the terms of this Section 4.10 to the extent
such Asset Disposition consists of a sale of the Missouri Properties;
provided, however, that if the Net Available Cash from such Asset
Disposition exceeds $7.5 million, the Issuers will be required to apply
the amount of such excess in accordance with the provision of this
Section 4.10.
For the purposes of this Section 4.10, the following will be deemed to
be cash: (x) the assumption by the transferee of Senior Secured Indebtedness
of an Issuer, or Senior Secured Indebtedness of any Restricted Subsidiary of
an Issuer and the release of such Issuer or such Restricted Subsidiary from
all liability on such senior indebtedness in connection with such Asset
Disposition (in which case the Issuers shall, without further action, be
deemed to have applied such assumed Indebtedness in accordance with clause
(A) of the preceding paragraph) and (y) securities received by an Issuer or
any Restricted Subsidiary of an Issuer from the transferee that are promptly
(and in any event within 60 days) converted by such Issuer or such Restricted
Subsidiary into cash.
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(b) In the event of an Asset Disposition that requires the
purchase of Securities pursuant to clause (a)(iii)(B), the Issuers will be
required to purchase Securities tendered pursuant to an offer by the Issuers
for the Securities at a purchase price of 101% of the Accreted Value thereof
or 101% of the principal amount thereof, as applicable, under clause
(a)(iii)(B), and in each case plus accrued and unpaid interest, if any, to
the purchase date in accordance with the procedures (including prorating in
the event of oversubscription) set forth in this Indenture. If the aggregate
purchase price of the Securities tendered pursuant to the offer is less than
the Net Available Cash allotted to the purchase of the Securities, the
Issuers will apply the remaining Net Available Cash in accordance with
clauses (a) (iii) (C) or (D) above.
(c) The Issuers will comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities
laws or regulations in connection with the repurchase of Securities pursuant
to this Indenture. To the extent that the provisions of any securities laws
or regulations conflict with provisions of this Section 4.10, the Issuers
will comply with the applicable securities laws and regulations and will not
be deemed to have breached its obligations under this Indenture by virtue
thereof.
SECTION 4.11. LIMITATION ON AFFILIATE TRANSACTIONS.
(a) The Issuers shall not, and shall not permit any of their
Restricted Subsidiaries to, directly or indirectly, enter into or conduct any
transaction or series of related transactions (including the purchase, sale,
lease or exchange of any property or the rendering of any service) with or
for the benefit of any Affiliate of an Issuer, other than a Wholly-Owned
Subsidiary (an "Affiliate Transaction") unless: (i) the terms of such
Affiliate Transaction are no less favorable to such Issuer or such Restricted
Subsidiary, as the case may be, than those that could be obtained at the time
of such transaction in arm's length dealings with a Person who is not such an
Affiliate; (ii) in the event such Affiliate Transaction involves an aggregate
amount in excess of $200,000, the terms of such transaction have been
approved by a majority of the members of the Board of Directors of such
Issuer and by a majority of the disinterested members of such Board, if any
(and such majority or majorities, as the case may be, determines that such
Affiliate Transaction satisfies the criteria in (i) above); and (iii) in the
event such Affiliate Transaction involves an aggregate amount in excess of
$1.0 million, the Issuers have received a written opinion from an independent
investment banking firm of nationally recognized standing that such Affiliate
Transaction is fair to such Issuer or such Restricted Subsidiary, as the case
may be, from a financial point of view.
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(b) The foregoing paragraph (a) shall not apply to (i) any
Restricted Payment permitted to be made pursuant to Section 4.07, (ii) any
issuance of securities, or other payments, awards or grants in cash,
securities or otherwise pursuant to, or the funding of, employment
arrangements, or any stock options and stock ownership plans for the benefit
of employees, officers and directors, consultants and advisors approved by
the Board of Directors of the applicable Issuer, (iii) loans or advances to
employees in the ordinary course of business of the Issuers or any of their
Restricted Subsidiaries in aggregate amount outstanding not to exceed
$250,000 to any employee or $1.0 million in the aggregate at any time, (iv)
any transaction between Wholly-Owned Subsidiaries, (v) indemnification
agreements with, and the payment of fees and indemnities to, directors,
officers and employees of each of the Issuers and the Issuers' Restricted
Subsidiaries and indemnification agreements with, or for the benefit of,
officers and employees of BMCLP to the extent related to the performance of
management services for the Issuers or any of their Subsidiaries, in each
case in the ordinary course of business, (vi) transactions pursuant to
agreements in existence on the Issue Date (other than with BMCLP) which are
(x) described in the Offering Memorandum or (y) otherwise, in the aggregate,
immaterial to the Issuers and their Restricted Subsidiaries taken as a whole,
(vii) any employment, noncompetition or confidentiality agreements entered
into by the Issuers or any of their Restricted Subsidiaries with its
employees in the ordinary course of business, (viii) the issuance of Capital
Stock of an Issuer (other than Disqualified Stock), (ix) the acquisition of
Managed Affiliate Notes provided that the aggregate principal amount thereof
(including the Managed Affiliate Notes outstanding on the Issue Date) does
not exceed $20 million at any time outstanding; (x) the Managed Affiliate
Management Agreements, and (xi) provided that no Default or Event of Default
shall have occurred and be continuing, payments to BMCLP for services
rendered to the Issuers and the Restricted Subsidiaries under the
Administrative Management Agreements not to exceed in any fiscal year in the
aggregate the remainder of (A) the lesser of (1) the greater of $2 million or
15% of Media Cashflow for such fiscal year or (2) $5 million over (B) the
payments to BMCLP under management agreements between BMCLP and Managed
Affiliates in such fiscal year provided that the obligations to make such
payments to BMCLP under the Administrative Management Agreements constitute
Subordinated Obligations and the terms of such subordination are no less
favorable to the holders of senior indebtedness (including the Securities)
than the terms set forth in the Administrative Management Agreements between
the Issuers and BMCLP on the Issue Date.
SECTION 4.12. LIMITATION ON LIENS.
The Issuers shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, create, incur, assume or suffer to
exist any Liens except for Permitted Liens.
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SECTION 4.13. CORPORATE EXISTENCE.
Subject to Article 5 hereof, each Issuer shall do or cause to be
done all things necessary to preserve and keep in full force and effect its
corporate, partnership or other existence, and the corporate, partnership
or other existence of each Subsidiary, in accordance with the respective
organizational documents (as the same may be amended from time to time) of
each Subsidiary and the rights (charter and statutory), licenses and
franchises of the Issuers and their Subsidiaries; provided, however, that
the Issuers shall not be required to preserve any such right, license or
franchise, or the corporate, partnership or other existence of any
Subsidiary, if the Board of Directors of the applicable Issuer shall
determine that the preservation thereof is no longer desirable in the
conduct of the business of the Issuers and their Subsidiaries, taken as a
whole, and that the loss thereof is not adverse in any material respect to
the Securityholders.
SECTION 4.14. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each
Securityholder will have the right to require the Issuers to purchase all or
any part of such Securityholder's Securities, in the case of a repurchase
date prior to December 15, 1999, at a purchase price in cash equal to 101% of
the Accreted Value thereof plus any accrued and unpaid interest, if any, to
the date of repurchase (subject to the right of Securityholders of record on
the relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date) and for any repurchase date on or after December 15,
1999, at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest, if any, to the date of repurchase
(subject to the right of Security holders of record on the relevant Interest
Record Date to receive interest due on the relevant Interest Payment Date)
(such applicable purchase price being hereinafter referred to as the "Change
of Control Purchase Price").
(b) Within 30 days following any Change of Control, unless the
Issuers have mailed a redemption notice with respect to all the outstanding
Securities in connection with such Change of Control, the Issuers shall
mail a notice to each Securityholder with a copy to the Trustee stating:
(i) that a Change of Control has occurred and that such
Securityholder has the right to require the Issuers to repurchase such
Securityholder's Securities at a purchase price in cash equal to the
Change of Control Purchase Price;
(ii) the repurchase date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed); and
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(iii) the procedures determined by the Issuers, consistent
with this Indenture, that a Securityholder must follow in order to
have its Securities repurchased.
(c) Securityholders electing to have a Security repurchased will
be required to surrender the Security, with the form entitled "Option of
Securityholder to Elect Purchase" on the reverse of the Security completed,
to the Issuers at the address specified in the notice at least 10 Business
Days prior to the repurchase date. Securityholders will be entitled to
withdraw their election if the Trustee or the Issuers receive not later
than three Business Days prior to the repurchase date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Securityholder, the principal amount of the Security which was delivered
for repurchase by the Securityholder and a statement that such
Securityholder is withdrawing his election to have such Security purchased.
(d) On the repurchase date, all Securities repurchased by the
Issuers under this Section 4.14 shall be delivered by the Trustee for
cancellation, and the Issuers shall pay the repurchase price plus accrued
and unpaid interest, if any, to the Securityholders entitled thereto.
(e) The Issuers shall to the extent applicable comply with any
tender offer rules under the Exchange Act which may then be applicable,
including Rule 14e-1, in connection with any offer required to be made by
the Issuers to repurchase the Securities 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 this Indenture relative to the
Issuers' obligation to make an offer to repurchase the Securities as a
result of a Change of Control, the Issuers shall comply with the applicable
securities laws and regulations and will not be deemed to have breached
their obligations under such provisions of this Indenture by virtue
thereof.
SECTION 4.15. LIMITATION ON ISSUANCES OF CAPITAL STOCK OF RESTRICTED
SUBSIDIARIES.
The Issuers shall not permit any of their Restricted Subsidiaries
to issue any Capital Stock to any Person (other than to an Issuer or a
Wholly-Owned Subsidiary of an Issuer) or permit any Person (other than an
Issuer or a Wholly-Owned Subsidiary of an Issuer) to own any Capital Stock
of a Restricted Subsidiary of an Issuer, if in either case as a result
thereof such Restricted Subsidiary would no longer be a Restricted
Subsidiary of an Issuer; provided, however, that this provision shall not
prohibit (x) the Issuers or any of their Restricted Subsidiaries from
selling, leasing or otherwise disposing of 100% of the Capital Stock of any
Restricted Subsidiary in accordance with Section 4.10 and Section
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5.01 hereof or (y) the designation of a Restricted Subsidiary as an
Unrestricted Subsidiary in compliance with this Indenture.
SECTION 4.16. LIMITATION ON SALE/LEASEBACK TRANSACTION.
The Issuers shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, Guarantee or otherwise
become liable with respect to any Sale/Leaseback Transaction with respect
to any property or assets unless (i) the Issuers or such Restricted
Subsidiary, as the case may be, would be entitled, pursuant to this
Indenture, to Incur Indebtedness secured by a Permitted Lien on such
property or assets in an amount equal to the Attributable Indebtedness with
respect to such Sale/Leaseback Transaction, (ii) the net cash proceeds from
such Sale/Leaseback Transaction are at least equal to the fair market value
of the property or assets subject to such Sale/Leaseback Transaction (such
fair market value determined, in the event such property or assets have a
fair market value in excess of $1.0 million, no more than 30 days prior to
the effective date of such Sale/Leaseback Transaction, by the Board of
Directors of BMC as evidenced by a resolution of such Board) and (iii) the
net cash proceeds of such Sale/Leaseback Transaction are applied in
accordance with the provisions described under Section 4.10.
SECTION 4.17. LIMITATION ON DESIGNATIONS OF UNRESTRICTED SUBSIDIARIES.
(a) The Issuers may designate any Subsidiary of an Issuer (other than
a Subsidiary of an Issuer which owns Capital Stock of a Restricted
Subsidiary) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") only if:
(i) no Default shall have occurred and be continuing at the time
of or after giving effect to such Designation; and
(ii) the Issuers would be permitted under this Indenture to make
an Investment in Unrestricted Subsidiaries at the time of Designation
(assuming the effectiveness of such Designation) in an amount (the
"Designation Amount") equal to the sum of (x) fair market value of the
Capital Stock of such Subsidiary owned by the Issuers and the
Restricted Subsidiaries on such date and (y) the aggregate amount of
other Investments of the Issuers and the Restricted Subsidiaries in
such Subsidiary on such date; and
(iii) except in the case of a newly formed or a newly acquired
Subsidiary, the Issuers would be permitted to incur $1.00 of
additional Indebtedness pursuant
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to paragraph (a)(ii) of Section 4.09 at the time of Designation (assuming
the effectiveness of such Designation).
(b) In the event of any such Designation, the Issuers shall be deemed
to have made an Investment constituting a Restricted Payment pursuant to
Section 4.07 for all purposes of this Indenture (including, without
limitation, the definition of Permitted Investment) in the Designation
Amount.
(c) The Issuers shall not, and shall not permit any Restricted
Subsidiary to, at any time (x) provide direct or indirect credit support
for or a guarantee of any Indebtedness of any Unrestricted Subsidiary
(including of any undertaking, agreement or instrument evidencing such
Indebtedness), (y) be directly or indirectly liable for any Indebtedness of
any Unrestricted Subsidiary or (z) be directly or indirectly liable for any
Indebtedness which provides that the holder thereof may (upon notice, lapse
of time or both) declare a default thereon or cause the payment thereof to
be accelerated or payable prior to its final scheduled maturity upon the
occurrence of a default with respect to any Indebtedness of any
Unrestricted Subsidiary (including any right to take enforcement action
against such Unrestricted Subsidiary), except, in the case of clause (x) or
(y), to the extent permitted under Section 4.07.
(d) The Issuers may revoke any Designation of a Subsidiary as an
Unrestricted Subsidiary (a "Revocation"), whereupon such Subsidiary shall
then constitute a Restricted Subsidiary, if:
(i) no Default shall have occurred and be continuing at the time
of and after giving effect to such Revocation; and
(ii) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such Revocation would, if Incurred
at such time, have been permitted to be Incurred for all purposes of
this Indenture.
All Designations and Revocations must be evidenced by Board
Resolutions of the Issuers delivered to the Trustee certifying compliance
with the foregoing provisions.
SECTION 4.18. FUTURE NOTE GUARANTORS.
The Issuers shall cause each newly organized or acquired
Restricted Subsidiary to execute and deliver to the Trustee pursuant to
Section 10.07 (a) a supplemental indenture in which such Restricted
Subsidiary agrees to be bound by the terms of this Indenture as a
Subsidiary Guarantor and (b) a Subsidiary Guarantee.
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SECTION 4.19. LIMITATION ON BUSINESS
The Issuers shall not, and shall not permit any of their
Restricted Subsidiaries to, engage substantially in any business other than
a Permitted Business.
SECTION 4.20. FURTHER INSTRUMENTS AND ACTS.
The Trustee shall not be bound to ascertain or inquire as to the
performance or observance of any covenants, conditions or agreements on the
part of the Issuers, except as otherwise set forth herein, but the Trustee
may require of the Issuers full information and advice as to the
performance of the covenants, conditions and agreements contained herein,
and upon request of the Trustee, the Issuers will execute and deliver such
further instruments and do such further acts as may be reasonably necessary
or proper to carry out more effectively the purposes of this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE OF ASSETS.
No Issuer shall consolidate with or merge with or into, or
convey, transfer or lease all or substantially all of its assets to, any
Person, unless:
(i) the resulting, surviving or transferee Person (the
"Successor Company") shall be a corporation, partnership, trust or
limited liability company organized and existing under the laws of the
United States of America, any State thereof or the District of
Columbia and the Successor Company (if not an Issuer) shall expressly
assume, by supplemental indenture, executed and delivered to the
Trustee, in form satisfactory to the Trustee, all the obligations of
such Issuer under the Securities and this Indenture;
(ii) immediately after giving effect to such transaction (and
treating any Indebtedness that becomes an obligation of the Successor
Company or any Subsidiary of the Successor Company as a result of such
transaction as having been Incurred by the Successor Company or such
Restricted Subsidiary at the time of such transaction), no Default or
Event of Default shall have occurred and be continuing;
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(iii) immediately after giving effect to such transaction,
the Successor Company (A) shall have a Consolidated Net Worth equal or
greater to the Consolidated Net Worth of the applicable Issuer
immediately prior to such transaction and (B) shall be able to incur
at least an additional $1.00 of Indebtedness pursuant to paragraph
(a)(ii) of Section 4.09; and
(iv) such Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture (if
any) comply with this Indenture; and
(v) there has been delivered to the Trustee an Opinion of
Counsel to the effect that holders of Securities will not recognize
income, gain or loss for U.S. federal income tax purposes as a result
of such consolidation, merger, conveyance, transfer or lease and will
be subject to U.S. federal income tax on the same amount and in the
same manner and at the same times as would have been the case if such
consolidation, merger, conveyance, transfer or lease had not occurred.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
The Successor Company will succeed to, and be substituted for,
and may exercise every right and power of, the applicable Issuer under this
Indenture, but, in the case of a lease of all or substantially all its
assets, the applicable Issuer will not be released from the obligation to
pay the principal of and interest on the Securities.
Notwithstanding clauses (ii) and (iii), of Section 5.01, any
Restricted Subsidiary of an Issuer may consolidate with, merge into or
transfer all or part of its properties and assets to the applicable Issuer.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
(a) An "Event of Default" occurs if:
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(i) there is a default in any payment of interest on any
Security when due, continued for 30 days;
(ii) there is a default in the payment of principal of any
Security when due at its Stated Maturity, upon optional redemption,
upon required repurchase, upon declaration or otherwise;
(iii) there is a failure by an Issuer to comply with its
obligations under Section 5.01, Section 4.14 or Section 4.10;
(iv) there is failure by an Issuer to comply for 30 days after
notice with any of its obligations under Section 4.01, 4.03, 4.04,
4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16, 4.17 or
4.19 hereof (in each case, other than a failure to purchase Securities
which shall constitute an Event of Default under clause (ii) above);
(v) the failure by an Issuer to comply for 60 days after notice
with its other agreements contained in this Indenture;
(vi) Indebtedness of an Issuer or any Restricted Subsidiary is
not paid within any applicable grace period after final maturity or is
accelerated by the holders thereof because of a default and the total
amount of such Indebtedness unpaid or accelerated exceeds $1.0 million
and such default shall not have been cured after a 10-day period;
(vii) any judgment or decree for the payment of money in
excess of $1.0 million (to the extent not covered by insurance) is
rendered against an Issuer or a Significant Subsidiary and such
judgment or decree shall remain undischarged or unstayed for a period
of 60 days after such judgment becomes final and nonappealable (the
"judgment default provision");
(viii) any Subsidiary Guarantee by a Significant Subsidiary
ceases to be in full force and effect (except as contemplated by the
terms of this Indenture) or any Subsidiary Guarantor that is a
Significant Subsidiary denies or disaffirms its obligations under this
Indenture or its Subsidiary Guarantee and such Default continues for
10 days;
(ix) an Issuer or any of its Significant Subsidiaries pursuant to
or within the meaning of any Bankruptcy Law:
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(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it
in an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property,
(D) makes a general assignment for the benefit of its
creditors,
(E) consents to or acquiesces in the institution of a
bankruptcy or an insolvency proceeding against it, or
(F) takes any corporate action to authorize or effect any
of the foregoing; or
(x) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against an Issuer or any of its
Significant Subsidiaries in an involuntary case,
(B) appoints a Custodian of an Issuer or any of its
Significant Subsidiaries or for all or substantially all of the
property of an Issuer or any of its Significant Subsidiaries, or
(C) orders the liquidation of an Issuer or any of its
Significant Subsidiaries,
and the order or decree remains unstayed and in effect for 60
consecutive days.
(b) The term "Bankruptcy Law" means Title 11, U.S. Code or any
similar Federal or state law for the relief of debtors. The term
"Custodian" means any receiver, trustee, assignee, liquidator or similar
official under any Bankruptcy Law.
(c) A Default under clause (iv) or (v) of Section 6.01(a) hereof
is not an Event of Default until the Trustee or the Holders of 25% in
principal amount of the outstanding Securities notifies the Issuers or such
Subsidiary Guarantor, as the case may be, of the Default and the Issuers or
such Subsidiary Guarantor, as the case may be, does
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not cure such Default within the time specified in such clause (iv) or (v)
after receipt of the notice.
SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified
in clause (ix) or (x) of Section 6.01(a) with respect to an Issuer or any
Subsidiary Guarantor) occurs and is continuing, the Trustee or the Holders
of not less than 25% in aggregate principal amount of the then outstanding
Securities by notice to the Issuers, may declare (a "Declaration") (i) in
the case of a Declaration that occurs prior to December 15, 1999, the
Accreted Value of all the Securities then outstanding plus accrued interest
on the Securities to the date of acceleration, and (ii) in the case of a
Declaration that occurs on or after December 15, 1999, the entire principal
amount of all the Securities then outstanding plus accrued interest to the
date of acceleration (the "Default Amount"). Upon any such Declaration,
the Default Amount shall be due and payable immediately. If an Event of
Default specified in clause (ix) or (x) of Section 6.01(a) occurs with
respect to an Issuer or any of the Subsidiary Guarantors, the Default
Amount shall ipso facto become and be immediately due and payable without
any Declaration or other act on the part of the Trustee or any
Securityholder. The Holders of a majority in aggregate principal amount of
the then outstanding Securities by written notice to the Trustee may
rescind any Declaration if all Events of Default then continuing (other
than any Events of Default with respect to the nonpayment of principal of
or interest on any Security which has become due solely as a result of such
Declaration) have been cured, and may waive any Default other than a
Default with respect to a covenant or provision that cannot be modified or
amended without the consent of each Securityholder pursuant to Section 9.02
hereof.
SECTION 6.03. OTHER REMEDIES.
(a) If an Event of Default occurs and is continuing, the Trustee
and the Securityholders may pursue any available remedy to collect the
payment of principal, premium, if any, or interest on the Securities or to
enforce the performance of any provision of the Securities or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not
possess any of the Securities or does not produce any of them in the
proceeding. A delay or omission by the Trustee or any Securityholder 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.
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SECTION 6.04. WAIVER OF PAST DEFAULTS.
Securityholders of not less than a majority in aggregate
principal amount of the then outstanding Securities by notice to the
Trustee may waive an existing Default or Event of Default and its
consequences, except a continuing Default or Event of Default in the
payment of the principal, premium, if any, or interest on any Security
(other than principal, premium (if any) or interest which has become due
solely as a result of a Declaration) or a Default or Event of Default that
cannot be modified or amended without the consent of the Holder of each
outstanding Security affected. 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.
Securityholders of a majority in principal amount of the
Securities then outstanding voting as a single class may direct the time,
method and place of conducting any proceeding for any remedy available to
the Trustee or exercising any trust or power conferred on it. However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture, that the Trustee determines may be unduly prejudicial to the
rights of other Securityholders or that may involve the Trustee in personal
liability.
SECTION 6.06. LIMITATION ON SUITS.
(a) A Securityholder may pursue a remedy with respect to this
Indenture or the Securities only if:
(i) the Securityholder has previously given to the Trustee
written notice of a continuing Event of Default;
(ii) the Holders of at least 25% in principal amount of the then
outstanding Securities make a written request to the Trustee to pursue
the remedy;
(iii) such Securityholder or Securityholders offer, and, if
requested, provide, to the Trustee security or indemnity satisfactory
to the Trustee against any loss, liability or expense;
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(iv) 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 security or indemnity; and
(v) during such 60-day period the Holders of a majority in
principal amount of the then outstanding Securities do not give the
Trustee, in the reasonable opinion of such Trustee, a direction
inconsistent with the request.
(b) A Securityholder may not use this Indenture to prejudice the
rights of another Securityholder or to obtain a preference or priority over
another Securityholder.
SECTION 6.07. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right
of any Securityholder to receive payment of principal, premium, if any, and
interest on the Security, on or after the respective due dates expressed in
the Security, 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 the Securityholder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE.
If an Event of Default specified in Section 6.01(a)(i) or (ii) or
an acceleration pursuant to Section 6.02 occurs and is continuing, the
Trustee is authorized to recover judgment in its own name and as trustee of
an express trust against an Issuer or any Subsidiary Guarantor or any other
obligor on the Securities for the whole amount of principal, premium, if
any, and accrued interest remaining unpaid on the Securities and interest
on overdue principal, premium, if any, and, to the extent lawful, interest
on overdue installments of interest and such further amount as shall be
sufficient to cover the costs and expenses of collection, including any
advances made by the Trustee and the reasonable compensation, expenses and
disbursements of the Trustee, its agents and counsel, and any other amounts
due the Trustee under Section 7.07 hereof.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM.
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 any other amounts due the Trustee under Section 7.07 hereof)
and the Securityholders allowed in any judicial proceedings relative to the
Issuers or any Subsidiary Guarantor (or any other obligor on the
Securities),
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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 hereby
authorized by each Securityholder 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 Securityholders, 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 7.07 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 7.07 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 which the
Securityholders 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 Securityholder
any plan of reorganization, arrangement, adjustment or composition affecting
the Securities or the rights of any Securityholder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.10. PRIORITIES.
(a) If the Trustee collects any money pursuant to this Article, it
shall pay out the money in the following order:
(i) First: to the Trustee, its agents and attorneys for amounts
due under Section 7.07, including payment of all compensation,
expenses and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection;
(ii) Second: if the Securityholders are forced to proceed against
the Issuer directly without the Trustee, to the Securityholders for
their collection costs;
(iii) Third: to the Securityholders for amounts due and
unpaid on the Securities for principal, premium, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on the Securities for principal, premium, if
any, and interest, respectively; and
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(iv) Fourth: to the Issuers or, to the extent the Trustee
collects any amount pursuant to Article 10 hereof from any Subsidiary
Guarantor, to such Subsidiary Guarantor, or to such party as a court
of competent jurisdiction shall direct.
(b) The Trustee may fix a record date and payment date for any
payment to Securityholders.
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 does not apply to a suit
by the Trustee, a suit by a Securityholder pursuant to Section 6.06 hereof,
or a suit by Holders of more than 10% in principal amount of the then
outstanding Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances and in the
conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Trustee undertakes to perform only those duties as are
specifically set forth in this Indenture and the duties of the Trustee
shall be determined solely by the express provisions of this
Indenture, 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
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(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 any certificates
or opinions furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall examine the same to determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary herein contained,
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 shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that
the Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall 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 shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuers.
Assets held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
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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 unless the Trustee has reason to believe such fact or matter is not
true.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The
Trustee shall not be liable for any action it takes or omits to take in good
faith reliance on such Officers' Certificate or Opinion of Counsel. The
Trustee may consult with counsel and the written advice of such counsel or
any Opinion of Counsel shall 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 agents and shall not be
responsible for the misconduct or negligence of any agent appointed with due
care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
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 Issuers or any Subsidiary
Guarantor shall be sufficient if signed by an Officer of an Issuer or any
Subsidiary Guarantor.
(f) The permissive rights of the Trustee to do certain things
enumerated in this Indenture shall not be construed as a duty and the Trustee
shall not be answerable for other than its negligence or wilful default with
respect to such permissive rights.
(g) Except for an Event of Default under 6.01(a)(i) (other than
with respect to Additional Interest) or (ii) hereof, the Trustee shall not be
deemed to have notice of any Default or Event of Default unless (i)
specifically notified in writing of such event by an Issuer or the
Securityholders of not less than 25% in aggregate principal amount of
Securities outstanding or (ii) a Responsible Officer of the Trustee has
actual knowledge of such Default or Event of Default; as used herein, the
term "actual knowledge" means the actual fact or statement of knowing,
without any duty to make any investigation with regard thereto.
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SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Securities and may otherwise deal with the Issuers, any
Subsidiary Guarantor or any Affiliate of an Issuer or any Subsidiary
Guarantor with the same rights it would have if it were not Trustee. Any
Agent may do the same with like rights. However, the Trustee is subject to
Sections 7.10 and 7.11 hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes no
representation as to the validity or adequacy of this Indenture, the
Securities or the Subsidiary Guarantees, it shall not be accountable for the
Issuers' use of the proceeds from the Securities or any money paid to an
Issuer or upon the direction of an Issuer under any provision of this
Indenture, it shall not be responsible for the use or application of any
money received by any Paying Agent other than the Trustee, and it shall not
be responsible for any statement or recital herein or any statement in the
Securities or the Subsidiary Guarantees or any other document in connection
with the sale of the Securities 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 shall mail to each Securityholder a
notice of the Default or Event of Default within 90 days after it occurs.
Except in the case of a Default in any payment of principal or interest on
any Security, the Trustee may withhold the notice if a committee of its
officers in good faith determines that withholding the notice is in the
interest of the Securityholders. In addition, each Issuer is required to
deliver to the Trustee, within 90 days after the end of each fiscal year of
such Issuer, a certificate indicating whether the signers thereof know of any
Default that occurred during the previous year. The Issuers shall also
deliver to the Trustee, within 30 days after the occurrence thereof, written
notice of any events which would constitute a Default or an Event of Default.
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS.
(a) Within 60 days after each June 15 beginning with the June 15
following the date of this Indenture, the Trustee shall mail to the
Securityholders a brief report dated as of such reporting date that complies
with TIA Section 313(a) (but if no event described in TIA Section 313(a)
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has occurred within the twelve months preceding the reporting date, no report
need be transmitted). The Trustee also shall comply with TIA Section
313(b), (c) and (d).
(b) A copy of each report at the time of its mailing to the
Securityholders shall be filed with the Commission and each stock exchange,
if any, on which the Securities are listed. The Issuers shall promptly
notify the Trustee if and when the Securities are listed on any stock
exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
(a) Each of the Issuers and the each of the Subsidiary Guarantors,
jointly and severally, shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. Each of the Issuers and each of the Subsidiary
Guarantors, jointly and severally, shall reimburse the Trustee upon request
for all reasonable disbursements, advances and expenses incurred or made by
it in addition to the compensation for its services. Such expenses shall
include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
(b) Each of the Issuers and each of the Subsidiary Guarantors,
jointly and severally, shall 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 defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder, except as set forth below in subparagraph
(d). The Trustee shall notify the Issuers and each of the Subsidiary
Guarantors promptly of any claim for which it may seek indemnity. Failure by
the Trustee to so notify the Issuers or any Subsidiary Guarantor shall not
relieve the Issuers or any of the Subsidiary Guarantors of their Obligations
hereunder. The Trustee may have separate counsel and each of the Issuers and
each of the Subsidiary Guarantors, jointly and severally, shall pay the
reasonable fees and expenses of such counsel. Neither the Issuers nor any
Subsidiary Guarantor need pay for any settlement made without its consent,
which consent shall not be unreasonably withheld.
(c) The obligations of each of the Issuers and each of the
Subsidiary Guarantors under this Section 7.07 shall survive the resignation
or removal of the Trustee and the satisfaction and discharge or termination
of this Indenture.
(d) Notwithstanding subparagraphs (a) or (b) above, neither the
Issuers nor any Subsidiary Guarantor need reimburse any expense or indemnify
against any loss
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or liability incurred by the Trustee through its own negligence, bad faith or
willful misconduct.
(e) To secure the Issuers' and each of the Subsidiary Guarantor's
payment obligations in this Section, the Trustee shall have a Lien prior to
the Securities on all money or property held or collected by the Trustee,
except that held in trust to pay principal, premium, if any, and interest on
particular Securities. Such Lien shall survive the resignation or removal of
the Trustee and the satisfaction and discharge of this Indenture.
(f) When the Trustee incurs expenses or renders services after an
Event of Default specified in Section 6.01(ix) or (x) hereof occurs, the
expenses and the compensation for such services (including the fees and
expenses of its agents and counsel) are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section 7.08.
(b) The Trustee may resign at any time and be discharged from the
trust hereby created by so notifying the Issuers. The Securityholders of a
majority in principal amount of the then outstanding Securities may remove
the Trustee by so notifying the Trustee and the Issuers. The Issuers may
remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10 hereof;
(ii) 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;
(iii) a Custodian, receiver or other public officer takes
charge of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a vacancy exists in
the office of Trustee for any reason, the Issuers shall notify each
Securityholder of such event and promptly appoint a successor Trustee. Within
one year after the successor Trustee takes
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office, the Holders of a majority in principal amount of the then outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Issuers.
(d) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuers. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and
the successor Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall mail a notice of
its succession to each Securityholder. The retiring Trustee shall 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 7.07 hereof. Notwithstanding replacement
of the Trustee pursuant to this Section 7.08, the Issuers' and each of the
Subsidiary Guarantor's obligations under Section 7.07 hereof shall continue
for the benefit of the retiring Trustee.
(e) If a successor Trustee does not take office within 60 days
after the retiring Trustee resigns or is removed, the retiring Trustee, the
Issuers, any of the Subsidiary Guarantors or the Securityholders of at least
10% in principal amount of the then outstanding Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
(f) If the Trustee after written request by any Securityholder who
has been a Securityholder for at least six months fails to comply with
Section 7.10, such Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business to another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however,
that such corporation shall be otherwise qualified and eligible under this
Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
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(a) There shall at all times be a Trustee hereunder which shall be
a corporation organized and doing business under the laws of the United
States of America or any State or Territory thereof or the District of
Columbia authorized under such laws to exercise corporate trustee power,
shall be subject to supervision or examination by Federal, State,
Territorial, or District of Columbia authority and shall have a combined
capital and surplus of at least $50 million as set forth in its most recent
published annual report of condition.
(b) This Indenture shall always have a Trustee who satisfies the
requirements of TIA Section 310(a)(1), (2) and (5). The Trustee shall
comply with TIA Section 310(b). The provisions of TIA Section 310 shall
also apply to the Issuers and each of the Subsidiary Guarantors, as obligor
of the Securities.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUERS.
The Trustee shall comply with TIA Section 311(a), excluding
any creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the
extent indicated therein. The provisions of TIA Section 311 shall apply to
the Issuers and each of the Subsidiary Guarantors as obligor on the
Securities.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES; DEFEASANCE.
(a) When (i) the Issuers deliver to the Trustee all outstanding
Securities (other than Securities replaced pursuant to Section 2.07 hereof)
canceled or for cancellation or (ii) all outstanding Securities have become
due and payable whether at maturity or as a result of a Notice of Redemption
and the Issuers irrevocably deposit with the Trustee funds sufficient to pay
at maturity or redemption all outstanding Securities, including interest
thereon (other than Securities replaced pursuant to Section 2.07 hereof), and
if in either case the Issuers pay all other sums payable hereunder by the
Issuers, then this Indenture shall, subject to Sections 8.01(e) and 8.06
hereof, cease to be of further effect. The Trustee shall acknowledge
satisfaction and discharge of this Indenture on demand of the Issuers
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accompanied by an Officers' Certificate and an Opinion of Counsel and at the
cost and expense of the Issuers.
(b) Subject to Sections 8.01(e), 8.02 and 8.06 hereof, the Issuers
at any time may terminate (i) all of their obligations under the Securities
and this Indenture ("legal defeasance option") or (ii) all obligations under
Sections 3.09, 4.04(a), (b) and (c), 4.07, 4.08, 4.09, 4.10, 4.11, 4.12,
4.13, 4.14, 4.15, 4.16, 4.17, 4.19 or 5.01(iii) and 5.01(iv) and the
operation of Sections 6.01(a)(iv), 6.01(a)(v), 6.01(a)(vi) and 6.01(a)(vii)
(as well as 6.01(a)(ix) and 6.01(a)(x) hereof but only with respect to
Significant Subsidiaries) ("covenant defeasance option"). The Issuers may
exercise their legal defeasance option notwithstanding the prior exercise of
their covenant defeasance option.
(c) If the Issuers exercise their legal defeasance option, payment
of the Securities may not be accelerated because of an Event of Default. If
the Issuers exercise their covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Section 6.01(a)(iv), 6.01(a)(vi), 6.01(a)(vii) or 6.01(a)(viii) (or
6.01(a)(ix) and 6.01(a)(x) but only with respect to Significant Subsidiaries
which are Subsidiary Guarantors), or because of the failure of the Issuers or
the Subsidiary Guarantors to comply with Sections 5.01(iii) or 5.01(iv).
(d) Upon satisfaction of the conditions set forth herein and upon
request of the Issuers, the Trustee shall acknowledge in writing the
discharge of those obligations that the Issuers terminate.
(e) Notwithstanding clauses (a) and (b) above, the Issuers'
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 7.07, 7.08, 8.01(d),
8.04, 8.05 and 8.06 hereof and the obligations of each Subsidiary Guarantor
under Article 10 in respect thereof shall survive until the Securities have
been paid in full. Thereafter, the Issuers' obligations in Sections 7.07,
8.04 and 8.05 hereof and the obligations of Subsidiary Guarantors under
Article 10 in respect thereof shall survive.
SECTION 8.02. CONDITIONS TO DEFEASANCE.
(a) The Issuers may exercise their legal defeasance option or
their covenant defeasance option only if:
(i) the Issuers irrevocably deposit in trust with the Trustee
money or U.S. Government Obligations in amounts (including interest,
but without consideration of any reinvestment of such interest) and
maturities sufficient, but in the case of the
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legal defeasance option only, not more than such amounts (as
certified by a nationally recognized firm of independent public
accountants), to pay and discharge at their Stated Maturity (or
such earlier redemption date as the Issuers shall have specified to
the Trustee) the principal of, premium, if any, and interest on all
outstanding Securities to maturity or redemption, as the case may
be, and to pay all of the sums payable by them hereunder; provided,
that the Trustee shall have been irrevocably instructed to apply
such money or the proceeds of such U.S. Government Obligations to
the payment of said principal, premium, if any, and interest with
respect to the Securities;
(ii) in the case of the legal defeasance option only, 123 days
pass after the deposit is made and during the 123 day period no Event
of Default specified in Section 6.01(ix) or (x) hereof with respect to
an Issuer or any Subsidiary Guarantor occurs which is continuing at
the end of the period;
(iii) no Default or Event of Default has occurred and is
continuing on the date of such deposit and after giving effect
thereto;
(iv) the deposit does not constitute a default under any other
agreement binding on an Issuer;
(v) the Issuers deliver to the Trustee an Opinion of Counsel to
the effect that the trust resulting from the deposit does not
constitute, or is qualified as, a regulated investment company under
the Investment Company Act of 1940, as amended;
(vi) in the case of the legal defeasance option, the Issuers
deliver to the Trustee an Opinion of Counsel stating that (x) the
Issuers have received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such Opinion
of Counsel shall confirm that, the Securityholders will not recognize
income, gain or loss for Federal income tax purposes as a result of
such defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been
the case if such defeasance had not occurred;
(vii) in the case of the covenant defeasance option, the
Issuers deliver to the Trustee an Opinion of Counsel to the effect
that the Securityholders 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
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amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(viii) the Issuers deliver to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent to the defeasance and discharge of the Securities
as contemplated by this Article 8 have been complied with.
(b) In order to have money available on a payment date to pay
principal, premium, if any, or interest on the Securities, the U.S.
Government Obligations deposited pursuant to preceding clause (a) shall be
payable as to principal or interest at least one Business Day before such
payment date in such amounts as shall provide the necessary money. U.S.
Government Obligations shall not be callable at the issuer's option.
(c) Before or after a deposit, the Issuers may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date
in accordance with Article 3 hereof.
SECTION 8.03. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to this Article 8. It shall apply the
deposited money and the money from U.S. Government Obligations through the
Paying Agent and in accordance with this Indenture to the payment of
principal, premium, if any, and interest on the Securities.
SECTION 8.04. REPAYMENT TO THE ISSUERS.
(a) The Trustee and the Paying Agent shall promptly pay to the
Issuers upon written request any excess money or securities held by them at
any time; provided, however, that the Trustee shall not pay any such excess
to the Issuers unless the amount remaining on deposit with the Trustee, after
giving effect to such transfer are sufficient to pay principal, premium, if
any, and interest on the outstanding Securities, which amount shall be
certified by independent public accountants.
(b) The Trustee and the Paying Agent shall pay to the Issuers upon
written request any money held by them for the payment of principal, premium,
if any, or interest that remains unclaimed for two years after the date upon
which such payment shall have become due; provided, however, that the Issuers
shall have either caused notice of such payment to be mailed to each
Securityholder entitled thereto no less than 30 days prior to
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such repayment or within such period shall have published such notice in a
financial newspaper of widespread circulation published in the City of New
York. After payment to the Issuers, Securityholders entitled to the money
must look to the Issuers and the Subsidiary Guarantors for payment as general
creditors unless an applicable abandoned property law designates another
Person, and all liability of the Trustee and such Paying Agent with respect
to such money shall cease.
SECTION 8.05. INDEMNITY FOR GOVERNMENT OBLIGATIONS.
The Issuers and the Subsidiary Guarantors, jointly and severally,
shall pay and shall indemnify the Trustee against any tax, fee or other
charge imposed on or assessed against deposited U.S. Government Obligations
or the principal and interest received on such U.S. Government Obligations.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with this Article 8 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 Issuers' and each of the Guarantor's Obligations under this
Indenture and the Securities and the Subsidiary Guarantees shall be revived
and reinstated as though no deposit had occurred pursuant to this Article 8
until such time as the Trustee or Paying Agent is permitted to apply all such
money or U.S. Government Obligations in accordance with this Article 8;
provided, however, that if an Issuer or any Subsidiary Guarantor has made any
payment of principal of, premium, if any, or interest on any Securities
because of the reinstatement of its Obligations, such Issuer or any of the
Subsidiary Guarantors, as the case may be, shall be subrogated to the rights
of the Securityholders to receive such payment from the money or U.S.
Government Obligations held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.
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(a) Notwithstanding Section 9.02 of this Indenture, the Issuers,
when authorized by Board Resolutions, and the Trustee may amend or supplement
this Indenture or the Securities without the consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency or
to provide for the assumption by a successor corporation, partnership
trust or limited liability company of the obligation of an Issuer
under this Indenture; provided, that such amendment or supplement does
not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect the rights of any Securityholder in any respect;
(ii) to comply with Article 5 hereof;
(iii) to provide for uncertificated Securities in addition to
or in place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes
of Section 163(f) of the Internal Revenue Code of 1986, as amended, or
in a manner such that the uncertificated Securities are described in
Section 163(f)(2)(B) of the Internal Revenue Code of 1986, as amended;
(iv) to add Guarantees with respect to the Securities;
(v) to add to the covenants of the Issuers or the Subsidiary
Guarantors for the benefit of the Securityholders or to surrender any
right or power herein conferred upon the Issuer or the Subsidiary
Guarantors;
(vi) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(vii) to make any change that does not, as evidenced by an
Opinion of Counsel delivered to the Trustee, adversely affect the
rights of any Securityholder in any respect; or
(viii) to evidence or provide for a replacement Trustee under
Section 7.08 hereof;
provided, that the Issuers have delivered to the Trustee an Opinion of
Counsel stating that any such amendment or supplement complies with the
provisions of this Section 9.01.
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(b) Upon the request of the Issuers and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors or
board of managers, as the case may be, authorizing the execution of any such
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Issuers and
the Subsidiary Guarantors in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into such
supplemental indenture which affects its own rights, duties or immunities
under this Indenture or otherwise.
(c) After an amendment or supplement under this Section 9.01
becomes effective, the Issuers shall mail to all Securityholders a notice
briefly describing such amendment or supplement. The failure to give such
notice to all Securityholders, or any defect therein, shall not impair or
affect the validity of an amendment or supplement under this Section.
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS.
(a) The Issuers, the Subsidiary Guarantors and the Trustee may
amend or supplement this Indenture or the Securities with the written consent
of the Securityholders of not less than a majority in aggregate principal
amount of the Securities, voting as a single class, then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Securities) and any existing Default and its consequences
(including, without limitation, an acceleration of the Securities) or
compliance with any provision of this Indenture or the Securities may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Securities (including consents obtained in connection
with a tender offer or exchange offer for the Securities). Furthermore,
subject to Sections 6.04 and 6.07 hereof, the Holders of a majority in
aggregate principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Securities) may waive compliance in a particular instance by the Issuers with
any provision of this Indenture or the Securities. However, without the
consent of each Securityholder affected, an amendment, supplement or waiver
under this Section 9.02 may not (with respect to any Securities held by a
non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
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(ii) reduce the rate of or extend the time for payment of any
interest on any Security;
(iii) reduce the principal of or extend the Stated Maturity
of any Security or alter the redemption or repurchase provisions
(including without limitation Sections 3.07, 3.09, 4.11 and 4.14
hereof) with respect thereto;
(iv) reduce the premium payable upon the redemption or repurchase
of any Security or change the time at which any Security may be
redeemed in accordance with Section 3.07;
(v) make any Security payable in money other than that stated in
the Security;
(vi) make any change in Section 6.04 or 6.07 hereof or in this
Section 9.02(a); or
(vii) waive a Default or Event of Default in the payment of
principal of premium, if any, or interest on, or redemption payment
with respect to, any or Security (excluding any principal or interest
due solely as a result of the occurrence of a Declaration);
(viii) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities.
(b) Upon the request of the Issuer and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors or
board of managers, as the case may be, authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee of
evidence satisfactory to the Trustee of the consent of the Securityholders
as aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Issuers and the
Subsidiary Guarantors in the execution of such supplemental indenture
unless such supplemental indenture affects the Trustee's own rights, duties
or immunities under this Indenture or otherwise, in which case the Trustee
may in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
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(c) It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
(d) After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Issuers shall mail to all Securityholders a
notice briefly describing the amendment, supplement or waiver. Any failure
of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Securityholder is a continuing consent by the
Securityholder and every subsequent Securityholder or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. However, any such
Securityholder or subsequent Securityholder may revoke the consent as to its
Security 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 Securityholder.
(b) The Issuers may fix a record date for determining which
Securityholders must consent to such amendment, supplement or waiver. If the
Issuers fix a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the
most recent list of Securityholders furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the
Issuers shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
(a) Securities authenticated and delivered after the execution of
any supplemental indenture may bear a notation in form approved by the
Trustee as to any matter provided for in such amendment, supplement or waiver
on any Security thereafter authenticated. The
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Issuers in exchange for all Securities may issue and the Trustee shall
authenticate new Securities that reflect the amendment, supplement or waiver.
(b) Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, waiver or supplemental
indenture authorized pursuant to this Article 9 if the amendment, waiver or
supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but
need not, sign it. In signing or refusing to sign such amendment, waiver or
supplemental indenture, the Trustee shall be entitled to receive and, subject
to Section 7.01, shall be fully protected in relying upon, in addition to the
documents required by Section 11.04, an Officers' Certificate and an Opinion
of Counsel as conclusive evidence that such amendment, waiver or supplemental
indenture is authorized or permitted by this Indenture, that it is not
inconsistent herewith, and that it will be valid and binding upon the Issuers
in accordance with its terms.
ARTICLE 10
SUBSIDIARY GUARANTEE OF SECURITIES
SECTION 10.01. SUBSIDIARY GUARANTEE
(a) Each Subsidiary Guarantor hereby jointly and severally
irrevocably and unconditionally guarantees, as a primary obligor and not a
surety, to each Securityholder of a Security now or hereafter 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 Securities or the Obligations of the Issuers hereunder or thereunder, (i)
the due and punctual payment of the principal, premium, if any, interest
(including post-petition interest in any proceeding under any Bankruptcy Law
whether or not an allowed claim in such proceeding) on overdue principal,
premium, if any, and interest, if lawful on such Security, and (ii) all other
monetary Obligations payable by the Issuers under this Indenture (including
under Section 7.07 hereof) and the Securities (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and as
the same shall become due and payable, whether by acceleration thereof, call
for redemption or otherwise (including amounts that would become due but for
the operation
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of the automatic stay under Section 362(a) of the Bankruptcy Code), in
accordance with the terms of any such Security and of this Indenture,
subject, however, in the case of (i) and (ii) above, to the limitations set
forth in Section 10.04 hereof. Each Subsidiary Guarantor hereby agrees that
its Obligations hereunder shall be absolute and unconditional, irrespective
of, and shall be unaffected by, any failure to enforce the provisions of any
such Security or this Indenture, any waiver, modification or indulgence
granted to the Issuers with respect thereto, the recovery of any judgment
against an Issuer, any action to enforce the same, by the Securityholders or
the Trustee, the recovery of any judgment against the Issuer, any action to
enforce the same, or any other circumstances which may otherwise constitute a
legal or equitable discharge of a surety or guarantor. Each Subsidiary
Guarantor hereby waives diligence, presentment, filing of claims with a court
in the event of a merger or bankruptcy of an Issuer, any right to require a
proceeding first against the Issuers, the benefit of discussion, protest or
notice with respect to any such Security or the Indebtedness evidenced
thereby and all demands whatsoever, and covenants that this Subsidiary
Guarantee shall not be discharged as to any such Security except by payment
in full of the principal thereof, premium, if any, and all accrued interest
thereon.
(b) Each Subsidiary Guarantor further agrees that this Subsidiary
Guarantee herein constitutes a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waives any right
to require that any resort be had by any Securityholder or the Trustee to any
Security held for payment of the Guaranteed Obligations.
(c) Each Subsidiary Guarantor agrees that it shall not be entitled
to, and hereby irrevocably waives, any right of subrogation in relation to
the Securityholders or the Trustee in respect of any Guaranteed Obligations.
Each Subsidiary Guarantor further agrees that, as between such Subsidiary
Guarantor, on the one hand, and the Securityholders and the Trustee, on the
other hand, (x) the maturity of the Guaranteed Obligations may be accelerated
as provided in Article 6 for the purposes of such Subsidiary Guarantor's
Subsidiary Guarantee herein, notwithstanding any stay, injunction or other
prohibition preventing such acceleration in respect of the Guaranteed
Obligations, and (y) in the event of any Declaration of acceleration of such
Guaranteed Obligations as provided in Article 6 hereof, such Guaranteed
Obligations (whether or not due and payable) shall forthwith become due and
payable by such Subsidiary Guarantor for the purpose of this Article 10.
(d) Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee
or any Securityholder in enforcing any rights under this Article 10.
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(e) The Subsidiary Guarantee set forth in this Article 10 shall
not be valid or become obligatory for any purpose with respect to a Security
until the certificate of authentication on such Security shall have been
signed by or on behalf of the Trustee.
SECTION 10.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
(a) To evidence each Subsidiary Guarantor's Subsidiary Guarantee
set forth in this Article 10, each Subsidiary Guarantor hereby agrees that a
notation of such Subsidiary Guarantee shall be placed on each Security
authenticated and delivered by the Trustee.
(b) This Indenture shall be executed on behalf of each Subsidiary
Guarantor, and an Officer of each Subsidiary Guarantor shall sign the
notation of the Subsidiary Guarantee on the Securities by manual or facsimile
signature. If an Officer whose signature is on this Indenture or the
notation of the Subsidiary Guarantee no longer holds that office at the time
the Trustee authenticates the Security on which the Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee shall be valid nevertheless. Each
Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee set forth in
Section 10.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of the Subsidiary
Guarantee.
(c) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.
SECTION 10.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Subsidiary Guarantor will be obligated to pay the same
immediately. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be continuing, absolute and unconditional, irrespective of:
the recovery of any judgment against an Issuer or any Subsidiary Guarantor;
any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of an Issuer under this Indenture or any Security, by
operation of law or otherwise; any modification or amendment of or supplement
to this Indenture or any Security; any change in the corporate existence,
structure or ownership of an Issuer, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting an Issuer or its assets
or any resulting release or discharge of any obligation of an Issuer
contained in this Indenture or any Security; the existence of any claim,
set-off or other rights which any Subsidiary Guarantor may have at any time
against an Issuer, the Trustee, any Securityholder or any other Person,
whether in connection herewith or any
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unrelated transactions; provided, that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim; any
invalidity or unenforceability relating to or against an Issuer for any
reason of this Indenture or any Security, or any provision of applicable law
or regulation purporting to prohibit the payment by an Issuer of the
principal, premium, if any, or interest on any Security or any other
Guaranteed Obligation; or any other act or omission to act or delay of any
kind by an Issuer, the Trustee, any Securityholder or any other Person or any
other circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Subsidiary
Guarantors' obligations hereunder. Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in
the event of insolvency or bankruptcy of the Issuer, any right to require a
proceeding first against the Issuers, protest, notice and all demand
whatsoever and covenants that this Subsidiary Guarantee will not be
discharged except by the complete performance of the obligations contained in
the Securities, this Indenture and in this Article 10. Each Subsidiary
Guarantor's obligations hereunder shall remain in full force and effect until
this Indenture shall have terminated and the principal of and interest on the
Securities and all other Guaranteed Obligations shall have been paid in full.
If at any time any payment of the principal of or interest on any Security
or any other payment in respect of any Guaranteed Obligation is rescinded or
must be otherwise restored or returned upon the insolvency, bankruptcy or
reorganization of an Issuer or otherwise, each Subsidiary Guarantor's
obligations hereunder with respect to such payment shall be reinstated as
though such payment had been due but not made at such time, and this Article
10, to the extent theretofore discharged, shall be reinstated in full force
and effect. Each Subsidiary Guarantor irrevocably waives any and all rights
to which it may be entitled, by operation of law or otherwise, upon making
any payment hereunder to be subrogated to the rights of the payee against the
Issuers with respect to such payment or otherwise to be reimbursed,
indemnified or exonerated by the Issuers in respect thereof.
SECTION 10.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each
Securityholder hereby confirms that it is the intention of all such parties
that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary
Guarantee not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Law, Federal and state fraudulent conveyance laws or other
legal principles. To effectuate the foregoing intention, the Securityholders
and each Guarantor hereby irrevocably agree that the obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other
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Subsidiary Guarantor under its Subsidiary Guarantee or pursuant to Section
10.05 hereof, result in the obligations of such Subsidiary Guarantor under
the Subsidiary Guarantee not constituting such fraudulent transfer or
conveyance under federal or state law.
SECTION 10.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from all other Subsidiary Guarantors in a
pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by that Funding Guarantor in discharging the Issuers' obligations
with respect to the Securities or any other Subsidiary Guarantor's
obligations with respect to the Subsidiary Guarantee.
SECTION 10.06. RELEASE.
Upon the sale or disposition of all of the equity interests of a
Subsidiary Guarantor to an entity which is not an Issuer or a Subsidiary of
an Issuer, which is otherwise in compliance with this Indenture, such
Subsidiary Guarantor shall be deemed released from all its obligations under
this Indenture without any further action required on the part of the Trustee
or any Securityholder and the Subsidiary Guarantee of such Subsidiary
Guarantor shall terminate; provided, however, that any such termination shall
occur if and only to the extent that all Obligations of each Subsidiary
Guarantor under all of its guarantees of, and under all of its pledges of
assets or other security interests which secure, Indebtedness of an Issuer
and the other Subsidiary Guarantors shall also terminate upon such release,
sale or transfer; provided further, that without limiting the foregoing, any
proceeds received by an Issuer or any Subsidiary of an Issuer from such
transaction shall be applied as provided in Section 4.10 and Section 3.09.
The Trustee shall deliver an appropriate instrument evidencing such release
upon receipt of a request by the Issuers accompanied by an Officers'
Certificate certifying as to the compliance with this Section 10.06. Any
Subsidiary Guarantor not so released remains liable for the full amount of
principal, premium, if any, and interest on the Securities as provided in
this Article 10.
SECTION 10.07. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to
the Trustee (a) a supplemental indenture in substantially the form and
substance satisfactory to the Trustee,
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which subjects such Person to the provisions (including, without limitation,
the representations and warranties in this Article 10) of this Indenture as a
Subsidiary Guarantor and (b) an Opinion of Counsel complying with Section
9.06 and to the effect that such supplemental indenture has been duly
authorized and executed by such Person and constitutes the legal, valid,
binding and enforceable obligation of such Person (subject to such customary
exceptions concerning creditors' rights and equitable principles as may be
acceptable to the Trustee in its discretion). The Subsidiary Guarantee of
each Person described in this Section 10.07 shall apply to all Securities
theretofore executed and delivered, notwithstanding any failure of such
Securities to contain a notation of such Subsidiary Guarantee thereon.
SECTION 10.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary
Guarantor with or into an Issuer or another Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of an Issuer or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as
an entirety, to an Issuer or another Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of an Issuer. Upon any such consolidation, merger,
sale or conveyance, the Subsidiary Guarantee given by such Subsidiary
Guarantor shall no longer have any force or effect.
(b) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary
Guarantor with or into a corporation or corporations other than an Issuer or
another Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or
shall prevent any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to a corporation
other than an Issuer or another Subsidiary Guarantor (whether or not
affiliated with the Subsidiary Guarantor); provided, however, that, subject
to Sections 10.06 and 10.08(a), (x) (i) immediately after such transaction,
and giving effect thereto, no Default or Event of Default shall have occurred
as a result of such transaction and be continuing, or (ii) such transaction
does not violate any covenants set forth in this Indenture, and (y) (i) the
respective transaction is treated as an Asset Disposition for purposes of
Section 4.10 and Section 3.09 hereof or (ii) if the surviving corporation is
not the Subsidiary Guarantor, each Subsidiary Guarantor hereby covenants and
agrees that, upon any such consolidation, merger, sale or conveyance, the
Subsidiary Guarantee set forth in this Article 10, and the due and punctual
performance and
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observance of all of the covenants and conditions of this Indenture to be
performed by such Subsidiary Guarantor, shall be expressly assumed (in the
event that the Subsidiary Guarantor is not the surviving corporation in the
merger), by supplemental indenture satisfactory in form to the Trustee of the
due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Subsidiary Guarantor, such successor
corporation shall succeed to, and be substituted for, the Subsidiary
Guarantor with the same effect as if it had been named herein as a Subsidiary
Guarantor.
SECTION 10.09. SUCCESSORS AND ASSIGNS.
This Article 10 shall be binding upon each Subsidiary Guarantor and
its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Securityholders and, in the event of any
transfer or assignment of rights by any Securityholder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 10.10. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Subsidiary Guarantor 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 or
extension law or any usury law or other law that would prohibit or forgive
each such Subsidiary Guarantor from performing its Subsidiary Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) each such Subsidiary Guarantor
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE 11
MISCELLANEOUS
SECTION 11.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by
the TIA, the required provision shall control. Until such time as this
Indenture becomes qualified under the TIA,
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the Issuers, the Subsidiary Guarantors and the Trustee shall be deemed
subject to and governed by the TIA as if this Indenture were so qualified on
the date hereof.
SECTION 11.02. NOTICES.
(a) Any notice or communication by the Issuers, any Subsidiary
Guarantor or the Trustee to the other is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), confirmed facsimile transmission or overnight air
courier guaranteeing next day delivery, to the other's address:
If to the Issuers or any of the Subsidiary Guarantors:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attention: Alan R. Brill
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention: Corporate Trust Administration
Facsimile Number: (212) 852-1625
(b) The Issuers or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) All notices and communications (other than those sent to
Securityholders) shall 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 receipt acknowledged,
if by facsimile transmission; and the next Business Day after timely delivery
to the courier, if sent by overnight air courier guaranteeing next day
delivery.
(d) Any notice or communication to a Securityholder shall be
mailed by first class mail, postage prepaid, to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section
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313(c), to the extent required by the TIA. Failure to mail a notice or
communication to a Securityholder or any defect in it shall not affect its
sufficiency with respect to other Securityholders.
(e) If a notice or communication is mailed to any Person in the
manner provided above within the time prescribed, it is duly given, whether
or not the addressee receives it.
(f) If the Issuers mail a notice or communication to
Securityholders, they shall mail a copy to the Trustee and each Agent at the
same time.
SECTION 11.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER
SECURITYHOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture
or the Securities. The Issuers, the Subsidiary Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 11.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers and/or any of the
Subsidiary Guarantors to the Trustee to take any action under this Indenture,
the Issuers and/or any of the Subsidiary Guarantors, as the case may be,
shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 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
(except with regard to an authentication order pursuant to Section
2.02(c) hereof, which shall require a certificate of two Officers);
and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 11.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been
satisfied.
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SECTION 11.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall include:
(i) a statement that the person making such certificate or
opinion has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such person, he has
made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied.
SECTION 11.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 11.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York City, or at a place of payment are authorized or
obligated 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.
SECTION 11.08. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, agent,
manager, stockholder or partner of an Issuer or its predecessors shall have
any liability for any Obligations of an Issuer under the Securities or this
Indenture or for any claim based on,
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in respect of, or by reason of such Obligations or their creation. Each
Securityholder by accepting a Security waives and releases all such
liability. This waiver and release are part of the consideration for
issuance of the Securities.
SECTION 11.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 11.10. GOVERNING LAW.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York but 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.
SECTION 11.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Subsidiary Guarantors, an Issuer or their
respective Subsidiaries. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.
SECTION 11.12. SUCCESSORS.
All agreements of the Issuers and the Subsidiary Guarantors in this
Indenture and the Securities shall bind their successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 11.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.14. COUNTERPART ORIGINALS.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be an original, but all of them together represent
the same agreement.
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SECTION 11.15. 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 shall
in no way modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SIGNATURES
BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By_______________________
Name: Alan R. Brill
Title:President
BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation
By_______________________
Name: Alan R. Brill
Title: President
<PAGE>
BMC HOLDINGS, LLC, a Virginia Limited
Liability Company
BY: BRILL MEDIA COMPANY, LLC, its Manager
BY: BRILL MEDIA MANAGEMENT, INC., its Manager
By:_______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
TRI-STATE BROADCASTING, INC., a Virginia
Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
NCR II, INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:_______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
NORTHLAND BROADCASTING, LLC,
a Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC, a
Virginia Limited Liability Company,
its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation its
Manager
By:_______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN
DISTRIBUTION CO., INC. its General
Partner
By:_______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: Vice President
HURON P.S. LLC, a Virginia Limited
Liability Company
<PAGE>
By: HURON HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia Limited
Liability Company
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
<PAGE>
HURON HOLDINGS, LLC, a Virginia Limited Liability
Company
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS, LLC
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC. a Virginia
Corporation, its Manager
By: _______________________
Alan R. Brill, President
<PAGE>
NCR III, LLC, a Virginia Limited Liability Company
By: NCH II, LLC, a Virginia Limited Liability
Company, its Manager
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: Brill Media Company, LLC, a Virginia Limited
Liability Company, its Manager
By: Brill Media Management, Inc., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia Limited Liability Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
<PAGE>
NORTHLAND HOLDINGS, LLC, a Virginia Limited
Liability Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By:_______________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia Corporation
By:_______________________
Name: Alan R. Brill
<PAGE>
Title: President
UNITED STATES TRUST COMPANY OF NEW YORK, as
Trustee
By:_______________________
Name:
Title:
<PAGE>
SCHEDULE 1
SUBSIDIARY GUARANTORS
1. BMC Holdings, LLC
2. Reading Radio, Inc.
3. Tri-State Broadcasting, Inc.
4. Northern Colorado Radio, Inc.
5. NCR II, Inc.
6. Central Missouri Broadcasting, Inc.
7. CMB II, Inc.
8. Northland Broadcasting, LLC
9. NB II, Inc.
10. Central Michigan Newspapers, Inc.
11. Cadillac Newspapers, Inc.
12. CMN Associated Publications, Inc.
13. Central Michigan Distribution Co., L.P.
14. Central Michigan Distribution Co., Inc.
15. Gladwin Newspapers, Inc.
16. Graph Ads Printing, Inc.
17. Midland Buyer's Guide, Inc.
18. St. Johns Newspapers, Inc.
19. Huron Holdings, LLC
20. Northern Colorado Holdings, LLC
21. NCR III, LLC
22. NCH II, LLC
23. Northland Holdings, LLC
24. CMN Holding, Inc.
25. Brill Radio Inc.
26. Brill Newspapers, Inc.
27. Huron P.S., LLC
28. Huron Newspapers, LLC
<PAGE>
SCHEDULE 2
LIENS/CAPITAL LEASES
<TABLE>
<CAPTION>
MONTHLY BALANCE AS OF
COMPANY LENDER DESCRIPTION PERMITTED LIENS PAYMENT 8-31-97
- ------------------ ------------------- -------------- -------------------- ---------- ---------
<S> <C> <C> <C> <C> <C>
CMB II............ Jefferson Bank PMF Equipment $ 3,850 $153,593
CMB II............ Town & Country Seller Financing 1st Lien Note/Stock 3,033 209,721
Communications Pledge
CMB II............ Jefferson Bank Promissory Note Unsecured 3,155 141,614
CMBI.............. Ford Motor CL 94 Ford 447 3,881
Credit
CMBI.............. Tower Company, CL FM Tower/ 12,500 370,545
Inc. Transmitter
CMNI.............. Ford Motor CL 94 Ford Van 447 4,571
Credit
CMNI.............. Ryder CL 98 Navistar Truck 2,410 104,200
and Stoughton
Trailer
CMNI.............. PX Investment CMN Building Mar 00 3,850 59,901
CMNI.............. FirstBank PMF Imagesetter 3,713 62,055
CMNI.............. Heller CL Inserting Machine 2,513 16,923
NB II............. Al Quarnstrom CL Equipment Lease 655 9,640
NB II............. QB Broadcasting, Seller Financing 1st Lien Note/Stock 9,074 628,118
Inc. Pledge
NB, LLC........... Citicorp CL Broadcast 1,199 34,381
Equipment
NB, LLC........... Colonial Pacific CL Computer 562 15,036
Equipment
NB, LLC........... Republic Leasing CL Broadcast 584 14,973
Equipment
NCRI.............. Philip Brewer Noncompete Subordinated 3,984 185,571
Agreement 2nd/Stock Pledge
</TABLE>
1
<PAGE>
EXHIBIT A
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY
NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE
ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) OR (B) IT IS
AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) or (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE TRANSACTION
IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT, (2)
AGREES THAT IT WILL NOT WITHIN THE TIME PERIOD REFERRED TO IN
RULE 144(k) UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO
SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY EXCEPT
(A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED STATES TO AN
INSTITUTIONAL ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON
TRANSFER OF THIS NOTE (THE FORM OF WHICH LETTER 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
<PAGE>
EXHIBIT A
Page 2
ACCEPTABLE TO THE ISSUERS HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE
WITH THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE) OR (F)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES
ACT AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND; PROVIDED THAT AN INITIAL INVESTOR PURCHASING AS DESCRIBED IN
CLAUSE (1)(B) ABOVE FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT
BE PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL ACCREDITED
INVESTOR. IN CONNECTION WITH ANY TRANSFER OF THIS NOTE WITHIN THE
TIME PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK THE APPROPRIATE
BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE PROPOSED
TRANSFEREE IS AN INSTITUTIONAL ACCREDITED INVESTOR PURCHASING PURSUANT
TO CLAUSE (2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH CERTIFICATIONS,
LEGAL OPINIONS OR OTHER INFORMATION AS ANY OF THEM MAY REASONABLY
REQUIRE TO CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES"
<PAGE>
EXHIBIT A
Page 3
AND "UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY
REGULATION S UNDER THE SECURITIES ACT. THE INDENTURE CONTAINS A
PROVISION REQUIRING THE TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.(*)
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 ANY
SUCH NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE
OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE.(*)
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC"), TO THE ISSUERS OR THEIR 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
- ----------------
(*) To be included in Restricted Securities only.
(*) To be included in the Global Note only.
<PAGE>
EXHIBIT A
Page 4
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.*/
THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH ORIGINAL
ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET.SEQ. OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED. THE ISSUE DATE OF THIS
SECURITY IS DECEMBER 30, 1997. FOR INFORMATION REGARDING THE ISSUE
PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO
MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF
FINANCIAL OFFICER OF BRILL MEDIA COMPANY, LLC AT 812-423-6200 OR AT
THE ADDRESS SET FORTH ON THE REVERSE OF THIS SECURITY.
<PAGE>
EXHIBIT A
Page 5
CUSIP No:
(Front of Security)
No. $__________
BRILL MEDIA COMPANY, LLC
BRILL MEDIA MANAGEMENT, INC.
12% Senior Notes due 2007, Series A
BRILL MEDIA COMPANY, LLC, a Virginia limited liability company, and BRILL
MEDIA MANAGEMENT, INC., a Virginia corporation, jointly and severally,
promise to pay to ____________________________________, or its registered
assigns, the principal sum of $____________ [For Global Notes add: , as
such amount may be increased or decreased on the records of the Trustee,]
on December 15, 2007.
Interest Payment Dates: June 15 and December 15, commencing June 15, 1998.
Interest Record Dates: June 1 and December 1 (whether or not a Business
Day).
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
Name:
Title:
<PAGE>
EXHIBIT A
Page 6
BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
By:_________________________________
Authorized Officer
<PAGE>
EXHIBIT A
Page 7
(Reverse of Security)
12% SENIOR NOTE DUE 2007, Series A
Capitalized terms used herein have the meanings assigned to them
in the Indenture (as defined below) unless otherwise indicated.
1. Interest. Brill Media Company LLC, a Virginia limited liability
company ("BMC"), and Brill Media Management, Inc., a Virginia corporation
(together with BMC, the "Issuers"), jointly and severally, promise to pay
interest on the principal amount of this Security at the rate and in the
manner specified below. The Issuers shall pay, in cash, interest on the
principal amount of this Security at the rate per annum of 7 1/2% per annum
from the date of original issuance until December 15, 1999, and at a rate of
12% per annum from and including December 15, 1999 until maturity. The
Issuers will pay interest semiannually in arrears on June 15 and December 15
of each year (each an "Interest Payment Date"), commencing June 15, 1998, or
if any such day is not a Business Day on the next succeeding Business Day.
Interest will be computed on the basis of a 360-day year consisting of twelve
30-day months. Interest shall accrue from the most recent Interest Payment
Date to which interest has been paid or, if no interest has been paid, from
the date of the original issuance of the Securities. To the extent lawful,
the Issuers shall pay interest on overdue principal at the rate of 2% per
annum in excess of the then applicable interest rate on the Securities; they
shall pay interest on overdue installments of interest (without regard to any
applicable grace periods) at the same rate to the extent lawful. The rate of
interest payable on this Security shall be subject to the assessment of
additional interest (the "Additional Interest") as follows:
(i) if neither the Exchange Offer Registration Statement (as
defined below) nor the Shelf Registration Statement (as defined below) is
filed within 60 days following the Issue Date (the "Filing Date"),
Additional Interest shall accrue on the Initial Securities over and above
the stated interest at a rate of 0.50% per annum for the first 60 days
commencing on the 61st day after the Filing Date, such Additional Interest
rate increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period;
(ii) if neither the Exchange Offer Registration Statement nor the
Shelf Registration Statement is declared effective within 150 days
following the Filing Date, Additional Interest shall accrue on the Initial
Securities over and above the stated interest at a rate of 0.50% per annum
for the first 120 days commencing on the 151st day after the Filing Date,
such Additional Interest rate increasing by an additional 0.50% per annum
at the beginning of each subsequent 30-day period; or
<PAGE>
EXHIBIT A
Page 8
(iii) if (A) the Issuers and the Subsidiary Guarantors have not
exchanged all Securities validly tendered in accordance with the terms of
the Exchange Offer on or prior to 180 days after the Filing Date or (B) the
Exchange Offer Registration Statement ceases to be effective at any time
prior to the time that the Exchange Offer is consummated or (C) if
applicable, the Shelf Registration Statement has been declared effective
and such Shelf Registration Statement ceases to be effective at any time
prior to the second anniversary of the Issue Date (unless all the
Securities have been sold thereunder), then Additional Interest shall
accrue on the Initial Securities over and above the stated interest at a
rate of 0.50% per annum for the first 30 days commencing on (x) the 181st
day after the Filing Date with respect to the Securities validly tendered
and not exchanged by the Issuers, in the case of (A) above, or (y) the day
the Exchange Offer Registration Statement ceases to be effective or usable
for its intended purpose in the case of (B) above, or (z) the day such
Shelf Registration Statement ceases to be effective in the case of (C)
above, such Additional Interest rate increasing by an additional 0.50% per
annum at the beginning of each subsequent 30-day period; provided, however,
that the Additional Interest rate on the Securities may not exceed in the
aggregate 1.5% per annum in any event; and provided further, that (1) upon
the filing of the Exchange Offer Registration Statement or Shelf
Registration Statement (in the case of clause (i) above), (2) upon the
effectiveness of the Exchange Offer Registration Statement or Shelf
Registration Statement (in the case of (ii) above), or (3) upon the
exchange of Exchange Securities for all Securities tendered (in the case of
clause (iii)(A) above), or upon the effectiveness of the Exchange Offer
Registration Statement which had ceased to remain effective (in the case of
clause (iii)(B) above), or upon the effectiveness of the Shelf Registration
Statement which had ceased to remain effective (in the case of clause
(iii)(C) above), Additional Interest on the Initial Securities as a result
of such clause or the relevant subclause thereof, as the case may be, shall
cease to accrue.
"Exchange Offer" shall mean the exchange offer by the Issuers of
Initial Securities for Exchange Securities pursuant to Section 2(a) of the
Registration Rights Agreement.
"Exchange Offer Registration Statement" shall mean an exchange
offer registration statement on Form S-4 (or, if applicable, on another
appropriate form) and all amendments and supplements to such registration
statement, in each case including the Offering Memorandum or prospectus
contained therein, all exhibits thereto and all material incorporated by
reference therein.
"Interest Record Date" shall have the meaning provided on the
front of this Security.
<PAGE>
EXHIBIT A
Page 9
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Issuers and the Subsidiary Guarantors pursuant to the
provisions of the Registration Rights Agreement which covers all of the
Registrable Notes (as defined therein) on an appropriate form under Rule
415 under the Securities Act, or any similar rule that may be adopted by
the Commission, and all amendments and supplements to such registration
statement, including post-effective amendments, in each case including the
Offering Memorandum contained therein, all exhibits thereto and all
material incorporated by reference therein.
2. Method of Payment. The Issuers shall pay interest on this
Security (except defaulted interest) to the Persons who are registered
Holders of Securities at the close of business on the Interest Record Date
immediately preceding the Interest Payment Date, even if such Securities
are cancelled after such Interest Record Date and on or before such
Interest Payment Date. Securityholders must surrender Securities to a
Paying Agent to collect principal payments. The Issuers shall pay
principal, premium, if any, and interest in money of the United States that
at the time of payment is legal tender for payment of public and private
debts ("U.S. Legal Tender"). However, the Issuers may pay principal,
premium, if any, and interest by its check payable in such U.S. Legal
Tender. The Issuers may deliver any such interest payment to the Paying
Agent or to a Securityholder at the Securityholder's registered address.
3. Paying Agent and Registrar. Initially, the Trustee will act
as Paying Agent and Registrar. The Issuers may change any Paying Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Issuers or any Subsidiary Guarantor may act in any such capacity.
4. Indenture. The Issuers issued the Securities under an
Indenture, dated as of December 30, 1997 (the "Indenture"), among the
Issuers, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the TIA as in effect on the date the Indenture is
qualified, except as the Indenture otherwise provides. The Securities are
subject to all such terms, and Securityholders are referred to the
Indenture and the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture and the
Securities. The Securities are senior Obligations of the Issuers limited
to $105,000,000 in aggregate principal amount.
5.(a) Optional Redemption. Except as indicated in the next
succeeding paragraph, Securities will not be redeemable at the option of
the Issuers prior to December 15, 2002. On and after such date, the
Securities will be redeemable, at the Issuers' option, in whole or in part,
at any time upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each Holder's registered address, at the
following redemption prices (expressed in percentages of principal amount),
if
<PAGE>
EXHIBIT A
Page 10
redeemed during the 12-month period commencing on December 15th of the
years set forth below, plus accrued and unpaid interest to the redemption
date (subject to the right of holders of record on the relevant record date
to receive interest due on the relevant Interest Payment Date):
Period Redemption Price
2002................................ 106.00%
2003................................ 104.00%
2004................................ 102.00%
2005 and thereafter................. 100.00%
(b) Optional Redemption Upon Public Equity Offerings. In the
event of the sale by an Issuer prior to December 15, 2000 of its Capital
Stock (other than Disqualified Stock) in one or more Public Equity
Offerings the Net Cash Proceeds of which are at least $25.0 million in the
aggregate, the Issuers may, at their option, use the Net Cash Proceeds of
such sale or sales of Capital Stock to redeem up to 25% of the aggregate
principal amount of the aggregate principal amount of the Securities at a
redemption price, in the case of a redemption date prior to December 15,
1999, equal to 112.0% of the Accreted Value thereof plus accrued and unpaid
interest thereon, if any, to the redemption date (subject to the right of
holders of record on the relevant record date to receive interest due on
the relevant Interest Payment Date) and for any redemption date on or after
December 15, 1999, at a redemption price equal to 112.0% of the principal
amount thereof plus accrued and unpaid interest thereon, if any, to the
redemption date (subject to the right of holders of record on the relevant
record date to receive interest due on the relevant Interest Payment Date);
provided, however, that after any such redemption the aggregate principal
amount of the Securities outstanding must equal at least $79.0 million. In
order to effect the foregoing redemption with the proceeds of any such sale
of Capital Stock, the Issuers shall make such redemption not more than 90
days after the consummation of any such sale or sales of Capital Stock.
6. Mandatory Redemption. The Securities are not subject to
mandatory redemption or sinking fund payments.
7. Repurchase at Option of Securityholder. (a) If there is a
Change of Control, each Holder of Securities will have the right to require
the Issuers to repurchase all or any part of such Holder's Securities, in
the case of a repurchase date prior to December 15, 1999, at a purchase
price in cash equal to 101% of the Accreted Value thereof plus any accrued
and unpaid interest, if any, to the date of repurchase (subject to the
right of Securityholders of record on the relevant record date to receive
interest due
<PAGE>
EXHIBIT A
Page 11
on the relevant Interest Payment Date) and for any repurchase date on or
after December 15, 1999, at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Securityholders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date) (such applicable purchase price being hereinafter referred to as the
"Change of Control Purchase Price"). Within 30 days following any Change of
Control, the Issuers will mail a notice to each Securityholder stating (i)
that a Change of Control has occurred and that such Securityholder has the
right to require the Issuers to repurchase all or any part of such
Securityholder's Securities at a repurchase price in cash equal to the Change
of Control Purchase Price (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date); (ii) the circumstances and relevant facts regarding
such Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control); (iii) the repurchase date (which will be no earlier then
30 days nor later than 60 days from the date such notice is mailed); and (iv)
the procedures, determined by the Issuers consistent with the Indenture, that
a Securityholder must follow in order to have its Securities repurchased.
Securityholders that are subject to an offer to repurchase may elect to have
such Securities repurchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
(b) If an Issuer or a Subsidiary consummates any Asset Disposition,
and when the aggregate amount of Net Available Cash from such an Asset
Disposition exceeds $10 million (except as otherwise set forth in Section
4.10 of the Indenture), the Issuers shall be required to offer to purchase
the maximum principal amount of Securities, that is in an integral multiple
of $1,000, that may be purchased out of the Net Available Cash at 100% of the
Accreted Value thereof if such purchase date occurs prior to December 15,
1999, and at 100% of the principal amount thereof if such purchase date
occurs on or after December 15, 1999, in each case 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. If the aggregate
principal amount of Securities surrendered by Holders thereof exceeds the
amount of Net Available Cash, the Securities to be redeemed shall be selected
on a pro rata basis to the extent practicable. Securityholders that are the
subject of an offer to purchase will receive an Asset Disposition Offer from
the Issuers prior to any related purchase date and may elect to have such
Securities purchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days before the redemption date to each Holder whose Securities
are to be redeemed at its registered address. Securities may be redeemed
in part but only in whole multiples of $1,000, unless all of the Securities
held by a Securityholder are to be redeemed. On and after the redemption
date, interest ceases to accrue on Securities or portions of them called
for redemption.
<PAGE>
EXHIBIT A
Page 12
9. Registration Rights. Pursuant to the Registration Rights
Agreement, and subject to certain terms and conditions stated therein, the
Issuers will be obligated to consummate an Exchange Offer pursuant to which
the Holders of the Initial Securities shall have the right to exchange this
Security for Exchange Securities, which have been registered under the
Securities Act, in like principal amount and having terms identical in all
material respects to the Initial Securities except that the Exchange Notes
(i) shall contain no restrictive legend thereon and (ii) shall not be
entitled to any further registration rights hereunder or to any Additional
Interest.
10. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar
and the Trustee may require a Securityholder among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and
fees required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption. Also, it need not exchange or register the
transfer of any Securities during a period beginning at the opening of
business on a Business Day 15 days before the day of any selection of
Securities to be redeemed and ending at the close of business on the day of
selection or during the period between an Interest Record Date and the
corresponding Interest Payment Date.
11. Persons Deemed Owners. Prior to due presentment to the
Trustee for registration of the transfer of this Security, the Trustee, any
Agent and the Issuers shall treat the Person in whose name this Security is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all
other purposes whatsoever, whether or not this Security is overdue, and
neither the Trustee, any Agent nor the Issuers shall be affected by notice
to the contrary. The registered Securityholder shall be treated as its
owner for all purposes.
12. Amendments and Waivers. Subject to certain exceptions
provided in the Indenture, the Issuers and the Trustee may amend or
supplement the Indenture or the Securities with the consent of the Holders
of a majority in principal amount of the then outstanding Securities, and,
among other things, any existing Default or Event of Default (except a
payment default) may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities. Under
certain conditions, without the consent of any Securityholder, the Issuers
and the Trustee may amend the Indenture or the Securities may be amended
to, among other things, cure any ambiguity, defect or inconsistency, to
comply with the requirements of the Commission in order to effect or
maintain qualification of the Indenture under the TIA or to make any change
that does not adversely affect the rights of any Securityholder.
<PAGE>
EXHIBIT A
Page 13
13. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount
of the then outstanding Securities may declare the unpaid principal of, and
any accrued and unpaid interest on, all the Securities to be due and
payable immediately; provided, that in the case of an Event of Default
arising from certain events of bankruptcy or insolvency with respect to an
Issuer or any Subsidiary Guarantor, all outstanding Securities shall become
due and payable immediately without further action or notice.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory
to it before it enforces the Indenture or the Securities. Subject to
certain limitations, Holders of a majority in principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust
or power. The Trustee may withhold from Securityholders notice of any
continuing default (except a default in payment of principal or interest)
if it determines that withholding notice is in their interests. The
Issuers and each Subsidiary Guarantor must furnish an annual compliance
certificate to the Trustee.
14. Trustee Dealings with the Issuers. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to,
accept deposits from, and perform services for the Issuers, the Subsidiary
Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors,
and may otherwise deal with the Issuers, the Subsidiary Guarantors and
their respective Affiliates as if it were not the Trustee.
15. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Issuers and their Restricted Subsidiaries
to, among other things, incur additional Indebtedness, make payments in
respect of its Capital Stock or certain Indebtedness, enter into
transactions with Affiliates, create dividend or other payment restrictions
affecting Subsidiaries, merge or consolidate with any other Person, sell,
assign, transfer, lease, convey or otherwise dispose of all or
substantially all of its assets or adopt a plan of liquidation. Such
limitations are subject to a number of important qualifications and
exceptions provided for in the Indenture. The Issuers and each Subsidiary
Guarantor must annually report to the Trustee on compliance with such
limitations.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly
and severally irrevocably and unconditionally guaranteed the payment of
principal, premium, if any, and interest (including interest on overdue
principal and overdue interest, if lawful) on the Securities; provided,
however, each Subsidiary Guarantor that makes a payment or distribution
under a Subsidiary Guarantee shall be entitled to a
<PAGE>
EXHIBIT A
Page 14
contribution from each other Subsidiary Guarantor in a pro rata amount based
on the Adjusted Net Assets of each Subsidiary Guarantor.
18. Defeasance. Subject to certain conditions provided for in
the Indenture, the Issuers at any time may terminate some or all of their
obligations under the Securities and the Indenture if the Issuers deposit
with the Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the Securities to redemption or
maturity, as the case may be.
19. Governing Law. The Laws of the State of New York shall
govern this Security and the Indenture, without regard to principles of
conflict of laws.
20. Abbreviations. Customary abbreviations may be used in the
name of a Securityholder 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).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by
the Committee on Uniform Security Identification Procedures, the Issuers
have caused CUSIP numbers to be printed on the Securities and has directed
the Trustee to use CUSIP numbers in notices of redemption as a convenience
to Securityholders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice
of redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Issuers will furnish to any Securityholder upon written
request and without charge a copy of the Indenture. Request may be made
to:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attn: Alan R. Brill
<PAGE>
EXHIBIT A
Page 15
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor Person under the Indenture) (i) have jointly and
severally irrevocably and unconditionally guaranteed as a primary obligor and
not a surety (such guarantee by each Subsidiary Guarantor being referred to
herein as the "Subsidiary Guarantee"), (a) the due and punctual payment of
the principal, premium, if any, and interest on the Securities, whether at
Stated Maturity or interest payment date, by acceleration, call for
redemption or otherwise, (b) the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Securities, to the extent
lawful, (c) the due and punctual performance of all other monetary
Obligations of the Issuers under the Indenture and the Securities to the
Securityholders or the Trustee, all in accordance with the terms set forth in
Article 10 of the Indenture and (d) in case of any extension of time of
payment or renewal of any Securities or any such Obligations, 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 and (ii) have agreed to pay any and all costs and expenses
(including reasonable attorneys' fees) incurred by the Trustee or any
Securityholder in enforcing any rights under this Subsidiary Guarantee.
The Obligations of each Subsidiary Guarantor to the Securityholders
of Securities and to the Trustee pursuant to this Subsidiary Guarantee and
the Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to such Indenture for the precise terms of this
Subsidiary Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Subsidiary Guarantor shall have any liability under
this Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This is a continuing Subsidiary Guarantee and, except as otherwise
expressly provided for in Section 10.06 of the Indenture, shall remain in
full force and effect and shall be binding upon the Subsidiary Guarantor and
its successors and assigns until full and final payment of all of the
Issuers' Obligations under the Securities and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Securityholders and, in the event of any transfer or assignment of rights by
any Securityholder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to
<PAGE>
EXHIBIT A
Page 16
the terms and conditions hereof. This is a Subsidiary Guarantee of payment
and not of collectability.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Subsidiary Guarantors:
BMC HOLDINGS, LLC, a Virginia Limited
Liability Company
BY: BRILL MEDIA COMPANY, LLC, its
Manager
BY: BRILL MEDIA MANAGEMENT, INC., its
Manager
By:___________________________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 17
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
NORTHERN COLORADO RADIO, a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:___________________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 18
NORTHLAND BROADCASTING, LLC,
a Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:___________________________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 19
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN
DISTRIBUTION CO., INC. its General
Partner
By:___________________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC., a Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 20
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: Vice President
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a
Virginia Limited Liability Company,
its Manager
<PAGE>
EXHIBIT A
Page 21
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:___________________________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:___________________________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT A
Page 22
HURON HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:___________________________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS, LLC
By: BMC HOLDINGS, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC. a
Virginia Corporation, its Manager
By:___________________________________
Alan R. Brill, President
NCR III, LLC, a Virginia Limited
Liability Company
<PAGE>
EXHIBIT A
Page 23
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: Brill Media Company, LLC, a
Virginia Limited Liability Company,
its Manager
By: Brill Media Management, Inc., a
Virginia Corporation
By:___________________________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia Limited
Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:___________________________________
Name: Alan R. Brill
Title: President
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
<PAGE>
EXHIBIT A
Page 24
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:___________________________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By:___________________________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT A
Page 25
<PAGE>
EXHIBIT A
Page 26
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we)
assign and transfer this Security to
- ------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
- ------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
-------------------------------------------
<PAGE>
EXHIBIT A
Page 27
agent to transfer this Security on the books of the Issuers. The agent
may substitute another to act for him.
Date:__________________
Your Signature:_______________________________
(Sign exactly as your name appears on the
face of this Security)
Signature Guarantee:
- ------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements will include membership or participation in the
Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT A
Page 28
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering resales
of this Security (which effectiveness shall not have been suspended or
terminated at the date of the transfer) and (ii) December 30, 1999, the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that this Security is
being transferred:
Check One
---------
(1) ___ to an Issuer or a Subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A under
the Securities Act; or
(3) ___ to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act) that has furnished to the Trustee a
signed letter containing certain representations and
agreements (the form of which letter can be obtained
from the Trustee); or
(4) ___ outside the United States to a "foreign person" in
compliance with Rule 904 of Regulation S under the
Securities Act; or
(5) ___ pursuant to the exemption from registration provided
by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement
under the Securities Act; or
(7) ___ pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any Person
other than the registered Securityholder thereof; provided that if box (3),
(4), (5) or (7) is checked, the Issuers or the Trustee may require, prior to
registering any such transfer of the Securities, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or an Issuer has
reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. If none of the foregoing boxes is
checked, the Trustee or Registrar shall not be obligated to register this
<PAGE>
EXHIBIT A
Page 29
Security in the name of any Person other than the Securityholder hereof
unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
Dated:________________ Signed: _________________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:_______________________________________________________
- -------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements will include membership or participation in the
Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:_________________________ _________________________________________
NOTICE: To be executed by an
executive officer
<PAGE>
EXHIBIT A
Page 30
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the
Indenture check the appropriate box:
/ / Section 4.10 / / Section 4.14
If you want to have only part of the Security purchased by the
Issuers pursuant to Section 4.10 or Section 4.14 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 Security)
Signature Guarantee:
- ---------------------------------
(Signatures must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Registrar, which
requirements will include membership or participation in the
Securities Transfer Agents Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the
Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT B
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 ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY
THE DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR 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, A NEW YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR 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 IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.(*)
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN
THE INDENTURE.(*)
_____________________________
(*) To be included in the Global Note only.
<PAGE>
EXHIBIT B
Page 2
THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED ON DECEMBER 31, 1997
WITH ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS 1271 ET.SEQ. OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. FOR INFORMATION REGARDING THE
ISSUE PRICE, AMOUNT OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO
MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF FINANCIAL
OFFICER OF BRILL MEDIA COMPANY, LLC AT 812-423-6200 OR AT THE ADDRESS SET
FORTH ON THE REVERSE OF THIS SECURITY.
<PAGE>
EXHIBIT B
Page 3
CUSIP No:
(Front of Security)
No. 1 $___________
BRILL MEDIA COMPANY, LLC
BRILL MEDIA MANAGEMENT, INC.
12% Senior Note dues 2007, Series B
BRILL MEDIA COMPANY, LLC, a Virginia limited liability company and BRILL
MEDIA MANAGEMENT, INC., a Virginia corporation, jointly and severally,
promise to pay to ________________________________________, or its registered
assigns, the principal sum of $____________,
[For Global Exchange Notes add:, as such amount may be increased or decreased
on the records of the Trustee,] on December 15, 2007.
Interest Payment Dates: June 15 and December 15, commencing June 15, 1998.
Interest Record Dates: June 1 and December 1 (whether or not a Business Day).
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its
Manager
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
Name:
Title:
<PAGE>
EXHIBIT B
Page 4
BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
Name:
Title:
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
By:_____________________________
Authorized Officer
<PAGE>
EXHIBIT B
Page 5
(Reverse of Security)
12% SENIOR NOTE DUE 2007, SERIES B
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Interest. Brill Media Company, LLC, a Virginia limited
liability company ("BMC"), and Brill Media Management Inc., a Virginia
corporation (together with BMC, the "Issuers"), jointly and severally,
promise to pay interest on the principal amount of this Security at the rate
and in the manner specified below. The Issuers shall pay, in cash, interest
on the principal amount of this Security at the rate per annum of 7 1/2% per
annum from the date of original issuance until December 15, 1999, and at a
rate of 12% per annum from and including December 15, 1999 until maturity.
The Issuers will pay interest semiannually in arrears on June 15 and December
15 of each year (each an "Interest Payment Date"), commencing June 15, 1998,
or if any such day is not a Business Day on the next succeeding Business Day.
Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. Interest shall accrue from the most recent Interest
Payment Date to which interest has been paid or, if no interest has been paid,
from the date of the original issuance of the Securities. To the extent
lawful, the Issuers shall pay interest on overdue principal at the rate of 2%
per annum in excess of the then applicable interest rate on the Securities;
they shall pay interest on overdue installments of interest (without regard to
any applicable grace periods) at the same rate to the extent lawful.
2. Method of Payment. The Issuers shall pay interest on this
Security (except defaulted interest) to the Persons who are registered
Holders of Securities at the close of business on the Interest Record Date
immediately preceding the Interest Payment Date, even if such Securities are
cancelled after such Interest Record Date and on or before such Interest
Payment Date. Securityholders must surrender Securities to a Paying Agent to
collect principal payments. The Issuers shall pay principal premium, if any,
and interest in money of the United States that at the time of payment is
legal tender for payment of public and private debts ("U.S. Legal Tender").
However, the Issuers may pay principal, premium, if any, and interest by its
check payable in such U.S. Legal Tender. The Issuers may deliver any such
interest payment to the Paying Agent or to a Securityholder at the
Securityholder's registered address.
<PAGE>
EXHIBIT B
Page 6
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Issuers, or any Subsidiary Guarantor may act in any such capacity.
4. Indenture. The Issuers issued the Securities under an
Indenture, dated as of December 30, 1997 (the "Indenture"), among the
Issuers, the Subsidiary Guarantors and the Trustee. The terms of the
Securities include those stated in the Indenture and those made part of the
Indenture by reference to the TIA as in effect on the date the Indenture is
qualified, except as the Indenture otherwise provides. The Securities are
subject to all such terms, and Securityholders are referred to the Indenture
and the TIA for a statement of such terms. The terms of the Indenture shall
govern any inconsistencies between the Indenture and the Securities. The
Securities are senior Obligations of the Issuers limited to $105,000,000 in
aggregate principal amount.
5.(a) Optional Redemption. Except as indicated in the next
succeeding paragraph, Securities will not be redeemable at the option of the
Issuers prior to December 15, 2002. On and after such date, the Securities
will be redeemable, at the Issuers' option, in whole or in part, at any time
upon not less than 30 nor more than 60 days' prior notice mailed by
first-class mail to each Holder's registered address, at the following
redemption prices (expressed in percentages of principal amount), if redeemed
during the 12-month period commencing on December 15th of the years set forth
below, plus accrued and unpaid interest to the redemption date (subject to
the right of holders of record on the relevant record date to receive
interest due on the relevant Interest Payment Date):
Period
------
Redemption Price
----------------
2002...................... 106.00%
2003...................... 104.00%
2004...................... 102.00%
2005 and thereafter....... 100.00%
(b) Optional Redemption Upon Public Equity Offerings. In the event
of the sale by an Issuer prior to December 15, 2000 of its Capital Stock
(other than Disqualified Stock) in one or more Public Equity Offerings the
Net Cash Proceeds of which are at least $25.0 million in the aggregate, the
Issuers may, at their option, use the
<PAGE>
EXHIBIT B
Page 7
Net Cash Proceeds of such sale or sales of Capital Stock to redeem up to 25%
of the aggregate principal amount of the aggregate principal amount of the
Securities at a redemption price, in the case of a redemption date prior to
December 15, 1999, equal to 112.0% of the Accreted Value thereof plus accrued
and unpaid interest thereon, if any, to the redemption date (subject to the
right of holders of record on the relevant record date to receive interest
due on the relevant Interest Payment Date) and for any redemption date on or
after December 15, 1999, at a redemption price equal to 112.0% of the
principal amount thereof plus accrued and unpaid interest thereon, if any, to
the redemption date (subject to the right of holders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date); provided, however, that after any such redemption the aggregate
principal amount of the Securities outstanding must equal at least $79.0
million. In order to effect the foregoing redemption with the proceeds of
any such sale of Capital Stock, the Issuers shall make such redemption not
more than 90 days after the consummation of any such sale or sales of Capital
Stock.
6. Mandatory Redemption. The Securities are not subject to
mandatory redemption or sinking fund payments.
7. Repurchase at Option of Securityholder. (a) If there is a Change
of Control, each Holder of Securities will have the right to require the
Issuers to repurchase all or any part of such Holder's Securities, in the
case of a repurchase date prior to December 15, 1999, at a purchase price in
cash equal to 101% of the Accreted Value thereof plus any accrued and unpaid
interest, if any, to the date of repurchase (subject to the right of
Securityholders of record on the relevant record date to receive interest due
on the relevant Interest Payment Date) and for any repurchase date on or
after December 15, 1999, at a purchase price in cash equal to 101% of the
principal amount thereof plus accrued and unpaid interest, if any, to the
date of repurchase (subject to the right of Securityholders of record on the
relevant record date to receive interest due on the relevant Interest Payment
Date) (such applicable purchase price being hereinafter referred to as the
"Change of Control Purchase Price"). Within 30 days following any Change of
Control, the Issuers will mail a notice to each Securityholder stating (i)
that a Change of Control has occurred and that such Securityholder has the
right to require the Issuers to repurchase all or any part of such
Securityholder's Securities at a repurchase price in cash equal to the Change
of Control Purchase Price (subject to the right of Holders of record on the
relevant Interest Record Date to receive interest due on the relevant
Interest Payment Date); (ii) the circumstances and relevant facts regarding
such Change of Control (including information with respect to pro forma
historical income, cash flow and capitalization after giving effect to such
Change of Control); (iii) the repurchase date (which will be no earlier then
30 days nor later than 60 days from the
<PAGE>
EXHIBIT B
Page 8
date such notice is mailed); and (iv) the procedures, determined by the
Issuers consistent with the Indenture, that a Securityholder must follow in
order to have its Securities repurchased. Securityholders that are subject to
an offer to repurchase may elect to have such Securities repurchased by
completing the form entitled "Option of Securityholder to Elect Purchase"
appearing below.
(b) If an Issuer or a Subsidiary consummates any Asset Disposition,
and when the aggregate amount of Net Available Cash from such an Asset
Disposition exceeds $10 million (except as otherwise set forth in Section
4.10 of the Indenture), the Issuers shall be required to offer to purchase
the maximum principal amount of Securities, that is in an integral multiple
of $1,000, that may be purchased out of the Net Available Cash, at 100% of
the Accreted Value thereof if such purchase date occurs prior to December 15,
1999, and at 100% of the principal amount thereof if such purchase date
occurs on or after December 15, 1999, in each case 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. If the aggregate
principal amount of Securities surrendered by Holders thereof exceeds the
amount of Net Available Cash, the Securities to be redeemed shall be selected
on a pro rata basis to the extent practicable. Securityholders that are the
subject of an offer to purchase will receive an Asset Disposition Offer from
the Issuers prior to any related purchase date and may elect to have such
Securities purchased by completing the form entitled "Option of
Securityholder to Elect Purchase" appearing below.
8. Notice of Redemption. Notice of redemption shall be mailed at
least 30 days before the redemption date to each Holder whose Securities are
to be redeemed at its registered address. Securities may be redeemed in part
but only in whole multiples of $1,000, unless all of the Securities held by a
Securityholder are to be redeemed. On and after the redemption date,
interest ceases to accrue on Securities or portions of them called for
redemption.
9. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples of $1,000. The transfer of Securities may be registered and
Securities may be exchanged as provided in the Indenture. The Registrar and
the Trustee may require a Securityholder among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption. Also, it need not exchange or register the transfer
of any Securities during a period beginning on the opening of business on a
Business Day 15 days before the day of any selection of Securities to be
redeemed and ending on the
<PAGE>
EXHIBIT B
Page 9
close of business on the day of selection or during the period between a
Interest Record Date and the corresponding Interest Payment Date.
10. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Security, the Trustee, any Agent and
the Issuers may deem and treat the Person in whose name this Security is
registered as its absolute owner for the purpose of receiving payment of
principal of, premium, if any, and interest on this Security and for all
other purposes whatsoever, whether or not this Security is overdue, and
neither the Trustee, any Agent nor the Issuers shall be affected by notice to
the contrary. The registered Securityholder shall be treated as its owner
for all purposes.
11. Amendments and Waivers. Subject to certain exceptions provided
in the Indenture, the Issuers and the Trustee may amend or supplement the
Indenture or the Securities with the consent of the Holders of a majority in
principal amount of the then outstanding Securities, and, among other things,
any existing Default or Event of Default (except a payment default) may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Securities. Under certain conditions, without the
consent of any Securityholder, the Issuers and the Trustee may amend the
Indenture or the Securities may be amended to, among other things, cure any
ambiguity, defect or inconsistency, to comply with the requirements of the
Commission in order to effect or maintain qualification of the Indenture under
the TIA or to make any change that does not adversely affect the rights of any
Securityholder.
12. Defaults and Remedies. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount of
the then outstanding Securities may declare the unpaid principal of, and any
accrued and unpaid interest on, all the Securities to be due and payable
immediately; provided, that in the case of an Event of Default arising from
certain events of bankruptcy or insolvency with respect to an Issuer or any
Subsidiary Guarantor, all outstanding Securities shall become due and payable
immediately without further action or notice. Securityholders may not enforce
the Indenture or the Securities except as provided in the Indenture. The
Trustee may require indemnity satisfactory to it before it enforces the
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in principal amount of the then outstanding Securities may direct
the Trustee in its exercise of any trust or power. The Trustee may withhold
from Securityholders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is
in their interests. The Issuers and each Subsidiary Guarantor must furnish
an annual compliance certificate to the Trustee.
<PAGE>
EXHIBIT B
Page 10
13. Trustee Dealings with the Issuers. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers, the Subsidiary Guarantors
or any Affiliate of the Issuers or the Guarantors, and may otherwise deal with
the Issuers, the Subsidiary Guarantors and their respective Affiliates as if
it were not Trustee.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Issuers and their Restricted Subsidiaries
to, among other things, incur additional Indebtedness, make payments in
respect of its Capital Stock or certain Indebtedness, enter into transactions
with Affiliates, create dividend or other payment restrictions affecting
Subsidiaries, merge or consolidate with any other Person, sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets or adopt a plan of liquidation. Such limitations are subject to a
number of important qualifications and exceptions provided for in the
Indenture. The Issuers and each Subsidiary Guarantor must annually report to
the Trustee on compliance with such limitations.
15. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
16. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly
and severally irrevocably and unconditionally guaranteed the payment of
principal, premium, if any, and interest (including interest on overdue
principal and overdue interest, if lawful) on the Securities; provided,
however, each Subsidiary Guarantor that makes a payment or distribution under
a Subsidiary Guarantee shall be entitled to a contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of
each Subsidiary Guarantor.
17. Defeasance. Subject to certain conditions provided for in the
Indenture, the Issuers at any time may terminate some or all of their
obligations under the Securities and the Indenture if the Issuers deposit
with the Trustee money or U.S. Government Obligations for the payment of
principal, premium (if any) and interest on the Securities to redemption or
maturity, as the case may be.
18. Governing Law. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
19. Abbreviations. Customary abbreviations may be used in the name
of a Securityholder or an assignee, such as: TEN COM (= tenants in common),
TEN ENT
<PAGE>
EXHIBIT B
Page 11
(= 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).
20. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
The Issuers will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attn: Alan R. Brill
<PAGE>
EXHIBIT B
Page 12
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor person under the Indenture) (i) have jointly and
severally irrevocably and unconditionally guaranteed as a primary obligor and
not a surety, (such guarantee by each Subsidiary Guarantor being referred to
herein as the "Subsidiary Guarantee") (a) the due and punctual payment of the
principal, premium, if any, and interest on the Securities, whether at Stated
Maturity or interest payment date, by acceleration, call for redemption or
otherwise, (b) the due and punctual payment of interest on the overdue
principal of and interest, if any, on the Securities, to the extent lawful,
(c) the due and punctual performance of all other monetary Obligations of the
Issuers under the Indenture and the Securities to the Securityholders or the
Trustee, all in accordance with the terms set forth in Article 10 of the
Indenture and (d) in case of any extension of time of payment or renewal of
any Securities or any such Obligations, 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 and (ii)
have agreed to pay any and all costs and expenses (including reasonable
attorneys' fees) incurred by the Trustee or any Securityholder in enforcing
any rights under this Subsidiary Guarantee.
The Obligations of each Subsidiary Guarantor to the Securityholders
of Securities and to the Trustee pursuant to this Subsidiary Guarantee and
the Indenture are expressly set forth in Article 10 of the Indenture and
reference is hereby made to such Indenture for the precise terms of this
Subsidiary Guarantee.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Subsidiary Guarantor shall have any liability under
this Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This is a continuing Subsidiary Guarantee and, except as otherwise
expressly provided for in Section 10.06 of the Indenture, shall remain in
full force and effect and shall be binding upon the Subsidiary Guarantor and
its successors and assigns until full and final payment of all of the
Issuers' Obligations under the Securities and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Securityholders and, in the event of any transfer or assignment of rights by
any Securityholder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to
<PAGE>
EXHIBIT B
Page 13
the terms and conditions hereof. This is a Subsidiary Guarantee of payment
and not of collectability.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this Subsidiary Guarantee is noted shall have been executed by the Trustee
under the Indenture by the manual signature of one of its authorized officers.
THE TERMS OF ARTICLE 10 OF THE INDENTURE ARE INCORPORATED HEREIN
BY REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Subsidiary Guarantors:
BMC HOLDINGS, LLC, a Virginia
Limited Liability Company
BY: BRILL MEDIA COMPANY, LLC,
its Manager
BY: BRILL MEDIA MANAGEMENT, INC.,
its Manager
By:____________________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 14
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia
Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:____________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 15
NORTHLAND BROADCASTING, LLC, a
Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation
its Manager
By:____________________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 16
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN
DISTRIBUTION CO., INC. its General
Partner
By:____________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 17
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: Vice President
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a
Virginia Limited Liability Company,
its Manager
<PAGE>
EXHIBIT B
Page 18
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:____________________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:____________________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT B
Page 19
HURON HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:____________________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS,
LLC
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC. a
Virginia Corporation, its Manager
By:____________________________
Alan R. Brill, President
NCR III, LLC, a Virginia Limited Liability
Company
<PAGE>
EXHIBIT B
Page 20
By: NCH II, LLC, a Virginia Limited Liability
Company, its Manager
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: Brill Media Company, LLC, a Virginia
Limited Liability Company, its Manager
By: Brill Media Management, Inc., a Virginia
Corporation
By:____________________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia Limited Liability
Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation, its Manager
By:____________________________
Name: Alan R. Brill
Title: President
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
<PAGE>
EXHIBIT B
Page 21
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation, its Manager
By:____________________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By:____________________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT B
Page 22
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
(Print or type assignee's name, address and zip code)
and irrevocably appoint ______________________________________________________
<PAGE>
EXHIBIT B
Page 23
agent to transfer this Security on the books of the Issuers. The agent may
substitute another to act for him.
Date: ___________________
Your Signature: _____________________________________
(Sign exactly as your name appears on the face of this
Security)
Signature Guarantee:
__________________________
(Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements will include membership
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT B
Page 24
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Security
purchased by the Issuers pursuant to Section 4.10 or Section 4.14 of the
Indenture check the appropriate box:
/ / Section 4.10 / / Section 4.14
If you want to have only part of the Security purchased by the
Issuers pursuant to Section 4.10 or Section 4.14 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 Security)
Signature Guarantee:
__________________________
(Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements will include membership
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
<PAGE>
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Re: Brill Media Company, LLC and
Brill Media Management, Inc.
12% Senior Notes due 2007
Ladies and Gentlemen:
In connection with our proposed purchase of 12% Senior Notes due
2007 (the "Securities") of Brill Media Company, LLC ("Brill") and Brill Media
Management, Inc. (together with BMC, the "Issuers"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated December 23, 1997 relating to the Securities
and such other information as we deem necessary in order to make our
investment decision. We acknowledge that we have read and agreed to the
matters stated on pages (ii) and (iii) of the Offering Memorandum and in the
section entitled "Notes Transfer Restrictions" of the Offering Memorandum
including the restrictions on duplication and circulation of the Offering
Memorandum.
2. We understand that any subsequent transfer of the Securities is
subject to certain restrictions and conditions set forth in the Indenture
relating to the Securities (as described in the Offering Memorandum) and the
undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such restrictions and
conditions and the Securities Act of 1933, as amended (the "Securities Act").
<PAGE>
EXHIBIT C
Page 2
3. We understand that the offer and sale of the Securities have not
been registered under the Securities Act, and that the Securities 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 or otherwise transfer any
Securities prior to the date which is two years after the original issuance
of the Securities, we will do so only (i) to an Issuer or any of its
subsidiaries, (ii) inside the United States in accordance with Rule 144A
under the Securities Act to a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act), (iii) inside the United States to an
institutional "accredited investor" (as defined below) that, prior to such
transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer)
to the Trustee (as defined in the Indenture relating to the Securities), a
signed letter containing certain representations and agreements relating to
the restrictions on transfer of the Securities, (iv) outside the United
States in accordance with Rule 904 of Regulation S under the Securities Act,
(v) pursuant to the exemption from registration provided by Rule 144 under
the Securities Act (if available), or (vi) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Securities from us a notice
advising such purchaser that resales of the Securities are restricted as
stated herein.
4. We are not acquiring the Securities for or on behalf of, and
will not transfer the Securities to, any pension or welfare plan (as defined
in Section 3 of the Employee Retirement Income Security Act of 1974), except
as permitted in the section entitled "Transfer Restrictions" of the Offering
Memorandum.
5. We understand that, on any proposed resale of any Securities, we
will be required to furnish to the Trustee and the Issuers such
certification, legal opinions and other information as the Trustee and the
Issuers may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the Securities
purchased by us will bear a legend to the foregoing effect.
6. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and
have such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting are each able to
bear the economic risk of our or their investment, as the case may be.
<PAGE>
EXHIBIT C
Page 3
7. We are acquiring the Securities purchased by us for
our 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 Issuers 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
proceeding or official inquiry with respect to the matters covered
hereby.
Very truly yours,
By:
-------------------------------
Name:
<PAGE>
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_______________,______
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Re: Brill Media Company, LLC and
Brill Media Management, Inc.
(collectively the "Issuers") 12% Senior
Notes due 2007 (the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_____________
aggregate principal amount of the Securities, we confirm that such
sale has been effected pursuant to and in accordance with
Regulation S under the U.S. Securities Act of 1933, as amended (the
"Securities Act"), and, accordingly, we represent that:
(1) the offer of the Securities was not made to a Person
in the United States;
(2) either (a) at the time the buy offer was originated,
the transferee was outside the United States or we and any
person acting on our behalf reasonably believed that the
transferee was outside the United States, or (b) the
transaction was executed in, on or through the facilities of a
designated off-shore securities market and neither we nor any
Person acting on our behalf knows that the transaction has
been pre-arranged with a buyer in the United States;
<PAGE>
EXHIBIT D
Page 2
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule
903(b) or Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
You and the Issuers 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. Terms used in this certificate have the meanings set forth
in Regulation S.
Very truly yours,
[Name of Transferor]
By:
----------------------
Authorized Signature
<PAGE>
===============================================================================
BRILL MEDIA COMPANY, LLC,
and
BRILL MEDIA MANAGEMENT, INC.
as Issuers,
and
THE SUBSIDIARY GUARANTORS
NAMED HEREIN
and
UNITED STATES TRUST COMPANY OF NEW YORK
as Trustee
$3,000,000 aggregate principal amount
APPRECIATION NOTES DUE 2007, SERIES A
APPRECIATION NOTES DUE 2007, SERIES B
--------------------------
----------
APPRECIATION NOTE INDENTURE
Dated as of December 30, 1997
----------
===============================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Trust Indenture
Act Section Indenture Section
310(a)(1)............................... 7.10
(a)(2)............................... 7.10
(a)(3)............................... N.A.
(a)(4)............................... N.A.
(a)(5)............................... 7.10
(b).................................. 7.10
(c).................................. N.A.
311(a).................................. 7.11
(b).................................. 7.11
(c).................................. N.A.
312(a).................................. 2.05
(b).................................. 12.03
(c).................................. 12.03
313(a).................................. 7.06
(b)(1)............................... 7.06
(b)(2)............................... 7.06
(c).................................. 7.06
(d).................................. 7.06
314(a).................................. 4.04
(b).................................. N.A.
(c)(1)............................... 12.05
(c)(2)............................... 12.05
(c)(3)............................... N.A.
(d).................................. N.A.
(e).................................. 12.05
(f).................................. N.A.
315(a).................................. 7.01
(b).................................. 7.05
(c).................................. 7.01
(d).................................. 6.03;7.01
(e).................................. 6.09
316(a).................................. 1.01
(a)(1)(A)............................ 6.02
(a)(1)(B)............................ 6.02
<PAGE>
(a)(2)............................... N.A.
(b).................................. 6.05
(c).................................. 2.19
317(a)(1)............................... 6.06
(a)(2)............................... 6.07
(b).................................. 2.04
318(a).................................. 12.01
(b).................................. N.A.
(c).................................. 12.01
- -------------------
*This Cross-Reference Table is not part of the Indenture.
N.A. means not applicable.
(2)
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE ................. 1
SECTION 1.01. DEFINITIONS....................................... 1
SECTION 1.02. OTHER DEFINITIONS................................. 13
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT.................................... 14
SECTION 1.04. RULES OF CONSTRUCTION............................. 14
ARTICLE 2 THE SECURITIES.............................................. 15
SECTION 2.01. FORM AND DATING................................... 15
SECTION 2.02. EXECUTION AND AUTHENTICATION...................... 16
SECTION 2.03. REGISTRAR AND PAYING AGENT........................ 16
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST............... 17
SECTION 2.05. SECURITYHOLDER LISTS.............................. 17
SECTION 2.06. TRANSFER AND EXCHANGE............................. 18
SECTION 2.07. REPLACEMENT SECURITIES............................ 18
SECTION 2.08. OUTSTANDING SECURITIES............................ 19
SECTION 2.09. TREASURY SECURITIES............................... 19
SECTION 2.10. TEMPORARY SECURITIES.............................. 19
SECTION 2.11. CANCELLATION...................................... 20
SECTION 2.12. DEFAULTED INTEREST................................ 20
SECTION 2.13. CUSIP NUMBER...................................... 20
SECTION 2.14. DEPOSIT OF MONEYS................................. 21
SECTION 2.15. RESTRICTIVE LEGENDS............................... 21
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY......... 23
SECTION 2.17. SPECIAL TRANSFER PROVISIONS....................... 25
SECTION 2.18. PERSONS DEEMED OWNERS............................. 27
ARTICLE 3 REDEMPTION.................................................. 27
SECTION 3.01. NOTICES TO TRUSTEE................................ 27
SECTION 3.02. [RESERVED]........................................ 27
SECTION 3.03. NOTICE OF OPTIONAL REDEMPTION BY THE ISSUERS...... 27
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.................... 28
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE....................... 28
SECTION 3.06. SECURITIES REDEEMED IN PART....................... 29
SECTION 3.07. REDEMPTION UPON MATURITY.......................... 29
SECTION 3.08. OPTIONAL REDEMPTION............................... 29
<PAGE>
SECTION 3.09. MANDATORY REDEMPTION AT THE OPTION OF THE
SECURITYHOLDERS UPON THE OCCURRENCE OF
CERTAIN EVENTS................................... 30
SECTION 3.10. MANDATORY REDEMPTION AT THE OPTION OF
THE SECURITYHOLDERS ON SPECIFIED DATES........... 31
ARTICLE 4 COVENANTS................................................... 32
SECTION 4.01. PAYMENT OF SECURITIES............................. 32
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY................... 32
SECTION 4.03. SEC REPORTS....................................... 33
SECTION 4.04. COMPLIANCE CERTIFICATES........................... 34
SECTION 4.05. TAXES............................................. 35
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.................... 35
SECTION 4.07. CORPORATE EXISTENCE............................... 35
SECTION 4.09. FURTHER INSTRUMENTS AND ACTS...................... 36
ARTICLE 5 SUCCESSORS.................................................. 36
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION
OR SALE OF ASSETS................................ 36
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED................. 37
ARTICLE 6 REMEDIES.................................................... 37
SECTION 6.01. REMEDIES.......................................... 37
SECTION 6.02. WAIVER OF PAST DEFAULTS........................... 37
SECTION 6.03. CONTROL BY MAJORITY............................... 38
SECTION 6.04. LIMITATION ON SUITS............................... 38
SECTION 6.05. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT...... 39
SECTION 6.06. COLLECTION SUIT BY TRUSTEE........................ 39
SECTION 6.07. TRUSTEE MAY FILE PROOFS OF CLAIM.................. 39
SECTION 6.08. PRIORITIES........................................ 40
SECTION 6.09. UNDERTAKING FOR COSTS............................. 40
ARTICLE 7 TRUSTEE..................................................... 41
SECTION 7.01. DUTIES OF TRUSTEE................................. 41
SECTION 7.02. RIGHTS OF TRUSTEE................................. 42
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE...................... 43
SECTION 7.04. TRUSTEE'S DISCLAIMER.............................. 43
SECTION 7.05. NOTICE OF DEFAULTS................................ 43
SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS............. 44
SECTION 7.07. COMPENSATION AND INDEMNITY........................ 44
SECTION 7.08. REPLACEMENT OF TRUSTEE............................ 45
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.................. 46
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION..................... 47
(ii)
<PAGE>
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS
AGAINST THE ISSUERS.............................. 47
ARTICLE 8 DISCHARGE OF INDENTURE...................................... 47
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.............. 47
SECTION 8.02. APPLICATION OF TRUST MONEY........................ 48
SECTION 8.03. REPAYMENT TO THE ISSUERS.......................... 48
SECTION 8.04. REINSTATEMENT..................................... 48
ARTICLE 9 AMENDMENTS.................................................. 49
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS................ 49
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS................... 50
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT............... 52
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS................. 52
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES............. 52
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC................... 53
ARTICLE 10 SUBORDINATION.......................................... 53
SECTION 10.01. AGREEMENT TO SUBORDINATE.......................... 53
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.............. 53
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OR
GUARANTOR SENIOR INDEBTEDNESS.................... 54
SECTION 10.04. WHEN DISTRIBUTION MUST BE PAID OVER............... 54
SECTION 10.05. SUBROGATION....................................... 54
SECTION 10.06. RELATIVE RIGHTS................................... 55
SECTION 10.07. SUBORDINATION MAY NOT BE IMPAIREDBY
ISSUERS OR THE SUBSIDIARY GUARANTORS............. 55
SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT................ 55
SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.......... 56
SECTION 10.10. ARTICLE 10 NOT TO PREVENT EVENTS OF DEFAULT....... 56
SECTION 10.11. TRUSTEE ENTITLED TO RELY.......................... 56
SECTION 10.12. TRUSTEE TO EFFECTUATE SUBORDINATION............... 57
SECTION 10.13. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR
INDEBTEDNESS AND SUBSIDIARY GUARANTOR
SENIOR INDEBTEDNESS.............................. 57
SECTION 10.14. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS AND
GUARANTOR SENIOR INDEBTEDNESS ON SUBORDINATION
PROVISIONS....................................... 57
ARTICLE 11 SUBSIDIARY GUARANTEE OF SECURITIES..................... 58
SECTION 11.01. SUBSIDIARY GUARANTEE.............................. 58
(iii)
<PAGE>
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.... 59
SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC........... 59
SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.... 60
SECTION 11.05. CONTRIBUTION...................................... 61
SECTION 11.06. RELEASE........................................... 61
SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS.................. 61
SECTION 11.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON
CERTAIN TERMS.................................... 62
SECTION 11.09. SUCCESSORS AND ASSIGNS............................ 63
SECTION 11.10. WAIVER OF STAY, EXTENSION OR USURY LAWS........... 63
ARTICLE 12 MISCELLANEOUS.......................................... 63
SECTION 12.01. TRUST INDENTURE ACT CONTROLS...................... 63
SECTION 12.02. NOTICES........................................... 64
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER
SECURITYHOLDERS.................................. 65
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS
PRECEDENT........................................ 65
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION..... 65
SECTION 12.06. RULES BY TRUSTEE AND AGENTS....................... 66
SECTION 12.07. LEGAL HOLIDAYS.................................... 66
SECTION 12.08. NO RECOURSE AGAINST OTHERS........................ 66
SECTION 12.09. DUPLICATE ORIGINALS............................... 66
SECTION 12.10. GOVERNING LAW..................................... 67
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS..... 67
SECTION 12.12. SUCCESSORS........................................ 67
SECTION 12.13. SEVERABILITY...................................... 67
SECTION 12.14. COUNTERPART ORIGINALS............................. 67
SECTION 12.15. TABLE OF CONTENTS, HEADINGS, ETC.................. 67
(iv)
<PAGE>
EXHIBIT A - FORM OF INITIAL SECURITY WITH SUBSIDIARY GUARANTEE
EXHIBIT B - FORM OF EXCHANGE SECURITY WITH SUBSIDIARY GUARANTEE
EXHIBIT C - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS TO NON-QIB ACCREDITED INVESTORS
EXHIBIT D - FORM OF CERTIFICATE TO BE DELIVERED IN CONNECTION
WITH TRANSFERS PURSUANT TO REGULATION S
SCHEDULE 1 SUBSIDIARY GUARANTORS
(v)
<PAGE>
APPRECIATION NOTE INDENTURE, dated as of December
30, 1997, among Brill Media Company, LLC, a Virginia limited
liability company ("BMC"), Brill Media Management, Inc., a
Virginia corporation ("Media" and, collectively with BMC,
the "Issuers"), the subsidiary guarantors listed on Schedule
I attached hereto as Subsidiary Guarantors (as defined) of
the Issuers' obligations hereunder, and United States Trust
Company of New York, a banking corporation organized and
existing under the laws of the State of New York, as Trustee
(the "Trustee").
The Issuers have duly authorized the creation of
an issue of Appreciation Notes due 2007, Series A (the
"Initial Securities") and Appreciation Notes due 2007,
Series B (the "Exchange Securities") and, to provide
therefor, the Issuers and the Subsidiary Guarantors have
duly authorized the execution and delivery of this
Indenture. All things necessary to make the Securities (as
defined), when duly issued and executed by the Issuers, and
authenticated and delivered hereunder, the valid obligations
of the Issuers and the Subsidiary Guarantors, and to make
this Indenture a valid and binding agreement of the Issuers
and the Subsidiary Guarantors, have been done.
The Issuers, the Subsidiary 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) of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Administrative Management Agreement" means any
management agreements between either of the Issuers or any
of the Subsidiary Guarantors and BMCLP, pursuant to which
BMCLP provides management services to such Issuer or such
Subsidiary Guarantors.
"Adjusted Net Assets" of a Subsidiary Guarantor at
any date means the lesser of the amount by which (x) the
fair value of the property of such Subsidiary Guarantor
exceeds the total amount of liabilities, including, without
limitation, the probable liability of such Subsidiary
Guarantor with respect to its contingent liabilities (after
giving effect to all other fixed and contingent liabilities
incurred or assumed on such date), but excluding liabilities
under the Subsidiary Guarantee of such Subsidiary Guarantor
at such date and (y) the present fair salable value of the
assets of such Subsidiary Guarantor at such date exceeds the
amount that will be required to pay the probable liability
of such Subsidiary Guarantor on its debts (after
<PAGE>
giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any
collection from any Subsidiary by such Subsidiary Guarantor in
respect of the obligations of such Subsidiary under the
Subsidiary Guarantee), excluding debt in respect of the
Subsidiary Guarantee, as they become absolute and matured.
"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. For the purposes of this
definition, "control" when used with respect to any Person
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Agent" means any Registrar, Paying Agent or
co-registrar.
"Appreciation Notes Registration Rights Agreement"
means the registration rights agreement relating to the
Securities and dated December 30, 1997 among the Issuers,
the Subsidiary Guarantors and the Initial Purchaser for the
benefit of themselves and the Securityholders, as the same
may be amended or modified from time to time in accordance
with the terms thereof.
"Attributable Indebtedness" in respect of a
Sale/Leaseback Transaction means, as at the time of
determination, the present value (discounted at the interest
rate borne by the Securities, compounded annually) of the
total obligations of the lessee for rental payments during
the remaining term of the lease included in such
Sale/Leaseback Transaction (including any period for which
such lease has been extended).
"Bankruptcy Code" means Title 11, U.S. Code or any
similar Federal, state or foreign law for the relief of
debtors.
"BMC" has the meaning set forth in the preamble to
this Indenture until a successor replaces such Person in
accordance with Article 5 hereof and thereafter means such
successor.
"BMCLP" means Brill Media Company, L.P, a Virginia
limited partnership, and its successors.
"Board of Directors" means as to BMC (i) so long
as BMC or any successor to BMC is a limited liability
company or a partnership, the board of directors of Media,
which is the manager of BMC and (ii) at any other time, the
board of directors of BMC, and as to Media, the board of
directors of Media.
"Board Resolution" means, with respect to any
Person, a copy of a resolution certified by the Secretary or
an Assistant Secretary of such Person (or, in the case of
BMC so
2
<PAGE>
long as it is a limited liability company or a partnership, of
Media, which is the manager of BMC) to have been duly adopted by
the Board of Directors of such Person and to be in full force
and effect on the date of such certification, and delivered to
the Trustee.
"Business Day" means a day that is not a Legal
Holiday.
"Capital Stock" of any Person means any and all
shares, membership and other interests, rights to purchase,
warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person,
including any Preferred Stock, but excluding any debt
securities convertible into such equity.
"Capitalized Lease Obligation" means an obligation
that is required to be classified and accounted for as a
capitalized lease for financial reporting purposes in
accordance with GAAP, and the amount of Indebtedness
represented by such obligation shall be the capitalized
amount of such obligation determined in accordance with
GAAP, and the stated maturity thereof shall be the date of
the last payment of rent or any other amount due under such
lease prior to the first date such lease may be terminated
without penalty.
"Cash Equivalents" means (i) United States
dollars, (ii) securities issued or directly and fully
guaranteed or insured by the United States government or any
agency or instrumentality thereof, (iii) certificates of
deposit, time deposits 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
commercial bank having capital and surplus in excess of $500
million, (iv) repurchase obligations for underlying
securities of the types described in clauses (ii) and (iii)
entered into with any financial institution meeting the
qualifications specified in clause (iii) above, (v)
commercial paper rated A-1 or the equivalent thereof by
Moody's or S&P and in each case maturing within one year
after the date of acquisition, (vi) investment funds
investing 95% of their assets in securities of the types
described in clauses (i)-(v) above, (vii) readily marketable
direct obligations issued by any state of the United States
of America or any political subdivision thereof having one
of the two highest rating categories obtainable either
Moody's or S&P and (viii) Indebtedness or Preferred Stock
issued by Persons with a rating of "A" or higher from S&P or
"A2" or higher from Moody's.
"Commission" means the U.S. Securities and
Exchange Commission or its successor.
"Consolidated EBITDA" means, for any period an
amount equal to Consolidated Net Income for such period,
plus the following to the extent deducted in calculating
such Consolidated Net Income: (i) the provision for taxes
for such period based on income or profits and any provision
for taxes utilized in computing net loss, (ii) Consolidated
Interest Expense, (iii) depreciation expense, (iv)
amortization expense (including the amortization of debt
issuance costs), (v) all other non-cash items reducing
Consolidated Net Income for such period
3
<PAGE>
(excluding any non-cash item to the extent it represents an
accrual of or reserve for cash disbursements for any subsequent
period prior to the Stated Maturity of the Securities or
amortization of a pre-paid cash expense that was paid in a prior
period), minus (b) all non-cash items increasing Consolidated
Net Income for such period, in each case on a consolidated basis
for the Issuers and their Subsidiaries for such period
determined in accordance with GAAP.
"Consolidated Interest Expense" means, for any
period, the total interest expense of the Issuers and their
Subsidiaries determined on a consolidated basis in
accordance with GAAP, plus, to the extent not included in
such interest expense, (i) interest expense attributable to
Capitalized Lease Obligations, (ii) capitalized interest,
(iii) non-cash interest expense, (iv) commissions, discounts
and other fees and charges owed with respect to letters of
credit and bankers' acceptance financing, (v) interest
actually paid by either Issuer or any such Subsidiary under
any Guarantee of Indebtedness or other obligation of any
other Person, (vi) net payments (whether positive or
negative) pursuant to Interest Rate Agreements and (vii) the
cash contributions to any employee stock ownership plan or
similar trust to the extent such contributions are used by
such plan or trust to pay interest or fees to any Person
(other than an Issuer) in connection with Indebtedness
incurred by such plan or trust and less (a) to the extent
included in such interest expense, the amortization of
capitalized debt issuance costs and (b) interest income.
"Consolidated Net Income" means, for any period,
the consolidated net income (loss) of the Issuers and their
respective consolidated Subsidiaries determined in
accordance with GAAP.
"Consolidated Net Worth" means the total of the
amounts shown on the balance sheets of the Issuers and their
consolidated Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP, as of the end of
the most recent fiscal quarter of the Issuers ending prior
to the taking of any action for the purpose of which the
determination is being made and for which financial
statements are available (but in no event ending more than
135 days prior to the taking of such action), as (i) the par
or stated value of all outstanding Capital Stock of an
Issuer plus (ii) paid in capital or capital surplus relating
to such Capital Stock plus (iii) any retained earnings or
earned surplus less (A) any accumulated deficit and (B) any
amounts attributable to Disqualified Stock.
"Corporate Trust Office of the Trustee" shall be
at the address of the Trustee specified in Section 11.02 or
such other address as to which the Trustee may give notice
to the Issuers.
"Currency Agreement" means in respect of a Person
any foreign exchange contract, currency swap agreement or
other similar agreement as to which such Person is a party
or a beneficiary.
4
<PAGE>
"Default" means any failure by an Issuer or a
Subsidiary Guarantor to comply with its covenants hereunder.
"Depository" means The Depository Trust Company,
its nominees and successors.
"Designated Senior Indebtedness" means any Senior
Indebtedness in the case of the Issuers, or Guarantor Senior
Indebtedness in the case of a Subsidiary Guarantor which, at
the date of determination, has an aggregate principal amount
outstanding of, or under which, at the date of
determination, the holders thereof, are committed to lend up
to, at least $5 million and is specifically designated by an
Issuer or such Subsidiary Guarantor in the instrument
evidencing or governing such Senior Indebtedness or
Guarantor Senior Indebtedness as "Designated Senior
Indebtedness" for purposes of this Indenture; provided,
however, that the Indebtedness of the Issuers under the
Notes, and the Subsidiary Guarantee of each Subsidiary
Guarantor under its Guarantee of the Notes, shall always
constitute Designated Senior Indebtedness.
"Disqualified Stock" means any Capital Stock
which, by its terms (or by the terms of any security into
which it is convertible or for which it is exchangeable), or
upon the happening of any event, (i) matures (excluding any
maturity as the result of an optional redemption by the
issuer thereof) or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or is redeemable at
the option of the holder thereof, in whole or in part, on or
prior to the final Stated Maturity of the Securities, or
(ii) is convertible into or exchangeable (unless at the sole
option of the issuer thereof) for (a) debt securities or (b)
any Capital Stock referred to in (i) above, in each case at
any time prior to the final Stated Maturity of the
Securities.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended, and the rules and regulations of the
Commission promulgated thereunder, or any successor statute
or statutes thereto.
"Exchange Offer" means the registration by the
Issuers and the Subsidiary Guarantors under the Securities
Act pursuant to a registration statement of the offer by the
Issuers and the Subsidiary Guarantors to each Securityholder
of the Initial Securities to exchange all the Initial
Securities held by such Securityholder for the Exchange
Securities in an aggregate principal amount equal to the
aggregate principal amount of the Initial Securities held by
such Securityholder, all in accordance with the terms and
conditions of the Appreciation Notes Registration Rights
Agreement.
"Exchange Securities" has the meaning set forth in
the preamble to this Indenture.
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"fair market value" means, with respect to any
asset or property, the price which could be negotiated in an
arm's-length, free market transaction, for cash, between a
willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the
transaction. Fair market value shall be determined by the
Board of Directors of BMC acting reasonably and in good
faith and shall be evidenced by a Board Resolution of the
Board of Directors of BMC delivered to the Trustee.
"GAAP" means generally accepted accounting
principles in the United States of America as in effect as
of the date of this Indenture, including those 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 approved by a significant
segment of the accounting profession. All computations
based on GAAP contained in this Indenture shall be computed
in conformity with GAAP.
"Group" means any "group" for purposes of Section
13(d) of the Exchange Act.
"Guarantee" means any obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing
any Indebtedness of any other Person and any obligation,
direct or indirect, contingent or otherwise, of such Person
(i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Indebtedness of such other
Person (whether arising by virtue of partnership
arrangements, or by agreement to keep-well, to purchase
assets, goods, securities or services, to take-or-pay, or to
maintain financial statement conditions or otherwise) or
(ii) entered into for purposes of assuring in any other
manner the obligee of such Indebtedness of the payment
thereof or to protect such obligee against loss in respect
thereof (in whole or in part); provided, however, that the
term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business.
The term "Guarantee" used as a verb has a corresponding
meaning.
"Guarantor Senior Indebtedness" means, with
respect to a Subsidiary Guarantor, whether outstanding on
the Issue Date or thereafter issued, all Guarantees by such
Subsidiary Guarantor of Senior Indebtedness of an Issuer and
all other Indebtedness of such Subsidiary Guarantor,
including interest and fees thereon, unless, in the
instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is expressly provided that
the obligations of such Subsidiary Guarantor in respect of
such Indebtedness are not superior in right of payment to
the obligations of such Subsidiary Guarantor under the
Guarantee of the Securities; provided, however, that
Guarantor Senior Indebtedness shall not include (1) any
obligations of such Subsidiary Guarantor to the Issuers or
any other Subsidiary of the Issuers or (2) any Indebtedness,
Guarantee or obligation of such Subsidiary Guarantor that is
expressly subordinate or junior in right of payment to any
other Indebtedness, Guarantee or obligation of such
Subsidiary Guarantor, including any Guarantor Subordinated
Indebtedness of such Subsidiary Guarantor.
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"Guarantor Subordinated Indebtedness" means, with
respect to a Subsidiary Guarantor, the obligations of such
Subsidiary Guarantor under the Guarantee of the Securities
and any other Indebtedness of such Subsidiary Guarantor that
specifically provides that such Indebtedness is to rank pari
passu in right of payment with the obligations of such
Subsidiary Guarantor under the Guarantee of the Securities.
"Incur" means issue, assume, guarantee, incur or
otherwise become liable for.
"Indebtedness" means, with respect to any Person
on any date of determination (without duplication), (i) the
principal of and premium (if any) in respect of indebtedness
of such Person for borrowed money, (ii) the principal of and
premium (if any) in respect of obligations of such Person
evidenced by bonds, debentures, notes or other similar
instruments, (iii) all obligations of such Person in respect
of letters of credit or other similar instruments (including
reimbursement obligations with respect thereto) (other than
obligations with respect to letters of credit securing
obligations (other than obligations described in clauses
(i), (ii) and (v) ) entered into in the ordinary course of
business of such Person to the extent that such letters of
credit are not drawn upon or, if and to the extent drawn
upon, such drawing is reimbursed no later than the third
business day following receipt by such Person of a demand
for reimbursement following payment on the letter of
credit), (iv) all obligations of such Person to pay the
deferred and unpaid purchase price of property or services
(except (x) trade payables and accrued expenses (including
accrued management fees under the Administrative Management
Agreements) incurred in the ordinary course of business and
(y) contingent or "earnout" payment obligations in respect
of any business acquired by an Issuer or any Restricted
Subsidiary), which purchase price is due more than six
months after the date of placing such property in service or
taking delivery and title thereto or the completion of such
services, (v) all Capitalized Lease Obligations and all
Attributable Indebtedness of such Person, (vi) all
Indebtedness of other Persons secured by a Lien on any asset
of such Person, whether or not such Indebtedness is assumed
by such Person, (vii) all Indebtedness of other Persons to
the extent Guaranteed by such Person, and (viii) to the
extent not otherwise included in this definition,
obligations under Currency Agreements and Interest Rate
Agreements.
"Indenture" means this Indenture, as amended or
supplemented from time to time.
"Initial Public Offering" means an offering or
offerings of Capital Stock of an Issuer under one or more
effective registration statements under the Securities Act
such that, after giving effect thereto, such offerings
result in aggregate cash proceeds being received by an
Issuer and the persons selling such Capital Stock of at
least $25 million before deduction of underwriter's
discounts and other expenses, as a result of such Capital
Stock is listed or admitted to trading on a national
securities exchange or quoted by NASDAQ.
"Initial Purchaser" means NatWest Capital Markets
Limited.
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"Initial Securities" has the meaning set forth in
the preamble to this Indenture.
"Institutional Accredited Investor" means an
institution that is an "accredited investor" as that term is
defined in Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Rate Agreement" means with respect to
any Person any interest rate protection agreement, interest
rate future agreement, interest rate option agreement,
interest rate swap agreement, interest rate cap agreement,
interest rate collar agreement, interest rate hedge
agreement or other similar agreement or arrangement as to
which such Person is party or a beneficiary.
"Issue Date" means the date on which the Initial
Securities are originally issued.
"Lien" means any mortgage, pledge, security
interest, encumbrance, lien or charge of any kind (including
any conditional sale or other title retention agreement or
lease in the nature thereof).
"Managed Affiliate", means a Person at least 90%
of the Capital Stock of which is owned, directly or
indirectly, by Alan R. Brill.
"Managed Affiliate Notes" mean any promissory
notes of a Managed Affiliate, issued to an Issuer or a
Subsidiary.
"Maturity Date" means December 15, 2007.
"Media Cashflow" for any period means for any
Person an amount equal to Consolidated EBITDA for such
period plus interest income received in respect of the
Managed Affiliate Notes during such period and the following
to the extent deducted in calculating such Consolidated
EBITDA (i) management fees charged by BMCLP under the
Administrative Management Agreements, (ii) expenses accruing
under Performance Compensation Agreements , (iii) consulting
fees payable in connection with acquisitions and (iv) fees
paid under time brokerage agreements.
"Moody's" means Moody's Investors Service, Inc.,
or its successors.
"Non-U.S. Person" means a Person who is not a U.S.
person, as defined in Regulation S of the Securities Act.
"Notes" means the 12% Senior Notes due 2007 issued
under the Senior Note Indenture.
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"Obligations" means any principal, premium,
interest, penalties, fees, indemnifications, reimbursements,
damages and other liabilities payable under the
documentation governing any Indebtedness.
"Offering Memorandum" means the Offering
Memorandum dated December 23, 1997, pursuant to which the
Initial Securities were offered, and any supplements
thereto.
"Officer" means the Chairman of the Board, the
Vice-Chairman of the Board, the Chief Executive Officer, the
Chief Financial Officer, the President, any Vice-President,
the Treasurer or the Secretary of an Issuer (or, in the case
of BMC, so long as it is a limited liability company or a
partnership, of Media, which is the manager of BMC).
"Officers' Certificate" means a certificate signed
by two Officers of an Issuer at least one of whom shall be
the principal executive, financial or accounting officer of
an Issuer.
"Opinion of Counsel" means a written opinion from
legal counsel who is acceptable to the Trustee, and which
complies, if applicable, with the provisions of Section
12.04 hereof. The counsel may be an employee of or counsel
to an Issuer or the Trustee.
"Performance Compensation Agreement" means any
agreements between an Issuer or any Subsidiary and any
executive officer of such Subsidiary pursuant to which such
Subsidiary provides deferred compensation to such officer by
crediting amounts (as determined under a formula set forth
in such agreement) to an identified account for the benefit
of such executive officer.
"Person" means any individual, corporation,
partnership, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or any agency or political
subdivision thereof or any other entity.
"Preferred Stock" as applied to the Capital Stock
of any corporation, means Capital Stock of any class or
classes (however designated) which is preferred as to the
payment of dividends, or as to the distribution of assets
upon any voluntary or involuntary liquidation or dissolution
of such corporation, over shares of Capital Stock of any
other class of such corporation.
"Pro Rata Percentage" of a Security, means the
Specified Percentage of such Security divided by 5%.
"Qualified Institutional Buyer" or "QIB" shall
have the meaning specified in Rule 144A under the Securities
Act.
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"Related Brill Party" means (A) the spouse or
immediate family member of Alan R. Brill or (B) any trust,
corporation, partnership or other entity, the beneficiaries,
shareholders, partners, members, owners or Persons
beneficially holding an 80% or more controlling interest of
which consist of Alan R. Brill and/or such other Persons
referred to in the immediately preceding clause (A).
"Representative" means the trustee, agent or
representative (if any) for an issue of Senior Indebtedness.
"Responsible Officer" when used with respect to
the Trustee, means any officer within the corporate trust
department of the Trustee (or any successor group of the
Trustee) with direct responsibility for the administration
of this Indenture 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.
"Restricted Security" has the meaning assigned to
such term in Rule 144(a)(3) under the Securities Act.
"Restricted Subsidiary" has the meaning assigned
to such term in the Senior Note Indenture as in effect from
time to time.
"S&P" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc, or its
successors.
"Sale/Leaseback Transaction" means an arrangement
relating to property now owned or hereafter acquired whereby
an Issuer or a Subsidiary transfers such property to a
Person and such Issuer or a Subsidiary of such Issuer leases
it from such Person.
"Sale of the Company" means (i) any sale, lease,
exchange or other transfer (in one transaction or in a
series of transactions) of all or substantially all of the
assets of an Issuer or an Issuer and its Subsidiaries on a
consolidated basis or (ii) the acquisition by any Person or
Group (other than Alan R. Brill or any Related Brill Party)
of the power, directly or indirectly, to vote or direct the
voting of securities having more than 50% of the ordinary
voting power for the election of directors of an Issuer, or
any direct or indirect holding company thereof.
"Securities" means the Initial Securities and the
Exchange Securities treated as a single class of securities,
as amended or supplemented from time to time in accordance
with the terms hereof, that are issued pursuant to this
Indenture.
"Securities Act" means the Securities Act of 1933,
as amended, and the rules and regulations of the Commission
promulgated thereunder.
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"Securityholder" or "Holder" means a registered
holder of one or more Securities.
"Senior Indebtedness" in the case of the
Securities means, whether outstanding on the Issue Date or
thereafter issued, all obligations under the Notes and all
other Indebtedness of the Issuers, or either one of the
Issuers, including interest and fees thereon, unless, in the
instrument creating or evidencing the same or pursuant to
which the same is outstanding, it is provided that the
obligations in respect of such Indebtedness are not superior
in right of payment to the Securities; provided, however,
that Senior Indebtedness will not include any obligation of
an Issuer to any Subsidiary or any Subordinated Obligations.
"Senior Note Indenture" means the Indenture, dated
as of the Issue Date, among the Issuers, the Subsidiary
Guarantors and the United States Trust Company of New York
relating to the Notes.
"Specified Event Purchase Price" means for a
Security a redemption price equal to (i) in the case of a
redemption with respect to an Initial Public Offering, the
price at which Capital Stock is sold in such Initial Public
Offering (less underwriting discounts and commissions, if
any), which represent a percentage interest in BMC equal to
the Specified Percentage of such Security, (ii) in the case
of redemption with respect to a Sale of the Company as
defined in clause (i) of the definition thereof, the amount
equal to the Specified Percentage of such Security of the
sum of the aggregate fair market value of all consideration
received by the Issuers and their Subsidiaries, net of any
debt repaid therewith, net of ordinary and customary
transaction expenses of the related transfer and the fair
market value of the Issuers as determined after giving
effect to such sale, and (iii) in the case of a redemption
with respect to Sale of the Company defined in clause (ii)
of the definition thereof, the price at which Capital Stock
is sold in such Sale of the Company or in the transaction
which resulted in such Sale of the Company, which represent
a percentage interest in BMC equal to the Specified
Percentage of such Security, and (iv) in the case of a
redemption with respect to a liquidation of either Issuer,
an amount equal to the fair market value of the distribution
received by Capital Stock in an amount equal to the
Specified Percentage of such Security in connection with
such liquidation.
"Specified Percentage" of a Security means a
percentage equal to (i) 5% multiplied by (ii) a fraction the
numerator of which is the principal amount of such Security
and the denominator of which is $3,000,000.
"Stated Maturity" means, with respect to any
security, the date specified in such security as the fixed
date on which the payment of principal of such security is
due and payable, including pursuant to any mandatory
redemption provision.
"Subordinated Obligation" means with respect to an
Issuer or any Subsidiary Guarantor, any Indebtedness of such
Issuer or such Subsidiary Guarantor, as the case may be
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(whether outstanding on the Issue Date or thereafter
incurred) which is expressly subordinate or junior in right
of payment to the Securities or such Subsidiary Guarantor's
Guarantee of the Securities, as the case may be, in each
case pursuant to a written agreement.
"Subsidiary" of any Person means any corporation,
association, partnership or other business entity of which
more than 50% of the total voting power of shares of Capital
Stock or other interests (including partnership interests)
entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers
or trustees thereof is at the time owned or controlled,
directly or indirectly, by (i) such Person, (ii) such Person
and one or more Subsidiaries of such Person or (iii) one or
more Subsidiaries of such Person. Unless otherwise
specified herein, each reference to a Subsidiary shall refer
to a Subsidiary of an Issuer.
"Subsidiary Guarantee" means the Guarantee of the
Securities by a Subsidiary Guarantor.
"Subsidiary Guarantor" means each Subsidiary of an
Issuer on the Issue Date and each newly organized or
acquired Restricted Subsidiary that operates and executes a
supplemental indenture pursuant to Section 11.07.
"TIA" means the Trust Indenture Act of 1939 (15
U.S.C. Sections 77aaa-77bbbb) as in effect on the date on
which this Indenture is qualified under the TIA, except as
provided in Section 9.03 hereof; provided, however, that, in
the event the Trust Indenture Act of 1939 is amended after
such date, "TIA" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
"Trustee" means United States Trust Company of New
York, a banking corporation organized and existing under the
laws of the State of New York, until a successor replaces it
in accordance with Article 7 and thereafter means the
successor serving hereunder.
"Value" of BMC on the Maturity Date means an
amount equal to 12 times Media Cashflow for the then most
recent four fiscal quarters for which financial statements
of BMC are available plus the cash and Cash Equivalents of
BMC and its Subsidiaries on the Maturity Date less the
aggregate amount of Indebtedness of BMC and its Subsidiaries
on a consolidated basis outstanding on the Maturity Date.
"Wholly-Owned Subsidiary" means a Subsidiary of an
Issuer, at least 95% of the Capital Stock of which (other
than directors' qualifying shares) is owned by such Issuer
or another Wholly-Owned Subsidiary.
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SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
"actual knowledge"................................... 7.02
"Agent Members"...................................... 2.16
"Funding Guarantor"................................. 11.05
"Global Appreciation Note"........................... 2.01
"Guaranteed Obligations"............................ 11.01
"Legal Holiday"..................................... 12.07
"Offshore Physical Securities"....................... 2.01
"Paying Agent"....................................... 2.03
"Physical Securities"................................ 2.01
"Private Placement Legend"........................... 2.15
"Registrar".......................................... 2.03
"Successor Company".................................. 5.01
"U.S. Physical Securities"........................... 2.01
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST INDENTURE
ACT.
Whenever this Indenture refers to a provision of
the TIA, the provision is incorporated by reference in and
made a part of this Indenture.
The following TIA terms used in this Indenture
have the following meanings:
"indenture securities" means the Securities and
the Subsidiary Guarantees;
"indenture security holder" means a
Securityholder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee"
means the Trustee;
"obligor" on the Securities means the Issuer, the
Guarantors and any successor obligor upon the Securities.
All other terms used in this Indenture that are
defined by the TIA, defined by TIA reference to another
statute or defined by Commission rule under the TIA have the
meanings so assigned to them.
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SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has
the meaning assigned to it in accordance with GAAP;
(iii) "or" is not exclusive;
(iv) words in the singular include the plural, and
in the plural include the singular; and
(v) provisions apply to successive events and
transactions.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING.
The Initial Securities, the notation thereon
relating to the Subsidiary Guarantees and the Trustee's
certificate of authentication thereon shall be substantially
in the form of Exhibit A hereto. The Exchange Securities,
the notation thereon relating to the Subsidiary Guarantees
and the Trustee's certificate of authentication thereon
shall be substantially in the form of Exhibit B hereto. The
Securities may have notations, legends or endorsements
required by law, stock exchange rule or Depository rule or
usage. The Issuers, the Subsidiary Guarantors and the
Trustee shall approve the form of the Securities and any
notation, legend or endorsement on them. Each Security
shall be dated the date of its authentication.
The terms and provisions contained in the forms of
the Securities and the Subsidiary Guarantees, annexed hereto
as Exhibits A and B, shall constitute, and are hereby
expressly made, a part of this Indenture and, to the extent
applicable, the Issuers, the Subsidiary Guarantors and the
Trustee, by their execution and delivery of this Indenture,
expressly agree to such terms and provisions and to be bound
thereby.
Securities offered and sold in reliance on Rule
144A shall be issued initially in the form of one or more
permanent global notes in registered form, in substantially
the form set forth in Exhibit A (the "Global Appreciation
Note"), deposited with the Trustee, as custodian for the
Depository, duly executed by the Issuers and authenticated
by the Trustee as hereinafter provided. The aggregate
principal amount of the Global Appreciation Note may from
time to
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time be increased or decreased by adjustments made on the
records of the Trustee, as custodian for the Depository,
as hereinafter provided.
Securities offered and sold in offshore
transactions in reliance on Regulation S shall be issued in
the form of permanent certificated Securities in registered
form in substantially the form set forth in Exhibit A (the
"Offshore Physical Securities"). Securities offered and
sold in reliance on any other exemption from registration
under the Securities Act other than as described in the
preceding paragraph shall be issued, and Securities offered
and sold in reliance on Rule 144A may be issued, in the form
of permanent certificated Securities in registered form, in
substantially the form set forth in Exhibit A (the "U.S.
Physical Securities"). The Offshore Physical Securities and
the U.S. Physical Securities are sometimes collectively
herein referred to as the "Physical Securities".
SECTION 2.02. EXECUTION AND AUTHENTICATION.
(a) Two Officers of each Issuer (each of whom
shall, in each case, have been duly authorized by all
requisite corporate actions) shall sign the Securities for
such Issuer by manual or facsimile signature. If an Officer
whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security
shall nevertheless be valid. Each Subsidiary Guarantor
shall execute a Subsidiary Guarantee in the manner set forth
in Section 11.02.
(b) A Security shall not be valid until
authenticated by the manual signature of the Trustee. The
signature of the Trustee shall be conclusive evidence that
the Security has been authenticated under this Indenture.
(c) The Trustee shall authenticate (i) Initial
Securities for original issue in the aggregate principal
amount not to exceed $3,000,000 and an aggregate Specified
Percentage not to exceed 5% and (ii) Exchange Securities
from time to time for issue only in exchange for a like
principal amount and Specified Percentage of Initial
Securities, in each case upon receipt of a written order of
the Issuers. Securities may only be issued in denominations
of $28.571428 or integral multiples thereof, provided,
however, that fractions of a cent shall be rounded down to
the nearest whole cent.
(d) The Trustee may appoint an authenticating
agent acceptable to the Issuers to authenticate Securities.
Unless limited by the terms of such appointment, an
authenticating agent may authenticate Securities whenever
the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by
such agent. An authenticating agent has the same rights as
an Agent to deal with the Issuers or an Affiliate.
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SECTION 2.03. REGISTRAR AND PAYING AGENT.
(a) The Issuers shall maintain an office or agency (which
shall be located in the Borough of Manhattan in the City of
New York, State of New York) where (i) Securities may be
presented for registration of transfer or for exchange
("Registrar"), (ii) Securities may be presented for payment
("Paying Agent") and (iii) notices and demands to or upon
the Issuers in respect of the Securities and this Indenture
may be served. The Registrar shall keep a register of the
Securities and of their transfer and exchange. The Issuers
may appoint one or more co-registrars and one or more
additional paying agents. The term "Paying Agent" includes
any additional paying agent. The Issuers may change any
Paying Agent, Registrar or co-registrar without prior notice
to any Securityholder. The Issuers shall notify the Trustee
and the Trustee shall notify the Securityholders of the name
and address of any Agent not a party to this Indenture. If
the Issuers fail to appoint or maintain another entity as
Registrar or Paying Agent, the Trustee shall act as such.
An Issuer or any Subsidiary Guarantor may act as Paying
Agent, Registrar or co-registrar. The Issuers shall enter
into an appropriate agency agreement with any Agent not a
party to this Indenture, which shall incorporate the
provisions of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such Agent. The
Issuers shall notify the Trustee of the name and address of
any such Agent. If the Issuers fail to maintain a Registrar
or Paying Agent, or fail to give the foregoing notice, the
Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07
hereof.
(b) The Issuers initially appoint the Trustee as
Registrar, Paying Agent and agent for service of notices and
demands in connection with the Securities.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuers, the Subsidiary Guarantors or any
other obligor on the Securities shall require each Paying
Agent other than the Trustee to agree in writing that the
Paying Agent shall hold in trust for the benefit of the
Securityholders or the Trustee all money held by the Paying
Agent for the payment of principal of, premium, if any, and
interest on the Securities, and shall notify the Trustee of
any Default by the Issuers, any of the Subsidiary Guarantors
or any other obligor on the Securities 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 Issuers, the Subsidiary Guarantors or any
other obligor on the Securities at any time 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 an Issuer or a Subsidiary Guarantor) shall have no
further liability for the money delivered to the Trustee.
If an Issuer, any Subsidiary Guarantor or any other obligor
on the Securities acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the
Securityholders all money held by it as Paying Agent.
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SECTION 2.05. SECURITYHOLDER LISTS.
The Trustee shall preserve in as current a form as
is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders and shall
otherwise comply with TIA Section 312(a). If the Trustee
is not the Registrar, the Issuers, the Subsidiary Guarantors
or any other obligor on the Securities shall furnish to the
Trustee at least seven Business Days before any date on
which payment is due on the Securities 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 Securityholders,
including the aggregate principal amount of the Securities
held by each thereof, and the Issuers, the Subsidiary
Guarantors or any other obligor on the Securities shall
otherwise comply with TIA Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
(a) Where Securities are presented to the Registrar or a
co-registrar with a request to register the transfer thereof
or exchange them for an equal principal amount of Securities
of other denominations, the Registrar shall, subject to
Section 2.17, register the transfer or make the exchange if
its requirements for such transactions are met; provided,
however, that any Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed
or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed
by the Securityholder thereof or his attorney duly
authorized in writing. To permit registrations of transfer
and exchanges, the Issuers shall issue and the Trustee shall
authenticate Securities at the Registrar's request.
(b) The Issuers shall not be required (i) to
issue, to register the transfer of or to exchange Securities
during a period beginning at the opening of business on a
Business Day 15 days before the day of any selection of
Securities for redemption under Section 3.02 hereof and
ending at the close of business on the day of selection or
(ii) to register the transfer of or exchange any Security so
selected for redemption.
(c) No service charge shall be made for any
registration of a transfer or exchange (except as otherwise
expressly permitted herein), but the Issuers may require
payment by the Securityholder of a sum sufficient to cover
any transfer tax or similar governmental charge payable in
connection therewith (other than such transfer tax or
similar governmental charge payable upon exchanges pursuant
to Section 2.10, 3.06 or 9.05 hereof).
(d) Any Holder of the Global Appreciation Note
shall, by acceptance of such Global Appreciation Note, agree
that transfers of beneficial interests in such Global
Appreciation Note may be effected only through a book entry
system maintained by the Holder of such Global Appreciation
Note (or its agent), and that ownership of a beneficial
interest in the Global Appreciation Note shall be required
to be reflected in a book entry.
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SECTION 2.07. REPLACEMENT SECURITIES.
(a) If any mutilated Security is surrendered to the
Trustee, or an Issuer and the Trustee receive evidence to
their satisfaction of the destruction, loss or theft of any
Security, the Issuers shall issue and the Trustee, upon
receipt by it of the written order of the Issuers signed by
two Officers of each of the Issuers, shall authenticate a
replacement Security if the Trustee's requirements for
replacements of Securities are met. If required by the
Trustee or the Issuers, an indemnity bond must be supplied
by the Holder that is sufficient in the judgment of the
Trustee and the Issuers to protect the Issuers, the
Subsidiary Guarantors, the Trustee, any Agent or any
authenticating agent from any loss which any of them may
suffer if a Security is replaced. The Issuers and the
Trustee may charge a Securityholder for reasonable
out-of-pocket expenses in replacing a Security.
(b) Every replacement Security is an obligation
of each of the Issuers and each of the Subsidiary
Guarantors.
SECTION 2.08. OUTSTANDING SECURITIES.
(a) The Securities outstanding at any time are all the
Securities authenticated by the Trustee except for those
cancelled by the Issuers or by the Trustee, those delivered
to the Trustee for cancellation and those described in this
Section as not outstanding.
(b) If a Security is replaced pursuant to Section
2.07 hereof, it ceases to be outstanding unless the Trustee
receives proof satisfactory to it that the replaced Security
is held by a bona fide purchaser.
(c) If the principal amount of any Security is
considered paid under Section 4.01 hereof, it ceases to be
outstanding and interest on it ceases to accrue.
(d) Subject to Section 2.09 hereof, a Security
does not cease to be outstanding because an Issuer or an
Affiliate of an Issuer or a Subsidiary Guarantor holds the
Security.
SECTION 2.09. TREASURY SECURITIES.
In determining whether the Holders of the required
principal amount of Securities have concurred in any
direction, waiver or consent, Securities owned by an Issuer,
a Subsidiary Guarantor, or any of their respective
Affiliates shall be considered as though not outstanding,
except that for purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver
or consent, only Securities which a Responsible Officer
knows to be so owned shall be so considered.
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SECTION 2.10. TEMPORARY SECURITIES.
Until definitive Securities are ready for
delivery, the Issuers may prepare and the Trustee shall
authenticate temporary Securities. Temporary Securities
shall be substantially in the form of definitive Securities
but may have variations that the Issuers, the Subsidiary
Guarantors and the Trustee consider appropriate for
temporary Securities. Without unreasonable delay, the
Issuers shall prepare and the Trustee, upon receipt of the
written order of the Issuers signed by two Officers of each
of the Issuers, shall authenticate definitive Securities in
exchange for temporary Securities. Until such exchange,
temporary Securities shall be entitled to the same rights,
benefits and privileges as definitive Securities.
SECTION 2.11. CANCELLATION.
The Issuers at any time may deliver Securities to
the Trustee for cancellation. The Registrar and Paying
Agent shall forward to the Trustee any Securities
surrendered to them for registration of transfer, exchange
or payment. The Trustee shall cancel all Securities, if not
already cancelled, surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall
destroy cancelled Securities (subject to the record
retention requirement of the Exchange Act), and deliver
certification of their destruction to the Issuers, unless by
a written order, signed by two Officers of each of the
Issuers, the Issuers shall direct that cancelled Securities
be returned to them. The Issuers may not issue new
Securities to replace Securities that they have redeemed or
paid or that have been delivered to the Trustee for
cancellation.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuers default in a payment of interest on
the Securities, they shall pay the defaulted interest in any
lawful manner plus, to the extent lawful, interest payable
on the defaulted interest, to the Persons who are
Securityholders on a subsequent special record date, which
date shall be at the earliest practicable date but in all
events at least five Business Days prior to the payment
date, in each case at the rate provided in the Securities
and in Section 4.01 hereof. The Issuers shall, with the
consent of the Trustee, fix or cause to be fixed each such
special record date and payment date. At least 15 days
before the special record date, the Issuers (or the Trustee,
in the name of and at the expense of the Issuers) shall mail
to Securityholders a notice that states the special record
date, the related payment date and the amount of such
interest to be paid.
SECTION 2.13. CUSIP NUMBER.
The Issuers in issuing the Securities may use a
"CUSIP" number, and if so, the Trustee shall use the
CUSIP number in notices of redemption or exchange as a
convenience to Securityholders; provided, however, that no
representation shall be deemed to be made by the Trustee as
to the correctness or accuracy of the CUSIP number printed
in the notice or on the
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Securities, and that reliance may be placed only on the
other identification numbers printed on
the Securities. The Issuers shall promptly notify the
Trustee of any change in the CUSIP number.
SECTION 2.14. DEPOSIT OF MONEYS.
Prior to 11:00 a.m. New York City time on each
date on which payments are due under the Securities and
Maturity Date, the Issuers shall deposit with the Paying
Agent in immediately available funds money sufficient to
make cash payments, if any, due on such date or Maturity
Date, as the case may be, in a timely manner which permits
the Paying Agent to remit payment to the Securityholders on
such date or Maturity Date, as the case may be.
SECTION 2.15. RESTRICTIVE LEGENDS.
Each Global Appreciation Note and Physical
Security that constitutes a Restricted Security shall bear
the following legend (the "Private Placement Legend") unless
otherwise agreed by the Issuers and the Securityholder
thereof:
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR
FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES
PERSONS EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) OR (B) IT IS AN
INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D
UNDER THE SECURITIES ACT) (AN "INSTITUTIONAL
ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S.
PERSON AND IS ACQUIRING THIS NOTE IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S UNDER
THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT,
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k)
UNDER THE SECURITIES ACT AS IN EFFECT WITH RESPECT
TO SUCH TRANSFER, RESELL OR OTHERWISE TRANSFER
THIS NOTE EXCEPT (A) TO AN ISSUER THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A
UNDER THE SECURITIES ACT, (C) INSIDE THE UNITED
STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR
THAT, PRIOR TO SUCH TRANSFER, FURNISHES TO THE
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TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE) AND
IF SUCH TRANSFER IS IN RESPECT OF AN AGGREGATE
PRINCIPAL AMOUNT OF NOTES OF LESS THAN $250,000,
AN OPINION OF COUNSEL ACCEPTABLE TO THE ISSUERS
HEREOF THAT SUCH TRANSFER IS IN COMPLIANCE WITH
THE SECURITIES ACT, (D) OUTSIDE THE UNITED STATES
IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE
904 OF REGULATION S UNDER THE SECURITIES ACT, (E)
PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND (3) AGREES THAT IT WILL DELIVER TO EACH PERSON
TO WHOM THIS NOTE IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND;
PROVIDED THAT AN INSTITUTIONAL ACCREDITED INVESTOR
PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE
FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT
BE PERMITTED TO TRANSFER THIS NOTE TO AN
INSTITUTIONAL ACCREDITED INVESTOR. IN CONNECTION
WITH ANY TRANSFER OF THIS NOTE WITHIN THE TIME
PERIOD REFERRED TO ABOVE, THE HOLDER MUST CHECK
THE APPROPRIATE BOX SET FORTH ON THE REVERSE
HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND
SUBMIT THIS CERTIFICATE TO THE TRUSTEE. IF THE
PROPOSED TRANSFEREE IS AN INSTITUTIONAL ACCREDITED
INVESTOR PURCHASING PURSUANT TO CLAUSE (2)(C)
ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS ANY OF THEM MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND
"UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO
THEM BY REGULATION S UNDER THE SECURITIES ACT.
THE INDENTURE CONTAINS A PROVISION REQUIRING THE
TRUSTEE TO REFUSE TO REGISTER ANY TRANSFER OF
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THIS NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.
Each Global Appreciation Note shall also bear the
following legend on the face thereof:
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
ANY SUCH NOMINEE OF THE DEPOSITARY, OR BY THE
DEPOSITARY OR NOMINEE OF SUCH SUCCESSOR DEPOSITARY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR A
NOMINEE OF SUCH SUCCESSOR DEPOSITARY. TRANSFERS
OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES
OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH
IN THE INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUERS OR THEIR 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 IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE
OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.
SECTION 2.16. BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.
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(a) The Global Appreciation Note initially shall (i) be
registered in the name of the Depository or the nominee of
such Depository, (ii) be delivered to the Trustee as
custodian for such Depository and (iii) bear legends as set
forth in Section 2.15.
Members of, or participants in, the Depository
("Agent Members") shall have no rights under this Indenture
with respect to any Global Appreciation Note held on their
behalf by the Depository, or the Trustee as its custodian,
or under the Global Appreciation Note, and the Depository
may be treated by the Issuers, the Trustee and any agent of
an Issuer or the Trustee as the absolute owner of the
Global Appreciation Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent
the Issuers, the Trustee or any agent of an Issuer or the
Trustee from giving effect to any written certification,
proxy or other authorization furnished by the Depository or
impair, as between the Depository and its Agent Members, the
operation of customary practices governing the exercise of
the rights of a Holder of any Security.
(b) Transfers of the Global Appreciation Note
shall be limited to transfers in whole, but not in part, to
the Depository, its successors or their respective nominees.
Interest of beneficial owners in the Global Appreciation
Note may be transferred or exchanged for Physical Securities
in accordance with the rules and procedures of the
Depository and the provisions of Section 2.17. In addition,
Physical Securities shall be transferred to all beneficial
owners in exchange for their beneficial interests in the
Global Appreciation Note if (i) the Depository notifies the
Issuers that it is unwilling or unable to continue as
Depository for the Global Appreciation Note and a successor
depository is not appointed by the Issuers within 90 days of
such notice or (ii) a default has occurred and is continuing
and the Registrar has received a written request from the
Depository or the Trustee to issue Physical Securities.
(c) In connection with any registration of
transfer or exchange of a portion of the beneficial interest
in the Global Appreciation Note to beneficial owners
pursuant to paragraph (b) above, the Registrar shall (if one
or more Physical Securities are to be issued) reflect on its
books and records the date and a decrease in the principal
amount of the beneficial interest in the Global Appreciation
Note to be transferred, and the Issuers shall execute, and
the Trustee shall authenticate and deliver, one or more
Physical Securities of like tenor and amount.
(d) In connection with the registration of
transfer of the entire Global Appreciation Note to
beneficial owners pursuant to paragraph (b), the Global
Appreciation Note shall be deemed to be surrendered to the
Trustee for cancellation, and the Issuers shall execute, and
the Trustee shall authenticate and deliver, to each
beneficial owner identified by the Depository in exchange
for its beneficial interest in the Global Appreciation Note,
an equal aggregate principal amount of Physical Securities
of authorized denominations.
(e) Any Physical Security constituting a
Restricted Security delivered in exchange for an interest in
the Global Appreciation Note pursuant to paragraph (b) or
(c) above
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shall, except as otherwise provided by paragraphs
(a)(i)(x) and (c) of Section 2.17, bear the legend regarding
transfer restrictions applicable to the Physical Securities
set forth in Section 2.15.
(f) The Holder of the Global Appreciation Note
may grant proxies and otherwise authorize any Person,
including Agent Members and Persons that may hold interests
through Agent Members, to take any action which a
Securityholder is entitled to take under this Indenture or
the Securities.
SECTION 2.17. SPECIAL TRANSFER PROVISIONS.
(a) Transfers to Non-QIB Institutional Accredited
Investors and Non-U.S. Persons. The following provisions shall
apply with respect to the registration of any proposed transfer of
a Security constituting a Restricted Security to any
Institutional Accredited Investor which is not a QIB or to
any Non-U.S. Person:
(i) the Registrar shall register the
transfer of any Security constituting a Restricted
Security, whether or not such Security bears the
Private Placement Legend, if (x) the requested
transfer is after December 30, 1999 or (y) (1) in
the case of a transfer to an Institutional
Accredited Investor which is not a QIB (excluding
Non-U.S.Persons), the proposed transferee has
delivered to the Registrar a certificate
substantially in the form of Exhibit C hereto or
(2) in the case of a transfer to a Non-U.S.
Person, the proposed transferor has delivered to
the Registrar a certificate substantially in the
form of Exhibit D hereto; and
(ii) if the proposed transferor is an Agent
Member holding a beneficial interest in the Global
Appreciation Note, upon receipt by the Registrar
of (x) the certificate, if any, required by
paragraph (i) above and (y) instructions given in
accordance with the Depository's and the
Registrar's procedures, whereupon (a) the
Registrar shall reflect on its books and records
the date and (if the transfer does not involve a
transfer of outstanding Physical Securities) a
decrease in the principal amount of the Global
Appreciation Note in an amount equal to the
principal amount of the beneficial interest in the
Global Appreciation Note to be transferred, and
(b) the Issuers shall execute and the Trustee
shall authenticate and deliver one or more
Physical Securities of like tenor and amount.
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(b) Transfers to QIBs. The following provisions
shall apply with respect to the registration of any proposed
transfer of a Security constituting a Restricted Security to
a QIB (excluding transfers to Non-U.S. Persons):
(i) the Registrar shall register the
transfer if such transfer is being made by a
proposed transferor who has checked the box
provided for on the form of Security stating, or
has otherwise advised the Issuer and the Registrar
in writing, that the sale has been effected in
compliance with the provisions of Rule 144A to a
transferee who has signed the certification
provided for on the form of Security stating, or
has otherwise advised the Issuers and the
Registrar in writing, that it is purchasing the
Security for its own account or an account with
respect to which it exercises sole investment
discretion and that any such account is a QIB
within the meaning of Rule 144A, and it is aware
that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received
such information regarding the Issuers as it has
requested pursuant to Rule 144A or has determined
not to request such information and that it is
aware that the transferor is relying upon its
foregoing representations in order to claim the
exemption from registration provided by Rule 144A;
and
(ii) if the proposed transferee is an Agent
Member and the Securities to be transferred
consist of Physical Securities which after
transfer are to be evidenced by an interest in the
Global Appreciation Note, upon receipt by the
Registrar of instructions given in accordance with
the Depository's and the Registrar's procedures,
the Registrar shall reflect on its books and
records the date and an increase in the principal
amount of the Global Appreciation Note in an
amount equal to principal amount of the Physical
Securities to be transferred, and the Trustee
shall cancel the Physical Securities so
transferred.
(c) Private Placement Legend. Upon the
registration of the transfer, exchange or replacement of
Securities not bearing the Private Placement Legend, the
Registrar shall deliver Securities that do not bear the
Private Placement Legend. Upon the registration of the
transfer, exchange or replacement of Securities bearing the
Private Placement Legend, the Registrar shall deliver only
Securities that bear the Private Placement Legend unless (i)
the circumstance contemplated by paragraph (a)(i)(x) of this
Section 2.17 exists or (ii) there is delivered to the
Registrar an Opinion of Counsel reasonably satisfactory to
the Issuers and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required
in order to maintain compliance with the provisions of the
Securities Act.
(d) General. By its acceptance of any Security
bearing the Private Placement Legend, each Holder of such a
Security acknowledges the restrictions on transfer of
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such Security set forth in this Indenture and in the Private
Placement Legend and agrees that it will transfer such
Security only as provided in this Indenture.
The Registrar shall retain for at least two years
copies of all letters, notices and other written
communications received pursuant to Section 2.16 or this
Section 2.17. The Issuers shall have the right to inspect
and make copies of all such letters, notices or other
written communications at any reasonable time upon the
giving of reasonable written notice to the Registrar.
SECTION 2.18. PERSONS DEEMED OWNERS.
Prior to due presentment of a Security for
registration of transfer and subject to Section 2.12, the
Issuers, the Trustee, any Paying Agent, any Registrar and
any co-registrar shall treat the Person in whose name any
Security shall be registered upon the register of Securities
kept by the Registrar as the absolute owner of such Security
(whether or not such Security shall be overdue and
notwithstanding any notation of the ownership or other
writing thereon made by anyone other than an Issuer, any
Registrar or any co-registrar) for the purpose of receiving
payments of principal of or interest on such Security and
for all other purposes; and none of the Issuers, the
Trustee, any Paying Agent, any Registrar or any co-registrar
shall be affected by any notice to the contrary.
SECTION 2.19. TAX CONSIDERATIONS AND ALLOCATION OF PURCHASE
PRICE.
BMC agrees, and each holder of a Security by acceptance of a
Security agrees, to treat the Securities as indebtedness for all U.S.
federal, state and local income tax purposes. Based on their estimate of
the relative fair market values of the Notes and the Securities, the
Issuers agree that of the initial purchase price of $922.0 for each
$1,000 principal amount of Securities, they shall treat for U.S. federal
income tax purposes $899.63 of such initial purchase price as allocable to
the Notes and $22.37 as allocable to the Securities.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
(a) If the Issuers elect to redeem Securities pursuant to
the optional redemption provisions of Section 3.08 hereof,
they shall furnish to the Trustee, at least 45 days (unless
a shorter period is acceptable to the Trustee) but not more
than 60 days before a redemption date, an Officers'
Certificate setting forth (i) the Section of this Indenture
pursuant to which the redemption shall occur, (ii) the
redemption date, and (iii) the redemption price.
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(b) If the Issuers are required to make an offer
to redeem Securities pursuant to the provisions of Section
3.09 hereof, they shall furnish to the Trustee at least 30
days but not more than 60 days before a redemption date, an
Officers' Certificate setting forth (i) the Section of this
Indenture pursuant to which the redemption shall occur, (ii)
the redemption date, (iii) the redemption price and (iv)
further setting forth a statement to the effect that a
Specified Event has occurred and the conditions set forth in
Section 3.09 have been satisfied.
SECTION 3.02. [RESERVED].
SECTION 3.03. NOTICE OF OPTIONAL REDEMPTION BY THE ISSUERS
OR MATURITY.
(a) At least 30 days before a redemption pursuant to
Section 3.08, the Issuers shall mail a notice of redemption
by first class mail, postage prepaid to each Holder at the
last address for such Holder then shown on the registry
books.
The notice shall state that all Securities are to
be redeemed and shall further state:
(i) the redemption date;
(ii) the redemption price;
(iii) the name and address of the Paying
Agent;
(iv) that Securities called for redemption must be
surrendered to the Paying Agent to collect the
redemption price;
(v) that, unless the Issuers default in making
such redemption payment, interest on Securities called
for redemption ceases to accrue on and after the
redemption date;
(vi) the paragraph of the Securities and/or
Section of this Indenture pursuant to which the
Securities called for redemption are being redeemed.
(b) At the Issuers' request, the Trustee shall
give the notice of redemption in the Issuers' names and at
the Issuers' expense; provided, however, that the Issuers
shall have delivered to the Trustee at least 45 days (unless
a shorter period is acceptable to the Trustee) prior to the
proposed redemption date an Officers' 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.
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SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance
with Section 3.03 hereof, Securities called for redemption
become due and payable on the redemption date at the
redemption price plus accrued and unpaid interest, if any.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
(a) Prior to 11:00 a.m., New York City time, on or before
any date on which the Securities are being redeemed or
otherwise paid in full, the Issuers shall deposit with the
Trustee or with the Paying Agent money sufficient to pay the
redemption price and other applicable payments due on all
Securities to be redeemed or otherwise paid in full. The
Trustee or the Paying Agent shall promptly return to the
Issuers any money deposited with the Trustee or the Paying
Agent by the Issuers in excess of the amounts necessary to
pay the redemption price and any other applicable payment
due on all Securities.
If any Security to be redeemed shall not be so
paid upon surrender for redemption because of the failure of
the Issuers to comply with the preceding paragraph, interest
shall be paid on the unpaid principal, from the redemption
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 of 17% per annum as provided in the
Securities and in Section 4.01 hereof.
SECTION 3.06. SECURITIES REDEEMED IN PART.
Upon surrender of a Security that is redeemed in
part, the Issuers shall issue and the Trustee shall
authenticate for the Securityholder at the expense of the
Issuer a new Security equal in principal amount and
Specified Percentage to the unredeemed portion of the
Security surrendered.
SECTION 3.07. REDEMPTION UPON MATURITY.
The Securities will mature on the Maturity Date.
Each Security will entitle the Holder thereof to receive on
the Maturity Date a cash payment of principal and interest
in the amount equal to (i) the principal amount thereof plus
(ii) the amount by which the Specified Percentage of such
Security of the Value of BMC on the Maturity Date exceeds
the principal amount of such Security. At least five
Business Days prior to the Maturity Date, the Issuers shall
deliver to the Trustee an Officers' Certificate, upon which
the Trustee may conclusively rely, certifying the amount to
be paid on each $28.571428 principal amount of the
Securities on the Maturity Date.
SECTION 3.08. OPTIONAL REDEMPTION.
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(a) The Securities will not be redeemable at the option
of the Issuers prior to June 15, 1999. Thereafter, if an
Initial Public Offering has not occurred on or before a date
set forth below, the Securities will be redeemable, at the
Issuers' option, in whole but not in part, on such date, at
a redemption price for each Security equal to the Pro Rata
Percentage of such Security of the amount set forth below
opposite such redemption date (which amount, in each case,
represents payment in full of all principal and interest on
the Securities):
Date Amount
---- ------
June 15, 1999 $ 3.0 million
June 15, 2000 $ 8.3 million
June 15, 2001 $12.8 million
June 15, 2002 $18.0 million
June 15, 2003 $24.0 million
June 15, 2004 $31.0 million
June 15, 2005 $39.0 million
June 15, 2006 $48.0 million
June 15, 2007 $58.0 million
SECTION 3.09. MANDATORY REDEMPTION AT THE OPTION OF THE
SECURITYHOLDERS UPON THE OCCURRENCE OF CERTAIN EVENTS.
(a) Upon the occurrence of an Initial Public
Offering, a Sale of the Company or the liquidation of either
Issuer (each such event, a "Specified Event"), each Holder
shall have the right to require the Issuers to redeem all or
any part of such Holder's Securities at the relevant
Specified Event Purchase Price (which amount, in each case,
represents payment in full of all principal and interest on
such Securities) in accordance with this Section 3.09.
(b) Within 30 days following the occurrence of
any Specified Event, unless the Issuers have mailed a
redemption notice with respect to all the outstanding
Securities, the Issuers shall mail a notice to each Holder
with a copy to the Trustee stating:
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(i) that a Specified Event has occurred and that
such Securityholder has the right to require the
Issuers to redeem such Securityholder's Securities at a
purchase price in cash equal to the Specified Event
Purchase Price (stating the Specified Event Purchase
Price for each $28.571428 principal amount of the
Securities);
(ii) the redemption date (which shall be no
earlier than 30 days nor later than 60 days from the
date such notice is mailed);
(iii) the name and address of the Paying
Agent; and
(iv) the procedures determined by the Issuers,
consistent with this Indenture, that a Securityholder
must follow in order to have its Securities redeemed.
(c) Securityholders electing to have a Security
redeemed will be required to surrender the Security, with
the form entitled "Option of Securityholder to Elect
Redemption" on the reverse of the Security completed, to the
Issuers at the address specified in the notice at least 10
Business Days prior to the redemption date. Securityholders
will be entitled to withdraw their election if the Trustee
or the Issuers receives not later than three Business Days
prior to the redemption date, a telegram, telex, facsimile
transmission or letter setting forth the name of the
Securityholder, the principal amount of the Security which
was delivered for redemption by the Securityholder and a
statement that such Securityholder is withdrawing his
election to have such Security redeemed.
(d) On the redemption date, all Securities
redeemed by the Issuers under this Section 3.09 shall be
delivered by the Trustee for cancellation, and the Issuers
shall pay the redemption price plus accrued and unpaid
interest, if any, to the Securityholders entitled thereto.
(e) The Issuers shall to the extent applicable
comply with any tender offer rules under the Exchange Act
which may then be applicable, including Rule 14e-1, in
connection with any offer required to be made by the Issuers
to redeem the Securities as a result of a Specified Event.
To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Indenture
relative to the Issuers' obligation to make an offer to
redeem the Securities as a result of a Specified Event, the
Issuers shall comply with the applicable securities laws and
regulations and will not be deemed to have breached their
obligations under such provisions of this Indenture by
virtue thereof.
SECTION 3.10. MANDATORY REDEMPTION AT THE OPTION OF THE
SECURITYHOLDERS ON SPECIFIED DATES.
If an Initial Public Offering has not occurred on
or before a date set forth below, the Securityholders may
require the Issuers to redeem their Securities, in whole or
in part within 90 days of such date at a redemption price
for each Security equal to the Pro Rata Percentage
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of such Security of the amount set forth below opposite such
date (which amount, in each case, represents payment in full of
all principal and interest thereon):
Date Amount
---- ------
June 30, 2003 $24.0 million
June 30, 2004 $20.0 million
June 30, 2005 $13.0 million
A Securityholder may exercise its rights to
require the redemption of the Securities held by such Holder
by delivering a notice to the Issuers (with a copy to the
Trustee in the manner set forth in Section 12.02) on or
before a date as set forth above stating that such Holder is
demanding that the Issuers redeem such Holder's Securities
and the portion of Securities to be redeemed. Upon receipt
of any such notice the Issuers shall redeem the Securities
for which such notice has been delivered by no later than
the 90th day following the relevant date. Within five
Business Days following the relevant date specified above,
the Issuers shall mail a notice to each Holder that has
elected to have all or a portion of its Securities redeemed
following such relevant date and to the Trustee stating (1)
the redemption date; (2) the aggregate principal amount of
the Securities that will be redeemed on the redemption date;
(3) the aggregate redemption price; (4) the name and address
of the Paying Agent; and (5) that Securities to be redeemed
must be surrendered to the Paying Agent to collect the
redemption price for such Securities.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES.
(a) The Issuers shall pay the principal of, premium, if
any, and interest on the Securities on the dates and in the
manner provided in the Securities and in this Indenture.
Principal, premium, if any, and interest shall be considered
paid on the date due if the Paying Agent, if other than an
Issuer or a Subsidiary Guarantor, holds as of 11:00 a.m. New
York City time on the due date money deposited by the
Issuers in immediately available funds and designated for
and sufficient to pay all principal, premium, if any, and
interest then due. Such Paying Agent shall return to the
Issuers, no later than five days following the date of
payment, any money
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(including accrued interest paid by the Issuers) that exceeds such
amount of principal, premium, if any, and interest paid on the
Securities.
(b) The Issuers shall pay interest (including
post-petition interest in any proceeding under any
Bankruptcy Code) on overdue principal and other amounts not
paid when due at a rate of 17% per annum to the extent
lawful; it shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Code) 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.
(a) The Issuers shall maintain in the Borough of Manhattan,
in 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 Securities may be
surrendered for registration of transfer or exchange and
where notices and demands to or upon the Issuers in respect
of the Securities and this Indenture may be served. The
Issuers shall give prior written notice to the Trustee of
the location, and any change in the location, of such office
or agency. If at any time the Issuers shall fail to
maintain any such required office or agency or shall 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.
(b) The Issuers may also from time to time
designate one or more other offices or agencies where the
Securities may be presented or surrendered for any or all
such purposes and may from time to time rescind such
designations; provided, however, that no such designation or
rescission shall in any manner relieve the Issuers of their
obligation to maintain an office or agency in the Borough of
Manhattan, in the City of New York for such purposes. The
Issuers shall give prior 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.
(c) The Issuers hereby designate the Corporate
Trust Office of the Trustee as one such office or agency of
the Issuers in accordance with Section 2.03.
SECTION 4.03. SEC REPORTS.
(a) Upon consummation of the Exchange Offer and the
issuance of the Exchange Securities, each Issuer and each
Subsidiary Guarantor (at its own expense) shall file with
the Commission and shall furnish to the Trustee and each
Securityholder within 15 days after it files them with the
Commission copies of the quarterly and annual reports and of
the information, documents, and other reports (or copies of
such portions of any of the foregoing as the Commission may
by rules and regulations prescribe) to be filed pursuant to
Section 13 or 15(d) of the Exchange Act (without regard to
whether either of the Issuers is subject to the
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requirements of such Section 13 or 15(d) of the Exchange Act).
Notwithstanding the foregoing, in the event that the Issuers
are not required to file such reports with the Commission
pursuant to the Exchange Act, the Issuers will nevertheless
deliver such Exchange Act information to the Holders of the
Securities within 15 days after it would have been required
to file it with the Commission. Upon qualification of this
Indenture under the TIA, the Issuers and each of the
Subsidiary Guarantors shall also comply with the provisions
of TIA Section 314(a).
(b) At the Issuers' expense, each Issuer and each
of the Subsidiary Guarantors, as applicable, shall cause an
annual report if furnished by it to stockholders generally
and each quarterly or other financial report if furnished by
it to stockholders generally to be filed with the Trustee
and mailed to the Securityholders at their addresses
appearing in the register of Securities maintained by the
Registrar at the time of such mailing or furnishing to
stockholders.
(c) Each Issuer and each of the Subsidiary
Guarantors shall provide to any Securityholder any
information reasonably requested by such Securityholder
concerning the Issuers and the Subsidiary Guarantors
(including financial statements) necessary in order to
permit such Securityholder to sell or transfer Securities in
compliance with Rule 144A under the Securities Act.
SECTION 4.04. COMPLIANCE CERTIFICATES.
(a) Each of the Issuers and each Subsidiary Guarantor
shall deliver to the Trustee, within 90 days after the end of each
fiscal year, an Officers' Certificate signed by its
principal executive officer, principal financial officer or
principal accounting officer stating that a review of the
activities of such Issuer and its Subsidiaries or such
Subsidiary Guarantor and its Subsidiaries, as the case may
be, during the preceding fiscal year has been made under the
supervision of the signing Officers with a view to
determining whether each has kept, observed, performed and
fulfilled its Obligations under this Indenture, and further
stating, as to each such Officer signing such certificate,
that to the best of his or her knowledge each has kept,
observed, performed and fulfilled each and every covenant
contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions
and conditions of this Indenture (or, if a Default shall
have occurred, describing all such Defaults of which he or
she may have knowledge and what action each is taking or
proposes to take with respect thereto).
(b) So long as not contrary to the then current
recommendations of the American Institute of Certified
Public Accountants, the year-end financial statements
delivered pursuant to Section 4.03 above shall be
accompanied by a written statement of (x) the Issuers'
independent public accountants (who shall be a firm of
established national reputation) that in making the
examination necessary for certification of such financial
statements nothing has come to their attention which would
lead them to believe that either Issuer has violated any
provisions of Article 4 or 5 of this Indenture insofar as
they relate to accounting matters or, if any such violation
has occurred, specifying the nature and period of existence
thereof, it being
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understood that such accountants shall not be liable directly
or indirectly to any Person for any failure to obtain knowledge
of any such violation and (y) if any Subsidiary Guarantor's
financial statements are not prepared on a consolidated basis
with the applicable Issuer's, such Subsidiary Guarantor's
independent public accountants (who shall be a firm of established
national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to
their attention which would lead them to believe that any of the
Subsidiary Guarantors is in Default under this Indenture or, if
any such Default has occurred, specifying the nature and period
of existence thereof, it being understood that such accountants
shall not be liable directly or indirectly to any Person for any
failure to obtain knowledge of any such violation.
(c) Each Issuer and each of the Subsidiary
Guarantors shall, so long as any of the Securities are
outstanding, deliver to the Trustee, forthwith upon any
Officer becoming aware of (i) any Default or (ii) any event
of default under any other mortgage, indenture or instrument
to which either Issuer or a Subsidiary Guarantor is a party,
an Officers' Certificate specifying such Default, or event
of default and what action such Issuer or such Subsidiary
Guarantor, as the case may be, is taking or proposes to take
with respect thereto.
(d) Each Issuer and each of the Subsidiary
Guarantors shall also comply with TIA Section 314(a)(4).
SECTION 4.05. TAXES.
Each Issuer and each of the Subsidiary Guarantors
shall pay, and shall cause each of their respective
Subsidiaries to pay, prior to delinquency, all material
taxes, assessments, and governmental levies except as
contested in good faith and by appropriate proceedings.
SECTION 4.06. STAY, EXTENSION AND USURY LAWS.
Each of the Issuers and the Subsidiary Guarantors
covenants (to the extent that it may lawfully do so) that it
shall 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 (including, but not
limited to, the payment of the principal of or interest on
the Securities); and each Issuer and each Subsidiary
Guarantor (to the extent that they may lawfully do so)
hereby expressly waive all benefit or advantage of any such
law, and covenant that they shall not, by resort to any such
law, hinder, delay or impede the execution of any power
herein granted to the Trustee, but shall suffer and permit
the execution of every such power as though no such law has
been enacted.
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SECTION 4.07. CORPORATE EXISTENCE.
Subject to Article 5 hereof, each Issuer shall do
or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence, and
the corporate, partnership or other existence of each
Subsidiary, in accordance with the respective organizational
documents (as the same may be amended from time to time) of
each Subsidiary and the rights (charter and statutory),
licenses and franchises of each Issuer and its Subsidiaries;
provided, however, that the Issuers shall not be required to
preserve any such right, license or franchise, or the
corporate, partnership or other existence of any Subsidiary,
if the Board of Directors of an Issuer shall determine that
the preservation thereof is no longer desirable in the
conduct of the business of the Issuers and their
Subsidiaries, taken as a whole, and that the loss thereof is
not adverse in any material respect to the Securityholders.
SECTION 4.08. FUTURE GUARANTORS.
The Issuers shall cause each newly organized or
acquired Restricted Subsidiary to execute and deliver to the
Trustee pursuant to Section 11.07 (a) a supplemental
Indenture in which such Restricted Subsidiary agrees to be
bound by the terms of this Indenture as a Subsidiary
Guarantor and (b) a Subsidiary Guarantee.
SECTION 4.09. FURTHER INSTRUMENTS AND ACTS.
The Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any
covenants, conditions or agreements on the part of the
Issuers, except as otherwise set forth herein, but the
Trustee may require of the Issuers full information and
advice as to the performance of the covenants, conditions
and agreements contained herein, and upon request of the
Trustee, the Issuers will execute and deliver such further
instruments and do such further acts as may be reasonably
necessary or proper to carry out more effectively the
purposes of this Indenture.
ARTICLE 5
SUCCESSORS
SECTION 5.01. LIMITATIONS ON MERGER, CONSOLIDATION OR SALE
OF ASSETS.
Neither Issuer shall consolidate with or merge
with or into, or convey, transfer or lease all or
substantially all of its assets to, any Person, unless:
(i) the resulting, surviving or transferee Person
(the "Successor Company") shall be a corporation,
partnership, trust or limited liability company
organized and
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existing under the laws of the United States of America,
any State thereof or the District of Columbia and the
Successor Company (if not an Issuer) shall expressly
assume, by supplemental indenture, executed and delivered
to the Trustee, in form satisfactory to the Trustee, all
the obligations of such Issuer under the Securities and
this Indenture;
(ii) immediately after giving effect to such
transaction, the Successor Company shall have a
Consolidated Net Worth equal or greater to the
Consolidated Net Worth of the relevant Issuer
immediately prior to such transaction;
(iii) the Issuers shall have delivered to the
Trustee an Officers' Certificate and an Opinion of
Counsel, each stating that such consolidation, merger
or transfer and such supplemental indenture (if any)
comply with this Indenture; and
(iv) there has been delivered to the Trustee an
Opinion of Counsel to the effect that Holders of
Securities will not recognize income, gain or loss for
U.S. federal income tax purposes as a result of such
consolidation, merger, conveyance, transfer or lease
and will be subject to U.S. federal income tax on the
same amount and in the same manner and at the same
times as would have been the case if such
consolidation, merger, conveyance, transfer or lease
had not occurred.
SECTION 5.02. SUCCESSOR CORPORATION SUBSTITUTED.
The Successor Company will succeed to, and be
substituted for, and may exercise every right and power of,
the applicable Issuer under this Indenture, but, in the case
of a lease of all or substantially all its assets, the
applicable Issuer will not be released from the obligation
to pay the principal of and interest on the Securities.
ARTICLE 6
REMEDIES
SECTION 6.01. REMEDIES.
(a) If a Default occurs and is continuing, the Trustee and
the Securityholders may pursue any available remedy to
collect the payment of principal, premium, if any, or
interest on the Securities as they become due and payable or
to enforce the performance of any provision of the
Securities or this Indenture, it being understood that a
Default shall not cause the acceleration of principal,
premium or interest on the Securities.
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(b) The Trustee may maintain a proceeding even if
it does not possess any of the Securities or does not
produce any of them in the proceeding. A delay or omission
by the Trustee or any Securityholder in exercising any right
or remedy accruing upon a Default shall not impair the right
or remedy or constitute a waiver of or acquiescence in the
Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.02. WAIVER OF PAST DEFAULTS.
Securityholders of not less than a majority in
aggregate principal amount of the then outstanding
Securities by notice to the Trustee may waive an existing
Default and its consequences, except a continuing Default in
the payment of the principal, premium, if any, or interest
on any Security or a Default that cannot be modified or
amended without the consent of the Holder of each
outstanding Security affected. Upon any such waiver, such
Default shall cease to exist and 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 6.03. CONTROL BY MAJORITY.
Securityholders of a majority in principal amount
of the Securities then outstanding may direct the time,
method and place of conducting any proceeding for any remedy
available to the Trustee or exercising any trust or power
conferred on it. However, the Trustee may refuse to follow
any direction that conflicts with law or this Indenture,
that the Trustee determines may be unduly prejudicial to the
rights of other Securityholders or that may involve the
Trustee in personal liability.
SECTION 6.04. LIMITATION ON SUITS.
(a) A Securityholder may pursue a remedy with respect to
this Indenture or the Securities only if:
(i) the Securityholder has previously given to
the Trustee written notice of a continuing Default;
(ii) the Holders of at least 25% in principal
amount of the then outstanding Securities make a
written request to the Trustee to pursue the remedy;
(iii) such Securityholder or Securityholders
offer, and, if requested, provide, to the Trustee
indemnity satisfactory to the Trustee against any loss,
liability or expense;
(iv) 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
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(v) during such 60-day period the Holders of a
majority in principal amount of the then outstanding
Securities do not give the Trustee, in the reasonable
opinion of such Trustee, a direction inconsistent with
the request.
(b) A Securityholder may not use this Indenture
to prejudice the rights of another Securityholder or to
obtain a preference or priority over another Securityholder.
SECTION 6.05. RIGHTS OF SECURITYHOLDERS TO RECEIVE PAYMENT.
Notwithstanding any other provision of this
Indenture, the right of any Securityholder to receive
payment of principal, premium, if any, and interest on the
Security, on or after the respective due dates expressed in
the Security, 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 the
Securityholder.
SECTION 6.06. COLLECTION SUIT BY TRUSTEE.
If a Default in the payment of the Securities
occurs and is continuing, the Trustee is authorized to
recover judgment in its own name and as trustee of an
express trust against an Issuer or any Subsidiary Guarantor
or any other obligor on the Securities for the whole amount
of principal, premium, if any, and accrued interest
remaining unpaid on the Securities and interest on overdue
principal, premium, if any, and, to the extent lawful,
interest on overdue installments of interest and such
further amount as shall be sufficient to cover the costs and
expenses of collection, including any advances made by the
Trustee and the reasonable compensation, expenses and
disbursements of the Trustee, its agents and counsel, and
any other amounts due the Trustee under Section 7.07 hereof.
SECTION 6.07. TRUSTEE MAY FILE PROOFS OF CLAIM.
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 any other amounts due the Trustee
under Section 7.07 hereof) and the Securityholders allowed
in any judicial proceedings relative to the Issuers or any
Subsidiary Guarantor (or any other obligor on the
Securities), 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 hereby authorized by each Securityholder 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 Securityholders, 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 7.07
hereof. To the extent that the payment of any such compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, and
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any other amounts due the Trustee under Section 7.07 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 which the Securityholders 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 Securityholder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Securityholder thereof, or to authorize
the Trustee to vote in respect of the claim of any Securityholder in any
such proceeding.
SECTION 6.08. PRIORITIES.
(a) If the Trustee collects any money pursuant to this
Article, it shall pay out the money in the following order:
(i) First: to the Trustee, its agents and
attorneys for amounts due under Section 7.07, including
payment of all compensation, expenses and liabilities
incurred, and all advances made, by the Trustee and the
costs and expenses of collection;
(ii) Second: if the Securityholders are forced to
proceed against the Issuers directly without the
Trustee, to the Securityholders for their collection
costs;
(iii) Third: subject to Article 10, to the
Securityholders for amounts due and unpaid on the
Securities for principal, premium, if any, and
interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on
the Securities for principal, premium, if any, and
interest, respectively; and
(iv) Fourth: to the Issuers or, to the extent the
Trustee collects any amount pursuant to Article 11
hereof from any Subsidiary Guarantor, to such
Subsidiary Guarantor, or to such party as a court of
competent jurisdiction shall direct.
(b) The Trustee may fix a record date and payment
date for any payment to Securityholders.
SECTION 6.09. 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 does not
apply to a suit
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by the Trustee, a suit by a Securityholder pursuant to Section
6.04 hereof, or a suit by Holders of more than 10% in principal
amount of the then outstanding Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If a Default in the payment of the Securities has
occurred and is continuing, the Trustee shall exercise such
of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances
and in the conduct of his own affairs.
(b) Except during the continuance of a Default in
the payment of the Securities:
(i) the Trustee undertakes to perform only those
duties as are specifically set forth in this Indenture
and the duties of the Trustee shall be determined
solely by the express provisions of this Indenture, 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 any certificates or opinions
furnished to the Trustee and conforming to the
requirements of this Indenture, but in the case of any
such certificates or opinions which by any provision
hereof are specifically required to be furnished to the
Trustee, the Trustee shall examine the same to
determine whether or not they conform to the
requirements of this Indenture.
(c) Notwithstanding anything to the contrary
herein contained, 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 shall not be liable for any error
of judgment made in good faith by a Responsible
Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts; and
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(iii) the Trustee shall 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 6.03 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 shall require
the Trustee to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of
its duties hereunder or in the exercise of any of its rights
or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) The Trustee shall not be liable for interest
on any money received by it except as the Trustee may agree
in writing with the Issuers. Assets held in trust by the
Trustee need not be segregated from other funds except to
the extent required by law.
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 unless
the Trustee has reason to believe such fact or matter is not
true.
(b) Before the Trustee acts or refrains from
acting, it may require an Officers' Certificate or an
Opinion of Counsel or both. The Trustee shall not be liable
for any action it takes or omits to take in good faith
reliance on such Officers' Certificate or Opinion of
Counsel. The Trustee may consult with counsel and the
written advice of such counsel or any Opinion of Counsel
shall 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 agents and shall
not be responsible for the misconduct or negligence of any
agent appointed with due care.
(d) The Trustee shall not be liable for any
action it takes or omits to take in good faith which it
believes to be authorized or within its 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 Issuers or any Subsidiary Guarantor shall be
sufficient if signed by an Officer of an Issuer or any
Subsidiary Guarantor.
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(f) The permissive rights of the Trustee to do
certain things enumerated in this Indenture shall not be
construed as a duty and the Trustee shall not be answerable
for other than its negligence or wilful default with respect
to such permissive rights.
(g) Except for a Default in the payment of the
Securities (other than with respect to Additional Interest
(as defined in the Securities)), the Trustee shall not be
deemed to have notice of any Default unless (i) specifically
notified in writing of such event by an Issuer or the
Securityholders of not less than 25% in aggregate principal
amount of Securities outstanding or (ii) a Responsible
Officer of the Trustee has actual knowledge of such Default;
as used herein, the term "actual knowledge" means the actual
fact or statement of knowing, without any duty to make any
investigation with regard thereto.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other
capacity may become the owner or pledgee of Securities and
may otherwise deal with the Issuers, any Subsidiary
Guarantor or any Affiliate of an Issuer or any Subsidiary
Guarantor with the same rights it would have if it were not
Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11
hereof.
SECTION 7.04. TRUSTEE'S DISCLAIMER.
The Trustee shall not be responsible for and makes
no representation as to the validity or adequacy of this
Indenture, the Securities or the Subsidiary Guarantees, it
shall not be accountable for the Issuers' use of the
proceeds from the Securities or any money paid to an Issuer
or upon the direction of an Issuer under any provision of
this Indenture, it shall not be responsible for the use or
application of any money received by any Paying Agent other
than the Trustee, and it shall not be responsible for any
statement or recital herein or any statement in the
Securities or the Subsidiary Guarantees or any other
document in connection with the sale of the Securities or
pursuant to this Indenture other than its certificate of
authentication.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall mail to each
Securityholder a notice of the Default within 60 days after
it occurs. Except in the case of a Default in any payment
of principal or interest on any Security, the Trustee may
withhold the notice if a committee of its officers in good
faith determines that withholding the notice is in the
interest of the Securityholders. In addition, each Issuer
is required to deliver to the Trustee, within 90 days after
each fiscal year of such Issuer, a certificate indicating
whether the signers thereof know of any Default that
occurred during the previous year. The Issuers shall also
deliver to the Trustee, within 30 days after the occurrence
thereof, written notice of any events which would constitute
a Default.
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SECTION 7.06. REPORTS BY TRUSTEE TO SECURITYHOLDERS.
(a) Within 60 days after each June 15 beginning with the
June 15 following the date of this Indenture, the Trustee
shall mail to the Securityholders a brief report dated as of
such reporting date that complies with TIA Section 313(a)
(but if no event described in TIA Section 313(a) has
occurred within the twelve months preceding the reporting
date, no report need be transmitted). The Trustee also
shall comply with TIA Section 313(b), (c) and (d).
(b) A copy of each report at the time of its
mailing to the Securityholders shall be filed with the
Commission and each stock exchange, if any, on which the
Securities are listed. The Issuers shall promptly notify
the Trustee if and when the Securities are listed on any
stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
(a) Each of the Issuers and the each of the Subsidiary
Guarantors, jointly and severally, shall pay to the Trustee
from time to time reasonable compensation for its acceptance
of this Indenture and services hereunder. The Trustee's
compensation shall not be limited by any law on compensation
of a trustee of an express trust. Each of the Issuers and
each of the Subsidiary Guarantors, jointly and severally,
shall reimburse the Trustee upon request for all reasonable
disbursements, advances and expenses incurred or made by it
in addition to the compensation for its services. Such
expenses shall include the reasonable compensation,
disbursements and expenses of the Trustee's agents and
counsel.
(b) Each of the Issuers and each of the
Subsidiary Guarantors, jointly and severally, shall
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 defending itself against any claim or liability
in connection with the exercise or performance of any of its
powers or duties hereunder, except as set forth below in
subparagraph (d). The Trustee shall notify the Issuers and
each of the Subsidiary Guarantors promptly of any claim for
which it may seek indemnity. Failure by the Trustee to so
notify the Issuers or any Subsidiary Guarantor shall not
relieve the Issuers or any of the Subsidiary Guarantors of
their Obligations hereunder. The Trustee may have separate
counsel and each of the Issuers and each of the Subsidiary
Guarantors, jointly and severally, shall pay the reasonable
fees and expenses of such counsel. Neither the Issuers nor
any Subsidiary Guarantor need pay for any settlement made
without its consent, which consent shall not be unreasonably
withheld.
(c) The obligations of each of the Issuers and
each of the Subsidiary Guarantors under this Section 7.07
shall survive the resignation or removal of the Trustee and
the satisfaction and discharge or termination of this
Indenture.
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(d) Notwithstanding subparagraphs (a) or (b)
above, neither the Issuers nor any Subsidiary Guarantor need
reimburse any expense or indemnify against any loss or
liability incurred by the Trustee through its own
negligence, bad faith or willful misconduct.
(e) To secure the Issuers' and each of the
Subsidiary Guarantor's payment obligations in this Section,
the Trustee shall have a Lien prior to the Securities on all
money or property held or collected by the Trustee, except
that held in trust to pay principal, premium, if any, and
interest on particular Securities. Such Lien shall survive
the resignation or removal of the Trustee and the
satisfaction and discharge of this Indenture.
(f) When the Trustee incurs expenses or renders
services after the occurrence of bankruptcy, insolvency or
other similar event with respect to an Issuer or a
Subsidiary Guarantor the expenses and the compensation for
such services (including the fees and expenses of its agents
and counsel) are intended to constitute expenses of
administration under the Bankruptcy Code.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
(a) A resignation or removal of the Trustee and appointment
of a successor Trustee shall become effective only upon the
successor Trustee's acceptance of appointment as provided in
this Section 7.08.
(b) The Trustee may resign at any time and be
discharged from the trust hereby created by so notifying the
Issuers. The Securityholders of a majority in principal
amount of the then outstanding Securities may remove the
Trustee by so notifying the Trustee and the Issuers. The
Issuers may remove the Trustee if:
(i) the Trustee fails to comply with Section 7.10
hereof;
(ii) the Trustee is adjudged a bankrupt or an
insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Code;
(iii) a Custodian, receiver or other public
officer takes charge of the Trustee or its property; or
(iv) the Trustee becomes incapable of acting.
(c) If the Trustee resigns or is removed or if a
vacancy exists in the office of Trustee for any reason, the
Issuers shall notify each Securityholder of such event and
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
Securities may appoint a successor Trustee to replace the
successor Trustee appointed by the Issuers.
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(d) A successor Trustee shall deliver a written
acceptance of its appointment to the retiring Trustee and to
the Issuers. Thereupon, the resignation or removal of the
retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall
mail a notice of its succession to each Securityholder.
The retiring Trustee shall 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 7.07 hereof.
Notwithstanding replacement of the Trustee pursuant to this
Section 7.08, the Issuers' and each of the Subsidiary
Guarantor's obligations under Section 7.07 hereof shall
continue for the benefit of the retiring Trustee.
(e) If a successor Trustee does not take office
within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Issuers, any of the
Subsidiary Guarantors or the Securityholders of at least 10%
in principal amount of the then outstanding Securities may
petition any court of competent jurisdiction for the
appointment of a successor Trustee.
(f) If the Trustee after written request by any
Securityholder who has been a Securityholder for at least
six months fails to comply with Section 7.10, such
Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates with, merges or
converts into, or transfers all or substantially all of its
corporate trust business to another corporation, the
resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or
transferee corporation is otherwise eligible hereunder, be
the successor Trustee; provided, however, that such
corporation shall be otherwise qualified and eligible under
this Article Seven.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
(a) There shall at all times be a Trustee hereunder which
shall be a corporation organized and doing business under
the laws of the United States of America or any State or
Territory thereof or the District of Columbia authorized
under such laws to exercise corporate trustee power, shall
be subject to supervision or examination by Federal, State,
Territorial, or District of Columbia authority and shall
have a combined capital and surplus of at least $50 million
as set forth in its most recent published annual report of
condition.
(b) This Indenture shall always have a Trustee
who satisfies the requirements of TIA Section 310(a)(1),
(2) and (5). The Trustee shall comply with TIA Section
310(b). The provisions
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of TIA Section 310 shall also apply to the Issuers and each of
the Subsidiary Guarantors, as obligor of the Securities.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE
ISSUERS.
The Trustee shall comply with TIA Section 311(a),
excluding any creditor relationship listed in TIA Section
311(b). A Trustee who has resigned or been removed shall be
subject to TIA Section 311(a) to the extent indicated therein.
The provisions of TIA Section 311 shall apply to the Issuers and
each of the Subsidiary Guarantors as obligor on the Securities.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. DISCHARGE OF LIABILITY ON SECURITIES.
(a) When (i) the Issuers deliver to the Trustee all
outstanding Securities (other than Securities replaced
pursuant to Section 2.07 hereof) canceled or for
cancellation or (ii) all outstanding Securities have become
due and payable, whether at maturity or as a result of the
mailing of a notice of redemption pursuant to Section 3.08,
and the Issuers have irrevocably deposited with the Trustee
funds sufficient to pay at maturity all outstanding
Securities, including interest thereon (other than
Securities replaced pursuant to Section 2.07 hereof), and if
in either case the Issuers pay all other sums payable
hereunder by the Issuers, then this Indenture shall, subject
to Sections 8.01(c) and 8.04 hereof, be satisfied and
discharged and cease to be of further effect. The Trustee
shall acknowledge satisfaction and discharge of this
Indenture on demand of the Issuers accompanied by an
Officers' Certificate and an Opinion of Counsel at the cost
and expense of the Issuers.
(b) Notwithstanding clause (a) above, the
Issuers' obligations in Sections 2.03, 2.04, 2.05, 2.06,
2.07 and 7.07 hereof and the obligations of each Subsidiary
Guarantor under Article 11 in respect thereof shall survive
until the Securities have been paid in full. Thereafter,
the Issuers' obligations in Section 7.07 hereof and the
obligations of Subsidiary Guarantors under Article 11 in
respect thereof shall survive.
SECTION 8.02. APPLICATION OF TRUST MONEY.
The Trustee shall hold in trust money deposited with it
pursuant to this Article 8. It shall apply the deposited money
through the Paying Agent and in accordance with this Indenture to
the payment of principal, premium, if any, and interest on the
Securities.
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SECTION 8.03. REPAYMENT TO THE ISSUERS.
(a) The Trustee and the Paying Agent shall promptly pay to
the Issuers upon written request any excess money or
securities held by them at any time; provided, however, that
the Trustee shall not pay any such excess to the Issuers
unless the amount remaining on deposit with the Trustee,
after giving effect to such transfer are sufficient to pay
principal, premium, if any, and interest on the outstanding
Securities, which amount shall be certified by independent
public accountants.
(b) The Trustee and the Paying Agent shall pay to
the Issuers upon written request any money held by them for
the payment of principal, premium, if any, or interest that
remains unclaimed for two years after the date upon which
such payment shall have become due; provided, however, that
the Issuers shall have either caused notice of such payment
to be mailed to each Securityholder entitled thereto no less
than 30 days prior to such repayment or within such period
shall have published such notice in a financial newspaper of
widespread circulation published in the City of New York.
After payment to the Issuers, Securityholders entitled to
the money must look to the Issuers and the Subsidiary
Guarantors for payment as general creditors unless an
applicable abandoned property law designates another Person,
and all liability of the Trustee and such Paying Agent with
respect to such money shall cease.
SECTION 8.04. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply
any money in accordance with this Article 8 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 Issuers' and
each of the Guarantor's Obligations under this Indenture and
the Securities and the Subsidiary Guarantees shall be
revived and reinstated as though no deposit had occurred
pursuant to this Article 8 until such time as the Trustee or
Paying Agent is permitted to apply all such money in
accordance with this Article 8; provided, however, that if
an Issuer or any Subsidiary Guarantor has made any payment
of principal of, premium, if any, or interest on any
Securities because of the reinstatement of its Obligations,
such Issuer or any of the Subsidiary Guarantors, as the case
may be, shall be subrogated to the rights of the
Securityholders to receive such payment from the money held
by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF SECURITYHOLDERS.
(a) Notwithstanding Section 9.02 of this Indenture, the Issuers,
when authorized by Board Resolutions, and the Trustee may amend or supplement
this Indenture or the Securities without the consent of any Securityholder:
(i) to cure any ambiguity, omission, defect or inconsistency or to
provide for the assumption by a successor corporation, partnership trust
or limited liability company of the obligation of an Issuer under this
Indenture; provided, however, that such amendment or supplement does
not, as evidenced by an Opinion of Counsel delivered to the Trustee,
adversely affect the rights of any Securityholder in any respect;
(ii) to comply with Article 5 hereof;
(iii) to provide for uncertificated Securities in addition to or in
place of certificated Securities; provided, however, that the
uncertificated Securities are issued in registered form for purposes of
Section 163(f) of the Internal Revenue Code of 1986, as amended, or in a
manner such that the uncertificated Securities are described in Section
163(f)(2)(B) of the Internal Revenue Code of 1986, as amended;
(iv) to add Guarantees with respect to the Securities;
(v) to add to the covenants of the Issuers or the Subsidiary
Guarantors for the benefit of the Securityholders or to surrender any
right or power herein conferred upon the Issuers or the Subsidiary
Guarantors;
(vi) to comply with requirements of the Commission in order to
effect or maintain the qualification of this Indenture under the TIA;
(vii) to make any change that does not, as evidenced by an Opinion
of Counsel delivered to the Trustee, adversely affect the rights of any
Securityholder in any respect; or
(viii) to evidence or provide for a replacement Trustee under
Section 7.08 hereof;
provided, that the Issuers have delivered to the Trustee an Opinion of
Counsel stating that any such amendment or supplement complies with the
provisions of this Section 9.01.
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(b) Upon the request of the Issuers and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors or
board of managers, as the case may be, authorizing the execution of any such
supplemental indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Issuers and
the Subsidiary Guarantors in the execution of any supplemental indenture
authorized or permitted by the terms of this Indenture and to make any
further appropriate agreements and stipulations which may be therein
contained, but the Trustee shall not be obligated to enter into such
supplemental indenture which affects its own rights, duties or immunities
under this Indenture or otherwise.
(c) After an amendment or supplement under this Section 9.01
becomes effective, the Issuers shall mail to all Securityholders a notice
briefly describing such amendment or supplement. The failure to give such
notice to all Securityholders, or any defect therein, shall not impair or
affect the validity of an amendment or supplement under this Section.
SECTION 9.02. WITH CONSENT OF SECURITYHOLDERS.
(a) The Issuers, the Subsidiary Guarantors and the Trustee may
amend or supplement this Indenture or the Securities with the written consent
of the Securityholders of not less than a majority in aggregate principal
amount of the Securities, voting as a single class, then outstanding
(including consents obtained in connection with a tender offer or exchange
offer for the Securities) and any existing Default and its consequences or
compliance with any provision of this Indenture or the Securities may be
waived with the consent of the Holders of a majority in principal amount of
the then outstanding Securities (including consents obtained in connection
with a tender offer or exchange offer for the Securities). Furthermore,
subject to Sections 6.02 and 6.05 hereof, the Holders of a majority in
aggregate principal amount of the Securities then outstanding (including
consents obtained in connection with a tender offer or exchange offer for the
Securities) may waive compliance in a particular instance by the Issuers or
the Subsidiary Guarantors with any provision of this Indenture or the
Securities. However, without the consent of each Securityholder affected, an
amendment, supplement or waiver under this Section 9.02 may not (with respect
to any Securities held by a non-consenting Holder):
(i) reduce the principal amount of Securities whose Holders must
consent to an amendment, supplement or waiver;
(ii) reduce the rate of or extend the time for payment of any
interest on any Security;
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(iii) reduce the principal of or extend the Stated Maturity of any
Security or alter the redemption provisions (including without
limitation Sections 3.07, 3.08, 3.09 and 3.10 hereof) with respect
thereto;
(iv) reduce the premium payable upon the redemption of any Security
or change the time at which any Security may be redeemed in accordance
with Section 3.07, 3.08, 3.09 and 3.10;
(v) make any Security payable in money other than that stated in
the Security;
(vi) make any change in Section 6.02 or 6.05 hereof or in this
Section 9.02(a); or
(vii) waive a Default in the payment of principal of premium, if
any, or interest on, or redemption payment with respect to, any Security;
(viii) impair the right of any Holder to receive payment of
principal of and interest on such Holder's Securities on or after the
due dates therefor or to institute suit for the enforcement of any
payment on or with respect to such Holder's Securities.
(b) Upon the request of the Issuers and the Subsidiary Guarantors
accompanied by Board Resolutions of their respective Boards of Directors or
board of managers, as the case may be, authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Securityholders as
aforesaid, and upon receipt by the Trustee of the documents described in
Section 9.06 hereof, the Trustee shall join with the Issuers and the
Subsidiary Guarantors in the execution of such supplemental indenture unless
such supplemental indenture affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise, in which case the Trustee may
in its discretion, but shall not be obligated to, enter into such
supplemental indenture.
(c) It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed amendment, supplement or waiver, but it shall be sufficient if such
consent approves the substance thereof.
(d) After an amendment, supplement or waiver under this Section
9.02 becomes effective, the Issuers shall mail to all Securityholders a
notice briefly describing the amendment, supplement or waiver. Any failure
of the Issuers to mail such notice, or any defect therein, shall not,
however, in any way impair or affect the validity of any such amendment,
supplement or waiver.
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SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Securities
shall comply with the TIA as then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
(a) Until an amendment, supplement or waiver becomes effective, a
consent to it by a Securityholder is a continuing consent by the
Securityholder and every subsequent Securityholder or portion of a Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent is not made on any Security. However, any such
Securityholder or subsequent Securityholder may revoke the consent as to its
Security 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 Securityholder.
(b) The Issuers may fix a record date for determining which
Securityholders must consent to such amendment, supplement or waiver. If the
Issuers fix a record date, the record date shall be fixed at (i) the later of
30 days prior to the first solicitation of such consent or the date of the
most recent list of Securityholders furnished to the Trustee prior to such
solicitation pursuant to Section 2.05 hereof, or (ii) such other date as the
Issuers shall designate.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES.
(a) Securities authenticated and delivered after the execution of
any supplemental indenture may bear a notation in form approved by the
Trustee as to any matter provided for in such amendment, supplement or waiver
on any Security thereafter authenticated. The Issuers in exchange for all
Securities may issue and the Trustee shall authenticate new Securities that
reflect the amendment, supplement or waiver.
(b) Failure to make the appropriate notation or issue a new
Security shall not affect the validity and effect of such amendment,
supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amendment, waiver or supplemental
indenture authorized pursuant to this Article 9 if the amendment, waiver or
supplemental indenture does not adversely affect the rights, duties,
liabilities or immunities of the Trustee. If it does, the Trustee may, but
need not, sign it. In signing or refusing to sign such amendment, waiver or
supplemental indenture, the Trustee shall be entitled to receive and, subject
to Section 7.01, shall be fully protected in relying upon, in addition to the
documents required by Section 12.04,
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an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that such amendment, waiver or supplemental indenture is authorized or
permitted by this Indenture, that it is not inconsistent herewith, and that
it will be valid and binding upon the Issuers in accordance with its terms.
ARTICLE 10
SUBORDINATION
SECTION 10.01. AGREEMENT TO SUBORDINATE.
The Issuers and each Subsidiary Guarantor agree, and each Holder by
accepting an Security and the related Subsidiary Guarantee agrees, that the
Indebtedness evidenced by the Securities and the related Subsidiary
Guarantees is subordinated in right of payment, to the extent and in the
manner provided in this Article 10, to the prior payment of (i) all Senior
Indebtedness in the case of an Security and (ii) all Guarantor Senior
Indebtedness of each Subsidiary Guarantor in the case of its obligations
under its Subsidiary Guarantee and that the subordination is for the benefit
of and enforceable by the holders of Senior Indebtedness and such Guarantor
Senior Indebtedness.
SECTION 10.02. LIQUIDATION, DISSOLUTION, BANKRUPTCY.
Upon any payment or distribution of the assets of an Issuer or any
Subsidiary Guarantor to creditors upon a total or partial liquidation or a
total or partial dissolution of an Issuer or such Subsidiary Guarantor or in
a bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to an Issuer or such Subsidiary Guarantor or their respective
properties:
(a) holders of Senior Indebtedness in the case of the Issuers or
holders of Guarantor Senior Indebtedness of such Subsidiary Guarantor in
the case of such Subsidiary Guarantor shall be entitled to receive
payment in full of all Senior Indebtedness in the case of the Issuers or
all such Guarantor Senior Indebtedness in the case of such Subsidiary
Guarantor before Holders shall be entitled to receive any payment of
principal of or interest on or other amounts with respect to the
Securities from the Issuers or such Subsidiary Guarantor, whether
directly by the Issuers or pursuant to the Subsidiary Guarantees; and
(b) until the Senior Indebtedness in the case of the Issuers or
such Guarantor Senior Indebtedness in the case of such Subsidiary
Guarantor is paid in full, any payment or distribution to which Holders
would be entitled but for this Article 10 shall be made to holders of
Senior Indebtedness in the case
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of payments or distributions made by the Issuers or to the holders of such
Guarantor Senior Indebtedness in the case of payments or distributions
made by such Subsidiary Guarantor, in each case as their respective
interests may appear.
SECTION 10.03. DEFAULT ON SENIOR INDEBTEDNESS OR GUARANTOR SENIOR
INDEBTEDNESS.
Neither the Issuers nor any Subsidiary Guarantor may pay the
principal of, premium (if any), or interest on the Securities or repurchase,
redeem or otherwise retire any Securities, whether directly by the Issuers or
by such Subsidiary Guarantor under its Subsidiary Guarantee (collectively,
"pay the Securities") if (i) any Designated Senior Indebtedness not paid when
due or (ii) any other default on Designated Senior Indebtedness occurs and
the maturity of such Designated Senior Indebtedness is accelerated in
accordance with its terms unless, in either case, (x) the default has been
cured or waived and any such acceleration has been rescinded or (y) such
Designated Senior Indebtedness has been paid in full in cash; provided,
however, that the Issuers or such Subsidiary Guarantor may pay the
Securities, whether directly or pursuant to the Subsidiary Guarantee, without
regard to the foregoing if the Issuers or such Subsidiary Guarantor and the
Trustee receive written notice approving such payment from the Representative
of the Designated Senior Indebtedness with respect to which either of the
events set forth in clause (i) or (ii) of this sentence has occurred or is
continuing.
SECTION 10.04. WHEN DISTRIBUTION MUST BE PAID OVER.
If a distribution is made to Holders that because of this Article
10 should not have been made to them, the Holders who receive the
distribution shall hold it in trust for holders of Senior Indebtedness and
Guarantor Senior Indebtedness and promptly pay it over to them as their
respective interests may appear.
SECTION 10.05. SUBROGATION.
After all Senior Indebtedness and Guarantor Senior Indebtedness is
paid in full in cash and until the Securities are paid in full, Holders shall
be subrogated to the rights of holders of Senior Indebtedness and Guarantor
Senior Indebtedness to receive distributions applicable to Senior
Indebtedness and Guarantor Senior Indebtedness. A distribution made under
this Article 10 to holders of Senior Indebtedness or Guarantor Senior
Indebtedness which otherwise would have been made to Holders is not, as
between the Issuers and Holders, a payment by an Issuer of Senior
Indebtedness or, as between a Subsidiary Guarantor and Holders, a payment by
such Subsidiary Guarantor of Guarantor Senior Indebtedness.
SECTION 10.06. RELATIVE RIGHTS.
This Article 10 defines the relative rights of Holders and holders
of Senior Indebtedness and Guarantor Senior Indebtedness. Nothing in this
Article 10 shall:
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(1) impair, as between the Issuers or the Subsidiary Guarantors,
as the case may be, and Holders, the obligation of the Issuers or the
Subsidiary Guarantors, as the case may be, which is absolute and
unconditional, to pay principal of and interest on the Securities in
accordance with their terms; or
(2) prevent the Trustee or any Holder from exercising its
available remedies upon a Default, subject to the rights of holders of
Senior Indebtedness and Guarantor Senior Indebtedness to receive
distributions otherwise payable to Holders.
SECTION 10.07. SUBORDINATION MAY NOT BE IMPAIRED BY ISSUERS OR THE
SUBSIDIARY GUARANTORS.
No right of any holder of Senior Indebtedness or Guarantor Senior
Indebtedness to enforce the subordination of the Indebtedness evidenced by
the Securities or the related Subsidiary Guarantee shall be impaired by any
act or failure to act by the Issuers or any Subsidiary Guarantor or by the
failure of any of them to comply with this Indenture.
SECTION 10.08. RIGHTS OF TRUSTEE AND PAYING AGENT.
Notwithstanding Section 10.03, the Trustee or Paying Agent may
continue to make payments on the Securities and shall not be charged with
knowledge of the existence of facts that would prohibit the making of any
such payments unless, not less than two Business Days prior to the date of
such payment, a Responsible Officer of the Trustee receives notice
satisfactory to it that payments may not be made under this Article 10. The
Issuers, the Registrar or co-registrar, the Paying Agent, a Representative or
a holder of Senior Indebtedness or Guarantor Senior Indebtedness may give the
notice; provided, however, that, if an issue of Senior Indebtedness or
Guarantor Senior Indebtedness has a Representative, only the Representative
may give the notice.
The Trustee in its individual or any other capacity may hold Senior
Indebtedness or Guarantor Senior Indebtedness with the same rights it would
have if it were not the Trustee. The Registrar and co-registrar and the
Paying Agent may do the same with like rights. The Trustee shall be entitled
to all the rights set forth in this Article 10 with respect to any Senior
Indebtedness or Guarantor Senior Indebtedness which may at any time be held
by it, to the same extent as any other holder of Senior Indebtedness or
Guarantor Senior Indebtedness; and nothing in Article 7 shall deprive the
Trustee of any of its rights as such holder. Nothing in this Article 10
shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 7.07.
SECTION 10.09. DISTRIBUTION OR NOTICE TO REPRESENTATIVE.
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Whenever a distribution is to be made or a notice given to holders
of Senior Indebtedness or Guarantor Senior Indebtedness, the distribution may
be made and the notice given to their Representative (if any).
SECTION 10.10. ARTICLE 10 NOT TO PREVENT DEFAULT.
The failure to make a payment in respect of the Securities, whether
directly or pursuant to the Subsidiary Guarantees, by reason of any provision
in this Article 10 shall not be construed as preventing the occurrence of a
Default. Nothing in this Article 10 shall have any effect on the right of
the Holders or the Trustee to make a claim for payment under the Subsidiary
Guarantees.
SECTION 10.11. TRUSTEE ENTITLED TO RELY.
Upon any payment or distribution pursuant to this Article 10, the
Trustee and the Holders shall be entitled to rely (i) upon any order or
decree of a court of competent jurisdiction in which any proceedings of the
nature referred to in Section 10.02 are pending, (ii) upon a certificate of
the liquidating trustee or agent or other Person making such payment or
distribution to the Trustee or to the Holders or (iii) upon the
Representatives for the holders of Senior Indebtedness or Guarantor Senior
Indebtedness for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior
Indebtedness, Guarantor Senior Indebtedness and other Indebtedness of the
Issuers or the Subsidiary Guarantors, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts
pertinent thereto or to this Article 10. In the event that the Trustee
determines, in good faith, that evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness or Guarantor Senior
Indebtedness to participate in any payment or distribution pursuant to this
Article 10, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of Senior
Indebtedness or Guarantor Senior Indebtedness held by such Person, the extent
to which such Person is entitled to participate in such payment or
distribution and other facts pertinent to the rights of such Person under
this Article 10, and, if such evidence is not furnished, the Trustee may
defer any payment to such Person pending judicial determination as to the
right of such Person to receive such payment. The provisions of Sections
7.01 and 7.02 shall be applicable to all actions or omissions of actions by
the Trustee pursuant to this Article 10.
SECTION 10.12. TRUSTEE TO EFFECTUATE SUBORDINATION.
Each Holder by accepting a Security authorizes and directs the
Trustee on his behalf to take such action as may be necessary or appropriate
to acknowledge or effectuate the subordination between the Holders and the
holders of Senior Indebtedness and Guarantor Senior Indebtedness as provided
in this Article 10 and appoints the Trustee as attorney-in-fact for any and
all such purposes.
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SECTION 10.13. TRUSTEE NOT FIDUCIARY FOR HOLDERS OF SENIOR INDEBTEDNESS AND
SUBSIDIARY GUARANTOR SENIOR INDEBTEDNESS.
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness or Guarantor Senior Indebtedness and shall not
be liable to any such holders if it shall mistakenly pay over or distribute
to Holders or the Issuers, the Subsidiary Guarantors or any other Person,
money or assets to which any holders of Senior Indebtedness or Guarantor
Senior Indebtedness shall be entitled by virtue of this Article 10 or
otherwise.
SECTION 10.14. RELIANCE BY HOLDERS OF SENIOR INDEBTEDNESS AND GUARANTOR
SENIOR INDEBTEDNESS ON SUBORDINATION PROVISIONS.
Each Holder by accepting a Security acknowledges and agrees that
the foregoing subordination provisions are, and are intended to be, an
inducement and a consideration to each holder of any Senior Indebtedness or
Guarantor Senior Indebtedness, whether such Senior Indebtedness or Guarantor
Senior Indebtedness was created or acquired before or after the issuance of
the Securities, to acquire and continue to hold, or to continue to hold, such
Senior Indebtedness or Guarantor Senior Indebtedness and such holder of
Senior Indebtedness or Guarantor Senior Indebtedness shall be deemed
conclusively to have relied on such subordination provisions in acquiring and
continuing to hold, or in continuing to hold, such Senior Indebtedness or
Guarantor Senior Indebtedness.
ARTICLE 11
SUBSIDIARY GUARANTEE OF SECURITIES
SECTION 11.01. SUBSIDIARY GUARANTEE
(a) Each Subsidiary Guarantor hereby jointly and severally
irrevocably and unconditionally guarantees, as a primary obligor and not a
surety, to each Securityholder of a Security now or hereafter 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 Securities or the Obligations of the Issuers hereunder or thereunder, (i)
the due and punctual payment of the principal, premium, if any, interest
(including post-petition interest in any proceeding under any Bankruptcy Code
whether or not an allowed claim in such proceeding) on overdue principal,
premium, if any, and interest, if lawful on such Security, and (ii) all other
monetary Obligations payable by the Issuers under this Indenture (including
under Section 7.07 hereof) and the Securities (all of the foregoing being
hereinafter collectively called the "Guaranteed Obligations"), when and as
the same shall become due and payable, whether by acceleration thereof, call
for redemption or otherwise (including amounts that would become due but for
the operation of the automatic stay under Section 362(a) of the Bankruptcy
Code), in accordance with the terms of any such Security and of this
Indenture, subject, however, in the case of (i)
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and (ii) above, to the limitations set forth in Section 11.04 hereof. Each
Subsidiary Guarantor hereby agrees that its Obligations hereunder shall be
absolute and unconditional, irrespective of, and shall be unaffected by, any
failure to enforce the provisions of any such Security or this Indenture, any
waiver, modification or indulgence granted to the Issuers with respect
thereto, the recovery of any judgment against an Issuer, any action to
enforce the same, by the Securityholders or the Trustee, the recovery of any
judgment against the Issuer, any action to enforce the same, or any other
circumstances which may otherwise constitute a legal or equitable discharge
of a surety or guarantor. Each Subsidiary Guarantor hereby waives diligence,
presentment, filing of claims with a court in the event of a merger or
bankruptcy of an Issuer, any right to require a proceeding first against the
Issuers, the benefit of discussion, protest or notice with respect to any
such Security or the Indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Subsidiary Guarantee shall not be
discharged as to any such Security except by payment in full of the principal
thereof, premium, if any, and all accrued interest thereon.
(b) Each Subsidiary Guarantor further agrees that this Subsidiary
Guarantee herein constitutes a guarantee of payment, performance and
compliance when due (and not a guarantee of collection) and waives any right
to require that any resort be had by any Securityholder or the Trustee to any
Security held for payment of the Guaranteed Obligations.
(c) Each Subsidiary Guarantor agrees that it shall not be entitled
to, and hereby irrevocably waives, any right of subrogation in relation to
the Securityholders or the Trustee in respect of any Guaranteed Obligations.
(d) Each Subsidiary Guarantor also agrees to pay any and all costs
and expenses (including reasonable attorneys' fees) incurred by the Trustee
or any Securityholder in enforcing any rights under this Article 11.
(e) The Subsidiary Guarantee set forth in this Article 11 shall
not be valid or become obligatory for any purpose with respect to a Security
until the certificate of authentication on such Security shall have been
signed by or on behalf of the Trustee.
SECTION 11.02. EXECUTION AND DELIVERY OF SUBSIDIARY GUARANTEE.
(a) To evidence each Subsidiary Guarantor's Subsidiary Guarantee
set forth in this Article 11, each Subsidiary Guarantor hereby agrees that a
notation of such Subsidiary Guarantee shall be placed on each Security
authenticated and delivered by the Trustee.
(b) This Indenture shall be executed on behalf of each Subsidiary
Guarantor, and an Officer of each Subsidiary Guarantor shall sign the
notation of the Subsidiary Guarantee on the Securities by manual or facsimile
signature. If an Officer whose signature is on this Indenture or the
notation of the Subsidiary Guarantee no longer holds that office at the time
the
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Trustee authenticates the Security on which the Subsidiary Guarantee is
endorsed, the Subsidiary Guarantee shall be valid nevertheless. Each
Subsidiary Guarantor hereby agrees that the Subsidiary Guarantee set forth in
Section 11.01 hereof shall remain in full force and effect notwithstanding
any failure to endorse on each Security a notation of the Subsidiary
Guarantee.
(c) The delivery of any Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of the
Subsidiary Guarantee set forth in this Indenture on behalf of each Subsidiary
Guarantor.
SECTION 11.03. SUBSIDIARY GUARANTEE UNCONDITIONAL, ETC.
Upon failure of payment when due of any Guaranteed Obligation for
whatever reason, each Subsidiary Guarantor will be obligated to pay the same
immediately. Each Subsidiary Guarantor hereby agrees that its obligations
hereunder shall be continuing, absolute and unconditional, irrespective of:
the recovery of any judgment against an Issuer or any Subsidiary Guarantor;
any extension, renewal, settlement, compromise, waiver or release in respect
of any obligation of an Issuer under this Indenture or any Security, by
operation of law or otherwise; any modification or amendment of or supplement
to this Indenture or any Security; any change in the corporate existence,
structure or ownership of an Issuer, or any insolvency, bankruptcy,
reorganization or other similar proceeding affecting an Issuer or its assets
or any resulting release or discharge of any obligation of an Issuer
contained in this Indenture or any Security; the existence of any claim,
set-off or other rights which any Subsidiary Guarantor may have at any time
against an Issuer, the Trustee, any Securityholder or any other Person,
whether in connection herewith or any unrelated transactions; provided,
however, that nothing herein shall prevent the assertion of any such claim by
separate suit or compulsory counterclaim; any invalidity or unenforceability
relating to or against an Issuer for any reason of this Indenture or any
Security, or any provision of applicable law or regulation purporting to
prohibit the payment by an Issuer of the principal, premium, if any, or
interest on any Security or any other Guaranteed Obligation; or any other act
or omission to act or delay of any kind by an Issuer, the Trustee, any
Securityholder or any other Person or any other circumstance whatsoever which
might, but for the provisions of this paragraph, constitute a legal or
equitable discharge of the Subsidiary Guarantors' obligations hereunder.
Each Subsidiary Guarantor hereby waives diligence, presentment, demand of
payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Issuer, any right to require a proceeding first against the
Issuers, protest, notice and all demand whatsoever and covenants that this
Subsidiary Guarantee will not be discharged except by the complete
performance of the obligations contained in the Securities, this Indenture
and in this Article 11. Each Subsidiary Guarantor's obligations hereunder
shall remain in full force and effect until this Indenture shall have
terminated and the principal of and interest on the Securities and all other
Guaranteed Obligations shall have been paid in full. If at any time any
payment of the principal of or interest on any Security or any other payment
in respect of any Guaranteed Obligation is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy or reorganization of an
Issuer or otherwise, each Subsidiary Guarantor's obligations hereunder with
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respect to such payment shall be reinstated as though such payment had been
due but not made at such time, and this Article 11, to the extent theretofore
discharged, shall be reinstated in full force and effect. Each Subsidiary
Guarantor irrevocably waives any and all rights to which it may be entitled,
by operation of law or otherwise, upon making any payment hereunder to be
subrogated to the rights of the payee against the Issuers with respect to
such payment or otherwise to be reimbursed, indemnified or exonerated by the
Issuers in respect thereof.
SECTION 11.04. LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY.
Each Subsidiary Guarantor and by its acceptance hereof each
Securityholder hereby confirms that it is the intention of all such parties
that the guarantee by such Subsidiary Guarantor pursuant to its Subsidiary
Guarantee not constitute a fraudulent transfer or conveyance for purposes of
the Bankruptcy Code, Federal and state fraudulent conveyance laws or other
legal principles. To effectuate the foregoing intention, the Securityholders
and each Guarantor hereby irrevocably agree that the obligations of such
Subsidiary Guarantor under the Subsidiary Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor and after giving effect to any
collections from or payments made by or on behalf of any other Subsidiary
Guarantor in respect of the obligations of such other Subsidiary Guarantor
under its Subsidiary Guarantee or pursuant to Section 11.05 hereof, result in
the obligations of such Subsidiary Guarantor under the Subsidiary Guarantee
not constituting such fraudulent transfer or conveyance under federal or
state law.
SECTION 11.05. CONTRIBUTION.
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, inter se, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Guarantor") under the Subsidiary Guarantee, such Funding Guarantor
shall be entitled to a contribution from all other Subsidiary Guarantors in a
pro rata amount based on the Adjusted Net Assets of each Subsidiary Guarantor
(including the Funding Guarantor) for all payments, damages and expenses
incurred by that Funding Guarantor in discharging the Issuer's obligations
with respect to the Securities or any other Subsidiary Guarantor's
obligations with respect to the Subsidiary Guarantee.
SECTION 11.06. RELEASE.
Upon the sale or disposition of all of the equity interests of a
Subsidiary Guarantor to an entity which is not an Issuer or a Subsidiary of
an Issuer, which is otherwise in compliance with this Indenture, such
Subsidiary Guarantor shall be deemed released from all its obligations under
this Indenture without any further action required on the part of the Trustee
or any Securityholder; provided, however, that any such termination shall
occur if and only to the extent that all Obligations of each Subsidiary
Guarantor under all of its guarantees of, and under all of its pledges of
assets or other security interests which secure any other
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Indebtedness of an Issuer and the other Subsidiary Guarantors shall also
terminate upon such release, sale or transfer. The Trustee shall deliver an
appropriate instrument evidencing such release upon receipt of a request by
the Issuers accompanied by an Officers' Certificate certifying as to the
compliance with this Section 11.06. Any Subsidiary Guarantor not so released
remains liable for the full amount of principal, premium, if any, and
interest on the Securities as provided in this Article 11.
SECTION 11.07. ADDITIONAL SUBSIDIARY GUARANTORS.
Any Person that was not a Subsidiary Guarantor on the date of this
Indenture may become a Subsidiary Guarantor by executing and delivering to
the Trustee (a) a supplemental indenture in form and substance satisfactory
to the Trustee, which subjects such Person to the provisions (including,
without limitation, the representations and warranties in this Article 11) of
this Indenture as a Subsidiary Guarantor and (b) an Opinion of Counsel
complying with Section 9.06 and to the effect that such supplemental
indenture has been duly authorized and executed by such Person and
constitutes the legal, valid, binding and enforceable obligation of such
Person (subject to such customary exceptions concerning creditors' rights and
equitable principles as may be acceptable to the Trustee in its discretion).
The Subsidiary Guarantee of each Person described in this Section 11.07 shall
apply to all Securities theretofore executed and delivered, notwithstanding
any failure of such Securities to contain a notation of such Subsidiary
Guarantee thereon.
SECTION 11.08. SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN
TERMS.
(a) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary
Guarantor with or into an Issuer or another Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of an Issuer or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as
an entirety, to an Issuer or another Subsidiary Guarantor that is a
Wholly-Owned Subsidiary of an Issuer. Upon any such consolidation, merger,
sale or conveyance, the Subsidiary Guarantee given by such Subsidiary
Guarantor shall no longer have any force or effect.
(b) Nothing contained in this Indenture or in any of the
Securities shall prevent any consolidation or merger of a Subsidiary
Guarantor with or into a corporation or corporations other than an Issuer or
another Subsidiary Guarantor (whether or not affiliated with the Subsidiary
Guarantor), or successive consolidations or mergers in which a Subsidiary
Guarantor or its successor or successors shall be a party or parties, or
shall prevent any sale or conveyance of the property of a Subsidiary
Guarantor as an entirety or substantially as an entirety, to a corporation
other than an Issuer or another Subsidiary Guarantor (whether or not
affiliated with the Subsidiary Guarantor); provided, however, that, subject
to Sections 11.06 and 11.08(a), (x) (i) immediately after such transaction,
and giving effect thereto, no Default shall
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have occurred as a result of such transaction and be continuing and (ii) such
transaction does not violate any covenants set forth in this Indenture, and
(y) if the surviving corporation is not the Subsidiary Guarantor, each
Subsidiary Guarantor hereby covenants and agrees that, upon any such
consolidation, merger, sale or conveyance, the Subsidiary Guarantee set forth
in this Article 11, and the due and punctual performance and observance of
all of the covenants and conditions of this Indenture to be performed by such
Subsidiary Guarantor, shall be expressly assumed (in the event that the
Subsidiary Guarantor is not the surviving corporation in the merger), by
supplemental indenture satisfactory in form to the Trustee of the due and
punctual performance of all of the covenants and conditions of this Indenture
to be performed by the Subsidiary Guarantor, such successor corporation shall
succeed to, and be substituted for, the Subsidiary Guarantor with the same
effect as if it had been named herein as a Subsidiary Guarantor.
SECTION 11.09. SUCCESSORS AND ASSIGNS.
This Article 11 shall be binding upon each Subsidiary Guarantor and
its successors and assigns and shall inure to the benefit of the successors
and assigns of the Trustee and the Securityholders and, in the event of any
transfer or assignment of rights by any Securityholder or the Trustee, the
rights and privileges conferred upon that party in this Indenture and in the
Securities shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions of this Indenture.
SECTION 11.10. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each Subsidiary Guarantor 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 or
extension law or any usury law or other law that would prohibit or forgive
each such Subsidiary Guarantor from performing its Subsidiary Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force,
or which may affect the covenants or the performance of this Indenture; and
(to the extent that it may lawfully do so) each such Subsidiary Guarantor
hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not hinder, delay or impede the execution of any power
herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
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ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with another provision which is required to be included in this Indenture by
the TIA, the required provision shall control. Until such time as this
Indenture becomes qualified under the TIA, the Issuers, the Subsidiary
Guarantors and the Trustee shall be deemed subject to and governed by the TIA
as if this Indenture were so qualified on the date hereof.
SECTION 12.02. NOTICES.
(a) Any notice or communication by the Issuers, any Subsidiary
Guarantor or the Trustee to the other is duly given if in writing and
delivered in person or mailed by first class mail (registered or certified,
return receipt requested), confirmed facsimile transmission or overnight air
courier guaranteeing next day delivery, to the other's address:
If to the Issuers or any of the Subsidiary Guarantors:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attention: Alan R. Brill
If to the Trustee:
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
Attention: Corporate Trust Administration
Facsimile Number: (212) 852-1625
(b) The Issuers or the Trustee, by notice to the other, may
designate additional or different addresses for subsequent notices or
communications.
(c) All notices and communications (other than those sent to
Securityholders) shall 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 receipt
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acknowledged, if by facsimile transmission; and the next Business Day after
timely delivery to the courier, if sent by overnight air courier guaranteeing
next day delivery.
(d) Any notice or communication to a Securityholder shall be
mailed by first class mail, postage prepaid, to its address shown on the
register kept by the Registrar. Any notice or communication shall also be so
mailed to any Person described in TIA Section 313(c), to the extent required
by the TIA. Failure to mail a notice or communication to a Securityholder or
any defect in it shall not affect its sufficiency with respect to other
Securityholders.
(e) If a notice or communication is mailed to any Person in the
manner provided above within the time prescribed, it is duly given, whether
or not the addressee receives it.
(f) If the Issuers mail a notice or communication to
Securityholders, they shall mail a copy to the Trustee and each Agent at the
same time.
SECTION 12.03. COMMUNICATION BY SECURITYHOLDERS WITH OTHER SECURITYHOLDERS.
Securityholders may communicate pursuant to TIA Section 312(b)
with other Securityholders with respect to their rights under this Indenture
or the Securities. The Issuers, the Subsidiary Guarantors, the Trustee, the
Registrar and anyone else shall have the protection of TIA Section 312(c).
SECTION 12.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.
Upon any request or application by the Issuers and/or any of the
Subsidiary Guarantors to the Trustee to take any action under this Indenture,
the Issuers and/or any of the Subsidiary Guarantors, as the case may be,
shall furnish to the Trustee:
(i) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 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
(except with regard to an authentication order pursuant to Section
2.02(c) hereof, which shall require a certificate of two Officers); and
(ii) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set
forth in Section 12.05 hereof) stating that, in the opinion of such
counsel, all such conditions precedent and covenants have been satisfied.
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SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a
certificate provided pursuant to TIA Section 314(a)(4)) shall include:
(i) a statement that the person making such certificate or opinion
has read such covenant or condition;
(ii) 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;
(iii) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been satisfied; and
(iv) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been satisfied.
SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting
of Securityholders. The Registrar or Paying Agent may make reasonable rules
and set reasonable requirements for its functions.
SECTION 12.07. LEGAL HOLIDAYS.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions in New York City, or at a place of payment are authorized or
obligated 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.
SECTION 12.08. NO RECOURSE AGAINST OTHERS.
No past, present or future director, officer, employee, agent,
manager, stockholder or partner of an Issuer or its predecessors shall have
any liability for any Obligations of an Issuer under the Securities or this
Indenture or for any claim based on, in respect of, or by reason of such
Obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. This waiver and release are part of
the consideration for issuance of the Securities.
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SECTION 12.09. DUPLICATE ORIGINALS.
The parties may sign any number of copies of this Indenture. One
signed copy is enough to prove this Indenture.
SECTION 12.10. GOVERNING LAW.
This Indenture and the Securities shall be governed by, and
construed in accordance with, the laws of the State of New York but 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.
SECTION 12.11. NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.
This Indenture may not be used to interpret another indenture, loan
or debt agreement of any of the Subsidiary Guarantors, an Issuer or their
respective Subsidiaries. Any such indenture, loan or debt agreement may not
be used to interpret this Indenture.
SECTION 12.12. SUCCESSORS.
All agreements of the Issuers and the Subsidiary Guarantors in this
Indenture and the Securities shall bind their successors. All agreements of
the Trustee in this Indenture shall bind its successors.
SECTION 12.13. SEVERABILITY.
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 12.14. COUNTERPART ORIGINALS.
This Indenture may be executed in any number of counterparts, each
of which so executed shall be an original, but all of them together represent
the same agreement.
SECTION 12.15. 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 shall
in no way modify or restrict any of the terms or provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed as of the date first written above.
SIGNATURES
BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation, its
Manager
By_______________________
Name: Alan R. Brill
Title: President
BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation
By_______________________
Name: Alan R. Brill
Title: President
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BMC HOLDINGS, LLC, a Virginia Limited
Liability Company
BY: BRILL MEDIA COMPANY, LLC,
its Manager
BY: BRILL MEDIA MANAGEMENT,
INC., its Manager
By:______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
TRI-STATE BROADCASTING, INC.,a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
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NCR II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:______________________
Name: Alan R. Brill
Title: Vice President
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<PAGE>
NORTHLAND BROADCASTING, LLC, a
Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC, a
Virginia Limited Liability Company, its
Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation its
Manager
By:______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
69
<PAGE>
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN
DISTRIBUTION CO., INC. its General
Partner
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
70
<PAGE>
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
71
<PAGE>
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, its
Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:______________________
Name: Alan R. Brill
Title: President
72
<PAGE>
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:______________________
Name: Alan R. Brill
Title: President
HURON HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:______________________
Name: Alan R. Brill
Title: President
73
<PAGE>
NORTHERN COLORADO HOLDINGS,
LLC
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC. a
Virginia Corporation, its Manager
By:______________________
Alan R. Brill, President
NCR III, LLC, a Virginia Limited Liability
Company
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: Brill Media Company, LLC, a Virginia
Limited Liability Company, its Manager
By: Brill Media Management, Inc., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: President
74
<PAGE>
NCH II, LLC, a Virginia Limited Liability
Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:______________________
Name: Alan R. Brill
Title: President
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:______________________
Name: Alan R. Brill
Title: President
75
<PAGE>
CMN HOLDING, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: President
UNITED STATES TRUST COMPANY OF
NEW YORK, as Trustee
By:______________________
Name:
Title:
76
<PAGE>
SCHEDULE 1
SUBSIDIARY GUARANTORS
1. BMC Holdings, LLC
2. Reading Radio, Inc.
3. Tri-State Broadcasting, Inc.
4. Northern Colorado Radio, Inc.
5. NCR II, Inc.
6. Central Missouri Broadcasting, Inc.
7. CMB II, Inc.
8. Northland Broadcasting, LLC
9. NB II, Inc.
10. Central Michigan Newspapers, Inc.
11. Cadillac Newspapers, Inc.
12. CMN Associated Publications, Inc.
13. Central Michigan Distribution Co., L.P.
14. Central Michigan Distribution Co., INC.
15. Gladwin Newspapers, Inc.
16. Graph Ads Printing, Inc.
17. Midland Buyer's Guide, Inc.
18. St. Johns Newspapers, Inc.
19. Huron Holdings, LLC
20. Northern Colorado Holdings, LLC
21. NCR III, LLC
22. NCH II, LLC
23. Northland Holdings, LLC
24. CMN Holding, Inc.
25. Brill Radio Inc.
26. Brill Newspapers, Inc.
27. Huron P.S., LLC
28. Huron Newspapers, LLC
<PAGE>
EXHIBIT A
[THIS NOTE HAS NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR
BENEFIT OF, UNITED STATES PERSONS EXCEPT AS SET FORTH
IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED
INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL
"ACCREDITED INVESTOR" (AS DEFINED IN RULE 501(a)(1),
(2), (3) or (7) OF REGULATION D UNDER THE SECURITIES
ACT) (AN "INSTITUTIONAL ACCREDITED INVESTOR") OR (C) IT
IS NOT A U.S. PERSON AND IS ACQUIRING THIS NOTE IN AN
OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (2) AGREES THAT IT WILL NOT
WITHIN THE TIME PERIOD REFERRED TO IN RULE 144(k) UNDER
THE SECURITIES ACT AS IN EFFECT WITH RESPECT TO SUCH
TRANSFER, RESELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO AN ISSUER OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL
BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL
ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,
FURNISHES TO THE TRUSTEE A SIGNED LETTER CONTAINING
CERTAIN REPRESENTATIONS AND AGREEMENTS RELATING TO THE
RESTRICTIONS ON TRANSFER OF THIS NOTE (THE FORM OF
WHICH LETTER 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 ISSUERS HEREOF THAT SUCH
TRANSFER IS IN COMPLIANCE WITH THE SECURITIES ACT, (D)
OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
<PAGE>
EXHIBIT A
Page 2
COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE
SECURITIES ACT, (E) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES
ACT (IF AVAILABLE) OR (F) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
NOTE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND; PROVIDED THAT AN INITIAL
INVESTOR PURCHASING AS DESCRIBED IN CLAUSE (1)(B) ABOVE
FROM THE INITIAL PURCHASER OF THIS NOTE SHALL NOT BE
PERMITTED TO TRANSFER THIS NOTE TO AN INSTITUTIONAL
ACCREDITED INVESTOR. IN CONNECTION WITH ANY TRANSFER
OF THIS NOTE WITHIN THE TIME PERIOD REFERRED TO ABOVE,
THE HOLDER MUST CHECK THE APPROPRIATE BOX SET FORTH ON
THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE TRUSTEE.
IF THE PROPOSED TRANSFEREE IS AN INSTITUTIONAL
ACCREDITED INVESTOR PURCHASING PURSUANT TO CLAUSE
(2)(C) ABOVE, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND THE ISSUERS HEREOF SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS
ANY OF THEM MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN,
THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND
"UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM
BY REGULATION S UNDER THE SECURITIES ACT. THE
INDENTURE CONTAINS A PROVISION REQUIRING THE TRUSTEE TO
REFUSE TO REGISTER ANY TRANSFER OF THIS
<PAGE>
EXHIBIT A
Page 3
NOTE IN VIOLATION OF THE FOREGOING RESTRICTIONS.](*)
[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 ANY SUCH NOMINEE OF
THE DEPOSITARY, OR BY THE DEPOSITARY OR NOMINEE OF SUCH
SUCCESSOR DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR
DEPOSITARY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITARY.
TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.](**)
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO THE ISSUERS OR THEIR 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 IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED
- -------------------------
* To be included in a Restricted Security only.
** To be included in the Global Appreciation Note only.
<PAGE>
EXHIBIT A
Page 4
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.](***)
THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS
1271 ET. SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE ISSUE DATE OF THIS SECURITY IS DECEMBER 30,
1997. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT OF
OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO MATURITY FOR
PURPOSES OF THE OID RULES, PLEASE CONTACT THE CHIEF
FINANCIAL OFFICER OF BRILL MEDIA MANAGEMENT, INC. AT
812-423-6200 OR AT THE ADDRESS SET FORTH ON THE REVERSE OF
THIS SECURITY.
- -------------------------
** To be included in the Global Appreciation Note only.
<PAGE>
EXHIBIT A
Page 5
CUSIP No:
(Front of Security)
No. 1 $___________
Specified Percentage: _____%
BRILL MEDIA COMPANY, LLC
BRILL MEDIA MANAGEMENT, INC.
Appreciation Notes due 2007, Series A
BRILL MEDIA COMPANY, LLC, a Virginia limited liability company
("BMC"), and BRILL MEDIA MANAGEMENT, INC. ("Media"), a Virginia
corporation, jointly and severally, promise to pay to
______________________________________, or its registered
assigns, on December 15, 2007 the sum of (i) ________________
(the "Principal Amount") and (ii) the amount by which the
Specified Percentage set forth above (the "Specified Percentage")
of the Value of BMC on such date exceeds the Principal Amount.
Additional provisions of this Security are set forth on the other
side of this Security.
Dated:
BRILL MEDIA COMPANY, LLC, a
Virginia Liability Company
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation, its
Manager
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation
By: _____________________________
Name: Alan R. Brill
Title: President
By: _____________________________
<PAGE>
EXHIBIT A
Page 6
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred
to in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
By:_________________________________
Authorized Officer
<PAGE>
EXHIBIT A
Page 7
(Reverse of Security)
APPRECIATION NOTE DUE 2007, Series A
Capitalized terms used herein have the meanings
assigned to them in the Indenture (as defined below) unless
otherwise indicated.
1. Payment Obligations. Brill Media Company, LLC, a Virginia
limited liability company ("BMC"), and Brill Media Management,
Inc., a Virginia corporation (together with BMC, the "Issuers"),
jointly and severally, promise to pay principal of, and interest
and premium, if any, on this Security in the amounts and in the
manner specified below.
2. Terms of Securities.
The Securities will mature on December 15, 2007 (the
"Maturity Date"). Each Security will entitle the Holder thereof
to receive on the Maturity Date a cash payment of principal and
interest in the amount equal to (i) the Principal Amount plus
(ii) the amount by which the Specified Percentage of the Value of
BMC on the Maturity Date exceeds the Principal Amount.
3. Additional Interest. The rate of interest payable
on this Security shall be subject to the assessment of interest
(the "Additional Interest") as follows:
(i) if the Exchange Offer Registration Statement (as
defined below) or Shelf Registration Statement (as defined below)
is not filed within 60 days following the Issue Date (the "Filing
Date"), Additional Interest shall accrue on the Principal Amount
at a rate of 0.50% per annum for the first 60 days commencing on
the 61st day after the Filing Date, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of
each subsequent 30-day period;
(ii) if the Exchange Offer Registration Statement or
Shelf Registration Statement is not declared effective within 150
days following the Filing Date, Additional Interest shall accrue
on the Principal Amount at a rate of 0.50% per annum for the
first 120 days commencing on the 151st day after the Filing Date,
such Additional Interest rate increasing by an additional 0.50%
per annum at the beginning of each subsequent 30-day period; or
(iii) if (A) the Issuers and the Subsidiary Guarantors
have not exchanged all Securities validly tendered in accordance
with the terms of the Exchange Offer on or prior to 180 days
after the Filing Date or (B) the Exchange Offer Registration
Statement ceases to be effective at any time prior to the time
that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration Statement has been declared effective and such
Shelf Registration Statement ceases to be effective at any time
prior to the second anniversary of the Issue Date (unless all the
Securities have been sold thereunder), then Additional Interest
shall accrue on the Principal Amount at a rate of 0.50% per annum
for the first 30 days
<PAGE>
EXHIBIT A
Page 8
commencing on (x) the 181st day after the Filing Date with respect to the
Securities validly tendered and not exchanged by the Issuers, in the case
of (A) above, or (y) the day the Exchange Offer Registration Statement
ceases to be effective or usable for its intended purpose in the case of
(B) above, or (z) the day such Shelf Registration Statement ceases to be
effective in the case of (C) above, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of each
subsequent 30-day period; provided, however, that the Additional Interest
rate on the Securities may not exceed in the aggregate 1.5% per annum; and
provided further, that (1) upon the filing of the Exchange Offer
Registration Statement or Shelf Registration Statement (in the case of
clause (i) above), (2) upon the effectiveness of the Exchange Offer
Registration Statement or Shelf Registration Statement (in the case of
(ii) above), or (3) upon the exchange of Exchange Securities for all
Securities tendered (in the case of clause (iii)(A) above), or upon the
effectiveness of the Exchange Offer Registration Statement which had
ceased to remain effective (in the case of clause (iii)(B) above), or upon
the effectiveness of the Shelf Registration Statement which had ceased to
remain effective (in the case of clause (iii)(C) above), Additional
Interest on the Securities as a result of such clause or the relevant
subclause thereof, as the case may be, shall cease to accrue.
Accrued Additional Interest shall be due and payable on
each June 15 and December 15.
"Appreciation Notes Registration Rights Agreement"
means the registration rights agreement pertaining to the
Securities dated as of December 30, 1997 among the Issuers, the
Subsidiary Guarantors and the Initial Purchasers.
"Exchange Offer" shall mean the exchange offer by the
Issuers of Initial Securities for Exchange Securities pursuant to
Section 2(a) of the Appreciation Notes Registration Rights
Agreement.
"Exchange Offer Registration Statement" shall mean an
exchange offer registration statement on Form S-4 (or, if
applicable, on another appropriate form) and all amendments and
supplements to such registration statement, in each case
including the Offering Memorandum or prospectus contained
therein, all exhibits thereto and all material incorporated by
reference therein.
"Shelf Registration Statement" shall mean a "shelf"
registration statement of the Issuers and the Subsidiary
Guarantors pursuant to the provisions of the Appreciation Notes
Registration Rights Agreement which covers all of the Initial
Securities on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the
Commission, and all amendments and supplements to such
registration statement, including post-effective amendments, in
each case including the Offering Memorandum contained therein,
all exhibits thereto and all material incorporated by reference
therein.
4. Method of Payment. The Issuers shall pay amounts
due on the Securities to the Persons who are registered Holders
of Securities at the close of business on the date on
<PAGE>
EXHIBIT A
Page 9
which payment is due. Securityholders must surrender Securities to a
Paying Agent to collect principal payments. The Issuers shall
pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for
payment of public and private debts ("U.S. Legal Tender").
However, the Issuers may pay principal, premium, if any, and
interest by its check payable in such U.S. Legal Tender. The
Issuers may deliver any such payment to the Paying Agent or to a
Securityholder at the Securityholder's registered address.
5. Paying Agent and Registrar. Initially, the Trustee
will act as Paying Agent and Registrar. The Issuers may change
any Paying Agent, Registrar or co-registrar without prior notice
to any Securityholder. The Issuers or any Subsidiary Guarantor
may act in any such capacity.
6. Indenture. The Issuers issued the Securities under
an Indenture, dated as of December 30, 1997 (the "Indenture"),
among the Issuers, the Subsidiary Guarantors and the Trustee.
The terms of the Securities include those stated in the Indenture
and those made part of the Indenture by reference to the TIA as
in effect on the date the Indenture is qualified, except as the
Indenture otherwise provides. The Securities are subject to all
such terms, and Securityholders are referred to the Indenture and
the TIA for a statement of such terms. The terms of the
Indenture shall govern any inconsistencies between the Indenture
and the Securities. As and to the extent set forth in the
Indenture, the Securities are subordinated in right of payment to
the payment of all payments due and payable on all existing and
future Senior Indebtedness.
7. Optional Redemption. The Securities will not be
redeemable at the option of the Issuers prior to June 15, 1999.
Thereafter, if an Initial Public Offering has not occurred on or
before a date set forth below, the Securities will be redeemable,
at the Issuers' option, in whole but not in part, on such date
upon not less than 30 nor more than 60 days' prior notice mailed
by first-class mail to each holder's registered address, at a
redemption price for each Security equal to the Pro Rata
Percentage of each such Security of the amount set forth below
opposite such redemption date (which amount, in each case,
represents payment in full of all principal and interest on the
Securities):
Date Amount
------------ --------------
June 15, 1999 $ 3.0 million
June 15, 2000 $ 8.3 million
June 15, 2001 $12.8 million
June 15, 2002 $18.0 million
June 15, 2003 $24.0 million
June 15, 2004 $31.0 million
June 15, 2005 $39.0 million
June 15, 2006 $48.0 million
June 15, 2007 $58.0 million
<PAGE>
EXHIBIT A
Page 10
8. Mandatory Redemption at the Option of the
Securityholders upon the Occurrence of Certain Events. Upon the
occurrence of an Initial Public Offering, a Sale of the Company
or the liquidation of either Issuer, each Holder will have the
right to require the Issuers to redeem all or any part of such
Holder's Securities at the relevant Specified Event Purchase
Price (which amount, in each case, represents payment in full of
all principal and interest on the Securities).
9. Mandatory Redemption at the Option of the
Securityholders on Specified Dates. If an Initial Public
Offering has not occurred on or before a date set forth below,
the Securityholders may require the Issuers to redeem their
Securities, in whole or in part, within 90 days of such date
at a redemption price for each Security equal to the Pro Rata
Percentage of such Security of the amount set forth below
opposite such date (which amount, in each case, represents
payment in full of all principal and interest thereon):
Date Amount
June 30, 2003 $24.0 million
June 30, 2004 $20.0 million
June 30, 2005 $13.0 million
A Securityholder may exercise its rights to require the
redemption of the Securities held by such Holder by mailing a
notice to the Trustee on or before a date as set forth above
stating that such Holder is demanding that the Issuers redeem the
Securities and the portion of the Securities to be redeemed.
Upon receipt of such notice the Issuers shall redeem the
Securities for which such notice has been received by no later
than the 90th day following the relevant date.
10. Notice of Optional Redemption by the Issuers.
Notice of optional redemption shall be mailed at least 30 but not
more than 60 days before the redemption date to each Holder whose
Securities are to be redeemed at its registered address pursuant
to an optional redemption by the Issuers. Securities may only be
redeemed in full.
11. Notice of Mandatory Redemption upon Specified
Events. Within 30 days following the occurrence of any Specified
Event, unless the Issuers have mailed a redemption notice with
respect to all the outstanding Securities, the Issuers shall mail
a notice to each Holder with a copy to the Trustee stating:
(i) that a Specified Event has occurred and that such
Securityholder has the right to require the Issuers to
redeem such Securityholder's Securities at a purchase price
in cash equal to the Specified Event Purchase Price (stating
the Specified Event Purchase Price for each $28.571428
principal amount of the Securities);
(ii) the redemption date (which shall be no earlier
than 30 days nor later than 60 days from the date such
notice is mailed);
(iii) the name and address of the Paying Agent; and
<PAGE>
EXHIBIT A
Page 11
(iv) the procedures determined by the Issuers,
consistent with this Indenture, that a Securityholder must
follow in order to have its Securities redeemed.
Securityholders electing to have a Security
redeemed will be required to surrender the Security, with the
form entitled "Option of Securityholder to Elect Redemption" on
the reverse of the Security completed, to the Issuers at the
address specified in the notice at least 10 Business Days prior
to the redemption date. Securityholders will be entitled to
withdraw their election if the Trustee or the Issuers receive
not later than three Business Days prior to the redemption date,
a telegram, telex, facsimile transmission or letter setting forth
the name of the Securityholder, the principal amount of the
Security which was delivered for redemption by the Securityholder
and a statement that such Securityholder is withdrawing his
election to have such Security redeemed.
12. Subordination. To the extent provided in the
Indenture, the Securities are subordinated to Senior Indebtedness
as defined in the Indenture. The Issuers agree, and each Holder
by accepting a Security agrees, to the subordination provisions
contained in the Indenture and authorizes the Trustee to give
them effect and appoints the Trustee as attorney-in-fact for such
purpose.
The Issuers may not pay the Securities and may not
otherwise purchase, redeem or otherwise retire any Security
(collectively, "pay the Securities") if (i) any Designated Senior
Indebtedness is not paid when due or (ii) any other default on
Designated Senior Indebtedness occurs and the maturity of such
Designated Senior Indebtedness is accelerated in accordance with
its terms unless, in either case, the default has been cured or
waived and any such acceleration has been rescinded or such
Designated Senior Indebtedness has been paid in full in cash.
However, the Issuers may pay the Securities without regard to the
foregoing if the Issuers and the Trustee receive written notice
approving such payment from the Representative of the Designated
Senior Indebtedness with respect to which either of the events
set forth in clause (i) or (ii) of the immediately preceding
sentence has occurred and is continuing.
<PAGE>
EXHIBIT A
Page 12
13. Registration Rights. Pursuant to the Appreciation
Note Registration Rights Agreement, and subject to certain terms
and conditions stated therein, the Issuers will be obligated to
consummate an Exchange Offer pursuant to which the Holders of the
Initial Securities shall have the right to exchange Initial
Securities for Exchange Securities, which have been registered
under the Securities Act, in like principal amount and having
terms identical in all material respect to the Initial
Securities.
14. Transfer, Exchange. The transfer of Securities may
be registered and Securities may be exchanged as provided in the
Indenture. The Registrar and the Trustee may require a
Securityholder among other things, to furnish appropriate
endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar
need not exchange or register the transfer of any Security or
portion of a Security selected for redemption.
15. Persons Deemed Owners. Prior to due presentment to
the Trustee for registration of the transfer of this Security,
the Trustee, any Agent and the Issuers shall treat the Person in
whose name this Security is registered as its absolute owner for
the purpose of receiving payment of principal of, premium, if
any, and interest on this Security and for all other purposes
whatsoever, whether or not this Security is overdue, and neither
the Trustee, any Agent nor the Issuers shall be affected by
notice to the contrary. The registered Securityholder shall be
treated as its owner for all purposes.
16. Amendments and Waivers. Subject to certain
exceptions provided in the Indenture, the Indenture or the
Securities may be amended with the consent of the Holders of a
majority in principal amount of the then outstanding Securities,
and any existing Default or Event of Default (except a payment
default may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Securities.
Without the consent of any Securityholder, the Indenture or the
Securities may be amended to, among other things, cure any
ambiguity, defect or inconsistency, to comply with the
requirements of the Commission in order to effect or maintain
qualification of the Indenture under the TIA or to make any
change that does not adversely affect the rights of any
Securityholder.
17. Trustee Dealings with the Issuers. The Trustee
under the Indenture, in its individual or any other capacity, may
make loans to, accept deposits from, and perform services for the
Issuers, the Subsidiary Guarantors or any Affiliate of the
Issuers or the Subsidiary Guarantors, and may otherwise deal with
the Issuers, the Subsidiary Guarantors and their respective
Affiliates as if it were not Trustee.
18. Restrictive Covenants. The Indenture imposes
certain limitations on the ability of the Issuers and their
Restricted Subsidiaries to, among other things, merge or
consolidate with any other Person or sell, assign, transfer,
lease, convey or otherwise dispose of all or substantially all of
its assets. Such limitations are subject to a number of
important qualifications and exceptions provided for in the
Indenture. The Issuers and each Subsidiary Guarantor must
annually report to the Trustee on compliance with such
limitations.
<PAGE>
EXHIBIT A
Page 13
19. Authentication. This Security shall not be valid
until authenticated by the manual signature of the Trustee or an
authenticating agent.
20. Subsidiary Guarantee. Each Subsidiary Guarantor
has jointly and severally irrevocably and unconditionally
guaranteed the payment of principal, premium, if any, and
interest (including interest on overdue principal and overdue
interest, if lawful) on the Securities; provided, however, each
Subsidiary Guarantor that makes a payment or distribution under a
Subsidiary Guarantee shall be entitled to a contribution from
each other Subsidiary Guarantor in a pro rata amount based on the
Adjusted Net Assets of each Subsidiary Guarantor.
21. Governing Law. The Laws of the State of New York
shall govern this Security and the Indenture, without regard to
principles of conflict of laws.
22. Abbreviations. Customary abbreviations may be used
in the name of a Securityholder 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).
23. CUSIP Numbers. Pursuant to a recommendation
promulgated by the Committee on Uniform Security Identification
Procedures, the Issuers have caused CUSIP numbers to be printed
on the Securities and has directed the Trustee to use CUSIP
numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of
such numbers either as printed on the Securities or as contained
in any notice of redemption and reliance may be placed only on
the other identification numbers placed thereon.
The Issuers will furnish to any Securityholder upon
written request and without charge a copy of the Indenture.
Request may be made to:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attn: Alan R. Brill
<PAGE>
EXHIBIT A
Page 14
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors (as defined in the Indenture (the
"Indenture") referred to in the Security upon which this notation is endorsed
and each hereinafter referred to as a "Subsidiary Guarantor," which term
includes any successor Person under the Indenture) (i) have jointly and
severally irrevocably and unconditionally guaranteed as a primary obligor and
not a surety (such guarantee by each Subsidiary Guarantor being referred to
herein as the "Subsidiary Guarantee"), (a) the due and punctual payment of
the principal, premium, if any, and interest on the Securities, whether at
Stated Maturity, call for redemption or otherwise, (b) the due and punctual
payment of interest on the overdue principal of and interest, if any, on the
Securities, to the extent lawful, (c) the due and punctual performance of all
other monetary Obligations of the Issuers under the Indenture and the
Securities to the Securityholders or the Trustee, all in accordance with the
terms set forth in Article 11 of the Indenture and (d) in case of any
extension of time of payment or renewal of any Securities or any such
Obligations, 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 and (ii) have agreed to pay any and all
costs and expenses (including reasonable attorneys' fees) incurred by the
Trustee or any Securityholder in enforcing any rights under this Subsidiary
Guarantee.
The Obligations of each Subsidiary Guarantor to the Securityholders of
Securities and to the Trustee pursuant to this Subsidiary Guarantee and the
Indenture are expressly set forth in Article 10 and Article 11 of the
Indenture and reference is hereby made to such Indenture for the precise
terms of this Subsidiary Guarantee. Indebtedness evidenced by this
Subsidiary Guarantee is subordinated to Guarantor Senior Indebtedness as set
forth in the Indenture.
No stockholder, officer, director or incorporator, as such, past,
present or future of any Subsidiary Guarantor shall have any liability under
this Subsidiary Guarantee by reason of his or its status as such stockholder,
officer, director or incorporator.
This is a continuing Subsidiary Guarantee and, except as otherwise
expressly provided for in Section 11.06 of the Indenture, shall remain in
full force and effect and shall be binding upon the Subsidiary Guarantor and
its successors and assigns until full and final payment of all of the
Issuers' Obligations under the Securities and the Indenture and shall inure
to the benefit of the successors and assigns of the Trustee and the
Securityholders and, in the event of any transfer or assignment of rights by
any Securityholder or the Trustee, the rights and privileges herein conferred
upon that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and conditions hereof. This
is a Subsidiary Guarantee of payment and not of collectability.
This Subsidiary Guarantee shall not be valid or obligatory for any
purpose until the certificate of authentication on the Security upon which
this Subsidiary Guarantee is noted
<PAGE>
EXHIBIT A
Page 15
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.
THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED HEREIN BY
REFERENCE.
Capitalized terms used herein have the same meanings given in the
Indenture unless otherwise indicated.
Subsidiary Guarantors:
BMC HOLDINGS, LLC, a Virginia Limited
Liability Company
BY: BRILL MEDIA COMPANY, LLC, its
Manager
BY: BRILL MEDIA MANAGEMENT, INC., its
Manager
By:______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 16
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 17
NORTHLAND BROADCASTING, LLC, a Virginia
Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation its
Manager
By:______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 18
CADILLAC NEWSPAPERS, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS, INC. a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
By: CENTRAL MICHIGAN DISTRIBUTION CO.,
INC. its General Partner
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 19
GLADWIN NEWSPAPERS, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT A
Page 20
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, its
Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:______________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its
Manager
By:______________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT A
Page 21
HURON HOLDINGS, LLC, a Virginia Limited
Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its
Manager
By:______________________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS, LLC
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC. a
Virginia Corporation, its Manager
By:______________________________
Alan R. Brill, President
<PAGE>
EXHIBIT A
Page 22
NCR III, LLC, a Virginia Limited
Liability Company
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: Brill Media Company, LLC, a
Virginia Limited Liability Company,
its Manager
By: Brill Media Management, Inc., a
Virginia Corporation, its Manager
By:______________________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia Limited
Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:______________________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT A
Page 23
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By:______________________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia
Corporation
By:______________________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:______________________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By:______________________________
Name: Alan R. Brill
Title: President
<PAGE>
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
EXHIBIT A
Page 24
If you want to have all or part of this Security purchased by the
Issuers pursuant to Section 3.09 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 Security)
Signature Guarantee:
________________
(Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements will include membership
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
(Insert assignee's soc. sec. or tax I.D. no.)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ----------------------------------------------------
<PAGE>
EXHIBIT A
Page 25
agent to transfer this Security on the books of the Issuers.
The agent may substitute another to act for him.
Date:______________
Your Signature: _______________________________________
(Sign exactly as your name appears on
the face of this Security)
Signature Guarantee:
__________________________
(Signatures must be
guaranteed by an
"eligible guarantor
institution" meeting
the requirements of the
Registrar, which
requirements will
include membership or
participation in the
Securities Transfer
Agents Medallion
Program ("STAMP") or
such other "signature
guarantee program" as
may be determined by
the Registrar in
addition to, or in
substitution for,
STAMP, all in
accordance with the
Securities Exchange Act
of 1934, as amended.)
<PAGE>
EXHIBIT A
Page 26
In connection with any transfer of this Security occurring prior to
the date which is the earlier of (i) the date of the declaration by the
Commission of the effectiveness of a registration statement under the
Securities Act of 1933, as amended (the "Securities Act"), covering resales
of this Security (which effectiveness shall not have been suspended or
terminated at the date of the transfer) and (ii) December 30, 1999, the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer and that this Security is
being transferred:
Check One
(1) ___ to an Issuer or a Subsidiary thereof; or
(2) ___ pursuant to and in compliance with Rule 144A
under the Securities Act; or
(3) ___ to an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) that has furnished to
the Trustee a signed letter containing certain
representations and agreements (the form of
which letter can be obtained from the Trustee); or
(4) ___ outside the United States to a "foreign person"
in compliance with Rule 904 of Regulation S
under the Securities Act; or
(5) ___ pursuant to the exemption from registration
provided by Rule 144 under the Securities Act; or
(6) ___ pursuant to an effective registration statement
under the Securities Act; or
(7) ___ pursuant to another available exemption from
the registration requirements of the Securities
Act.
Unless one of the boxes is checked, the Trustee will refuse to register any
of the Securities evidenced by this certificate in the name of any Person
other than the registered Securityholder thereof; provided that if box (3),
(4), (5) or (7) is checked, the Issuers or the Trustee may require, prior to
registering any such transfer of the Securities, in its sole discretion, such
legal opinions, certifications (including an investment letter in the case of
box (3) or (4)) and other information as the Trustee or an Issuer has
reasonably requested to confirm that such transfer is being made pursuant to
an exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act. If none of the foregoing boxes is
checked, the Trustee or Registrar shall not be obligated to register this
Security in the name of any Person other than the Securityholder hereof
unless and until the conditions to any such transfer of registration set
forth herein and in Section 2.17 of the Indenture shall have been satisfied.
<PAGE>
EXHIBIT A
Page 27
Dated:_______________ Signed:_________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:__________________________________________
__________________________
(Signatures must be
guaranteed by an
"eligible guarantor
institution" meeting
the requirements of the
Registrar, which
requirements will
include membership or
participation in the
Securities Transfer
Agents Medallion
Program ("STAMP") or
such other "signature
guarantee program" as
may be determined by
the Registrar in
addition to, or in
substitution for,
STAMP, all in
accordance with the
Securities Exchange Act
of 1934, as amended.)
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and is aware that the sale to it is being made in reliance on Rule 144A and
acknowledges that it has received such information regarding the Issuers as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated:___________________ ____________________________________
NOTICE: To be executed by an
executive officer
<PAGE>
EXHIBIT B
[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 ANY SUCH
NOMINEE OF THE DEPOSITARY, OR BY THE DEPOSITARY OR
NOMINEE OF SUCH SUCCESSOR DEPOSITARY OR ANY SUCH
NOMINEE TO A SUCCESSOR DEPOSITARY OR A NOMINEE OF
SUCH SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT
NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A
SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND
TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL
BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN THE INDENTURE.](*)
[UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
ISSUERS OR THEIR 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED
________________________
* To be included in the Global Appreciation Note only.
<PAGE>
EXHIBIT B
Page 2
OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.](**)
THIS SECURITY WILL BE CONSIDERED TO HAVE BEEN ISSUED WITH
ORIGINAL ISSUE DISCOUNT ("OID") FOR PURPOSES OF SECTIONS
1271 ET. SEQ. OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED. THE ISSUE DATE OF THIS SECURITY IS DECEMBER 30,
1997. FOR INFORMATION REGARDING THE ISSUE PRICE, AMOUNT
OF OID PER $1,000 OF PRINCIPAL AMOUNT AND YIELD TO
MATURITY FOR PURPOSES OF THE OID RULES, PLEASE CONTACT
THE CHIEF FINANCIAL OFFICER OF BRILL MEDIA MANAGEMENT,
INC. AT 812-423-6200 OR AT THE ADDRESS SET FORTH ON THE
REVERSE OF THIS SECURITY.
________________________
** To be included in the Global Appreciation Note only.
<PAGE>
EXHIBIT B
Page 3
CUSIP No:
(Front of Security)
No.
$___________
Specified Percentage: _____%
BRILL MEDIA COMPANY, LLC
BRILL MEDIA MANAGEMENT, INC.
Appreciation Notes due 2007, Series A
BRILL MEDIA COMPANY, LLC, a Virginia limited liability company ("BMC"), and
BRILL MEDIA MANAGEMENT, INC. ("Media"), a Virginia corporation, jointly and
severally, promise to pay to ______________________________________, or its
registered assigns, on December 15, 2007 the sum of (i) ________________ (the
"Principal Amount") and (ii) the amount by which the Specified Percentage set
forth above (the "Specified Percentage") of the Value of BMC on such date
exceeds the Principal Amount.
Additional provisions of this Security are set forth on the other side of
this Security.
Dated:
BRILL MEDIA COMPANY, LLC, a
Virginia Liability Company
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia
Corporation, its Manager
By:_____________________________
Name: Alan R. Brill
Title: President
By:_____________________________
BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation
By:_____________________________
Name: Alan R. Brill
Title: President
By:_____________________________
<PAGE>
EXHIBIT B
Page 4
TRUSTEE'S CERTIFICATE
OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned Indenture
UNITED STATES TRUST COMPANY OF NEW YORK, as Trustee
By:_________________________________
Authorized Officer
<PAGE>
EXHIBIT B
Page 5
(Reverse of Security)
APPRECIATION NOTE DUE 2007, Series B
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. Payment Obligations. Brill Media Company, LLC, a Virginia limited
liability company ("BMC"), and Brill Media Management, Inc., a Virginia
corporation (together with BMC, the "Issuers"), jointly and severally,
promise to pay principal of, and interest and premium, if any, on this
Security in the amounts and in the manner specified below.
2. Terms of Securities.
The Securities will mature on December 15, 2007 (the "Maturity Date").
Each Security will entitle the Holder thereof to receive on the Maturity
Date a cash payment of principal and interest in the amount equal to (i) the
Principal Amount plus (ii) the amount by which the Specified Percentage of
the Value of BMC on the Maturity Date exceeds the Principal Amount.
3. Method of Payment. The Issuers shall pay amounts due on the
Securities to the Persons who are registered Holders of Securities at the
close of business on the date on which payment is due. Securityholders must
surrender Securities to a Paying Agent to collect principal payments. The
Issuers shall pay principal, premium, if any, and interest in money of the
United States that at the time of payment is legal tender for payment of
public and private debts ("U.S. Legal Tender"). However, the Issuers may pay
principal, premium, if any, and interest by its check payable in such U.S.
Legal Tender. The Issuers may deliver any such payment to the Paying Agent
or to a Securityholder at the Securityholder's registered address.
4. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuers may change any Paying Agent,
Registrar or co-registrar without prior notice to any Securityholder. The
Issuers or any Subsidiary Guarantor may act in any such capacity.
5. Indenture. The Issuers issued the Securities under an Indenture,
dated as of December 30, 1997 (the "Indenture"), among the Issuers, the
Subsidiary Guarantors and the Trustee. The terms of the Securities include
those stated in the Indenture and those made part of the Indenture by
reference to the TIA as in effect on the date the Indenture is qualified,
except as the Indenture otherwise provides. The Securities are subject to
all such terms, and Securityholders are referred to the Indenture and the TIA
for a statement of such terms. The terms of the Indenture shall govern any
inconsistencies between the Indenture and the Securities. As and to the
extent set forth in the Indenture, the Securities are
<PAGE>
EXHIBIT B
Page 6
subordinated in right of payment to the payment of all payments due and
payable on all existing and future Senior Indebtedness.
6. Optional Redemption. The Securities will not be redeemable at the
option of the Issuers prior to June 15, 1999. Thereafter, if an Initial
Public Offering has not occurred on or before a date set forth below, the
Securities will be redeemable, at the Issuers' option, in whole but not in
part, on such date upon not less than 30 nor more than 60 days' prior notice
mailed by first-class mail to each holder's registered address, at a
redemption price for each Security equal to the Pro Rata Percentage of each
such Security of the amount set forth below opposite such redemption date
(which amount, in each case, represents payment in full of all principal and
interest on the Securities):
Date Amount
---- ------
June 15, 1999 $ 3.0 million
June 15, 2000 $ 8.3 million
June 15, 2001 $12.8 million
June 15, 2002 $18.0 million
June 15, 2003 $24.0 million
June 15, 2004 $31.0 million
June 15, 2005 $39.0 million
June 15, 2006 $48.0 million
June 15, 2007 $58.0 million
7. Mandatory Redemption at the Option of the Securityholders upon the
Occurrence of Certain Events. Upon the occurrence of an Initial Public
Offering, a Sale of the Company or the liquidation of either Issuer, each
Holder will have the right to require the Issuers to redeem all or any part
of such Holder's Securities at the relevant Specified Event Purchase Price
(which amount, in each case, represents payment in full of all principal and
interest on the Securities).
8. Mandatory Redemption at the Option of the Securityholders on
Specified Dates. If an Initial Public Offering has not occurred on or before
a date set forth below, the Securityholders may require the Issuers to redeem
their Securities, in whole or in part, within 90 days of such date at a
redemption price for each Security equal to the Pro Rata Percentage of such
Security of the amount set forth below opposite such date (which amount, in
each case, represents payment in full of all principal and interest thereon):
Date Amount
---- ------
June 30, 2003 $24.0 million
June 30, 2004 $20.0 million
June 30, 2005 $13.0 million
A Securityholder may exercise its rights to require the redemption of
the Securities held by such Holder by mailing a notice to the Trustee on or
before a date as set forth above
<PAGE>
EXHIBIT B
Page 7
stating that such Holder is demanding that the Issuers redeem the Securities
and the portion of the Securities to be redeemed. Upon receipt of such
notice the Issuers shall redeem the Securities for which such notice has been
received by no later than the 90th day following the relevant date.
9. Notice of Optional Redemption by the Issuers. Notice of optional
redemption shall be mailed at least 30 but not more than 60 days before the
redemption date to each Holder whose Securities are to be redeemed at its
registered address pursuant to an optional redemption by the Issuers.
Securities may only be redeemed in full.
10. Notice of Mandatory Redemption upon Specified Events. Within 30
days following the occurrence of any Specified Event, unless the Issuers have
mailed a redemption notice with respect to all the outstanding Securities,
the Issuers shall mail a notice to each Holder with a copy to the Trustee
stating:
(i) that a Specified Event has occurred and that such
Securityholder has the right to require the Issuers to redeem such
Securityholder's Securities at a purchase price in cash equal to
the Specified Event Purchase Price (stating the Specified Event
Purchase Price for each $28.571428 principal amount of the
Securities);
(ii) the redemption date (which shall be no earlier than 30 days
nor later than 60 days from the date such notice is mailed);
(iii) the name and address of the Paying Agent; and
(iv) the procedures determined by the Issuers, consistent with
this Indenture, that a Securityholder must follow in order to have
its Securities redeemed.
Securityholders electing to have a Security redeemed will be
required to surrender the Security, with the form entitled "Option of
Securityholder to Elect Redemption" on the reverse of the Security completed,
to the Issuers at the address specified in the notice at least 10 Business
Days prior to the redemption date. Securityholders will be entitled to
withdraw their election if the Trustee or the Issuers receive not later than
three Business Days prior to the redemption date, a telegram, telex,
facsimile transmission or letter setting forth the name of the
Securityholder, the principal amount of the Security which was delivered for
redemption by the Securityholder and a statement that such Securityholder is
withdrawing his election to have such Security redeemed.
<PAGE>
EXHIBIT B
Page 8
11. Subordination. To the extent provided in the Indenture, the
Securities are subordinated to Senior Indebtedness as defined in the
Indenture. The Issuers agree, and each Holder by accepting a Security
agrees, to the subordination provisions contained in the Indenture and
authorizes the Trustee to give them effect and appoints the Trustee as
attorney-in-fact for such purpose.
The Issuers may not pay the Securities and may not otherwise purchase,
redeem or otherwise retire any Security (collectively, "pay the Securities")
if (i) any Designated Senior Indebtedness is not paid when due or (ii) any
other default on Designated Senior Indebtedness occurs and the maturity of
such Designated Senior Indebtedness is accelerated in accordance with its
terms unless, in either case, the default has been cured or waived and any
such acceleration has been rescinded or such Designated Senior Indebtedness
has been paid in full in cash. However, the Issuers may pay the Securities
without regard to the foregoing if the Issuers and the Trustee receive
written notice approving such payment from the Representative of the
Designated Senior Indebtedness with respect to which either of the events set
forth in clause (i) or (ii) of the immediately preceding sentence has
occurred and is continuing.
12. Transfer, Exchange. The transfer of Securities may be registered
and Securities may be exchanged as provided in the Indenture. The Registrar
and the Trustee may require a Securityholder among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not
exchange or register the transfer of any Security or portion of a Security
selected for redemption.
13. Persons Deemed Owners. Prior to due presentment to the Trustee
for registration of the transfer of this Security, the Trustee, any Agent and
the Issuers shall treat the Person in whose name this Security is registered
as its absolute owner for the purpose of receiving payment of principal of,
premium, if any, and interest on this Security and for all other purposes
whatsoever, whether or not this Security is overdue, and neither the Trustee,
any Agent nor the Issuers shall be affected by notice to the contrary. The
registered Securityholder shall be treated as its owner for all purposes.
14. Amendments and Waivers. Subject to certain exceptions provided in
the Indenture, the Indenture or the Securities may be amended with the
consent of the Holders of a majority in principal amount of the then
outstanding Securities, and any existing Default or Event of Default (except
a payment default may be waived with the consent of the Holders of a majority
in principal amount of the then outstanding Securities. Without the consent
of any Securityholder, the Indenture or the Securities may be amended to,
among other things, cure any
<PAGE>
EXHIBIT B
Page 9
ambiguity, defect or inconsistency, to comply with the requirements of the
Commission in order to effect or maintain qualification of the Indenture
under the TIA or to make any change that does not adversely affect the rights
of any Securityholder.
15. Trustee Dealings with the Issuers. The Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Issuers, the Subsidiary
Guarantors or any Affiliate of the Issuers or the Subsidiary Guarantors, and
may otherwise deal with the Issuers, the Subsidiary Guarantors and their
respective Affiliates as if it were not Trustee.
16. Restrictive Covenants. The Indenture imposes certain limitations
on the ability of the Issuers and their Restricted Subsidiaries to, among
other things, merge or consolidate with any other Person or sell, assign,
transfer, lease, convey or otherwise dispose of all or substantially all of
its assets. Such limitations are subject to a number of important
qualifications and exceptions provided for in the Indenture. The Issuers and
each Subsidiary Guarantor must annually report to the Trustee on compliance
with such limitations.
17. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
18. Subsidiary Guarantee. Each Subsidiary Guarantor has jointly and
severally irrevocably and unconditionally guaranteed the payment of
principal, premium, if any, and interest (including interest on overdue
principal and overdue interest, if lawful) on the Securities; provided,
however, each Subsidiary Guarantor that makes a payment or distribution under
a Subsidiary Guarantee shall be entitled to a contribution from each other
Subsidiary Guarantor in a pro rata amount based on the Adjusted Net Assets of
each Subsidiary Guarantor.
19. Governing Law. The Laws of the State of New York shall govern
this Security and the Indenture, without regard to principles of conflict of
laws.
20. Abbreviations. Customary abbreviations may be used in the name of
a Securityholder 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).
21. CUSIP Numbers. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuers have
caused CUSIP numbers to be printed on the Securities and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to
Securityholders. No representation is made as to the accuracy of such
numbers either as printed on the Securities or as contained in any notice of
redemption and reliance may be placed only on the other identification
numbers placed thereon.
<PAGE>
EXHIBIT B
Page 10
The Issuers will furnish to any Securityholder upon written request
and without charge a copy of the Indenture. Request may be made to:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47708
Attn: Alan R. Brill
<PAGE>
EXHIBIT B
Page 11
FORM OF NOTATION ON SECURITY
RELATING TO SUBSIDIARY GUARANTEE
SUBSIDIARY GUARANTEE
The Subsidiary Guarantors (as defined in the
Indenture (the "Indenture") referred to in the Security upon
which this notation is endorsed and each hereinafter referred
to as a "Subsidiary Guarantor," which term includes any
successor Person under the Indenture) (i) have jointly and
severally irrevocably and unconditionally guaranteed as a
primary obligor and not a surety (such guarantee by each
Subsidiary Guarantor being referred to herein as the
"Subsidiary Guarantee"), (a) the due and punctual payment of
the principal, premium, if any, and interest on the
Securities, whether at Stated Maturity, call for redemption or
otherwise, (b) the due and punctual payment of interest on the
overdue principal of and interest, if any, on the Securities,
to the extent lawful, (c) the due and punctual performance of
all other monetary Obligations of the Issuers under the
Indenture and the Securities to the Securityholders or the
Trustee, all in accordance with the terms set forth in Article
11 of the Indenture and (d) in case of any extension of time
of payment or renewal of any Securities or any such
Obligations, 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 and (ii) have agreed to pay any and all costs and
expenses (including reasonable attorneys' fees) incurred by
the Trustee or any Securityholder in enforcing any rights
under this Subsidiary Guarantee.
The Obligations of each Subsidiary Guarantor to the
Securityholders of Securities and to the Trustee pursuant to
this Subsidiary Guarantee and the Indenture are expressly set
forth in Article 10 and Article 11 of the Indenture and
reference is hereby made to such Indenture for the precise
terms of this Subsidiary Guarantee. Indebtedness evidenced by
this Subsidiary Guarantee is subordinated to Guarantor Senior
Indebtedness as set forth in the Indenture.
No stockholder, officer, director or incorporator,
as such, past, present or future of any Subsidiary Guarantor
shall have any liability under this Subsidiary Guarantee by
reason of his or its status as such stockholder, officer,
director or incorporator.
This is a continuing Subsidiary Guarantee and,
except as otherwise expressly provided for in Section 11.06 of
the Indenture, shall remain in full force and effect and shall
be binding upon the Subsidiary Guarantor and its successors
and assigns until full and final payment of all of the
Issuers' Obligations under the Securities and the Indenture
and shall inure to the benefit of the successors and assigns
of the Trustee and the Securityholders and, in the event of
any transfer or assignment of rights by any Securityholder or
the Trustee, the rights and privileges herein conferred upon
that party shall automatically extend to and be vested in such
transferee or assignee, all subject to the terms and
conditions hereof. This is a Subsidiary Guarantee of payment
and not of collectability.
This Subsidiary Guarantee shall not be valid or
obligatory for any purpose until the certificate of
authentication on the Security upon which this Subsidiary
Guarantee is noted
<PAGE>
EXHIBIT B
Page 12
shall have been executed by the Trustee under the Indenture by
the manual signature of one of its authorized officers.
THE TERMS OF ARTICLE 11 OF THE INDENTURE ARE INCORPORATED
HEREIN BY REFERENCE.
Capitalized terms used herein have the same meanings
given in the Indenture unless otherwise indicated.
Subsidiary Guarantors:
BMC HOLDINGS, LLC, a Virginia
Limited Liability Company
BY: BRILL MEDIA COMPANY, LLC,
its Manager
BY: BRILL MEDIA MANAGEMENT, INC.,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 13
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 14
NORTHLAND BROADCASTING, LLC, a
Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation
its Manager
By:______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 15
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN DISTRIBUTION
CO., INC. its General Partner
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 16
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
EXHIBIT B
Page 17
HURON P.S. LLC, a Virginia
Limited Liability Company
By: HURON HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT B
Page 18
HURON HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS,
LLC
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC.
a Virginia Corporation,
its Manager
By:__________________________
Alan R. Brill, President
<PAGE>
EXHIBIT B
Page 19
NCR III, LLC, a Virginia
Limited Liability Company
By: NCH II, LLC, a Virginia
Limited Liability Company,
its Manager
By: BMC Holdings, LLC, a Virginia
Limited Liability Company,
its Manager
By: Brill Media Company, LLC,
a Virginia Limited Liability Company,
its Manager
By: Brill Media Management, Inc.,
a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT B
Page 20
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company,
its Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: President
<PAGE>
EXHIBIT B
Page 21
OPTION OF SECURITYHOLDER TO ELECT PURCHASE
If you want to have all or part of this Security purchased by the
Issuers pursuant to Section 3.09 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 Security)
Signature Guarantee:
______________________________
(Signatures must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Registrar, which requirements will include membership
or participation in the Securities Transfer Agents Medallion Program
("STAMP") or such other "signature guarantee program" as may be determined by
the Registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.)
ASSIGNMENT FORM
To assign this Security, fill in the form below: (I) or (we) assign and
transfer this Security to
(Insert assignee's soc. sec. or tax I.D. no.)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint ____________________________________________________
<PAGE>
EXHIBIT B
Page 22
agent to transfer this Security on the books of the Issuers. The agent may
substitute another to act for him.
Date:______________
Your Signature: ______________________________
(Sign exactly as your name appears on the face
of this Security)
Signature Guarantee:
__________________________
(Signatures must be
guaranteed by an "eligible
guarantor institution"
meeting the requirements
of the Registrar, which
requirements will include
membership or
participation in the
Securities Transfer Agents
Medallion Program
("STAMP") or such other
"signature guarantee
program" as may be
determined by the
Registrar in addition to,
or in substitution for,
STAMP, all in accordance
with the Securities
Exchange Act of 1934, as
amended.)
<PAGE>
EXHIBIT C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Re: Brill Media Company, LLC,
Brill Media Management, Inc.
Appreciation Notes due 2007
Ladies and Gentlemen:
In connection with our proposed purchase of
Appreciation Notes due 2007 (the "Securities") of Brill Media
Company, LLC ("BMC") and Brill Media Management, Inc.
(together with BMC, the "Issuers"), we confirm that:
1. We have received a copy of the Offering Memorandum (the
"Offering Memorandum"), dated December 23, 1997 relating to
the Securities and such other information as we deem necessary
in order to make our investment decision. We acknowledge that
we have read and agreed to the matters stated on pages (ii)
and (iii) of the Offering Memorandum and in the section
entitled "Appreciation Note Transfer Restrictions" of the
Offering Memorandum including the restrictions on duplication
and circulation of the Offering Memorandum.
2. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions
set forth in the Indenture relating to the Securities (as
described in the Offering Memorandum) and the undersigned
agrees to be bound by, and not to resell, pledge or otherwise
transfer the Securities except in compliance with, such
restrictions and conditions and the Securities Act of 1933, as
amended (the "Securities Act").
3. We understand that the offer and sale of the
Securities have not been registered under the Securities Act,
and that the Securities 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 or otherwise
<PAGE>
EXHIBIT C
Page 2
transfer any Securities prior to the date which is two years
after the original issuance of the Securities, we will do so
only (i) to an Issuer or any of its subsidiaries, (ii) inside
the United States in accordance with Rule 144A under the
Securities Act to a "qualified institutional buyer" (as
defined in Rule 144A under the Securities Act), (iii) inside
the United States to an institutional "accredited investor"
(as defined below) that, prior to such transfer, furnishes (or
has furnished on its behalf by a U.S. broker-dealer) to the
Trustee (as defined in the Indenture relating to the
Securities), a signed letter containing certain
representations and agreements relating to the restrictions on
transfer of the Securities, (iv) outside the United States in
accordance with Rule 904 of Regulation S under the Securities
Act, (v) pursuant to the exemption from registration provided
by Rule 144 under the Securities Act (if available), or (vi)
pursuant to an effective registration statement under the
Securities Act, and we further agree to provide to any person
purchasing any of the Securities from us a notice advising
such purchaser that resales of the Securities are restricted
as stated herein.
4. We are not acquiring the Securities for or on
behalf of, and will not transfer the Securities to, any
pension or welfare plan (as defined in Section 3 of the
Employee Retirement Income Security Act of 1974), except as
permitted in the section entitled "Appreciation Notes Transfer
Restrictions" of the Offering Memorandum.
5. We understand that, on any proposed resale of any
Securities, we will be required to furnish to the Trustee and
the Issuers such certification, legal opinions and other
information as the Trustee and the Issuers may reasonably
require to confirm that the proposed sale complies with the
foregoing restrictions. We further understand that the
Securities purchased by us will bear a legend to the foregoing
effect.
6. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D
under the Securities Act) and have such knowledge and
experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the
Securities, and we and any accounts for which we are acting
are each able to bear the economic risk of our or their
investment, as the case may be.
7. We are acquiring the Securities purchased by us
for our 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 Issuers 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 proceeding or official inquiry with respect to the
matters covered hereby.
Very truly yours,
<PAGE>
EXHIBIT C
Page 3
By:___________________________
Name:
<PAGE>
EXHIBIT D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_______________, ____
United States Trust Company of New York
114 West 47th Street
New York, New York 10036-1532
Attention: Corporate Trust Administration
Re: Brill Media Company, LLC and
Brill Media Management, Inc.
(collectively the "Issuers")
Appreciation Notes due 2007
(the "Securities")
Ladies and Gentlemen:
In connection with our proposed sale of $_____________ aggregate
principal amount of the Securities, we confirm that such sale has been
effected pursuant to and in accordance with Regulation S under the U.S.
Securities Act of 1933, as amended (the "Securities Act"), and, accordingly,
we represent that:
(1) the offer of the Securities was not made to a Person in the
United States;
(2) either (a) at the time the buy offer was originated, the
transferee was outside the United States or we and any person acting on
our behalf reasonably believed that the transferee was outside the
United States, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any Person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the United
States in contravention of the requirements of Rule 903(b) or Rule
904(b) of Regulation S, as applicable;
<PAGE>
EXHIBIT D
Page 2
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act; and
(5) we have advised the transferee of the transfer restrictions
applicable to the Securities.
You and the Issuers 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. Terms used in this
certificate have the meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:___________________________
Authorized Signature
<PAGE>
EX-5.1
[Letterhead of Carter, Ledyard & Milburn]
January ___, 1998
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Ladies and Gentlemen:
This opinion is rendered in connection with Registration Statement (No. )
on Form S-4 (the "Registration Statement") of Brill Media Company, LLC, a
Virginia limited liability company ("BMC"), and Brill Media Management, Inc., a
Virginia corporation ("Media" and collectively with BMC, the "Company"),
relating to $105,000,000 in aggregate principal amount of the Company's Series B
12% Senior Notes due 2007 (the "Exchange Notes") and $3,000,000 aggregate
principal amount of the Company's Series B Appreciation Notes due 2007 (the
"Exchange Appreciation Notes"), which are being offered pursuant to an exchange
offer (the "Exchange Offer") in exchange for the Company's outstanding 12%
Senior Notes due 2007 (the "Original Notes") and the Company's outstanding
Appreciation Notes due 2007 (the "Original Appreciation Notes"), respectively.
In connection with this opinion, we, as special counsel to the Company,
have examined originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Indenture (the "Indenture") dated as of December 30,
1997 among the Company, the subsidiary guarantors of the Company (the
"Guarantors") and United States Trust Company of New York, as trustee (the
"Trustee"), pursuant to which the Exchange Notes would be issued, (ii) the
Appreciation Notes Indenture (the "Appreciation Note Indenture") dated as of
December 30, 1997 among the Company, the Guarantors and the Trustee, pursuant
to which the Exchange Appreciation Notes would be issued,(iii) the
Registration Statement, (iv) the form of Exchange Notes, (v) the form of
Exchange Appreciation Notes, (vi) the form of guarantees by the Guarantors of
the Exchange Notes and the Exchange Appreciation Notes (the "Guarantees") and
(vii) all such
<PAGE>
Brill Media Company, LLC -2-
additional agreements, certificates and other statements of government officials
and officers and other representatives of the Company and other documents as we
have deemed necessary to form a basis for this opinion. In such examination, we
have assumed the genuineness of all signatures, the authenticity of all
documents submitted to us as originals and the conformity with the originals
(and the authenticity of such originals) of all documents submitted to us as
copies. We have, when relevant facts material to our opinion were not
independently established by us, relied upon certificates of public officials
and certificates and other written statements of officers of the Company.
Based upon and subject to the foregoing and to the qualifications
expressed below, we advise you that, in our opinion:
(i) The Exchange Notes, when duly executed by the proper officers of the
Company, duly authenticated by the Trustee in accordance with the
terms of the Indenture and issued and delivered in accordance
with the terms of the Exchange Offer and the Indenture, will
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms,
except that enforcement thereof may be subject to (A) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and
other similar laws now or hereafter in effect relating to or
affecting creditors' rights and (B) general principles of equity
(regardless of whether the issue of enforceability is considered in
a proceeding in equity or at law) and the discretion of the court
before which any proceeding therefor may be brought.
(ii) The Exchange Appreciation Notes, when duly executed by the proper
officers of the Company, duly authenticated by the Trustee in
accordance with the terms of the Appreciation Note Indenture and
issued and delivered in accordance with the terms of the Exchange
Offer and the Appreciation Note Indenture, will constitute valid
and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except that enforcement
thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar
laws now or hereafter in effect relating to or affecting creditors'
rights and (B) general principles of equity (regardless of whether
the issue of enforceability is considered in a proceeding in equity
or at law) and the discretion of the court before which any
proceeding therefor may be brought.
(iii) Each Guarantee will constitute a valid and legally binding
agreement of the applicable Guarantor, enforceable against such
Guarantor in accordance with its terms, except that enforcement
thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other
similar laws now or hereafter in effect relating to or affecting
creditors' rights and (B) general equitable principles
(regardless of whether the issue of enforceability is considered
in a proceeding in equity or at law) and the discretion of the
court before which any proceeding therefor may be brought.
The opinions rendered herein are qualified, inasmuch as they relate to the
Exchange Appreciation Notes, to the extent that they are subject to the
applicability of the limitations on rates of interest imposed by sections 190.40
and 190.42 of the New York Penal Law. Section 5-501(6)(b) of the New York
General Obligations Law provides an exemption from such sections for loans or
forbearances aggregating two million five hundred thousand dollars or more which
are to be made or advanced "to any one borrower" in one or more installments
pursuant to a written agreement. Inasmuch as the Exchange Appreciation Notes
would be issued by BMC and Media jointly and severally, and there has not been
any allocation of the aggregate value of the Exchange Notes and the Exchange
Appreciation Notes as between BMC and Media, it is in the
<PAGE>
Brill Media Company, LLC -3-
absence of controlling precedent not clear that the exemption contained in
Section 5-501(6)(b) is available. However, in view of the facts that (i) BMC is
the sole owner of Media and, indirectly, of all of the Guarantors, (ii) the
Exchange Notes and the Exchange Appreciation Notes are integral parts of one
transaction, (iii) the aggregate principal amount of the Exchange Notes and the
Exchange Appreciation Notes greatly would exceed the minimum amount set forth in
Section 5-501(6)(b) and (iv) the issuance of the Exchange Notes, the Exchange
Appreciation Notes and the Guarantees are integral parts of transactions that
resulted from arms-length negotiations in which BMC, Media and each Guarantor
had an opportunity to consult with their financial and legal advisors, we
believe that a court applying the law of New York would conclude that the
exemption contained in Section 5-501(6)(b) is available in the circumstances.
We are admitted to practice law in the State of New York and the
opinions expressed herein are limited to the laws of the State of New York.
We have relied, as to certain matters of the laws of the Commonwealth of
Virginia, on the accompanying opinion dated January ____, 1998 of Thompson &
McMullan, P.C.
We hereby consent to being named in the Registration Statement and in the
Prospectus which constitutes a part thereof as special counsel for the Company
and the Guarantors who have passed upon certain legal matters in connection with
the securities to which the Registration Statement and the Prospectus relate. We
further consent to the filing of this opinion as an exhibit to the Registration
Statement.
Very truly yours,
<PAGE>
EXHIBIT 5.2
[LETTERHEAD OF THOMPSON & MCMULLAN, P.C.]
January ___, 1998
Brill Media Company, LLC
420 NW Fifth Street, Suite 3-B
Evansville, Indiana 47708
Re: $105,000,000 in Securities
--------------------------
Gentlemen:
We have acted as counsel to the Company and to the Guarantors, each as
identified in that certain Purchase Agreement with exhibits thereto (the
"Purchase Agreement") dated December 22, 1997 and entered into by and among
NatWest Capital Markets Limited as the "Initial Purchaser"; and Brill Media
Company, LLC (the "Company"); Brill Media Management, Inc. (Media"); and the
"Guarantors" as therein identified, in connection with the sale and issuance
of the "Securities" as therein defined. All capitalized terms not otherwise
defined herein shall have the meanings given such terms in the Purchase
Agreement.
In connection with this opinion, we have examined and relied on such
documents as we have deemed appropriate and upon factual statements and
representations from one or more of the Company and the Guarantors or their
officers, and have made such other examinations and investigations as we have
deemed appropriate and necessary.
We have assumed the truthfulness of all representations and warranties,
the good faith of all parties, the genuineness of all signatures on (other
than the signatures of Brill, the Company, or the Guarantors) and the
authenticity of all documents submitted to us as originals, the conformity to
the original of documents submitted to us as copies, and the due execution,
delivery, and performance by the parties to all instruments delivered on the
Closing Date at consummation of the transactions contemplated by the
Purchase Agreement.
We are authorized to practice law in the Commonwealth of Virginia and
have made such examination of the laws of the Commonwealth of Virginia and of
the federal laws of the United States of America as we deem relevant and
necessary for the purposes of this opinion. We do not (and do not purport to)
<PAGE>
Brill Media Company, LLC
January ___, 1998
Page 2
render any opinion with regard to matters that are controlled by the laws of
any jurisdiction other than the Commonwealth of Virginia. Each opinion
expressed herein is limited to the effect of the laws of the Commonwealth of
Virginia (excluding those dealing with or controlled by the principles of
choice of laws or conflicts of laws) or the federal laws of the United
States, if any, in each case only as and to the extent they are
determined to be applicable and controlling, and, in any event, only as such
laws are presently in effect in the Commonwealth of Virginia as of the date
hereof. We call to your attention that the validity and interpretation
of the Exchange Notes, the Appreciation Exchange Notes, the
Guarantees and many related documents are governed by and construed in
accordance with the laws of the State of New York.
Based upon and subject to the foregoing, as of the date hereof we are
of the following opinions:
(i) Each of the Company and each Guarantor has all requisite
corporate, company, or partnership power and authority to execute, deliver,
and perform its respective obligations under the Exchange Notes and the
Appreciation Exchange Notes. The Exchange Notes and Appreciation Exchange
Notes have been duly and validly authorized by the Company and each Guarantor.
(ii) Each of the Guarantors has all requisite corporate company or
partnership power and authority to execute, deliver, and perform its
obligations under its respective Guarantee. Each Guarantee issued by a
Guarantor has been duly and validly authorized, executed, and delivered by
the applicable Guarantor.
Our opinion speaks as of the date hereof and is based on applicable law
as presently in effect in the Commonwealth of Virginia and the United States
and facts existing or assumed to exist on the date hereof.
The opinion expressed herein is limited to those matters expressly and
explicitly set forth herein, and no other opinions are implied by or may be
inferred from the contents of this letter. Carter, Ledyard & Milburn
may rely on this letter as if it had been addressed to them. We hereby consent
to being named in the Registration Statement of the Company and the Guarantors
relating to the Exchange Notes, the Appreciation Exchange Notes and the
Guarantees (the "Registration Statement") and in the Prospectus which
constitutes a part thereof as counsel for the Company and the Guarantors who
have passed upon legal matters in connection with the securities to which the
Registration Statement and the Prospectus relate. We further consent to the
filing of this opinion as an exhibit to the Registration Statement.
Very truly yours,
<PAGE>
EX-8
[Carter, Ledyard & Milburn Letterhead]
(212) 238-8809
January ____, 1998
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Re: Form S-4 Registration Statement
Ladies and Gentlemen:
We have acted as counsel to Brill Media Company, LLC, a Virginia limited
liability company ("BMC"), and Brill Media Management, Inc., a Virginia
corporation ("Media" and collectively with BMC, the "Company"), in connection
with an exchange offer (the "Exchange Offer") under which $105,000,000 in
aggregate principal amount of the Company's Series B 12% Senior Notes due 2007
(the "Exchange Notes") and $3,000,000 in aggregate principal amount of the
Company's Series B Appreciation Notes due 2007 (the "Exchange Appreciation
Notes"), will be offered in exchange for the Company's outstanding 12% Senior
Notes due 2007 (the "Original Notes") and the Company's outstanding Appreciation
Notes (the "Original Appreciation Notes"), respectively. The Exchange Offer is
the subject of a Registration Statement on Form S-4 under the Securities Act of
1933 (the "Registration Statement").
We have examined originals or copies, certified or otherwise identified to
our satisfaction, of all such agreements, certificates and other statements of
corporate officers and other representatives of the Company as we have deemed
necessary as a basis for this opinion. In such examination we have assumed the
genuineness of all signatures and the authenticity of all documents submitted to
us as originals and the conformity with the originals of all documents submitted
to us as copies.
<PAGE>
Brill Media Company, LLC -2-
Based on and subject to the foregoing, we are of the opinion that the
section entitled "Certain Federal Income Tax Considerations" in the prospectus
constituting Part I of the Registration Statement contains an accurate general
description, under currently applicable law, of the principal United States
federal income tax considerations that apply to holders of Exchange Notes and
Exchange Appreciation Notes.
We consent to the filing of this opinion as an Exhibit to the Registration
Statement. In giving this consent we do not acknowledge that we come within the
category of persons whose consent is required by the Securities Act or the rules
and regulations promulgated thereunder.
Very truly yours,
JJC:lrh
<PAGE>
EX-10.1(a)
Performance Incentive Plan Agreement
PERFORMANCE AGREEMENT
This is an agreement made this 26th day of November, 1985, by and between
Clifton E. Forrest (hereinafter "Executive") and Central Michigan Newspapers,
Inc., a Virginia corporation (hereinafter "Company")
Recitals
Executive has loyally and effectively served Company in a key management
capacity, and Company desires to recognize Executive's past contributions to
Company's business, to retain Executive's experience and knowledge in Company's
management, and to induce Executive to remain in the employ of Company or an
Affiliate. To these ends, Company desires by this agreement to provide
identifiable financial incentives for Executive to foster the financial growth
and expansion of Company and its Affiliates.
In consideration of the foregoing and of the covenants and agreements
hereinafter contained, Company and Executive hereby covenant and agree as
follows:
1. Executive. Executive shall perform such duties as normally are incident
to Executive's current position as President of Company and such offer or
additional duties as Company's Board of Directors hereafter may, from time to
time, prescribe and shall devote such reasonable time, attention, and effort as
are necessary properly to fulfill Executive's duties and responsibilities to
Executive's employer.
2. Creation of Account. With respect to the company designated as provided
in Section 3 ("Performance Company"), Company hereby credits to a special
account identified to this agreement and created for such purpose ("Account")
the number of units ("Units") designed in Section 3. The value of the Account as
determined from time to time ("Account Value") shall be that amount, not less
than zero, determined by applying the formula set Forth in Exhibit A, adjusted
as permitted by Section 10, ("Formula") to the Performance Company, using the
factor designated in Section 3. ("Factor").
3. Participation Certificate and Designations. Subject to the provisions
of Section 10., for purposes of this agreement, the following are hereby
designated: (a) the number of Units is 4000.; (b) the Performance Company is CMN
Holding, Inc. & Subsidiaries (Consolidated); and (c) the Factor is -0-. This
designation is memorialized in participation certificate ("Certificate") number
1 delivered to Executive this date, receipt of which is hereby acknowledged by
Executive. The Certificate shall create no rights, and all rights of Executive
shall be solely as expressly
1
<PAGE>
provided in this agreement.
4. Vesting. Subject to Section 13. and if Executive is then employed by
Company or an Affiliate and vesting shall not have been earlier terminated by
Company as provided in Section 6., on February 28 of the year next following the
date of this agreement Executive's interest in the Account Value shall be 80 %
vested, and thereafter during the period of Executive's continued employment by
Company or an Affiliate an additional 20 % interest in such Account Value shall
vest on each subsequent February 28 of each of the next succeeding 1 fiscal
years.
5. Accelerated Vesting. Subject to Section 13., if Executive is then
employed by Company or an Affiliate and vesting shall not have been earlier
terminated, Executive's interest in the Account Value shall immediately be 100%
vested as of the date when any of the following occurs: (a) Executive's death,
(b) Executive's retirement from employment by Company or any Affiliate after
attaining the age of 65 years, or (c) termination of Executive's employment by.
Company or any Affiliate due to Executive's inability to perform the tasks of
Executive's then position because of a medically determinable physical or mental
impairment, not caused or contributed to by any action of Executive, that is
expected by Company to continue for a continuous period of 12 calendar months or
more extending beyond the date of such termination of employment.
6. Payment of Vested Amount; Termination of Vesting. Subject to the
provisions of Sections 7. and 13., and to the extent not then prohibited or
restricted by any agreement to which Company or its assets then are subject, on
that date (the "Satisfaction Date") which is the earlier to occur of (i) the
date when Executive ceases to be an employee of Company or any Affiliate, or
(ii) the date when Executive receives written notice from Company of Company's
election to discontinue vesting hereunder as to Executive, Executive shall
become entitled to either of the following:
A. If Executive has then ceased to be an employee of Company or any
Affiliate, Executive shall be entitled to payment in cash of an amount
equal to Executive's then vested percentage of the Executive's then
Account Value ("Vested Amount") upon delivery to Company of an acceptable
receipt, payable to Executive as follows: either (a) in full within 60
days after the Satisfaction Date, or, at Company's sole election, (b) in
quarterly installments of at least 2.5% of the Vested Amount, payable
until such time as the Vested Amount is paid in full; the first of any
such quarterly installments to be due and payable on that date
2
<PAGE>
which is l90 days after the Satisfaction Date. If paid in quarterly
installments as provided in (b), the balance of the Vested Amount owing on
any quarterly installment date may be paid in full at Company's then
election, but if not so paid the then unpaid balance of the Vested Amount
owing as of the next subsequent quarterly installment date shall be an
amount equal to 102% of the amount of any unpaid balance of the Vested
Amount as of the immediately preceding installment date, or
B. If Executive is an employee of Company or any Affiliate but has
received written notice from Company of its election to discontinue vesting
hereunder as to Executive, Executive shall be entitled to receive from Company,
within 60 days after such notice, and at Company's sole election, either (a) the
Vested Amount paid as provided in A. above, or (b) a new performance agreement
substantially identical herewith in form and economic effect but executed and
entered into by Executive and an Affiliate, whereupon sue; Affiliate shall
thereby assume and become solely liable for any then vested percentage of the
Executive's then Account Value hereunder, as in such agreement provided, and
Company thereafter shall have no further responsibility to Executive hereunder.
In no event shall Executive be entitled to payment, or to any other right or
rights, under or pursuant to this agreement other than as herein expressly
provided, and Company, at its sole option, may discontinue vesting hereunder as
to Executive at any time, with or without cause, by delivering or mailing notice
of such discontinuance to Executive, and thereafter the Account Value shall be
fixed and no further interest in the Account Value shall vest in Executive
pursuant to this agreement.
7. Reduction for Cause. (a) If Company or any Affiliate shall terminate
Executive's employment for Cause then the terminating entity, at its sole
election, may reduce Executive's then vested interest, if any, in the Account
Value to no less than 50% of its then amount, effective as of the Satisfaction
Date. (b) If at any time or times within the period ending three years after the
Satisfaction Date Executive shall engage in Prohibited Competition, then
Company, at its sole option, may reduce Executive's then Vested Amount so that
Executive thereafter shall not receive, and Company shall not thereafter make or
be required to make, payment or payments, in whole or in part, which will cause
the aggregate amount of all payments made by Company on the Vested Amount to
exceed 30% of the amount of the Vested Amount as determined as of the
Satisfaction Date.
8. Beneficiaries. Each payment on the Vested Amount required hereby shall
be made to Executive so long as Executive shall live. After Executive's death
each required payment on the
3
<PAGE>
Vested Amount shall be made to Executive's personal representative to be a part
of Executive's estate, unless during Executive's lifetime Executive shall have
filed with Company a written designation acceptable to Company designating one
or more named beneficiaries ["Beneficiary(ies)"] to receive any such payment
after Executive's death, in which case each such required payment shall be made
to any designated Beneficiary then living, in accordance with such designation.
9. Definitions. When used in this agreement and any exhibit hereto, each
term defined in Exhibit B shall have the meaning therein set forth.
10. Subsequent Designation of Performance Company. If the Performance
Company specified in Section 3. shall (a) or any reason cease to be an
Affiliate, or (b) shall be merged or combined with or into another company, or
(c) shall have its results consolidated for accounting purposes with companies
other than those consolidated with it as of the date of this agreement, Company
at its sole option may, by a writing mailed or delivered to Executive, designate
from among Company and its then Affiliates a new Performance Company for all
purposes of this agreement. Upon any such designation the formula set forth in
Exhibit A shall be adjusted in order to minimize any change in the then amount
of the Account Value as of the date the new Performance Company is designated.
11. Not an Employment Contract. This is not an employment contract, does
not confer upon Executive any right to any present or future position or scale
of remuneration or to a continuation of employment for any time, and does not in
any way restrict or limit the right of Company or any Affiliate to terminate
Executive's employment at any time, with or without cause or for no cause.
12. No Shareholder or Other Rights. This agreement and the Certificate
delivered to Executive pursuant hereto create no rights as a shareholder in
Company or any Affiliate, create no rights with respect to any share to
Company's capital stock, and create no security or other interest or right in
and to any property or assets of Company or any Affiliate.
13. Annulment of Agreement. Anything to the contrary in this agreement
notwithstanding, this agreement and all rights of Executive or of his personal
representative, estate, or of any Beneficiary, arising hereunder, including,
without limitation, any right then or thereafter to receive any payment or
payments of all or any portion of any Vested Amount hereunder, whether then or
thereafter to be determined, shall cease and determine and this agreement, all
rights hereunder, and the Certificate, each shall be void upon Executive's (a)
executing a petition to
4
<PAGE>
be declared a bankrupt, or (b) making a general, written assignment for the
benefit of Executive's creditors, or (c) without Company's previous written
consent, attempting in any way, in whole or in part, to anticipate, sell,
assign, pledge, alienate, encumber, charge, or otherwise transfer or grant a
security or other interest in ("Transfer"), any right or rights hereunder or
thereunder.
14. No additional Units. This agreement gives the Executive no right to
any additional or different number of Units other than as expressly set forth
herein.
15. Miscellaneous. This agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, personal representatives,
successors, and assigns and sets forth the entire agreement of the parties
hereto concerning the subject matter hereof. Executive may not, directly or
indirectly, or in whole or in part, Transfer any right to Executive under this
agreement and upon any such Transfer or attempted Transfer all of Executive's
rights hereunder shall cease and determine and become void. This agreement may
not be amended without the prior written consent of all parties hereto, and
shall be governed by and construed in accordance with the domestic, substantive
laws of the Commonwealth of Virginia. The captions herein are for ease of
reference only and do not constitute a substantive part of this agreement.
WITNESS the following signatures as of the day, month, and year first
above written.
Company:
Central Michigan Newspapers, Inc.
By: /s/ Alan Brill
----------------------------------
a Duly authorized officer
Executive:
/s/ Clifton E. Forrest
----------------------------------
(name)
5
<PAGE>
Exhibit A
Account Value
The Account Value at any time shall be the sum of
(a) Primary Unit Rights multiplied by Working Capital Adjustment,
(b) Primary Unit Rights multiplied by Long Term Debt multiplied by (-1),
(c) Primary Unit Rights multiplied by the sum of Dividends less Dividends
Received,
(d) Secondary Unit rights multiplied by the sum of
(1) Revenues, multiplied by the coverage percentage, and
(2) The quotient of Factor divided by Multiple,
when applied with respect to the Performance Company; provided that if Account
Value is determined in conjunction with a sale of this Performance Company, such
amount as determined in (d) shall not exceed 10 percent of the sale price.
6
<PAGE>
Exhibit B
DEFINITIONS
As used herein the following terms shall have the following meanings:
1. Affiliate - Means as of any time each corporation of which Alan R.
Brill then owns, directly or through an Affiliate, at least 51 % of the then
issued and outstanding voting capital stock.
2. Coverage Percentage - Means as of any time the result, of Revenues
divided into the sum of: (a) net income (loss) before income taxes and equity in
the income of Affiliates; (b) depreciation; (c) management fee; and (d)
non-operating expenses, net of non-operating income, each to be conclusively
determined by Company from Performance Company's financial statements for its
then most recently ended fiscal year.
3. Cause - Means any fraudulent or criminal act by Executive or any
willful act by Executive to the material detriment of the operations or
business of Company or any Affiliate.
4. Dividends - Means cumulative distributions on the common stock of the
Performance Company subsequent to the date of this agreement.
5. Dividends Received - Means cumulative distributions to the Performance
Company on stock investments in its affiliates subsequent to the date of this
agreement.
6. Factor - Means the amount specified in Section 3.
7. Long-Term Debt - Means as of any time that portion of all long-term
liabilities of the Performance Company as reflected in its financial statements
plus the gross obligations under non-operating consulting or non-competition
agreements to extent not otherwise reflected in such statements, for its then
most recently ended fiscal year, which Company elects in its sole discretion, to
include in computing the Account Value.
8. Multiple - Means a number of -8- eight to be used in determination of
Secondary Unit Rights.
9. Primary Unit Rights - Primary Unit Rights are the Unit Rights
multiplied by (.25).
7
<PAGE>
10. Prohibited Competition - Means Executive's (a) serving, directly or
indirectly, as an officer agent, partner, or director of, or being employed by,
consulting with, assisting, or rendering advice to, or having more than a 5%
ownership interest as a stockholder, partner, or otherwise in any partnership,
corporation or other person, or persons, natural or corporate, engaged in any
business activity competing for personnel of or with any business conducted by
Company or any Affiliate, including any owner or operator of a business located
within, or which regularly solicits advertising in, a significant circulation or
broadcast area of any publication or broadcast station then owned by Company or
any Affiliate, or (b) divulging any material, confidential, or commercially
sensitive information concerning the business, profits, sales, customers,
financing, or financial condition of Company or any Affiliate to any person or
persons natural or corporate, other than an officer, director, stockholder, or
duly authorized agent, or employee of Company or an Affiliate.
11. Revenues - Means as of any time annual operating revenues of the
Performance Company as reported in the financial statements of Performance
Company for its then; most recently ended fiscal year, including trade, and
other non-primary revenues net of related expenses.
12. Secondary Unit Rights - Secondary Unit Rights are the Primary Unit
Rights multiplied by the Multiple.
13. Unit Rights - Unit Rights are the number of Units as specified in
Section (3) multiplied by the Unit Value.
14. Unit Value - Unit Value is .00D1.
15. Working Capital Adjustment - As of any time the Working Capital
Adjustment is the excess (or deficit) of current assets over current
liabilities, further adjusted to include non-current assets of a non-operating
investment nature (such as notes-receivable, cash value of life insurance, and
investment in subsidiaries) and less par value of preferred stock and any
deferred tax liability, all as determined by Company from the Performance
Company's financial statements for its then most recently ended fiscal year.
8
<PAGE>
EX-10.1(b)
Performance Incentive Plan Agreement
PERFORMANCE AGREEMENT
This is an agreement made this 26th day of November, 1985, by and between
Alan L. Beck (hereinafter "Executive") and WIOV, Inc., a Virginia corporation
(hereinafter "Company").
Recitals
Executive has loyally and effectively served Company in a key management
capacity, and Company desires to recognize Executive's past contributions to
Company's business, to retain Executive's experience and knowledge in Company's
management, and to induce Executive to remain in the employ of Company or an
Affiliate. To these ends, Company desires by this agreement to provide
identifiable financial incentives for Executive to foster the financial growth
and expansion of Company and its Affiliates.
In consideration of the foregoing and of the covenants and agreements
hereinafter contained, Company and Executive hereby covenant and agree as
follows:
1. Executive. Executive shall perform such duties as normally are incident
to Executive's current position as President of Company and such other or
additional duties as Company's Board of Directors hereafter may, from time to
time, prescribe and shall devote such reasonable time, attention, and effort as
are necessary properly to fulfill Executive's duties and responsibilities to
Executive's employer.
2. Creation of Account. With respect to the company designated as provided
in Section 3 ("Performance Company"), Company hereby credits to a special
account identified to this agreement and created for such purpose ("Account")
the number of units ("Units") designed in Section 3. The value of the Account as
determined from time to time ("Account Value") shall be that amount, not less
than zero, determined by applying the formula set forth in Exhibit A, adjusted
as permitted by Section 10, ("Formula") to the Performance Company, using the
factor designated in Section 3. ("Factor").
3. Participation Certificate and Designations. Subject to the provisions
of Section 10., for purposes of this agreement, the following are hereby
designated: (a) the number of Units is 4000.; (b) the Performance Company is
WIOV, Inc.; and (c) the Factor is -0-. This designation is memorialized in
participation certificate ("Certificate") number 1 delivered to Executive this
date, receipt of which is hereby acknowledged by Executive. The Certificate
shall create no rights, and all rights of Executive shall be solely as expressly
provided in this agreement.
4. Vesting. Subject to Section 13., and if Executive is then employed by
Company or an Affiliate and vesting shall not have been earlier terminated by
Company as provided in Section 6., on February 28 of the year next following the
date of this
<PAGE>
agreement Executive's interest in the Account Value shall be 10% vested, and
thereafter during the period of Executive's continued employment by Company or
an Affiliate an additional 10% interest in such Account Value shall vest on each
subsequent February 28 of each of the next succeeding 9 fiscal years.
5. Accelerated Vesting. Subject to Section 13., if Executive is then
employed by Company or an Affiliate and vesting shall not have been earlier
terminated, Executive's interest in the Account Value shall immediately be 100%
vested as of the date when any of the following occurs: (a) Executive's death,
(b) Executive's retirement from employment by Company or any Affiliate after
attaining the age of 65 years, or (c) termination of Executive's employment by
Company or any Affiliate due to Executive's inability to perform the tasks of
Executive's then position because of a medically determinable physical or mental
impairment, not caused or contributed to by any action of Executive, that is
expected by Company to continue for a continuous period of 12 calendar months or
more extending beyond the date of such termination of employment.
6. Payment of Vested Amount; Termination of Vesting. Subject to the
provisions of Sections 7. and 13., and to the extent not then prohibited or
restricted by any agreement to which Company or its assets then are subject, on
that date (the "Satisfaction Date") which is the earlier to occur of (i) the
date when Executive ceases to be an employee of Company or any Affiliate, or
(ii) the date when Executive receives written notice from Company of Company's
election to discontinue vesting hereunder as to Executive, Executive shall
become entitled to either of the following:
A. If Executive has then ceased to be an employee of Company or any
Affiliate, Executive shall be entitled to payment in cash of an amount
equal to Executive's then vested percentage of the Executive's then
Account Value ("Vested Amount") upon delivery to Company of an acceptable
receipt, payable to Executive as follows: either (a) in full within 60
days after the Satisfaction Date, or, at Company's sole election, (b) in
quarterly installments of at least 2.5% of the Vested Amount, payable
until such time as the Vested Amount is paid in full; the first of any
such quarterly installments to be due and payable on that date which is 90
days after the Satisfaction Date. If paid in quarterly installments as
provided in (b), the balance of the Vested Amount owing on any quarterly
installment date may be paid in full at Company's then election, but if
not so paid the then unpaid balance of the Vested Amount owing as of the
next subsequent quarterly installment date shall be an amount equal to
102% of the amount of any unpaid balance of the Vested Amount as of the
immediately preceding installment date, or
<PAGE>
B. If Executive is an employee of Company or any Affiliate but has
received written notice from Company of its election to discontinue
vesting hereunder as to Executive, Executive shall be entitled to
receive from Company, within 60 days after such notice, and at Company's
sole election, either (a) the Vested Amount paid as provided in A.
above, or (b) a new performance agreement substantially identical
herewith in form and economic effect but executed and entered into by
Executive and an Affiliate, whereupon such Affiliate shall thereby
assume and become solely liable for any then vested percentage of the
Executive's then Account Value hereunder, as in such agreement provided,
and Company thereafter shall have no further responsibility to Executive
hereunder.
In no event shall Executive be entitled to payment, or to any other right or
rights, under or pursuant to this agreement other than as herein expressly
provided, and Company, at its sole option, may discontinue vesting hereunder as
to Executive at any time, with or without cause, by delivering or mailing notice
of such discontinuance to Executive, and thereafter the Account Value shall be
fixed and no further interest in the Account Value shall vest in Executive
pursuant to this agreement.
7. Reduction for Cause. (a) If Company or any Affiliate shall terminate
Executive's employment for Cause then the terminating entity, at its sole
election, may reduce Executive's then vested interest, if any, in the Account
Value to no less than 50% of its then amount, effective as of the Satisfaction
Date. (b) If at any time or times within the period ending three years after the
Satisfaction Date Executive shall engage in Prohibited Competition, then
Company, at its sole option, may reduce Executive's then Vested Amount so that
Executive thereafter shall not receive, and Company shall not thereafter make or
be required to make, payment or payments, in whole or in part, which will cause
the aggregate amount of all payments made by Company on the Vested Amount to
exceed 30% of the amount of the Vested Amount as determined as of the
Satisfaction Date.
8. Beneficiaries. Each payment on the Vested Amount required hereby shall
be made to Executive so long as Executive shall live. After Executive's death
each required payment on the Vested Amount shall be made to Executive's personal
representative to be a part of Executive's estate, unless during Executive's
lifetime Executive shall have filed with Company a written designation
acceptable to Company designating one or more named beneficiaries
["Beneficiary(ies)"] to receive any such payment after Executive's death, in
which case each such required payment shall be made to any designated
Beneficiary then living, in accordance with such designation.
<PAGE>
9. Definitions. When used in this agreement and any exhibit hereto, each
term defined in Exhibit B shall have the meaning therein set forth.
10. Subsequent Designation of Performance Company. If the Performance
Company specified in Section 3. shall (a) for any reason cease to be an
Affiliate, or (b) shall be merged or combined with or into another company, or
(c) shall have its results consolidated for accounting purposes with companies
other than those consolidated with it as of the date of this agreement, Company
at its sole option may, by a writing mailed or delivered to Executive, designate
from among Company and its then Affiliates a new Performance Company for all
purposes of this agreement. Upon any such designation the formula set forth in
Exhibit A shall be adjusted in order to minimize any change in the then amount
of the Account Value as of the date the new Performance Company is designated.
11. Not an Employment Contract. This is not an employment contract, does
not confer upon Executive any right to any present or future position or scale
of remuneration or to a continuation of employment for any time, and does not in
any way restrict or limit the right of Company or any Affiliate to terminate
Executive's employment at any time, with or without cause, or for no cause.
12. No Shareholder or Other Rights. This agreement and the Certificate
delivered to Executive pursuant hereto create no rights as a shareholder in
Company or any Affiliate, create no rights with respect to any share to
Company's capital stock, and create no security or other interest or right in
and to any property or assets of Company or any Affiliate.
13. Annulment of Agreement. Anything to the contrary in this agreement
notwithstanding, this agreement and all rights of Executive or of his personal
representative, estate, or of any Beneficiary, arising hereunder, including,
without limitation, any right then or thereafter to receive any payment or
payments of all or any portion of any Vested Amount hereunder, whether then or
thereafter to be determined, shall cease and determine and this agreement, all
rights hereunder, and the Certificate, each shall be void upon Executive's (a)
executing a petition to be declared a bankrupt, or (b) making a general, written
assignment for the benefit of Executive's creditors, or (c) without Company's
previous written consent, attempting in any way, in whole or in part, to
anticipate, sell, assign, pledge, alienate, encumber, charge, or otherwise
transfer or grant a security or other interest in ("Transfer"), any right or
rights hereunder or thereunder.
14. No additional Units. This agreement gives the Executive no right to
any additional or different number of Units other than as expressly set forth
herein.
<PAGE>
15. Miscellaneous. This agreement shall be binding upon and inure to the
benefit of the parties hereto or their heirs, personal representatives,
successors, and assigns and sets forth the entire agreement of the parties
hereto concerning the subject matter hereof. Executive may not, directly or
indirectly, or in whole or in part, transfer any right to Executive under this
agreement and upon any such Transfer or attempted Transfer all of Executive's
rights hereunder shall cease and determine and become void. This agreement may
not be amended without the prior, written consent of all parties hereto, and
shall be governed by and construed in accordance with the domestic, substantive
laws of the Commonwealth of Virginia. The captions herein are for ease of
reference only and do not constitute a substantive part of this agreement.
WITNESS the following signatures as ,of the day, month, and year first above
written.
Company:
WIOV, INC.
By: /s/ Alan R. Brill
-----------------------------
a duly authorized officer
Executive:
/s/ Alan Beck
---------------------------------
(name)
<PAGE>
Exhibit A
Account Value
The Account Value at any time shall be the sum of
(a) Primary Unit Rights multiplied by Working Capital Adjustment,
(b) Primary Unit Rights multiplied by Long Term Debt multiplied by (-1),
(c) Primary Unit Rights multiplied by the sum of Dividends less
Dividends Received,
(d) Secondary Unit rights multiplied by the sum of
(1) Revenues, multiplied by the coverage percentage, and
(2) The quotient of Factor divided by Multiple,
when applied with respect to the Performance Company; provided that if Account
Value is determined in conjunction with a sale of this Performance Company, such
amount as determined in (d) shall not exceed 10 percent of the sale price.
<PAGE>
Exhibit B
DEFINITIONS
As used herein the following terms shall have the following meanings:
1. Affiliate - Means as of any time each corporation of which Alan
R. Brill then owns, directly or through an Affiliate, at least 51% of the then
issued and outstanding voting capital stock.
2. Coverage Percentage - Means as of any time the result of Revenues
divided into the sum of: (a) net income (loss) before income taxes and equity in
the Income of Affiliates; (b) depreciation; (c) management fee; and (d)
non-operating expenses, net of non-operating income, each to be conclusively
determined by Company from Performance Company's financial statements for its
then most recently ended fiscal year.
3. Cause - Means any fraudulent or criminal act by Executive or any
willful act by Executive to the material detriment of the operations or
business of Company or any Affiliate.
4. Dividends - Means cumulative distributions on the common stock of
the Performance Company subsequent to the date of this agreement.
5. Dividends Received - Means cumulative distributions to the
Performance Company on stock investments in its affiliates subsequent to the
date of this agreement.
6. Factor - Means the amount specified in Section 3.
7. Long-Term Debt - Means as of any time that portion of all
long-term liabilities of the Performance Company as reflected in its financial
statements plus the gross obligations under non-operating consulting or
non-competition agreements to extent not otherwise reflected in such statements,
for its then most recently ended fiscal year, which Company elects in its sole
discretion, to include in computing the Account Value.
8. Multiple - Means a number of -8- eight to be used in
determination of Secondary Unit Rights.
9. Primary Unit Rights - Primary Unit Rights are the Unit Rights
multiplied by (.25).
10. Prohibited Competition - Means Executive's (a) serving, directly
or indirectly, as an officer, agent, partner, or director of, or being employed
by, consulting with, assisting, or rendering advice to, or having more than a 5%
ownership interest as a stockholder, partner, or otherwise in any part-
<PAGE>
nership, corporation or other person, or persons, natural or corporate, engaged
in any business activity competing for personnel of or with any business
conducted by Company or any Affiliate, including any owner or operator of a
business located within, or which regularly solicits advertising in, a
significant circulation or broadcast area of any publication or broadcast
station then owned by Company or any Affiliate, or (b) divulging any material,
confidential, or commercially sensitive information concerning the business,
profits, sales, customers, financing, or financial condition of Company or any
Affiliate to any person or persons natural or corporate, other than an officer,
director, stockholder, or duly authorized agent, or employee of Company or an
Affiliate.
11. Revenues - Means as of any time annual operating revenues of the
Performance Company as reported in the financial statements of Performance
Company for its then most recently ended fiscal year, including trade, and other
non-primary revenues net of related expenses.
12. Secondary Unit Rights - Unit Rights are the number of Units as
specified in Section (3) multiplied by the Unit Value.
13. Unit Rights - Unit Rights are the number of Units as specified
in Section (3) multiplied by the Unit Value.
14. Unit Value - Unit Value is .0001.
15. Working Capital Adjustment - As of any time the Working Capital
Adjustment is the excess (or deficit) of current assets over current
liabilities, further adjusted to include non-current assets of a non-operating
investment nature (such as notes-receivable, cash value of life insurance, and
investment in subsidiaries) and less par value of preferred stock and any
deferred tax liability, all as determined by Company from the Performance
Company's financial statements for its then most recently ended fiscal year.
<PAGE>
Exhibit 10.2
MANAGED AFFILIATES
SUBORDINATION AGREEMENT
This is an agreement entered into this 30th day of December 1997, by and
among BRILL MEDIA COMPANY, L.P. ("BMCLP") and READING RADIO, INC.; TRI-STATE
BROADCASTING, INC.; NORTHERN COLORADO RADIO, INC.; NCR II, INC.; CENTRAL
MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHLAND BROADCASTING, LLC; NB
II, INC.; CENTRAL MICHIGAN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; CMN
ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.;
CENTRAL MICHIGAN DISTRIBUTION CO., INC.; GLADWIN NEWSPAPERS, INC; GRAPH ADS
PRINTING, INC.; MIDLAND BUYER'S GUIDE, INC.; ST. JOHNS NEWSPAPERS, INC.;
HURON P.S., LLC; HURON NEWSPAPERS, LLC; NCR III, LLC; NCH II, LLC; HURON
HOLDINGS, LLC; NORTHERN COLORADO HOLDINGS, LLC; NORTHLAND HOLDINGS, LLC; CMN
HOLDINGS, INC.; BRILL RADIO, INC.; and BRILL NEWSPAPERS, INC. (severally and
collectively, the "Company").
RECITALS
BMCLP and each Company have entered into a management agreement
(severally and collectively the "Administrative Management Agreement")
pursuant to which BMCLP provides certain management services to each Company
as therein provided. BMCLP and each Company now desire to subordinate BMCLP's
right to receive payment under each Administrative Management Agreement as
and to the extent herein provided.
NOW THEREFORE, in consideration of and relying upon the foregoing and
for other valuable considerations, BMCLP and each Company agree as follows:
Section 1.01. Subordination of Liabilities. Each Company and BMCLP for
itself and its successors and assigns, covenants and agrees that the payment
of the management fees and other amounts owed to BMCLP under each
Administrative Management Agreement (the "Subordinated Indebtedness") is
hereby expressly subordinated, to the extent and in the manner hereinafter
set forth, to the prior payment in full in cash of all Senior Indebtedness
(as defined in Section 1.07) or any default under the Managed Affiliate Note
(as defined in Section 1.07). The provisions of this agreement shall
constitute a continuing offer to all persons who, in reliance upon such
provisions, become holders of, or continue to hold, Senior Indebtedness, and
such provisions are made for the benefit of the holders of Senior
Indebtedness, and such holders are hereby made obligees hereunder the same as
if their names were written herein as such, and they and/or each of them may
proceed to enforce such provisions.
Section 1.02. Company not to Make Payments with Respect to Subordinated
Indebtedness in Certain Circumstances. (a) Upon the maturity of any Senior
Indebtedness (including interest thereon or fees or any other amounts owing
in respect thereof), whether at
<PAGE>
Page 2
stated maturity, by acceleration or otherwise, all Obligations (as defined in
Section 1.07 of this Annex) owing in respect thereof, in each case to the
extent due and owing, shall first be paid in full in cash, before any
payment, whether in cash, property, securities or other wise, is made on
account of the Subordinated Indebtedness.
(b) The Company may not, directly or indirectly, make any payment of
any Subordinated Indebtedness and may not acquire any Subordinated
Indebtedness for cash or property until all Senior Indebtedness has been paid
in full in cash if any Default or Event of Default under, and as defined in,
the Indenture (as defined in Section 1.07 of this agreement or any default
under the Managed Affiliate Note (as defined in Section 1.07 of this
Agreement) is then in existence or would result therefrom. BMCLP hereby
agrees that, so long as any such Default or Event of Default exists or any
restrictions set forth in any issue of Senior Indebtedness reduces the amount
permitted to be paid in respect of the Subordinated Indebtedness, BMCLP will
not sue for, or otherwise take any action to enforce the Company's
obligations to pay, amounts owing in respect of the Subordinated Indebtedness.
(c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this Section 1.02, the Company shall
make any payment on account of the Subordinated Indebtedness at a time when
payment is not permitted by said subsection (a) or (b), such payment shall be
held by BMCLP, in trust for the benefit or, and shall be paid forthwith over
and delivered to, the holders of Senior Indebtedness or their representative
or the trustee under the indenture or other agreement pursuant to which any
instruments evidencing any Senior Indebtedness may have been issued, as their
respective interests may appear, for application prorata to the payment of
all Senior Indebtedness remaining unpaid to the extent necessary to pay all
Senior Indebtedness in full, in cash, in accordance with the terms of such
Senior Indebtedness, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
Section 1.03. Subordination to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon
any distribution of assets of the Company upon dissolution, winding up,
liquidation or reorganization of the Company (whether in bankruptcy,
insolvency or receivership proceedings or upon an assignment for the benefit
of creditors or otherwise):
(a) the holders of all Senior Indebtedness shall first be entitled to
receive payment in full in cash of all Senior Indebtedness (including,
without limitation, post-petition
<PAGE>
Page 3
interest at the rate provided in the documentation with respect to the
Senior Indebtedness, whether or not such post-petition interest is an
allowed claim against the debtor in any bankruptcy or similar proceeding)
before BMCLP is entitled to receive any payment on account of the
Subordinated Indebtedness;
(b) any payment or distributions of assets of the Company of any kind
or character, whether in cash, property or securities to which BMCLP would
be entitled except for the provisions of this Annex, shall be paid by the
liquidating trustee or agent or other person making such payment or
distribution, whether a trustee in bankruptcy, a receiver or liquidating
trustee or other trustee or agent, directly to the holders of Senior
Indebtedness or their representative or representatives, or to the trustee
or trustees under any indenture under which any instruments evidencing any
such Senior Indebtedness may have been issued, to the extent necessary to
make payment in full in cash of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(c) in the event that, notwithstanding the foregoing provisions of
this Section 1.03, any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, shall be
received by BMCLP on account of Subordinated Indebtedness before all Senior
Indebtedness is paid in full in cash, such payment or distribution shall be
received and held in trust for and shall be paid over to the holders of the
Senior Indebtedness remaining unpaid or unprovided for or their
representative or representatives, or to the trustee or trustees under any
indenture under which any instruments evidencing any of such Senior
Indebtedness may have been issued, for application to the payment of such
Senior Indebtedness until all such Senior Indebtedness shall have been paid
in full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
Section 1.04. Subrogation. Subject to the prior payment in full
in cash of all Senior Indebtedness, BMCLP shall be subrogated to the rights
of the holders of Senior Indebtedness to receive payments or distributions of
assets of the Company applicable to the Senior Indebtedness until all amounts
owing on the Subordinated Indebtedness shall be paid in full, and for the
purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or by or on behalf of
BMCLP by virtue of this Annex which otherwise
<PAGE>
Page 4
would have been made to BMCLP shall, as between the Company, its creditors
other than the holders of Senior Indebtedness, and BMCLP, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions of this Annex are and are intended solely or
the purpose of defining the relative rights of BMCLP, on the one hand, and
the holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained in this Annex or in the Administrative Management Agreement is
intended to or shall impair, as between the Company and BMCLP, the obligation
of the Company, which is absolute and unconditional, to pay to BMCLP the
Subordinated Indebtedness as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the
relative rights of BMCLP and creditors of the Company other than the holders
of the Senior Indebtedness, nor shall anything herein or therein (except to
the extent set forth in this Annex) prevent BMCLP from exercising all
remedies otherwise permitted by applicable law and this Annex upon a default
under the Administrative Management Agreement, subject to the rights, if any,
under this Annex of the holders of Senior Indebtedness in respect of cash,
property, or securities of the Company received upon the exercise of any such
remedy. Upon any distribution of assets of the Company referred to in this
Annex, BMCLP shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which such dissolution, winding up,
liquidation or reorganization proceedings are pending, or a certificate of
the liquidating trustee or agent or other person making any distribution to
BMCLP, for the purpose of ascertaining the persons entitled to participate in
such distribution, the holders of the Senior Indebtedness and other
indebtedness of the Company, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Annex.
Section 1.06. Subordination Rights not Impaired by Aces or
Omissions of Company or Holders of Senior Indebtedness. No right of any
present or future holders of any Senior Indebtedness to enforce subordination
as herein provided shall at any time in any way be prejudiced or impaired by
any act or failure to act on the par, of the Company or by any act or failure
to act in good faith by any such holder, or by any noncompliance by the
Company with the terms and provisions of the Administrative Management
Agreement, regardless of any knowledge thereof which any such holder may have
or be otherwise charged with. The holders of the Senior Indebtedness may,
without in any way affecting the obligations of BMCLP with respect hereto, at
any time or from time to time and in their absolute discretion, change the
manner, place or terms of payment of, change or extend the time of payment
of, or renew or
<PAGE>
Page 5
alter, any Senior Indebtedness or amend, modify or supplement any agreement
or instrument governing or evidencing such Senior Indebtedness or any other
document referred to therein, or exercise or refrain from exercising any
other of their rights under the Senior Indebtedness including, without
limitation, the waiver of default thereunder and the release of any
collateral securing such Senior Indebtedness, all without notice to or assent
from BMCLP.
Section 1.07. Senior Indebtedness. The term "Senior Indebtedness"
shall mean all Obligations (as defined below) of each Company under, or in
respect of, each Note dated December 30, 1997, made by each Company to the
order of Tri-State Broadcasting, Inc. (the "Managed Affiliate Notes") and the
Managed Affiliate Management Agreements dated December 30, 1997, between
each Company and Tri-State Broadcasting, Inc. As used herein, (x) the term
"Indenture" shall mean the Indenture dated as of December 30, 1997 among
BMC, Media, the Subsidiary Guarantors named therein and United States Trust
Company of New York, and (y) the term "Obligation" shall mean any principal,
interest, premium, penalties, fees, expenses, indemnities, and other
liabilities and obligations payable under the documentation governing any
Senior Indebtedness (including interest accruing after the commendement of
any bankruptcy, insolvency, receivership, or similar proceeding, whether or
not such interest is an allowed claim against the debtor in any such
proceeding).
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
BRILL MEDIA COMPANY, L.P.
By:___________________________
a duly authorized officer
READING RADIO, INC.
By:___________________________
a duly authorized officer
TRI-STATE BROADCASTING, INC.
By:___________________________
a duly authorized officer
NORTHERN COLORADO RADIO, INC.
By:___________________________
<PAGE>
Page 6
a duly authorized officer
NCR II, INC.
By:___________________________
a duly authorized officer
CENTRAL MISSOURI BROADCASTING, INC.
By:___________________________
a duly authorized officer
CMB II, INC.
By:___________________________
a duly authorized officer
NORTHLAND BROADCASTING, LLC
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
NB II, INC.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
CADILLAC NEWSPAPERS, INC.
By:___________________________
<PAGE>
Page 7
a duly authorized officer
CMN ASSOCIATED PUBLICATIONS, INC.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
By:___________________________
a duly authorized officer
CENTRAL MICHIGAN DISTRIBUTION CO., INC.
By:___________________________
a duly authorized officer
GLADWIN NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
GRAPH ADS PRINTING, INC.
By:___________________________
a duly authorized officer
MIDLAND BUYER'S GUIDE, INC.
By:___________________________
a duly authorized officer
ST. JOHNS NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
HURON P.S., LLC
By: Huron Holdings, LLC, its manager
By: BMC Holdings, LLC, its manager
<PAGE>
Page 8
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
HURON NEWSPAPERS, LLC
By: Huron Holdings, LLC, its manager
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
<PAGE>
Page 9
NCR III, LLC
By: NCH II, LLC, its manager
By: BMC Holdings, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
NCH II, LLC
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
HURON HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
NORTHERN COLORADO HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
NORTHLAND HOLDINGS, LLC
By: BMC Holdings, LLC, its manager
By: Brill Media Company, LLC, its manager
By: Brill Media Management, Inc.
By:___________________________
a duly authorized officer
CMN HOLDINGS, INC.
<PAGE>
Page 10
By:___________________________
a duly authorized officer
BRILL RADIO, INC.
By:___________________________
a duly authorized officer
BRILL NEWSPAPERS, INC.
By:___________________________
a duly authorized officer
<PAGE>
EX-10.3
Management and Consulting Agreements
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
BRILL NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person or
<PAGE>
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between BMCLP and
Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
BRILL NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
BRILL RADIO, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
BRILL RADIO, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CADILLAC NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CADILLAC NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia corporation (hereinafter referred
to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CENTRAL MICHIGAN NEWSPAPERS, BRILL MEDIA COMPANY, L.P.
INC.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation (hereinafter
referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and
1
<PAGE>
supervision of Company's officers and management, and no agency, joint venture,
or partnership relationship is intended to be or shall be created by and between
BMCLP and Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
CENTRAL MISSOURI BROADCASTING, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CMB II, INC., a Virginia corporation (hereinafter referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
CMB II, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CENTRAL MICHIGAN DISTRIBUTION CO., INC., a Virginia corporation (hereinafter
referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CENTRAL MICHIGAN DISTRIBUTION BRILL MEDIA COMPANY, L.P.
CO., INC.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CENTRAL MICHIGAN DISTRIBUTION CO., L.P., a Virginia limited partnership
(hereinafter referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CENTRAL MICHIGAN DISTRIBUTION BRILL MEDIA COMPANY, L.P.
CO., L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CMN HOLDINGS, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person or independent contractor as to Company; with respect to Company's
<PAGE>
operation and management BMCLP will be subject to direction and supervision of
Company's officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between BMCLP and
Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CMN HOLDINGS, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
3
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
CMN ASSOCIATED PUBLICATIONS, INC., a Virginia corporation (hereinafter referred
to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
CMN ASSOCIATED PUBLICATIONS INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
GLADWIN NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
GLADWIN NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
GRAPH ADS PRINTING, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
GRAPH ADS PRINTING, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
HURON HOLDINGS, LLC, a Virginia limited liability company (hereinafter referred
to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person or
<PAGE>
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between BMCLP and
Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
BRILL MEDIA COMPANY, L.P.
by:____________________________
a duly authorized officer
HURON HOLDINGS, LLC
by: BMC Holdings, LLC; its manager
by: Brill Media Company, LLC; its manager
by: Brill Media Management, Inc.
by:________________________________
a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
HURON NEWSPAPERS, LLC, a Virginia limited liability company (hereinafter
referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
BRILL MEDIA COMPANY, L.P.
by:____________________________
a duly authorized officer
HURON NEWSPAPERS, LLC
by: Huron Holdings, LLC, its manager
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
by:________________________________
a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
HURON P.S., LLC, a Virginia limited liability company (hereinafter referred to
as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person or independent contractor as to Company; with respect to Company's
<PAGE>
operation and management BMCLP will be subject to direction and supervision of
Company's officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between BMCLP and
Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
BRILL MEDIA COMPANY, L.P.
by:____________________________
a duly authorized officer
HURON P.S., LLC
by: Huron Holdings, LLC; its manager
by: BMC Holdings, LLC; its manager
by: Brill Media Company, LLC; its manager
by: Brill Media Management, Inc.
by:________________________________
a duly authorized officer
4
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
MIDLAND BUYER'S GUIDE, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
MIDLAND BUYER'S GUIDE, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NB II, INC., a Virginia corporation (hereinafter referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NB II, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NCH II, LLC, a Virginia limited liability company (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NCH II, LLC
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NCR II, INC., a Virginia corporation (hereinafter referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NCR II, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NCR III, LLC, a Virginia limited liability company (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NCR III, LLC
by: NCH II, LLC, its manager
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NORTHLAND BROADCASTING, LLC, a Virginia limited liability company (hereinafter
referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and
1
<PAGE>
supervision of Company's officers and management, and no agency, joint venture,
or partnership relationship is intended to be or shall be created by and between
BMCLP and Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NORTHLAND BROADCASTING, LLC
by: Northland Holdings, LLC, its manager
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NORTHLAND HOLDINGS, LLC, a Virginia limited liability company (hereinafter
referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and
1
<PAGE>
supervision of Company's officers and management, and no agency, joint venture,
or partnership relationship is intended to be or shall be created by and between
BMCLP and Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NORTHLAND HOLDINGS, LLC
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NORTHERN COLORADO HOLDINGS, LLC, a Virginia limited liability company
(hereinafter referred to as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and
1
<PAGE>
supervision of Company's officers and management, and no agency, joint venture,
or partnership relationship is intended to be or shall be created by and between
BMCLP and Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five hundred dollars ($500.00) per month,
together with reimbursement of any expenses advanced by BMCLP, payable on the
first day of each month.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NORTHERN COLORADO HOLDINGS, LLC
by: BMC Holdings, LLC, its manager
by: Brill Media Company, LLC, its manager
by: Brill Media Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
NORTHERN COLORADO RADIO, INC., a Virginia corporation (hereinafter referred to
as "Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
NORTHERN COLORADO RADIO, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
READING RADIO, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
READING RADIO, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed as of this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
ST. JOHNS NEWSPAPERS, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to local
newspapers on a consulting and contractual basis. Company owns, publishes, and
distributes, directly or indirectly, one or more local newspapers and shoppers
and recognizes, therefore, that BMCLP is in a position to render Company
valuable services and consultation, not now available to Company, and therefore,
desires to employ BMCLP as herein provided. Accordingly, for some time BMCLP has
provided such services and consultation to Company upon the terms hereinafter
set forth in this agreement, and it is the parties' desire now formally to put
into writing their long-standing relationship and agreement.
NOW THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the production, printing, distribution, and marketing
of Company's and others' newspapers, shoppers and circulars, as herein provided,
and BMCLP hereby accepts such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however,
<PAGE>
guaranteeing the result and without liability to any person or independent
contractor as to Company; with respect to Company's operation and management
BMCLP will be subject to direction and supervision of Company's officers and
management, and no agency, joint venture, or partnership relationship is
intended to be or shall be created by and between BMCLP and Company by this
agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out-of-pocket
expenses directly applicable to benefits of the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee of five per centum (5%) per year of Company's
annual consolidated net operating revenues in each of Company's fiscal years
during the Term, payable on the first day of each month based on the revenues of
the immediately preceding month.
6. Term. The term of this agreement shall be one (1) year from its date,
and thereafter shall be automatically renewed for an additional one (1) year
period, unless and until such time as either party shall give the other written
notice to terminate at least ninety (90) days prior to the expiration of the
then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
3
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month, and year first above written.
ST. JOHNS NEWSPAPERS, INC. BRILL MEDIA COMPANY, L.P.
by:____________________________ by:____________________________
a duly authorized officer a duly authorized officer
4
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
TRI-STATE BROADCASTING, INC., a Virginia corporation (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided. Accordingly, for some
time BMCLP has provided such services and consultation to Company upon the terms
hereinafter set forth in this agreement, and it is the parties' desire now
formally to put into writing their long-standing relationship and agreement.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency,
1
<PAGE>
joint venture, or partnership relationship is intended to be or shall be created
by and between BMCLP and Company by this agreement or BMCLP's performance
hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
2
<PAGE>
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
TRI-STATE BROADCASTING, INC.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
TSB III, LLC, a Virginia limited liability company (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
1
<PAGE>
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between BMCLP and
Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
2
<PAGE>
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
TSB III, LLC
by: Tri-State Holdings, LLC, its manager
by: Tri-State Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
BUSINESS MANAGEMENT AND CONSULTING AGREEMENT
THIS AGREEMENT is executed this 30th day of December, 1997, by and
between BRILL MEDIA COMPANY, L.P., a Virginia limited partnership ("BMCLP"), and
TSB IV, LLC, a Virginia limited liability company (hereinafter referred to as
"Company").
RECITALS
BMCLP is engaged in the business of managing communications and publishing
businesses and of providing advisory and consulting services to persons, firms,
and corporations owning, operating, and managing communications businesses and
is, therefore, in a position to render valuable management services to owners
and operators of broadcast properties on a consulting and contractual basis.
Company owns, operates, and manages, directly or indirectly, one or more local
broadcast properties and recognizes, therefore, that BMCLP is in a position to
render Company valuable services and consultation, not now available to Company,
and therefore, desires to employ BMCLP as herein provided.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, BMCLP and Company agree as follows:
1. Employment of BMCLP. For the Term (hereinafter defined) Company employs
BMCLP as a business manager and consultant to provide assistance and supervision
to Company's management in the operation, promotion, marketing, and management
of Company's broadcast properties, as herein provided, and BMCLP hereby accepts
such employment on the conditions herein set forth.
2. BMCLP's Services and Relationship. During the Term and at Company's
request, BMCLP shall from time to time consult with counsel, and advise Company,
its management, its officers, agents, employees, accountants, auditors, and
other consultants as, to the extent, and in the manner BMCLP deems necessary and
advisable, in connection with the management and operation of Company's
business, and BMCLP shall use its best efforts and judgment in rendering such
services, without, however, guaranteeing the result and without liability to any
person on account thereof. At all times BMCLP is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management BMCLP will be subject to direction and
1
<PAGE>
supervision of Company's officers and management, and no agency, joint venture,
or partnership relationship is intended to be or shall be created by and between
BMCLP and Company by this agreement or BMCLP's performance hereunder.
3. Support Services and Benefits. BMCLP also will make available to
Company the pooled benefits available generally to its affiliates such as group
insurance programs, general insurance coverage, training programs, audit
coordination, cash management, profit sharing plan, bulk purchasing, accounting,
marketing, and recruiting services. The expertise and manpower of BMCLP shall be
available to provide such services at no further charge, but out of pocket
expenses directly applicable to benefits to the Company will be borne by the
Company.
4. Intent. The basic intent and purpose of this agreement is that BMCLP's
experience and organization be made available to assist Company in its
operations, and Company and BMCLP believe, expect, and expressly recognize that
BMCLP's services and resources to be provided hereby will be of real, if perhaps
intangible, value to Company and will be of great benefit and advantage to
Company in the conduct of its business.
5. Compensation. During the Term, for BMCLP's services hereunder Company
will pay to BMCLP a management fee at the rate of ten per centum (10%) per year
of Company's annual consolidated net cash revenues (exclusive of trades) in each
of Company's fiscal years during the Term, payable in monthly installments on
the first day of each month based on Company's revenues for the immediately
preceding month; provided, however that in each of Company's fiscal years the
amount of such fee shall in no event exceed the amount permitted by application
of restrictions on such a management fee contained in any agreement entered into
by and between Company and others as at any time and from time to time then in
effect.
6. Term. The term ("Term") of this agreement shall extend for one (1) year
from its date, and thereafter for an additional one (1) year period, unless and
until such time as either party shall give the other written notice to terminate
at least ninety (90) days prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by BMCLP or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof
2
<PAGE>
and may be changed, altered, or amended only by an agreement in writing duly
executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures the
day, month and year first above written.
BRILL MEDIA COMPANY, L.P.
By:________________________________
a duly authorized officer
TSB IV, LLC
by: Tri-State Holdings, LLC, its manager
by: Tri-State Management, Inc.
By:________________________________
a duly authorized officer
3
<PAGE>
EX-10.4(a)
Managed Affiliate Management Agreement
MANAGED AFFILIATE MANAGEMENT AGREEMENT
This agreement is entered into as of this 30th day of December, 1997, by
and between TRI-STATE BROADCASTING, INC. ("Tri-State"), a Virginia corporation,
and TSB III, LLC, a Virginia limited liability company ("Company").
RECITALS
Tri-State owns and operates radio stations located in the Evansville,
Indiana, Owensboro, Kentucky, area. Company owns, operates, and manages one or
more local broadcast properties in this area and recognizes, therefore, that
Tri-State is in a unique position to render Company valuable services and
support, not now available to Company, and Company therefore, desires to employ
Tri-State as herein provided.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, Tri-State and Company agree as follows:
1. Employment of Tri-State. For the Term (hereinafter defined) Company
employs Tri-State to provide consultation, assistance, and support to Company's
management in the operation, promotion, marketing, and management of Company's
broadcast properties, and Tri-State hereby accepts such employment on the
conditions herein set forth.
2. Tri-State's Services and Relationship. During the Term, Tri-State shall
from time to time consult with counsel and advise Company, its management,
officers, agents, employees, accountants, auditors, and other consultants as, to
the extent, and in the manner Tri-State deems necessary and advisable, in
connection with the management and operation of Company's broadcast properties
and business and shall use its best efforts and judgment in rendering such
services without, however, guaranteeing the result.
3. Relationships. At all times Tri-State is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management Tri-State will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between Tri-State and
Company by this agreement or Tri-State's performance hereunder.
4. Intent. The basic intent and purpose of this agreement is that
Tri-State's experience and organization be made available
<PAGE>
to assist Company in its operations, and Company and Tri-State believe, expect,
and expressly recognize that Tri-State's services and resources to be provided
hereby will be of real, if perhaps intangible, value to Company and will be of
great benefit and advantage to Company in the conduct of its business.
5. Compensation. During the Term, for Tri-State's services hereunder on or
before the 15th day in June and December of each year, Company will pay to
Tri-State the fee (the "Media Affiliate Management Fee") determined as set forth
and described in Attachment 5.1 hereto.
6. Term. The term ("Term") of this agreement shall be for a period ending
fifteen (15) years from its date, and thereafter shall be automatically renewed
for an additional five (5) year period, unless and until such time as either
party shall give the other written notice to terminate at least thirty (30) days
prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by Tri-State or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures as of
the day, month, and year first above written.
Tri-State Broadcasting, Inc.
by:_________________________________
a duly authorized officer
TSB III, LCC
by: Tri-State Management, Inc.
Its manager
by:___________________________
a duly authorized officer
<PAGE>
ATTACHMENT 5.1
Managed Affiliate Management Fee
The amount of the "Managed Affiliate Management Fee" (I) shall be
computed and accrued based on Available Media Cashflow and (II) shall be paid
from Net Media Cashflow pursuant to the following formula.
"Media Cashflow" is Net Income plus (or minus): (a) depreciation, (b)
amortization, (c) interest expense, (d) acquisition related charges (such as
consulting or time brokerage fees), (e) other financing related charges, (f)
other non-cash charges, (g) income taxes, (h) (gain) or loss on disposition
of assets, (i) Administrative Management Fees charged pursuant to the
Administrative Management Agreement, and, (j) Managed Affiliate Management
Fees. Media Cashflow represents all the cash that is generated by the
business (aside from timing differences for accrued income and expenses) and
that is available to the business to pay its obligations other than operating
obligations.
"Available Media Cashflow" is Media Cashflow reduced by interest
expense; acquisition related charges paid in cash; other financing related
charges paid in cash; income taxes and distribution in lieu of income taxes;
losses realized in cash on dispositions of assets, and the amount of the Base
Fee.
"Net Media Cashflow" is Media Cash Flow remaining after payment of the
following, in the order listed: debt service; other financing related
charges; acquisition related charges; income taxes and distributions in lieu
of taxes; capital expenditure requirements utilizing cash; working capital
expansion, and the amount of the Base Fee.
(I) The amount of the Managed Affiliate Management Fee shall be computed and
accrued as follows:
A. The "Base Fee" of $10,000.00 per month, and
B. The "Variable Fee" of (i) 75% of the positive amount of
Available Media Cashflow as adjusted below, until such time as the
Administrative Management Fee payable to Brill Media Company, L.P. is
provided for, and (ii) 90% of Available Media Cashflow thereafter.
In computing each of (i) and (ii), Available Media Cashflow shall
be adjusted to provide for the Administrative Management Fee (until
provided for to the full extent of its accrual) to the extent of 20% of
the positive amount of Available Media Cashflow.
(II) After the Base Fee has been paid and the Variable Fee has been accrued
in its entirety, the Variable Fee shall be paid from Net Media Cashflow as
follows:
(i) 20% of the amount of Net Media Cashflow shall be applied to
payment of the accrued Administrative Management Fee, until the accrual is
paid in full, and (ii) 75% of the amount of Net Media Cashflow shall be
applied to payment of the Variable Fee, until the Administrative Management
Fee is paid in full, and then (iii) 90% of Net Media Cashflow shall be
applied to payment of the Variable Fee until paid in full.
<PAGE>
EX-10.4(b)
Managed Affiliate Management Agreement
MANAGED AFFILIATE MANAGEMENT AGREEMENT
This agreement is entered into as of this 30th day of December, 1997, by
and between TRI-STATE BROADCASTING, INC. ("Tri-State"), a Virginia corporation,
and TSB IV, LLC, a Virginia limited liability company ("Company").
RECITALS
Tri-State owns and operates radio stations located in the Evansville,
Indiana, Owensboro, Kentucky, area. Company owns, operates, and manages one or
more local broadcast properties in this area and recognizes, therefore, that
Tri-State is in a unique position to render Company valuable services and
support, not now available to Company, and Company therefore, desires to employ
Tri-State as herein provided.
NOW, THEREFORE, in consideration of and relying upon the foregoing and for
other valuable considerations, Tri-State and Company agree as follows:
1. Employment of Tri-State. For the Term (hereinafter defined) Company
employs Tri-State to provide consultation, assistance, and support to Company's
management in the operation, promotion, marketing, and management of Company's
broadcast properties, and Tri-State hereby accepts such employment on the
conditions herein set forth.
2. Tri-State's Services and Relationship. During the Term, Tri-State shall
from time to time consult with counsel and advise Company, its management,
officers, agents, employees, accountants, auditors, and other consultants as, to
the extent, and in the manner Tri-State deems necessary and advisable, in
connection with the management and operation of Company's broadcast properties
and business and shall use its best efforts and judgment in rendering such
services without, however, guaranteeing the result.
3. Relationships. At all times Tri-State is and shall be only an
independent contractor as to Company; with respect to Company's operation and
management Tri-State will be subject to direction and supervision of Company's
officers and management, and no agency, joint venture, or partnership
relationship is intended to be or shall be created by and between Tri-State and
Company by this agreement or Tri-State's performance hereunder.
4. Intent. The basic intent and purpose of this agreement is that
Tri-State's experience and organization be made available
<PAGE>
to assist Company in its operations, and Company and Tri-State believe, expect,
and expressly recognize that Tri-State's services and resources to be provided
hereby will be of real, if perhaps intangible, value to Company and will be of
great benefit and advantage to Company in the conduct of its business.
5. Compensation. During the Term, for Tri-State's services hereunder on or
before the 15th day in June and December of each year, Company will pay to
Tri-State the fee (the "Media Affiliate Management Fee") determined as set forth
and described in Attachment 5.1 hereto.
6. Term. The term ("Term") of this agreement shall be for a period ending
fifteen (15) years from its date, and thereafter shall be automatically renewed
for an additional five (5) year period, unless and until such time as either
party shall give the other written notice to terminate at least thirty (30) days
prior to the expiration of the then period.
7. Assignment. This agreement may not be assigned by Tri-State or Company.
8. Virginia Law. This agreement is made pursuant to and the rights of the
parties shall be governed by the laws of the Commonwealth of Virginia.
9. Entire Agreement. This agreement constitutes the entire agreement
between the parties on the subject matter hereof and may be changed, altered, or
amended only by an agreement in writing duly executed by all parties hereto.
IN WITNESS WHEREOF, the parties have hereunto set their signatures as of
the day, month, and year first above written.
Tri-State Broadcasting, Inc.
by:________________________________
a duly authorized officer
TSB IV, LCC
by: Tri-State Management, Inc.
Its manager
by:___________________________
a duly authorized officer
<PAGE>
ATTACHMENT 5.1
Managed Affiliate Management Fee
The amount of the "Managed Affiliate Management Fee" (I) shall be
computed and accrued based on Available Media Cashflow and (II) shall be paid
from Net Media Cashflow pursuant to the following formula.
"Media Cashflow" is Net Income plus (or minus): (a) depreciation, (b)
amortization, (c) interest expense, (d) acquisition related charges (such as
consulting or time brokerage fees), (e) other financing related charges, (f)
other non-cash charges, (g) income taxes, (h) (gain) or loss on disposition
of assets, (i) Administrative Management Fees charged pursuant to the
Administrative Management Agreement, and, (j) Managed Affiliate Management
Fees. Media Cashflow represents all the cash that is generated by the
business (aside from timing differences for accrued income and expenses) and
that is available to the business to pay its obligations other than operating
obligations.
"Available Media Cashflow" is Media Cashflow reduced by interest
expense; acquisition related charges paid in cash; other financing related
charges paid in cash; income taxes and distribution in lieu of income taxes;
losses realized in cash on dispositions of assets, and the amount of the Base
Fee.
"Net Media Cashflow" is Media Cash Flow remaining after payment of the
following, in the order listed: debt service; other financing related
charges; acquisition related charges; income taxes and distributions in lieu
of taxes; capital expenditure requirements utilizing cash; working capital
expansion, and the amount of the Base Fee.
(I) The amount of the Managed Affiliate Management Fee shall be computed and
accrued as follows:
A. The "Base Fee" of $10,000.00 per month, and
B. The "Variable Fee" of (i) 75% of the positive amount of
Available Media Cashflow as adjusted below, until such time as the
Administrative Management Fee payable to Brill Media Company, L.P. is
provided for, and (ii) 90% of Available Media Cashflow thereafter.
In computing each of (i) and (ii), Available Media Cashflow shall
be adjusted to provide for the Administrative Management Fee (until
provided for to the full extent of its accrual) to the extent of 20% of
the positive amount of Available Media Cashflow.
(II) After the Base Fee has been paid and the Variable Fee has been accrued
in its entirety, the Variable Fee shall be paid from Net Media Cashflow as
follows:
(i) 20% of the amount of Net Media Cashflow shall be applied to
payment of the accrued Administrative Management Fee, until the accrual is
paid in full, and (ii) 75% of the amount of Net Media Cashflow shall be
applied to payment of the Variable Fee, until the Administrative Management
Fee is paid in full, and then (iii) 90% of Net Media Cashflow shall be
applied to payment of the Variable Fee until paid in full.
<PAGE>
EX-10.5(a)
THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN
THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR
OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
TSB III, LLC
Managed Affiliate
Promissory Note
$6,455,000.00 December 30, 1997
For value received, TSB III, LLC, a Virginia limited liability company
("Maker"), promises to pay to Tri-State Broadcasting, Inc. ("Payee"), or
order, at Payee's address located at 420 N.W. Fifth St., Evansville, Indiana,
the principal sum of Six Million Four Hundred Fifty Five Thousand and no/100
Dollars ($6,455,000.00) in lawful money of the United States of America,
together with simple interest in like money at the rate of twelve per cent
(12.0%) per annum from the date hereof for so long as payment on any
principal balance hereof remains unpaid, such principal and interest to be
due and payable on the following obligatory schedule (except as and to the
extent offset, anticipated, or prepaid, in whole or in part, as hereinafter
provided):
Beginning June 15, 1998, and on December 15 and June 15 of each year
thereafter Maker shall pay to the holder hereof interest accrued on the
outstanding principal balance hereof until January 1, 2001, when final payment
of all then unpaid principal and accrued interest thereon shall be due and
payable.
The Maker reserves the right to anticipate and prepay at any time or from
time to time, without penalty, all or any part of the indebtedness evidenced by
this note. Any partial prepayment of principal also shall include accrued
interest on the unpaid principal balance to the date of such prepayment, and
each prepayment shall be applied to and be deducted from the scheduled
obligatory payments falling due hereunder in the inverse order of their
scheduled due dates. All prepayments on this note shall be
<PAGE>
recorded when made on the reverse side hereof by the then holder of this note.
The following, and only the following, shall constitute an "Event of
Default" under this note:
(a) any failure of Maker to make (or to cause to be made) to the then
holder of this note any scheduled obligatory payment of principal or interest on
this note when due and payable, which failure continues for a period of at least
thirty (30) consecutive calendar days after written notice of such failure has
been given to Maker by such holder, or
(b) the commencement by maker of a voluntary case under and within the
meaning of the United States Bankruptcy Code, or
(c) entry by a court of competent jurisdiction of an order in an
involuntary case commenced against Maker under and within the meaning of the
United States Bankruptcy Code that (i) forbids the Maker to continue to use,
acquire, or dispose of property as if no such involuntary case had been
commenced, or (ii) is for relief against Maker, or (iii) appoints an interim
trustee to take possession of Maker's property, or (iv) orders the liquidation
of Maker, and, in each case, sixty (60) consecutive calendar days shall have
elapsed since entry of any such order, such order shall then be unstayed and
effective, and such involuntary case shall then still be pending and not
dismissed.
Upon the occurrence and during the continuation of an Event of Default,
and not otherwise, the then holder of this note, at such holder's sole election
made by a written notice executed by such holder (expressly referring to and
describing this note and the Event of Default) and given to Maker, may declare
all of the then unpaid principal balance of this note, together with any
interest accrued thereon, to be, and they shall thereupon become, immediately
due and payable without presentment, demand, protest, or other notice of any
kind.
Any notice to Maker shall be deemed to have been given only upon the
earlier to occur of (a) actual receipt of such notice by Maker (whether by hand
delivery or facsimile transmission), or (b) the eighth day after the date of
deposit of such notice in the U.S. mail, postage prepaid, certified or
registered, with return receipt or proof of deliver required, addressed to Maker
at the address for Maker shown herein or at such other address as Maker may
theretofore establish by notice to Payee as provided in the Agreement.
Mere delay or failure to act shall not preclude the exercise or
enforcement of any right or remedy hereunder; all such rights
<PAGE>
and remedies shall be cumulative and may be exercised singularly or
concurrently, and the exercise or enforcement of any one such right or remedy
shall neither be a condition to nor bar the exercise or enforcement of any other
right or remedy.
The rights of all parties hereto and of each holder hereof shall be
governed by and enforced or construed only in accordance with the domestic,
substantive laws of the Commonwealth of Virginia, excluding those relating to
conflicts of laws.
The payment of any management fee by the Maker pursuant to any management
agreement [other than a Managed Affiliate Management Agreement with the Payee as
an affiliate of Brill Media Company, LLC and Brill Media Management, Inc. (the
"Issuer")] shall be subordinated to the obligation of the Maker under this note
to the same extent as the obligation of the Issuer and its subsidiaries under
the management agreements with Brill Media Company, L.P. are subordinated to the
obligation of the Issuer and its subsidiaries under the Notes and the Subsidiary
Guarantees issued and made by such persons under and pursuant to an Offering
Memorandum dated December 23, 1997, and entered into by the Issuer and the
subsidiaries therein identified.
Maker agrees to pay all reasonable attorneys' fees that may be incurred in
collecting this note after an Event of Default, but not to exceed 5% of any then
due and payable principal balance.
IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly
authorized officer on the day, month, and year first above written.
TSB III, LLC
By: Tri-State Management, Inc.
Its Manager
By:_______________________________
a duly authorized officer
<PAGE>
EX-10.5(b)
THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN
THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR
OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
TSB IV, LLC
Managed Affiliate
Promissory Note
$9,861,000.00 December 30, 1997
For value received, TSB IV, LLC, a Virginia limited liability company
("Maker"), promises to pay to Tri-State Broadcasting, Inc. ("Payee"), or
order, at Payee's address located at 420 N.W. Fifth St., Evansville, Indiana,
the principal sum of Nine Million Eight Hundred Sixty One Thousand and no/100
Dollars ($9,861,000.00) in lawful money of the United States of America,
together with simple interest in like money at the rate of twelve per cent
(12.0%) per annum from the date hereof for so long as payment on any principal
balance hereof remains unpaid, such principal and interest to be due and
payable on the following obligatory schedule (except as and to the extent
offset, anticipated, or prepaid, in whole or in part, as hereinafter provided):
Beginning June 15, 1998, and on December 15 and June 15 of each year
thereafter Maker shall pay to the holder hereof interest accrued on the
outstanding principal balance hereof until January 1, 2001, when final
payment of all then unpaid principal and accrued interest thereon shall be
due and payable.
The Maker reserves the right to anticipate and prepay at any time or
from time to time, without penalty, all or any part of the indebtedness
evidenced by this note. Any partial prepayment of principal also shall
include accrued interest on the unpaid principal balance to the date of such
prepayment, and each prepayment shall be applied to and be deducted from the
scheduled obligatory payments falling due hereunder in the inverse order of
their scheduled due dates. All prepayments on this note shall be
<PAGE>
recorded when made on the reverse side hereof by the then holder of this note.
The following, and only the following, shall constitute an "Event of
Default" under this note:
(a) any failure of Maker to make (or to cause to be made) to the then
holder of this note any scheduled obligatory payment of principal or interest
on this note when due and payable, which failure continues for a period of at
least thirty (30) consecutive calendar days after written notice of such
failure has been given to Maker by such holder, or
(b) the commencement by maker of a voluntary case under and within the
meaning of the United States Bankruptcy Code, or
(c) entry by a court of competent jurisdiction of an order in an
involuntary case commenced against Maker under and within the meaning of the
United States Bankruptcy Code that (i) forbids the Maker to continue to use,
acquire, or dispose of property as if no such involuntary case had been
commenced, or (ii) is for relief against Maker, or (iii) appoints an interim
trustee to take possession of Maker's property, or (iv) orders the
liquidation of Maker, and, in each case, sixty (60) consecutive calendar days
shall have elapsed since entry of any such order, such order shall then be
unstayed and effective, and such involuntary case shall then still be pending
and not dismissed.
Upon the occurrence and during the continuation of an Event of Default,
and not otherwise, the then holder of this note, at such holder's sole
election made by a written notice executed by such holder (expressly
referring to and describing this note and the Event of Default) and given to
Maker, may declare all of the then unpaid principal balance of this note,
together with any interest accrued thereon, to be, and they shall thereupon
become, immediately due and payable without presentment, demand, protest, or
other notice of any kind.
Any notice to Maker shall be deemed to have been given only upon the
earlier to occur of (a) actual receipt of such notice by Maker (whether by
hand delivery or facsimile transmission), or (b) the eighth day after the
date of deposit of such notice in the U.S. mail, postage prepaid, certified
or registered, with return receipt or proof of deliver required, addressed to
Maker at the address for Maker shown herein or at such other address as Maker
may theretofore establish by notice to Payee as provided in the Agreement.
Mere delay or failure to act shall not preclude the exercise or
enforcement of any right or remedy hereunder; all such rights
<PAGE>
and remedies shall be cumulative and may be exercised singularly or
concurrently, and the exercise or enforcement of any one such right or remedy
shall neither be a condition to nor bar the exercise or enforcement of any other
right or remedy.
The rights of all parties hereto and of each holder hereof shall be
governed by and enforced or construed only in accordance with the domestic,
substantive laws of the Commonwealth of Virginia, excluding those relating to
conflicts of laws.
The payment of any management fee by the Maker pursuant to any management
agreement [other than a Managed Affiliate Management Agreement with the Payee as
an affiliate of Brill Media Company, LLC and Brill Media Management, Inc. (the
"Issuer")] shall be subordinated to the obligation of the Maker under this note
to the same extent as the obligation of the Issuer and its subsidiaries under
the management agreements with Brill Media Company, L.P. are subordinated to the
obligation of the Issuer and its subsidiaries under the Notes and the Subsidiary
Guarantees issued and made by such persons under and pursuant to an Offering
Memorandum dated December 23, 1997, and entered into by the Issuer and the
subsidiaries therein identified.
Maker agrees to pay all reasonable attorneys' fees that may be incurred in
collecting this note after an Event of Default, but not to exceed 5% of any then
due and payable principal balance.
IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly
authorized officer on the day, month, and year first above written.
TSB IV, LLC
By: Tri-State Management, Inc.
Its Manager
By:_______________________________
a duly authorized officer
<PAGE>
EX-10.6(a)
Assets Purchase Agreement
ASSETS PURCHASE AGREEMENT
This agreement is entered into this 24th day of October 1997, by and
between CMB II, INC., a Virginia corporation ("Seller"), and MVP Radio, Inc. a
Missouri corporation ("Buyer").
RECITALS
Seller is the broadcast licensee of and owns and operates radio station
KATI-FM of California, Missouri (the "Station"). Buyer wishes to buy and Seller
wishes to sell and transfer to Buyer certain of Seller's assets, and Buyer
wishes to obtain an assignment of, and Seller wishes to assign and transfer to
Buyer, each license and authorization issued by the Federal Communications
Commission (the "Commission") for the operation of the Station, all upon the
terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing and the
agreements contained herein, Seller and Buyer hereby agree as follows:
1. Purchase and Sale of Property and Assets.
1.1 Upon and subject to compliance with all terms and conditions of
this agreement, at Closing (hereinafter defined) Buyer agrees to buy from
Seller, and Seller agrees to sell, assign, transfer, convey, and deliver to
Buyer all of Seller's right, title, and interest in and to all of the real,
personal, tangible, and intangible property and assets owned or leased and used
by Seller in the Stations' operations (including all of Seller's interests in
and to any of the Stations' real or personal property; machinery; vehicles;
fixtures; studio, broadcast, or transmitter equipment; supplies; music
collection; contracts, and leaseholds), excluding only the property described in
Section 1.2 (collectively, the "Property Sold").
1.2 The following are not part of the Property Sold and are not
being sold to Buyer: (a) Seller's (i) rights under this agreement, (ii) cash on
hand or in bank, (iii) corporate stock records, seal, and minute book, (iv)
insurance policies, or the proceeds thereof, (v) books of account and original
entry, (vi) unliquidated claims or choses in action, and (vii) notes or accounts
receivable, including all accounts with or due from related or affiliated
persons or companies; (b) such items otherwise includable as part of the
Property Sold as may be disposed of by Seller before Closing in the ordinary
course of Seller's business while acting in accordance with Seller's past
practices, and (c) those assets of Seller not used in the Stations' operations.
<PAGE>
2. Purchase Price.
2.1 The purchase price (the "Purchase Price") payable for the
Property Sold shall be the sum of One Million Fifty Thousand and no/100 Dollars
($1,050,000.00), adjusted as required by Section 2.2, to be paid by Buyer to
Seller at Closing in cash or by wire transfer of immediately available federal
funds and shall be allocated as set forth on Exhibit 2.01 hereof.
2.2 (a) Operation of Station and use of the Property Sold, and any
income or expenses attributable thereto, shall be for Seller's account until
Closing and thereafter shall be for Buyer's account. At Closing all prepaid
items (other than income taxes) that are received by Buyer or that will accrue
to Buyer's benefit after Closing shall be prorated between Buyer and Seller as
of Closing and the Purchase Price adjusted accordingly.
(b) If Buyer and Seller disagree as to the amount of any
adjustment required by this Section 2.2, such disputed amount or amounts will be
finally determined by Ernst & Young, and its fees and expenses shared equally by
Buyer and Seller.
2.3 Pursuant to an escrow agreement of even date herewith (the
"Escrow Agreement"), Buyer has deposited with Old National Trust Company,
Evansville, Indiana ("Agent") cash in the amount of Six Hundred Thousand and
No/100 Dollars ($600,000.00) (together with all income earned thereon, the
"Deposit"), to be held by the Agent pursuant to the terms and conditions of the
Escrow Agreement.
3. Closing; Applications; Etc.
3.1 Unless sooner terminated as herein provided for, consummation of
the sale and purchase contemplated hereby ("Closing") shall take place at 10:00
o'clock a.m., local time, at the offices of Thompson & McMullan, P.C., 100
Shockoe Slip, Richmond, Virginia 23219, on (a) the fifth (5th) business day
following the date on which the Commission's consent to the Applications has
become final, or (b), at Seller's option upon ten (10) days prior notice to
Buyer at such earlier time for Closing as Seller designates in such notice given
after Seller has received notice of the Commission's consent to the
Applications, or (c) at such other time and/or place as Buyer and Seller
hereafter may agree upon in writing (such date as so determined, designated, or
agreed upon shall be the "Closing Date").
3.2 In exchange for and upon receipt of the items to be delivered at
Closing by Buyer, as described in Section 3.3, Seller agrees to and shall
deliver or cause to be delivered to Buyer at Closing each of the following:
2
<PAGE>
(a) such documents and duly executed instruments as shall be
necessary and appropriate to Closing, including instruments of conveyance,
assignment, or transfer sufficient to assign, convey, transfer to, and vest in
Buyer all of Seller's right, title, and interest in and to the Property Sold
free and clear of any and all liens or encumbrances as and to the extent
warranted by Seller in Section 4.6;
(b) a certified copy of necessary corporate proceedings and
resolutions duly adopted by Seller and its shareholder(s) authorizing and
approving execution and delivery of this agreement and consummation of the
transactions contemplated hereby;
(c) the legal opinion of Messrs. Thompson & McMullan, 100
Shockoe Slip, Richmond, Virginia 23219, dated as of the Closing Date, in form
and substance satisfactory to Buyer as to the matters set forth in Sections 4.1
and 4.2; and
(d) a list of Seller's accounts receivable (aged 30, 60, 90
days, etc.) for the Station (the "Accounts Receivable").
3.3 Contemporaneously with Seller's performance of its obligations
described in Section 3.2, Buyer agrees to and shall deliver to Seller at Closing
each of the following:
(a) payment to Seller of the Purchase Price as described in
Section 2.1;
(b) the legal opinion of Buyer's legal counsel, dated as of
the Closing Date, in form and substance satisfactory to Seller as to the matters
set forth in Sections 7.1, 7.2, and 7.3;
(c) to the extent appropriate, certified copies of duly
adopted resolutions authorizing and approving execution and delivery of this
agreement and consummation of the transactions contemplated hereby; and
(d) such duly executed instruments, in form and substance
satisfactory to Seller, as are required by Section 3.6.
3.4 Until Closing Buyer shall not directly or indirectly control,
determine, supervise, or direct or attempt to control, determine, supervise, or
direct the operations of Station or its policies or programs.
3.5 Within five (5) business days of the date hereof, Buyer and
Seller will file or cause to be filed with the Commission appropriate, formal
applications ("Applications") for consent to assignment to Buyer of the Licenses
(hereinafter defined), and thereafter Seller and Buyer will diligently process
the
3
<PAGE>
Applications and will supply all information, filings, and documentation
concerning Buyer, Seller, and Station or their operations as the Commission
reasonably may require in connection therewith. The obligation for all charges
made by the Commission for filing and processing the Applications shall be borne
equally by Buyer and Seller.
3.6 As of and after Closing Buyer assumes and agrees to perform,
pay, and discharge all obligations, contracts, and liabilities of Seller as of
or arising after Closing pursuant to those instruments or agreements of Seller
identified on Exhibit 3.06.1 and as set forth in instruments of assumption [the
"Assumption Agreement(s)"], in form and substance satisfactory to Seller, to be
executed and delivered to Seller by Buyer at Closing.
3.7 At Closing, Seller will assign the Accounts Receivable to Buyer
as its agent for purposes of collection only for the period of ninety (90) days
immediately following Closing. During such period, as Seller's agent Buyer shall
have the exclusive right to and shall collect the Accounts Receivable in
Seller's name in the same manner and with the same diligence as used by Buyer to
collect Buyer's own accounts, except that Buyer shall not be required to file
any action or hire any collection agency for such purpose. Payments received by
Buyer on an account from any customer of Buyer that is also an account debtor to
Seller shall first be applied to Seller's Accounts Receivable. At the end of
each calendar month, Buyer will remit all collections on such Accounts
Receivable to Seller and shall deliver to Seller a summary of all such
collections for such month. When received by Buyer, such collections shall be
deposited in a separate account as designated by Seller. At the end of such
ninety (90) day period, Buyer shall deliver all remaining collections to Seller
along with a final summary of all collections for such period and shall return
to Seller all such Accounts Receivable then remaining uncollected, and Buyer's
responsibility and authority with respect to such Accounts Receivable thereupon
shall terminate.
3.8 Exhibit 3.08.1 is an accurate and complete list and brief
description of all contracts, leases, or other agreements to which Seller is a
party or to which it is bound.
4. Seller's Representations and Warranties. To induce Buyer to enter into
and perform this agreement, Seller represents and warrants to Buyer that each of
the following is true:
4.1 Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the Commonwealth of Virginia, has all requisite
corporate power and authority to conduct its business as it is now being
conducted and to own and operate Station, and is duly domesticated and qualified
to do business as a foreign corporation in the State of Missouri.
4
<PAGE>
4.2 This agreement and the actions contemplated hereby have been
validly authorized by Seller, and this agreement has been duly executed and
delivered by Seller and constitutes a legal, valid, and binding obligation of
Seller enforceable against Seller in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, or similar laws generally
affecting the enforcement of creditors' rights.
4.3 As listed and briefly identified on Exhibit 4.03, Seller
presently holds licenses and authorizations issued by the Commission for the
ownership and operation of the Station (the "Licenses"); the Licenses are in
full force and effect, and the Station is being operated in compliance with all
material terms of the Licenses and the Commission's applicable rules and
regulations.
4.4 The Property Sold, together with the assets described in Section
1.2, include all of Seller's assets that are currently being used by Seller to
operate the Station.
4.5 Except as Seller may have advised Buyer otherwise, Seller knows
of no legal, administrative, arbitrative, investigative, or other suit or action
pending or threatened against Seller.
4.6 Except for property leased by Seller, at Closing Seller will
convey to Buyer good, record (where applicable), and marketable title to all of
the Property Sold free and clear of all liens or encumbrances other than those
for (a) unpaid taxes not overdue and other liens, encumbrances, or minor
imperfections of title that do not materially detract from Seller's use or
materially interfere with Stations' operations as presently conducted, (b) such
as would be disclosed by a survey of any real property that is a part of the
Property Sold, and (c) the obligations listed on Exhibit 3.06.1 and to be
assumed by Buyer at Closing pursuant to Assumption Agreements.
4.7 Seller's execution of, delivery of, performance of, compliance
with, and Closing of this agreement will not constitute a default under or
result in any material breach of any term, condition, or provision of any
applicable agreement to which Seller is a party
5. Conduct Prior to Closing. Until Closing, Seller covenants and agrees
that:
5.1 Seller will carry on its business only in the ordinary course
and substantially in the same manner as heretofore.
5
<PAGE>
5.2 Upon prior reasonable notice from Buyer, Seller shall give
Buyer's authorized representatives reasonable access to the Station.
5.3 Without Buyer's prior consent, which shall not be unreasonably
withheld, Seller will not agree to any material modification of any written
agreement materially affecting the Station or the Property Sold.
5.4 Seller shall notify Buyer if it becomes aware that any
litigation or other judicial proceeding has been commenced against Seller.
5.5 No later than thirty (30) days prior to the Closing Date, Buyer
shall have performed a lien search with respect to the Property Sold and
notified Seller of any lien of record [other than a permitted lien described in
Section 4.6 above] as to any material portion of the Property Sold that Buyer is
unwilling to waive (a "Recorded Lien"). Failure to perform such search or to
notify Seller of each such Recorded Lien shall be deemed to be a waiver of
Buyer's right to object to any Recorded Lien that would have been discoverable
by such a search or to any defect so discovered or discoverable. Within fifteen
(15) days of receipt of such notice, Seller shall notify Buyer either that (a)
Seller will cause such Recorded Lien to be cured by, upon, or at Closing on the
Closing Date, or (b) Seller will not cure such Recorded Lien, and in the event
of (b) Buyer may either (i) proceed to Closing on the Closing Date subject to
such Recorded Lien or (ii) terminate this agreement by notice to Seller given
within ten (10) days after receipt of Seller's notice and thereupon be entitled
to a prompt refund of the Deposit.
6. Conditions to Buyer's Obligations. As conditions for the benefit of
Buyer, each and any of which Buyer may waive, each obligation of Buyer under
this agreement shall be subject to and conditioned upon satisfaction as of
Closing of each of the following:
6.1 Seller shall have complied in all material respects with the
terms of this agreement applicable to it.
6.2 In all material respects, each of Seller's representations and
warranties contained herein shall have been true and correct when made, shall be
deemed to be made again at and as of Closing, and in all material respects shall
then be true and correct.
6.3 Seller shall have delivered to Buyer each item listed in Section
3.2.
6
<PAGE>
6.4 Since the date of this agreement, no uninsured loss or damage
materially affecting Station or the Property Sold shall have occurred and be
continuing.
6.5 No law or order shall directly restrain or prohibit Closing, and
no suit, action, investigation, inquiry, or governmental or other proceeding,
judicial or administrative, shall have been instituted or be threatened raising
any material question as to the validity, legality, or enforceability of this
agreement or the transactions contemplated hereby.
6.6 The Commission's consent to the Applications shall have been
obtained and, unless Seller elects otherwise, such consent shall have become a
final order.
7. Buyer's Representations and Warranties. To induce Seller to enter into
and perform this agreement, Buyer represents and warrants to Seller that each of
the following is true:
7.1 Buyer has all requisite power and authority to enter into this
agreement, to consummate the transactions contemplated hereby, to conduct
Buyer's business as it is now being conducted, and to own and operate Buyer's
properties and assets.
7.2 This agreement and the actions contemplated hereby have been
validly authorized by Buyer, and this agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid, and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, or similar laws generally affecting
the enforcement of creditors' rights.
7.3 No litigation or proceeding is pending or, to Buyer's knowledge,
threatened that affects or may affect in any material, adverse manner Buyer's
power, authority, or ability to consummate the transactions contemplated hereby.
7.4 Buyer is now legally and financially qualified and able to
undertake and perform Buyer's obligations under and as contemplated by this
agreement, and Closing by Buyer on the Closing Date as contemplated hereby will
not violate, conflict with, or be void or voidable under any instrument, law,
rule, or regulation.
8. Conditions to Seller's Obligations. As conditions for the sole benefit
of Seller, each and any of which Seller may waive, each obligation of Seller
under this agreement shall be subject to and conditioned upon satisfaction as of
Closing of each of the following:
8.1 Buyer shall have complied in all material respects with the
terms of this agreement applicable to Buyer.
7
<PAGE>
8.2 In all material respects, each of Buyer's representations and
warranties contained herein shall have been true and correct when made, shall be
deemed to be made again at and as of Closing, and in all material respects shall
then be true and correct.
8.3 Buyer shall have delivered to Seller each item listed in Section
3.3.
8.4 Seller shall have determined that the conditions set forth in
Sections 6.5 and 6.6 shall have been met to Seller's reasonable satisfaction.
8.5 Contemporaneously with Closing hereunder, Closing (as therein
defined) shall have occurred under that certain agreement of even date herewith
entered into by and between Central Missouri Broadcasting, Inc. as "Seller", and
Zimmer Broadcasting of Mid-Missouri, Inc. as "Buyer" for the sale to "Buyer" by
"Seller" of all of the assets of radio stations KLIK-AM and KTXY-FM as therein
provided.
8.6 Buyer shall have complied in all respects with its obligations
under the Time Brokerage Agreement of even date herewith entered into by and
between Seller and Buyer.
9. Miscellaneous.
9.1. (a) Seller agrees to indemnify, defend, and hold Buyer harmless
from each and any action, suit, cause of action, loss, damage, or claim (singly
a "Claim"; collectively, the "Claims") asserted against or incurred or sustained
by Buyer and arising from, based on, or on account of (i) Company's operation of
the Station prior to Closing, (ii) any Claim asserted against Seller, or (iii)
any material failure to perform or breach or untruthfulness of any material
covenant, representation, or warranty of Seller herein.
(b) Buyer agrees to indemnify, defend, and hold Seller
harmless from each and any Claim or Claims asserted against or incurred or
sustained by Seller and arising from, based on, or on account of (i) Buyer's
operation of the Station after Closing, (ii) any Claim asserted against Buyer,
or (iii) any material failure to perform or breach or untruthfulness of any
material covenant, representation or warranty of Buyer herein.
(c) Each indemnity obligation herein shall be enforceable only
after the aggregate amount of all Claims against the indemnified party shall
have exceeded Five Thousand and no/100 Dollars ($5,000.00) and shall survive
Closing but expire as to all
8
<PAGE>
Claims made after the last day of the twenty-fourth (24th) full calendar month
following Closing.
9.2 Each notice or other communication hereunder shall be in writing
and shall be effective only upon receipt if sent prepaid via overnight courier
service, or if delivered personally, or if sent by telecopy (during business
hours) followed by overnight courier service, postage prepaid, or ten (10) days
after having been mailed certified or registered United States mail, postage
prepaid, addressed to the appropriate party as follows:
If to Seller: CMB II, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street
Evansville, Indiana 47708
Attention: Mr. Alan R. Brill
Facsimile No.: (812) 428-4021
copy to: Charles W. Laughlin, Esquire
Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
Facsimile No.: (804) 780-1813
if to Buyer: MVP Radio, Inc.
324 Broadway
P.O. Box 1610
Cape Giradeau, MO 63702-1610
By a like notice, either party may change the address of such party for
future notices.
9.3 This agreement may not be assigned or amended, in whole or in
part, without the prior, written consent of all parties hereto and shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
9.4 Without any liability on Seller as a result of such actions,
Seller may, but shall not be required to, rescind and terminate this agreement
and Seller's obligations hereunder by notice to Buyer (a) within thirty (30)
days after Seller first receives notice either (i) that Buyer is not FCC
qualified or (ii) that filings have been made in opposition to any of the
Applications or that any of the Applications will be or has been designated for
hearing, or (b) if Closing shall not have occurred (through no fault of Seller)
within one hundred eighty (180) days of the date hereof.
9.5 Buyer and Seller represent and warrant each to the other that
only Media Services Group shall be entitled to a commission as a result of
Closing, which commission, at agreed
9
<PAGE>
rates, Buyer shall pay upon Closing, and Buyer shall hold Seller harmless from
any claim therefor. If a claim is made by any other broker in connection with
this transaction, the party who is alleged to have engaged or retained such
broker shall indemnify and hold harmless the other party from any and all
liabilities and expenses connected therewith.
9.6 Wherever used in this agreement each of the following terms
shall have the meaning defined in the Section of this agreement identified
below:
Term Section
---- -------
Accounts Receivable ss. 3.2(d)
Applications ss. 3.5
Agent ss. 2.3
Assumption Agreement(s) ss. 3.6
Buyer Preamble
Claim(s) ss. 9.1(a)
Closing ss. 3.1
Closing Date ss. 3.1
Commission Recitals
Deposit ss. 2.3
Escrow Agreement ss. 2.3
Licenses ss. 4.3
Property Sold ss. 1.1
Purchase Price ss. 2.1
Recorded Lien ss. 5.5
Seller Preamble
Station Recitals
9.7 If Closing does not occur on the Closing Date, Buyer shall
forthwith return all documents received from Seller and thereafter will cause
all confidential information it obtained concerning Seller, Station, or the
Company to be treated as such.
9.8 This agreement, its enforceability or interpretation, and the
legal relationships between Buyer and Seller created hereby shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia,
without giving effect to such laws' principles regarding choice of law or
conflicts of laws.
9.9 The Section headings were inserted for convenience only and are
not a substantive part of this agreement.
9.10 If any one or more of the provisions contained in this
agreement, or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal, or unenforceable in any respect, then to the
maximum extent permitted by law such invalidity, illegality, or unenforceability
shall not
10
<PAGE>
affect any other provision of this agreement or any other such instrument.
9.11 This agreement contains the entire understanding of the parties
hereto with respect to its subject matter. As between Buyer and Seller there are
no agreements, restrictions, promises, representations, warranties, covenants,
or undertakings other than as expressly set forth herein, and this agreement
waives, releases, and supersedes any and all such and also each and any prior
agreement or understanding between the parties (or their agents, principals, or
representatives) concerning the transactions contemplated hereby.
9.12 This agreement may be executed in any number of counterparts,
each of which shall constitute an original, which, when the first such
counterpart shall have been executed by each of Buyer and Seller, shall
constitute but one and the same agreement.
9.13 Buyer and Seller agree that Buyer has had and shall have the
right to examine the Property Sold to the extent reasonably desired, that the
personal property included in the Property Sold is being sold "as is", with "all
faults" as of the date hereof, reasonable wear and tear excepted, and without
and excluding each and any warranty, express or implied, other than the warranty
of title as and to the extent expressly set forth in Section 4.6, and that as to
each, all, or any part of the personal property included in the Property Sold
there is no warranty, express or implied, as to its or their merchantability,
freedom or lack of freedom from defect, fitness for any particular use or
purpose, or value or condition.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement
as of the day, month, and year first above written.
Seller: CMB II, Inc.
by:___________________________
a duly authorized officer
Buyer: MVP Radio, Inc.
by:________________________________
a duly authorized officer
11
<PAGE>
Exhibit 2.01
Allocation of Purchase Price
CMB II, Inc.
- ------------
Studio Building Leasehold Improvements $ 5,000
Broadcast Equipment 245,000
Goodwill, FCC License and other intangibles 800,000
----------
Total $1,050,000
==========
<PAGE>
Exhibit 3.06.1
Assumed Obligations Reducing the Purchase Price
Pursuant to Section 3.06.1
(to come)
<PAGE>
Exhibit 3.08.1
List of Contracts
<PAGE>
Exhibit 4.03
License
KATI-FM, California, Missouri
94.3 MHz
Class "C2", 50 kw nondirectional;
150 meters HAAT; unlimited hours
License file # BZH951013KA
Grant: 1/28/97
Expires: 2/1/05
<PAGE>
EX-10.6(b)
Assets Purchase Agreement
ASSETS PURCHASE AGREEMENT
This agreement is entered into this 24th day of October 1997, by and
between CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation ("Seller"),
and ZIMMER RADIO OF MID-MISSOURI, INC. a Missouri corporation ("Buyer").
RECITALS
Seller is the broadcast licensee of and owns and operates radio stations
KLIK-AM and KTXY-FM of Jefferson City, Missouri (the "Stations"). Buyer wishes
to buy and Seller wishes to sell and transfer to Buyer certain of Seller's
assets, and Buyer wishes to obtain an assignment of, and Seller wishes to assign
and transfer to Buyer, each license and authorization issued by the Federal
Communications Commission (the "Commission") for the operation of the Stations,
all upon the terms and conditions set forth herein.
NOW, THEREFORE, for and in consideration of the foregoing and the
agreements contained herein, Seller and Buyer hereby agree as follows:
1. Purchase and Sale of Property and Assets.
1.1 Upon and subject to compliance with all terms and conditions of
this agreement, at Closing (hereinafter defined) Buyer agrees to buy from
Seller, and Seller agrees to sell, assign, transfer, convey, and deliver to
Buyer all of Seller's right, title, and interest in and to all of the real,
personal, tangible, and intangible property and assets owned or leased and used
by Seller in the Stations' operations (including all of Seller's interests in
and to any of the Stations' real or personal property; machinery; vehicles;
fixtures; studio, broadcast, or transmitter equipment; supplies; music
collection; contracts, and leaseholds), excluding only the property described in
Section 1.2 (collectively, the "Property Sold").
1.2 The following are not part of the Property Sold and are not
being sold to Buyer: (a) Seller's (i) rights under this agreement, (ii) cash on
hand or in bank, (iii) corporate stock records, seal, and minute book, (iv)
insurance policies, or the proceeds thereof, (v) books of account and original
entry, (vi) unliquidated claims or choses in action, and (vii) notes or accounts
receivable, including all accounts with or due from related or affiliated
persons or companies; (b) such items otherwise includable as part of the
Property Sold as may be disposed of by Seller before Closing in the ordinary
course of Seller's business while acting in accordance with Seller's past
practices, and (c) those assets of Seller not used in the Stations' operations.
<PAGE>
2. Purchase Price.
2.1 The purchase price (the "Purchase Price") payable for the
Property Sold shall be the sum of Six Million Six Hundred Twenty-Five Thousand
and no/100 Dollars ($6,625,000.00), adjusted as required by Section 2.2, to be
paid by Buyer to Seller at Closing in cash or by wire transfer of immediately
available federal funds and shall be allocated as set forth on Exhibit 2.01
hereof.
2.2 (a) Operation of Stations and use of the Property Sold, and any
income or expenses attributable thereto, shall be for Seller's account until
Closing and thereafter shall be for Buyer's account. At Closing all prepaid
items (other than income taxes) that are received by Buyer or that will accrue
to Buyer's benefit after Closing shall be prorated between Buyer and Seller as
of Closing and the Purchase Price adjusted accordingly.
(b) The Purchase Price shall be reduced at Closing by the then
amount of Seller's liabilities listed and briefly described on Exhibit 2.02,
which liabilities shall be assumed by Buyer at Closing pursuant to the
Assumption Agreements (hereinafter defined).
(c) If Buyer and Seller disagree as to the amount of any
adjustment required by this Section 2.2, such disputed amount or amounts will be
finally determined by Ernst & Young, and its fees and expenses shared equally by
Buyer and Seller.
2.3 Pursuant to an escrow agreement of even date herewith (the
"Escrow Agreement"), Buyer has deposited with Old National Trust Company,
Evansville, Indiana ("Agent") cash in the amount of Two Million Four Hundred
Thousand and No/100 Dollars ($2,400,000.00) (together with all income earned
thereon, the "Deposit"), to be held by the Agent pursuant to the terms and
conditions of the Escrow Agreement.
3. Closing; Applications; Etc.
3.1 Unless sooner terminated as herein provided for, consummation of
the sale and purchase contemplated hereby ("Closing") shall take place at 10:00
o'clock a.m., local time, at the offices of Thompson & McMullan, P.C., 100
Shockoe Slip, Richmond, Virginia 23219, on (a) the fifth (5th) business day
following the date on which Seller receives notice that the Commission's consent
to the Applications has become final, or (b), at Seller's option upon ten (10)
days prior notice to Buyer at such earlier time for Closing as Seller designates
in such notice given after Seller has received notice of the Commission's
consent to the Applications, or (c) at such other time and/or place as Buyer and
Seller hereafter may agree upon in writing (such date as so
2
<PAGE>
determined, designated, or agreed upon shall be the "Closing Date").
3.2 In exchange for and upon receipt of the items to be delivered at
Closing by Buyer, as described in Section 3.3, Seller agrees to and shall
deliver or cause to be delivered to Buyer at Closing each of the following:
(a) such documents and duly executed instruments as shall be
necessary and appropriate to Closing, including instruments of conveyance,
assignment, or transfer sufficient to assign, convey, transfer to, and vest in
Buyer all of Seller's right, title, and interest in and to the Property Sold
free and clear of any and all liens or encumbrances as and to the extent
warranted by Seller in Section 4.6;
(b) a certified copy of necessary corporate proceedings and
resolutions duly adopted by Seller and its shareholder(s) authorizing and
approving execution and delivery of this agreement and consummation of the
transactions contemplated hereby;
(c) the legal opinion of Messrs. Thompson & McMullan, 100
Shockoe Slip, Richmond, Virginia 23219, dated as of the Closing Date, in form
and substance satisfactory to Buyer as to the matters set forth in Sections 4.1
and 4.2;
(d) a list of Seller's accounts receivable (aged 30, 60, 90
days, etc.) for the Stations (the "Accounts Receivable"); and
(e) transfer to Buyer from Tower Company, Inc. ("Tower") of
title to the broadcast equipment listed and briefly described on Exhibit 3.02.1
in return for payment by Buyer to Tower Company of Twenty Five Thousand and
no/100 Dollars ($25,000.00) cash.
3.3 Contemporaneously with Seller's performance of its obligations
described in Section 3.2, Buyer agrees to and shall deliver to Seller at Closing
each of the following:
(a) payment to Seller of the Purchase Price as described in
Section 2.1 and to Tower of the agreed purchase price for the broadcast
equipment listed on Exhibit 3.02.1;
(b) the legal opinion of Buyer's legal counsel, dated as of
the Closing Date, in form and substance satisfactory to Seller as to the matters
set forth in Sections 7.1, 7.2, and 7.3;
(c) to the extent appropriate, certified copies of duly
adopted resolutions authorizing and approving execution and
3
<PAGE>
delivery of this agreement and consummation of the transactions contemplated
hereby; and
(d) such duly executed instruments, in form and substance
satisfactory to Seller, as are required by Section 3.6.
3.4 Until Closing Buyer shall not directly or indirectly control,
determine, supervise, or direct or attempt to control, determine, supervise, or
direct the operations of Stations or their policies or programs.
3.5 Within five (5) business days of the date hereof, Buyer and
Seller will file or cause to be filed with the Commission appropriate, formal
applications ("Applications") for consent to assignment to Buyer of the Licenses
(hereinafter defined), and thereafter Seller and Buyer will diligently process
the Applications and will supply all information, filings, and documentation
concerning Buyer, Seller, and Stations or their operations as the Commission
reasonably may require in connection therewith. The obligation for all charges
made by the Commission for filing and processing the Applications shall be borne
equally by Buyer and Seller.
3.6 As of and after Closing Buyer assumes and agrees to perform,
pay, and discharge all obligations, contracts, and liabilities of Seller as of
or arising after Closing pursuant to those instruments or agreements of Seller
identified on Exhibit 3.06.1 and as set forth in instruments of assumption [the
"Assumption Agreement(s)"], in form and substance satisfactory to Seller, to be
executed and delivered to Seller by Buyer at Closing.
3.7 At Closing, Seller will assign the Accounts Receivable to Buyer
as its agent for purposes of collection only for the period of ninety (90) days
immediately following Closing. During such period, as Seller's agent Buyer shall
have the exclusive right to and shall collect the Accounts Receivable in
Seller's name in the same manner and with the same diligence as used by Buyer to
collect Buyer's own accounts, except that Buyer shall not be required to file
any action or hire any collection agency for such purpose. Payments received by
Buyer on an account from any customer of Buyer that is also an account debtor to
Seller shall first be applied to Seller's Accounts Receivable. At the end of
each calendar month, Buyer will remit all collections on such Accounts
Receivable to Seller and shall deliver to Seller a summary of all such
collections for such month. When received by Buyer, such collections shall be
deposited in a separate account as designated by Seller. At the end of such
ninety (90) day period, Buyer shall deliver all remaining collections to Seller
along with a final summary of all collections for such period and shall return
to Seller all such Accounts Receivable then remaining uncollected,
4
<PAGE>
and Buyer's responsibility and authority with respect to such Accounts
Receivable thereupon shall terminate.
3.8 Exhibit 3.08.1 is an accurate and complete list and brief
description of all contracts, leases, or other agreements to which Seller is a
party or to which it is bound.
4. Seller's Representations and Warranties. To induce Buyer to enter into
and perform this agreement, Seller represents and warrants to Buyer that each of
the following is true:
4.1 Seller is a corporation duly organized, validly existing, and in
good standing under the laws of the Commonwealth of Virginia, has all requisite
corporate power and authority to conduct its business as it is now being
conducted and to own and operate Stations, and is duly domesticated and
qualified to do business as a foreign corporation in the State of Missouri.
4.2 This agreement and the actions contemplated hereby have been
validly authorized by Seller, and this agreement has been duly executed and
delivered by Seller and constitutes a legal, valid, and binding obligation of
Seller enforceable against Seller in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, or similar laws generally
affecting the enforcement of creditors' rights.
4.3 As listed and briefly identified on Exhibit 4.03, Seller
presently holds licenses and authorizations issued by the Commission for the
ownership and operation of the Stations (the "Licenses"); the Licenses are in
full force and effect, and the Stations are being operated in compliance with
all material terms of the Licenses and the Commission's applicable rules and
regulations.
4.4 The Property Sold, together with the assets described in Section
1.2, include all of Seller's assets that are currently being used by Seller to
operate the Stations.
4.5 Except as Seller may have advised Buyer otherwise, Seller knows
of no legal, administrative, arbitrative, investigative, or other suit or action
pending or threatened against Seller.
4.6 Except for property leased by Seller, at Closing Seller will
convey to Buyer good, record (where applicable), and marketable title to all of
the Property Sold free and clear of all liens or encumbrances other than (a)
those for unpaid taxes not overdue and other liens, encumbrances, or minor
imperfections of title that do not materially detract from Seller's use or
materially interfere with Stations' operations as presently conducted, (b) such
as would be disclosed by a survey of any real property that is a part of the
Property Sold, and (c) the
5
<PAGE>
obligations listed on Exhibit 3.06.1 and to be assumed by Buyer at Closing
pursuant to Assumption Agreements.
4.7 Seller's execution of, delivery of, performance of, compliance
with, and Closing of this agreement will not constitute a default under or
result in any material breach of any term, condition, or provision of any
applicable agreement to which Seller is a party
5. Conduct Prior to Closing. Until Closing, Seller covenants and agrees
that:
5.1 Seller will carry on its business only in the ordinary course
and substantially in the same manner as heretofore.
5.2 Upon prior reasonable notice from Buyer, Seller shall give
Buyer's authorized representatives reasonable access to the Stations.
5.3 Without Buyer's prior consent, which shall not be unreasonably
withheld, Seller will not agree to any material modification of any written
agreement materially affecting the Stations or the Property Sold.
5.4 Seller shall notify Buyer if it becomes aware that any
litigation or other judicial proceeding has been commenced against Seller.
5.5 No later than thirty (30) days prior to the Closing Date, Buyer
shall have performed a lien search with respect to the Property Sold and
notified Seller of any lien of record [other than a permitted lien described in
Section 4.6 above] as to any material portion of the Property Sold that Buyer is
unwilling to waive (a "Recorded Lien"). Failure to perform such search or to
notify Seller of each such Recorded Lien shall be deemed to be a waiver of
Buyer's right to object to any Recorded Lien that would have been discoverable
by such a search or to any defect so discovered or discoverable. Within fifteen
(15) days of receipt of such notice, Seller shall notify Buyer either that (a)
Seller will cause such Recorded Lien to be cured by, upon, or at Closing on the
Closing Date, or (b) Seller will not cure such Recorded Lien, and in the event
of (b) Buyer may either (i) proceed to Closing on the Closing Date subject to
such Recorded Lien or (ii) terminate this agreement by notice to Seller given
within ten (10) days after receipt of Seller's notice and thereupon be entitled
to a prompt refund of the Deposit.
6. Conditions to Buyer's Obligations. As conditions for the benefit of
Buyer, each and any of which Buyer may waive, each obligation of Buyer under
this agreement shall be subject to and
6
<PAGE>
conditioned upon satisfaction as of Closing of each of the following:
6.1 Seller shall have complied in all material respects with the
terms of this agreement applicable to it.
6.2 In all material respects, each of Seller's representations and
warranties contained herein shall have been true and correct when made, shall be
deemed to be made again at and as of Closing, and in all material respects shall
then be true and correct.
6.3 Seller shall have delivered to Buyer each item listed in Section
3.2.
6.4 Since the date of this agreement, no uninsured loss or damage
materially affecting Stations or the Property Sold shall have occurred and be
continuing.
6.5 No law or order shall directly restrain or prohibit Closing, and
no suit, action, investigation, inquiry, or governmental or other proceeding,
judicial or administrative, shall have been instituted or be threatened raising
any material question as to the validity, legality, or enforceability of this
agreement or the transactions contemplated hereby.
6.6 The Commission's consent to the Applications shall have been
obtained and, unless Seller elects otherwise, such consent shall have become a
final order.
6.7 At Closing, Tower shall have transferred to Buyer title to the
broadcast equipment listed and briefly described on Exhibit 3.02.1 upon Buyer's
payment to Tower of the agreed purchase price therefor.
7. Buyer's Representations and Warranties. To induce Seller to enter into
and perform this agreement, Buyer represents and warrants to Seller that each of
the following is true:
7.1 Buyer has all requisite power and authority to enter into this
agreement, to consummate the transactions contemplated hereby, to conduct
Buyer's business as it is now being conducted, and to own and operate Buyer's
properties and assets.
7.2 This agreement and the actions contemplated hereby have been
validly authorized by Buyer, and this agreement has been duly executed and
delivered by Buyer and constitutes a legal, valid, and binding obligation of
Buyer enforceable against Buyer in accordance with its terms, except as limited
by bankruptcy, insolvency, reorganization, or similar laws generally affecting
the enforcement of creditors' rights.
7
<PAGE>
7.3 No litigation or proceeding is pending or, to Buyer's knowledge,
threatened that affects or may affect in any material, adverse manner Buyer's
power, authority, or ability to consummate the transactions contemplated hereby.
7.4 Buyer is now legally and financially qualified and able to
undertake and perform Buyer's obligations under and as contemplated by this
agreement, and Closing by Buyer on the Closing Date as contemplated hereby will
not violate, conflict with, or be void or voidable under any instrument, law,
rule, or regulation.
8. Conditions to Seller's Obligations. As conditions for the sole benefit
of Seller, each and any of which Seller may waive, each obligation of Seller
under this agreement shall be subject to and conditioned upon satisfaction as of
Closing of each of the following:
8.1 Buyer shall have complied in all material respects with the
terms of this agreement applicable to Buyer.
8.2 In all material respects, each of Buyer's representations and
warranties contained herein shall have been true and correct when made, shall be
deemed to be made again at and as of Closing, and in all material respects shall
then be true and correct.
8.3 Buyer shall have delivered to Seller each item listed in Section
3.3.
8.4 Seller shall have determined that the conditions set forth in
Sections 6.5 and 6.6 shall have been met to Seller's reasonable satisfaction.
8.5 Contemporaneously with Closing hereunder, Closing (as therein
defined) shall have occurred under that certain agreement of even date herewith
entered into by and between CMB II, Inc. as "Seller", and MVP Radio, Inc. as
"Buyer" for the sale to "Buyer" by "Seller" of all assets of radio station
KATI-FM as therein provided.
8.6 Buyer shall have complied in all respects with its obligations
under the Time Brokerage Agreement of even date herewith entered into by and
between Seller and Buyer.
9. Miscellaneous.
9.1. (a) Seller agrees to indemnify, defend, and hold Buyer harmless
from each and any action, suit, cause of action, loss, damage, or claim (singly
a "Claim"; collectively, the "Claims") asserted against or incurred or sustained
by Buyer and
8
<PAGE>
arising from, based on, or on account of (i) Company's operation of the Stations
prior to Closing, (ii) any Claim asserted against Seller, or (iii) any material
failure to perform or breach or untruthfulness of any material covenant,
representation, or warranty of Seller herein.
(b) Buyer agrees to indemnify, defend, and hold Seller
harmless from each and any Claim or Claims asserted against or incurred or
sustained by Seller and arising from, based on, or on account of (i) Buyer's
operation of the Stations after Closing, (ii) any Claim asserted against Buyer,
or (iii) any material failure to perform or breach or untruthfulness of any
material covenant, representation or warranty of Buyer herein.
(c) Each indemnity obligation herein shall be enforceable only
after the aggregate amount of all Claims against the indemnified party shall
have exceeded Five Thousand and no/100 Dollars ($5,000.00) and shall survive
Closing but expire as to all Claims made after the last day of the twenty-fourth
(24th) full calendar month following Closing.
9.2 Each notice or other communication hereunder shall be in writing
and shall be effective only upon receipt if sent prepaid via overnight courier
service, or if delivered personally, or if sent by telecopy (during business
hours) followed by overnight courier service, postage prepaid, or ten (10) days
after having been mailed certified or registered United States mail, postage
prepaid, addressed to the appropriate party as follows:
If to Seller: Central Missouri Broadcasting, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street
Evansville, Indiana 47708
Attention: Mr. Alan R. Brill
Facsimile No.: (812) 428-4021
copy to: Charles W. Laughlin, Esquire
Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
Facsimile No.: (804) 780-1813
if to Buyer: Zimmer Radio of Mid-Missouri, Inc.
324 Broadway
P.O. Box 1610
Cape Giradeau, MO 63702-1610
By a like notice, either party may change the address of such party for
future notices.
9
<PAGE>
9.3 This agreement may not be assigned or amended, in whole or in
part, without the prior, written consent of all parties hereto and shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
9.4 Without any liability on Seller as a result of such actions,
Seller may, but shall not be required to, rescind and terminate this agreement
and Seller's obligations hereunder by notice to Buyer (a) within thirty (30)
days after Seller first receives notice either (i) that Buyer is not FCC
qualified or (ii) that filings have been made in opposition to any of the
Applications or that any of the Applications will be or has been designated for
hearing, or (b) if Closing shall not have occurred (through no fault of Seller)
within one hundred eighty (180) days of the date hereof.
9.5 Buyer and Seller represent and warrant each to the other that
only Media Services Group shall be entitled to a commission as a result of
Closing, which commission, at agreed rates, Buyer shall pay upon Closing, and
Buyer shall hold Seller harmless from any claim therefor. If a claim is made by
any other broker in connection with this transaction, the party who is alleged
to have engaged or retained such broker shall indemnify and hold harmless the
other party from any and all liabilities and expenses connected therewith.
9.6 Wherever used in this agreement each of the following terms
shall have the meaning defined in the Section of this agreement identified
below:
Term Section
---- -------
Accounts Receivable ss. 3.2(d)
Applications ss. 3.5
Agent ss. 2.3
Assumption Agreement(s) ss. 3.6
Buyer Preamble
Claim(s) ss. 9.1(a)
Closing ss. 3.1
Closing Date ss. 3.1
Commission Recitals
Deposit ss. 2.3
Escrow Agreement ss. 2.3
Licenses ss. 4.3
Property Sold ss. 1.1
Purchase Price ss. 2.1
Recorded Lien ss. 5.5
Seller Preamble
Stations Recitals
Tower ss. 3.2(e)
10
<PAGE>
9.7 If Closing does not occur on the Closing Date, Buyer shall
forthwith return all documents received from Seller and thereafter will cause
all confidential information it obtained concerning Seller, Stations, or the
Company to be treated as such.
9.8 This agreement, its enforceability or interpretation, and the
legal relationships between Buyer and Seller created hereby shall be governed by
and construed in accordance with the laws of the Commonwealth of Virginia,
without giving effect to such laws' principles regarding choice of law or
conflicts of laws.
9.9 The Section headings were inserted for convenience only and are
not a substantive part of this agreement.
9.10 If any one or more of the provisions contained in this
agreement, or in any other instrument referred to herein, shall, for any reason,
be held to be invalid, illegal, or unenforceable in any respect, then to the
maximum extent permitted by law such invalidity, illegality, or unenforceability
shall not affect any other provision of this agreement or any other such
instrument.
9.11 This agreement contains the entire understanding of the parties
hereto with respect to its subject matter. As between Buyer and Seller there are
no agreements, restrictions, promises, representations, warranties, covenants,
or undertakings other than as expressly set forth herein, and this agreement
waives, releases, and supersedes any and all such and also each and any prior
agreement or understanding between the parties (or their agents, principals, or
representatives) concerning the transactions contemplated hereby.
9.12 This agreement may be executed in any number of counterparts,
each of which shall constitute an original, which, when the first such
counterpart shall have been executed by each of Buyer and Seller, shall
constitute but one and the same agreement.
9.13 Buyer and Seller agree that Buyer has had and shall have the
right to examine the Property Sold to the extent reasonably desired, that the
personal property included in the Property Sold is being sold "as is", with "all
faults" as of the date hereof, reasonable wear and tear excepted, and without
and excluding each and any warranty, express or implied, other than the warranty
of title as and to the extent expressly set forth in Section 4.6, and that as to
each, all, or any part of the personal property included in the Property Sold
there is no warranty, express or implied, as to its or their merchantability,
freedom or lack of freedom from defect, fitness for any particular use or
purpose, or value or condition.
11
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement
as of the day, month, and year first above written.
Seller: Central Missouri Broadcasting, Inc.
by:___________________________
a duly authorized officer
Buyer: Zimmer Radio of Mid-Missouri, Inc.
by:________________________________
a duly authorized officer
12
<PAGE>
Exhibit 2.01
Allocation of Purchase Price
Central Missouri Broadcasting, Inc.
Studio Building Leasehold Improvements $ 35,000
Business Equipment 85,000
Vehicles 65,000
AM Towers 175,000
Broadcast Equipment 350,000
Goodwill, FCC License and other intangibles 5,915,000
----------
Total $6,625,000
==========
<PAGE>
Exhibit 2.02
Assumed Obligations Reducing the Purchase Price
Pursuant to Section 2.2
Balance to
Monthly Reduce
Creditor Description Payment Price
- -------- ----------- ------- ----------
Tower Company Tower space lease $6,000.00 $256,000
KTXY-FM
<PAGE>
Exhibit 3.02.1
Description of Broadcast Equipment
Transmitter and antenna
Harris HT-35 FM 35 RW Transmitter and accessories
Bird meter assembly (2 meters), accessories and lines
Myat Transfer Panel and associated accessories
Andrew Dehydrator and accessories
Altronic 35 KW Dummy Load
L.E.A. Voltage Surge Suppressor
QEI Modulation Monitor
Harris 6-foot Rack and Panel
VRC 2000 Remote control system with Data Interface, Video Display, printer
and Modem
Emerson Uninterrupted Power Supply
Marti SCA Generator and Marti SCA Demodular
Marti TSC-30 Package including Scala antenna and accessories
Moseley 6030 STL System and Mark Products 10-foot dish and 6-
foot dish
ERI FMT 8AC FM antennae with Shorting Stub, Beam Tilt, Deicer System with
Rosemount detector and controller
Main Transmission Line
1300-foot Andrew 4" Heliax, connectors, hangers, etc.
STL and TSL Transmission Line
1200-foot CSI 7/8 Coaxial Cable with grips, hangers, connectors, etc.
<PAGE>
Exhibit 3.06.1
Contracts to be Assumed
<PAGE>
Exhibit 3.08.1
List of Contracts
<PAGE>
Exhibit 4.03
Licenses
1. KTXY-FM, Jefferson City, Missouri
106.9 MHz, class "C", 100kw non-directional unlimited hours, 381 meters
HAAT
License #BLH-900727KA
Grant: 1/31/97
Expiration: 2/01/05
2. KLIK-AM, Jefferson City, Missouri
950 KHz, 5kw day non-directional; 5kw night directional unlimited hours
File# BZ-900205AA
Grant: 1/31/97
Expiration: 2/01/05
3. KPK310
450.01 MHz
RP Auxiliary Remote Pick Up, Affiliated station KTXY
Power: 30 watts
File #900052MA
Effective: 10/24/90
Expiration: 2/01/05
4. WLO-653
949.00 MHz
Auxiliary Broadcast Aural STL Unlimited hours. Affiliated with KTXY
Power: 10 watts
File #BPLST-880921MB
Effective: 6/15/89
Expiration: 2/01/05
5. KB-55702
450.15 MHz and 450.25 MHz
Auxiliary Broadcast R/P Mobile System, Associated with KTXY
Power: 15 watts
File # BLNRE-880714MB
Effective: 9/26/88
Expiration: 2/01/05
6. WMU-454
951.5 MHz
Auxiliary Broadcast Aural Intercity Relay, Associated with KTXY
Power: 5 watts
File #BPLIC-930923MD
Effective: 12/16/93
Expiration: 2/01/05
<PAGE>
Exhibit 4.03
Licenses
(continued from previous page)
7. WLO-538
948 MHz
Auxiliary Broadcast Aural STL, Associated with KTXY
Power: 6 watts
File #BPLST-880921MA
Effective: 2/07/89
Expiration: 2/01/05
8. KEH-584
161.70, 161.76 MHz
Remote Pick Up base Mobile System. Associated with KLIK, KTXY
Power: 90 watts
File #BLRE-28345
Effective: 8/29/77
Expiration: 2/01/05
<PAGE>
EX-10.8(a)
Time Brokerage Agreement
TIME BROKERAGE AGREEMENT
This time brokerage agreement dated November 1, 1997, is entered into by
and between CMB II, INC., a Virginia corporation ("Licensee"), and MVP RADIO,
INC., a Missouri corporation ("Programmer", and with Licensee, the "Parties").
Recitals.
Licensee owns radio station KATI-FM of California, Missouri (the
"Station"). Programmer's personnel are experienced in radio station ownership
and operation, and Licensee wishes to retain Programmer to provide sales and
marketing services, technical support, and programming for the Station, in
conformity with the rules, regulations, and policies for time brokerage
agreements of the Federal Communications Commission ("FCC") and this agreement.
Programmer as "Buyer" and Licensee as "Seller" have this day entered into a
certain agreement (the "Assets Purchase Agreement") for sale of the Station's
assets to Buyer as therein provided for. Terms not otherwise defined herein
shall be defined as in the Assets Purchase Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants herein contained and other good and valuable
consideration, the Parties, intending to be bound legally, agree as follows:
Section 1
Term and Programmer Services
1.1 Effective Date. The term (hereinafter defined) of this agreement shall
begin on the date hereof (the "Effective Date").
1.2 Term. The term (the "Term") shall continue from the Effective Date
until the earlier to occur of: (a) Closing (as therein defined) of the Assets
Purchase Agreement, or (b) termination of this agreement (as herein provided
for) or of the Assets Purchase Agreement.
1.3 Programmer Services. During the Term, Licensee agrees to make
available to Programmer on an exclusive basis broadcast time on the Station as
set forth in this agreement. Subject to Licensee's reasonable approval,
Programmer shall provide programming in the format and content of its selection
complete with commercial matter, news, public service announcements, and other
suitable programming for at least one hundred sixty-two (162) hours per week,
which broadcast time of the Station Licensee shall make available during the
Term exclusively to Programmer, free and clear of all rights of any other person
or entity. Licensee reserves to itself, however, the right to broadcast its own
<PAGE>
programming material for up to six (6) hours per week between the hours of 6 AM
- - 12:00 Noon on Sundays ("Licensee's Reserved Time") for its own regularly
scheduled news, public affairs and other suitable programming designed to serve
the community needs and interests of the Station's listening audience. Licensee
shall cooperate with and promptly notify Programmer if Licensee will use all or
any part of Licensee's Reserved Time, and Programmer shall have the right to use
any unused portion of Licensee's Reserved Time in default of such a notice from
Licensee.
1.4 Consideration, Fee. As consideration for the air time made available
during the term hereof Programmer shall make payments as set forth in Exhibit
1.4 hereto. The Parties agree that Exhibit 1.4 contains proprietary and
confidential information and each agrees to take all steps reasonably necessary
to maintain such confidentiality, including redacting such confidential
information from any copy of this Agreement that is filed with the FCC.
1.5 Expenses and Revenues. Programmer shall be solely responsible for all
expenses attributable to its programming on the Station, including but not
limited to any expenses incurred in the origination and/or delivery of its
programming to the Station's studio and transmitter sites, for all costs
associated with the acquisition, clearance, and production of its own
programming, and for the salaries, taxes, insurance and related costs for all
personnel employed by Programmer in connection with the sale of advertising
time, marketing of the Station, technical maintenance of Station's equipment,
and production and delivery of programming. Programmer shall retain all revenues
from the sale of commercial time during its programming of the Station,
including any revenues arising from Programmer's programming during Licensee's
Reserved Time.
1.6 Use of Station's Facilities. Subject to overall supervision by
Licensee and its employees, during the Term, Programmer shall make its studio
facilities (located within the Station's principal community contour) reasonably
available to Licensee only for the production and presentation of Licensee's
programming as provided for hereunder, and as otherwise necessary to fulfill
Licensee's obligations as FCC Licensee.
1.7 Contracts. Programmer shall cooperate with Licensee to fulfill all
appropriate contracts, agreements, and leases in effect on the Effective Date
that involve operation of the Station.
1.8 Collection of Accounts Receivable. During the Term, as agent for
Licensee Programmer shall collect the Licensee's accounts
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receivable for the Station that exist as of the Effective Date. Licensee shall
provide Programmer with a list of all such accounts receivable to be collected
by Programmer. In collecting such accounts receivable, Programmer shall use
reasonable diligence, but shall not be required to institute legal proceedings
to collect any account receivable, or to defend any claim or counterclaim by any
account debtor. All amounts received by Programmer from an account debtor that
also is an account debtor of Programmer during the Term shall be applied first
to payment of the accounts receivable of Licensee unless otherwise specifically
identified by the account debtor. Within ten (10) days of the end of each
calendar month of the Term, Licensee shall deliver to Programmer the amount of
all amounts collected and credited to the accounts receivable of Licensee during
the prior calendar month in accordance with this Section 1.8. Within ten (10)
days after the end of the Term, Programmer shall deliver to Licensee all records
of uncollected accounts receivable of Licensee and any amounts not previously
remitted to Licensee at which time Programmer's obligation for the collection of
Licensee's accounts receivable as herein provided shall cease.
Section 2
Licensee's and Programmer's Duties and Obligations
2.1 Licensee's Authority. During the Term, Licensee shall have full
authority, power, and control over the management and operation of the Station,
and at its sole expense shall be responsible for compliance by Station with all
applicable provisions of the Communications Act of 1934, as amended (the "Act"),
the rules, regulations and policies of the FCC, and all other applicable laws,
rules, and regulations. During the Term, at its sole expense, Licensee shall
maintain all FCC Licenses for the Station's operation in full force and effect
in compliance with all FCC rules, regulations, and policies, and shall timely
file all necessary reports and prosecute to a satisfactory conclusion all
renewal or other applications necessary to maintain such Licenses in full force
and effect during the Term, without material change or restriction. Upon
Licensee's failure to fulfill any obligation hereunder, Programmer may take
reasonable steps to cure such failure(s) and may charge the expense thereof to
Licensee and/or deduct all or any part of such expense from any payment
otherwise due to Licensee from Programmer.
2.2 Programming. Programmer recognizes that the Station is obligated to
broadcast programming to meet the needs and interests of the California,
Missouri, area, and Programmer shall air programming on issues of importance to
the local community. In the event of the occurrence of a local or national
emergency that in
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the good faith, reasonable judgment of Licensee, is not being adequately
addressed by Programmer, Licensee retains the right to interrupt Programmer's
programming and substitute programming produced by Licensee that is more
responsive to the emergency.
2.3 Station's ID. During the Term, Programmer shall coordinate with
Licensee to ensure that the Station's hourly station identification and any
other required announcements are aired as Licensee may direct, and Licensee
shall retain all present call signs of the Station.
2.4 Political Advertising. During the Term, Programmer shall cooperate
with Licensee in Licensee's compliance with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be necessary
to comply with FCC rules and polices, including those concerning the lowest unit
rate, equal opportunities, reasonable access, political file, and related
requirements of federal law. Programmer, in consultation with Licensee, shall
develop a statement that discloses the Station's political broadcasting policies
to political candidates, and Programmer shall follow those policies in the sale
of any political programming or advertising during the Term. In the event that
Programmer fails to satisfy political broadcasting requirements under the Act
and the rules, regulations, and policies of the FCC and such failure inhibits
Licensee in its compliance with the political broadcasting requirements of the
FCC, then to the extent reasonably necessary to assure such compliance,
Programmer shall either provide rebates to political advertisers or release
advertising availabilities to Licensee.
2.5 Main Studio. During the Term, Licensee shall (i) maintain and staff a
main studio, as that term is defined by the FCC, at a location that complies
with FCC rules for the location of a main studio within such area, (ii) maintain
a local public inspection file within California, Missouri, and (iii) prepare
and place in such inspection file in a timely manner all material required by
Section 73.3526 of the FCC's rules, including without limitation the Station's
quarterly issues/program lists. Programmer shall provide Licensee with timely
information concerning Programmer's programs as is necessary to assist Licensee
in the preparation of such lists.
2.6 Employment Practices. Programmer shall provide to Licensee such
information as Licensee reasonably may request concerning Programmer's
recruitment, hiring, or employment practices in connection with Programmer's
provision of services to
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the Station. Programmer shall be directly and solely responsible for the
salaries, taxes, insurance, and related costs for all of the personnel employed
by it in operating the Station after the Effective Date.
Section 3
Programming
3.1 Programming Policy Statement. During the Term, Programmer shall comply
in all material respects with all applicable laws, rules, and regulations.
3.2 Licensee's Oversight of Programming. Programmer recognizes that
Licensee has the right to reject or refuse any portion of Programmer's
programming that is contrary to the public interest.
3.3 Compliance. Programmer shall not broadcast any material in violation
of any applicable law, rule, or regulation.
3.4 Payola. Programmer will not accept, and will not knowingly permit any
of its employees to accept, any consideration, compensation, gift, or gratuity
of any kind whatsoever, regardless of its value or form, for the broadcast of
any material on the Station, unless the payer is identified on the program for
which consideration was provided as having paid for or furnished such
consideration, in accordance with the Act and FCC requirements.
3.5 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Station serves the needs and
interest of the residents of the California, Missouri, area and agree to
cooperate during the Term in doing so.
3.6 Confidential Review. Prior to the Effective Date, Programmer shall
acquaint Licensee, upon request, with the nature and type of the programming to
be provided. Licensee shall be entitled to review at its discretion from time to
time on a confidential basis any of Programmer's programming material it may
reasonably request. Programmer shall promptly provide Licensee with copies of
all correspondence and complaints received from the public (including any
telephone logs of complaints called in).
Section 4
Indemnification
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4.1 Indemnification. Programmer shall indemnify, defend, and hold harmless
Licensee from and against any and all claims, losses, costs, liabilities,
damages, and expenses, including any FCC fines or forfeitures (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature, and description arising out of Programmer's broadcasts on the Station
and/or sale of advertising time under this agreement during the Term, or the
actions or conduct of Programmer's employees.
4.2 Time Brokerage Challenge. If this agreement is challenged at the FCC
or in any other administrative or judicial forum, whether or not in connection
with any license assignment application, counsel for Licensee and Programmer
shall jointly defend the agreement and the Parties' performance hereunder
throughout all such proceedings. If any portion of this agreement does not
receive the FCC's approval, then the Parties shall reform the agreement,
consistent with the provisions of Section 6.6 below, as necessary to satisfy the
FCC's concerns.
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Section 5
Termination
5.1 Termination. Unless the parties otherwise agree hereafter in writing,
this agreement and the Term hereof shall terminate automatically upon the
earlier to occur of: (a) declaration that this agreement is invalid or illegal
in whole or material part by an order or decree of an administrative agency or
court of competent jurisdiction and such order or decree is final and is no
longer subject to further administrative or judicial review, (b) termination of
the Assets Purchase Agreement, (c) Closing of the Assets Purchase Agreement, (d)
notice of termination by Programmer to Licensee upon Licensee's failure to
perform as agreed herein, or (e) upon notice from Programmer or Licensee to the
other party given after the date that is one hundred eighty (180) days from the
date hereof.
5.2 Force Majeure. Any failure or impairment of the Station's facilities
or any delay or interruption in the broadcast of programs, or failure at any
time to furnish facilities, in whole or in part, for broadcast, due to acts of
God, strikes, lockouts, material or labor restrictions imposed by any
governmental authority, civil riot, flood, or any other cause not reasonably
within the control of Licensee or Programmer, shall not constitute a breach of
this agreement or create liability to or on any of the Parties.
Section 6
Miscellaneous
6.1 Assignment. This agreement is binding upon the Parties, their
successors and assigns. Neither of the Parties may assign its rights under this
agreement without the prior written consent of the other party.
6.2 Amendment. No amendment to this agreement shall be effective unless
evidenced by an instrument in writing signed by both Parties.
6.3 Headings. The headings herein are for convenience only and do not
control or affect the meaning or construction of the provisions of this
agreement.
6.4 Governing Law. This agreement is subject to applicable federal, state,
and local law, rules and regulations, including, but not limited to, the Act and
the rules, regulations, and policies of the FCC. The construction and
interpretation of this agreement and the Parties' obligations hereunder will be
determined
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under and controlled by the laws of the Commonwealth of Virginia, without giving
effect to such laws' principles regarding choice of law or conflicts of laws.
6.5 Notices. Each notice, consent, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given only upon the earlier of receipt (by hand delivery, fax, or
otherwise) or ten (10) days after having been mailed, certified or registered
United States mail, postage prepaid, addressed as follows:
(a) If to Licensee:
CMB II, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Attention: Alan R. Brill
Facsimile No.: (812) 428-4021
With a copy to:
Charles W. Laughlin, Esquire
Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
Facsimile No. (804) 780-1813
(b) If to Programmer:
MVP Radio, Inc.
324 Broadway
P.O. Box 1610
Cape Giradeau, MO 63702-1610
Facsimile No.: _____________
or to such other address as either party may designate from time to time by
written notice to the other.
6.6 Invalidity. If any provision of this agreement or the application
thereof to any person or circumstances shall be held invalid or unenforceable to
any extent, the Parties shall negotiate in good faith and attempt to agree on an
amendment to this agreement that will provide the Parties with substantially the
same rights, economic benefits, and obligations to the greatest extent possible
as the original agreement in valid, binding, and enforceable form.
8
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Section 7
Counterparts
7.1 Counterparts. This agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same agreement. For purposes of executing this
agreement, a facsimile signature shall be as effective as an actual signature,
so long as the original signature is promptly delivered thereafter.
IN WITNESS WHEREOF, the Parties have executed this agreement as of the
date first written above.
LICENSEE: CMB II, Inc.
by:_____________________________________
a duly authorized officer
PROGRAMMER: MVP Radio, Inc.
by:_____________________________________
a duly authorized officer
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EXHIBIT 1.4
Station's Operating Expenses Included in Time Brokerage Agreement
In accordance with Section 1.4 of the foregoing Time Brokerage Agreement
(the "TBA") between CMB II, Inc. ("Licensee"), and MVP Radio, Inc.
("Programmer") for the operation of radio station KATI-FM, California, Missouri
(the "Station"), Programmer shall reimburse Licensee for the costs and expenses
incurred by Licensee for the operation of the Station during the Term of the
TBA, including but not limited to the following items:
o FCC filing and regulatory fees;
o Local, state and federal property taxes, license fees and similar
regulatory charges;
o Contract engineering fees in order to maintain the operation of the
Stations' transmitter facilities;
o Electric power and other utility charges;
o Telephone and facsimile charges, copying, printing, postage and similar
administrative expenses;
o Payments for the specific financing agreements of the studio sites and
equipment currently used for the operation of the Stations;
o Insurance premiums for the Stations' general liability, health, auto,
umbrella, property coverage and errors and omissions policies; and
o Music licensing fees.
Monthly Fee. In addition to the reimbursement of expenses for the
operation of the Stations, Programmer shall pay to Licensee beginning on the
Effective Date and on the first day of every month thereafter a Monthly Fee of
Ten Thousand Dollars ($10,000.00) as additional consideration for the
programming rights provided to Programmer under the TBA.
Failure to Close. Notwithstanding any other provision in the TBA or the
Purchase Agreement, in the event the Parties fail to close on the sale of the
Stations to Programmer, Licensee shall not be obligated to repay to Programmer
any amounts advanced by Programmer to Licensee under the TBA.
<PAGE>
EX-10.8(b)
Time Brokerage Agreement
TIME BROKERAGE AGREEMENT
This time brokerage agreement dated November 1, 1997, is entered into by
and between CENTRAL MISSOURI BROADCASTING, INC., a Virginia corporation
("Licensee"), and ZIMMER RADIO OF MID-MISSOURI, INC. a Missouri corporation
("Programmer", and with Licensee, the "Parties").
Recitals.
Licensee owns radio stations KLIK-AM and KTXY-FM in Jefferson City,
Missouri (the "Stations"). Programmer's personnel are experienced in radio
station ownership and operation, and Licensee wishes to retain Programmer to
provide sales and marketing services, technical support, and programming for the
Stations, in conformity with the rules, regulations, and policies for time
brokerage agreements of the Federal Communications Commission ("FCC") and this
agreement. Programmer as "Buyer" and Licensee as "Seller" have this day entered
into a certain agreement (the "Assets Purchase Agreement") for sale of the
Stations' assets to Buyer as therein provided for. Terms not otherwise defined
herein shall be defined as in the Assets Purchase Agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants herein contained and other good and valuable
consideration, the Parties, intending to be bound legally, agree as follows:
Section 1
Term and Programmer Services
1.1 Effective Date. The term (hereinafter defined) of this agreement shall
begin on the date hereof (the "Effective Date").
1.2 Term. The term (the "Term") shall continue from the Effective Date
until the earlier to occur of: (a) Closing (as therein defined) of the Assets
Purchase Agreement, or (b) termination of this agreement (as herein provided
for) or of the Assets Purchase Agreement.
1.3 Programmer Services. During the Term, Licensee agrees to make
available to Programmer on an exclusive basis broadcast time on the Stations as
set forth in this agreement. Subject to Licensee's reasonable approval,
Programmer shall provide programming in the format and content of its selection
complete with commercial matter, news, public service announcements, and other
suitable programming for at least one hundred sixty-two (162) hours per week,
which broadcast time of the Stations Licensee shall make available during the
Term exclusively to Programmer, free and clear of all rights of any other person
or entity. Licensee
<PAGE>
reserves to itself, however, the right to broadcast its own programming material
for up to six (6) hours per week between the hours of 6 AM - 12:00 Noon on
Sundays ("Licensee's Reserved Time") for its own regularly scheduled news,
public affairs and other suitable programming designed to serve the community
needs and interests of the Stations' listening audience. Licensee shall
cooperate with and promptly notify Programmer if Licensee will use all or any
part of Licensee's Reserved Time, and Programmer shall have the right to use any
unused portion of Licensee's Reserved Time in default of such a notice from
Licensee.
1.4 Consideration, Fee. As consideration for the air time made available
during the term hereof Programmer shall make payments as set forth in Exhibit
1.4 hereto. The Parties agree that Exhibit 1.4 contains proprietary and
confidential information and each agrees to take all steps reasonably necessary
to maintain such confidentiality, including redacting such confidential
information from any copy of this Agreement that is filed with the FCC.
1.5 Expenses and Revenues. Programmer shall be solely responsible for all
expenses attributable to its programming on the Stations, including but not
limited to any expenses incurred in the origination and/or delivery of its
programming to the Stations' studio and transmitter sites, for all costs
associated with the acquisition, clearance, and production of its own
programming, and for the salaries, taxes, insurance and related costs for all
personnel employed by Programmer in connection with the sale of advertising
time, marketing of the Stations, technical maintenance of Stations' equipment,
and production and delivery of programming. Programmer shall retain all revenues
from the sale of commercial time during its programming of the Stations,
including any revenues arising from Programmer's programming during Licensee's
Reserved Time.
1.6 Use of Stations' Facilities. Subject to overall supervision by
Licensee and its employees, during the Term, Programmer shall make its studio
facilities (located within the Stations' principal community contour) reasonably
available to Licensee only for the production and presentation of Licensee's
programming as provided for hereunder, and as otherwise necessary to fulfill
Licensee's obligations as FCC Licensee.
1.7 Contracts. Programmer shall cooperate with Licensee to fulfill all
appropriate contracts, agreements, and leases in effect on the Effective Date
that involve operation of the Stations.
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<PAGE>
1.8 Collection of Accounts Receivable. During the Term, as agent for
Licensee Programmer shall collect the Licensee's accounts receivable for the
Stations that exist as of the Effective Date. Licensee shall provide Programmer
with a list of all such accounts receivable to be collected by Programmer. In
collecting such accounts receivable, Programmer shall use reasonable diligence,
but shall not be required to institute legal proceedings to collect any account
receivable, or to defend any claim or counterclaim by any account debtor. All
amounts received by Programmer from an account debtor that also is an account
debtor of Programmer during the Term shall be applied first to payment of the
accounts receivable of Licensee unless otherwise specifically identified by the
account debtor. Within ten (10) days of the end of each calendar month of the
Term, Licensee shall deliver to Programmer the amount of all amounts collected
and credited to the accounts receivable of Licensee during the prior calendar
month in accordance with this Section 1.8. Within ten (10) days after the end of
the Term, Programmer shall deliver to Licensee all records of uncollected
accounts receivable of Licensee and any amounts not previously remitted to
Licensee at which time Programmer's obligation for the collection of Licensee's
accounts receivable as herein provided shall cease.
Section 2
Licensee's and Programmer's Duties and Obligations
2.1 Licensee's Authority. During the Term, Licensee shall have full
authority, power, and control over the management and operation of the Stations,
and at its sole expense shall be responsible for compliance by Stations with all
applicable provisions of the Communications Act of 1934, as amended (the "Act"),
the rules, regulations and policies of the FCC, and all other applicable laws,
rules, and regulations. During the Term, at its sole expense, Licensee shall
maintain all FCC Licenses for the Stations' operation in full force and effect
in compliance with all FCC rules, regulations, and policies, and shall timely
file all necessary reports and prosecute to a satisfactory conclusion all
renewal or other applications necessary to maintain such Licenses in full force
and effect during the Term, without material change or restriction. Upon
Licensee's failure to fulfill any obligation hereunder, Programmer may take
reasonable steps to cure such failure(s) and may charge the expense thereof to
Licensee and/or deduct all or any part of such expense from any payment
otherwise due to Licensee from Programmer.
2.2 Programming. Programmer recognizes that the Stations are obligated to
broadcast programming to meet the needs and interests of the Jefferson City,
Missouri, area, and Programmer shall air
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programming on issues of importance to the local community. In the event of the
occurrence of a local or national emergency that in the good faith, reasonable
judgment of Licensee, is not being adequately addressed by Programmer, Licensee
retains the right to interrupt Programmer's programming and substitute
programming produced by Licensee that is more responsive to the emergency.
2.3 Stations' ID. During the Term, Programmer shall coordinate with
Licensee to ensure that the Stations' hourly station identifications and any
other required announcements are aired as Licensee may direct, and Licensee
shall retain all present call signs of the Stations.
2.4 Political Advertising. During the Term, Programmer shall cooperate
with Licensee in Licensee's compliance with all rules of the FCC regarding
political broadcasting. Licensee shall promptly supply to Programmer, and
Programmer shall promptly supply to Licensee, such information, including all
inquiries concerning the broadcast of political advertising, as may be necessary
to comply with FCC rules and polices, including those concerning the lowest unit
rate, equal opportunities, reasonable access, political file, and related
requirements of federal law. Programmer, in consultation with Licensee, shall
develop a statement that discloses the Stations' political broadcasting policies
to political candidates, and Programmer shall follow those policies in the sale
of any political programming or advertising during the Term. In the event that
Programmer fails to satisfy political broadcasting requirements under the Act
and the rules, regulations, and policies of the FCC and such failure inhibits
Licensee in its compliance with the political broadcasting requirements of the
FCC, then to the extent reasonably necessary to assure such compliance,
Programmer shall either provide rebates to political advertisers or release
advertising availabilities to Licensee.
2.5 Main Studio. During the Term, Licensee shall (i) maintain and staff a
main studio, as that term is defined by the FCC, at a location that complies
with FCC rules for the location of a main studio within such area, (ii) maintain
a local public inspection file within Jefferson City, Missouri, and (iii)
prepare and place in such inspection file in a timely manner all material
required by Section 73.3526 of the FCC's rules, including without limitation the
Stations' quarterly issues/program lists. Programmer shall provide Licensee with
timely information concerning Programmer's programs as is necessary to assist
Licensee in the preparation of such lists.
2.6 Employment Practices. Programmer shall provide to Licensee such
information as Licensee reasonably may request
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<PAGE>
concerning Programmer's recruitment, hiring, or employment practices in
connection with Programmer's provision of services to the Stations. Programmer
shall be directly and solely responsible for the salaries, taxes, insurance, and
related costs for all of the personnel employed by it in operating the Stations
after the Effective Date.
Section 3
Programming
3.1 Programming Policy Statement. During the Term, Programmer shall comply
in all material respects with all applicable laws, rules, and regulations.
3.2 Licensee's Oversight of Programming. Programmer recognizes that
Licensee has the right to reject or refuse any portion of Programmer's
programming that is contrary to the public interest.
3.3 Compliance. Programmer shall not broadcast any material in violation
of any applicable law, rule, or regulation.
3.4 Payola. Programmer will not accept, and will not knowingly permit any
of its employees to accept, any consideration, compensation, gift, or gratuity
of any kind whatsoever, regardless of its value or form, for the broadcast of
any material on the Stations, unless the payer is identified on the program for
which consideration was provided as having paid for or furnished such
consideration, in accordance with the Act and FCC requirements.
3.5 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Stations serve the needs and
interest of the residents of the Jefferson City, Missouri, area and agree to
cooperate during the Term in doing so.
3.6 Confidential Review. Prior to the Effective Date, Programmer shall
acquaint Licensee, upon request, with the nature and type of the programming to
be provided. Licensee shall be entitled to review at its discretion from time to
time on a confidential basis any of Programmer's programming material it may
reasonably request. Programmer shall promptly provide Licensee with copies of
all correspondence and complaints received from the public (including any
telephone logs of complaints called in).
Section 4
Indemnification
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<PAGE>
4.1 Indemnification. Programmer shall indemnify, defend, and hold harmless
Licensee from and against any and all claims, losses, costs, liabilities,
damages, and expenses, including any FCC fines or forfeitures (including
reasonable legal fees and other expenses incidental thereto) of every kind,
nature, and description arising out of Programmer's broadcasts on the Stations
and/or sale of advertising time under this agreement during the Term, or the
actions or conduct of Programmer's employees.
4.2 Time Brokerage Challenge. If this agreement is challenged at the FCC
or in any other administrative or judicial forum, whether or not in connection
with any license assignment application, counsel for Licensee and Programmer
shall jointly defend the agreement and the Parties' performance hereunder
throughout all such proceedings. If any portion of this agreement does not
receive the FCC's approval, then the Parties shall reform the agreement,
consistent with the provisions of Section 6.6 below, as necessary to satisfy the
FCC's concerns.
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Section 5
Termination
5.1 Termination. Unless the parties otherwise agree hereafter in writing,
this agreement and the Term hereof shall terminate automatically upon the
earlier to occur of: (a) declaration that this agreement is invalid or illegal
in whole or material part by an order or decree of an administrative agency or
court of competent jurisdiction and such order or decree is final and is no
longer subject to further administrative or judicial review, (b) termination of
the Assets Purchase Agreement, (c) Closing of the Assets Purchase Agreement, (d)
notice of termination by Programmer to Licensee upon Licensee's failure to
perform as agreed herein, or (e) upon notice from Programmer or Licensee to the
other party given after the date that is one hundred eighty (180) days from the
date hereof.
5.2 Force Majeure. Any failure or impairment of the Stations' facilities
or any delay or interruption in the broadcast of programs, or failure at any
time to furnish facilities, in whole or in part, for broadcast, due to acts of
God, strikes, lockouts, material or labor restrictions imposed by any
governmental authority, civil riot, flood, or any other cause not reasonably
within the control of Licensee or Programmer, shall not constitute a breach of
this agreement or create liability to or on any of the Parties.
Section 6
Miscellaneous
6.1 Assignment. This agreement is binding upon the Parties, their
successors and assigns. Neither of the Parties may assign its rights under this
agreement without the prior written consent of the other party.
6.2 Amendment. No amendment to this agreement shall be effective unless
evidenced by an instrument in writing signed by both Parties.
6.3 Headings. The headings herein are for convenience only and do not
control or affect the meaning or construction of the provisions of this
agreement.
6.4 Governing Law. This agreement is subject to applicable federal, state,
and local law, rules and regulations, including, but not limited to, the Act and
the rules, regulations, and policies of the FCC. The construction and
interpretation of this agreement and the Parties' obligations hereunder will be
determined
7
<PAGE>
under and controlled by the laws of the Commonwealth of Virginia, without giving
effect to such laws' principles regarding choice of law or conflicts of laws.
6.5 Notices. Each notice, consent, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given only upon the earlier of receipt (by hand delivery, fax, or
otherwise) or ten (10) days after having been mailed, certified or registered
United States mail, postage prepaid, addressed as follows:
(a) If to Licensee:
Central Missouri Broadcasting, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Attention: Alan R. Brill
Facsimile No.: (812) 428-4021
With a copy to:
Charles W. Laughlin, Esquire
Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
Facsimile No. (804) 780-1813
(b) If to Programmer:
Zimmer Radio of Mid-Missouri, Inc.
324 Broadway
P.O. Box 1610
Cape Giradeau, MO 63702-1610
Facsimile No.: _____________
or to such other address as either party may designate from time to time by
written notice to the other.
6.6 Invalidity. If any provision of this agreement or the application
thereof to any person or circumstances shall be held invalid or unenforceable to
any extent, the Parties shall negotiate in good faith and attempt to agree on an
amendment to this agreement that will provide the Parties with substantially the
same rights, economic benefits, and obligations to the greatest extent possible
as the original agreement in valid, binding, and enforceable form.
8
<PAGE>
Section 7
Counterparts
7.1 Counterparts. This agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same agreement. For purposes of executing this
agreement, a facsimile signature shall be as effective as an actual signature,
so long as the original signature is promptly delivered thereafter.
IN WITNESS WHEREOF, the Parties have executed this agreement as of the
date first written above.
LICENSEE: Central Missouri Broadcasting, Inc.
by:_____________________________________
a duly authorized officer
PROGRAMMER: Zimmer Broadcasting of Mid-Missouri, Inc.
by:_____________________________________
a duly authorized officer
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EXHIBIT 1.4
Stations' Operating Expenses Included in Time Brokerage Agreement
In accordance with Section 1.4 of the foregoing Time Brokerage Agreement
(the "TBA") between Central Missouri Broadcasting, Inc. ("Licensee"), and Zimmer
Broadcasting of Mid-Missouri, Inc. ("Programmer") for the operation of radio
stations KLIK-AM and KTXY-FM, Jefferson City, Missouri (the "Stations"),
Programmer shall reimburse Licensee for the costs and expenses incurred by
Licensee for the operation of the Stations during the Term of the TBA, including
but not limited to the following items:
o FCC filing and regulatory fees;
o Local, state and federal property taxes, license fees and similar
regulatory charges;
o Contract engineering fees in order to maintain the operation of the
Stations' transmitter facilities;
o Electric power and other utility charges;
o Telephone and facsimile charges, copying, printing, postage and similar
administrative expenses;
o Payments for the specific financing agreements of the studio sites and
equipment currently used for the operation of the Stations;
o Insurance premiums for the Stations' general liability, health, auto,
umbrella, property coverage and errors and omissions policies; and
o Music licensing fees.
Monthly Fee. In addition to the reimbursement of expenses for the
operation of the Stations, Programmer shall pay to Licensee beginning on the
Effective Date and on the first day of every month thereafter a Monthly Fee of
Forty Thousand Dollars ($40,000.00) as additional consideration for the
programming rights provided to Programmer under the TBA.
Failure to Close. Notwithstanding any other provision in the TBA or the
Purchase Agreement, in the event the Parties fail to close on the sale of the
Stations to Programmer, Licensee shall not be obligated to repay to Programmer
any amounts advanced by Programmer to Licensee under the TBA.
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EX-10.8(c)
Time Brokerage Agreement
TIME BROKERAGE AGREEMENT
This time brokerage agreement dated June 27, 1997, is entered into by and
between ONYX BROADCASTING, INC. a Delaware corporation ("Licensee"), and NCR II,
INC, a Virginia corporation ("Programmer"). Collectively, Licensee and
Programmer shall be identified as the "Parties").
Recitals.
Licensee owns radio station KTRR-FM of Loveland, Colorado (the "Station").
The principals of Programmer are experienced in radio station ownership and
operation, and Licensee wishes to retain Programmer to provide sales and
marketing services, technical support, and programming for the Station that is
in conformity with the rules, regulations, and policies for time brokerage
agreements of the Federal Communications Commission ("FCC") and this agreement.
NOW, THEREFORE, in consideration of the above recitals and the mutual
promises and covenants contained herein, the Parties, intending to be bound
legally, agree as follows:
Section 1
Effective Date and Programmer Services
1.1 Effective Date. The Initial Term (hereinafter defined) of this
agreement shall begin (the "Effective Date") on the earlier to occur of August
5, 1996 or the termination, cancellation, or expiration of Licensee's present
Program Services Agreement (the "Duchossois Agreement") entered into on August
5, 1991 with Duchossois Communications Company of Colorado, Inc. ("Duchossois").
1.2 Term. The initial term shall continue after the Effective Date for a
period of five years (the "Initial Term"), and thereafter for four additional
five year terms [the "Additional Term(s)," and, with the Initial Term, the
"Term")] unless sooner terminated by Programmer's notice of termination given to
Licensee no less than one hundred eighty (180) days before expiration of the
Initial Term or of any Additional Term.
1.3 Programmer Services. During the Term, Licensee agrees to make
available to Programmer on an exclusive basis broadcast time on the Station as
set forth in this agreement. Programmer shall provide entertainment programming
in the format and content of its selection complete with commercial matter,
news, public service announcements, and other suitable programming for at least
one hundred sixty-two (162) hours per week, which broadcast time of the Station
Licensee shall make available during the Term exclusively
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to Programmer, free and clear of all rights of any other person or entity.
Licensee reserves to itself, however, the right to broadcast its own programming
material for up to six (6) hours per week between the hours of 6 AM - 12:00 Noon
on Sundays ("Licensee's Reserved Time") for its own regularly scheduled news,
public affairs and other suitable non-entertainment programming designed to
serve the community needs and interests of the Station's listening audience.
Licensee shall cooperate with and promptly (at least 24 hours before) notify
Programmer if Licensee will use all or any part of Licensee's Reserved Time, and
Programmer shall have the right to use any unused portion of Licensee's Reserved
Time in default of such a notice from Licensee.
1.4 Consideration. As consideration for Programmer's rights hereunder and
the air time made available during the Term hereof, Programmer shall make
payments as set forth in Attachment 1.4 attached hereto and identified by the
initials of the Parties' representatives. The Parties agree that Attachment 1.4
and Attachment 7.3 contain proprietary and confidential information, and each
agrees to take all steps reasonably necessary to maintain such confidentiality,
including redacting such confidential information from any copy of this
agreement that is filed with the FCC.
1.5 Expenses and Revenues. Licensee shall be solely responsible for the
timely payment of all taxes and other costs incidental thereto, all FCC
regulatory fees, real estate and personal property taxes, all utility costs
relating to the existing transmitter site, transmitter and antenna, and all
maintenance and repair costs on the transmitter equipment. Programmer shall be
solely responsible for all expenses attributable to its programming on the
Station, including but not limited to any expenses incurred in the origination
and/or delivery of its programming to the Station's studio and transmitter
sites, for all costs associated with the acquisition, clearance, and production
of its own programming, and for the salaries, taxes, insurance and related costs
for all personnel employed by Programmer in connection with the sale of
advertising time, marketing of the Station, technical maintenance of Station's
equipment, and production and delivery of programming. Programmer shall retain
all revenues from the sale of commercial time during its programming of the
Station, including any revenues arising from such programming during Licensee's
Reserved Time. In the event Licensee broadcasts programming outside Licensee's
Reserved Time, other than as a result of preemptions under Section 2.1 or
Section 3.2, it shall reimburse Programmer at the Station's then highest unit
rate, per half-hour, or any portion thereof, in accordance with the Station's
existing rate cards, said amount to be deducted from the next payment to
Licensee due under Section 1.4 above.
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1.6 Use of Station's Facilities. Throughout the entire Term Programmer
shall make its studio facilities, located within the Station's principal
community contour, reasonably available to Licensee, at no charge, for the
production and presentation of Licensee's programming and as otherwise necessary
to fulfill Licensee's obligations as an FCC licensee. Consistent with its
obligations under this agreement and with all requirements of the laws, rules,
and regulations of the FCC, Programmer shall have full use of the Station's
facilities, studios, and equipment free from any hindrance or interference from
any person or persons whomsoever claiming by, through, or under Licensee, which
facilities Programmer shall use only for the purpose of exercising its rights
and fulfilling its obligations under this agreement.
1.7 Contracts. This agreement does not obligate Programmer to assume any
of Licensee's existing contracts, agreements, or leases. Notwithstanding the
foregoing, Programmer shall cooperate with Licensee to fulfill all appropriate
contracts, agreements, and leases in effect on the Effective Date that involve
operation of the Station. From and after the date hereof, Licensee will take all
actions necessary to make certain that, and, as a precondition of Programmer's
agreements and liability hereunder, it shall be a fact that, as of the Effective
Date the Station (or Licensee for Station) is not then subject to, and that
Licensee has not entered into or committed Station to, any contract, lease, or
agreement that will bind Programmer during the Term or any part thereof, except
such as may have received the prior, written approval of Programmer, or as may
be expressly permitted hereunder. Except with Licensee's prior written approval,
Programmer will not enter into any contracts, leases, or agreements that will
bind Licensee in any way after termination of this agreement, except for
agreements for the sale of broadcast time for cash entered into in the normal
course of business that may be canceled without penalty on no more than thirty
(30) days prior notice.
Section 2
Licensee's Duties and Obligations
2.1 Licensee's Authority. At all time, Licensee shall remain responsible
for compliance by Station with all applicable provisions of the Communications
Act of 1934, as amended (the "Act"), the rules, regulations and policies of the
FCC, and all other applicable laws. Licensee shall be solely responsible for and
pay in a timely manner all operating costs of the Station, including but not
limited to the expenses listed and identified as Licensee's expenses on
Attachment 1.4 including the salaries, taxes, insurance, and related costs for
all personnel employed by Licensee. Licensee shall maintain insurance consistent
with its
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existing coverages covering the Station's transmission facilities, and shall
include Programmer as a named additional insured as its interests may appear.
Programmer recognizes that the Station is obligated to broadcast programming to
meet the needs and interests of the Red Lion, Pennsylvania, area, and Programmer
shall air programming on issues of importance to the local community. In the
event of the occurrence of a local or national emergency that in the good faith,
reasonable judgment of Licensee, is not being adequately addressed by
Programmer, Licensee retains the right to interrupt Programmer's programming to
substitute programming produced by Licensee that is more responsive to the
emergency. During the Term, Licensee shall maintain all FCC Licenses for the
Station's operation in full force and effect in compliance with all FCC rules,
regulations, and policies, and shall timely file all necessary reports and
prosecute to a satisfactory conclusion all renewal or other applications
necessary to maintain such Licenses in full force and effect during the Term,
without material change or restriction.
2.1A Station Signal. At all times during the Term, at its sole expense
Licensee shall maintain the Station's broadcast signal within such signal's
present technical parameters and without Programmer's prior consent, shall not
materially change the Station's presently licensed tower or transmission
facilities.
2.2 Additional Licensee Obligations.
(a) Station's ID. During the Term, Programmer shall coordinate with
Licensee to ensure that the Station's hourly station identifications and any
other required announcements are aired as Licensee may direct, and Licensee
shall not change "KTRR-FM" as the Station's call sign without the consent of
Programmer.
(b) Political Advertising. During the Term, Programmer shall
cooperate with Licensee to assist Licensee in complying with all rules of the
FCC regarding political broadcasting. Licensee shall promptly supply to
Programmer, and Programmer shall promptly supply to Licensee, such information,
including all inquiries concerning the broadcast of political advertising, as
may be necessary to comply with FCC rules and polices, including the lowest unit
rate, equal opportunities, reasonable access, political file, and related
requirements of federal law. Programmer, in consultation with Licensee, shall
develop a statement that discloses the Station's political broadcasting policies
to political candidates, and Programmer shall follow those policies in the sale
of political programming or advertising during the Term. In the event that
Programmer fails to satisfy political broadcasting requirements under the Act
and the rules, regulations,
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and policies of the FCC and such failure inhibits Licensee in its compliance
with the political broadcasting requirements of the FCC, then to the extent
reasonably necessary to assure such compliance, Programmer shall either provide
rebates to political advertisers or release advertising availabilities to
Licensee.
(c) Main Studio. In cooperation with Programmer, during the Term
Licensee shall (i) maintain and staff a main studio, as that term is defined by
the FCC, which Licensee may locate within facilities that Programmer shall
provide within the Station's principal community contour, or at such other
location that complies with FCC rules for the location of a main studio within
such area, (ii) maintain a local public inspection file within Loveland,
Colorado, and (iii) prepare and place in such inspection file in a timely manner
all material required by Section 73.3526 of the FCC's rules, including without
limitation the Station's quarterly issues/program lists. Programmer shall
provide Licensee with timely information concerning Programmer's programs as is
necessary to assist Licensee in the preparation of such lists.
(d) Employment Practices. During the Term, Programmer shall provide
to Licensee such information as Licensee reasonably may request concerning
Programmer's recruitment, hiring, or employment practices in connection with
Programmer's provision of services to the Station.
2.3 Responsibility for Employees. Licensee shall provide and be
responsible for the Station's personnel necessary to fulfill Licensee's
responsibilities or as otherwise required by the FCC for agreements of this
nature. Programmer shall be directly and solely responsible for the salaries,
taxes, insurance, and related costs for all of the personnel employed by it in
operating the Station after the Effective Date.
2.4 Collection of Accounts Receivable. For a period of ninety (90) days
(the "Collection Period") following any termination of this agreement, Licensee
shall collect as agent for Programmer the accounts receivable of the Station in
existence as of the termination date. Programmer shall provide Licensee with a
list of all such accounts receivable to be collected by Licensee. In collecting
such accounts receivable, Licensee shall use reasonable diligence, but shall not
be required to institute legal proceedings to collect any account receivable, or
to defend any claim or counterclaim by any account debtor. All amounts received
from an account debtor that also is an account debtor of Licensee after the
termination date shall be applied first to payment of the accounts receivable of
Programmer. Within ten (10) days of the end of each calendar month of the
Collection Period, Licensee shall
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deliver to Programmer the net amount, after deducting any sales commission,
agency fees and similar direct expenses attributable to such accounts
receivable, of all amounts collected and credited to the accounts receivable of
Programmer during the prior calendar month in accordance with this Section 2.4.
Within ten (10) days of the end of the Collection Period, Licensee shall deliver
to Programmer all records of uncollected accounts receivable of Programmer and
any amounts not previously remitted to Programmer at which time Licensee's
obligation for the collection of Programmer's accounts receivable shall cease.
2.5 Failures to Broadcast. If during the Term, the Station fails to
broadcast for any reason, other than as a result of circumstances or events
attributable to Programmer, or as provided in Section 2.1 or Section 2.3.
Programmer shall be entitled to deduct $1,000 per day from the amount payable to
Licensee hereunder for each twenty-four hours in which broadcasting at the
Station was interrupted for an aggregate of two or more hours, which amount
shall be offset by any payments due and payable to Licensee pursuant to the last
sentence of Section 1.5.
2.6 Right to Cure. Any deficiency or degradation in the coverage or power
of the Station occurring at any time during the Term, or the effects of any and
all actions or failures to act by Licensee that adversely affect Station or its
broadcast operations, or any obligations of Licensee that are not fulfilled,
remedied, or cured by Licensee as promptly as is possible, may be fulfilled,
remedied, or cured by Programmer at its sole election in order to ensure the
availability and full utility of the broadcast time herein made available to
Programmer, and the expense of any such actions by Programmer shall be charged
to Licensee and may first be deducted from the amounts payable to Licensee
hereunder, except to the extent that any such loss of Programmer's is covered by
business interruption or similar insurance coverage payable to Programmer.
Section 3
Licensee's Programming Policies
3.1 Programming Policy Statement. Licensee has adopted a Programming
Policy Statement (the "Policy Statement"), a copy of which appears as Attachment
3.1 attached hereto and identified by the initials of the Parties'
representatives. During the Term, Programmer shall comply in all material
respects with the Policy Statement and with all applicable rules and regulations
of the FCC. If a program, commercial announcement, or promotional material
supplied by Programmer contains material that is obscene, indecent, libelous,
constitutes a "personal attack"; or an invasion of
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privacy or violates the Act or the FCC's rules, or otherwise does not comply
with the Policy Statement Licensee may, after prior, written notice to
Programmer (to the extent time permits such notice), suspend or cancel such
program, commercial announcement, or promotional material and may require
Programmer to substitute a suitable program, commercial announcement, or
promotional material. Notwithstanding the foregoing or Attachment 3.1, the
parties agree that the regular broadcast of programming similar in style and
content to the Rush Limbaugh and Don Imus programs shall not constitute a
violation of Section 3.1 or Attachment 3.1, and further agree that the isolated
broadcast of material that is inconsistent with certain provisions of Attachment
3.1 shall not constitute a violation of Section 3.1 or Attachment 3.1.
3.2 Licensee Oversight of Programming. Programmer recognizes that Licensee
has the right to reject or refuse such portions of the Programmer's programming
that is contrary to the public interest. At all times, all actions of Licensee
shall be based upon Licensee's good faith implementation of its responsibilities
as an FCC Licensee and shall not be taken for commercial purposes or for the
commercial, economic, or business advantage of Licensee. Within the limitation
of Attachment 3.2, at all times Programmer shall determine the entertainment
format and marketing and promotional direction of the Station. Attached hereto
as Attachment 3.2 is a general description of Programmer's presently planned
programming. Licensee is generally familiar with Programmer's operating
standards and, in particular, approves of the programming outlined in Attachment
3.2. Programmer shall make no substantial and material change in its scheduled
programming from that described in Attachment 3.2 without Licensee's prior
consent, which shall not be unreasonably withheld.
3.3 Compliance with Copyright Act. Programmer represents, warrants and
covenants to Licensee that Programmer has full authority to broadcast its format
and programming on the Station, and that Programmer shall not knowingly
broadcast any material in violation of the Copyright Act. Licensee will be
responsible for all copyright clearances for its programming and shall maintain
the Station's copyright licenses in full force and effect.
3.4 Payola. With respect to its programming on the Station during the
Term, Programmer agrees that it will not accept, and will not knowingly permit
any of its employees to accept, any consideration, compensation, gift, or
gratuity of any kind whatsoever, regardless of its value or form, for the
broadcast of any material on the Station unless the payer is identified on the
program for which consideration was provided as having paid for or
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furnished such consideration, in accordance with the Act and FCC requirements.
3.5 Cooperation on Programming. Programmer and Licensee mutually
acknowledge their interest in ensuring that the Station serve the needs and
interest of the residents of the Loveland, Colorado area and agree to cooperate
during the Term in doing so. Licensee shall, on a regular basis, assess (which
results shall be shared with Programmer on a regular basis) the issues of public
concern and address those issues in the Station's public service programming.
Licensee shall describe those issues and responsive programming and place
issues/programs lists in the Station's public inspection file as required by FCC
rules. Further, during the Term Programmer shall provide Licensee with
information concerning such of Programmer's programs as are responsive to
community issues in order to assist Licensee in meeting its public service
programming obligations. Upon Licensee's reasonable request, Programmer shall
also provide Licensee with such other information as reasonably may be necessary
to enable Licensee to prepare records and reports required by the Commission or
other local, state, or federal government entities.
Section 4
Indemnification
4.1 Programmer's Indemnification. Programmer shall indemnify and hold
harmless Licensee from and against any and all claims, losses, costs,
liabilities, damages, and expenses, including any FCC fines or forfeitures
(including reasonable legal fees and other expenses incidental thereto) of every
kind, nature, and description, including but not limited to slander or
defamation or otherwise (hereinafter "Claims"), arising out of Programmer's
broadcasts on the Station and/or sale of advertising time under this agreement
during the Term, or the actions or conduct of Programmer's employees.
4.2 Licensee's Indemnification. Licensee shall indemnify and hold harmless
Programmer from and against any and all Claims arising out of broadcasts
originated by Licensee pursuant to this agreement, and for the actions or
conduct of Licensee or Licensee's employees.
4.3 Time Brokerage Challenge. If this agreement is challenged at the FCC
or in any other administrative or judicial forum, whether or not in connection
with any license assignment application, counsel for Licensee and Programmer
shall jointly defend the agreement and the Parties' performance hereunder
throughout all such proceedings. If portions of this agreement do not receive
the approval of the FCC, then the Parties shall reform
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the agreement, consistent with the provisions of Section 6.6 below, as necessary
to satisfy the FCC's concerns.
Section 5
Termination
5.1 Termination.
(a) Automatic Termination.
This agreement and the Term hereof shall terminate
automatically upon the occurrence of any of the following:
(i) the earlier of (a) Programmer's termination of the Term
hereof as herein provided, or (b) the day before the anniversary date hereof in
the year 2022;
(ii) this agreement is declared invalid or illegal in whole or
substantial part by an order or decree of an administrative agency or court of
competent jurisdiction and such order or decree has become final and is no
longer subject to further administrative or judicial review, or
(iii) there is a material change in FCC rules, policies or
precedent that causes this agreement to be in material, incurable violation
thereof and such change is in effect and not the subject of an appeal or further
administrative review, provided, however, that in such event the Parties first
shall negotiate in good faith and attempt to agree on an amendment to this
agreement consistent with Section 6.6 below.
(b) Other Termination.
This agreement may be terminated (i) by the Parties' mutual
written consent, or (ii) by Licensee giving Programmer prior, written notice of
such termination in the event of (a) Programmer's material breach of a material
provision of this agreement that is not cured (or a cure instituted and carried
forward in good faith) within thirty (30) days after written notice thereof to
Programmer describing such breach in detail, or (b) failure to close and
consummate any agreed Sale of the Station to Programmer as hereafter agreed upon
by the Parties, which failure is due solely to Programmer's material, uncured
default under such agreement of Sale after thirty (30) days written notice of
such default given to Programmer by Licensee describing such default in detail,
or (iii) by Programmer giving Licensee at least sixty (60) days prior, written
notice of such termination at any time upon or after any Sale (hereinafter
defined) or other transfer of the
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Station or the Station's Licenses to an owner other than the Licensee.
5.2 Force Majeure. Subject to Section 2.6, any failure or impairment of
the Station's facilities or any delay or interruption in the broadcast of
programs, or failure at any time to furnish facilities, in whole or in part, for
broadcast, due to acts of God, strikes, lockouts, material or labor restrictions
by any governmental authority, civil riot, floods and any other cause not
reasonably within the control of Licensee or Programmer, shall not constitute a
breach of this agreement or create liability to or on any of the Parties.
Section 6
Miscellaneous
6.1 Assignment. This agreement is binding upon the Parties, their
successors and assigns. Neither of the Parties may assign its rights under this
agreement without the prior written consent of the other party. For purposes of
this Section 6.1, an assignment shall include any change in control of a Party,
e.g., by sale of capital stock, merger, or operation of law.
6.2 Amendment. No amendment to this agreement shall be effective unless
evidenced by an instrument in writing signed by both Parties.
6.3 Headings. The headings herein are for convenience only and do not
control or affect the meaning or construction of the provisions of this
agreement.
6.4 Governing Law. This agreement is subject to applicable federal, state,
and local law, rules and regulations, including, but not limited to, the Act and
the rules, regulations, and policies of the FCC. The construction and
interpretation of this agreement and the Parties' obligations hereunder will be
determined under and controlled by the laws of the Commonwealth of Virginia,
without giving effect to such laws' principles regarding choice of law or
conflicts of laws.
6.5 Notices. Each notice, consent, request, demand or other communication
required or permitted hereunder shall be in writing and shall be deemed to have
been duly given only upon the earlier of receipt (by hand delivery, fax, or
otherwise) or five (5) days after having been mailed, certified or registered
United States mail, postage prepaid, addressed as follows:
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if to Licensee or Onyx Broadcasting, Inc.
Gammon: 8401 Old Courthouse Road, Suite 140
Tyson's Corner, Virginia 22180
Attention: Mr. Thomas P. Gammon
President
copy to: Meredith Senter, Esquire
c/o Leventhal, Senter & Lerman
Suite 600
2000 K Street, N.W.
Washington, D.C. 2006-1809
if to Programmer: NCR II, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Attention: Alan R. Brill
copy to: Charles W. Laughlin, Esquire
c/o Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
or when so delivered or mailed to such other place or person as a party
hereafter from time to time may have designated in a prior written notice to the
other party.
6.6 Invalidity. If any provision of this agreement or the application
thereof to any person or circumstances shall be held invalid or unenforceable to
any extent, the Parties shall negotiate in good faith and attempt to agree on an
amendment to this agreement that will provide the Parties with substantially the
same rights, economic benefits, and obligations to the greatest extent possible
as the original agreement in valid, binding, and enforceable form.
6.7 Governing Laws; Attorneys' Fees. This agreement, the rights and
obligations of the Parties, and any claims or disputes arising hereunder shall
be governed by and construed in accordance with the laws of the Commonwealth of
Virginia (without regard to the choice-of-law rules utilized in that
jurisdiction), and the state and federal courts of Virginia shall have
nonexclusive jurisdiction over any controversy or claim arising out of or
related to the interpretation or enforcement of this agreement. In the event of
a dispute between the Parties arising out of or related to the interpretation or
enforcement of this agreement, the prevailing Party shall be entitled to
reimbursement of reasonable attorneys' fees, costs and other expenses (including
expert fees). Such right of reimbursement shall be in addition to any other
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right or remedy that the prevailing Party may have under this agreement. In
addition, to the fullest extent permitted by law, any objection that any Party
now or hereafter may have to the laying of venue of any suit, action, or
proceeding arising out of or relating to this agreement or any judgment entered
by any court in respect thereof in the Commonwealth of Virginia is hereby
waived, and any claim that any suit, action, or proceeding brought in the
Commonwealth of Virginia has been brought in an inconvenient forum is hereby
further irrevocably waived. Each Party hereby further agrees that if any such
suit, action, or proceeding is pending in more than one jurisdiction, the
Licensee's selection of the forum shall be binding upon the Parties.
Section 7
Security Interest; Sale of Station
7.1 Security Agreements, Pledges.
(a) Licensee. In order to secure Licensee's performance of this
agreement, Licensee has executed and delivered to Programmer a stock pledge
agreement, in form and substance satisfactory to Programmer, granting to
Programmer a security interest in and a pledge of all of the capital stock of
Licensee, as therein more particularly provided.
(b) Programmer. In order to secure Programmer's performance of this
agreement, Programmer has executed and delivered to Licensee a stock pledge
agreement, in form and substance satisfactory to Licensee, granting to Licensee
a security interest in and a pledge of all of the capital stock of Programmer,
as therein more particularly provided.
7.2. Restrictions on Sale of the Station. During the Term, Licensee agrees
that it will not agree to, enter into a contract for, or consummate a sale or
other transfer of the Station without first complying with the provisions of
this agreement. Upon any such Sale or other transfer the rights of any purchaser
or transferee shall be and be made subject and subordinate to the terms and
conditions of this agreement and to Programmer's rights hereunder, and any such
Sale or other transfer, except a Sale to Programmer (or its designated
affiliate), shall not affect Programmer's rights under this agreement.
7.3. Purchase Option. Licensee hereby grants to Programmer, (or an
affiliate of Programmer) during the Term, the sole and exclusive option to
purchase (for Programmer or its affiliate) (the "Purchase Option") from Licensee
the Station, including its broadcast license(s) and all assets used or useful in
the business
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of the Station, for the price and upon the terms and conditions set forth in
Attachment 7.3 (the "Purchase Agreement") attached hereto and identified by the
initials of the Parties' representatives. Such option shall be exercised by
Programmer giving Licensee at least ten (10) days prior, written notice of
Programmer's intent to exercise its Purchase Option at least one hundred eighty
(180) days prior to expiration of the Initial Term or of any Additional Term.
Within five (5) business days of Licensee's receipt of such notice, the Parties
shall enter into and execute, and thereafter shall perform, the Purchase
Agreement.
7.4. Sale Option. So long as (a) Programmer has not exercised its Purchase
Option, (b) Thomas P. Gammon of Fairfax County, Virginia, remains the sole
stockholder of Licensee, (c) Licensee is not in material default under this
agreement, and (d) this agreement has not been terminated, at any time on and
after the date upon which the order of the FCC approving the Licensee's
application for renewal of its current broadcast license shall have become a
Final Order as defined in the Purchase Agreement (the "Sale Option Date"), or at
such earlier time as the Parties may agree upon in writing, Licensee shall have
the sole and exclusive option (the "Sale Option") to sell to Programmer (or to
Programmer's designated affiliate) the Station, including the License(s) and all
assets used or useful in the business of the Station, for the price and upon the
terms and conditions set forth in the Purchase Agreement. Such Sale Option may
be exercised by Licensee giving Programmer at least ten (10) days prior, written
notice of Licensee's intent to exercise its Sale Option, at lease one hundred
eighty (180) days prior to expiration of the Initial Term or of any Additional
Term. Within five (5) business days of Programmer's receipt of such notice, the
Parties shall enter into and execute, and thereafter shall perform, the Purchase
Agreement.
7.5 Notice of Sale. Until the Sale Option Date shall have passed, within
ten (10) days after receipt of any good faith bona fide written offer from a
third party ("Offer") for a Sale of the Station or its stock or assets (the
"Proposed Sale') that Licensee desires to accept, Licensee will give written
notice to Programmer of the Offer (the "Sale Notice") stating (a) the name and
address of the offeror (the "Offeror"), (b) that Licensee proposes to accept the
Offer, and (c) the essential terms of the Offer, accompanies by a true and
complete copy of the Offer.
7.6 Sale Preconditions. If, during the period of thirty (30) days (the
"Option Period") immediately following Programmer's receipt of a Sale Notice
complying with Section 7.5 Programmer (or its affiliate) shall fail to exercise
its Purchase Option granted by Section 3 by giving written notice of such
exercise to Licensee
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and Offeror within such Option Period, then during the period thirty (30) days
(the "Sale Period") immediately following the expiration of such Option Period,
and only during such Sale Period, Licensee or its shareholder(s) may enter into
a contract (the "Sale Contract") with the Offeror for such Proposed Sale, but
if, and only if, (a) such Sale Contract is entered into in writing with
conditions set forth in such Sale Notice, (b) if the Sale Contract is entered
into prior to June 1, 1997, the purchase price to be paid under such Sale
Contract is at least $2,000,000.00, (c) a true, complete, and fully executed
copy of such Sale Contract is delivered to Programmer before expiration of such
Sale Period, and (d) the Offeror, as potential purchaser of the Station, and
transferee of its License(s), enters into an agreement in writing (the
"Assumption Agreement") with Programmer, in form and substance satisfactory to
Programmer, providing that Station and the Offeror as such owner and transferee
shall assume, agree to, be bound by, and be subject to all obligations of
Licensee under this agreement and to all other provisions of this agreement,
including Programmer's Term. If the Sale agreed upon in such Sale Contract is
not closed and consummated upon the terms agreed upon in the Sale Contract, or
if any other of such preconditions is not met, then Licensee or its
shareholder(s) thereafter may not agree to or consummate any Sale of the Station
or its stock or assets pursuant to such Sale Contract and must again comply with
all requirements of this agreement, including the notice and precondition
provisions of Sections 7.5 and 7.6, before any Sale. Any attempted Sale other
than in compliance with all provisions of this agreement shall be null and void.
Section 8
Counterparts
8.1 Counterparts. This agreement may be executed in one or more
counterparts, each of which will be deemed an original but all of which together
will constitute one and the same agreement. For purposes of executing this
agreement, a facsimile signature shall be as effective as an actual signature,
so long as the original signature is promptly delivered thereafter.
14
<PAGE>
IN WITNESS WHEREOF, the Parties have executed this agreement as of the
date first written above.
LICENSEE: ONYX BROADCASTING, INC.
By:___________________________
a duly authorized officer
PROGRAMMER: NCR II, INC.
by:___________________________
a duly authorized officer
DISTRICT OF COLUMBIA
CITY OF WASHINGTON, to-wit:
The foregoing Time Brokerage Agreement was acknowledged before me this
27th day of June 1996, by Tom Gammon as President of Onyx Broadcasting, Inc., a
Delaware corporation, as Licensee on behalf of the corporation, in the City of
Washington, D.C.
My commission expires: / /
-----------------------------------
Notary Public
(Official Seal)
COMMONWEALTH OF INDIANA
CITY/COUNTY OF VANDERBURG, to-wit:
The foregoing Time Brokerage Agreement was acknowledged before me this 22
day of June, 1996, by Alan R. Brill as President of NCR II, Inc., a Virginia
corporation, as Programmer, on behalf of the corporation, in the City/County of
Evansville, Vanderburg.
My commission expires: / /
-----------------------------------
Notary Public
(Official Seal)
15
<PAGE>
ATTACHMENT 1.4
Station Expenses
(1 page)
Licensee's Expenses. In accordance with Section 1.4 of the foregoing Time
Brokerage Agreement dated __________, 19__ (the "Operating Agreement") between
Onyx Broadcasting, Inc. ("Licensee"), and NCR II, Inc. ("Programmer") for the
operation of radio station KTRR-FM, Loveland, Colorado (the "Station"), Licensee
shall be solely responsible for the costs and expenses incurred as Licensee of
the Station during the Term of the Operating Agreement, including but not
limited to each of the following items:
o Employee salaries and fringe benefits, including withholding taxes and
health insurance, for (a) a management employee, for (b) a full time
receptionist who also will provide such services for Programmer, and for
(c) each additional employee hired by Licensee or required to be hired by
License;
o FCC filing and regulatory fees;
o Local, state and federal property taxes, license fees and similar
regulatory charges;
o Contract engineering fees in order to maintain the operation of the
Station's transmitter facilities;
o Electric power and other utility charges at the transmitter site;
o Telephone and facsimile charges, copying, printing, postage and similar
administrative expenses of Licensee;
o Insurance premiums for the Licensee's general liability, and any health,
auto, umbrella, property coverage and errors and omissions policies;
o Music licensing fees for Licensee's programming; and
o All transmitter site lease payments.
Monthly Fee. Programmer shall pay to Licensee beginning on the Effective
Date and on the first day of every month thereafter during the Term a Monthly
Fee of Four Thousand Dollars ($4,000.00) together with reimbursement for such
costs for the receptionist as are advanced by Licensee.
<PAGE>
ATTACHMENT 3.1
Station Programming Policies
(2 pages)
In accordance with Section 3.1 of the foregoing Time Brokerage Agreement
dated __________, 19__ (the "Operating Agreement") between Onyx Broadcasting,
Inc. ("Licensee"), and NCR II, Inc. ("Programmer") for the operation of radio
station KTRR-FM, Loveland, Colorado (the "Station"), Programmer shall comply
with the following programming policies of Licensee.
1. Controversial Issues. Any discussion of controversial issues of public
importance will be reasonably balanced with the presentation of contrasting
viewpoints in the course of overall programming; no attacks on the honesty,
integrity or like personal qualities of any person or group of persons will be
made during the discussions of controversial issues of public importance; and,
during the course of political campaigns, the programs are not to be used as a
forum for editorializing about individual candidates.
2. No Plugola or Payola. The mention of any business activity or "plug"
for any commercial, professional or other related endeavor, except where
contained in an actual commercial message of a sponsor, is prohibited. No
commercial messages (plugs) or undue references shall be made in programming
presented over the Station to any business venture, profit making activity or
other interest (other than noncommercial announcements for bona fide charities,
church activities or other public service activities) in which Programmer is
directly or indirectly interested without the same having been approved in
advance by the Stations' Manager and such broadcast being announced as sponsored
material.
3. No Gambling. Any form of gambling on a program is prohibited. This
provision shall not prohibit the broadcast of information concerning
state-operated lotteries or other contests that are lotteries but are not in
violation of state or federal law.
4. Election Procedures. At least 90 days before the start of any election
campaign, Programmer will review with the Station's Manager the rates that will
be charged for the time to be sold to candidates for public office or their
supporters to make certain that such rates conform with the applicable law and
Station policy.
5. Required Announcements. Programmer will broadcast (i) an announcement
in a form satisfactory to Licensee at the beginning of each hour to identify the
Station, and (ii) any other announcements required by applicable law or Station
policy.
- ------
1 of 2 (continued)
<PAGE>
6. Credit Terms Advertising. Unless all applicable state and federal
guidelines relative to disclosure of credit terms are complied with, no
advertising of credit terms will be made over the Station beyond mention of the
fact that, if desired, credit terms are available.
7. No Illegal Announcements. No announcements or promotions prohibited by
law of any lottery or game of change will knowingly be broadcast over the
Station.
- ------
2 of 2 (continued)
<PAGE>
ATTACHMENT 3.2
Programming Format
During the Term, the format of the Station shall be an adult mainstream
format, and shall not be changed to another format that is inconsistent
therewith without the prior consent of Licensee, which consent shall not be
unreasonably withheld.
<PAGE>
ATTACHMENT 7.3
ASSETS PURCHASE AGREEMENT
(22 pages)
This agreement is entered into this ____ day of ________, 19__, by and
among NCR II, INC., a Virginia corporation (sometimes hereinafter, "Buyer"),
ONYX BROADCASTING, INC., a Delaware corporation ("Seller"), and THOMAS P. GAMMON
of Fairfax County, Virginia ("Stockholder").
RECITALS
Seller is the broadcast licensee and owner of radio station KTRR-FM of
Loveland, Colorado (the "Station"); Stockholder is the sole owner of all of the
issued and outstanding shares of stock of Seller, and Seller heretofore has
entered into a Time Brokerage Agreement dated __________, 1996 with NCR II, Inc.
as "Programmer" for the Station, which agreement (the "Operating Agreement") is
in full force and effect and is not affected by this agreement. All terms
defined in the Operating Agreement shall have such meaning when used herein.
Buyer wishes to purchase from Seller, and Seller wishes to sell and transfer to
Buyer, substantially all of the Station's property and assets subject to the
Operating Agreement and the rights of Programmer thereunder, and Buyer wishes to
obtain an assignment of, and Seller wishes to assign and transfer to Buyer (or
its nominee), each operating license and authorization (as hereinafter further
defined, the "Licenses") issued by the Federal Communications Commission (the
"Commission") for the Station, all in the manner and upon the terms and
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of and relying upon the foregoing
recitals, each covenant, agreement, representation, and warranty set forth
herein and each act done pursuant to this agreement, the parties hereto agree as
follows:
1. PURCHASE AND SALE OF PROPERTY AND ASSETS:
1.1 Agreement to Purchase and to Sell. Upon and subject to (i)
compliance with all terms and conditions of this agreement, and (ii) the rights
of the Programmer under the Operating Agreement for Station during the Term
thereof, Buyer agrees to purchase from Seller, and Seller agrees to sell,
deliver, transfer, and convey to Buyer (or its nominee as to the Licenses) as an
operating business all right, title, and interest in and to substantially all of
the tangible and intangible property, rights, and assets of Station owned by
Seller, and excluding only the Excluded Property (jointly and severally the
"Property Sold").
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1.2 Excluded Property. The following (the "Excluded Property") are
not part of the Property Sold and are not being sold to Buyer: Seller's (i)
notes, (ii) cash on hand or on deposit, (iii) accounts receivable, (iv) rights
under this agreement, (v) insurance policies insuring the Property Sold, (vi)
corporate stock records, seal, and minute book, (vii) the tower and the tower
site, and (viii) original financial and accounting records, and such items of
the Property Sold as may be disposed of by Seller before Closing for value and
in the ordinary course of Seller's business while acting in accordance with
Seller's past practices and in compliance with this agreement.
2. PURCHASE PRICE:
2.1 Purchase Price. As full and complete consideration for purchase
of the Property Sold, at Closing Buyer shall pay or deliver to Seller (a) cash
or immediately available federal funds payable by wire transfer in the amount of
Five Hundred Fifty Thousand and no/100 Dollars ($550,000.00), and (b) Buyer's
promissory note payable to Seller substantially in the form and containing the
substance of Exhibit 2.01 (the "Note"). If this agreement is executed and
entered into by and between the parties named above on or before June 1, 1997,
the original principal amount of such Note (the "Principal Amount") shall be One
Million Two Hundred Fifty Thousand and no/100 Dollars ($1,250,000.00). If
neither the Sale Option nor the Purchase Option shall have been exercised before
June 1, 1997, then on June 1, 1997, and on June 1 of each year thereafter until
either the Sale Option or the Purchase Option shall have been exercised, such
Principal Amount of the Note shall be increased by Seventy-Five Thousand and
no/100 Dollars ($75,000.00) and the amount of cash payable under (a) above shall
be increased by Seventy-Five Thousand and no/100 Dollars ($75,000.00). The
Principal Amount of the Note, together with the amount of item (a) above shall
constitute the "Purchase Price," which Purchase Price shall be adjusted,
however, as may be required by paragraph 2.2 and allocated as set forth in
Exhibit 2.01.1.
2.2 Adjustments. At and as of Closing on the Closing Date certain
adjustments in the Purchase Price shall be made ("Closing Adjustment(s)") as
follows:
(a) Seller's and Station's expenses incurred for or accrued
during all periods ending with, upon, or prior to Closing (regardless of when
assessed, determined, calculated, paid, or collected) shall be Seller's sole
responsibility, and at and as of Closing Station's paid and unpaid expenses
(excluding any income taxes) shall be prorated as appropriate between Buyer and
Seller and the Purchase Price adjusted accordingly, so that Seller shall be
responsible for and pay all of Station's expenses incurred or accrued for all
periods ending prior to the Closing and Buyer shall
2
<PAGE>
be responsible for all of Station's expenses incurred or accrued thereafter, and
(b) also, the Purchase Price and Buyer's cash portion thereof
due at Closing shall be reduced as appropriate, without duplication, by (i) the
amount of any prepaid revenues received or extraordinary discounts given by
Seller for Station's goods or services to be delivered or rendered by Station
after the Closing Date, (ii) the amount of Seller's liabilities as of the
Closing Date for advertising time owed to vendors for trade of goods or services
received by Seller prior to the Closing Date, (iii) the amount of any reduction
in the Purchase Price required by paragraph 7.3. and (iv) by any amount
necessary to discharge, satisfy, or cure each Lien, other than Permitted Liens
(hereinafter defined), then applicable to any part of the Property Sold.
2.3 How Adjustments Payable. Each of the Closing Adjustments
(including any expenses payable pursuant to paragraph 10.1) shall be made by
adjustments to and be payable in and from cash at Closing by the party
responsible.
2.4 Security at Closing. Buyer shall execute and deliver to Seller
(a) a security agreement substantially in the form and substance of Exhibit 2.04
(the "Security Agreement"), and (b) a stock pledge agreement (the "Stock Pledge
Agreement") substantially in the form and substance of Exhibit 2.04.1, in each
case securing payment of the Note as and to the extent therein provided.
2.5 Deposit. Buyer has deposited cash in the amount of One Hundred
Thousand and no/100 Dollars ($100,000.00) (the "Deposit") with Old National
Trust Company, Evansville, Indiana, pursuant to the escrow agreement in the form
and containing the substance of Exhibit 2.05 (the "Escrow Agreement") entered
into this date. If Seller is not in default hereunder but Closing shall not
occur solely because of Buyer's material breach of this agreement, then Seller
may retain all or any part of the Deposit as a part of any damages that Seller
may suffer as a result of such default, without prejudice to any claim for
additional damages to Seller arising from Buyer's breach of or default under
this agreement, otherwise the Deposit, or the remaining part thereof, shall be
returned to Buyer upon Closing or other termination of this agreement, all as
more particularly provided for in the Escrow Agreement.
3. CLOSING; COVENANTS.
3.1 Closing, and Closing Date. Unless this agreement is earlier
terminated or its Closing is postponed as herein provided for, consummation of
the sale and purchase contemplated hereby ("Closing") shall take place beginning
at 10:00 o'clock
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<PAGE>
a.m., local time, at the offices of Messrs. Leventhal, Senter & Lerman, Suite
600, 2000 K Street N.W., Washington, D.C. ("Seller's Counsel") on the date
designated by Buyer, which shall be between the fifth (5th) and tenth (10th)
business day following the date on which the Commission's consents to the
Applications (hereinafter defined) have become a Final Order (hereinafter
defined), or at such other time and place as Buyer and Seller hereafter may
agree upon in writing (such date of Closing as so determined, designated, agreed
upon, or postponed; hereinafter, the "Closing Date").
3.2 Duties of Seller at Closing. At Closing Seller agrees to and, at
Seller's sole expense [except as required by (g) below], shall tender and
deliver to Buyer at 10:00 o'clock a.m., local time on the Closing Date, in form
and substance reasonably satisfactory to Buyer and its counsel, each of the
following:
(a) such documents and duly executed instruments as shall be
necessary or appropriate to Closing and to carry out the transactions
contemplated by and the intent of this agreement, including, without limitation,
such instruments of conveyance, assignment, consent, or transfer as are
sufficient to assign, convey, transfer to, and vest in Buyer (and/or its nominee
as to the Licenses) the Licenses and all right, title, and interest in and to
each item and all of the Property Sold free and clear of all Liens except (i)
Permitted Liens and (ii) all rights of the Programmer under the Operating
Agreement and the Lien of the security agreement securing the same, which Lien
also shall be a Permitted Lien;
(b) subject to such Permitted Liens and the rights of
Programmer under the Operating Agreement, peaceful, exclusive, and unencumbered
possession of all tangible items of the Property Sold;
(c) a copy, certified by an appropriate officer of Seller as
being true and complete, of Seller's bylaws and articles of incorporation as
then in effect and of necessary corporate proceedings and resolutions duly
adopted by Seller's board of directors and shareholders;
(d) the legal opinion of Seller's Counsel dated as of the
Closing Date substantially in the form and containing the substance of Exhibit
3.02;
(e) a copy of a noncompetition agreement substantially in the
form of Exhibit 3.02.1 ("Noncompetition Agreement") dated as of the Closing Date
and duly executed by all parties thereto other than Buyer;
(f) a duly executed copy of each agreement, consent, waiver,
or approval described in paragraph 6.5 and of each
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<PAGE>
instrument necessary or effective to terminate on or before the Closing Date
each employee benefit plan as applicable to any of Station's employees;
(g) release of the Deposit to Buyer;
(h) each other document, opinion, waiver, consent,
certificate, statement, or instrument that this agreement requires Seller to
deliver;
(i) a lease substantially in the form and substance of Exhibit
3.02.2 (the "Tower Lease") dated as of the Closing and duly executed by all
parties thereto other than Buyer;
(j) a copy of such nondisturbance or similar agreement(s)
[collectively, the "Nondisturbance Instrument(s)"] as then reasonably may be
required by Buyer as to the Tower Lease, each to be executed by Seller and by
all other parties thereto other than Buyer and to be in form and substance
reasonably satisfactory to Buyer; and
(k) such net cash payment to Buyer as may be necessitated by
paragraph 2.3.
3.3 Duties of Buyer at Closing. Contemporaneously with Seller's
performance of its obligations described in paragraph 3.2, on Closing Buyer
agrees to and, at Buyer's sole expense, shall tender and deliver to Seller in
form and substance reasonably satisfactory to Seller and Seller's Counsel, each
of the following:
(a) the Purchase Price, adjusted and paid as herein agreed,
including the Note duly executed by Buyer;
(b) certified copies of any necessary resolutions authorizing
and approving Buyer's execution and delivery of this agreement and consummation
of the transactions contemplated hereby;
(c) subject to each Permitted Lien and to each Lien then
existing as to all or any part of the Property Sold, the Security Agreement duly
executed by Buyer;
(d) the legal opinion of Buyer's counsel dated as of the
Closing Date substantially in the form and containing the substance of Exhibit
3.03;
(e) a copy of the Noncompetition Agreement duly executed by
Buyer;
(f) a copy of the Stock Pledge Agreement duly executed by
Buyer;
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(g) a copy of the Tower Lease duly executed by Buyer;
(h) a copy of an agreement duly executed by Seller, Buyer, and
the Programmer under the Operating Agreement dated as of the Closing Date and
substantially in the form and containing the substance of Exhibit 3.03.1;
(i) such net cash payment to Seller as may be necessitated by
paragraph 2.3, and
(j) such assumption agreement(s) as may be entered into by
Buyer pursuant to paragraph 3.4, duly executed by Buyer.
3.4 Certain Liabilities. Unless and except as Buyer hereafter may
otherwise expressly agree in an agreement executed by Buyer at Closing, Buyer
assumes no liability of Seller, contractual or otherwise, except for Seller's
obligations as Licensee under the Operating Agreement as reflected in Exhibit
3.03.1, and Seller covenants and agrees with and for the benefit of Buyer that
Seller will discharge all of Seller's liabilities and obligations in the
ordinary course, including all obligations for payment of Seller's accounts
payable.
3.5 Transfer Assurances. After Closing, on Buyer's reasonable
request Seller shall take or cause to be taken all such further actions and
shall execute, acknowledge, and deliver all such instruments as reasonably may
be required to memorialize or effectuate the transactions occurring at Closing
in order to ensure that Buyer receives and realizes all of Seller's rights in
the Property Sold as of Closing as herein provided for.
4. SELLER'S AND STOCKHOLDER'S REPRESENTATIONS AND WARRANTIES:
To induce Buyer to enter into and perform pursuant to this
agreement, Seller and Stockholder, jointly and severally, represent and warrant
to Buyer that each of the following is true:
4.1 Corporate Organization, Qualification, Authorization, Etc.
Seller is a corporation duly organized, validly existing, and in good standing
under the laws of the state of its incorporation, has no subsidiaries, has all
requisite corporate power and authority to conduct its business as now being
conducted, to own and (subject to the Operating Agreement and the Programmer's
rights thereunder) operate Station, and to own, possess, occupy, or use the
Property Sold.
4.2 Call Signs. Seller has the full and exclusive right to use the
call sign "KTRR" (FM) under Commission regulations, and as of the Closing Date
the use of such call sign
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and such other names or slogans as are being or have been used by Seller will
not infringe upon or violate any use or right to use of or by any other person.
4.3 Seller's Licenses. As of the Closing Date Seller will hold such
valid licenses and authorizations issued by the Commission as are necessary to
own and operate the Station, including, as at present, a regular, seven-year,
unconditional license authorizing operation of Station KTRR-FM and each
auxiliary station license presently associated therewith (singly a "License";
collectively, the "Licenses"), all without material change or qualification.
Each License shall be in full force and effect, unimpaired by any act or
omission of Seller.
4.4 Environmental Matters. As of August 6, 1996, no part of the
Property Sold ever had been used (in violation of any law, rule, or regulation)
to generate, manufacture, refine, transport, release, treat, store, handle, or
dispose of any hazardous, industrial, toxic, or harmful substances, wastes, or
materials (e.g. asbestos, urea formaldehyde, polychlorinated biphenyls, or other
waste exhibiting hazardous characteristics) or any substance or element the
generation, release, storage, use, or handling of which was identified,
prohibited or regulated (singly, a "Hazardous Material"; collectively,
"Hazardous Materials") by or pursuant to any law, rule, or regulation (federal,
state, or local) regarding (a) health or safety, or (b) the effect on or use of
land, water, air, or the environment (e.g. the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended; 42 U.S.C.; ss.
6.01 et seq.; RCRA; or similar acts), or (c) the use, transport, handling,
storage, treatment, release, or disposal of any such Hazardous Materials
(singly, an "Environmental Law," collectively, the "Environmental Laws"). As of
such date, Seller always had complied with each such Environmental Law, and no
event had occurred and no condition existed or affected any part of the Property
Sold that, if known to the proper authorities, could have resulted in any
material complaint, notice, citation, action, proceeding, or investigation
before any authority in connection with any Hazardous Material or any
Environmental Law or the violation thereof or any claim against or liability to
Seller or Buyer arising out of or based on any Environmental Law or the breach
or enforcement thereof.
4.5 Conduct of Business; Absence of Change. During the last six
months, there has been no material, adverse change in the condition of the
Station's transmitter site or equipment or of the License.
4.6 Ownership of Station and Title to Property Sold. Except for the
presently existing Lien securing Programmer pursuant to the Operating Agreement
(and the security agreement securing Licensee's performance thereunder), except
as otherwise expressly
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disclosed and described as permitted liens in Exhibit 4.06 ("Permitted Liens"),
and except for property leased by Seller pursuant to leases listed on Exhibit
4.15.1, at Closing Seller will be the sole owner of the Property Sold and will
have, and at and as of Closing, subject to the Operating Agreement and
Programmer's rights thereunder, will convey and transfer to Buyer, full and
exclusive legal, equitable, good, record (where applicable), and marketable
title to and all rights in (and the right to immediate, exclusive, peaceful, and
unencumbered possession of) the Property Sold free and clear of any and all
Liens except any then existing Permitted Liens, and Seller's said title is
warranted against the claims of any and all persons.
4.7 Execution. This agreement has been duly executed and delivered
by Seller and constitutes a legal, valid, and binding obligation of Seller
enforceable against Seller in accordance with its terms.
4.8 License and Permits. At Closing, Seller will hold all
franchises, licenses, certificates, or permits needed to possess, own, lease,
use, or occupy the Property Sold, to operate the Station, or to conduct
Station's present business; each will be in full force and effect according to
its terms, and no action will be pending or threatened looking toward the
amendment, revocation, restriction, or revision of any of them.
4.9 Tax Matters. Seller has properly and timely filed in correct
form with appropriate governmental authorities all tax returns required to be
filed by it; all taxes due and payable by Seller have been properly and timely
reported, determined, and paid, and Seller has no liability for payment of any
unpaid tax, interest thereon, or any related penalty.
4.10 Employee Status. As of Closing each of Station's employees
shall have been paid all wages, salaries, commissions, severance pay, vacation
pay, sick leave, or other pay, benefits, or entitlements due and payable by
Seller and earned or accrued by or for each such employee as of, or for any
period prior to, or as a result of Closing.
4.11 Labor Agreements; Working Conditions. Seller has no written or
oral contract, express or implied, with any of Station's employees and is not a
party to any contract with a labor organization or to any collective bargaining
agreement covering or relating to any of Station's employees. Seller has
complied with all laws, rules, and regulations relating to conditions of
employment or applicable to the hiring, employment, or discharge of Station's
employees, including those relating to civil rights, wages, hours, pay,
harassment, discrimination, disability, occupational safety and health,
collective bargaining, or the withholding and payment of taxes and
contributions. There are no
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material claims or controversies pending or threatened between or concerning
Seller and any of its employees.
4.12 Benefit Plans. As a result of this agreement and Closing
hereunder, Buyer shall have and will incur no funding or other obligation or
liability in connection with any pension, profit-sharing, or other employee
benefit plan, its funding or termination, or any withdrawal therefrom, in whole
or in part.
4.13 Authorization for Agreement. Seller has full power and
authority to execute, perform, and deliver this agreement and to consummate the
transactions contemplated hereby. Seller's execution of, delivery of,
performance of, and compliance with this agreement have been duly and validly
authorized by all necessary corporate action.
4.14 Conveyances, Etc. When delivered to Buyer at Closing, the
instruments of conveyance, assignment, consent, or transfer will constitute
legal, valid, and binding obligations of each party thereto, and such
instruments will be effective to vest in Buyer, and as of Closing Buyer will
thereby receive and become the sole, vested owner of all right, title, and
interest in and to the Property Sold as and to the extent herein provided.
4.15 Agreements, Contracts, Leases, Etc. Exhibit 4.15.1 contains an
accurate and complete list and brief description of each material agreement,
obligation, contract, lease, or commitment (oral or written, express or implied)
applicable to or affecting Station as to which Seller is a party, or by which it
is bound, or that applies to or affects the Property Sold or any of Station's
properties or assets (the "Contracts"), and an accurate and complete copy or
statement of the terms of each such Contract has been or forthwith will be
supplied to Buyer. Except as so listed and described in Exhibit 4.15.1 Seller is
not a party to any other material agreement (oral or written, express or
implied) that affects Station or all or any part of the Property Sold. Each of
the Contracts is in full force and effect and is legal, valid, binding, and
enforceable in accordance with its terms; Seller has not defaulted as to or
breached, nor has it received notice of any claim or assertion that it has
defaulted as to or breached, any term or condition of any Contract, or other
agreement applicable to it, and no event has occurred that with notice or the
lapse of time, or both, would constitute such a breach or default. At Closing
all of Seller's rights under each Contract will be assignable to Buyer, and
Seller knows of no term, condition, or provision of, or event affecting, any
Contract that might effect the validity, continuation, or effectiveness thereof,
or that might prevent Buyer from realizing Seller's present rights therein and
all benefits to accrue thereunder after Closing.
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4.16 Statements, Etc., True and Not Misleading. No representation or
warranty made by Seller in this agreement, and no record, document, instrument,
or certificate furnished or to be furnished by Seller to Buyer (its
representatives, agents, attorneys, or accountants) pursuant to this agreement,
or in connection with Closing or the transactions contemplated hereby, contains
or will contain any untrue statement of a material fact.
4.17 Investment. On Closing, Seller will take the Note for its own
account, for investment purposes only, and not with a view or intention to
distribute or otherwise dispose of all or any part thereof. Seller understands
that the Note is to be issued without registration under any securities law and
pursuant to an exemption from registration under the provisions of the
Securities Act of 1933 as amended (the "Act") and that Seller (or other holder
thereof) may not hypothecate or otherwise transfer or dispose of the Note except
upon registration under the Act, unless an exemption from registration
provisions of the Act is available. Seller agrees that before it transfers or
disposes of the Note it will give Buyer notice of such proposed disposition, and
any new note issued by Buyer under such circumstances shall bear a legend
similar in form and substance to that appearing on Exhibit 2.01. Seller is aware
that Buyer is a newly-formed entity with limited capital and no previous
financial or operating history and that for the foreseeable future payment of
the Note will depend upon Buyer's revenues from the Station and its use of the
Property Sold. Seller is able to bear the risk of holding the Note for an
indefinite period of time and has received (or had free access to) all requisite
information, financial or otherwise, concerning Buyer.
5. CONDUCT PRIOR TO CLOSING:
Seller covenants and agrees that prior to and until Closing:
5.1 Conduct of Business. Seller will conduct its business
diligently, only in the ordinary course, in accordance with its customary
policies, and except as may otherwise be expressly permitted or required hereby,
without Buyer's prior written consent expressly identifying and referring to
this paragraph 5.1, Seller will not directly or indirectly do or agree to do any
one or more of the following:
(a) encumber, mortgage, pledge, or subject the Property Sold
or any part thereof to any Lien, security interest, charge, or encumbrance;
(b) grant, agree to, offer, or pay any kickback, discount,
incentive payment, commission, or promotional or other allowance to any
advertiser or customer, or sell or agree to sell
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or otherwise dispose of any part of the Property Sold other than for value and
in the ordinary and usual course of business;
(c) terminate, restrict, or waive any right materially
affecting the value of the Property Sold;
(d) conduct its business other than in compliance with all
laws, rules, and regulations of all local, state, and federal governmental
authorities, entities, and agencies;
(e) enter into any employment contract or lease that will
survive Closing, or
(f) enter into any contract or other commitment binding upon
Seller for a period of more than thirty (30) days or other than in the ordinary
course of business.
5.2 Reports; Taxes; Etc. Seller will properly and timely file all
necessary reports or returns with federal, state, foreign, local, or other
authorities (including taxing authorities) and on or before the Closing Date
will pay all taxes, charges, or assessments then due and payable by Seller or
the Station.
5.3 Termination of Plans. Without any liability to Buyer, Seller, at
its sole expense, shall terminate or cause to be terminated each pension,
profit-sharing, or other employee benefit plan of Seller as applicable to the
Station's employees, all in accordance with the provisions thereof and
applicable laws, rules, and regulations and shall satisfy and discharge each
withdrawal, termination, or other liability thereunder.
5.4 Commission Applications. Within ten (10) business days after the
date of this agreement, Seller will join with Buyer in filing or causing to be
filed with the Commission appropriate, formal applications (singly an
"Application"; collectively, the "Applications") for consent to the assignment
from Seller to Buyer of each of the Station's Licenses and authorizations. Each
party will pay one-half of the filing fees for the Applications. Thereafter
Seller will cooperate with Buyer in processing each of the Applications to a
conclusion, and Buyer and Seller will promptly supply all information, filings,
and documentation required by the Commission. Each of Buyer and Seller shall pay
such fees and expenses as may be incurred by it or imposed on such party by the
Commission during such process.
5.5 Licenses' Renewals. As and when prudent or necessary under the
Commission's orders, rules, or regulations Seller will promptly tender for
filing with the Commission a formal application for renewal of each of the
Licenses in form, substance, and content acceptable to the Commission, without
any deficiency material to the Commission, and will diligently process each such
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application to a favorable conclusion, causing each License to be renewed,
without termination, lapse, interruption, delay, or material modification of or
adverse change in its content from the present, for the regular term beginning
immediately upon expiration of each License's current term.
6. CONDITIONS TO BUYER'S OBLIGATIONS:
As conditions precedent for the sole benefit of Buyer, which Buyer
may waive (but only by and to the extent of its express, written consent given
hereafter), Closing and each obligation of Buyer under this agreement shall be
subject to and conditioned upon Buyer being satisfied as to each of the
following:
6.1 Compliance with Agreement; No Prohibition. Until, at, or prior
to Closing, each material term, covenant, agreement, and condition of this
agreement to be complied with or performed by Seller shall have been complied
with or performed, and nothing then shall restrain, inhibit, or prohibit
Closing.
6.2 Representations and Warranties; Certificate. Unless waived, each
of Seller's and Stockholder's representations and warranties contained herein
shall in all material respects have been true and correct when made, shall be
deemed to be made again at and as of Closing, and shall then be in all material
respects true and correct, and Seller shall have delivered to Buyer a
certificate to such effect, executed by Stockholder, in such form and containing
such substance and giving Buyer such assurances as Buyer reasonably may require.
6.3 Delivery. Buyer shall not have terminated this agreement as
permitted hereby, and Seller shall have delivered to Buyer each item required by
paragraph 3.2.
6.4 Environmental. A Phase I environmental site assessment of the
Real Property shall have been completed prior to Closing by a company chosen by
Buyer, the cost for such assessment to be borne by Buyer, the results thereof
shall have been reasonably satisfactory to Buyer, and no part of the Property
Sold shall have been contaminated by any Hazardous Material.
6.5 Approvals and Consents. All agreements, consents, waivers, or
approvals necessary or appropriate for Closing or for consummation of the
transactions contemplated hereby shall have been obtained from such parties and
in such form and substance as is reasonably satisfactory to Buyer, and copies
thereof delivered to Buyer.
6.6 Final Orders. The Commission's consent to the Applications shall
have been obtained without any condition adverse to Buyer, and such consent
shall have become a final order (meaning
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that it shall no longer be subject to appeal, challenge, review, or
reconsideration on any administrative or judicial level, that the time for
initiating any further appeal, challenge, review, or reconsideration of any kind
shall have expired, and that no action, or request for a stay is pending
concerning any Application) ("Final Order") and shall be effective, unchanged,
and unamended as of Closing.
6.7 Possession. Subject to the Operating Agreement, Programmer's
rights thereunder, and to any Permitted Liens, Seller shall have delivered to
Buyer peaceful possession of the Property Sold, including all of Station's
properties and premises tenanted by Seller, and at Buyer's request Seller shall
have obtained and delivered to Buyer duly executed subordination or
Nondisturbance Instruments in form and substance reasonably satisfactory to
Buyer, assuring to Buyer quiet possession of any such leased property and
premises for the term of the lease.
6.8 Closing Adjustments. Buyer and Seller shall have agreed upon the
Closing Adjustments to be made at Closing, as memorialized by a closing
statement executed at Closing by Buyer and Seller.
7. INDEMNIFICATION AND RISK OF LOSS:
7.1 Subject to the limitations of paragraph 7.2:
(a) Buyer's Indemnity. From and after Closing, Seller and
Stockholder, jointly and severally, agree to indemnify, defend, and hold Buyer,
its owners, officers, agents, representatives, successors and assigns, jointly
and severally, harmless from and against each, any, and all actions, suits,
causes of action, losses, costs, claims, damages, response costs, liabilities,
fines, judgments, or expenses (including all consequential or incidental damages
and all attorneys' or experts' fees) (singly a "Claim"; collectively the
"Claims") asserted against or incurred or sustained by each, any, or all of them
as a result of, arising out of, based upon, or on account of, in whole or in
part, each, any, or all of the following: (i) any violation of any law, rule, or
regulation or any act or failure to act by Seller or any one or more of its
officers, directors, agents, representatives, servants, or employees (or any
other person or entity for which Seller is or may be held responsible), (ii) any
agreement made by, claim against, or liability of Seller (except such Claims as
are caused by Buyer pursuant to assumption agreement(s) as described in
paragraph 3.4), (iii) the conduct of Seller's business or the ownership, use, or
operation of either or both of the Station or the Property Sold, or any part or
parts thereof, at any time prior to Closing, (iv) any illegal payment received,
directly or indirectly, by Seller at any time or times prior to Closing, (v) any
Lien existing at Closing on or as to any
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part or all of the Property Sold, other than a Permitted Lien, (vi) any breach
of any representation or warranty made by Seller or Stockholder in this
agreement or in any certificate or other instrument delivered by or on behalf of
Seller pursuant to this agreement or in connection with Closing; (vii) any
breach of any covenant set forth in this agreement to be performed prior to or
after Closing by Seller or Stockholder; (viii) any liability or obligation
(whether absolute, accrued, contingent, or otherwise) assumed by Seller
hereunder. As to each Claim the obligations imposed hereby shall include, but
not be limited to, an obligation to pay to or for Buyer all costs incurred by or
for Buyer to investigate, defend, or settle such Claim and all amounts necessary
to put Buyer in the same position and condition that Buyer would have been in if
such Claim had not arisen.
(b) Seller's Indemnity. From and after Closing, Buyer agrees
to indemnify, defend, protect and hold Seller, its officers, directors,
affiliates, agents, representatives, successors and assigns harmless from and
against each, any, and all Claims asserted against or incurred or sustained by
each, any, or all of them as a result of, arising out of, based upon, or on
account of, in whole or in part, each, any, or all of the following: (i) any
breach of any representation or warranty made by Buyer in this Agreement or in
any certificate or other instrument delivered by or on behalf of Buyer pursuant
to this Agreement or in connection with Closing; (ii) any breach of any covenant
set forth in this agreement to be performed prior to or after Closing by Buyer;
(iii) any liability or obligation (whether absolute, accrued, contingent, or
otherwise) assumed by Buyer hereunder, or (iv) Buyer's operation of the Station
after the Closing Date.
7.2 Limitations on Indemnity. Any indemnity obligation of any party
shall be enforceable only after the aggregate amount of all Claims for which
such party is responsible for indemnity shall have exceeded $5,000 and shall
survive Closing but expire as to all Claims not made on or before the last day
of the twelfth (12th) full calendar month following Closing except for Claims
(i) for taxes or penalties, or (ii) based on any Lien on any part of the
Property Sold existing at or before Closing, or (iii) for violation of any
Environmental Law or the misuse of any Hazardous Material, or (iv) based on
uninsured title defect(s) applicable to any part of the Property Sold, and for
each such excepted Claim the obligation to indemnify shall survive until barred
by operation of law.
7.3 Risk of Loss. Until Closing, the risk of destruction of or loss
or damage to the Station or any part of the Property Sold arising from any
actual or proposed condemnation or taking of all or any part of the Property
Sold or of the Station by governmental authority or by exercise of the power of
eminent
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domain, or from any fire, explosion, riot, flood, war, or other cause or
casualty shall remain with Seller. If Seller becomes aware of any such actual or
potential taking, loss, damage, or destruction, Seller will promptly notify
Buyer of all particulars thereof prior to Closing. If such damaged property is
material to Station's operations or value and is not completely replaced or
repaired and restored to its former condition by Seller before the Closing Date
then Buyer at its sole option may: (a) by notice to Seller postpone the Closing
Date or abandon and terminate this agreement and all obligations of Buyer
hereunder, or (b) effect Closing, in which case Seller shall assign and pay to
Buyer all insurance proceeds received or to be received by Seller with respect
to policies insuring the Property Sold and there shall be an appropriate
reduction in the Purchase Price to reflect the amount of any uninsured loss,
damage, or destruction to the Property Sold.
8. BUYER'S REPRESENTATIONS AND WARRANTIES:
To induce Seller to enter into and perform pursuant to this
agreement, Buyer represents and warrants to Seller that each of the following is
true:
8.1 Corporate Organization. Buyer is a corporation duly organized,
validly existing, and in good standing under the laws of the Commonwealth of
Virginia and has all requisite power and authority as such to conduct its
business as it is now being conducted and to own its properties and assets.
8.2 Authorization for Agreements. Buyer's execution and delivery of
this agreement have been duly and validly authorized by all necessary action on
the part of Buyer, and this agreement constitutes a valid and binding obligation
of Buyer.
8.3 FCC Qualifications. Buyer is qualified to be licensee of the
Station under the Communications Act of 1934, as amended, and the rules and
regulations of the FCC and knows of no facts that would delay the consummation
of the transactions contemplated by this agreement. Buyer has no reason to
believe that the FCC assignment contemplated herein might be challenged or might
not be granted by the FCC in the ordinary course. Buyer is financially qualified
to consummate the sale and purchase contemplated by this agreement.
8.4 Absence of Conflicting Agreements or Required Consents. Except
for the requirement of prior FCC consent, the execution, delivery and Closing of
this Agreement by Buyer: (a) do not and will not violate any provision of
Buyer's articles of incorporation and bylaws; (b) do not and will not require
the consent of any third party or governmental authority; (c) do not and will
not violate any law, judgment, order, injunction, decree,
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rule, regulation, or ruling of any governmental authority applicable to Buyer;
and (d) do not and will not, either alone or with the giving of notice or the
passage of time, or both, conflict with, constitute grounds for termination or
acceleration of or result in a breach of the terms, conditions, or provisions
of, or constitute a default under any agreement, lease, instrument, license, or
permit to which Buyer is now subject.
8.5 Bankruptcy. No insolvency proceedings of any character,
including, without limitation, bankruptcy, receivership, reorganization,
composition, or arrangement with creditors, voluntary or involuntary, affecting
Buyer are pending or threatened, and Buyer has made no assignment for the
benefit of creditors or taken any action in contemplation of or which would
constitute the basis for the institution of such insolvency proceedings.
8.6 Ownership and Capitalization of Buyer. Alan R. Brill and Bonnie
P. Brill own (directly or indirectly) at least 80% of the capital stock of
Buyer. Except for obligations to Seller under this agreement, Buyer has and at
Closing will have no material debt whatsoever except as permitted by Paragraph 3
of the Security Agreement. Buyer's obligations hereunder are not subject to a
contingency based on the availability or suitability of financing.
9. CONDITIONS TO SELLER'S OBLIGATIONS:
As conditions precedent for the sole benefit of Seller, which Seller
may waive (but only by and to the extent of its express, written consent given
hereafter), Closing and each obligation of Seller under this agreement shall be
subject to and conditioned upon Seller being satisfied of each of the following:
9.1 Delivery. Seller shall not have terminated this agreement as
permitted hereby, and Buyer shall have delivered to Seller each item as and when
required by paragraph 3.3.
9.2 Compliance with Agreement; No Prohibition. Until, at, or prior
to Closing, each material term, covenant, agreement, and condition of this
agreement to be complied with or performed by Buyer shall have been complied
with or performed, and nothing then shall restrain, inhibit, or prohibit
Closing.
9.3 Representations and Warranties. Unless waived, each of Buyer's
representations and warranties contained in Section 8 shall in all material
respects have been true and correct when made, shall be deemed to be made again
at and as of Closing, and shall then be in all material respects true and
correct, and Buyer shall have delivered to Seller a certificate to such effect,
executed by its President, in such form and containing such
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substance and giving Seller such assurances as Seller reasonably may require.
9.4 Agreement. Buyer and Programmer shall have duly entered into,
executed, and delivered an agreement in the form and containing the substance of
Exhibit 3.03.1.
9.5 Operating Agreement. Buyer shall have complied in all material
particulars with its obligations as Programmer under the Operating Agreement,
including its obligations for all monthly fees payable thereunder.
9.6 Final Order. The conditions of paragraph 6.6 shall have been
met.
9.6 Compliance with Agreement; No Prohibition. Until, at, or prior
to Closing, each term, covenant, agreement, and condition of this agreement to
be complied with or performed by Buyer shall have been complied with or
performed, and nothing then shall restrain, inhibit, or prohibit Closing.
9.7 Approvals and Consents. All agreements, consents, waivers, or
approvals necessary or appropriate for Closing or for consummation of the
transactions contemplated hereby shall have been obtained from such parties and
in such form and substance as is reasonably satisfactory to Seller, and copies
thereof delivered to Seller.
9.8 Closing Adjustments. Buyer and Seller shall have agreed upon the
Closing Adjustments to be made at Closing, as memorialized by a closing
statement executed at Closing by Buyer and Seller.
10. MISCELLANEOUS:
10.1 Expenses. Except as may otherwise be provided in this
agreement, each party shall be solely responsible for and shall pay all costs
and expenses incurred by it in connection with the negotiation, preparation and
performance of and compliance with the terms of this agreement. All recordation,
transfer, documentary, excise, sales or use taxes or fees imposed on this
transaction shall be borne in equal shares by Buyer and Seller.
10.2 Notices. Each notice, consent, request, demand or other
communication required or permitted hereunder shall be in writing and shall be
deemed to have been duly given only upon the earlier of receipt (by hand
delivery, fax, or otherwise) or five (5) days after having been mailed,
certified or registered United States mail, postage prepaid, addressed as
follows:
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if to Seller or Onyx Broadcasting, Inc.
Stockholder: 8401 Old Courthouse Road, Suite 140
Tyson's Corner, Virginia 22180
Attention: Mr. Thomas P. Gammon
President
copy to: Meredith S. Senter, Jr., Esquire
Leventhal, Senter & Lerman
Suite 1600
2000 K Street, N.W.
Washington, D.C. 20006-1809
if to Buyer: NCR II, Inc.
c/o Brill Media Company, Inc.
Post Office Box 3353
Evansville, Indiana 47732
Attention: Mr. Alan R. Brill
copy to: Charles W. Laughlin, Esquire
c/o Thompson & McMullan, P.C.
100 Shockoe Slip
Richmond, Virginia 23219
or when so delivered or mailed to such other place or person as a party
hereafter from time to time may have designated in a prior written notice to the
other party.
10.3 Survival of Representations and Warranties. Each representation
or warranty made herein shall remain operative and in full force and effect
regardless of and shall not be affected by any investigation made or knowledge
obtained by or on behalf of Seller or Buyer prior to Closing and shall survive
Closing. From and after Closing, the right to indemnification under paragraph 7
of this agreement shall be the exclusive remedy of any party in connection with
any breach by another party of any representation, warranty, or covenant
contained in this agreement.
10.4 Termination.
(a) This agreement may be terminated by either Buyer or
Seller, if the party seeking to terminate is not in material default or breach
of this agreement or the Operating Agreement, upon written notice to the other
after the occurrence of any of the following (assuming that any required notice
has been duly given): (i) if the other party has defaulted in any material
respect in the observance or in the due and timely performance of any of its
covenants or agreements contained herein, and such default has been neither
cured nor waived by the earlier to occur of (x) the Closing Date and (y) the
thirtieth (30th) day after written notice of such default; (ii) if the Operating
Agreement has been terminated pursuant to Section 5 thereof; (iii) if there
shall
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be in effect any judgment, final decree, or order that prevents or makes
unlawful the Closing, or if the Commission shall have released a hearing
designation order requiring a formal hearing on any of the Applications; or (iv)
if the Commission has not granted the Application(s) within three hundred sixty
(360) days of filing.
(b) This agreement may be terminated by Buyer, upon written
notice to Seller: (i) pursuant to Section 7.3 (Risk of Loss); (ii) if regular
broadcast transmission of the Station has been interrupted for a period of more
than seven (7) consecutive calendar days for any reason other than an Act of
God; or (iii) if the Commission makes a material, adverse change in any of the
Station's broadcast Licenses.
(c) This agreement may be terminated by mutual written consent
of Buyer and Seller.
(d) The termination of this agreement pursuant to this
paragraph 10.4 shall not relieve any party of any liability for breach of this
agreement prior to the date of termination.
10.5 Successors and Assigns. This agreement and each provision
hereof shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns and may not be assigned without the
prior written consent of all parties hereto. For purposes of this Section 10.5,
an assignment shall include any change in control of a party whether by sale of
stock, merger, operation of law, or otherwise.
10.6 Indemnity Concerning Brokers. Buyer and Seller represent and
warrant each to the other that no broker has been used, employed, or connected
with this transaction, and each party agrees to indemnify, defend, and save
harmless the other and its officers, agents, and employees against each
liability, cost, or expense, including attorneys' fees, that may be asserted on
account of any and all commissions, fees, expenses, or charges due and owing on
account of any brokerage services related to this transaction incurred by reason
of any agreement made by such party with any broker or finder.
10.7 Amendment and Waiver. Except for a waiver by Seller pursuant to
Section 9 or by Buyer pursuant to Section 6, no provision of this agreement may
be amended or its observance waived (whether generally or in a particular
instance and whether retroactively or prospectively) except with and by the
waiving party's prior, express, written consent. No other act, failure to act,
or course of dealing shall cause or constitute a waiver by Buyer or Seller.
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10.8 Definitions. Wherever used in this agreement each of the
following terms shall have the meaning defined in the paragraphs of this
agreement identified below:
Term Definition
---- ----------
Act P. 4.18
Application(s) P. 5.4
Buyer Preamble
Buyer's Commission P. 3.6
Claim(s) P. 7.1
Closing P. 3.1
Closing Adjustments P. 2.2
Closing Date P. 3.1
Collection Costs P. 3.6
Collection Period P. 3.6
Commission Recitals
Contracts P. 4.15
Deposit P. 2.5
Environmental Law(s) P. 4.4
Escrow Agreement P. 2.5
Excluded Property P. 1.2
Final Order P. 6.6
Hazardous Material(s) P. 4.4
License(s) Recitals, P. 4.3
Lien(s) P. 10.9
Noncompetition Agreement P. 3.2
Nondisturbance Instruments P. 3.2
Note P. 2.1
Operating Agreement Recitals
Permitted Liens P. 4.6
Property Sold P. 1.1
Purchase Price P. 2.1
Real Property P. 1.1
Security Agreement P. 2.4
Seller Preamble
Seller's Counsel P. 3.1
Station Recitals
Stockholder Preamble
Stock Pledge Agreement P. 2.4
Tower Lease P. 3.2
10.9 Additional Definitions. Wherever used in this agreement, the
term "Liens" (singly, "Lien") shall mean and include each, any, and all liens,
mortgages, security interests, pledges, title retention devices, claims (legal
or equitable, including without limitation, liability to or claims of any taxing
authority, creditor, or other person), conditional sale or other agreements,
encumbrances, leases, trusts, options, servitudes, rights, charges, assessments,
consignments or bailments, reservations, exceptions, encroachments, easements,
rights-of-way, conditions, restrictions,
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imperfections or deficiencies of title, or liabilities of any nature and however
arising [including those arising from violation of or noncompliance with any
law, ordinance, rule, or regulation (including, without limitation, municipal
ordinances relating to the zoning, occupancy, or use of real property)], whether
recorded or unrecorded, choate or inchoate, or appurtenant or non-appurtenant,
and whether arising by operation of law or otherwise, whether dependent on or
independent of possession, whether known or unknown, and whether now in
existence or to come into existence merely by the giving of notice or the lapse
of time, or both.
10.10 Control of the Station. Until Closing, Buyer will not directly
or indirectly control, supervise, or direct or attempt to control, supervise, or
direct the Station's operations contrary to Commission rules and regulations.
10.11 Governing Law. This agreement, its enforceability,
interpretation, and the legal relationships between the parties created hereby
shall be governed by and construed in accordance with the laws of the State of
Virginia, excluding those relating to choice of law or conflicts of laws. Any
suit, action, or proceeding with respect to this agreement, or any judgment
entered by any court in respect thereof, may be brought in the courts of the
Commonwealth of Virginia or in the U.S. District Court for the Eastern District
of Virginia, and the nonexclusive jurisdiction of those courts for the purpose
of any suit, action, or proceeding is hereby accepted by the parties hereto. In
addition, to the fullest extent permitted by law, any objection that any party
may now or hereafter have to the laying of venue of any suit, action, or
proceeding arising out of or relating to this agreement or any judgment entered
by any court in respect thereof, in the Commonwealth of Virginia is hereby
waived, and any claim that any suit, action, or proceeding brought in the
Commonwealth of Virginia has been brought in an inconvenient forum is hereby
further irrevocably waived. Buyer hereby further agrees that if any such suit,
action, or proceeding is pending in more than one jurisdiction, then Seller's
selection of the forum shall be binding upon the parties hereto.
10.12 Headings. The headings of the Sections and paragraphs of this
agreement are for convenience only and are not a substantive part hereof.
10.13 Integration. This agreement, including its exhibits, which are
a material part hereof and are incorporated herein by reference, contains the
entire understanding of the parties with respect to the subject matter hereof.
10.14 Counterparts. This instrument may be executed in any number of
counterparts (each of which shall constitute an original) and when Seller and
Buyer shall have executed at least
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one such counterpart shall constitute but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the day, month, and year first above written.
Buyer
NCR II, INC.
by________________________________
a duly authorized officer
Seller
ONYX BROADCASTING, INC.
by_________________________________
a duly authorized officer
Stockholder
-----------------------------------
Thomas P. Gammon
22
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EXECUTION COPY
BRILL MEDIA COMPANY, LLC. and
BRILL MEDIA MANAGEMENT, INC.
105,000 Units
Consisting of 12% SENIOR NOTES DUE 2007
and
APPRECIATION NOTES DUE 2007
PURCHASE AGREEMENT
December 22, 1997
<PAGE>
BRILL MEDIA COMPANY, LLC and
BRILL MEDIA MANAGEMENT, INC.
105,000 Units Representing
$105,000,000 Principal Amount of
12% Senior Notes Due 2007
and $3,000,000 of Appreciation Notes Due 2007
PURCHASE AGREEMENT
December 22, 1997
Natwest Capital Markets Limited
135 Bishopsgate
London, EC2M 3XT
England
Ladies and Gentlemen:
Brill Media Company, LLC, a Virginia limited liability company
("BMC"), and Brill Media Management, Inc., a Virginia corporation
(collectively with BMC, the "Company"), and the subsidiary guarantors listed
in Schedule 2 attached hereto (the "Guarantors") each hereby confirms its
agreement with you (the "Initial Purchaser"), as set forth below.
1. The Securities. Subject to the terms and conditions herein
contained, (i) the Company proposes to issue and sell to the Initial
Purchaser 105,000 Units (the "Units") representing $105,000,000 aggregate
principal amount of its 12% Senior Notes due 2007 (collectively, where
context permits, with the Senior Guarantees defined below, the "Notes") and
Appreciation Notes due 2007 (the "Appreciation Notes"). The Units, the Notes
and the Appreciation Notes are referred to herein collectively as the
"Securities". The Units are to be issued under a Unit Agreement (as defined
below). The Notes will be guaranteed (the "Senior Guarantees") by each of
the Guarantors on a senior basis. The Appreciation Notes will be guaranteed
(the "Appreciation Note Guarantee" and collectively with the Senior
Guarantees, the "Guarantees") by each of the Guarantors on a subordinated
basis. The Notes are to be issued under an indenture (the "Indenture") to be
dated as of the Closing Date (as defined in Section 3 below), by and among
the Company, the Guarantors and The United States Trust Company of New
<PAGE>
York, as trustee (the "Trustee"). The Appreciation Notes are to be issued
under an indenture (the "Appreciation Notes Indenture") to be dated as of the
Closing Date by and among the Company, the Guarantors and United States Trust
Company of New York, as trustee (the "Appreciation Notes Trustee").
The Units will be offered and sold to the Initial Purchaser without
being registered under the Securities Act of 1933, as amended (the "Act"), in
reliance on exemptions therefrom.
In connection with the sale of the Notes, the Company has prepared
a preliminary offering memorandum dated December 3, 1997 (the "Preliminary
Memorandum") and will prepare a final offering memorandum dated December 22,
1997 (the "Final Memorandum"; the Preliminary Memorandum and the Final
Memorandum each herein being referred to as the "Memorandum") relating to the
Securities.
The Company, the Guarantors and the Initial Purchaser will enter
into a Registration Rights Agreement in substantially the form attached as
Exhibit A hereto (the "Registration Rights Agreement") prior to or
concurrently with the issuance of the Notes. Pursuant to the Registration
Rights Agreement, under the circumstances and the terms set forth therein,
the Company and the Guarantors will agree to file with the Securities and
Exchange Commission (the "Commission"): (i) a registration statement on
Form S-4 (the "Exchange Offer Registration Statement") relating to a
registered Exchange Offer (as defined in the Registration Rights Agreement)
for the Notes under the Act to offer to the holders of the Notes the
opportunity to exchange their Notes for an issue of notes substantially
identical to the Notes (except that such notes will not contain restrictions
on transfer that would be registered under the Act (the "Exchange Notes"); or
(ii) alternatively, in the event that applicable interpretations of the
Commission do not permit the Company and the Guarantors to effect the
Exchange Offer or do not permit any holder (who is otherwise able to make the
representations set forth in the Registration Rights Agreement and acquire
the Exchange Notes) of the Notes to participate in the Exchange Offer, a
shelf registration statement (the "Shelf Registration Statement") to cover
resales of Notes by such holders who satisfy certain conditions relating to
and including the provision of information in connection with the Shelf
Registration Statement.
The Company, the Guarantors and the Initial Purchaser will enter
into an Appreciation Notes Registration Rights Agreement in substantially the
form attached as Exhibit B hereto (the "Appreciation Notes Registration
Rights Agreement") prior to or concurrently with the issuance of the
Appreciation Notes. Pursuant to the Appreciation Notes Registration Rights
Agreement, under the circumstances and the terms set forth
2
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therein, the Company and the Guarantors will agree to file with the
Commission: (i) a registration statement on Form S-4 (the "Appreciation
Notes Exchange Offer Registration Statement") relating to a registered
Appreciation Notes Exchange Offer (as defined in the Appreciation Notes
Registration Rights Agreement) for the Appreciation Notes under the Act to
offer to the holders of the Appreciation Notes the opportunity to exchange
their Appreciation Notes for an issue of notes substantially identical to the
Appreciation Notes (except that such notes will not contain restrictions on
transfer) that would be registered under the Act (the "Appreciation Exchange
Notes"); or (ii) alternatively, in the event that applicable interpretations
of the Commission do not permit the Company and the Guarantors to effect the
Appreciation Notes Exchange Offer or do not permit any holder (who is
otherwise able to make the representations set forth in the Appreciation
Notes Registration Rights Agreement and acquire the Appreciation Exchange
Notes) of the Appreciation Notes to participate in the Appreciation Notes
Exchange Offer, a shelf registration statement (the "Appreciation Notes Shelf
Registration Statement") to cover resales of Appreciation Notes by such
holders who satisfy certain conditions relating to and including the
provision of information in connection with the Appreciation Notes Shelf
Registration Statement.
The Company and the Guarantors will enter into a unit agreement
(the "Unit Agreement") dated as of the Closing Date, with United States Trust
Company of New York, as unit agent (the "Unit Agent").
2. Representations and Warranties. The Company and each
Guarantor represents and warrants to, and agrees, jointly and severally with
the Initial Purchaser that:
(a) Neither the Preliminary Memorandum as of the date thereof nor
the Final Memorandum nor any amendment or supplement thereto as of the date
thereof and at all times subsequent thereto up to the Closing Date (as
defined in Section 3 below) contained or contains any untrue statement of a
material fact or omitted or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under which they
were made, not misleading, except that the representations and warranties set
forth in this Section 2(a) do not apply to statements or omissions made in
reliance upon and in conformity with information relating to the Initial
Purchaser furnished to the Company in writing by the Initial Purchaser
expressly for use in the Preliminary Memorandum, the Final Memorandum or any
amendment or supplement thereto. The Final Memorandum conforms in all
material respects to the requirements of the Act and the rules and
regulations promulgated thereunder, as if it were a prospectus filed as part
of a registration statement on Form S-3 relating to the Notes (except that
such a prospectus would include the following information specified
3
<PAGE>
in items of Regulation S-K under the Act: (i) the pricing table specified in
Item 501; (ii) the statements regarding availability of additional
information specified in Item 502; and (iii) disclosure of the Commission's
position on indemnification specified in Item 510).
(b) As of the Closing Date, the Company will have the pro-forma
capitalization set forth in the Final Memorandum; the Guarantors constitute
all of the subsidiaries of the Company; the Company, directly or indirectly
will own one hundred percent of the issued and outstanding stock, partnership
or membership interests (or other equity securities) of each Guarantor
(except that for the Guarantors listed on Schedule 3 hereto the Company will
directly or indirectly own at least 98% of the membership interests in such
Guarantors and the remaining membership interest in each of such Guarantors
will be indirectly owned by Alan R. Brill), and such capital stock shall be
free and clear of all liens, charges, encumbrances or restrictions other than
(x) liens in favor of AMRESCO Funding Corporation and Goldman Sachs Credit
Partners, securing the obligations of the Company and the Guarantors under
the Amended and Restated Credit Agreement dated September 30, 1997 (the
"Credit Agreement") and (y) the liens on the capital stock of CMB II, Inc.,
NB II, Inc., St. John Newspapers, Inc. and NCR II, Inc. securing obligations
the principal amount of which does not exceed $4,900,000 in the aggregate.
All of the outstanding shares of capital stock (or other equity securities)
of the Company or any Guarantors have been, and as of the Closing Date will
be, duly authorized and validly issued, are fully paid and nonassessable and
were not issued in violation of any preemptive or similar rights; there are
no (i) options, warrants or other rights to purchase from the Company or any
Guarantor, (ii) agreements or other obligations of the Company or any
Guarantor to issue or (iii) other rights to convert any obligation into, or
exchange any securities for, shares of capital stock of or ownership
interests in the Company or any Guarantor outstanding. The entities listed on
Schedule 2 hereto are the only subsidiaries, direct or indirect of the
Company. Except as disclosed on Schedule 2 or as disclosed in the Final
Memorandum, the Company does not own, directly or indirectly, any capital
stock or any other equity or long-term debt securities or have any equity
interest in any firm, partnership, joint venture, limited liability company
or other entity.
(c) Each of the Company and each Guarantor has been duly
incorporated or organized, is validly existing and is in good standing as a
corporation, limited liability company or limited partnership under the laws
of its jurisdiction of incorporation or formation, with all requisite
corporate, company or partnership power and authority to own its properties
and conduct its business as now conducted and as described in the Final
Memorandum; each of the Company and each Guarantor is duly qualified to do
business as a foreign corporation, limited liability company or limited
partnership in good standing in all other jurisdictions where the ownership
or leasing of
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<PAGE>
its properties or the conduct of its business requires such qualification,
except where the failure to be so qualified would not, individually or in the
aggregate, have a material adverse effect on the general affairs, business,
condition (financial or otherwise), prospects or results of operations of the
Company and the Guarantors, taken as a whole (any such event, a "Material
Adverse Effect").
(d) The Company and each Guarantor has all requisite corporate,
company or partnership power, as the case may be, and authority to execute,
deliver and perform its obligations under the Notes and the Appreciation
Notes, including, in the case of the Guarantors, the Guarantees. The Notes
and the Appreciation Notes have been duly and validly authorized by the
Company and each of the Guarantors and, when executed by the Company and each
of the Guarantors, authenticated by the Trustee and the Appreciation Notes
Trustee, respectively, in accordance with the provisions of the Indenture and
the Appreciation Notes Indenture, respectively, and delivered to and paid for
by the Initial Purchaser, in accordance with the terms of this Agreement,
will have been duly executed, issued and delivered and will constitute valid
and legally binding obligations of the Company and each of the Guarantors,
entitled to the benefits of the Indenture and the Appreciation Notes
Indenture, respectively, and enforceable against the Company and each
Guarantor in accordance with their terms, except that the enforcement thereof
may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other similar laws now or hereafter in effect
relating to creditors' rights generally, and (ii) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought.
(e) The Company has all requisite corporate, company or
partnership power, as the case may be, and authority to execute, deliver and
perform their obligations under the Units. The Units have been duly and
validly authorized by the Company (as of the Closing Date) and, when executed
by the Company, authenticated by the Unit Agent in accordance with the
provisions of the Unit Agreement and delivered to and paid for by the Initial
Purchaser in accordance with the terms of the Unit Agreement, will have been
duly executed, issued and delivered and will constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other similar laws now or hereafter in effect relating to
creditors' rights generally, and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(f) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Exchange Notes and the Private Exchange
Notes (as defined in the
5
<PAGE>
Registration Rights Agreement). The Exchange Notes and the Private Exchange
Notes have been duly and validly authorized by the Company and each of the
Guarantors and, when the Exchange Notes and the Private Exchange Notes have
been duly executed and delivered by the Company and each of the Guarantors
and authenticated by the Trustee in accordance with the terms of the
Indenture, will constitute valid and legally binding obligations of the
Company, and each of the Guarantors, entitled to the benefits of the
Indenture, and enforceable against the Company and each of the Guarantors in
accordance with their terms, except that the enforcement thereof may be
subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of equity and the
discretion of any court before which any proceeding therefore may be brought.
(g) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Indenture. The Indenture meets the
requirements for qualification under the Trust Indenture Act of 1939, as
amended (the "TIA"). The Indenture has been duly and validly authorized by
the Company and each of the Guarantors and, when executed and delivered by
the Company and each of the Guarantors (assuming the due authorization,
execution and delivery of the Indenture by the Trustee), will constitute a
valid and legally binding agreement of the Company and each of the
Guarantors, enforceable against the Company and each of the Guarantors in
accordance with its terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and or other similar laws now or hereafter in effect, relating to
creditors' rights generally and (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(h) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Registration Rights Agreement. The
Registration Rights Agreement has been duly and validly authorized by the
Company and each of the Guarantors and, when executed and delivered by the
Company and each of the Guarantors, will constitute a valid and legally
binding agreement of the Company and each of the Guarantors enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that the enforcement thereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought, (iii) the
indemnification provisions contained therein may be unenforceable as contrary
to public policy, and (iv) the provisions for liquidated
6
<PAGE>
damages contained therein may be unenforceable if they were deemed to
constitute a penalty.
(i) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Appreciation Exchange Notes and the Private
Appreciation Exchange Notes (as defined in the Appreciation Notes
Registration Rights Agreement). The Appreciation Exchange Notes and the
Private Appreciation Exchange Notes have been duly and validly authorized (as
of the Closing Date) by the Company and each of the Guarantors and, when the
Appreciation Exchange Notes and the Private Appreciation Exchange Notes have
been duly executed and delivered by the Company and each of the Guarantors
and authenticated by the Appreciation Notes Trustee in accordance with the
terms of the Appreciation Notes Indenture, will constitute valid and legally
binding obligations of the Company, and each of the Guarantors, entitled to
the benefits of the Appreciation Notes Indenture, and enforceable against the
Company and each of the Guarantors in accordance with their terms, except
that the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally, (ii) general
principles of equity and the discretion of any court before which any
proceeding therefore may be brought.
(j) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Appreciation Notes Indenture. The
Appreciation Notes Indenture meets the requirements for qualification under
the Trust Indenture Act of 1939, as amended (the "TIA"). The Appreciation
Notes Indenture has been duly and validly authorized (as of the Closing Date)
by the Company and each of the Guarantors and, when executed and delivered by
the Company and each of the Guarantors (assuming the due authorization,
execution and delivery of the Appreciation Notes Indenture by the
Appreciation Notes Trustee), will constitute a valid and legally binding
agreement of the Company and each of the Guarantors, enforceable against the
Company and each of the Guarantors in accordance with its terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and or other similar laws
now or hereafter in effect, relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought.
(k) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under the Appreciation Notes Registration Rights
Agreement. The Appreciation Notes Registration Rights Agreement has been
duly and validly authorized
7
<PAGE>
by (as of the Closing Date) the Company and each of the Guarantors and, when
executed and delivered by the Company and each of the Guarantors, will
constitute a valid and legally binding agreement of the Company and each of
the Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, except that the enforcement thereof may be subject
to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium and other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought,
(iii) the indemnification provisions contained therein may be unenforceable
as contrary to public policy, and (iv) the provisions for liquidated damages
contained therein may be unenforceable if they were deemed to constitute a
penalty.
(l) The Company and each of the Guarantors has all requisite
corporate, company or partnership power and authority to execute, deliver and
perform its obligations under this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly and validly
authorized and has been duly executed and delivered by the Company and each
of the Guarantors and (assuming the due authorization, execution and delivery
of this Agreement by the Initial Purchaser) constitutes a valid legally
binding agreement of the Company and each of the Guarantors, enforceable
against the Company and each of the Guarantors in accordance with its terms,
except that the enforcement hereof may be subject to (i) bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium and other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought, and (iii) the
indemnification provisions contained in Section 9 hereof may be unenforceable
as contrary to public policy.
(m) Each of the Guarantors has all requisite corporate, company or
partnership, power and authority to execute, deliver and perform its
obligations under the Guarantees executed by it. Each Guarantee has been
duly and validly authorized by each Guarantor and when executed and delivered
by the Guarantors, will constitute a valid and legally binding agreement of
the Guarantors, enforceable against the Guarantors in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or other
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (regardless of whether the issue of
enforceability is considered in a proceeding in equity or at law).
(n) The Company and the Guarantors have all requisite corporate,
partnership or company power, as the case may be, and authority (as of the
Closing Date
8
<PAGE>
as to the Company) to execute, deliver and perform their obligations under
the Unit Agreement.
(o) No additional consent, approval, authorization or order of any
court or governmental agency or body, or third party is required for the
performance of this Agreement, the Registration Rights Agreement, the
Indenture, the Appreciation Notes Indenture, the Guarantees, the Unit
Agreement and the Appreciation Notes Registrations Rights Agreement by the
Company or any of the Guarantors or the consummation by the Company or any of
the Guarantors of the transactions contemplated hereby and thereby that are
to be completed on or before the Closing Date, except such as have been
obtained or disclosed in the Final Memorandum and such as may be required
under state securities or "Blue Sky" laws in connection with the purchase and
resale of the Notes and the Appreciation Notes by the Initial Purchaser.
None of the Company or any of the Guarantors is (i) in violation of its
certificate of incorporation or bylaws or operating agreement or partnership
agreement (or similar organizational document), (ii) in breach or violation
of any statute, judgment, decree, order, rule or regulation applicable to any
of them or any of their respective properties or assets, or (iii) in breach
of or in default under (nor has any event occurred which, with notice or
passage of time or both, would constitute a default under) or in violation of
any of the terms or provisions of any indenture, mortgage, deed of trust,
loan agreement, note, lease, license, franchise agreement, permit,
certificate, contract or other agreement or instrument to which any of them
is a party or to which any of them or their respective properties or assets
is subject (collectively, "Contracts") except such violations, breaches or
defaults that would not, individually or in the aggregate, have a Material
Adverse Effect.
(p) The execution, delivery and performance by the Company and the
Guarantors, as applicable, of this Agreement, the Indenture, the Appreciation
Notes Indenture, the Registration Rights Agreement, the Unit Agreement and
the Appreciation Notes Registration Rights Agreement and the consummation by
the Company and the Guarantors of the transactions contemplated hereby and
thereby, and the fulfillment of the terms hereof and thereof, and the
retention by BMC of NatWest Capital Markets Limited ("NatWest") pursuant to
those certain letter agreements (including the engagement and indemnity
letter agreements) dated as of September 18, 1997 (collectively, the "NatWest
Engagement Letter") and NatWest's acting as contemplated hereby and thereby,
will not conflict with or constitute or result in a breach of or a default
under (or an event which with notice or passage of time or both would
constitute a default under) or violation of any of (i) the terms or
provisions of any Contract except such conflicts, breaches, defaults or
violations, that would not, individually or in the aggregate, have a Material
Adverse Effect, (ii) the certificate of incorporation or by-laws or operating
agreement or partnership agreement (or similar organizational document)
9
<PAGE>
of the Company or any of the Guarantors or (iii) any statute, judgment,
decree, order, rule or regulation applicable to the Company or any of the
Guarantors or any of their respective properties or assets except such
conflicts, breaches, defaults or violations that would not, individually or
in the aggregate, have a Material Adverse Effect.
(q) The audited consolidated financial statements of the radio and
newspaper businesses of Alan R. Brill included in the Preliminary Memorandum
and the Final Memorandum present fairly in all material respects the
financial position, results of operations and cash flows of such entities at
the dates and for the periods to which they relate and have been prepared in
accordance with generally accepted accounting principles applied on a
consistent basis, except as otherwise stated therein. The summary and
selected financial and statistical data in the Preliminary Memorandum and the
Final Memorandum present fairly in all material respects the information
shown therein and have been prepared and compiled on a basis consistent with
the audited financial statements included therein, except as otherwise stated
therein. Ernst & Young LLP is an independent public accounting firm within
the meaning of the Act and the rules and regulations promulgated thereunder.
(r) The Company and the Guarantors collectively comprise all of
the radio and newspaper businesses of Alan R. Brill included in the financial
statements of the radio and newspaper businesses of Alan R. Brill set forth
in the Memorandum.
(s) Except as noted in the Memorandum, the pro forma financial
information included in the Preliminary Memorandum and the Final Memorandum
will (i) comply as to form in all material respects with the applicable
requirements of Regulation S-X promulgated under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), (ii) have been prepared in
accordance with the Commission's rules and guidelines with respect to pro
forma financial statements, and (iii) have been properly computed on the
bases described therein. The assumptions used in the preparation of the pro
forma financial data and other pro forma financial information included in
the Preliminary Memorandum and the Final Memorandum are reasonable and the
adjustments used therein are appropriate to give effect to the transactions
or circumstances referred to therein.
(t) Except as set forth in the Memorandum, there is not pending
or, to the knowledge of the Company or any Guarantor, threatened any action,
suit, proceeding, inquiry or investigation to which the Company or any of the
Guarantors is a party, or to which the property or assets of the Company or
any of the Guarantors are subject, before or brought by any court, arbitrator
or governmental agency or body which, if determined adversely to the Company
or any of the Guarantors would, individually or in the aggregate, have a
Material Adverse Effect or which seeks to
10
<PAGE>
restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Notes, the Units or the Appreciation Notes to be sold
hereunder or the consummation of the other transactions described in the
Preliminary Memorandum and the Final Memorandum.
(u) Each of the Company and the Guarantors owns or possesses
adequate licenses or other rights to use all material patents, trademarks,
service marks, trade names, copyrights and know-how necessary to conduct the
businesses now or proposed to be operated by it as described in the
Preliminary Memorandum and the Final Memorandum, and none of the Company or
the Guarantors has received any notice of infringement of or conflict with
(or knows of any such infringement of or conflict with) asserted rights of
others with respect to any patents, trademarks, service marks, trade names,
copyrights or know-how which, if such assertion of infringement or conflict
were sustained, would, individually or in the aggregate, have a Material
Adverse Effect.
(v) Each of the Company and the Guarantors possesses all licenses,
permits, certificates, consents, orders, approvals and other authorizations
from, and has made all declarations and filings with, all federal, state,
local and other governmental authorities, all self-regulatory organizations
and all courts and other tribunals, presently required or necessary to own or
lease, as the case may be, and to operate its respective properties and to
carry on its respective businesses as now or proposed to be conducted as set
forth in the Preliminary Memorandum and the Final Memorandum (collectively,
the "Permits"), except where the failure to obtain such Permits would not,
individually or in the aggregate, have a Material Adverse Effect; each of the
Company and the Guarantors has fulfilled and performed all of its obligations
with respect to such Permits and no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any
such Permit except where such revocation, termination or impairment would
not, individually or in the aggregate, have a Material Adverse Effect; and
none of the Company or the Guarantors has received any notice of any
proceeding relating to revocation or modification of any such Permit, except
as described in the Final Memorandum and except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(w) Since the date of the most recent financial statements
appearing in the Final Memorandum, except as described in the Memorandum, (i)
none of the Company or the Guarantors has incurred any liabilities or
obligations, direct or contingent, or entered into or agreed to enter into
any transactions or Contracts (written or oral) not in the ordinary course of
business which liabilities, obligations, transactions or Contracts could,
individually or in the aggregate, be material to the general affairs,
11
<PAGE>
management, business, condition (financial or otherwise), prospects or
results of operations of the Company and the Guarantors, taken as a whole (a
"Material Change"), (ii) other than as described in the Memorandum none of
the Company or the Guarantors has purchased any of its outstanding capital
stock, nor declared, paid or otherwise made any dividend or distribution of
any kind on its capital stock and (iii) other than as described in the
Memorandum, there shall not have been any change in the capital stock or
long-term indebtedness of the Company or the Guarantors which could,
individually or in the aggregate, constitute a Material Change.
(x) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or operations
of the Company and the Guarantors, either individually or taken as a whole,
from that set forth in the Preliminary Memorandum (exclusive of any
amendments or supplements thereto subsequent to the date of this Agreement).
(y) Each of the Company and the Guarantors has filed all necessary
federal, state, local and foreign income and franchise tax returns, and has
paid all taxes shown as due thereon; and, other than tax deficiencies which
the Company or any Guarantor is contesting in good faith, and for which the
Company or such Guarantor has provided adequate reserves, there is no tax
deficiency that has been asserted against the Company or any of the
Guarantors.
(z) The statistical and ratings market-related data and regulatory
information included in the Memorandum are based on or derived from sources
which are believed to be reliable and accurate.
(aa) None of the Company, the Guarantors or any agent acting on
their behalf has taken or will take any action that might cause this
Agreement or the sale of the Notes or Appreciation Notes to violate
Regulation G, T, U or X of the Board of Governors of the Federal Reserve
System, in each case as in effect, or as the same may hereafter be in effect,
on the Closing Date.
(bb) Each of the Company and the Guarantors has good and marketable
title to all real property and good title to all personal property described
in the Preliminary Memorandum and the Final Memorandum as being owned by it
and good and marketable title to any leasehold estate in the real and
personal property described in the Preliminary Memorandum and the Final
Memorandum as being leased by it free and clear of all recorded liens,
charges, encumbrances or restrictions, except as disclosed in the Preliminary
Memorandum and the Final Memorandum or in the Exhibits to the Credit
Agreement and except for the liens in favor of AMRESCO
12
<PAGE>
Funding Corporation and Goldman Sachs Credit Partners L.P. pursuant to the
Credit Agreement (it being understood that the indebtedness secured by the
Credit Agreement will be fully satisfied from the proceeds of the Notes and
that such liens will be discharged as promptly as practicable following the
Closing), or to the extent the failure to have such title or the existence of
such liens, charges, encumbrances or restrictions would not, individually or
in the aggregate, have a Material Adverse Effect. All Contracts to which the
Company or any of the Guarantors is a party or by which any of them is bound
are valid and enforceable against the Company or such Guarantor, and are
valid and enforceable against the other party or parties thereto and are in
full force and effect with only such exceptions as would not, individually or
in the aggregate, have a Material Adverse Effect.
(cc) There are no legal or governmental proceedings involving or
affecting the Company or any Guarantor or any of their respective properties
or assets which would be required to be described in a prospectus pursuant to
the Act that are not described in the Preliminary Memorandum and the Final
Memorandum, nor are there any material contracts or other documents which
would be required to be described in a prospectus pursuant to the Act that
are not described in the Preliminary Memorandum and the Final Memorandum.
(dd) Except as would not, individually or in the aggregate, be
reasonably expected to have a Material Adverse Effect (A) each of the Company
and the Guarantors is in compliance with and not subject to liability under
applicable Environmental Laws (as defined below), (B) each of the Company and
the Guarantors has made all filings and provided all notices required under
any applicable Environmental Law, and has and is in compliance with all
Permits required under any applicable Environmental Laws and each of them is
in full force and effect, (C) there is no civil, criminal or administrative
action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter or request for information pending or, to
the knowledge of the Company or any of the Guarantors, threatened against the
Company or any of the Guarantors under any Environmental Law, (D) no lien,
charge, encumbrance or restriction has been recorded under any Environmental
Law with respect to any assets, facility or property owned, operated, leased
or controlled by the Company or any of the Guarantors, (E) none of the
Company or the Guarantors has received notice that it has been identified as
a potentially responsible party under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended ("CERCLA") or
any comparable state law, (F) no property or facility of the Company or any
of the Guarantors is (i) listed or proposed for listing on the National
Priorities List under CERCLA or is (ii) listed in the Comprehensive
Environmental Response, Compensation, Liability Information System List
promulgated pursuant to
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CERCLA, or on any comparable list maintained by any state or local
governmental authority.
For purposes of this Agreement, "Environmental Laws" means the
common law and all applicable foreign and federal, state and local laws or
regulations, codes, orders, decrees, judgments or injunctions issued,
promulgated, approved or entered thereunder, relating to pollution or
protection of public or employee health and safety or the environment,
including, without limitation, laws relating to (i) emissions, discharges,
releases or threatened releases of hazardous materials, into the environment
(including, without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), (ii) the manufacture, processing,
distribution, use, generation, treatment, storage, disposal, transport or
handling of hazardous materials, and (iii) underground and above ground
storage tanks, and related piping, and emissions, discharges, releases or
threatened releases therefrom.
(ee) There is no strike, labor dispute, slowdown or work stoppage
with the employees of the Company or any of the Guarantors which is pending
or, to the knowledge of the Company or any of the Guarantors, threatened.
(ii) Each of the Company and the Guarantors carries insurance in
such amounts and covering such risks as is adequate for the conduct of its
business and the value of its properties. Neither the Company nor any of the
Guarantors has received notice from any insurer or agent of such insurer that
capital improvements or other expenditures are required or necessary to be
made in order to continue such insurance.
(ff) None of the Company or the Guarantors has any material
liability for any prohibited transaction (within the meaning of Section
4975(c) of the Code or Part 4 of Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA")) (or an accumulated funding
deficiency within the meaning of Section 412 of the Code or Section 302 of
ERISA) or any complete or partial withdrawal liability (within the meaning of
Section 4201 of ERISA) with respect to any pension, profit sharing or other
plan which is subject to ERISA, to which the Company or any of the Guarantors
makes or ever has made a contribution and in which any employee of the
Company or of any Guarantor is or has ever been a participant. With respect
to such plans, the Company and each Guarantor is in compliance in all
material respects with all applicable provisions of ERISA.
(ii) Each of the Company and the Guarantors (i) makes and keeps
accurate books and records and (ii) maintains internal accounting controls
which provide reasonable assurance that (A) transactions are executed in
accordance with management's authorization, (B) transactions are recorded as
necessary to permit
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preparation of its financial statements and to maintain accountability for
its assets, (C) access to its assets is permitted only in accordance with
management's authorization and (D) the reported accountability for its assets
is compared with existing assets at reasonable intervals.
(gg) None of the Company or the Guarantors is or immediately after
the sale of the Notes and the application of the proceeds from such sale as
described in the Final Memorandum under "Use of Proceeds" will be, an
"investment company" or "promoter" or "principal underwriter" for an
"investment company," within the meaning of the Investment Company Act of
1940, as amended, and the rules and regulations thereunder.
(hh) The Notes, the Exchange Notes, the Indenture, the Registration
Rights Agreement, the Units, the Unit Agreement, the Appreciation Notes, the
Exchange Appreciation Notes, the Appreciation Notes Indenture and the
Appreciation Notes Registration Rights Agreement, will conform in all
material respects to the descriptions thereof in the Final Memorandum.
(ii) No holder of securities of the Company or any of the
Guarantors will be entitled to have such securities registered under the
registration statements required to be filed by the Company pursuant to the
Registration Rights Agreement or the Appreciation Notes Registration Rights
Agreement other than as expressly permitted thereby.
(jj) Immediately after the consummation of the transactions
contemplated by this Agreement, the fair value and present fair saleable
value of the assets of each of the Company and the Guarantors (each on a
consolidated basis) will exceed the sum of its stated liabilities and
identified contingent liabilities; none of the Company or the Guarantors
(each on a consolidated basis) is, nor will any of the Company or the
Guarantors (each on a consolidated basis) be, after giving effect to the
execution, delivery and performance of this Agreement, and the consummation
of the transactions contemplated hereby, (a) left with unreasonably small
capital with which to carry on its business as it is currently or proposed to
be conducted, (b) unable to pay its debts (contingent or otherwise) as they
mature or otherwise become due or (c) otherwise insolvent.
(kk) None of the Company, the Guarantors or any of their respective
Affiliates (as defined in Rule 501(b) of Regulation D under the Act) has
directly, or through any agent, (i) sold, offered for sale, solicited offers
to buy or otherwise negotiated in respect of, any "security" (as defined in
the Act) which is or could be integrated with the sale of the Securities in a
manner that would require the registration
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<PAGE>
under the Act of the Notes or the Appreciation Notes or (ii) engaged in any
form of general solicitation or general advertising (as those terms are used
in Regulation D under the Act) in connection with the offering of the
Securities or in any manner involving a public offering within the meaning of
Section 4(2) of the Act. Neither the Company nor any Guarantor has
distributed and will not distribute any offering material in connection with
the offering of the Securities other than the Final Memorandum and any
Preliminary Memorandum. No securities of the same duration, interest rate
and ranking as the Notes have been issued and sold by the Company within the
six-month period immediately prior to the date hereof.
(ll) Assuming the accuracy of the representations and warranties of
the Initial Purchaser in Section 8 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities to the Initial Purchaser
in the manner contemplated by this Agreement to register any of the
Securities under the Act or to qualify the Indenture under the TIA except as
required by the Registration Rights Agreement.
(mm) No securities of the Company or any Guarantor are of the same
class (within the meaning of Rule 144A as promulgated under the Act ("Rule
144A")) as any of the Securities and listed on a national securities exchange
registered under Section 6 of the Exchange Act, or quoted in a U.S. automated
inter-dealer quotation system.
(nn) None of the Company or the Guarantors has taken, nor will any
of them take, directly or indirectly, any action designed to, or that might
be reasonably expected to, cause or result in stabilization or manipulation
of the price of the Securities.
(oo) None of the Company or the Guarantors, or any person acting on
any of their behalf (other than the Initial Purchaser or any Affiliate of the
Initial Purchaser) has engaged in any directed selling efforts (as that term
is defined in Regulation S under the Act ("Regulation S")) with respect to
the Securities; the Company and its respective Affiliates and any person
acting on any of their behalf (other than the Initial Purchaser or any
Affiliate of the Initial Purchaser) have complied with the offering
restrictions requirement of Regulation S.
(pp) Each of the Preliminary Memorandum and the Final Memorandum,
as of its respective date, contains all of the information that, if requested
by a prospective purchaser of the Securities, would be required to be
provided to such prospective purchaser pursuant to Rule 144A(d)(4) under the
Act.
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(qq) The Notes and the Appreciation Notes satisfy the eligibility
requirements of Rule 144A(d)(3) under the Act.
(rr) Neither the Company nor any of the Guarantors nor, to the
Company's knowledge, any officer or director purporting to act on behalf of the
Company or any of the Guarantors has at any time: (i) made any contributions to
any candidate for political office, or failed to disclose fully any such
contributions, in violation of law, (ii) made any payment of funds to, or
received or retained any funds from, any state, federal or foreign governmental
officer or official, or other person charged with similar public or quasi-public
duties, other than payments required or allowed by applicable law, (iii)
violated or is in violation of the Foreign Corrupt Practices Act of 1977, (iv)
made any bribe, rebate, payoff, influence payment, kickback or other unlawful
payment or (v) engaged in any transactions, maintained any bank account or used
any corporate funds except for transactions, bank accounts and funds which have
been and are reflected in the normally maintained books and records of the
Company and the Guarantors.
(ss) Except as disclosed in the Memorandum, there are no material
outstanding loans or dividends or distributions or advances or material
guarantees of indebtedness by the Company or any of its Guarantors to or for the
benefit of any of the officers or directors of the Company or any of the
Guarantors or any of the members of the families of any of them.
(tt) Neither the Company nor any affiliate of the Company does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Florida Statutes Section 517.075.
(uu) None of the Company or the Guarantors has engaged or retained
any person, other than NatWest as the Initial Purchaser (and Standard Capital),
to act as a financial advisor, underwriter or placement agent in connection with
the issuance of the Securities and, except for the fees and expenses payable in
connection with the issuance of the Securities as described in the Final
Memorandum, no person has the right to receive a material amount of financial
advisory, underwriting, placement, finder's or similar fees in connection with,
or as a result of, the issuance of the Securities and the purchase of the
Securities by the Initial Purchaser or the consummation of the other
transactions contemplated hereby.
Any certificate signed by any officer of the Company or any Guarantor
and delivered to the Initial Purchaser or to counsel for the Initial Purchaser
shall be deemed a joint and several representation and warranty by the Company
and each of the Guarantors to the Initial Purchaser as to the matters covered
thereby.
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<PAGE>
3. Purchase, Sale and Delivery of the Securities. On the basis of
the representations, warranties, agreements and covenants herein contained and
subject to the terms and conditions herein set forth, the Company agrees to
issue and sell to the Initial Purchaser, and the Initial Purchaser agrees to
purchase from the Company the number of Units set forth opposite its name on
Schedule 1 hereto at a price of $882.0 per Unit. One or more certificates in
definitive form for the Units that the Initial Purchaser has agreed to purchase
hereunder, and in such denomination or denominations and registered in such name
or names as the Initial Purchaser requests upon notice to the Company at least
36 hours prior to the Closing Date, shall be delivered by or on behalf of the
Company to the Initial Purchaser, against payment by or on behalf of the Initial
Purchaser of the purchase price therefor by wire transfer of same day funds to
such account or accounts as the Company shall specify prior to the Closing Date,
or by such means as the parties hereto shall agree prior to the Closing Date.
Such delivery of and payment for the Units shall be made at the offices of White
& Case, 1155 Avenue of the Americas, New York, New York at 10:00 A.M., New York
time, on December __, 1997, or at such other place, time or date as the Initial
Purchaser, on the one hand, and the Company, on the other hand, may agree upon,
such time and date of delivery against payment being herein referred to as the
"Closing Date." The Company will make such certificate or certificates for the
Units available for inspection and packaging by the Initial Purchaser at such
place as designated by the Initial Purchaser at least 24 hours prior to the
Closing Date.
4. Offering by the Initial Purchaser. The Initial Purchaser proposes
to make an offering of the Units, in accordance with Section 8 hereof, at the
price and upon the terms set forth in the Final Memorandum, as soon as
practicable after this Agreement is entered into and as in the judgment of the
Initial Purchaser is advisable.
5. Covenants of the Company and the Guarantors. Each of the Company
and the Guarantors, jointly and severally covenants and agrees with the Initial
Purchaser that:
(a) The Company and the Guarantors will not amend or supplement the
Final Memorandum or any amendment or supplement thereto unless the Initial
Purchaser shall previously have been advised and furnished a copy of such
amendment or supplement for a reasonable period of time prior to the proposed
amendment or supplement and as to which the Initial Purchaser shall have
consented, such consent not to be unreasonably withheld. The Company and the
Guarantors will promptly, upon the reasonable request of the Initial Purchaser
or counsel for the Initial Purchaser, make any amendments or supplements to the
Preliminary Memorandum or the Final Memorandum that may be necessary or
advisable in connection with the resale of the Notes or the Appreciation Notes
by the Initial Purchaser.
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<PAGE>
(b) The Company and the Guarantors will cooperate with the Initial
Purchaser in arranging for any necessary qualification of the Securities for
offering and sale under the securities or "Blue Sky" laws of such jurisdictions
as the Initial Purchaser may designate and will continue such qualifications in
effect for as long as may be necessary to complete the resale of the Securities
by the Initial Purchaser; provided, however, that in connection therewith, none
of the Company or any Guarantor shall be required to qualify as a foreign
corporation or to execute a general consent to service of process in any
jurisdiction or subject itself to taxation in excess of a nominal dollar amount
in any such jurisdiction where it is not then so subject.
(c) If, at any time prior to the earlier of (i) completion of the
initial resale by the Initial Purchaser of the Securities or (ii) two years from
the date hereof any event occurs or information becomes known as a result of
which the Final Memorandum as then amended or supplemented would, in the
judgment of the Company or any Guarantor or in the reasonable opinion of counsel
to the Initial Purchaser include any untrue statement of a material fact, or
omit to state a material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading, or if for
any other reason it is necessary at any time to amend or supplement the Final
Memorandum to comply with applicable law, the Company and the Guarantors will
promptly notify the Initial Purchaser thereof and will prepare, at the expense
of the Company and the Guarantors, an amendment or supplement to the Final
Memorandum that corrects such statement or omission or effects such compliance.
(d) The Company and the Guarantors will, without charge, provide to
the Initial Purchaser and to counsel for the Initial Purchaser as many copies of
the Preliminary Memorandum and the Final Memorandum or any amendment or
supplement thereto as the Initial Purchaser may reasonably request.
(e) The Company and the Guarantors will apply the net proceeds from
the sale of the Notes or the Appreciation Notes as set forth under "Use of
Proceeds" in the Final Memorandum.
(f) The Company and the Guarantors will furnish to the Initial
Purchaser copies of all reports and other communications (financial or
otherwise) furnished by the Company to the Trustee, the holders of the Notes,
the Unit Agent, holders of the Units, the Appreciation Notes Trustee and the
holders of Appreciation Notes and, as soon as available, copies of any reports
or financial statements furnished to or filed by the Company or any Guarantors
with the Commission or any national securities exchange on which any class of
securities of the Company may be listed.
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<PAGE>
(g) Prior to the Closing Date, the Company will furnish to the Initial
Purchaser, as soon as they have been prepared, a copy of any unaudited interim
financial statements of the Company and the Guarantors for any period subsequent
to the period covered by the most recent financial statements appearing in the
Final Memorandum.
(h) None of the Company or the Guarantors or any of their Affiliates
will sell, offer for sale or solicit offers to buy or otherwise negotiate in
respect of any "security" (as defined in the Act) which could be integrated with
the sale of the Notes or the Appreciation Notes in a manner which would require
the registration under the Act of the Securities.
(i) None of the Company or the Guarantors will engage in any form of
"general solicitation" or "general advertising" (as those terms are used in
Regulation D under the Act) in connection with the offering of the Units or in
any manner involving a public offering of the Units within the meaning of
Section 4(2) of the Act.
(j) None of the Company, the Guarantors or their Affiliates nor any
person acting on its or their behalf will engage, in any directed selling
efforts (as that term is defined in Regulation S under the Act) with respect to
the Units, and will comply, and will have its Affiliates and each person acting
on its or their behalf (other than the Initial Purchaser and its Affiliates)
comply, with the offering restrictions requirements of Regulation S under the
Act.
(k) For so long as any of the Securities remain outstanding, the
Company and the Guarantors will make available, upon request, to any seller of
such Securities the information specified in Rule 144A(d)(4) under the Act,
unless the Company and the Guarantors are then subject to Section 13 or 15(d) of
the Exchange Act or the Securities may be resold pursuant to Rule 144(k) under
the Act.
(l) For a period of 180 days from the date of the Final Memorandum,
neither the Company nor any Guarantor will offer for sale, sell, contract to
sell or otherwise dispose of, directly or indirectly, or file a registration
statement for, or announce any offer, sale, contract for sale of or other
disposition of any debt securities issued or guaranteed by the Company or any of
the Guarantors (other than the Notes or the Exchange Notes or the Private
Exchange Notes or the Appreciation Notes or the Appreciation Exchange Notes)
without the prior written consent of the Initial Purchaser.
(m) During the period from the Closing Date until two years after the
Closing Date, without the prior written consent of the Initial Purchaser,
neither the Company nor any Guarantor will, or permit any of their affiliates
(as defined in Rule 144 under the Securities Act) to, resell any of the
Securities that have been reacquired
20
<PAGE>
by them, except for Securities purchased by the Company or any Guarantor or
any of their affiliates and resold in a transaction registered under the
Securities Act.
(n) In connection with the offering of the Securities, until the
Initial Purchaser shall have notified the Company of the completion of the
resale of the Notes and the Appreciation Notes, the Company and the Guarantors
will not, and will cause their affiliated purchasers (as defined under the
Exchange Act) not to, either alone or with one or more other persons (i), bid
for or purchase, for any account in which it or any of its affiliated purchasers
has a beneficial interest, any Securities, or attempt to induce any person to
purchase any Securities and (ii) make bids or purchase for the purpose of
creating actual, or apparent, active trading in or of raising the price of the
Securities.
(o) The Company and the Guarantors will not take any action prior to
the execution and delivery of the Indenture which, if taken after such execution
and delivery, would have violated any of the covenants contained in the
Indenture;
(p) The Company and the Guarantors will not take any action prior to
the Closing Date which would require the Final Memorandum to be amended or
supplemented pursuant to Section 5(c).
(q) Prior to the Closing Date, the Company and the Guarantors will not
issue any press release or other communication directly or indirectly or hold
any press conference with respect to the Company or the Guarantors, its
condition, financial or otherwise, or earnings, business affairs or business
prospects (except for routine oral marketing communications in the ordinary
course of business and consistent with the past practices of the Company and of
which the Initial Purchaser is notified), without the prior written consent of
the Initial Purchaser, unless in the judgment of the Company and its counsel,
after notification to the Initial Purchaser, such press release or communication
is required by law.
(r) The Company will use its best efforts to (i) permit the Units,
Notes and Appreciation Notes to be designated PORTAL securities in accordance
with the rules and regulations adopted by the NASD relating to trading in the
Private Offerings, Resales and Trading through Automated Linkages market (the
"Portal Market") and (ii) permit the Units, Notes and Appreciation Notes to be
eligible for clearance and settlement through the Depository Trust Company.
(s) The Company shall, immediately upon receipt of the proceeds from
the Offering, pay, or cause to be paid, all outstanding indebtedness, including
all indebtedness of the Guarantors, owed to AMRESCO Funding Corporation and
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<PAGE>
Goldman Sachs Credit Partners L.P., including indebtedness under the Credit
Agreement and upon such payment the Company shall then cause the lien securing
such indebtedness to be released.
(t) The Company shall use its best efforts to perform the
transactions contemplated by the Offering Memorandum.
6. Expenses. The Company and the Guarantors agree, jointly and
severally, to pay all costs and expenses incident to the performance of their
obligations under this Agreement, whether or not the transactions contemplated
herein are consummated or this Agreement is terminated pursuant to Section 11
hereof, including all costs and expenses incident to (i) the printing, word
processing or other production of documents with respect to the transactions
contemplated hereby, including any costs of printing the Preliminary Memorandum
and the Final Memorandum and any amendment or supplement thereto, and any "Blue
Sky" memoranda, (ii) all arrangements relating to the delivery to the Initial
Purchaser of copies of the foregoing documents, (iii) the fees and disbursements
of counsel, accountants and any other experts or advisors retained by the
Company, (iv) preparation (including printing), issuance and delivery to the
Initial Purchaser of the Notes, (v) the qualification of the Securities under
state securities and "Blue Sky" laws, including filing fees and fees and
disbursements of counsel for the Initial Purchaser relating thereto, (vi) the
Company's expenses in connection with any meetings with prospective investors in
the Securities, (vii) fees and expenses of the Trustee including fees and
expenses of its counsel, (viii) all expenses and listing fees incurred in
connection with the application for quotation of the Securities on the PORTAL
Market, (ix) any fees charged by investment rating agencies for the rating of
the Securities and (x) reasonable out-of-pocket expenses of the Initial
Purchaser (including without limitation, road show expenses and the fees and
disbursements of legal counsel retained by the Initial Purchaser) incurred by
the Initial Purchaser or any of their affiliates in connection with, or arising
out of, the offering and sale of the Securities (but not more than $75,000). If
the sale of the Securities provided for herein is not consummated because any
condition to the obligations of the Initial Purchaser set forth in Section 7
hereof is not satisfied, because this Agreement is terminated or because of any
failure, refusal or inability on the part of the Company or any Guarantor to
perform all obligations and satisfy all conditions on their part to be performed
or satisfied hereunder (other than solely by reason of a default by the Initial
Purchaser of its obligations hereunder after all conditions hereunder have been
satisfied in accordance herewith), the Company agrees to promptly reimburse the
Initial Purchaser upon demand for all out-of-pocket expenses (including the
reasonable fees, disbursements and charges of White & Case, counsel for the
Initial Purchaser) that shall have been incurred by the Initial Purchaser in
connection with the proposed purchase and sale of the Securities.
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<PAGE>
7. Conditions of the Initial Purchaser's Obligations. The obligation
of the Initial Purchaser to purchase and pay for the Securities shall, in its
sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:
(a) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Thompson & McMullan, counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchaser, substantially to
the effect that:
(i) Each of the Company and the Guarantors is duly
incorporated or formed, as the case may be, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
formation and has all requisite corporate or partnership power and authority
to own, lease and operate its properties and to conduct its business as
described in the Final Memorandum. Each of the Company and the Guarantors is
duly qualified as a foreign corporation, limited liability company or limited
partnership and is in good standing in the jurisdictions set forth below such
Guarantor's name on Schedule A attached to such opinion, except such
jurisdictions in which the failure to be so qualified would not be reasonably
expected to have a Material Adverse Effect.
(ii) The Company has the authorized and issued capital stock (or
other equity securities) set forth in the Final Memorandum. To the knowledge of
Thompson & McMullan, the Guarantors constitute all the subsidiaries of the
Company and the Company, directly or indirectly, will own one hundred percent of
the issued and outstanding stock, partnership, or membership interests (or other
equity securities) of each of the Guarantors (except that for the Guarantors
listed on Schedule 3 hereto the Company will directly or indirectly own at least
98% of the membership interests in such Guarantors and the remaining membership
interest in each of such Guarantors will be indirectly owned by Alan R. Brill),
free and clear of all security interests perfected, or otherwise, and free and
clear of all other liens, encumbrances, equities and claims or restrictions on
transferability or voting in each case other than liens securing the obligations
of the Company and the Guarantors under the Credit Agreement and obligations
secured by pledge of the capital stock of CMB II, Inc., NB II, Inc., St. Johns
Newspapers, Inc. and NCR, II, Inc. All of the outstanding shares of capital
stock, partnership or membership interests (or other equity securities) of the
Company and the Guarantors have been duly authorized and validly issued, are
fully paid and nonassessable and were not issued in violation of any preemptive
or similar rights;
(iii) Except as set forth in the Final Memorandum, to the
knowledge of such counsel (A) no options, warrants or other rights to purchase
from the Company
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or any Guarantor shares of capital stock or ownership interests in the
Company or any Guarantor are outstanding and, (B) no agreements or other
obligations of the Company or any Guarantor to issue, or other rights to
cause the Company or any Guarantor to convert, any obligation into, or
exchange any securities for, shares of capital stock or ownership interests
in the Company or any Guarantor are outstanding.
(iv) The Company and each Guarantor has all requisite corporate,
company or partnership power and authority to execute, deliver and perform its
respective obligations under this Agreement, the Indenture, the Notes, the
Registration Rights Agreement, the Exchange Notes and the Private Exchange
Notes, the Unit Agreement, the Appreciation Notes Indenture, the Appreciation
Notes, the Appreciation Notes Registration Rights Agreement, the Appreciation
Exchange Notes and the Private Appreciation Exchange Notes, and the Indenture
and Appreciation Notes Indenture have been duly and validly authorized by the
Company and each Guarantor.
(v) The Global Note, the Global Appreciation Note and each other
Note and Appreciation Note have been duly and validly authorized by the Company
and authorized and duly executed and delivered by the Company and each
Guarantor.
(vi) The Exchange Notes, the Private Exchange Notes, the
Appreciation Exchange Notes and the Private Appreciation Exchange Notes have
been duly and validly authorized by the Company and each Guarantor.
(vii) The Unit Agreement has been duly and validly authorized
by the Company.
(viii) The Units have been duly and validly authorized by the
Company.
(ix) The Company and each Guarantor has all requisite corporate,
company or partnership power and authority to execute, deliver and perform its
obligations under each of the Registration Rights Agreement and the Appreciation
Notes Registration Rights Agreement and each of the Registration Rights
Agreement and the Appreciation Notes Registration Rights Agreement has been duly
and validly authorized by the Company and each Guarantor.
(x) The Company and each Guarantor has all requisite corporate,
company or partnership power and authority to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby; this Agreement and the consummation by the Company and each Guarantor of
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the transactions contemplated hereby have been duly and validly authorized,
executed and delivered by the Company and each Guarantor.
(xi) Each of the Guarantors has all requisite corporate, company
or partnership power and authority to execute, deliver and perform its
obligations under its respective Guarantee. Each Guarantee issued by a
Guarantor has been duly and validly authorized, executed and delivered by the
applicable Guarantor.
(xii) Except as disclosed in the Memorandum, no legal or
governmental proceedings are pending or, to the knowledge of such counsel,
threatened to which any of the Company or the Guarantors is a party or to which
the property or assets of the Company or the Guarantors is subject before or
brought by any court, arbitrator or governmental agency or body which, if
determined adversely to the Company or the Guarantors, would result,
individually or in the aggregate, in a Material Adverse Effect, or which seeks
to restrain, enjoin, prevent the consummation of or otherwise challenge the
issuance or sale of the Securities to be sold hereunder or the consummation of
the other transactions described in the Final Memorandum.
(xiii) None of the Company or any Guarantor is (i) in
violation of its certificate of incorporation or bylaws or operating agreement
or partnership agreement (or similar organizational document) or (ii) to the
knowledge of such counsel, in breach or violation of any judgment, decree or
order of any court, arbitrator or governmental body, agency or authority
applicable to any of them or any of their respective properties or assets.
(xiv) The execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement, the Unit Agreement, the
Appreciation Notes Indenture and the Appreciation Notes Registration Rights
Agreement and the Guarantees and the closing of the transactions contemplated
hereby and thereby (including, without limitation, the issuance and sale of the
Securities to the Initial Purchaser) will not conflict with or constitute or
result in a breach or a default under (or an event which with notice or passage
of time or both would constitute a default under) or violation of any of (i) the
terms or provisions of any Contract known to such counsel, (ii) the certificate
of incorporation or bylaws or operating agreement or partnership agreement (or
similar organizational document) of the Company or any Guarantor, or (iii)
(assuming compliance with all applicable state securities or "Blue Sky" laws any
statute, judgment, decree, order, rule or regulation of the Commonwealth of
Virginia or of the federal government of the United States (other than the
Communications Act or FCC Rules (as defined in Section 7(c)(i) hereof) and
securities laws as to each of which such counsel need not express any opinion)
which, in such counsel's experience, is normally applicable both to general
business corporations or limited liability companies or
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limited partnerships which are not engaged in regulated business activities
and to transactions of the type contemplated by the Final Memorandum.
(xv) To the knowledge of such counsel, the Company and each of
the Guarantors possess all Permits presently required or necessary, under the
laws of the Commonwealth of Virginia and the federal laws of the United States
(except for securities laws, the Communications Act and the FCC Rules) to own or
lease, as the case may be, and to operate its respective properties and to carry
on its respective businesses as now or proposed to be conducted as described in
the Preliminary Memorandum and the Final Memorandum, except where the failure to
obtain such Permits would not, individually or in the aggregate, have a Material
Adverse Effect; each of the Company and the Guarantors has fulfilled and
performed all of its obligations with respect to such Permits and no event has
occurred which allows, or after notice or lapse of time would allow, revocation
or termination thereof or results in any other material impairment of the rights
of the holder of any such Permit except where such revocation, termination or
impairment would not, individually or in the aggregate, have a Material Adverse
Effect; and none of the Company or the Guarantors has received any notice of any
proceeding relating to revocation or modification of any such Permit, except as
described in the Final Memorandum and except where such revocation or
modification would not, individually or in the aggregate, have a Material
Adverse Effect.
(xvi) Lien searches performed with respect to the Company and the
Guarantors in connection with the Credit Agreement and as described in Exhibits
to the Credit Agreement, disclose that as of September 30, 1997 the real and
personal property of the Company described in the Memorandum were free and clear
of all recorded liens, charges, encumbrances or restrictions, except as therein
described and as described in the Memorandum or to the extent that the failure
to have such title or the existence of such liens, charges, encumbrances or
restrictions would not, individually or in the aggregate, have a Material
Adverse Effect.
At the time the foregoing opinion is delivered, Thompson & McMullan
shall additionally state that it has participated in conferences with officers
and other representatives of the Company and the Guarantors, representatives of
the independent public accountants for the Company, representatives of the
Initial Purchaser and counsel for the Initial Purchaser, at which conferences
the contents of the Final Memorandum and related matters were discussed, and,
although it has not independently verified and is not passing upon and assumes
no responsibility for the accuracy, completeness or fairness of the statements
contained in the Final Memorandum, no facts have come to its attention which
lead it to believe that the Final Memorandum, on the date thereof or at the
Closing Date, contained an untrue statement of a material fact or omitted to
state a
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material fact required to be stated therein or necessary to make the
statements contained therein, in the light of the circumstances under which
they were made, not misleading, it being understood that such firm expresses
no opinion with respect to any of the financial statements (actual, summary,
selected or pro-forma) outlined therein or the related notes thereto and the
other financial, statistical and accounting data included in the Final
Memorandum or any information therein concerning or furnished in writing by
the Initial Purchaser for inclusion therein. In rendering such opinion,
Thompson & McMullan shall have received and may rely upon such certificates
and other documents and information as it may reasonably request to pass on
such matters. The opinion of Thompson & McMullan described in this Section
shall be rendered to the Initial Purchaser at the request of the Company and
shall so state therein. If requested by the Trustee, Thompson & McMullan
shall allow the Trustee to rely on its opinion and shall expressly so state.
References to the Final Memorandum in this subsection (a) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(b) On the Closing Date, the Initial Purchaser shall have received
the opinion, dated as of the Closing Date and addressed to the Initial
Purchaser, of Carter, Ledyard & Milburn, counsel for the Company, in form and
substance satisfactory to counsel for the Initial Purchaser, substantially to
the effect that:
(i) Except as set forth in the Final Memorandum, to the
knowledge of such counsel (A) no options, warrants or other rights to purchase
from the Company or any Guarantor shares of capital stock or ownership interests
in the Company or any Guarantor are outstanding, (B) no agreements or other
obligations of the Company or any Guarantor to issue, or other rights to cause
the Company or any Guarantor to convert, any obligation into, or exchange any
securities for, shares of capital stock or ownership interests in the Company or
any Guarantor are outstanding and (C) no holder of securities of or equity
interests in the Company or any Guarantor is entitled to have such securities
registered under a registration statement filed by the Company and the
Guarantors pursuant to the Registration Rights Agreement.
(ii) The Indenture is in sufficient form for qualification under
the TIA; the Indenture when duly executed and delivered by the Company and each
Guarantor (assuming the due authorization, execution and delivery thereof by the
Company, each Guarantor and the Trustee), will constitute the valid and legally
binding agreement of the Company and each Guarantor, enforceable against the
Company and each Guarantor in accordance with its terms, except that the
enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance,
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moratorium and other similar laws now or hereafter in effect relating to
creditors' rights generally and (B) general principles of equity and the
discretion of the court before which any proceeding therefor may be brought.
(iii) The Appreciation Notes Indenture is in sufficient form
for qualification under the TIA; the Appreciation Notes Indenture when duly
executed and delivered by the Company and each Guarantor (assuming the due
authorization, execution and delivery thereof by the Company, each Guarantor and
the Appreciation Notes Trustee), will constitute the valid and legally binding
agreement of the Company and each Guarantor, enforceable against the Company and
each Guarantor in accordance with its terms, except that the enforcement thereof
may be subject to (A) bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and other similar laws now or hereafter in effect
relating to creditors' rights generally and (B) general principles of equity and
the discretion of the court before which any proceeding therefor may be brought.
(iv) The Global Note (as such term is defined in the Indenture)
and each other Note to be delivered on the Closing Date are in the form
contemplated by the Indenture. The Global Note and each such other Note when
duly executed and delivered by the Company and when paid for by the Initial
Purchaser in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Indenture by the Company, each
Guarantor and the Trustee and due authentication and delivery of the Notes by
the Trustee in accordance with the Indenture), will constitute valid and legally
binding obligations of the Company, entitled to the benefits of the Indenture,
and enforceable against the Company in accordance with their terms, except that
the enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(v) The Global Appreciation Note (as such term is defined in the
Appreciation Notes Indenture) and each other Appreciation Note to be delivered
on the Closing Date are in form contemplated by the Appreciation Notes
Indenture. The Global Appreciation Note and each such other Appreciation Note
when duly executed and delivered by the Company and when paid for by the Initial
Purchaser in accordance with the terms of this Agreement (assuming the due
authorization, execution and delivery of the Appreciation Notes Indenture by the
Company, each Guarantor and the Appreciation Notes Trustee and due
authentication and delivery of the Appreciation Notes by the Trustee in
accordance with the Appreciation Notes Indenture), will constitute valid and
legally binding obligations of the Company enforceable against the
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Company and each Guarantor in accordance with their terms, except that the
enforcement thereof may be subject to (i) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws now
or hereafter in effect relating to creditors' rights generally and (ii)
general principles of equity and the discretion of the court before which any
proceeding therefor may be brought. With respect to the applicability of the
limitations on rates of interest imposed by sections 190.40 and 190.42 of the
Penal Law, and the availability of the exemption therefrom provided by
section 5-501(6) of the General Obligations Law, such opinion may be a
reasoned opinion.
(vi) The Exchange Notes when duly executed and delivered by the
Company (assuming the due authorization, execution and delivery of the Indenture
by the Trustee, the Company and each Guarantor and due authentication and
delivery of the Exchange Notes by the Trustee in accordance with the Indenture),
will constitute the valid and legally binding obligations of the Company and
each Guarantor, entitled to the benefits of the Indenture, and enforceable
against the Company and each Guarantor in accordance with their terms, except
that the enforcement thereof may be subject to (A) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws now or
hereafter in effect relating to creditors' rights generally and (B) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(vii) The Appreciation Exchange Notes when duly executed and
delivered (assuming the due authorization, execution and delivery of the
Appreciation Notes Indenture by the Appreciation Notes Trustee, the Company and
each Guarantor and due authentication and delivery of the Appreciation Exchange
Notes by the Appreciation Notes Trustee in accordance with the Appreciation
Notes Indenture), will constitute the valid and legally binding obligations of
the Company and each Guarantor, entitled to the benefits of the Appreciation
Notes Indenture, and enforceable against the Company and each Guarantor in
accordance with their terms, except that the enforcement thereof may be subject
to (A) bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
and other similar laws now or hereafter in effect relating to creditors' rights
generally and (B) general principles of equity and the discretion of the court
before which any proceeding therefor may be brought. With respect to the
applicability of the limitations on rates of interest imposed by sections 190.40
and 190.42 of the Penal Law, and the availability of the exemption therefrom
provided by section 5-501(6) of the General Obligations Law, such opinion may be
a reasoned opinion.
(viii) The Registration Rights Agreement (assuming due
authorization, execution and delivery thereof by the Company, each Guarantor and
the Initial
29
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Purchaser) will constitute the valid and legally binding agreement of the
Company and each Guarantor, enforceable against the Company and each
Guarantor in accordance with its terms, except that (A) the enforcement
thereof may be subject to (1) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium and other similar laws now or hereafter in
effect relating to creditors' rights generally and (2) general principles of
equity and the discretion of the court before which any proceeding therefor
may be brought; (B) the indemnification provisions contained therein may be
unenforceable as contrary to public policy; and (C) the provisions for
liquidated damages contained therein may be unenforceable if they were deemed
to constitute a penalty.
(ix) The Appreciation Notes Registration Rights Agreement
(assuming due authorization, execution and delivery thereof by the Company, each
Guarantor and the Initial Purchaser), will constitute the valid and legally
binding agreement of the Company and each Guarantor, enforceable against the
Company and each Guarantor in accordance with its terms, except that (A) the
enforcement thereof may be subject to (1) bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws now or
hereafter in effect relating to creditors' rights generally and (2) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought; (B) the indemnification provisions contained therein
may be unenforceable as contrary to public policy; and (C) the provisions for
liquidated damages contained therein may be unenforceable if they were deemed to
constitute a penalty.
(x) This Agreement (assuming its due authorization, execution
and delivery by the Company, each Guarantor and the Initial Purchaser)
constitutes a valid and legally binding agreement of the Company, and each
Guarantor, enforceable against the Company, and each Guarantor in accordance
with its terms, except that (A) the enforcement thereof may be subject to (1)
bankruptcy insolvency, reorganization fraudulent conveyance, moratorium and
other similar laws now or hereafter in effect relating to creditors rights
generally and (2) general principles of equity and the discretion of the court
before which any proceeding therefor may be bought; and (B) the indemnification
provisions contained in Section 9 of this Agreement may be unenforceable as
contrary to public policy.
(xi) Assuming that each Guarantee issued by a Guarantor has been
duly and validly authorized, executed and delivered by the applicable Guarantor,
such Guarantee will constitute a valid and legally binding agreement of such
Guarantor, enforceable against such Guarantor in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium and other similar laws
affecting the enforcement of creditors' rights generally and by general
equitable principles (regardless of whether the
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issue of enforceability is considered in a proceeding in equity or at law)
and the discretion of the court before which any proceeding therefor me be
brought.
(xii) The Unit Agreement (assuming due authorization,
execution and delivery thereof by the Company and the Unit Agent) constitutes
the valid and legally binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability thereof may
be subject to (1) bankruptcy, insolvency, reorganization fraudulent conveyance,
moratorium and other similar laws now or hereafter in effect relating to
creditors rights generally and (2) general principles of equity and the
discretion of the court before which any proceeding therefor may be bought.
(xiii) The Units (assuming due authorization by the Company),
when issued and delivered by the Company against payment therefor by the Initial
Purchaser in accordance with the terms of this Agreement will constitute valid
and binding obligations of the Company, enforceable against the Company in
accordance with their terms, except that the enforcement hereof may be subject
to (i) bankruptcy, insolvency, reorganization or other similar laws now or
hereafter in effect relating to creditors' rights generally and (ii) general
principles of equity and the discretion of the court before which any proceeding
therefor may be brought.
(xiv) The Indenture, the Notes (when issued, authorized and
delivered), the Exchange Notes (when issued, authorized and delivered), the
Registration Rights Agreement, the Unit Agreement, the Appreciation Notes
Indenture, the Appreciation Notes (when issued, authorized and delivered), and
the Appreciation Notes Exchange Notes (when issued, authorized and delivered),
the Appreciation Notes Registration Rights Agreement conform in all material
respects to the descriptions thereof contained in the Final Memorandum and the
statements in the Final Memorandum under "Description of Notes"; and "Exchange
Offer and Registration Rights", "Description of Units", "Description of
Appreciation Notes"; and "Appreciation Notes Exchange Offer and Registration
Rights" and "Descriptions of Membership Interests" insofar as they describe the
provisions of the documents and instruments therein described, constitute fair
summaries thereof in all material respects.
(xv) No consent, approval, authorization or order of any United
States federal or New York State governmental authority is required for the
issuance and sale by the Company of the Securities to the Initial Purchaser or
the other transactions contemplated under the Indenture, the Registration Rights
Agreement, the Guarantees, the Unit Agreement, the Appreciation Notes Indenture,
the Appreciation Notes Registration Rights Agreement and this Agreement, except
such as are disclosed in the Final Memorandum (or as may be required under Blue
Sky laws or as may be required
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by the FCC, as to which such counsel need express no opinion), and those
which have previously been obtained.
(xvi) The execution and delivery of this Agreement, the
Indenture, the Registration Rights Agreement, the Unit Agreement, the
Appreciation Notes Indenture, the Appreciation Notes Registration Rights
Agreement and the Guarantees and the consummation of the transactions
contemplated hereby and thereby (including, without limitation, the issuance and
sale of the Notes and Appreciation Notes to the Initial Purchaser) will not
(assuming compliance with all applicable state securities or "Blue Sky" laws and
assuming the accuracy of the representations and warranties of the Initial
Purchaser in Section 8 hereof) violate (A) any United States federal or New York
State statute, law, rule or regulation (other than the Communications Act or FCC
Rules as to which such counsel need not express any opinion) or (B) any
judgment, decree or order known to us and specifically binding on the Company or
any Guarantor.
(xvii) None of the Company or the Guarantors is, or
immediately after the sale of the Securities to be sold hereunder and the
application of the proceeds from such sale (as described in the Final Memorandum
under the caption "Use of Proceeds") will be, an "investment company" as such
term is defined in the Investment Company Act of 1940, as amended.
(xviii) The Securities satisfy the eligibility requirements of
Rule 144A(d)(3) under the Act.
(xix) No registration under the Act of the Notes is required
in connection with the sale of the Notes to the Initial Purchaser as
contemplated by this Agreement and the Final Memorandum or in connection with
the initial resale of the Notes by the Initial Purchaser in accordance with
Section 8 of this Agreement, and prior to the commencement of the Exchange Offer
or the effectiveness of the Shelf Registration Statement (as defined in the
Registration Rights Agreement), the Indenture is not required to be qualified
under the TIA, in each case assuming (A) that the purchasers who buy such Notes
in the initial resale thereof are qualified institutional buyers ("QIBs") as
defined in Rule 144A promulgated under the Act ("Rule 144A") or institutions
that are accredited investors as defined in Rule 501(a) (1), (2), (3) or (7)
promulgated under the Act ("Accredited Investors"), (B) the accuracy of the
Initial Purchaser's representations in Section 8 hereof and those of the Company
and the Guarantors contained in this Agreement and (C) the due performance by
the Initial Purchaser of the agreements set forth in Section 8 hereof.
(xx) No registration under the Act of the Appreciation Notes is
required in connection with the sale of the Appreciation Notes to the Initial
Purchaser as
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contemplated by this Agreement and the Final Memorandum or in connection with
the initial resale of the Appreciation Notes by the Initial Purchaser in
accordance with Section 8 of this Agreement, and prior to the commencement of
the Appreciation Notes Exchange Offer or the effectiveness of the Shelf
Registration Statement (as defined in the Appreciation Notes Registration
Rights Agreement), the Appreciation Notes Indenture is not required to be
qualified under the TIA, in each case assuming (A) that the purchasers who
buy such Appreciation Notes in the initial resale thereof are qualified
institutional buyers ("QIBs") as defined in Rule 144A promulgated under the
Act ("Rule 144A") or institutions that are accredited investors as defined in
Rule 501(a) (1), (2), (3) or (7) promulgated under the Act ("Accredited
Investors"), (B) the accuracy of the Initial Purchaser's representations in
Section 8 hereof and those of the Company and the Guarantors contained in
this Agreement and (C) the due performance by the Initial Purchaser of the
agreements set forth in Section 8 hereof.
(xxi) Neither the consummation of the transactions
contemplated by this Agreement nor the sale, issuance, execution or delivery of
the Notes or Appreciation Notes will violate Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System.
In rendering such opinion, such counsel may rely (A) as to matters
involving the Commonwealth of Virginia, upon Thompson & McMullan, (B) as to
matters involving the application of laws of any jurisdiction other than the
Commonwealth of Virginia, the State of New York or the United States or the
General Corporation Law of the State of Delaware, to the extent they deem proper
and specified in such opinion, upon the opinion of other counsel who are
satisfactory to counsel for the Initial Purchaser and (C) as to matters of fact
on certificates of officers of the Company and public officials.
At the time the foregoing opinion is delivered, Carter, Ledyard &
Milburn shall additionally state that it has participated in conferences with
officers and other representatives of the Company and the Guarantors,
representatives of the independent public accountants for the Company,
representatives of the Initial Purchaser and counsel for the Initial Purchaser,
at which conferences the contents of the Final Memorandum and related matters
were discussed, and, although it has not independently verified and is not
passing upon and assumes no responsibility for the accuracy, completeness or
fairness of the statements contained in the Final Memorandum, no facts have come
to its attention which lead it to believe that the Final Memorandum, on the date
thereof or at the Closing Date, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements contained therein, in the light of the circumstances
under which they were made, not misleading, it being understood that such firm
need
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express no view with respect to the financial statements (actual, summary,
selected or pro-formas) contained therein or the related notes thereto and
the other financial, statistical and accounting data included in the Final
Memorandum or any information therein concerning or furnished by the Initial
Purchaser.
The opinion of Carter, Ledyard & Milburn described in this Section
shall be rendered to the Initial Purchaser at the request of the Company and
shall so state therein. If requested by the Trustee or the Company, Carter,
Ledyard & Milburn shall allow the Trustee or the Company to rely on its opinion
and shall expressly so state.
References to the Final Memorandum in this subsection (b) shall
include any amendment or supplement thereto prepared in accordance with the
provisions of this Agreement at the Closing Date.
(c) On the Closing Date, the Initial Purchaser shall have received an
opinion, dated the Closing Date, of Irwin, Campbell & Tannenwald, P.C., counsel
for the Company. The opinion of such counsel shall be rendered to the Initial
Purchaser at the request of the Company and shall so state therein. The opinion
shall be in form and substance satisfactory to counsel for the Initial
Purchaser, substantially to the effect that:
(i) Those statements in the Memorandum that describe provisions
of the Communications Act of 1934, as amended (the "Communications Act"), and
the rules, regulations and published orders, policies and decisions of the FCC
("FCC Rules") are accurate descriptions in all material respects.
(ii) The execution, delivery and performance of the obligations
by the Company and the Guarantors under the Indenture, the Registration Rights
Agreement, the Notes, the Appreciation Notes Indenture, the Appreciation Notes
Registration Agreement, the Appreciation Notes and this Agreement are not and
will not be contrary to the Communications Act, or to the terms of any radio
license, will not result in any violation of the FCC Rules or, will not cause
any forfeiture or impairment of any FCC license of any of the radio stations,
and will not require any consent, approval or authorization of the FCC, except
that the prior approval of the FCC is required for the pro forma reorganization
of the intermediate entities between Alan R. Brill, as the controlling
shareholder/member, and the licensees of stations WIOV-AM and WIOV-FM (Reading
Radio, Inc.), WOMI-AM and WBKR-FM (Tri-State Broadcasting, Inc.), KLIK-AM and
KTXY-FM (Central Missouri Broadcasting, Inc.), KATI-FM (CMB II, Inc.), KUAD-FM
(Northern Colorado Radio, Inc.), WEBC-AM and KKCB-FM (Northland Broadcasting,
LLC), and KLDJ-FM (NB II, Inc.) which FCC consents to the pro forma transfer of
control were granted by the FCC on December 19, 1997.
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(iii) The Company and each of the Guarantors validly hold all
FCC licenses or authorizations necessary for the operation of the radio stations
in the manner in which they are described as being conducted in the Memorandum
("FCC Licenses"); the FCC Licenses are valid in accordance with their terms and
are not subject to any conditions or requirements not generally imposed by the
FCC upon the holders of such licenses.
(iv) All applicable administrative and judicial appeal, review
and reconsideration periods relating to the grant of the FCC Licenses have
expired without such counsel being served with any timely filing or petition
requesting reconsideration, review or appeal of such actions, and without the
FCC having instituted review or reconsideration of the grant of any of the FCC
Licenses on its own motion.
(v) To our knowledge, the Company and each of the Guarantors
filed with the FCC all material reports, documents, instruments, information and
applications required to be filed pursuant to the Communications Law. No notice
has been issued by the FCC which could permit, or after notice or lapse of time
or both could permit, revocation or termination of any of the FCC Licenses prior
to the expiration dates thereof or which could result in any other material
impairment of any of the Company's and each of the Guarantors' rights
thereunder.
(vi) To our knowledge, there is not outstanding or pending any
notice of violation, notice of apparent liability, order to show cause, material
complaint or investigation by or before the FCC, except for the pending Petition
To Deny the renewal application for station KUAD-FM filed by the Rainbow-PUSH
Condition alleging violation of the FCC equal employment opportunity rules and
factual misrepresentations, and the pending Petition To Deny and informal
objection to the assignment applications involving stations KLIK-AM, KTXY-FM and
KATI-FM alleging undue media concentration in the Jefferson City, Missouri
market if the proposed buyers are permitted to acquire these stations, and order
of forfeiture in the amount of $3,000.00 against station KUAD-FM for violation
of the sponsorship identification provisions of the FCC Rules. We have no
knowledge of facts at this time, subject to the Company's and the Guarantors'
continued regulatory compliance and the favorable resolution of the Petition To
Deny the KUAD-FM renewal application, that would lead us to believe that the FCC
Licenses will not be renewed in the ordinary course.
(vii) Subject to obtaining the prior consent of the FCC to
the pro forma transfer of control applications as noted in paragraph (ii) above,
the acquisitions and the proposed acquisitions described in the Memorandum,
under the section "Transactions", are in compliance with the Communications Law.
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(viii) To our knowledge, the Company and each of the
Guarantors possess all FCC Licenses presently required or necessary under the
Communications Act and the FCC Rules to operate its respective properties and to
carry on its respective businesses as now or proposed to be conducted as
described in the Preliminary Memorandum and except where the failure to obtain
such FCC Licenses would not, individually or in the aggregate, have a Material
Adverse Effect; to our knowledge, no event has occurred which allows, or after
notice or lapse of time would allow, revocation or termination thereof or
results in any other material impairment of the rights of the holder of any such
FCC License except where such revocation termination or impairment would not,
individually or in the aggregate, have a Material Adverse Effect.
(d) On the Closing Date, the Initial Purchaser shall have received
the opinion, in form and substance satisfactory to the Initial Purchaser, dated
as of the Closing Date and addressed to the Initial Purchaser, of White & Case,
counsel for the Initial Purchaser, with respect to certain legal matters
relating to this Agreement and such other related matters as the Initial
Purchaser may reasonably require. In rendering such opinion, White & Case shall
have received and may rely upon such certificates and other documents and
information as it may reasonably request to pass upon such matters.
(e) The Initial Purchaser shall have received from each of Ernst &
Young LLP a comfort letter dated the date hereof and the Closing Date,
substantially in the form attached as Exhibit B hereto.
(f) On the Closing Date, the Initial Purchaser shall have received
the following agreements, duly authorized, executed and (except for the
Indenture, to which the Initial Purchaser is not a party) delivered by each of
the parties thereto, in form and substance satisfactory to counsel for the
Initial Purchaser, and containing such terms and conditions that are usual and
customary in transactions similar to those contemplated hereby and thereby,
dated the Closing Date, and each such agreement shall be in full force and
effect according to its terms:
(i) the Indenture;
(ii) the Registration Rights Agreement;
(iii) the Guarantees;
(iv) the Unit Agreement;
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(v) the Appreciation Notes Indenture; and
(vi) the Appreciation Notes Registration Rights Agreement.
(g) On the Closing Date, the Initial Purchaser shall have received
evidence that all obligations of the Company and the Guarantors with respect to
the Credit Agreement, shall have been terminated and the total commitment under
the Credit Agreement shall have been terminated, all loans thereunder shall have
been repaid in full, together with interest thereon and all other amounts owing
pursuant to the Credit Agreement shall have been repaid in full and the Credit
Agreement shall have been terminated and be of no further force or effect. The
Initial Purchaser shall have received copies of all original documents
(including a pay-off letter) giving effect to the matters contemplated by this
subparagraph (g) in form, scope and substance reasonably satisfactory to counsel
to the Initial Purchaser.
(h) On the Closing Date, the Initial Purchaser shall have received
executed copies of the following agreements or notes, duly authorized and
executed by each of the parties thereto, in form and substance satisfactory to
counsel for the Initial Purchaser, and containing such terms and conditions that
are usual and customary in transactions similar to those contemplated hereby and
thereby, dated the Closing Date, and each such agreement shall be in full force
and effect according to its terms:
(i) the Managed Affiliate Management Agreements (as defined in
the Memorandum); and
(ii) the Managed Affiliate Notes (as defined in the Memorandum),
executed by each of TSB III, LLC and TSB IV, LLC in favor of Tri-State
Broadcasting, Inc.
(i) The Initial Purchaser shall have received good standing
certificates for the Company and each of the Guarantors from their respective
states of incorporation or formation, as the case may be, and from each of the
respective jurisdictions where each of them is qualified to do business as a
foreign corporation, limited liability company or limited partnership.
(j) The representations and warranties of the Company and the
Guarantors contained in this Agreement shall be true and correct on and as of
the date hereof and on and as of the Closing Date as if made on and as of the
Closing Date; the statements of the Company's or any Guarantor's officers made
pursuant to any certificate delivered in accordance with the provisions hereof
shall be true and correct on and as of the date made and on and as of the
Closing Date; the Company and the Guarantors shall
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have performed all covenants and agreements and satisfied all conditions on
their part to be performed or satisfied hereunder at or prior to the Closing
Date; and, except as described in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), subsequent to the
date of the most recent financial statements in such Final Memorandum, there
shall have been no event or development that, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse
Effect.
(k) The sale of the Securities hereunder shall not be enjoined
(temporarily or permanently) on the Closing Date.
(l) The Securities shall have been approved by the NASD for trading
in the PORTAL Market.
(m) There shall not have occurred any invalidation of Rule 144A under
the Securities Act by any court or any withdrawal or proposed withdrawal of any
rule or regulation under the Securities Act or the Exchange Act by the
Commission or any amendment or proposed amendment thereof by the Commission
which in the judgment of the Initial Purchaser would materially impair the
ability of the Initial Purchaser to purchase, hold or effect resales of the
Securities as contemplated hereby.
(n) There shall not have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise, or in
the earnings, business or operations, of the Company and the Guarantors, taken
as a whole, from that set forth in the Final Memorandum that constitutes a
Material Adverse Effect and that makes it, in the Initial Purchaser's judgment,
impracticable to market the Notes or the Appreciation Notes on the terms and in
the manner contemplated in the Final Memorandum.
(o) Subsequent to the date of the most recent financial statements in
the Final Memorandum (exclusive of any amendment or supplement thereto after the
date hereof), the conduct of the business and operations of the Company and the
Guarantors shall not have been interfered with by strike, fire, flood,
hurricane, accident or other calamity (whether or not insured) or by any court
or governmental action, order or decree, and, except as otherwise stated
therein, the properties of the Company and the Guarantors shall not have
sustained any loss or damage (whether or not insured) as a result of any such
occurrence, except any such calamity, action, order, decree, loss or damage
which would not, individually or in the aggregate, have a Material Adverse
Effect.
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(p) No securities of the Company or any Guarantor shall have been
downgraded or placed on any "watch list" for possible downgrading by any
nationally recognized statistical rating organization.
(q) The Initial Purchaser shall have received certificates of the
Company and each Guarantor, dated the Closing Date, signed by their respective
Chairman of the Board, President or any Senior Vice President and the Chief
Financial Officer, to the effect that:
(i) The representations and warranties of the Company and such
Guarantor contained in this Agreement are true and correct as of the date hereof
and as of the Closing Date, and the Company and each Guarantor has performed all
covenants and agreements and satisfied all conditions on their part to be
performed or satisfied hereunder at or prior to the Closing Date;
(ii) At the Closing Date, since the date hereof or since the date of
the most recent financial statements in the Final Memorandum (exclusive of any
amendment or supplement thereto after the date hereof), no event or events have
occurred, no information has become known nor does any condition exist that,
individually or in the aggregate, would have a Material Adverse Effect;
(iii) The sale of the Securities hereunder has not been enjoined
(temporarily or permanently);
(iv) Contemporaneously with the sale of the Units to the Initial
Purchaser on the Closing Date, the Company shall have caused to be paid or paid
all indebtedness owed to AMRESCO Funding Corporation and Goldman Sachs Credit
Partners, L.P. under the Credit Agreement; and
(v) such other information as the Initial Purchaser may reasonably
request.
(r) The Initial Purchaser shall have received a certificate from the
corporate secretary of the Company, dated the Closing Date, attaching certified
copies of (i) all resolutions of the Board of Directors or board of managers of
the Company, as the case may be, authorizing the transactions contemplated by
this Agreement, including, without limitation, approving the offering of the
Units, the entering into this Agreement, the Indenture, the Registration Rights
Agreement, the Unit Agreement, the Appreciation Notes Indenture, the
Appreciation Notes Registration Rights Agreement and the Managed Affiliate
Management Agreements (as defined in the Memorandum), (ii) the certificate of
incorporation and by-laws of the Company, or the operating
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<PAGE>
agreement or the partnership agreement, as the case may be, and (iii)
certifying the names and true signatures of those officers of the Company
executing any documents contemplated by this Agreement.
(s) Prior to the Closing Date, the FCC consents referred to in
paragraph (ii) of Section 7(c) hereof shall be obtained.
On or before the Closing Date, the Initial Purchaser and counsel for
the Initial Purchaser shall have received such further documents, opinions,
certificates, letters and schedules or instruments relating to the business,
corporate, legal and financial affairs of the Company and the Guarantors as they
shall have heretofore reasonably requested from the Company and the Guarantors.
All such documents, opinions, certificates, letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably satisfactory in all material respects to the
Initial Purchaser and counsel for the Initial Purchaser. The Company and the
Guarantors shall furnish to the Initial Purchaser such conformed copies of such
documents, opinions, certificates, letters, schedules and instruments in such
quantities as the Initial Purchaser shall reasonably request.
8. Offering of Notes; Restrictions on Transfer. The Initial
Purchaser agrees with the Company that (i) it has not and will not solicit
offers for, or offer or sell, the Securities by any form of general solicitation
or general advertising (as those terms are used in Regulation D under the Act)
or in any manner involving a public offering within the meaning of Section 4(2)
of the Act; (ii) it has not engaged in any "directed selling efforts" (as such
term is defined in Rule 902 of Regulation S under the Act) with respect to
Securities offered in reliance on Regulation S and (iii) it has and will solicit
offers for the Securities only from, and will offer the Securities only to (A)
in the case of offers inside the United States, (x) persons whom the Initial
Purchaser reasonably believes to be QIBs or, if any such person is buying for
one or more institutional accounts for which such person is acting as fiduciary
or agent, only when such person has represented to the Initial Purchaser that
each such account is a QIB, in each case to whom notice has been given that such
sale or delivery is being made in reliance on Rule 144A, and, in each case, in
transactions under Rule 144A or (y) a limited number of other institutional
investors reasonably believed by the Initial Purchaser to be Accredited
Investors that, prior to their purchase of the Securities, deliver to the
Initial Purchaser a letter containing the representations and agreements set
forth in Exhibit A to the Final Memorandum and (B) in the case of offers outside
the United States, to or for the account or benefit of persons other than U.S.
persons ("foreign purchasers," which term shall include dealers or other
professional fiduciaries in the United States acting on
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<PAGE>
a discretionary basis for foreign beneficial owners (other than an estate or
trust)); provided, however, that, in the case of this clause (B), (x) in
purchasing such Securities such persons are deemed to have represented and
agreed as provided under the caption "Transfer Restrictions" contained in the
Final Memorandum and (y) no sales shall be made pursuant to this clause (B)
to any person unless, at the time that the order to purchase the Securities
was placed, such person was outside the United States or the Initial
Purchaser and any person acting on its behalf reasonably believed, at the
time such order was placed, that such person was outside the United States.
For the purposes of this Section 8 the term "United States" shall have the
meaning ascribed thereto in Rule 902 of Regulation S under the Act.
The Initial Purchaser represents and warrants that it is a QIB, with
such knowledge and experience in financial and business matters as are necessary
in order to evaluate the merits and risks of an investment in the Units. The
Initial Purchaser agrees to comply with the applicable provisions of Rule 144A
and Regulation S under the Act. In connection with sales of the Units outside
the United States, the Initial Purchaser agrees that it will not offer, sell or
deliver the Units to, or for the account or benefit of, U.S. Persons (i) as part
of its distribution at any time or (ii) otherwise prior to 40 days after the
offering of the Units and it will send to any dealer to whom they sell Units
during such period a confirmation or other notice setting forth the restrictions
on offers and sales of the Units within the Unites States or to, or for the
account or benefit of, U.S. Persons. The Initial Purchaser hereby acknowledges
that the Company and the Guarantors and, for purposes of the opinions to be
delivered to the Initial Purchaser pursuant to Section 7(b) hereof, counsel to
the Company, will rely upon the accuracy and truth of the representations
contained in this Section 8 and the Initial Purchaser hereby consents to such
reliance.
9. Indemnification and Contribution. (a) The Company and the
Guarantors jointly and severally agree to indemnify and hold harmless the
Initial Purchaser and its respective affiliates, directors, officers, agents,
representatives general partners and employees of the Initial Purchaser or its
affiliates, and each other person, if any, who controls the Initial Purchaser or
its affiliates within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act, to the full extent lawful against any losses, claims, damages,
expenses or liabilities (or actions in respect thereof, including, without,
limitation, shareholder derivative actions and arbitration proceedings) to which
the Initial Purchaser or such other person may become subject under the Act, the
Exchange Act or otherwise, insofar as any such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon:
(i) any untrue statement or alleged untrue statement of any material
fact contained in any Memorandum or any amendment or supplement thereto or any
41
<PAGE>
application or other document, or any amendment or supplement thereto, executed
by the Company, or any Guarantor or based upon written information furnished by
or on behalf of the Company, or any Guarantor filed in any jurisdiction in order
to qualify the Securities under the securities or "Blue Sky" laws thereof or
filed with any securities association or securities exchange (each an
"Application");
(ii) the omission or alleged omission to state, in any Memorandum or
any amendment or supplement thereto or any Application, a material fact required
to be stated therein or necessary to make the statements therein not misleading;
or
(iii) any breach of any of the representations and warranties of
the Company and the Guarantors set forth in this Agreement, the Registration
Rights Agreement, the Unit Agreement, the Appreciation Notes Registration Rights
Agreement and the Guarantees, and will reimburse, as incurred, the Initial
Purchaser and each such other person for any legal or other expenses incurred by
the Initial Purchaser or such other person in connection with investigating,
defending against or appearing as a third-party witness in connection with any
such loss, claim, damage, liability or action; provided, however, the Company
and the Guarantors will not be liable in any such case to the extent that any
such loss, claim, damage, or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission (A) made
in any Memorandum or any amendment or supplement thereto or any Application in
reliance upon and in conformity with written information concerning the Initial
Purchaser furnished to the Company by the Initial Purchaser specifically for use
therein or (B) which results from the fact that a copy of the Final Memorandum
was not sent or given to such person, and if the untrue statement or omission or
alleged untrue statement or omission that was contained in the Preliminary
Memorandum has been corrected in the Final Memorandum and delivered to the
Initial Purchaser on a timely basis to permit such delivery or sending. This
indemnity agreement will be in addition to any liabilities or obligations that
the Company and the Guarantors may otherwise have to the indemnified parties,
including without limitation the indemnification obligations of the Company
pursuant to the NatWest Engagement Letter. The Company and the Guarantors shall
not be liable under this Section 9 for any settlement of any claim or action
effected without their prior written consent, which shall not be unreasonably
withheld.
(b) The Initial Purchaser agrees to indemnify and hold harmless the
Company and the Guarantors, their directors, their officers and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act against any losses, claims, damages or
liabilities to which the Company or the Guarantors or any such director, officer
or controlling person may become subject under the Act, the Exchange Act or
otherwise, insofar as such losses, claims, damages or
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<PAGE>
liabilities (or actions in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in any Memorandum or any amendment or supplement thereto or any
Application, or (ii) the omission or the alleged omission to state therein a
material fact required to be stated in any Memorandum or any amendment or
supplement thereto or any Application, or necessary to make the statements
therein not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
concerning the Initial Purchaser, furnished to the Company or the Guarantors
by the Initial Purchaser specifically for use therein; and subject to the
limitation set forth immediately preceding this clause, will reimburse, as
incurred, any legal or other expenses incurred by the Company, or any such
director, officer or controlling person in connection with investigating or
defending against or appearing as a third party witness in connection with
any such loss, claim, damage, liability or action in respect thereof. This
indemnity agreement will be in addition to any liability that the Initial
Purchaser may otherwise have to the indemnified parties. The Initial
Purchaser shall not be liable under this Section 9 for any settlement of any
claim or action effected without its prior written consent, which shall not
be unreasonably withheld. The Company and the Guarantors shall not, without
the prior written consent of the Initial Purchaser, effect any settlement or
compromise of any pending or threatened proceeding in respect of which the
Initial Purchaser is or could have been a party, or indemnity could have been
sought hereunder by the Initial Purchaser, unless such settlement (A)
includes an unconditional written release of the Initial Purchaser, in form
and substance reasonably satisfactory to the Initial Purchaser, from all
liability on claims that are the subject matter of such proceeding and (B)
does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of the Initial Purchaser.
(c) Promptly after receipt by an indemnified party under this Section
9 of notice of the commencement of any action for which such indemnified party
is entitled to indemnification under this Section 9, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 9, notify the indemnifying party of the commencement thereof
in writing; but the omission to so notify the indemnifying party (i) will not
relieve it from any liability under paragraph (a) or (b) above unless and to the
extent such failure results in the forfeiture by the indemnifying party of
substantial rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraphs (a) and (b) above. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that if (i) the use of counsel chosen by the
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<PAGE>
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have been advised by counsel that there may be one or
more legal defenses available to it and/or other indemnified parties that are
different from or additional to those available to the indemnifying party, or
(iii) the indemnifying party shall not have employed counsel reasonably
satisfactory to the indemnified party to represent the indemnified party
within a reasonable time after receipt by the indemnifying party of notice of
the institution of such action, then, in each such case, the indemnifying
party shall not have the right to direct the defense of such action on behalf
of such indemnified party or parties and such indemnified party or parties
shall have the right to select separate counsel to defend such action on
behalf of such indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof and approval by such indemnified party of counsel appointed
to defend such action, the indemnifying party will not be liable to such
indemnified party under this Section 9 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the immediately preceding sentence (it being understood, however,
that in connection with such action the indemnifying party shall not be
liable for the expenses of more than one separate counsel (in addition to
local counsel) in any one action or separate but substantially similar
actions in the same jurisdiction arising out of the same general allegations
or circumstances, designated by the Initial Purchaser in the case of
paragraph (a) of this Section 9 or either the Company or any of the
Guarantors in the case of paragraph (b) of this Section 9, representing the
indemnified parties under such paragraph (a) or paragraph (b), as the case
may be, who are parties to such action or actions) or (ii) the indemnifying
party has authorized in writing the employment of counsel for the indemnified
party at the expense of the indemnifying party. After such notice from the
indemnifying party to such indemnified party, the indemnifying party will not
be liable for the costs and expenses of any settlement of such action
effected by such indemnified party without the prior written consent of the
indemnifying party (which consent shall not be unreasonably withheld), unless
such indemnified party waived in writing its rights under this Section 9, in
which case the indemnified party may effect such a settlement without such
consent.
(d) In circumstances in which the indemnity agreement provided for in
the preceding paragraphs of this Section 9 is unavailable to an indemnified
party in respect of any losses, claims, damages or liabilities (or actions in
respect thereof), each indemnifying party, in order to provide for just and
equitable contribution, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect (i)
the relative benefits received by the indemnifying party or parties on the one
hand and the
44
<PAGE>
indemnified party on the other from the offering of the Securities or (ii) if
the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault
of the indemnifying party or parties on the one hand and the indemnified
party on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative benefits received
by the Company and the Guarantors on the one hand and the Initial Purchaser
on the other shall be deemed to be in the same proportion as the total
proceeds from the offering (net of commissions and before deducting expenses)
received by the Company and the Guarantors bear to the total discounts and
commissions received by the Initial Purchaser. The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Company and the Guarantors on the one hand, or the Initial Purchaser on
the other, the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission, and any other equitable considerations appropriate in
the circumstances. The Company, the Guarantors and the Initial Purchaser
agree that it would not be equitable if the amount of such contribution were
determined by pro rata or per capita allocation or by any other method of
allocation that does not take into account the equitable considerations
referred to in the first sentence of this paragraph (d). Notwithstanding any
other provision of this paragraph (d), the Initial Purchaser shall not be
obligated to make contributions hereunder that in the aggregate exceed the
total discounts, commissions and other compensation received by the Initial
Purchaser under this Agreement, less the aggregate amount of any damages that
the Initial Purchaser has otherwise been required to pay by reason of the
untrue or alleged untrue statements or the omissions or alleged omissions to
state a material fact, and no person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this paragraph (d), each person, if any,
who controls the Initial Purchaser within the meaning of Section 15 of the
Act or Section 20 of the Exchange Act shall have the same rights to
contribution as the Initial Purchaser, and each director of the Company, each
officer of the Company and each person, if any, who controls the Company or
the Guarantors within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act, shall have the same rights to contribution as the Company.
10. Survival Clause. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Company, the
Guarantors, their respective officers and the Initial Purchaser set forth in
this Agreement or made by or on behalf of them pursuant to this Agreement shall
remain in full force and effect, regardless of (i) any investigation made by or
on behalf of the Company, the Guarantors, any of their respective officers or
directors, the Initial Purchaser or any other person
45
<PAGE>
referred to in Section 9 hereof and (ii) delivery of and payment for the
Securities. The respective agreements, covenants, indemnities and other
statements set forth in Sections 6, 9 and 15 hereof shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement.
11. Termination. (a) This Agreement may be terminated in the
sole discretion of the Initial Purchaser by notice to the Company given prior
to the Closing Date in the event that the Company, or any Guarantor shall
have failed, refused or been unable to perform all obligations and satisfy
all conditions on their respective part to be performed or satisfied
hereunder at or prior thereto or, if at or prior to the Closing any of the
following shall have occurred:
(i) either the Company, or any Guarantor shall have
sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity,
whether or not covered by insurance, or from any strike, labor dispute,
slow down or work stoppage or any legal or governmental proceeding, which
loss or interference has had, has or could be reasonably likely to have a
Material Adverse Effect, or there shall have been, in the sole judgment
of the Initial Purchaser, any event or development that, individually or
in the aggregate, has or could be reasonably likely to have a Material
Adverse Effect (including without limitation a change in control of the
Company or the Guarantors), except in each case as described in the Final
Memorandum (exclusive of any amendment or supplement thereto);
(ii) there shall have occurred any change, or any development
involving a prospective change, in the condition, financial or otherwise,
or in the earnings, business or operations, of the Company and the
Guarantors taken as a whole, from that set forth in the Final Memorandum
that is material and adverse and that makes it, in the Initial
Purchaser's judgment, impracticable to market the Securities on the terms
and in the manner contemplated in the Final Memorandum;
(iii) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York
Stock Exchange, the American Stock Exchange or the National Association
of Securities Dealers, Inc. or the setting of minimum prices for trading
on such exchange or market shall have occurred or trading of any
securities of the Company or the Guarantors shall have been suspended on
any exchange or in any over-the-counter market;
(iv) a banking moratorium shall have been declared by New
York or United States authorities;
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<PAGE>
(v) there shall have been (A) an outbreak or escalation of
hostilities between the United States and any foreign power, (B) an
outbreak or escalation of any other insurrection or armed conflict
involving the United States, (C) any material change in the financial
markets of the United States or (D) any other national or international
calamity or emergency which, in the case of (A), (B), (C) or (D) above
and in the sole judgment of the Initial Purchaser, makes it impracticable
or inadvisable to proceed with the public offering or the delivery of the
Securities as contemplated by the Final Memorandum;
(vi) the taking of any action by any federal, state or local
government or agency in respect of its monetary or fiscal affairs that
has a material adverse effect on the financial markets in the United
States, and would, in the sole judgment of the Initial Purchaser, make it
impracticable or inadvisable to market the Securities;
(vii) the proposal, enactment, publication, decree, or other
promulgation of any federal or state statute, regulation, rule or order
of any court or other governmental authority which, in the sole judgment
of the Initial Purchaser, would have a Material Adverse Effect;
(viii) any securities of the Company shall have been downgraded
or placed on any "watch list" for possible downgrading by any nationally
recognized statistical rating organization; or
(ix) it shall have become impractical, in the sole judgment
of the Initial Purchaser, for the Company to consummate the offering of
the Units, on the terms described in the Final Memorandum.
(b) Termination of this Agreement pursuant to this Section 11 shall
be without liability of any party to any other party except as provided in
Sections 6 and 10 hereof.
12. Information Supplied by the Initial Purchaser. The statements
set forth in the "stabilization legend" on the inside front cover page of each
Memorandum and the fifth through ninth paragraphs under the heading "Plan of
Distribution" in each Memorandum (to the extent any such statements relate to
the Initial Purchaser) constitute as of the date hereof the only information
furnished by the Initial Purchaser to the Company for the purposes of Sections
2(a), 7(a), 7(b) and 9 hereof.
13. Notices. All communications hereunder shall be in writing and,
if sent to the Initial Purchaser, shall be mailed or delivered to (i) NatWest
Capital Markets Limited, 135 Bishopgate, London, England, Attention: Roger
Hoit; with a copy to White & Case, 1155 Avenue of the Americas, New York, NY
10036, Attention: Timothy B.
47
<PAGE>
Goodell, Esq.; if sent to the Company, shall be mailed or delivered to the
Company at Brill Media Company, LLC, 420 N.W. Fifth Street, Suite 3-B, P.O.
Box 3353, Evansville, Indiana 47732, Attention: Alan R. Brill, with a copy
to Thompson & McMullan, 100 Shockoe Slip, Richmond, VA 2329-4140, Attention:
Charles W. Laughlin, Esq.
All such notices and communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; and one business day
after being timely delivered to a next-day air courier.
14. Successors. This Agreement shall inure to the benefit of and be
binding upon the Initial Purchaser, the Company, the Guarantors and their
respective successors and legal representatives, and nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in respect of this
Agreement, or any provisions herein contained; this Agreement and all conditions
and provisions hereof being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person except that (i)
the indemnities of the Company and the Guarantors contained in Section 9 of this
Agreement shall also be for the benefit of any person or persons who control the
Initial Purchaser within the meaning of Section 15 of the Act or Section 20 of
the Exchange Act and (ii) the indemnities of the Initial Purchaser contained in
Section 9 of this Agreement shall also be for the benefit of the directors of
the Company and officers and any person or persons who control the Company
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act.
No purchaser of Units from the Initial Purchaser will be deemed a successor
because of such purchase.
15. APPLICABLE LAW. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN, WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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If the foregoing correctly sets forth our understanding, please
indicate your acceptance thereof in the space provided below for that
purpose, whereupon this letter shall constitute a binding agreement among the
Company, the Guarantors and the Initial Purchaser.
Very truly yours,
BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its Manager
By_________________________
Name: Alan R. Brill
Title:President
BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation
By____________________________
Name: Alan R. Brill
Title: President
<PAGE>
BMC HOLDINGS, LLC, a Virginia
Limited Liability Company
BY: BRILL MEDIA COMPANY, LLC, its
Manager
BY: BRILL MEDIA MANAGEMENT, INC.,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
NCR II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
NORTHLAND BROADCASTING, LLC,
a Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation its
Manager
By:______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
CADILLAC NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC. a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P.
By: CENTRAL MICHIGAN
DISTRIBUTION CO., INC. its General
Partner
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
GLADWIN NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
<PAGE>
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a
Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, its
Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:____________________
Name: Alan R. Brill
Title: President
<PAGE>
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
HURON HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation, its
Manager
By:____________________
Name: Alan R. Brill
Title: President
<PAGE>
NORTHERN COLORADO HOLDINGS,
LLC
By: BMC HOLDINGS, LLC, a
Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC.
a Virginia Corporation, its Manager
By:___________________________
Alan R. Brill, President
<PAGE>
NCR III, LLC, a Virginia Limited Liability
Company
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: Brill Media Company, LLC,
a Virginia Limited Liability Company,
its Manager
By: Brill Media Management, Inc., a
Virginia Limited Liability Company
By:_____________________
Name: Alan R. Brill
Title: President
<PAGE>
NCH II, LLC, a Virginia Limited Liability
Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
<PAGE>
NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:_____________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia Corporation
By:___________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:_____________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
<PAGE>
By:____________________
Name: Alan R. Brill
Title: President
<PAGE>
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written.
NATWEST CAPITAL MARKETS LIMITED
By:_____________________________
Name:
Title:
<PAGE>
SCHEDULE 1
Principal
Amount of
Initial Purchaser Notes
- ------------------ ------
NatWest Capital Markets Limited....... $105,000,000
Number
of
Units
-----
NatWest Capital Markets Limited....... 105,000
<PAGE>
SCHEDULE 2
GUARANTORS
Name
1. Holdings
2. Reading Radio, Inc.
3. Tri-State Broadcasting, Inc.
4. Northern Colorado Radio, Inc.
5. NCR II, Inc.
6. Central Missouri Broadcasting, Inc.
7. CMB II, Inc.
8. Northland Broadcasting, LLC
9. NB II, Inc.
10. Central Michigan Newspapers, Inc.
11. Cadillac Newspapers, Inc.
12. CMN Associated Publications, Inc.
13. Central Michigan Distribution Co., L.P.
14. Central Michigan Distribution Co., Inc.
15. Gladwin Newspapers, Inc.
16. Graph Ads Printing, Inc.
17. Midland Buyer's Guide, Inc.
18. St. Johns Newspapers, Inc.
19. Huron P.S., LLC
20. Huron Newspapers, LLC
21. Huron Holdings, LLC
22. Northern Colorado Holdings, LLC
23. NCR III, LLC
24. NCH II, LLC
25. Northland Holdings, LLC
26. CMN Holdings, Inc.
27. Brill Radio Inc.
28. Brill Newspapers, Inc.
<PAGE>
SCHEDULE 3
Northland Broadcasting, LLC
Huron P.S., LLC
Huron Newspapers, LLC
Huron Holdings, LLC
Northern Colorado Holdings, LLC
NCR III, LLC
NCH II, LLC
Northland Holdings, LLC
<PAGE>
Execution Copy
-----------------------------
-----------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of December 30, 1997
by and among
BRILL MEDIA COMPANY, LLC,
BRILL MEDIA MANAGEMENT, INC.,
THE SUBSIDIARY GUARANTORS
named herein
and
NATWEST CAPITAL MARKETS LIMITED
as Initial Purchaser
-----------------------------
-----------------------------
$105,000,000
12% SENIOR NOTES DUE 2007
<PAGE>
TABLE OF CONTENTS
Page
1. Definitions ........................................................... 1
2. Exchange Offer ........................................................ 5
3. Shelf Registration .................................................... 8
4. Additional Interest ................................................... 10
5. Registration Procedures ............................................... 12
6. Registration Expenses ................................................. 21
7. Indemnification ....................................................... 22
8. Rules 144 and 144A .................................................... 26
9. Underwritten Registrations ............................................ 26
10. Miscellaneous ......................................................... 27
(a) No Inconsistent Agreements ....................................... 27
(b) Adjustments Affecting Registrable Notes .......................... 27
(c) Amendments and Waivers ........................................... 27
(d) Notices .......................................................... 27
(e) Successors and Assigns ........................................... 29
(f) Counterparts ..................................................... 29
(g) Headings ......................................................... 29
(h) Governing Law .................................................... 29
(i) Severability ..................................................... 29
(j) Notes Held by the Issuers or their Affiliates .................... 29
(k) Third Party Beneficiaries ........................................ 30
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement (the "Agreement") is dated as of
December 30, 1997, by and among Brill Media Company, LLC, a Virginia limited
liability company ("BMC"), Brill Media Management, Inc., a Virginia
corporation ("Media" and, collectively with BMC, the "Company"), the
subsidiary guarantors of the Company's obligations hereunder as listed on
Schedule A hereto (collectively, the "Guarantors"), and NatWest Capital
Markets Limited (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated December 22, 1997, among the Company, the Guarantors and the
Initial Purchaser (the "Purchase Agreement"), which provides for the sale by
the Company to the Initial Purchaser of $105,000,000 aggregate principal
amount of the Company's 12% Senior Notes due 2007 (the "Notes"), which Notes
will be guaranteed by the Guarantors. The Company and the Guarantors are
collectively referred to herein as the "Issuers." In order to induce the
Initial Purchaser to enter into the Purchase Agreement, the Issuers have
agreed to provide the registration rights set forth in this Agreement for the
benefit of the Initial Purchaser and its direct and indirect transferees.
The execution and delivery of this Agreement is a condition to the obligation
of the Initial Purchaser to purchase the Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: Has the meaning provided in Section 4(a)
hereof.
Advice: Has the meaning provided in the last paragraph of Section
5 hereof.
Agreement: Has the meaning provided in the first introductory
paragraph hereto.
Applicable Period: Has the meaning provided in Section 2(b) hereof.
Closing Date: Has the meaning provided in the Purchase Agreement.
<PAGE>
Company: Has the meaning provided in the first introductory
paragraph hereto.
Effectiveness Date: The 90th day after the Filing Date.
Effectiveness Period: Has the meaning provided in Section 3(a)
hereof.
Event Date: Has the meaning provided in Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
Exchange Notes: Has the meaning provided in Section 2(a) hereof.
Exchange Offer: Has the meaning provided in Section 2(a) hereof.
Exchange Registration Statement: Has the meaning provided in
Section 2(a) hereof.
Filing Date: The 60th day after the Issue Date.
Guarantors: Has the meaning provided in the first introductory
paragraph hereto.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: Has the meaning provided in Section 7(c)
hereof.
Indemnifying Person: Has the meaning provided in Section 7(c)
hereof.
Indenture: The Indenture, dated as of December 30, 1997 between
the Company, the Guarantors and United States Trust Company of New York, as
trustee, pursuant to which the Notes are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchaser: Has the meaning provided in the first
introductory paragraph hereto.
Inspectors: Has the meaning provided in Section 5(o) hereof.
2
<PAGE>
Issue Date: The date on which the original Notes were sold to the
Initial Purchaser pursuant to the Purchase Agreement.
Issuers: Has the meaning provided in the second introductory
paragraph hereto.
NASD: Has the meaning provided in Section 5(s) hereof.
Notes: Has the meaning provided in the second introductory
paragraph hereto.
Participant: Has the meaning provided in Section 7(a) hereof.
Participating Broker-Dealer: Has the meaning provided in Section
2(b) hereof.
Persons: An individual, trustee, corporation, partnership, limited
liability company, joint stock company, trust, unincorporated association,
union, business association, firm or other legal entity.
Private Exchange: Has the meaning provided in Section 2(b) hereof.
Private Exchange Notes: Has the meaning provided in Section 2(b)
hereof.
Prospectus: The prospectus included in any Registration Statement
(including, without limitation, any prospectus subject to completion and a
prospectus that includes any information previously omitted from a prospectus
filed as part of an effective registration statement in reliance upon Rule
430A promulgated under the Securities Act), as amended or supplemented by any
prospectus supplement, and all other amendments and supplements to the
Prospectus, with respect to the terms of the offering of any portion of the
Registrable Notes covered by such Registration Statement including
post-effective amendments, and all material incorporated by reference or
deemed to be incorporated by reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second
introductory paragraph hereto.
Records: Has the meaning provided in Section 5(o) hereof.
3
<PAGE>
Registrable Notes: Each Note upon original issuance of the Notes
and at all times subsequent thereto and each Private Exchange Note upon
original issuance thereof and at all times subsequent thereto, until in the
case of any such Note or Private Exchange Note, as the case may be, the
earliest to occur of (i) a Registration Statement covering such Note or
Private Exchange Note, as the case may be, has been declared effective by the
SEC and such Note (unless such Note was not tendered for exchange by the
Holder thereof), or Private Exchange Note, as the case may be, has been
disposed of in accordance with such effective Registration Statement, (ii)
such Note or Private Exchange Note, as the case may be, is, or may be, sold
in compliance with Rule 144, or (iii) such Note or Private Exchange Note, as
the case may be, ceases to be outstanding for purposes of the Indenture.
Registration Statement: Any registration statement of the Company,
including, but not limited to, the Exchange Registration Statement, that
covers any of the Registrable Notes pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and
sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144) or regulation hereafter adopted by the SEC.
Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: Has the meaning provided in Section 2(c) hereof.
4
<PAGE>
Shelf Registration: Has the meaning provided in Section 3(a)
hereof.
Shelf Registration Statement: shall mean a "shelf" registration
statement of the Company and the Guarantors which covers all of the
Registrable Notes on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee(s): The trustee under the Indenture and, if existent, the
trustee under any indenture governing the Exchange Notes and Private Exchange
Notes (if any).
Underwritten registration or underwritten offering: A registration
in which securities of one or more of the Issuers are sold to an underwriter
for reoffering to the public.
2. Exchange Offer
(a) Each of the Issuers agrees to file with the SEC no later than
the Filing Date an offer to exchange (the "Exchange Offer") any and all of
the Notes for a like aggregate principal amount of debt securities of the
Company, guaranteed by the Guarantors, which are identical in all material
respects to the Notes (the "Exchange Notes") (and which are entitled to the
benefits of the Indenture or a trust indenture that is identical in all
material respects to the Indenture (other than such changes to the Indenture
or any such identical trust indenture as are necessary to comply with any
requirements of the SEC to effect or maintain the qualification thereof under
the TIA) and which, in either case, has been qualified under the TIA), except
that (i) the Exchange Notes shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain
no restrictive legend thereon and (ii) the Exchange Notes shall not be
entitled to any further registration rights hereunder or to any Additional
Interest. The Exchange Offer shall be registered under the Securities Act on
the appropriate form (the "Exchange Registration Statement") and shall comply
with all applicable tender offer rules and regulations under the Exchange
Act. The Issuers agree to use their reasonable best efforts to (x) cause the
Exchange Registration Statement to be declared effective under the Securities
Act no later than the 90th day after the Filing Date; (y) keep the Exchange
Offer open for at least 20 business days (or longer if required by applicable
law) after the date that notice of the Exchange Offer is mailed to the
Holders; and (z) consummate the Exchange Offer on or prior to the 120th day
following the Filing Date. If after such Exchange Registration
5
<PAGE>
Statement is declared effective by the SEC, the Exchange Offer or the
issuance of the Exchange Notes thereunder is interfered with by any stop
order, injunction or other order or requirement of the SEC or any other
governmental agency or court, such Exchange Registration Statement shall be
deemed not to have become effective for purposes of this Agreement until such
stop order, injunction or other order or requirement is no longer in effect.
Each Holder who participates in the Exchange Offer will be required to
represent that any Exchange Notes received by it will be acquired in the
ordinary course of its business, that at the time of the consummation of the
Exchange Offer such Holder will have no arrangement or understanding with any
Person to participate in the distribution of the Exchange Notes in violation
of the provisions of the Securities Act, that such Holder is not an
"affiliate" of any of the Issuers within the meaning of the Securities Act
and that such Holder is not acting on behalf of any person who could not
truthfully make the foregoing representations. Upon consummation of the
Exchange Offer in accordance with this Section 2, the Issuers shall have no
further obligation to register Registrable Notes (other than Private Exchange
Notes pursuant to Section 3 hereof). No securities other than the Exchange
Notes shall be included in the Exchange Registration Statement.
(b) The Issuers shall include within the Prospectus contained in
the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, which shall
contain a summary statement of the positions taken or policies made by the
Staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of Exchange Notes received by such broker-dealer in the
Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
policies have been publicly disseminated by the Staff of the SEC or such
positions or policies, in the judgment of the Initial Purchaser, represent
the prevailing views of the Staff of the SEC. Such "Plan of Distribution"
section shall also expressly permit the use of the Prospectus by all Persons
subject to the prospectus delivery requirements of the Securities Act,
including all Participating Broker-Dealers, and include a statement
describing the means by which Participating Broker-Dealers may resell the
Exchange Notes.
Each of the Issuers shall use its reasonable best efforts to keep
the Exchange Registration Statement effective and to amend and supplement the
Prospectus contained therein, in order to permit such Prospectus to be
lawfully delivered by any Participating Broker-Dealer subject to the
prospectus delivery requirements of the Securities Act for such period of
time as is necessary to comply with applicable law in connection with any
resale of the Exchange Notes; provided, however, that such period shall not
exceed 180 days after the consummation of the Exchange Offer (or such longer
period if extended pursuant to the last paragraph of Section 5 hereof) (the
"Applicable Period").
6
<PAGE>
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Notes acquired by it and having the status of an unsold
allotment in the initial distribution, the Issuers shall, upon the request of
the Initial Purchaser, simultaneously with the delivery of the Exchange Notes
in the Exchange Offer issue and deliver to the Initial Purchaser in exchange
(the "Private Exchange") for such Notes held by the Initial Purchaser a like
principal amount of debt securities of the Company, guaranteed by the
Guarantors, that are identical in all material respects to the Exchange Notes
(the "Private Exchange Notes") (and which are issued pursuant to the same
Indenture as the Exchange Notes) except for the placement of a restrictive
legend on such Private Exchange Notes. The Private Exchange Notes shall if
permissible bear the same CUSIP number as the Exchange Notes.
Interest on the Exchange Notes and the Private Exchange Notes will
accrue from the last interest payment date on which interest was paid on the
Notes surrendered in exchange therefor or, if no interest has been paid on
the Notes, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming part of the
Exchange Registration Statement, together with an appropriate letter of
transmittal and related documents;
(2) utilize the services of a depositary for the Exchange Offer
with an address in the Borough of Manhattan, The City of New York;
(3) permit Holders to withdraw tendered Notes at any time prior to
the close of business, New York time, on the last business day on which
the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all applicable
laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or the
Private Exchange, as the case may be, the Issuers shall:
(1) accept for exchange all Notes tendered and not validly withdrawn
pursuant to the Exchange Offer or the Private Exchange;
7
<PAGE>
(2) deliver to the Trustee for cancellation all Notes so accepted
for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to each
Holder of Notes, Exchange Notes or Private Exchange Notes, as the case may
be, equal in principal amount to the Notes of such Holder so accepted for
exchange.
The Exchange Notes and the Private Exchange Notes are to be issued
under (i) the Indenture or (ii) an indenture identical in all material
respects to the Indenture, which in either event shall provide that (1) the
Exchange Notes shall not be subject to the transfer restrictions set forth in
the Indenture and (2) the Private Exchange Notes shall be subject to the
transfer restrictions set forth in the Indenture. The Indenture or such
indenture shall provide that the Exchange Notes, the Private Exchange Notes
and the Notes shall vote and consent together on all matters as one class and
that none of the Exchange Notes, the Private Exchange Notes or the Notes will
have the right to vote or consent as a separate class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the Staff of the SEC, the Issuers are not
permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 120 days after the Filing Date, (iii) any holder of
Private Exchange Notes so requests at any time after the consummation of the
Private Exchange, or (iv) if any Holder (other than the Initial Purchaser) is
not eligible to participate in the Exchange Offer or such Holder does not
receive Exchange Notes on the date of the exchange that may be sold without
restriction under the state and federal securities laws (other than due
solely to the status of such Holder as an affiliate of any of the Issuers
within the meaning of the Securities Act), then the Issuers shall promptly
deliver to the Holders and the Trustee written notice thereof (the "Shelf
Notice") and, in the case of clauses (i) and (ii) above, to all Holders, in
the case of clause (iii) above, to the Holders of the Private Exchange Notes
and, in the case of clause (iv) above, to the affected Holder, and shall as
promptly as reasonably practicable file a Shelf Registration pursuant to
Section 3 hereof, provided, however, that in the case of clause (iii) above
such holder shall pay all reasonable registration expenses of the Company as
described in Section 6 hereof in connection with such Shelf Registration of
such Private Exchange Notes.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c)
hereof, then:
(a) Shelf Registration. The Issuers shall as promptly as
reasonably practicable file with the SEC a Registration Statement for an
offering to be made on a
8
<PAGE>
continuous basis pursuant to Rule 415 covering all of the Registrable Notes
(the "Shelf Registration"). If the Issuers shall not have yet filed an
Exchange Registration Statement, each of the Issuers shall use its best
efforts to file with the SEC the Shelf Registration on or prior to the Filing
Date. The Shelf Registration shall be on Form S-1 or another appropriate
form permitting registration of such Registrable Notes for resale by Holders
in the manner or manners designated by them (including, without limitation,
one or more underwritten offerings). The Issuers shall not permit any
securities other than the Registrable Notes to be included in the Shelf
Registration.
Each of the Issuers shall use its reasonable best efforts to cause
the Shelf Registration to be declared effective under the Securities Act by
the 180th day after the Issue Date and to keep the Shelf Registration
continuously effective under the Securities Act until the date which is two
years from the Issue Date, subject to extension pursuant to the last
paragraph of Section 5 hereof, or such shorter period ending when all
Registrable Notes covered by the Shelf Registration have been sold in the
manner set forth and as contemplated in the Shelf Registration or when the
Notes become eligible for transfer without volume restrictions pursuant to
Rule 144 under the Securities Act (the "Effectiveness Period").
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), each of the Issuers shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested for such purpose by the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration
Statement or by any underwriter of such Registrable Notes.
4. Additional Interest
(a) The Issuers and the Initial Purchaser agree that the Holders
of Registrable Notes will suffer damages if the Issuers fail to fulfill their
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision.
Accordingly, the Issuers agree to pay, as the sole liquidated damages for
such failure, additional interest on the Notes ("Additional Interest") under
the circumstances and to the extent set forth below:
9
<PAGE>
(i) if neither the Exchange Registration Statement nor the Shelf
Registration has been filed on or prior to the Filing Date, then,
commencing on the 61st day after the Issue Date, Additional Interest
shall accrue on the Notes over and above the stated interest at a rate
of 0.50% per annum for the first 30 days commencing on the 61st day
after the Issue Date, such Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each subsequent 30-day
period;
(ii) if neither the Exchange Registration Statement nor the Shelf
Registration is declared effective by the SEC on or prior to the
Effectiveness Date, then, commencing on the 91st day after the Filing
Date, Additional Interest shall accrue on the Notes included or which
should have been included in such Registration Statement over and above
the stated interest at a rate of 0.50% per annum for the first 30 days
commencing on the 91st day after the Filing Date, such Additional
Interest rate increasing by an additional 0.50% per annum at the
beginning of each subsequent 30-day period; and
(iii) if (A) the Issuers have not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange
Offer on or prior to the 120th day after the Filing Date or (B) the
Exchange Registration Statement ceases to be effective at any time prior
to the time that the Exchange Offer is consummated or (C) if applicable,
the Shelf Registration has been declared effective and such Shelf
Registration ceases to be effective at any time during the Effectiveness
Period, then Additional Interest shall accrue (over and above any
interest otherwise payable on such Notes) at a rate of 0.50% per annum
for the first 30 days commencing on (x) the 121st day after the Filing
Date with respect to the Notes validly tendered and not exchanged by the
Company, in the case of (A) above, or (y) the day the Exchange
Registration Statement ceases to be effective in the case of (B) above,
or (z) the day such Shelf Registration ceases to be effective in the
case of (C) above, such Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each such subsequent
30-day period;
provided, however, that in any event the Additional Interest rate on any
affected Notes may not exceed at any one time in the aggregate 1.5% per annum;
and provided, further, that (1) upon the filing of the Exchange Registration
Statement or a Shelf Registration (in the case of clause (i) of this Section
4(a)), (2) upon the effectiveness of the Exchange Registration Statement or the
Shelf Registration (in the case of clause (ii) of this Section 4(a)), or (3)
upon the exchange of Exchange Notes for all Notes tendered (in the case of
clause (iii)(A) of this Section 4(a)), or upon
10
<PAGE>
the effectiveness of the Exchange Registration Statement which had ceased to
remain effective (in the case of (iii)(B) of this Section 4(a)), or upon the
effectiveness of the Shelf Registration which had ceased to remain effective
(in the case of (iii)(C) of this Section 4(a)), Additional Interest on the
affected Notes as a result of such clause (or the relevant subclause
thereof), as the case may be, shall cease to accrue.
(b) The Issuers shall notify the Trustee within one business day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). The Company
shall pay the Additional Interest due on the transfer restricted Notes by
depositing with the paying agent (which shall not be the Company for these
purposes) for the transfer restricted Notes, in trust, for the benefit of the
holders thereof, prior to 11:00 A.M. on the next interest payment date
specified by the Indenture (or such other indenture), sums sufficient to pay
the Additional Interest then due. Any amounts of Additional Interest due
pursuant to clauses (a)(i), (a)(ii) or (a)(iii) of this Section 4 will be
payable to the Holders of affected Notes in cash semi-annually on each
interest payment date specified by the Indenture (or such other indenture) to
the record holders entitled to receive the interest payment to be made on
such date, commencing with the first such date occurring after any such
Additional Interest commences to accrue. The amount of Additional Interest
will be determined by multiplying the applicable Additional Interest rate by
the principal amount of the affected Registrable Notes of such Holders,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months and, in the case of
a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Issuers shall effect such
registration(s) to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by
the Issuers hereunder, the Issuers shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use their reasonable best efforts to cause
each such Registration Statement to become effective and remain
effective as provided herein; provided, however, that, if (1) such
filing is pursuant to Section 3 hereof, or (2) a Prospectus contained in
an Exchange Registration Statement filed pursuant to Section 2 hereof is
required to be delivered under the Securities Act by any Participating
Broker-Dealer who seeks to sell Exchange Notes during the Applicable
Period, before filing any Registration Statement or Prospectus or any
amendments or supplements thereto, the Issuers
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shall, if requested in writing, furnish to and afford the Holders of the
Registrable Notes covered by such Registration Statement or each such
Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, a reasonable opportunity to review copies
of all such documents (including copies of any documents to be
incorporated by reference therein and all exhibits thereto) proposed to
be filed (in each case at least three business days prior to such
filing). The Issuers shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect of which
the Holders must be afforded an opportunity to review prior to the
filing of such document under the immediately preceding sentence, if the
Holders of a majority in aggregate principal amount of the Registrable
Notes covered by such Registration Statement, or any such Participating
Broker-Dealer, as the case may be, their counsel, or the managing
underwriters, if any, shall reasonably object thereto in writing.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to keep
such Registration Statement continuously effective for the Effectiveness
Period or the Applicable Period or until consummation of the Exchange
Offer, as the case may be; cause the related Prospectus to be
supplemented by any Prospectus supplement required by applicable law,
and as so supplemented to be filed pursuant to Rule 424 (or any similar
provisions then in force) promulgated under the Securities Act; and
comply with the provisions of the Securities Act and the Exchange Act
applicable to it with respect to the disposition of all securities
covered by such Registration Statement as so amended or in such
Prospectus as so supplemented and with respect to the subsequent resale
of any securities being sold by a Participating Broker-Dealer covered by
any such Prospectus; the Company shall be deemed not to have used its
best efforts to keep a Registration Statement effective during the
Applicable Period if it voluntarily takes any action that would result
in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Exchange Notes not being
able to sell such Registrable Notes or such Exchange Notes during that
period unless such action is required by applicable law or unless the
Company complies with this Agreement, including without limitation, the
provisions of paragraph 5(k) hereof and the last paragraph of this
Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, notify the selling
Holders of Registrable Notes, or each such Participating
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Broker-Dealer, as the case may be, their counsel and the managing
underwriters, if any, promptly (but in any event within two business
days), and confirm such notice in writing, (i) when a Prospectus or any
Prospectus supplement or post-effective amendment has been filed, and,
with respect to a Registration Statement or any post-effective
amendment, when the same has become effective under the Securities Act
(including in such notice a written statement that any Holder may, upon
request, obtain, at the sole expense of the Issuers, one conformed copy
of such Registration Statement or post-effective amendment including
financial statements and schedules, documents incorporated or deemed to
be incorporated by reference and exhibits), (ii) of the issuance by the
SEC of any stop order suspending the effectiveness of a Registration
Statement or of any order preventing or suspending the use of any
preliminary prospectus or the initiation of any proceedings for that
purpose, (iii) if at any time when a Prospectus is required by the
Securities Act to be delivered in connection with sales of the
Registrable Notes or resales of Exchange Notes by Participating
Broker-Dealers the representations and warranties of the Issuers
contained in any agreement (including any underwriting agreement),
contemplated by Section 5(n) hereof cease to be true and correct, (iv)
of the receipt by the Issuers of any notification with respect to the
suspension of the qualification or exemption from qualification of a
Registration Statement or any of the Registrable Notes or the Exchange
Notes to be sold by any Participating Broker-Dealer for offer or sale in
any jurisdiction, or the initiation or threatening of any proceeding for
such purpose, (v) of the happening of any event, the existence of any
condition or any information becoming known that makes any statement
made in such Registration Statement or related Prospectus or any
document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires the making of any
changes in or amendments or supplements to such Registration Statement,
Prospectus or documents so that, in the case of the Registration
Statement, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and that in the
case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (vi) of
the determination by the Issuers that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any order
preventing or suspending the use of a Prospectus or suspending the
qualification (or exemption from qualification) of any of the
Registrable Notes or the Exchange Notes for sale
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in any jurisdiction, and, if any such order is issued, to use its best
efforts to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3 hereof
and if requested by the managing underwriter or underwriters (if any),
or the Holders of a majority in aggregate principal amount of the
Registrable Notes being sold in connection with an underwritten
offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter or
underwriters (if any), such Holders, or counsel for any of them
reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Issuers have received notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to
such Registration Statement.
(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, furnish to each
selling Holder of Registrable Notes and to each such Participating
Broker-Dealer who so requests and to counsel and each managing
underwriter, if any, at the sole expense of the Issuers, one conformed
copy of the Registration Statement or Registration Statements and each
post-effective amendment thereto, including financial statements and
schedules, and, if requested, all documents incorporated or deemed to be
incorporated therein by reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be delivered
under the Securities Act by any Participating Broker-Dealer who seeks to
sell Exchange Notes during the Applicable Period, deliver to each
selling Holder of Registrable Notes, or each such Participating
Broker-Dealer, as the case may be, their respective counsel, and the
underwriters, if any, at the sole expense of the Issuers, as many copies
of the Prospectus or Prospectuses (including each form of preliminary
prospectus) and each amendment or supplement thereto and any documents
incorporated by reference therein as such Persons may reasonably
request; and, subject to the last paragraph of this Section 5, each
Issuer hereby consents to the use of such Prospectus and each amendment
or supplement thereto by each of the selling Holders of Registrable
Notes or each such Participating Broker-Dealer, as the case-
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may be, and the underwriters or agents, if any, and dealers (if any), in
connection with the offering and sale of the Registrable Notes covered
by, or the sale by Participating Broker-Dealers of the Exchange Notes
pursuant to, such Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell Exchange
Notes during the Applicable Period, to use its best efforts to register
or qualify such Registrable Notes (and to cooperate with selling Holders
of Registrable Notes or each such Participating Broker-Dealer, as the
case may be, the managing underwriter or underwriters, if any, and their
respective counsel in connection with the registration or qualification
(or exemption from such registration or qualification) of such
Registrable Notes) for offer and sale under the securities or Blue Sky
laws of such jurisdictions within the United States as any selling
Holder, Participating Broker-Dealer, or the managing underwriter or
underwriters reasonably request in writing; provided, however, that
where Exchange Notes held by Participating Broker-Dealers or Registrable
Notes are offered other than through an underwritten offering, the
Issuers agree to cause their counsel to perform Blue Sky investigations
and file registrations and qualifications required to be filed pursuant
to this Section 5(h); keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration
Statement is required to be kept effective and do any and all other acts
or things reasonably necessary or advisable to enable the disposition in
such jurisdictions of the Exchange Notes held by Participating
Broker-Dealers or the Registrable Notes covered by the applicable
Registration Statement; provided, however, that none of the Issuers
shall be required to (A) qualify generally to do business in any
jurisdiction where it is not then so qualified, (B) take any action that
would subject it to general service of process in any such jurisdiction
where it is not then so subject or (C) subject itself to taxation in
excess of a nominal dollar amount in any such jurisdiction where it is
not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3 hereof,
cooperate with the selling Holders of Registrable Notes and the managing
underwriter or underwriters, if any, to facilitate the timely
preparation and delivery of certificates representing Registrable Notes
to be sold, which certificates shall not bear any restrictive legends
and shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Registrable Notes to be in such denominations
and registered in such names as the managing underwriter or
underwriters, if any, or Holders may reasonably request.
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(j) Use its best efforts to cause the Registrable Notes covered by
the Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary to enable the
Holders thereof or the underwriter or underwriters, if any, to dispose of
such Registrable Notes, except as may be required solely as a consequence
of the nature of a selling Holder's business, in which case each of the
Issuers will cooperate in all reasonable respects with the filing of such
Registration Statement and the granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the Applicable Period, upon the occurrence of any
event contemplated by paragraph 5(c)(v) or 5(c)(vi) hereof, as promptly as
practicable prepare and (subject to Section 5(a) hereof) file with the SEC,
at the sole expense of the Issuers, a supplement or post-effective
amendment to the Registration Statement or a supplement to the related
Prospectus or any document incorporated or deemed to be incorporated
therein by reference, or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Exchange Notes to whom such
Prospectus will be delivered by a Participating Broker-Dealer, any such
Prospectus will not contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.
(l) Use its best efforts to cause the Registrable Notes covered by a
Registration Statement or the Exchange Notes, as the case may be, to be
rated with the appropriate rating agencies, if so requested by the Holders
of a majority in aggregate principal amount of Registrable Notes covered by
such Registration Statement or the Exchange Notes, as the case may be, or
the managing underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration Statement
relating to the Registrable Notes, (i) provide the Trustee with
certificates for the Registrable Notes or Exchange Notes, as the case may
be, in a form eligible for deposit with The Depositary Trust Company and
(ii) provide a CUSIP number for the Registrable Notes or Exchange Notes, as
the case may be.
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(n) In connection with any underwritten offering initiated by the
Company of Registrable Notes pursuant to a Shelf Registration, enter into
an underwriting agreement as is customary in underwritten offerings of debt
securities similar to the Notes and take all such other actions as are
reasonably requested by the managing underwriter or underwriters in order
to facilitate the registration or the disposition of such Registrable Notes
and, in such connection, (i) make such representations and warranties to,
and covenants with, the underwriters with respect to the business of the
Issuers and their respective subsidiaries and the Registration Statement,
Prospectus and documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, as are customarily made by Issuers to
underwriters in underwritten offerings of debt securities similar to the
Notes, and confirm the same in writing if and when requested; (ii) obtain
the written opinion of counsel to the Issuers and written updates thereof
in form, scope and substance reasonably satisfactory to the managing
underwriter or underwriters, addressed to the underwriters covering the
matters customarily covered in opinions requested in underwritten offerings
of debt similar to the Notes and such other matters as may be reasonably
requested by the managing underwriter or underwriters; (iii) obtain "cold
comfort" letters and updates thereof in form, scope and substance
reasonably satisfactory to the managing underwriter or underwriters from
the independent certified public accountants of the Issuers (and, if
necessary, any other independent certified public accountants of any
subsidiary of any of the Issuers or of any business acquired by any of the
Issuers for which financial statements and financial data are, or are
required to be, included or incorporated by reference in the Registration
Statement), addressed to each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in
"cold comfort" letters in connection with underwritten offerings of debt
similar to the Notes and such other matters as reasonably requested by the
managing underwriter or underwriters; and (iv) if an underwriting agreement
is entered into, the same shall contain indemnification provisions and
procedures no less favorable than those set forth in Section 7 hereof (or
such other provisions and procedures acceptable to Holders of a majority in
aggregate principal amount of Registrable Notes covered by such
Registration Statement and the managing underwriter or underwriters or
agents) with respect to all parties to be indemnified pursuant to said
Section. The above shall be done at each closing under such underwriting
agreement, or as and to the extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration Statement
filed pursuant to Section 2 hereof is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell
Exchange Notes during the
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Applicable Period, make available for inspection by any selling Holder
of such Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in any
such disposition of Registrable Notes, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Issuers and their
respective subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Issuers and their respective subsidiaries to make
available for inspection all information reasonably requested by any
such Inspector in connection with such Registration Statement. Records
which any of the Issuers determine, in good faith, to be confidential
and any Records which it notifies the Inspectors are confidential shall
not be disclosed by the Inspectors unless (i) the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement, (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent
jurisdiction, (iii) disclosure of such information is, in the opinion of
counsel (a copy of which shall be delivered to the Issuers) for any
Inspector, necessary or advisable in connection with any action, claim,
suit or proceeding, directly or indirectly, involving or potentially
involving such Inspector and arising out of, based upon, relating to, or
involving this Agreement, or any transactions contemplated hereby or
arising hereunder, or (iv) the information in such Records has been made
generally available to the public. Each selling Holder of such
Registrable Securities and each such Participating Broker-Dealer will be
required to agree that information obtained by it as a result of such
inspections shall be deemed confidential and shall not be used by it as
the basis for any market transactions in the securities of the Issuers
unless and until such information is generally available to the public.
Each selling Holder of such Registrable Notes and each such
Participating Broker-Dealer will be required to further agree that it
will, upon learning that disclosure of such Records is sought in a court
of competent jurisdiction, give notice to the Issuers and allow the
Issuers to undertake appropriate action to prevent disclosure of the
Records deemed confidential at the Issuers' sole expense.
(p) Provide an indenture trustee for the Registrable Notes or the
Exchange Notes, as the case may be, and cause the Indenture or the trust
indenture provided for in Section 2(a) hereof, as the case may be, to be
qualified under the TIA not later than the effective date of the Exchange
Offer or the first Registration Statement relating to the Registrable
Notes; and in connection therewith, cooperate
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with the trustee under any such indenture and the Holders of the
Registrable Notes, to effect such changes to such indenture as may be
required for such indenture to be so qualified in accordance with the
terms of the TIA; and execute, and use its best efforts to cause such
trustee to execute, all documents as may be required to effect such
changes, and all other forms and documents required to be filed with the
SEC to enable such indenture to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule
158 thereunder (or any similar rule promulgated under the Securities Act)
no later than 45 days after the end of any 12-month period (or 90 days
after the end of any 12-month period if such period is a fiscal year) (i)
commencing at the end of any fiscal quarter in which Registrable Notes are
sold to underwriters in a firm commitment or best efforts underwritten
offering and (ii) if not sold to underwriters in such an offering,
commencing on the first day of the first fiscal quarter of the Company
after the effective date of a Registration Statement, which statements
shall cover said 12-month periods.
(r) If an Exchange Offer or a Private Exchange is to be consummated,
upon delivery of the Registrable Notes by Holders to the Issuers (or to
such other Person as directed by the Issuers) in exchange for the Exchange
Notes or the Private Exchange Notes, as the case may be, the Issuers shall
mark, or cause to be marked, on such Registrable Notes that such
Registrable Notes are being cancelled in exchange for the Exchange Notes or
the Private Exchange Notes, as the case may be; in no event shall such
Registrable Notes be marked as paid or otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Notes and their respective counsel in
connection with any filings required to be made with the National
Association of Securities Dealers, Inc. (the "NASD").
(t) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Notes covered by a
Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to which
any Registration Statement is being effected to furnish to the Issuers such
information regarding
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such seller and the distribution of such Registrable Notes as the Issuers
may, from time to time, reasonably request. The Issuers may exclude from
such Registration Statement the Registrable Notes of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request. Each seller as to which any Shelf Registration is
being effected agrees to furnish promptly to the Issuers all information
required to be disclosed in order to make the information previously
furnished to the Issuers by such seller not materially misleading.
Each Holder of Registrable Notes and each Participating Broker-Dealer
agrees by acquisition of such Registrable Notes or Exchange Notes to be sold by
such Participating Broker-Dealer, as the case may be, that, upon actual receipt
of any notice from the Issuers of the happening of any event of the kind
described in Section 5(c)(ii), 5(c)(iv), 5(c)(v), or 5(c)(vi) hereof, such
Holder will forthwith discontinue disposition of such Registrable Notes covered
by such Registration Statement or Prospectus or Exchange Notes to be sold by
such Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or until
it is advised in writing (the "Advice") by the Issuers that the use of the
applicable Prospectus may be resumed, and has received copies of any amendments
or supplements thereto. In the event the Issuers shall give any such notice,
each of the Effectiveness Period and the Applicable Period shall be extended by
the number of days during such periods from and including the date of the giving
of such notice to and including the date when each seller of Registrable Notes
covered by such Registration Statement or Exchange Notes to be sold by such
Participating Broker-Dealer, as the case may be, shall have received (x) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
hereof or (y) the Advice.
6. Registration Expenses
(a) Except as otherwise provided in Section 2(c) hereof, all fees and
expenses incident to the performance of or compliance with this Agreement by the
Issuers shall be borne by the Issuers whether or not the Exchange Offer or a
Shelf Registration is filed or becomes effective, including, without limitation,
(i) all registration and filing fees (including, without limitation, (A) fees
with respect to filings required to be made with the NASD in connection with an
underwritten offering and (B) fees and expenses of compliance with state
securities or Blue Sky laws (including, without limitation, reasonable fees and
disbursements of the Issuer's counsel in connection with Blue Sky qualifications
of the Registrable Notes or Exchange Notes and determination of the eligibility
of the Registrable Notes or Exchange Notes for investment under the laws of such
jurisdictions (x) where the holders of Registrable Notes are located, in the
case of the Exchange Notes, or (y) as provided in Section 5(h) hereof, in the
case of Registrable Notes or Exchange
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Notes to be sold by a Participating Broker-Dealer during the Applicable
Period)), (ii) printing expenses, including, without limitation, expenses of
printing certificates for Registrable Notes or Exchange Notes in a form
eligible for deposit with The Depository Trust Company and of printing
Prospectuses if the printing of Prospectuses is requested by the managing
underwriter or underwriters, if any, by the Holders of a majority in
aggregate principal amount of the Registrable Notes included in any
Registration Statement or sold by any Participating Broker-Dealer, as the
case may be, (iii) messenger, telephone and delivery expenses, (iv) fees and
disbursements of counsel for the Issuers, (v) fees and disbursements of all
independent certified public accountants referred to in Section 5(n)(iii)
hereof (including, without limitation, the expenses of any special audit and
"cold comfort" letters required by or incident to such performance by or
incident to such performance), (vi) rating agency fees, if any, and any fees
associated with making the Registrable Notes or Exchange Notes eligible for
trading through The Depository Trust Company, (vii) Securities Act liability
insurance, if the Issuers desire such insurance, (viii) fees and expenses of
all other Persons retained by the Issuers, (ix) internal expenses of the
Issuers (including, without limitation, all salaries and expenses of officers
and employees of the Issuers performing legal or accounting duties), (x) the
expense of any annual audit, (xi) the fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange or any inter-dealer quotation system, if applicable, and
(xii) the expenses relating to printing, word processing and distributing all
Registration Statements, underwriting agreements, securities sales
agreements, indentures and any other documents necessary in order to comply
with this Agreement.
(b) The Issuers, jointly and severally, shall (i) reimburse the
Holders of the Registrable Notes being registered in a Shelf Registration for
the reasonable fees and disbursements of not more than one counsel (in addition
to appropriate local counsel) chosen by the Holders of a majority in aggregate
principal amount of the Registrable Notes to be included in such Registration
Statement and (ii) reimburse out-of-pocket expenses (other than legal expenses)
of Holders of Registrable Notes incurred in connection with the registration and
sale of the Registrable Notes pursuant to a Shelf Registration or in connection
with the exchange of Registrable Notes pursuant to the Exchange Offer. In
addition, the Issuers, jointly and severally, shall reimburse the Initial
Purchaser for 50% (but not more than $30,000) of the reasonable fees and
expenses of one counsel in connection with the Exchange Offer which shall be
White & Case, and shall not be required to pay any other legal expenses of the
Initial Purchaser in connection therewith.
7. Indemnification. (a) Each of the Issuers, jointly and severally,
agrees to indemnify and hold harmless each Holder of Registrable Notes offered
pursuant to a Shelf Registration Statement and each Participating Broker-Dealer
selling Exchange Notes during the Applicable Period, the affiliates, directors,
officers, agents, representatives
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and employees of each such Person or its affiliates, and each other Person,
if any, who controls any such Person or its affiliates within the meaning of
either Section 15 of the Securities Act or Section 20 of the Exchange Act
(each, a "Participant") from and against any and all losses, claims, damages
and liabilities (including, without limitation, the reasonable legal fees and
other expenses actually incurred in connection with any suit, action or
proceeding or any claim asserted) caused by, arising out of or based upon any
untrue statement or alleged untrue statement of a material fact contained in
any Registration Statement pursuant to which the offering of such Registrable
Notes or Exchange Notes, as the case may be, is registered (or any amendment
thereto) or related Prospectus (or any amendments or supplements thereto) or
any related preliminary prospectus, or caused by, arising out of or based
upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading;
provided, however, that the Issuers will not be required to indemnify a
Participant if (i) such losses, claims, damages or liabilities are caused by
any untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with information relating to any
Participant furnished to the Issuers in writing by or on behalf of such
Participant expressly for use therein or (ii) if such Participant sold to the
person asserting the claim the Registrable Notes or Exchange Notes which are
the subject of such claim and such untrue statement or omission or alleged
untrue statement or omission was contained or made in any preliminary
prospectus and corrected in the Prospectus or any amendment or supplement
thereto and the Prospectus does not contain any other untrue statement or
omission or alleged untrue statement or omission of a material fact that was
the subject matter of the related proceeding and it is established by the
Issuers in the related proceeding that such Participant failed to deliver or
provide a copy of the Prospectus (as amended or supplemented) to such Person
with or prior to the confirmation of the sale of such Registrable Notes or
Exchange Notes sold to such Person if required by applicable laws, unless
such failure to deliver or provide a copy of the Prospectus (as amended or
supplemented) was a result of noncompliance by the Issuers with Section 5 of
this Agreement.
(b) Each Participant agrees, severally and not jointly, to indemnify
and hold harmless the Issuers, their respective directors and officers and each
Person who controls the Issuers within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Issuers to each Participant, but only (i) with
reference to information relating to such Participant furnished to the Issuers
in writing by or on behalf of such Participant expressly for use in any
Registration Statement or Prospectus, any amendment or supplement thereto, or
any preliminary prospectus or (ii) with respect to any untrue statement or
representation made by such Participant in writing to the Issuers. The
liability of any Participant under this
22
<PAGE>
paragraph shall in no event exceed the proceeds received by such Participant
from sales of Registrable Notes or Exchange Notes giving rise to such
obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any Person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such Person (the "Indemnified Person") shall promptly
notify the Person against whom such indemnity may be sought (the "Indemnifying
Person") in writing, and the Indemnifying Person, shall have the right to retain
counsel reasonably satisfactory to the Indemnified Person to represent the
Indemnified Person and any others the Indemnifying Person may reasonably
designate in such proceeding and shall pay the reasonable fees and expenses
actually incurred by such counsel related to such proceeding; provided, however,
that the failure to so notify the Indemnifying Person shall not relieve it of
any obligation or liability which it may have hereunder or otherwise (unless and
only to the extent that such failure results in the loss or compromise of any
material rights or defenses by the Indemnifying Person). In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed in writing to the contrary, (ii) the
Indemnifying Person shall have failed within a reasonable period of time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that, unless there
exists a conflict among Indemnified Persons, the Indemnifying Person shall not,
in connection with any one such proceeding or separate but substantially similar
related proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate firm
(in addition to any local counsel) for all Indemnified Persons, and that all
such reasonable fees and expenses shall be reimbursed promptly as they are
incurred. Any such separate firm for the Participants and such control Persons
of Participants shall be designated in writing by Participants who sold a
majority in interest of Registrable Notes and Exchange Notes sold by all such
Participants and any such separate firm for the Issuers, their directors, their
officers and such control Persons of the Issuers shall be designated in writing
by the Issuers. The Indemnifying Person shall not be liable for any settlement
of any proceeding effected without its prior written consent, but if settled
with such consent or if there be a final non-appealable judgment for the
plaintiff for which the Indemnified Person is entitled to indemnification
pursuant to this Agreement, the Indemnifying Person agrees to indemnify and hold
harmless each Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an
23
<PAGE>
Indemnified Person shall have requested an Indemnifying Person to reimburse
the Indemnified Person for reasonable fees and expenses actually incurred by
counsel as contemplated by the third sentence of this paragraph, the
Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement; provided, however, that the Indemnifying Person
shall not be liable for any settlement effected without its consent pursuant
to this sentence if the Indemnifying Person is contesting, in good faith, the
request for reimbursement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement or
compromise of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party, and indemnity could have
been sought hereunder by such Indemnified Person, unless such settlement (A)
includes an unconditional written release of such Indemnified Person, in form
and substance reasonably satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding and (B)
does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in Section 7(a) and 7(b)
hereof is for any reason unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, than each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to provide
for just and equitable contribution, shall contribute to the amount paid or
payable by such Indemnified Person as a result of such losses, claims, damages
or liabilities in such proportion as is appropriate to reflect (i) the relative
benefits received by the Indemnifying Person or Persons on the one hand and the
Indemnified Person or Persons on the other from the offering of the Notes or
(ii) if the allocation provided by the foregoing clause (i) is not permitted by
applicable law, not only such relative benefits but also the relative fault of
the Indemnifying Person or Persons on the one hand and the Indemnified Person or
Persons on the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the parties
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Issuers on the
one hand or such Participant or such other Indemnified Person, as the case may
be, on the other, the parties' relative intent, knowledge, access to information
and opportunity to correct or prevent such statement or omission, and any other
equitable considerations appropriate in the circumstances.
24
<PAGE>
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata allocation
(even if the Participants were treated as one entity for such purposes) or by
any other method of allocation that does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount
paid or payable by an Indemnified Person as a result of the losses, claims,
damages and liabilities referred to in the immediately preceding paragraph shall
be deemed to include, subject to the limitations set forth above, any reasonable
legal or other expenses actually incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 7, in no event shall a
Participant be required to contribute any amount in excess of the amount by
which proceeds received by such Participant from sales of Registrable Notes or
Exchange Notes, as the case may be, exceeds the amount of any damages that such
Participant has otherwise been required to pay or has paid by reason of such
untrue or alleged untrue statement or omission or alleged omission. No Person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person who was
not guilty of such fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A. The Company covenants that it will file the
reports required to be filed by it under the Securities Act and the Exchange Act
and the rules and regulations adopted by the SEC thereunder in a timely manner
in accordance with the requirements of the Securities Act and the Exchange Act
and, if at any time the Company is not required to file such reports, it will,
upon the request of any Holder of Registrable Notes, make publicly available
annual reports and such information, documents and other reports of the type
specified in Sections 13 and 15(d) of the Exchange Act. The Company further
covenants for so long as any Registrable Notes remain outstanding, to make
available to any Holder or beneficial owner of Registrable Notes in connection
with any sale thereof and any prospective purchaser of such Registrable Notes
from such Holder or beneficial owner the information required by Rule 144A(d)(4)
under the Securities Act in order to permit resales of such Registrable Notes
pursuant to Rule 144A.
9. Underwritten Registrations. If any of the Registrable Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in aggregate
principal amount of such Registrable Notes included in such offering and
reasonably acceptable to the Issuers.
25
<PAGE>
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all questionnaires, powers of attorney, indemnities,
underwriting agreements and other documents required under the terms of such
underwriting arrangements.
10. Miscellaneous. (a) No Inconsistent Agreements. None of the
Issuers have entered, as of the date hereof, and none of the Issuers shall,
after the date of this Agreement, enter into any agreement with respect to any
of its securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the provisions
hereof. Other than as provided in Schedule A attached hereto, none of the
Issuers have entered and none of the Issuers will enter into any agreement with
respect to any of its securities which will grant to any Person piggy-back
registration rights with respect to a Registration Statement.
(b) Adjustments Affecting Registrable Notes. Other than as provided
in Schedule B attached hereto, none of the Issuers shall, directly or
indirectly, take any action with respect to the Registrable Notes as a class
that would adversely affect the ability of the Holders of Registrable Notes to
include such Registrable Notes in a registration undertaken pursuant to this
Agreement.
(c) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, otherwise than with the prior written
consent of the Holders of not less than a majority in aggregate principal amount
of the then outstanding Registrable Notes. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable Notes whose
securities are being sold pursuant to a Registration Statement and that does not
directly or indirectly affect, impair, limit or compromise the rights of other
Holders of Registrable Notes may be given by Holders of at least a majority in
aggregate principal amount of the Registrable Notes being sold by such Holders
pursuant to such Registration Statement; provided, however, that the provisions
of this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(d) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee) provided
for or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, next-day air courier or facsimile:
26
<PAGE>
1. if to a Holder of the Registrable Notes or any Participating
Broker-Dealer, at the most current address of such Holder or
Participating Broker-Dealer, as the case may be, set forth on the
records of the registrar under the Indenture, with a copy in like
manner to the Initial Purchaser as follows:
NatWest Capital Markets Limited
135 Bishopgate
London, England
Attention: Roger Hoit
with a copy to:
White & Case
1155 Avenue of the Americas
New York, NY 10036
Facsimile No: (212) 354-8113
Attention: Timothy B. Goodell, Esq.
2. if to the Initial Purchaser, at the addresses specified in
Section 10(d)(1);
3. if to an Issuer, as follows:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Attention: Alan Brill
with a copy to:
Thompson & McMullan
100 Shockoe Slip
Richmond, VA 2329-4140
Attention: Charles W. Laughlin
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; one business day after
being timely
27
<PAGE>
delivered to a next-day air courier; and when receipt is acknowledged by the
addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the parties
hereto; provided, however, that this Agreement shall not inure to the benefit of
or be binding upon a successor or assign of a Holder unless and to the extent
such successor or assign holds Registerable Notes.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning thereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(i) Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their best efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.
28
<PAGE>
(j) Notes Held by the Issuers or their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registerable Notes
is required hereunder, Registerable Notes held by the Issuers or their
affiliates (as such term is defined in Rule 405 under the Securities Act) shall
not be counted in determining whether such consent or approval was given by the
Holders of such required percentage.
(k) Third Party Beneficiaries. Holders of Registerable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
29
<PAGE>
IN WITNESS WHEREOF, the parties have executed the Agreement as of the
date first written above.
Issuers:
BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:_________________________
Name: Alan R. Brill
Title: President
BRILL MEDIA MANAGEMENT, INC.,
a Virginia Corporation
By:____________________________
Name: Alan R. Brill
Title: President
30
<PAGE>
Guarantors:
BMC HOLDINGS, LLC, a Virginia
Limited Liability Company
By: BRILL MEDIA COMPANY, LLC,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., its Manager
By:______________________
Name: Alan R. Brill
Title: President
READING RADIO, INC.,
a Virginia Corporation
By:_______________________________
Name: Alan R. Brill
Title: President
TRI-STATE BROADCASTING, INC., a
Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
31
<PAGE>
NORTHERN COLORADO RADIO,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI
BROADCASTING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By:______________________
Name: Alan R. Brill
Title: Vice President
32
<PAGE>
NORTHLAND BROADCASTING, LLC,
a Virginia Limited Liability Company
By: NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
33
<PAGE>
CADILLAC NEWSPAPERS, INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS,
INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., L.P., a Virginia Limited Partnership
By: CENTRAL MICHIGAN DISTRIBUTION CO.,
INC., a Virginia Corporation, its General
Partner
By:______________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION
CO., INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
34
<PAGE>
GLADWIN NEWSPAPERS, INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC.,
a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: Vice President
35
<PAGE>
HURON P.S. LLC, a Virginia Limited
Liability Company
By: HURON HOLDINGS, LLC, a
Virginia Limited Liability
Company, its Manager
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, its
Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
36
<PAGE>
HURON NEWSPAPERS, LLC, a Virginia
Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
HURON HOLDINGS, LLC,
a Virginia Limited Liability Company
By: BMC HOLDINGS, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC, a
Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
37
<PAGE>
NORTHERN COLORADO HOLDINGS,
LLC
By: BMC HOLDINGS, LLC, a
Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability
Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC.
a Virginia Corporation, its Manager
By:______________________
Alan R. Brill, President
NCR III, LLC,
a Virginia Limited Liability Company
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: Brill Media Company, LLC,
a Virginia Limited Liability Company,
its Manager
By: Brill Media Management, Inc., a
Virginia Corporation, its Manager
By:______________________
Name: Alan R. Brill
Title: President
38
<PAGE>
NCH II, LLC,
a Virginia Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
NORTHLAND HOLDINGS, LLC,
a Virginia Limited Liability Company
By: BMC Holdings, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA COMPANY, LLC,
a Virginia Limited Liability Company,
its Manager
By: BRILL MEDIA MANAGEMENT,
INC., a Virginia Corporation,
its Manager
By:______________________
Name: Alan R. Brill
Title: President
39
<PAGE>
CMN HOLDING, INC., a Virginia
Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL RADIO INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia Corporation
By:______________________
Name: Alan R. Brill
Title: President
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written:
NATWEST CAPITAL MARKETS LIMITED
By:__________________________
Name:
Title:
40
<PAGE>
SCHEDULE A
SUBSIDIARY GUARANTORS
1. BMC Holdings, LLC
2. Reading Radio, Inc.
3. Tri-State Broadcasting, Inc.
4. Northern Colorado Radio, Inc.
5. NCR II, Inc.
6. Central Missouri Broadcasting, Inc.
7. CMB II, Inc.
8. Northland Broadcasting, LLC
9. NB II, Inc.
10. Central Michigan Newspapers, Inc.
11. Cadillac Newspapers, Inc.
12. CMN Associated Publications, Inc.
13. Central Michigan Distribution Co., L.P.
14. Central Michigan Distribution Co., Inc.
15. Gladwin Newspapers, Inc.
16. Graph Ads Printing, Inc.
17. Midland Buyer's Guide, Inc.
18. St. Johns Newspapers, Inc.
19. Huron P.S., LLC
20. Huron Newspapers, LLC
21. Huron Holdings, LLC
22. Northern Colorado Holdings, LLC
23. NCR III, LLC
24. NCH II, LLC
25. Northland Holdings, LLC
26. CMN Holdings, Inc.
27. Brill Radio Inc.
28. Brill Newspapers, Inc.
<PAGE>
Execution Copy
------------------------------------------------
------------------------------------------------
APPRECIATION NOTES REGISTRATION RIGHTS AGREEMENT
Dated as of December 30, 1997
by and among
BRILL MEDIA COMPANY, LLC,
BRILL MEDIA MANAGEMENT, INC.,
THE SUBSIDIARY GUARANTORS
named herein
and
NATWEST CAPITAL MARKETS LIMITED
as Initial Purchaser
------------------------------------------------
------------------------------------------------
$3,000,000 Aggregate Principal Amount of
APPRECIATION NOTES DUE 2007
<PAGE>
TABLE OF CONTENTS
1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Exchange Offer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3. Shelf Registration. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4. Additional Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5. Registration Procedures . . . . . . . . . . . . . . . . . . . . . . . . 12
6. Registration Expenses . . . . . . . . . . . . . . . . . . . . . . . . . 21
7. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8. Rules 144 and 144A. . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Underwritten Registrations. . . . . . . . . . . . . . . . . . . . . . . 27
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
(a) No Inconsistent Agreements . . . . . . . . . . . . . . . . . . . . 27
(b) Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . 27
(c) Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(d) Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 29
(e) Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(f) Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(g) Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
(h) Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
(i) Notes Held by the Issuers or their Affiliates. . . . . . . . . . . 30
(j) Third Party Beneficiaries. . . . . . . . . . . . . . . . . . . . . 30
i
<PAGE>
APPRECIATION NOTES REGISTRATION RIGHTS AGREEMENT
This Appreciation Notes Registration Rights Agreement (the
"Agreement") is dated as of December 30, 1997, by and among Brill Media
Company, LLC, a Virginia limited liability company ("BMC"), Brill Media
Management, Inc., a Virginia corporation ("Media" and, collectively with
BMC, the "Company"), the subsidiary guarantors of the Company's obligations
hereunder as listed on Schedule A hereto (collectively, the "Guarantors"),
and NatWest Capital Markets Limited (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated December 22, 1997, among the Company, the Guarantors and
the Initial Purchaser (the "Purchase Agreement"), which provides, among
other things, for the sale by the Company to the Initial Purchaser of
$3,000,000 aggregate principal amount of the Company's Appreciation Notes
due 2007 (the "Appreciation Notes"), which Appreciation Notes will be
guaranteed by the Guarantors. The Company and the Guarantors are
collectively referred to herein as the "Issuers." In order to induce the
Initial Purchaser to enter into the Purchase Agreement, the Issuers have
agreed to provide the registration rights set forth in this Agreement for
the benefit of the Initial Purchaser and its direct and indirect
transferees. The execution and delivery of this Agreement is a condition
to the obligation of the Initial Purchaser to purchase the Appreciation
Notes under the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions
As used in this Agreement, the following terms shall have the
following meanings:
Additional Interest: Has the meaning provided in Section 4(a)
hereof.
Advice: Has the meaning provided in the last paragraph of
Section 5 hereof.
Agreement: Has the meaning provided in the first introductory
paragraph hereto.
Applicable Period: Has the meaning provided in Section 2(b)
hereof.
Appreciation Exchange Notes: Has the meaning provided in Section
2(a) hereof.
<PAGE>
Appreciation Notes: Has the meaning provided in the second
introductory paragraph hereto.
Appreciation Notes Indenture: The Indenture, dated as of
December 30, 1997 between the Company, the Guarantors and United States
Trust Company of New York, as trustee, pursuant to which the Appreciation
Notes are being issued, as amended or supplemented from time to time in
accordance with the terms thereof.
Closing Date: Has the meaning provided in the Purchase
Agreement.
Company: Has the meaning provided in the first introductory
paragraph hereto.
Effectiveness Date: The 90th day after the Filing Date.
Effectiveness Period: Has the meaning provided in Section 3(a)
hereof.
Event Date: Has the meaning provided in Section 4(b) hereof.
Exchange Act: The Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
Exchange Offer: Has the meaning provided in Section 2(a) hereof.
Exchange Registration Statement: Has the meaning provided in
Section 2(a) hereof.
Filing Date: The 60th day after the Issue Date.
Guarantors: Has the meaning provided in the first introductory
paragraph hereto.
Holder: Any holder of a Registrable Note or Registrable Notes.
Indemnified Person: Has the meaning provided in Section 7(c)
hereof.
Indemnifying Person: Has the meaning provided in Section 7(c)
hereof.
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Indenture: The Indenture, dated as of December 30, 1997 between
the Company, the Guarantors and United States Trust Company of New York, as
trustee, pursuant to which $105,00,000 aggregate principal amount of the
Company's 12% Senior Notes due 2007 are being issued, as amended or
supplemented from time to time in accordance with the terms thereof.
Initial Purchaser: Has the meaning provided in the first
introductory paragraph hereto.
Inspectors: Has the meaning provided in Section 5(o) hereof.
Issue Date: The date on which the original Appreciation Notes
were sold to the Initial Purchaser pursuant to the Purchase Agreement.
Issuers: Has the meaning provided in the second introductory
paragraph hereto.
NASD: Has the meaning provided in Section 5(s) hereof.
Participant: Has the meaning provided in Section 7(a) hereof.
Participating Broker-Dealer: Has the meaning provided in Section
2(b) hereof.
Persons: An individual, trustee, corporation, partnership,
limited liability company, joint stock company, trust, unincorporated
association, union, business association, firm or other legal entity.
Private Exchange: Has the meaning provided in Section 2(b)
hereof.
Private Appreciation Exchange Notes: Has the meaning provided in
Section 2(b) hereof.
Prospectus: The prospectus included in any Registration
Statement (including, without limitation, any prospectus subject to
completion and a prospectus that includes any information previously
omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act),
as amended or supplemented by any prospectus supplement, and all other
amendments and supplements to the Prospectus, with respect to the terms of
the offering of any portion of the Registrable Notes covered by such
Registration Statement including post-effective
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amendments, and all material incorporated by reference or deemed to be
incorporated by reference in such Prospectus.
Purchase Agreement: Has the meaning provided in the second
introductory paragraph hereto.
Records: Has the meaning provided in Section 5(o) hereof.
Registrable Notes: Each Appreciation Note upon original issuance
of the Appreciation Notes and at all times subsequent thereto and each
Private Appreciation Exchange Note upon original issuance thereof and at
all times subsequent thereto, until in the case of any such Appreciation
Note or Private Appreciation Exchange Note, as the case may be, the
earliest to occur of (i) a Registration Statement covering such
Appreciation Note or Private Appreciation Exchange Note, as the case may
be, has been declared effective by the SEC and such Appreciation Note
(unless such Appreciation Note was not tendered for exchange by the Holder
thereof), or Private Appreciation Exchange Note, as the case may be, has
been disposed of in accordance with such effective Registration Statement,
(ii) such Appreciation Note or Private Appreciation Exchange Note, as the
case may be, is, or may be, sold in compliance with Rule 144, or (iii) such
Appreciation Note or Private Appreciation Exchange Note, as the case may
be, ceases to be outstanding for purposes of the Indenture.
Registration Statement: Any registration statement of the
Company, including, but not limited to, the Exchange Registration
Statement, that covers any of the Registrable Notes pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such registration statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or
deemed to be incorporated by reference in such registration statement.
Rule 144: Rule 144 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule (other than Rule
144A) or regulation hereafter adopted by the SEC providing for offers and
sales of securities made in compliance therewith resulting in offers and
sales by subsequent holders that are not affiliates of an issuer of such
securities being free of the registration and prospectus delivery
requirements of the Securities Act.
Rule 144A: Rule 144A promulgated under the Securities Act, as
such Rule may be amended from time to time, or any similar rule (other than
Rule 144) or regulation hereafter adopted by the SEC.
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Rule 415: Rule 415 promulgated under the Securities Act, as such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the SEC.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.
Shelf Notice: Has the meaning provided in Section 2(c) hereof.
Shelf Registration: Has the meaning provided in Section 3(a)
hereof.
Shelf Registration Statement: shall mean a "shelf" registration
statement of the Company and the Guarantors which covers all of the
Registrable Notes on an appropriate form under Rule 415 under the 1933 Act,
or any similar rule that may be adopted by the SEC, and all amendments and
supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all material incorporated by reference therein.
TIA: The Trust Indenture Act of 1939, as amended.
Trustee(s): The trustee under the Indenture and, if existent,
the trustee under any indenture governing the Exchange Notes and Private
Exchange Notes (if any).
Underwritten registration or underwritten offering: A
registration in which securities of one or more of the Issuers are sold to
an underwriter for reoffering to the public.
2. Exchange Offer
(a) Each of the Issuers agrees to file with the SEC no later
than the Filing Date an offer to exchange (the "Exchange Offer") any and
all of the Appreciation Notes for a like aggregate principal amount of debt
securities of the Company, guaranteed by the Guarantors, which are
identical in all material respects to the Appreciation Notes (the
"Appreciation Exchange Notes") (and which are entitled to the benefits of
the Appreciation Notes Indenture or a trust indenture that is identical in
all material respects to the Appreciation Notes Indenture (other than such
changes to the Appreciation Notes Indenture or any such identical trust
indenture as are necessary to comply with any requirements of the SEC to
effect or maintain the qualification thereof under the TIA) and
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which, in either case, has been qualified under the TIA), except that (i) the
Appreciation Exchange Notes shall have been registered pursuant to an
effective Registration Statement under the Securities Act and shall contain
no restrictive legend thereon and (ii) the Appreciation Exchange Notes shall
not be entitled to any further registration rights hereunder or to any
Additional Interest. The Exchange Offer shall be registered under the
Securities Act on the appropriate form (the "Exchange Registration
Statement") and shall comply with all applicable tender offer rules and
regulations under the Exchange Act. The Issuers agree to use their
reasonable best efforts to (x) cause the Exchange Registration Statement to
be declared effective under the Securities Act no later than the 90th day
after the Filing Date; (y) keep the Exchange Offer open for at least 20
business days (or longer if required by applicable law) after the date that
notice of the Exchange Offer is mailed to the Holders; and (z) consummate the
Exchange Offer on or prior to the 120th day following the Filing Date. If
after such Exchange Registration Statement is declared effective by the SEC,
the Exchange Offer or the issuance of the Appreciation Exchange Notes
thereunder is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Exchange Registration Statement shall be deemed not to have become effective
for purposes of this Agreement until such stop order, injunction or other
order or requirement is no longer in effect. Each Holder who participates in
the Exchange Offer will be required to represent that any Appreciation
Exchange Notes received by it will be acquired in the ordinary course of its
business, that at the time of the consummation of the Exchange Offer such
Holder will have no arrangement or understanding with any Person to
participate in the distribution of the Appreciation Exchange Notes in
violation of the provisions of the Securities Act, that such Holder is not an
"affiliate" of any of the Issuers within the meaning of the Securities Act
and that such Holder is not acting on behalf of any person who could not
truthfully make the foregoing representations. Upon consummation of the
Exchange Offer in accordance with this Section 2, the Issuers shall have no
further obligation to register Registrable Notes (other than Private
Appreciation Exchange Notes pursuant to Section 3 hereof). No securities
other than the Appreciation Exchange Notes shall be included in the Exchange
Registration Statement.
(b) The Issuers shall include within the Prospectus contained in
the Exchange Registration Statement a section entitled "Plan of
Distribution," reasonably acceptable to the Initial Purchaser, which shall
contain a summary statement of the positions taken or policies made by the
Staff of the SEC with respect to the potential "underwriter" status of any
broker-dealer that is the beneficial owner (as defined in Rule 13d-3 under
the Exchange Act) of Appreciation Exchange Notes received by such
broker-dealer in the Exchange Offer (a "Participating Broker-Dealer"),
whether such positions or policies have been publicly disseminated by the
Staff of the SEC or such positions or policies, in the judgment of the
Initial Purchaser, represent the prevailing views of the Staff of the SEC.
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Such "Plan of Distribution" section shall also expressly permit the use of
the Prospectus by all Persons subject to the prospectus delivery
requirements of the Securities Act, including all Participating
Broker-Dealers, and include a statement describing the means by which
Participating Broker-Dealers may resell the Appreciation Exchange Notes.
Each of the Issuers shall use its reasonable best efforts to keep
the Exchange Registration Statement effective and to amend and supplement
the Prospectus contained therein, in order to permit such Prospectus to be
lawfully delivered by any Participating Broker-Dealer subject to the
prospectus delivery requirements of the Securities Act for such period of
time as is necessary to comply with applicable law in connection with any
resale of the Appreciation Exchange Notes; provided, however, that such
period shall not exceed 180 days after the consummation of the Exchange
Offer (or such longer period if extended pursuant to the last paragraph of
Section 5 hereof) (the "Applicable Period").
If, prior to consummation of the Exchange Offer, the Initial
Purchaser holds any Appreciation Notes acquired by it and having the status
of an unsold allotment in the initial distribution, the Issuers shall, upon
the request of the Initial Purchaser, simultaneously with the delivery of
the Appreciation Exchange Notes in the Exchange Offer issue and deliver to
the Initial Purchaser in exchange (the "Private Exchange") for such
Appreciation Notes held by the Initial Purchaser a like principal amount of
debt securities of the Company, guaranteed by the Guarantors, that are
identical in all material respects to the Appreciation Exchange Notes (the
"Private Appreciation Exchange Notes") (and which are issued pursuant to
the same Appreciation Notes Indenture as the Appreciation Exchange Notes)
except for the placement of a restrictive legend on such Private
Appreciation Exchange Notes. The Private Appreciation Exchange Notes shall
if permissible bear the same CUSIP number as the Appreciation Exchange
Notes.
Interest on the Appreciation Exchange Notes and the Private
Appreciation Exchange Notes will accrue from the last interest payment date
on which interest was paid on the Appreciation Notes surrendered in
exchange therefor or, if no interest has been paid on the Appreciation
Notes, from the Issue Date.
In connection with the Exchange Offer, the Issuers shall:
(1) mail to each Holder a copy of the Prospectus forming part of
the Exchange Registration Statement, together with an appropriate
letter of transmittal and related documents;
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(2) utilize the services of a depositary for the Exchange
Offer with an address in the Borough of Manhattan, The City of
New York;
(3) permit Holders to withdraw tendered Appreciation Notes at
any time prior to the close of business, New York time, on the last
business day on which the Exchange Offer shall remain open; and
(4) otherwise comply in all material respects with all
applicable laws, rules and regulations.
As soon as practicable after the close of the Exchange Offer or
the Private Exchange, as the case may be, the Issuers shall:
(1) accept for exchange all Appreciation Notes tendered and not
validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(2) deliver to the Trustee for cancellation all Appreciation
Notes so accepted for exchange; and
(3) cause the Trustee to authenticate and deliver promptly to
each Holder of Appreciation Notes, Appreciation Exchange Notes or
Private Appreciation Exchange Notes, as the case may be, equal in
principal amount to the Appreciation Notes of such Holder so accepted
for exchange.
The Appreciation Exchange Notes and the Private Appreciation
Exchange Notes are to be issued under (i) the Appreciation Notes Indenture
or (ii) an indenture identical in all material respects to the Appreciation
Notes Indenture, which in either event shall provide that (1) the
Appreciation Exchange Notes shall not be subject to the transfer
restrictions set forth in the Appreciation Notes Indenture and (2) the
Private Appreciation Exchange Notes shall be subject to the transfer
restrictions set forth in the Indenture. The Appreciation Notes Indenture
or such indenture shall provide that the Appreciation Exchange Notes, the
Private Appreciation Exchange Notes and the Appreciation Notes shall vote
and consent together on all matters as one class and that none of the
Appreciation Exchange Notes, the Private Appreciation Exchange Notes or the
Appreciation Notes will have the right to vote or consent as a separate
class on any matter.
(c) If, (i) because of any change in law or in currently
prevailing interpretations of the Staff of the SEC, the Issuers are not
permitted to effect an Exchange Offer, (ii) the Exchange Offer is not
consummated within 120 days after the Filing Date, (iii) any
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<PAGE>
holder of Private Appreciation Exchange Notes so requests at any time after
the consummation of the Private Exchange, or (iv) if any Holder (other than
the Initial Purchaser) is not eligible to participate in the Exchange Offer
or such Holder does not receive Appreciation Exchange Notes on the date of
the exchange that may be sold without restriction under the state and federal
securities laws (other than due solely to the status of such Holder as an
affiliate of any of the Issuers within the meaning of the Securities Act),
then the Issuers shall promptly deliver to the Holders and the Appreciation
Notes Trustee written notice thereof (the "Shelf Notice") and, in the case of
clauses (i) and (ii) above, to all Holders, in the case of clause (iii)
above, to the Holders of the Private Appreciation Exchange Notes and, in the
case of clause (iv) above, to the affected Holder, and shall as promptly as
reasonably practicable file a Shelf Registration pursuant to Section 3
hereof, provided, however, that in the case of clause (iii) above such holder
shall pay all reasonable registration expenses of the Company as described in
Section 6 hereof in connection with such Shelf Registration of such Private
Appreciation Exchange Notes.
3. Shelf Registration
If a Shelf Notice is delivered as contemplated by Section 2(c)
hereof, then:
(a) Shelf Registration. The Issuers shall as promptly as
reasonably practicable file with the SEC a Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all
of the Registrable Notes (the "Shelf Registration"). If the Issuers shall
not have yet filed an Exchange Registration Statement, each of the Issuers
shall use its best efforts to file with the SEC the Shelf Registration on
or prior to the Filing Date. The Shelf Registration shall be on Form S-1
or another appropriate form permitting registration of such Registrable
Notes for resale by Holders in the manner or manners designated by them
(including, without limitation, one or more underwritten offerings). The
Issuers shall not permit any securities other than the Registrable Notes to
be included in the Shelf Registration.
Each of the Issuers shall use its reasonable best efforts to
cause the Shelf Registration to be declared effective under the Securities
Act by the 180th day after the Issue Date and to keep the Shelf
Registration continuously effective under the Securities Act until the date
which is two years from the Issue Date, subject to extension pursuant to
the last paragraph of Section 5 hereof, or such shorter period ending when
all Registrable Notes covered by the Shelf Registration have been sold in
the manner set forth and as contemplated in the Shelf Registration or when
the Appreciation Notes become eligible for transfer without volume
restrictions pursuant to Rule 144 under the Securities Act (the
"Effectiveness Period").
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<PAGE>
(b) Withdrawal of Stop Orders. If the Shelf Registration ceases
to be effective for any reason at any time during the Effectiveness Period
(other than because of the sale of all of the securities registered
thereunder), each of the Issuers shall use its best efforts to obtain the
prompt withdrawal of any order suspending the effectiveness thereof.
(c) Supplements and Amendments. The Issuers shall promptly
supplement and amend the Shelf Registration if required by the rules,
regulations or instructions applicable to the registration form used for such
Shelf Registration, if required by the Securities Act, or if reasonably
requested for such purpose by the Holders of a majority in aggregate
principal amount of the Registrable Notes covered by such Registration
Statement or by any underwriter of such Registrable Notes.
4. Additional Interest
(a) The Issuers and the Initial Purchaser agree that the Holders
of Registrable Notes will suffer damages if the Issuers fail to fulfill their
obligations under Section 2 or Section 3 hereof and that it would not be
feasible to ascertain the extent of such damages with precision. Accordingly,
the Issuers agree to pay, as the sole liquidated damages, for such failure
additional interest on the Appreciation Notes ("Additional Interest") shall
become payable with respect to the Appreciation Notes under the circumstances
and to the extent set forth below:
(i) if neither the Exchange Registration Statement nor the Shelf
Registration has been filed on or prior to the Filing Date, then,
commencing on the 61st day after the Issue Date, Additional Interest
shall accrue on $3,000,000 at a rate of 0.50% per annum for the first
30 days commencing on the 61st day after the Issue Date, such
Additional Interest rate increasing by an additional 0.50% per annum
at the beginning of each subsequent 30-day period;
(ii) if neither the Exchange Registration Statement nor the Shelf
Registration is declared effective by the SEC on or prior to the
Effectiveness Date, then, commencing on the 91st day after the Filing
Date, Additional Interest shall accrue on $3,000,000 at a rate of
0.50% per annum for the first 30 days commencing on the 91st day after
the Filing Date, such Additional Interest rate increasing by an
additional 0.50% per annum at the beginning of each subsequent 30-day
period; and
(iii) if (A) the Issuers have not exchanged Exchange Notes
for all Appreciation Notes validly tendered in accordance with the
terms of the Exchange Offer on or prior to the 120th day after the
Filing Date or (B) the Exchange
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Registration Statement ceases to be effective at any time prior to the
time that the Exchange Offer is consummated or (C) if applicable, the
Shelf Registration has been declared effective and such Shelf
Registration ceases to be effective at any time during the Effectiveness
Period (unless all Appreciation Notes have been sold thereunder), then
Additional Interest shall accrue on $3,000,000 at a rate of 0.50% per
annum for the first 30 days commencing on (x) the 121st day after the
Filing Date with respect to the Appreciation Notes validly tendered and
not exchanged by the Company, in the case of (A) above, or (y) the day
the Exchange Registration Statement ceases to be effective in the case
of (B) above, or (z) the day such Shelf Registration ceases to be
effective in the case of (C) above, such Additional Interest rate
increasing by an additional 0.50% per annum at the beginning of each
such subsequent 30-day period;
provided, however, that in any event the Additional Interest rate on any
affected Appreciation Notes may not exceed at any one time in the aggregate
1.5% per annum; and provided, further, that (1) upon the filing of the
Exchange Registration Statement or a Shelf Registration (in the case of
clause (i) of this Section 4(a)), (2) upon the effectiveness of the Exchange
Registration Statement or the Shelf Registration (in the case of clause (ii)
of this Section 4(a)), or (3) upon the exchange of Appreciation Exchange
Notes for all Appreciation Notes tendered (in the case of clause (iii)(A) of
this Section 4(a)), or upon the effectiveness of the Exchange Registration
Statement which had ceased to remain effective (in the case of (iii)(B) of
this Section 4(a)), or upon the effectiveness of the Shelf Registration which
had ceased to remain effective (in the case of (iii)(C) of this Section
4(a)), Additional Interest on the affected Appreciation Notes as a result of
such clause (or the relevant subclause thereof), as the case may be, shall
cease to accrue.
(b) The Issuers shall notify the Trustee within one business day
after each and every date on which an event occurs in respect of which
Additional Interest is required to be paid (an "Event Date"). The Company
shall pay the Additional Interest due on the transfer restricted Appreciation
Notes by depositing with the paying agent (which shall not be the Company for
these purposes) for the transfer restricted Appreciation Notes, in trust, for
the benefit of the holders thereof, prior to 11:00 A.M. on each June 15 and
December 15, sums sufficient to pay the Additional Interest then due. Any
amounts of Additional Interest due pursuant to clauses (a)(i), (a)(ii) or
(a)(iii) of this Section 4 will be payable to the Holders of affected
Appreciation Notes in cash semi-annually on each interest payment date
specified by the Indenture (or such other indenture) to the record holders
entitled to receive the interest payment to be made on such date, commencing
with the first such date occurring after any such Additional Interest
commences to accrue. The amount of Additional Interest will be determined by
multiplying the applicable Additional Interest rate by the principal amount
of the affected Registrable Notes of such Holders,
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multiplied by a fraction, the numerator of which is the number of days such
Additional Interest rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months and, in the case of
a partial month, the actual number of days elapsed), and the denominator of
which is 360.
5. Registration Procedures
In connection with the filing of any Registration Statement
pursuant to Sections 2 or 3 hereof, the Issuers shall effect such
registration(s) to permit the sale of the securities covered thereby in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto and in connection with any Registration Statement filed by
the Issuers hereunder, the Issuers shall:
(a) Prepare and file with the SEC prior to the Filing Date a
Registration Statement or Registration Statements as prescribed by
Sections 2 or 3 hereof, and use their reasonable best efforts to cause
each such Registration Statement to become effective and remain
effective as provided herein; provided, however, that, if (1) such
filing is pursuant to Section 3 hereof, or (2) a Prospectus contained
in an Exchange Registration Statement filed pursuant to Section 2
hereof is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Appreciation Exchange
Notes during the Applicable Period, before filing any Registration
Statement or Prospectus or any amendments or supplements thereto, the
Issuers shall, if requested in writing, furnish to and afford the
Holders of the Registrable Notes covered by such Registration
Statement or each such Participating Broker-Dealer, as the case may
be, their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies
of any documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed (in each case at least three
business days prior to such filing). The Issuers shall not file any
Registration Statement or Prospectus or any amendments or supplements
thereto in respect of which the Holders must be afforded an
opportunity to review prior to the filing of such document under the
immediately preceding sentence, if the Holders of a majority in
aggregate principal amount of the Registrable Notes covered by such
Registration Statement, or any such Participating Broker-Dealer, as
the case may be, their counsel, or the managing underwriters, if any,
shall reasonably object thereto in writing.
(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Shelf Registration or Exchange
Registration Statement, as the case may be, as may be necessary to
keep such Registration Statement continuously
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effective for the Effectiveness Period or the Applicable Period or until
consummation of the Exchange Offer, as the case may be; cause the
related Prospectus to be supplemented by any Prospectus supplement
required by applicable law, and as so supplemented to be filed pursuant
to Rule 424 (or any similar provisions then in force) promulgated under
the Securities Act; and comply with the provisions of the Securities Act
and the Exchange Act applicable to it with respect to the disposition of
all securities covered by such Registration Statement as so amended or
in such Prospectus as so supplemented and with respect to the subsequent
resale of any securities being sold by a Participating Broker-Dealer
covered by any such Prospectus; the Company shall be deemed not to have
used its best efforts to keep a Registration Statement effective during
the Applicable Period if it voluntarily takes any action that would
result in selling Holders of the Registrable Notes covered thereby or
Participating Broker-Dealers seeking to sell Appreciation Exchange Notes
not being able to sell such Registrable Notes or such Appreciation
Exchange Notes during that period unless such action is required by
applicable law or unless the Company complies with this Agreement,
including without limitation, the provisions of paragraph 5(k) hereof
and the last paragraph of this Section 5.
(c) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Appreciation Exchange Notes during the Applicable
Period, notify the selling Holders of Registrable Notes, or each such
Participating Broker-Dealer, as the case may be, their counsel and the
managing underwriters, if any, promptly (but in any event within two
business days), and confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment
has been filed, and, with respect to a Registration Statement or any
post-effective amendment, when the same has become effective under the
Securities Act (including in such notice a written statement that any
Holder may, upon request, obtain, at the sole expense of the Issuers,
one conformed copy of such Registration Statement or post-effective
amendment including financial statements and schedules, documents
incorporated or deemed to be incorporated by reference and exhibits),
(ii) of the issuance by the SEC of any stop order suspending the
effectiveness of a Registration Statement or of any order preventing
or suspending the use of any preliminary prospectus or the initiation
of any proceedings for that purpose, (iii) if at any time when a
Prospectus is required by the Securities Act to be delivered in
connection with sales of the Registrable Notes or resales of
Appreciation Exchange Notes by Participating Broker-Dealers the
representations and warranties of the Issuers contained in any
agreement (including any underwriting agreement), contemplated by
Section 5(n) hereof cease
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to be true and correct, (iv) of the receipt by the Issuers of any
notification with respect to the suspension of the qualification or
exemption from qualification of a Registration Statement or any of the
Registrable Notes or the Appreciation Exchange Notes to be sold by any
Participating Broker-Dealer for offer or sale in any jurisdiction, or
the initiation or threatening of any proceeding for such purpose, (v) of
the happening of any event, the existence of any condition or any
information becoming known that makes any statement made in such
Registration Statement or related Prospectus or any document
incorporated or deemed to be incorporated therein by reference untrue in
any material respect or that requires the making of any changes in or
amendments or supplements to such Registration Statement, Prospectus or
documents so that, in the case of the Registration Statement, it will
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein not misleading, and that in the case of the
Prospectus, it will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (vi) of the
determination by the Issuers that a post-effective amendment to a
Registration Statement would be appropriate.
(d) Use its best efforts to prevent the issuance of any order
suspending the effectiveness of a Registration Statement or of any
order preventing or suspending the use of a Prospectus or suspending
the qualification (or exemption from qualification) of any of the
Registrable Notes or the Appreciation Exchange Notes for sale in any
jurisdiction, and, if any such order is issued, to use its best
efforts to obtain the withdrawal of any such order at the earliest
possible moment.
(e) If a Shelf Registration is filed pursuant to Section 3
hereof and if requested by the managing underwriter or underwriters
(if any), or the Holders of a majority in aggregate principal amount
of the Registrable Notes being sold in connection with an underwritten
offering, (i) promptly incorporate in a prospectus supplement or
post-effective amendment such information as the managing underwriter
or underwriters (if any), such Holders, or counsel for any of them
reasonably request to be included therein, (ii) make all required
filings of such prospectus supplement or such post-effective amendment
as soon as practicable after the Issuers have received notification of
the matters to be incorporated in such prospectus supplement or
post-effective amendment, and (iii) supplement or make amendments to
such Registration Statement.
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(f) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Appreciation Exchange Notes during the Applicable
Period, furnish to each selling Holder of Registrable Notes and to
each such Participating Broker-Dealer who so requests and to counsel
and each managing underwriter, if any, at the sole expense of the
Issuers, one conformed copy of the Registration Statement or
Registration Statements and each post-effective amendment thereto,
including financial statements and schedules, and, if requested, all
documents incorporated or deemed to be incorporated therein by
reference and all exhibits.
(g) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Appreciation Exchange Notes during the Applicable
Period, deliver to each selling Holder of Registrable Notes, or each
such Participating Broker-Dealer, as the case may be, their respective
counsel, and the underwriters, if any, at the sole expense of the
Issuers, as many copies of the Prospectus or Prospectuses (including
each form of preliminary prospectus) and each amendment or supplement
thereto and any documents incorporated by reference therein as such
Persons may reasonably request; and, subject to the last paragraph of
this Section 5, each Issuer hereby consents to the use of such
Prospectus and each amendment or supplement thereto by each of the
selling Holders of Registrable Notes or each such Participating
Broker-Dealer, as the case-may be, and the underwriters or agents, if
any, and dealers (if any), in connection with the offering and sale of
the Registrable Notes covered by, or the sale by Participating
Broker-Dealers of the Appreciation Exchange Notes pursuant to, such
Prospectus and any amendment or supplement thereto.
(h) Prior to any public offering of Registrable Notes or any
delivery of a Prospectus contained in the Exchange Registration
Statement by any Participating Broker-Dealer who seeks to sell
Appreciation Exchange Notes during the Applicable Period, to use its
best efforts to register or qualify such Registrable Notes (and to
cooperate with selling Holders of Registrable Notes or each such
Participating Broker-Dealer, as the case may be, the managing
underwriter or underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from
such registration or qualification) of such Registrable Notes) for
offer and sale under the securities or Blue Sky laws of such
jurisdictions within the United States as any selling Holder,
Participating Broker-
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Dealer, or the managing underwriter or underwriters reasonably request in
writing; provided, however, that where Appreciation Exchange Notes held
by Participating Broker-Dealers or Registrable Notes are offered other
than through an underwritten offering, the Issuers agree to cause their
counsel to perform Blue Sky investigations and file registrations and
qualifications required to be filed pursuant to this Section 5(h); keep
each such registration or qualification (or exemption therefrom)
effective during the period such Registration Statement is required to
be kept effective and do any and all other acts or things reasonably
necessary or advisable to enable the disposition in such jurisdictions
of the Appreciation Exchange Notes held by Participating Broker-Dealers
or the Registrable Notes covered by the applicable Registration
Statement; provided, however, that none of the Issuers shall be required
to (A) qualify generally to do business in any jurisdiction where it is
not then so qualified, (B) take any action that would subject it to
general service of process in any such jurisdiction where it is not then
so subject or (C) subject itself to taxation in excess of a nominal
dollar amount in any such jurisdiction where it is not then so subject.
(i) If a Shelf Registration is filed pursuant to Section 3
hereof, cooperate with the selling Holders of Registrable Notes and
the managing underwriter or underwriters, if any, to facilitate the
timely preparation and delivery of certificates representing
Registrable Notes to be sold, which certificates shall not bear any
restrictive legends and shall be in a form eligible for deposit with
The Depository Trust Company; and enable such Registrable Notes to be
in such denominations and registered in such names as the managing
underwriter or underwriters, if any, or Holders may reasonably
request.
(j) Use its best efforts to cause the Registrable Notes covered
by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to
enable the Holders thereof or the underwriter or underwriters, if any,
to dispose of such Registrable Notes, except as may be required solely
as a consequence of the nature of a selling Holder's business, in
which case each of the Issuers will cooperate in all reasonable
respects with the filing of such Registration Statement and the
granting of such approvals.
(k) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Appreciation Exchange Notes during the Applicable
Period, upon the occurrence of any event contemplated by paragraph
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5(c)(v) or 5(c)(vi) hereof, as promptly as practicable prepare and
(subject to Section 5(a) hereof) file with the SEC, at the sole
expense of the Issuers, a supplement or post-effective amendment to
the Registration Statement or a supplement to the related Prospectus
or any document incorporated or deemed to be incorporated therein by
reference, or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Notes being sold
thereunder or to the purchasers of the Appreciation Exchange Notes to
whom such Prospectus will be delivered by a Participating
Broker-Dealer, any such Prospectus will not contain an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
(l) Use its best efforts to cause the Registrable Notes covered
by a Registration Statement or the Appreciation Exchange Notes, as the
case may be, to be rated with the appropriate rating agencies, if so
requested by the Holders of a majority in aggregate principal amount
of Registrable Notes covered by such Registration Statement or the
Appreciation Exchange Notes, as the case may be, or the managing
underwriter or underwriters, if any.
(m) Prior to the effective date of the first Registration
Statement relating to the Registrable Notes, (i) provide the Trustee
with certificates for the Registrable Notes or Appreciation Exchange
Notes, as the case may be, in a form eligible for deposit with The
Depositary Trust Company and (ii) provide a CUSIP number for the
Registrable Notes or Appreciation Exchange Notes, as the case may be.
(n) In connection with any underwritten offering initiated by
the Company of Registrable Notes pursuant to a Shelf Registration,
enter into an underwriting agreement as is customary in underwritten
offerings of debt securities similar to the Appreciation Notes and
take all such other actions as are reasonably requested by the
managing underwriter or underwriters in order to facilitate the
registration or the disposition of such Registrable Notes and, in such
connection, (i) make such representations and warranties to, and
covenants with, the underwriters with respect to the business of the
Issuers and their respective subsidiaries and the Registration
Statement, Prospectus and documents, if any, incorporated or deemed to
be incorporated by reference therein, in each case, as are customarily
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made by Issuers to underwriters in underwritten offerings of debt
securities similar to the Appreciation Notes, and confirm the same in
writing if and when requested; (ii) obtain the written opinion of
counsel to the Issuers and written updates thereof in form, scope and
substance reasonably satisfactory to the managing underwriter or
underwriters, addressed to the underwriters covering the matters
customarily covered in opinions requested in underwritten offerings of
debt similar to the Appreciation Notes and such other matters as may
be reasonably requested by the managing underwriter or underwriters;
(iii) obtain "cold comfort" letters and updates thereof in form, scope
and substance reasonably satisfactory to the managing underwriter or
underwriters from the independent certified public accountants of the
Issuers (and, if necessary, any other independent certified public
accountants of any subsidiary of any of the Issuers or of any business
acquired by any of the Issuers for which financial statements and
financial data are, or are required to be, included or incorporated by
reference in the Registration Statement), addressed to each of the
underwriters, such letters to be in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with underwritten offerings of debt similar to the
Appreciation Notes and such other matters as reasonably requested by
the managing underwriter or underwriters; and (iv) if an underwriting
agreement is entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set forth in
Section 7 hereof (or such other provisions and procedures acceptable
to Holders of a majority in aggregate principal amount of Registrable
Notes covered by such Registration Statement and the managing
underwriter or underwriters or agents) with respect to all parties to
be indemnified pursuant to said Section. The above shall be done at
each closing under such underwriting agreement, or as and to the
extent required thereunder.
(o) If (1) a Shelf Registration is filed pursuant to Section 3
hereof, or (2) a Prospectus contained in an Exchange Registration
Statement filed pursuant to Section 2 hereof is required to be
delivered under the Securities Act by any Participating Broker-Dealer
who seeks to sell Appreciation Exchange Notes during the Applicable
Period, make available for inspection by any selling Holder of such
Registrable Notes being sold, or each such Participating
Broker-Dealer, as the case may be, any underwriter participating in
any such disposition of Registrable Notes, if any, and any attorney,
accountant or other agent retained by any such selling Holder or each
such Participating Broker-Dealer, as the case may be, or underwriter
(collectively, the "Inspectors"), at the offices where normally kept,
during reasonable business hours, all financial and other records,
pertinent corporate documents and instruments of the Issuers and their
respective subsidiaries (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise any applicable due
diligence responsibilities, and cause the officers, directors and
employees of the Issuers and their respective subsidiaries to make
available for inspection all information reasonably requested by any
such Inspector in connection with such Registration Statement.
Records which any of the Issuers determine, in good faith, to be
confidential and any Records which it notifies the
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Inspectors are confidential shall not be disclosed by the Inspectors
unless (i) the disclosure of such Records is necessary to avoid or
correct a misstatement or omission in such Registration Statement, (ii)
the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction, (iii) disclosure of such
information is, in the opinion of counsel (a copy of which shall be
delivered to the Issuers) for any Inspector, necessary or advisable in
connection with any action, claim, suit or proceeding, directly or
indirectly, involving or potentially involving such Inspector and
arising out of, based upon, relating to, or involving this Agreement, or
any transactions contemplated hereby or arising hereunder, or (iv) the
information in such Records has been made generally available to the
public. Each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to agree that
information obtained by it as a result of such inspections shall be
deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Issuers unless and until
such information is generally available to the public. Each selling
Holder of such Registrable Notes and each such Participating
Broker-Dealer will be required to further agree that it will, upon
learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Issuers and allow the Issuers
to undertake appropriate action to prevent disclosure of the Records
deemed confidential at the Issuers' sole expense.
(p) Provide an indenture trustee for the Registrable Notes or
the Appreciation Exchange Notes, as the case may be, and cause the
Appreciation Notes Indenture or the trust indenture provided for in
Section 2(a) hereof, as the case may be, to be qualified under the TIA
not later than the effective date of the Exchange Offer or the first
Registration Statement relating to the Registrable Notes; and in
connection therewith, cooperate with the trustee under any such
indenture and the Holders of the Registrable Notes, to effect such
changes to such indenture as may be required for such indenture to be
so qualified in accordance with the terms of the TIA; and execute, and
use its best efforts to cause such trustee to execute, all documents
as may be required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such indenture
to be so qualified in a timely manner.
(q) Comply with all applicable rules and regulations of the SEC
and make generally available to its securityholders earnings
statements satisfying the provisions of Section 11(a) of the
Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the
end of any 12-month period (or 90 days after the end of any 12-month
period if such period is a fiscal year) (i) commencing at the end of
any fiscal quarter in which
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Registrable Notes are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in
such an offering, commencing on the first day of the first fiscal
quarter of the Company after the effective date of a Registration
Statement, which statements shall cover said 12-month periods.
(r) If an Exchange Offer or a Private Exchange is to be
consummated, upon delivery of the Registrable Notes by Holders to the
Issuers (or to such other Person as directed by the Issuers) in
exchange for the Appreciation Exchange Notes or the Private
Appreciation Exchange Notes, as the case may be, the Issuers shall
mark, or cause to be marked, on such Registrable Notes that such
Registrable Notes are being cancelled in exchange for the Appreciation
Exchange Notes or the Private Appreciation Exchange Notes, as the case
may be; in no event shall such Registrable Notes be marked as paid or
otherwise satisfied.
(s) Cooperate with each seller of Registrable Notes covered by
any Registration Statement and each underwriter, if any, participating
in the disposition of such Registrable Notes and their respective
counsel in connection with any filings required to be made with the
National Association of Securities Dealers, Inc. (the "NASD").
(t) Use its best efforts to take all other steps necessary or
advisable to effect the registration of the Registrable Notes covered
by a Registration Statement contemplated hereby.
The Issuers may require each seller of Registrable Notes as to
which any Registration Statement is being effected to furnish to the Issuers
such information regarding such seller and the distribution of such
Registrable Notes as the Issuers may, from time to time, reasonably request.
The Issuers may exclude from such Registration Statement the Registrable
Notes of any seller who unreasonably fails to furnish such information within
a reasonable time after receiving such request. Each seller as to which any
Shelf Registration is being effected agrees to furnish promptly to the
Issuers all information required to be disclosed in order to make the
information previously furnished to the Issuers by such seller not materially
misleading.
Each Holder of Registrable Notes and each Participating
Broker-Dealer agrees by acquisition of such Registrable Notes or Appreciation
Exchange Notes to be sold by such Participating Broker-Dealer, as the case
may be, that, upon actual receipt of any notice from the Issuers of the
happening of any event of the kind described in Section 5(c)(ii), 5(c)(iv),
5(c)(v), or 5(c)(vi) hereof, such Holder will forthwith dis-
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continue disposition of such Registrable Notes covered by such Registration
Statement or Prospectus or Appreciation Exchange Notes to be sold by such
Holder or Participating Broker-Dealer, as the case may be, until such
Holder's or Participating Broker-Dealer's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 5(k) hereof, or
until it is advised in writing (the "Advice") by the Issuers that the use of
the applicable Prospectus may be resumed, and has received copies of any
amendments or supplements thereto. In the event the Issuers shall give any
such notice, each of the Effectiveness Period and the Applicable Period shall
be extended by the number of days during such periods from and including the
date of the giving of such notice to and including the date when each seller
of Registrable Notes covered by such Registration Statement or Appreciation
Exchange Notes to be sold by such Participating Broker-Dealer, as the case
may be, shall have received (x) the copies of the supplemented or amended
Prospectus contemplated by Section 5(k) hereof or (y) the Advice.
6. Registration Expenses
(a) Except as otherwise provided in Section 2(c) hereof, all fees
and expenses incident to the performance of or compliance with this Agreement
by the Issuers shall be borne by the Issuers whether or not the Exchange
Offer or a Shelf Registration is filed or becomes effective, including,
without limitation, (i) all registration and filing fees (including, without
limitation, (A) fees with respect to filings required to be made with the
NASD in connection with an underwritten offering and (B) fees and expenses of
compliance with state securities or Blue Sky laws (including, without
limitation, reasonable fees and disbursements of the Issuer's counsel in
connection with Blue Sky qualifications of the Registrable Notes or
Appreciation Exchange Notes and determination of the eligibility of the
Registrable Notes or Appreciation Exchange Notes for investment under the
laws of such jurisdictions (x) where the holders of Registrable Notes are
located, in the case of the Appreciation Exchange Notes, or (y) as provided
in Section 5(h) hereof, in the case of Registrable Notes or Appreciation
Exchange Notes to be sold by a Participating Broker-Dealer during the
Applicable Period)), (ii) printing expenses, including, without limitation,
expenses of printing certificates for Registrable Notes or Appreciation
Exchange Notes in a form eligible for deposit with The Depository Trust
Company and of printing Prospectuses if the printing of Prospectuses is
requested by the managing underwriter or underwriters, if any, by the Holders
of a majority in aggregate principal amount of the Registrable Notes included
in any Registration Statement or sold by any Participating Broker-Dealer, as
the case may be, (iii) messenger, telephone and delivery expenses, (iv) fees
and disbursements of counsel for the Issuers, (v) fees and disbursements of
all independent certified public accountants referred to in Section 5(n)(iii)
hereof (including, without limitation, the expenses of any special audit and
"cold comfort" letters required by or incident to such performance by or
incident to such performance), (vi) rating agency
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fees, if any, and any fees associated with making the Registrable Notes or
Appreciation Exchange Notes eligible for trading through The Depository Trust
Company, (vii) Securities Act liability insurance, if the Issuers desire such
insurance, (viii) fees and expenses of all other Persons retained by the
Issuers, (ix) internal expenses of the Issuers (including, without
limitation, all salaries and expenses of officers and employees of the
Issuers performing legal or accounting duties), (x) the expense of any annual
audit, (xi) the fees and expenses incurred in connection with the listing of
the securities to be registered on any securities exchange or any
inter-dealer quotation system, if applicable, and (xii) the expenses relating
to printing, word processing and distributing all Registration Statements,
underwriting agreements, securities sales agreements, indentures and any
other documents necessary in order to comply with this Agreement.
(b) The Issuers, jointly and severally, shall (i) reimburse the
Holders of the Registrable Notes being registered in a Shelf Registration for
the reasonable fees and disbursements of not more than one counsel (in
addition to appropriate local counsel) chosen by the Holders of a majority in
aggregate principal amount of the Registrable Notes to be included in such
Registration Statement and (ii) reimburse out-of-pocket expenses (other than
legal expenses) of Holders of Registrable Notes incurred in connection with
the registration and sale of the Registrable Notes pursuant to a Shelf
Registration or in connection with the exchange of Registrable Notes pursuant
to the Exchange Offer. In addition, the Issuers, jointly and severally,
shall reimburse the Initial Purchaser for 50% (but not more than $30,000) of
the reasonable fees and expenses of one counsel in connection with the
Exchange Offer which shall be White & Case, and shall not be required to pay
any other legal expenses of the Initial Purchaser in connection therewith.
7. Indemnification. (a) Each of the Issuers, jointly and
severally, agrees to indemnify and hold harmless each Holder of Registrable
Notes offered pursuant to a Shelf Registration Statement and each
Participating Broker-Dealer selling Appreciation Exchange Notes during the
Applicable Period, the affiliates, directors, officers, agents,
representatives and employees of each such Person or its affiliates, and each
other Person, if any, who controls any such Person or its affiliates within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act (each, a "Participant") from and against any and all losses,
claims, damages and liabilities (including, without limitation, the
reasonable legal fees and other expenses actually incurred in connection with
any suit, action or proceeding or any claim asserted) caused by, arising out
of or based upon any untrue statement or alleged untrue statement of a
material fact contained in any Registration Statement pursuant to which the
offering of such Registrable Notes or Appreciation Exchange Notes, as the
case may be, is registered (or any amendment thereto) or related Prospectus
(or any amendments or supplements thereto) or any related preliminary
prospectus, or caused by, arising out of or based upon any omission or
alleged omission to
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<PAGE>
state therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that the Issuers will not be
required to indemnify a Participant if (i) such losses, claims, damages or
liabilities are caused by any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
information relating to any Participant furnished to the Issuers in writing
by or on behalf of such Participant expressly for use therein or (ii) if such
Participant sold to the person asserting the claim the Registrable Notes or
Appreciation Exchange Notes which are the subject of such claim and such
untrue statement or omission or alleged untrue statement or omission was
contained or made in any preliminary prospectus and corrected in the
Prospectus or any amendment or supplement thereto and the Prospectus does not
contain any other untrue statement or omission or alleged untrue statement or
omission of a material fact that was the subject matter of the related
proceeding and it is established by the Issuers in the related proceeding
that such Participant failed to deliver or provide a copy of the Prospectus
(as amended or supplemented) to such Person with or prior to the confirmation
of the sale of such Registrable Notes or Appreciation Exchange Notes sold to
such Person if required by applicable laws, unless such failure to deliver or
provide a copy of the Prospectus (as amended or supplemented) was a result of
noncompliance by the Issuers with Section 5 of this Agreement.
(b) Each Participant agrees, severally and not jointly, to
indemnify and hold harmless the Issuers, their respective directors and
officers and each Person who controls the Issuers within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Issuers to each Participant,
but only (i) with reference to information relating to such Participant
furnished to the Issuers in writing by or on behalf of such Participant
expressly for use in any Registration Statement or Prospectus, any amendment
or supplement thereto, or any preliminary prospectus or (ii) with respect to
any untrue statement or representation made by such Participant in writing to
the Issuers. The liability of any Participant under this paragraph shall in
no event exceed the proceeds received by such Participant from sales of
Registrable Notes or Exchange Notes giving rise to such obligations.
(c) If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted
against any Person in respect of which indemnity may be sought pursuant to
either of the two preceding paragraphs, such Person (the "Indemnified
Person") shall promptly notify the Person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person,
shall have the right to retain counsel reasonably satisfactory to the
Indemnified Person to represent the Indemnified Person and any others the
Indemnifying Person may reasonably designate in such proceeding and shall pay
the
23
<PAGE>
reasonable fees and expenses actually incurred by such counsel related to
such proceeding; provided, however, that the failure to so notify the
Indemnifying Person shall not relieve it of any obligation or liability which
it may have hereunder or otherwise (unless and only to the extent that such
failure results in the loss or compromise of any material rights or defenses
by the Indemnifying Person). In any such proceeding, any Indemnified Person
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Person unless (i)
the Indemnifying Person and the Indemnified Person shall have mutually agreed
in writing to the contrary, (ii) the Indemnifying Person shall have failed
within a reasonable period of time to retain counsel reasonably satisfactory
to the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and
the Indemnified Person and representation of both parties by the same counsel
would be inappropriate due to actual or potential differing interests between
them. It is understood that, unless there exists a conflict among
Indemnified Persons, the Indemnifying Person shall not, in connection with
any one such proceeding or separate but substantially similar related
proceeding in the same jurisdiction arising out of the same general
allegations, be liable for the fees and expenses of more than one separate
firm (in addition to any local counsel) for all Indemnified Persons, and that
all such reasonable fees and expenses shall be reimbursed promptly as they
are incurred. Any such separate firm for the Participants and such control
Persons of Participants shall be designated in writing by Participants who
sold a majority in interest of Registrable Notes and Appreciation Exchange
Notes sold by all such Participants and any such separate firm for the
Issuers, their directors, their officers and such control Persons of the
Issuers shall be designated in writing by the Issuers. The Indemnifying
Person shall not be liable for any settlement of any proceeding effected
without its prior written consent, but if settled with such consent or if
there be a final non-appealable judgment for the plaintiff for which the
Indemnified Person is entitled to indemnification pursuant to this Agreement,
the Indemnifying Person agrees to indemnify and hold harmless each
Indemnified Person from and against any loss or liability by reason of such
settlement or judgment. Notwithstanding the foregoing sentence, if at any
time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for reasonable fees and expenses actually
incurred by counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of
the aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such request prior to
the date of such settlement; provided, however, that the Indemnifying Person
shall not be liable for any settlement effected without its consent pursuant
to this sentence if the Indemnifying Person is contesting, in good faith, the
request for reimbursement. No Indemnifying Person shall, without the prior
written consent of the Indemnified Person, effect any settlement or
com-
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promise of any pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party, and indemnity could have
been sought hereunder by such Indemnified Person, unless such settlement (A)
includes an unconditional written release of such Indemnified Person, in form
and substance reasonably satisfactory to such Indemnified Person, from all
liability on claims that are the subject matter of such proceeding and (B)
does not include any statement as to an admission of fault, culpability or
failure to act by or on behalf of any Indemnified Person.
(d) If the indemnification provided for in Section 7(a) and 7(b)
hereof is for any reason unavailable to, or insufficient to hold harmless, an
Indemnified Person in respect of any losses, claims, damages or liabilities
referred to therein, than each Indemnifying Person under such paragraphs, in
lieu of indemnifying such Indemnified Person thereunder and in order to
provide for just and equitable contribution, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to
reflect (i) the relative benefits received by the Indemnifying Person or
Persons on the one hand and the Indemnified Person or Persons on the other
from the offering of the Appreciation Notes or (ii) if the allocation
provided by the foregoing clause (i) is not permitted by applicable law, not
only such relative benefits but also the relative fault of the Indemnifying
Person or Persons on the one hand and the Indemnified Person or Persons on
the other in connection with the statements or omissions or alleged
statements or omissions that resulted in such losses, claims, damages or
liabilities (or actions in respect thereof). The relative fault of the
parties shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Issuers on the one hand or such Participant or such other Indemnified
Person, as the case may be, on the other, the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission, and any other equitable considerations appropriate in
the circumstances.
(e) The parties agree that it would not be just and equitable if
contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Participants were treated as one entity for such
purposes) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result
of the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations
set forth above, any reasonable legal or other expenses actually incurred by
such Indemnified Person in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 7, in
no event shall a Participant be required to contribute any
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amount in excess of the amount by which proceeds received by such Participant
from sales of Registrable Notes or Appreciation Exchange Notes, as the case
may be, exceeds the amount of any damages that such Participant has otherwise
been required to pay or has paid by reason of such untrue or alleged untrue
statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
(f) The indemnity and contribution agreements contained in this
Section 7 will be in addition to any liability which the Indemnifying Persons
may otherwise have to the Indemnified Persons referred to above.
8. Rules 144 and 144A. The Company covenants that it will file
the reports required to be filed by it under the Securities Act and the
Exchange Act and the rules and regulations adopted by the SEC thereunder in a
timely manner in accordance with the requirements of the Securities Act and
the Exchange Act and, if at any time the Company is not required to file such
reports, it will, upon the request of any Holder of Registrable Notes, make
publicly available annual reports and such information, documents and other
reports of the type specified in Sections 13 and 15(d) of the Exchange Act.
The Company further covenants for so long as any Registrable Notes remain
outstanding, to make available to any Holder or beneficial owner of
Registrable Notes in connection with any sale thereof and any prospective
purchaser of such Registrable Notes from such Holder or beneficial owner the
information required by Rule 144A(d)(4) under the Securities Act in order to
permit resales of such Registrable Notes pursuant to Rule 144A.
9. Underwritten Registrations. If any of the Registrable Notes
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
manage the offering will be selected by the Holders of a majority in
aggregate principal amount of such Registrable Notes included in such
offering and reasonably acceptable to the Issuers.
No Holder of Registrable Notes may participate in any underwritten
registration hereunder unless such Holder (a) agrees to sell such Holder's
Registrable Notes on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and
(b) completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements.
10. Miscellaneous. (a) No Inconsistent Agreements. None of the
Issuers have entered, as of the date hereof, and none of the Issuers shall,
after the date of
26
<PAGE>
this Agreement, enter into any agreement with respect to any of its
securities that is inconsistent with the rights granted to the Holders of
Registrable Notes in this Agreement or otherwise conflicts with the
provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement may
not be amended, modified or supplemented, and waivers or consents to
departures from the provisions hereof may not be given, otherwise than with
the prior written consent of the Holders of not less than a majority in
aggregate principal amount of the then outstanding Registrable Notes.
Notwithstanding the foregoing, a waiver or consent to depart from the
provisions hereof with respect to a matter that relates exclusively to the
rights of Holders of Registrable Notes whose securities are being sold
pursuant to a Registration Statement and that does not directly or indirectly
affect, impair, limit or compromise the rights of other Holders of
Registrable Notes may be given by Holders of at least a majority in aggregate
principal amount of the Registrable Notes being sold by such Holders pursuant
to such Registration Statement; provided, however, that the provisions of
this sentence may not be amended, modified or supplemented except in
accordance with the provisions of the immediately preceding sentence.
(c) Notices. All notices and other communications (including,
without limitation, any notices or other communications to the Trustee)
provided for or permitted hereunder shall be made in writing by
hand-delivery, registered first-class mail, next-day air courier or facsimile:
1. if to a Holder of the Registrable Notes or any
Participating Broker-Dealer, at the most current address of such
Holder or Participating Broker-Dealer, as the case may be, set
forth on the records of the registrar under the Indenture, with a
copy in like manner to the Initial Purchaser as follows:
NatWest Capital Markets Limited
135 Bishopgate
London, England
Attention: Roger Hoit
with a copy to:
White & Case
1155 Avenue of the Americas
New York, NY 10036
Facsimile No: (212) 354-8113
27
<PAGE>
Attention: Timothy B. Goodell, Esq.
2. if to the Initial Purchaser, at the addresses specified
in Section 10(c)(1);
3. if to an Issuer, as follows:
Brill Media Company, LLC
420 N.W. Fifth Street, Suite 3-B
P.O. Box 3353
Evansville, Indiana 47732
Attention: Alan Brill
with a copy to:
Thompson & McMullan
100 Shockoe Slip
Richmond, VA 2329-4140
Attention: Charles W. Laughlin
All such notices and communications shall be deemed to have been
duly given: when delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; one
business day after being timely delivered to a next-day air courier; and when
receipt is acknowledged by the addressee, if sent by facsimile.
Copies of all such notices, demands or other communications shall
be concurrently delivered by the Person giving the same to the Trustee at the
address and in the manner specified in such Indenture.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties hereto; provided, however, that this Agreement shall not inure to the
benefit of or be binding upon a successor or assign of a Holder unless and to
the extent such successor or assign holds Registerable Notes.
(e) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
28
<PAGE>
(f) Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning thereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO
CONTRACTS MADE AND PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES
TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.
(h) Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the
parties hereto shall use their best efforts to find and employ an alternative
means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would
have executed the remaining terms, provisions, covenants and restrictions
without including any of such that may be hereafter declared invalid,
illegal, void or unenforceable.
(i) Notes Held by the Issuers or their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Registerable
Notes is required hereunder, Registerable Notes held by the Issuers or their
affiliates (as such term is defined in Rule 405 under the Securities Act)
shall not be counted in determining whether such consent or approval was
given by the Holders of such required percentage.
(j) Third Party Beneficiaries. Holders of Registerable Notes and
Participating Broker-Dealers are intended third party beneficiaries of this
Agreement and this Agreement may be enforced by such Persons.
29
<PAGE>
IN WITNESS WHEREOF, the parties have executed the Agreement as of
the date first written above.
Company:
BRILL MEDIA COMPANY, LLC, a Virginia Limited
Liability Company
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: President
30
<PAGE>
Guarantors:
BMC HOLDINGS, LLC, a Virginia Limited
Liability Company
By: BRILL MEDIA COMPANY, LLC., its Manager
By: BRILL MEDIA MANAGEMENT, INC. its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
READING RADIO, INC.,
a Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: President
TRI-STATE BROADCASTING, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
31
<PAGE>
NORTHERN COLORADO RADIO, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
NCR II, INC., a Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MISSOURI BROADCASTING, INC., a
Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CMB II, INC.
By: _______________________________
Name: Alan R. Brill
Title: Vice President
32
<PAGE>
NORTHLAND BROADCASTING, LLC, a Virginia
Limited Liability Company
By: NORTHLAND HOLDINGS, LLC, a Virginia
Limited Liability Company, its Manager
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
NB II, INC., a Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN NEWSPAPERS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
33
<PAGE>
CADILLAC NEWSPAPERS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CMN ASSOCIATED PUBLICATIONS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., L.P.
By: CENTRAL MICHIGAN DISTRIBUTION CO., INC.
its General Partner
By: _______________________________
Name: Alan R. Brill
Title: Vice President
CENTRAL MICHIGAN DISTRIBUTION CO., INC., a
Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
34
<PAGE>
GLADWIN NEWSPAPERS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
GRAPH ADS PRINTING, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
MIDLAND BUYER'S GUIDE, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
ST. JOHNS NEWSPAPERS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
35
<PAGE>
HURON P.S. LLC, a Virginia Limited Liability
Company
By: HURON HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a
Virginia Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
HURON NEWSPAPERS, LLC, a Virginia Limited
Liability Company
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
36
<PAGE>
HURON HOLDINGS, LLC, a Virginia Limited
Liability Company
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its
Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
NORTHERN COLORADO HOLDINGS, LLC
By: BMC HOLDINGS, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
NCR III, LLC, a Virginia Limited Liability
Company
37
<PAGE>
By: NCH II, LLC, a Virginia Limited
Liability Company, its Manager
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: Brill Media Company, LLC, a Virginia
Limited Liability Company, its Manager
By: Brill Media Management, Inc., a
Virginia Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
NCH II, LLC, a Virginia Limited Liability
Company
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
NORTHLAND HOLDINGS, LLC, a Virginia Limited
Liability Company
38
<PAGE>
By: BMC Holdings, LLC, a Virginia Limited
Liability Company, its Manager
By: BRILL MEDIA COMPANY, LLC, a Virginia
Limited Liability Company, its Manager
By: BRILL MEDIA MANAGEMENT, INC., a Virginia
Corporation, its Manager
By: _______________________________
Name: Alan R. Brill
Title: President
CMN HOLDING, INC., a Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: Vice President
BRILL RADIO INC., a Virginia Corporation
By: _______________________________
Name: Alan R. Brill
Title: President
BRILL NEWSPAPERS, INC., a Virginia
Corporation
By: _______________________________
Name: Alan R. Brill
Title: President
39
<PAGE>
40
<PAGE>
The foregoing Agreement is
hereby confirmed and accepted
as of the date first above
written:
NATWEST CAPITAL MARKETS LIMITED
By: __________________________
Name:
Title:
1
<PAGE>
SCHEDULE A
SUBSIDIARY GUARANTORS
1. Holdings
2. Reading Radio, Inc.
3. Tri-State Broadcasting, Inc.
4. Northern Colorado Radio, Inc.
5. NCR II, Inc.
6. Central Missouri Broadcasting, Inc.
7. CMB II, Inc.
8. Northland Broadcasting, LLC
9. NB II, Inc.
10. Central Michigan Newspapers, Inc.
11. Cadillac Newspapers, Inc.
12. CMN Associated Publications, Inc.
13. Central Michigan Distribution Co., L.P.
14. Central Michigan Distribution Co., Inc.
15. Gladwin Newspapers, Inc.
16. Graph Ads Printing, Inc.
17. Midland Buyer's Guide, Inc.
18. St. Johns Newspapers, Inc.
19. Huron P.S., LLC
20. Huron Newspapers, LLC
21. Huron Holdings, LLC
22. Northern Colorado Holdings, LLC
23. NCR III, LLC
24. NCH II, LLC
25. Northland Holdings, LLC
26. CMN Holdings, Inc.
27. Brill Radio Inc.
28. Brill Newspapers, Inc.
<PAGE>
EX-10.11(a)
Revolving Credit Agreement
REVOLVING CREDIT AGREEMENT
dated as of
December 30, 1997
By and Among
NB, II, INC.; NORTHLAND BROADCASTING, LLC; READING RADIO, INC.;
CENTRAL MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHERN COLORADO
RADIO, INC.; NCR II, INC.; TRI-STATE BROADCASTING, INC.; CENTRAL
MICHIGAN NEWSPAPERS, INC.; GRAPH ADS PRINTING, INC.; GLADWIN
NEWSPAPERS, INC.; CADILLAC NEWSPAPERS, INC.; MIDLAND BUYER'S GUIDE,
INC.; CMN ASSOCIATED PUBLICATIONS, INC.; CENTRAL MICHIGAN
DISTRIBUTION CO., INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.;
BRILL NESPAPERS, INC.; BRILL RADIO, INC.; HURON HOLDINGS, LLC;
NORTHERN COLORADO HOLDINGS, LLC; NCR III, LLC; NORTHLAND HOLDINGS,
LLC, CMN HOLDINGS, INC.; NCH II, LLC; ST. JOHNS NEWSPAPERS, INC.;
HURON NEWSPAPERS, LLC; and HURON P.S., LLC
("Borrowers")
and
BMC HOLDINGS, LLC
a Virginia Limited Liability Company
("Lender")
<PAGE>
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is dated as of December 30, 1997, and is
entered into by and among the following parties:
Northland Broadcasting, LLC ("Northland"); Reading Radio, Inc.
("Reading"); Central Missouri Broadcasting, Inc. ("CMB"); Northern Colorado
Radio, Inc. ("NCR"); Tri-State Broadcasting, Inc. (Tri-State"); CMB II, Inc.
("CMB II"); NB II, Inc. ("NB II"); Central Michigan Newspapers, Inc. ("CMN");
Graph Ads Printing, Inc. ("Graph Ads"); Gladwin Newspapers, Inc. ("Gladwin");
Cadillac Newspapers, Inc. ("Cadillac"); Midland Buyer's Guide, Inc. ("MBG"); CMN
Associated Publications, Inc. ("CMN Assoc."); Central Michigan Distribution,
Inc. ("CMD"); Central Michigan Distribution Co., L.P. ("CMD L.P."); Brill
Newspapers, Inc. ("BNI"); Brill Radio, Inc. ("BRI"); Huron Holdings, LLC ("HH
LLC"); Northern Colorado Holdings, LLC ("NCH LLC"); NCR III, LLC ("NCR III");
Northland Holdings, LLC ("NH LLC"); CMN Holdings, Inc. ("CMNH"); NCH II, LLC
("NCH II"); St. Johns Newspapers, Inc. ("St. Johns"); NCR II, Inc. ("NCR II");
Huron Newspapers, LLC ("Huron Newspapers"); and Huron P.S., LLC ("HPS"); (all of
the entities identified in this section shall be referred to individually
sometimes as a "Borrower" and collectively as "Borrowers"), as borrowers; and
BMC Holdings, LLC, a Virginia limited liability company (hereinafter "Lender")
as the lender.
RECITALS
(Capitalized terms used herein are defined below.)
Lender has agreed to extend a line of credit in favor of the Borrowers,
jointly and severally, in the maximum principal amount of $108,000,000.00 (the
"Credit Facility"), to be borrowed and reborrowed by the Borrowers, jointly and
severally, upon the terms hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing, and the covenants
contained herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
SECTION 1.1 Definitions. The following terms, as used herein, shall have
the following meanings:
"Additional Advance" and "Additional Advances" shall have the meaning set
forth in Section 2.1 hereof.
1
<PAGE>
"Advances" means collectively the Closing Date Advances and the Additional
Advances.
"Agreement" means this Revolving Credit Agreement, together with any
concurrent or subsequent rider, amendment, modification, schedule or exhibit to
this Revolving Credit Agreement.
"Bankruptcy Code" means Title 11 of the United States Code entitled "The
Bankruptcy Code," as amended or supplemented from time to time, or any successor
statute, and any and all rules and regulations issued or promulgated in
connection therewith.
"Borrower" or "Borrowers" means individually or collectively the Borrowers
described in the introduction to this Agreement and any other Person that
becomes a Borrower by executing this Agreement.
"Brill" means Alan R. Brill of Evansville, Indiana.
"Brill Media" means Brill Media Company, LLC.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which commercial lenders in the City of New York, New York, are authorized or
required by law or executive order or decree to close.
"Closing" shall have the meaning set forth in Section 3.1 hereof.
"Closing Date" means December 30, 1997.
"Closing Date Advance" and "Closing Date Advances" shall have the
respective meanings set forth in Section 2.2 hereof.
"Credit Document(s)" means each of the following documents, instruments,
and agreements individually or collectively, as the context requires: (a) this
Agreement; (b) the Revolving Credit Note; (c) the Indenture; and (d) such other
documents, instruments, and agreements as Lender may reasonably request in
connection with any transaction contemplated hereunder.
"Cure Period" shall mean the thirty (30) day period immediately following
the occurrence of an Event of Default.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means the fixed rate of interest of fifteen percent (15%)
per annum.
2
<PAGE>
"Dollars" or "$" means lawful currency of the United States of America.
"Event(s) of Default" shall have the meanings set forth in Section 7.1
hereof.
"FCC" means the Federal Communications Commission or any Governmental
authority succeeding to any of its functions.
"FCC Licenses" means all commercial broadcast station licenses, permits
and other certificates required by (A) the FCC, (B) the Communications Act of
1934, as amended, (C) 47 CFR Part 73, or (D) any other governmental entity in
connection with the ownership and operation of each of the Radio Stations and
granted or assigned to the Borrowers by the FCC or any other public or
governmental agency or regulatory body for the operation of said Radio Stations.
"Final FCC Order" means an order, action or decision of the FCC (or
subsequent court order or judgment) that (A) has not been reversed, stayed,
enjoined, modified or amended and as to which the time for appeal, petition for
certiorari, to seek reargument, rehearing, administrative reconsideration or
review has expired; and (B) as to which no appeal, reargument, petition for
certiorari, rehearing, petition for reconsideration or application for review is
pending; or (C) as to which any right to appeal, reargue, petition for
certiorari, rehearing, reconsideration or review has been sought, the order or
judgment of the court or FCC has been (1) affirmed by the highest court (or
administrative entity or body) to which the order was appealed or from which the
argument, rehearing, reconsideration or review was sought, or (2) certiorari has
been denied, and (3) the time to take any further appeal or to seek certiorari
or further reargument, rehearing, reconsideration or review has expired.
"Financial Statement(s)" means, with respect to any accounting period of
any Person, statements of income and statements of changes in financial position
of such Person for such period, and balance sheets of such Person as of the end
of such period, setting forth in each case in comparative form figures for the
corresponding period in the preceding Fiscal Year, or, if such period is a full
Fiscal Year, corresponding figures from the preceding annual audit, all prepared
in reasonable detail and in accordance with GAAP where appropriate. "Financial
Statement(s)" shall include the notes and schedules thereto.
"Fiscal Year" means, for each Borrower, the time period from and including
March 1 through the last day of the following February.
3
<PAGE>
"Funding Borrower" shall have the meaning set forth in Section 2.9(b)
hereof.
"Fiscal Year End" means, for each Borrower, the last day of February.
"GAAP" means generally accepted accounting principles in the United States
of America, consistently applied, which are in effect as of the date of their
application.
"Guaranty" means the Borrowers' joint and several guaranty of payment of
the Media Notes.
"Indenture" means that certain Trust Indenture entered into by and among
Brill Media and Brill Media Management, Inc. (collectively as the "Issuer"), and
U.S. Trust Company as "Trustee" dated December 30, 1997, in which each present
Borrower is identified as a "Restricted Subsidiary".
"Initial Interest Rate" means the fixed rate of interest of 7.292% per
annum until December 15, 1999 and thereafter at the rate of 11.6666% per annum
during any period that the unpaid principal balance of the Note exceeds $105
million and 12.0% per annum during any period that the unpaid principal balance
of the Note is $105 million or less.
"Insolvency Proceeding" means any proceeding commenced by or against any
Person, under any provision of the Bankruptcy Code, or under any other
bankruptcy or insolvency law, including, but not limited to, assignments for the
benefit of creditors, formal or informal moratoriums, compositions, or
extensions with some or all creditors.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
supplemented and amended from time to time, or any successor statute, and any
and all regulations and rules promulgated thereunder.
"Lender" means only BMC Holdings, LLC, a Virginia limited liability
company.
"Lending Office" means Lender's office located at the address set forth in
Section 8.1 or such other office of Lender as it may hereafter designate as its
Lending Office by notice to the Borrowers.
"Licenses" means all FCC Licenses.
"Loan" at any time means, collectively, the aggregate amount of all
Advances hereunder then outstanding.
4
<PAGE>
"Material Adverse Effect" means any material adverse change in (a) the
financial condition of the Borrowers taken as a whole, (b) the ability of the
Borrowers taken as a whole to perform the Obligations under the Credit Documents
(including, without limitation, repayment of the Obligations as they come due),
or (c) other than as the result of some action or inaction by Lender, the
validity or enforceability of this Agreement, the other Credit Documents, or the
rights or remedies of Lender hereunder and thereunder.
"Maturity Date" means the earlier of December 15, 2007, or the maturity of
the Media Notes according to their terms, or such earlier date to which the
maturity of the Loan may be accelerated as provided herein.
"Media Notes" mean the notes issued by Brill Media and Brill Media
Management, Inc. as co-issuers pursuant to the Indenture, the payment of which
is guaranteed by the Borrowers.
"Newspaper Operators" means, collectively, CMN, Graph Ads, Gladwin,
Cadillac, MBG, CMN Assoc., CMD Inc., CMD L.P., St. Johns, Huron Newspapers, HPS
and any other Borrower that operates or owns or controls any Newspaper from time
to time.
"Newspapers" means, collectively, the Morning Sun; Mt. Pleasant Buyers
Guide; Clare County Buyers Guide; Alma Reminder; Gladwin Buyers Guide; Isabella
County Herald; Cadillac Buyers Guide; Midland Buyers Guide; Carson City
Reminder; Edmore Advertiser; Hemlock Shoppers Guide; St. Johns Reminder; The
Northeastern Shopper Guides; and any other newspaper, periodical, tabloid,
magazine or other publication business owned and operated by any Borrower from
time to time, and "Newspaper" shall mean any one of the Newspapers.
"Obligations" means any and all indebtedness, liabilities, and obligations
of the Borrowers or any of them owing to Lender, arising out of or in connection
with this Agreement or any other Credit Document, previously, now, or hereafter
incurred, and howsoever evidenced, whether direct or indirect, absolute or
contingent, joint or several, liquidated or unliquidated, voluntary or
involuntary, due or not due, legal or equitable, whether incurred before,
during, or after any Insolvency Proceeding, and whether recovery thereof is or
becomes otherwise unenforceable or unallowable as claims in any Insolvency
Proceeding, together with all interest thereupon (including all interest
accruing during the pendency of an Insolvency Proceeding), including without
limitation all principal and interest owing under the Revolving Credit Note and
any other fees and expenses due hereunder, and all other indebtedness evidenced
by the Credit Documents.
5
<PAGE>
"Person" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, lenders, trust companies, land trusts, business
trusts, or other organizations, irrespective of whether they are legal entities,
and governments and agencies and political subdivisions thereof.
"Post-Closing Lender Expenses" means all reasonable costs or expenses paid
or advanced by Lenders which are required to be paid by the Borrowers under this
Agreement and all other documents executed in connection herewith on or after
the Closing Date, including without limitation all costs or expenses paid or
advanced by Lenders in connection with any Advances, including without
limitation, all recording fees, taxes, and any other fees and costs incurred in
connection with the funding of any Advances pursuant to Section 2.7 and Section
3.2; all taxes and insurance premiums of every nature and kind of the Borrowers
paid by Lenders; all amounts advanced by Lenders to cure defaults under
Permitted Debt; reasonable and customary appraisal, filing, recording,
documentation, publication and search fees paid or actually incurred by Lenders
to correct any default or enforce any provision of this Agreement and all other
Credit Documents executed in connection herewith on or after the Closing Date;
reasonable costs and expenses of suits or arbitration proceedings incurred by
Lenders in enforcing or defending this Agreement, or any portion hereof, and
reasonable attorneys' fees and expenses incurred by Lenders in amending,
terminating, enforcing, defending or taking other action concerning this
Agreement or any other Credit Documents or any other documents executed in
connection herewith, whether or not suit is brought, such attorneys' fees to
include the reasonable estimate of the allocated costs and expense of Lenders'
in-house legal counsel and professional staff. All Post-Closing Lender Expenses
paid or incurred by Lenders are payable upon demand, and if not reimbursed
within thirty (30) days after demand, shall become a part of the Obligations and
shall immediately thereafter bear interest, together with all other amounts to
be paid by the Borrowers pursuant hereto, at the appropriate interest rate in
accordance with the provisions of Section 2.3 hereof.
"Radio Operators" means, collectively, Northland, Reading, CMB, NCR,
Tri-State, CMB II, NB II, and NCR II, and any other Borrower that operates, owns
or controls any Radio Station from time to time.
"Radio Stations" means each of the broadcast radio stations presently
owned and operated by any of the Borrowers and any other broadcast radio station
hereafter owned or operated by any Borrower, and the Licenses with respect
thereto. "Radio Station" means any one of the Radio Stations.
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"Revolving Credit Note" or the "Note" means that certain Revolving Credit
Note of even date herewith in the principal amount of One Hundred Eight Million
Dollars ($108,000,000.00) executed by the Borrowers to the order of Lender,
together with any amendments thereto or modifications thereof.
SECTION 1.2 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP.
SECTION 1.3 Computation of Time Periods. In this Agreement, with respect
to the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding." Periods of days referred to in this Agreement
shall be counted in calendar days unless otherwise stated.
SECTION 1.4 Construction. Unless the context of this Agreement clearly
requires otherwise, references to the plural include the singular and to the
singular include the plural, references to any gender include any other gender,
the part includes the whole, the term "including" is not limiting, and the term
"or" has, except where otherwise indicated, the inclusive meaning represented by
the phrase "and/or." The words "hereof," "herein," "hereby," "hereunder," and
similar terms in this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article, section, subsection,
clause, exhibit and schedule references are to this Agreement, unless otherwise
specified. Any reference in this Agreement or any of the other Credit Documents
to this Agreement includes any and all permitted alterations, amendments,
changes, extensions, modifications, renewals, or supplements thereto or thereof,
as applicable.
SECTION 1.5 Schedules. All of the schedules attached hereto shall be
deemed incorporated herein by reference.
SECTION 1.6 Independence of Provisions. All agreements and covenants
hereunder, under the other Credit Documents, and the other documents,
instruments, and agreements entered into in connection herewith shall be given
independent effect such that if a particular action or condition is prohibited
by the terms of any such agreement or covenant, the fact that such action or
condition would be permitted within the limitations of another agreement or
covenant shall not be construed as allowing such action to be taken or condition
to exist, except as and to the extent otherwise herein provided.
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ARTICLE II
THE REVOLVING CREDIT
SECTION 2.1 The Loan. Subject to the terms and conditions hereof Lender
hereby agrees to make Advances to the Borrowers as follows:
(a) Closing Date Advances. Lender agrees to lend to the Borrowers on the
Closing Date an amount equal to the sum of the Closing Date Advances as set
forth in Section 2.2.
(b) Additional Advances. Subject to Borrowers' compliance with the
requirements of Section 3.2, from and after the Closing Date, from time to time
from funds available to Lender therefor the Lender shall lend and relend funds
and make additional advances to Borrowers upon the request of Borrowers (the
"Additional Advances"); provided, however, that at any time before December 15,
2007, the principal amount of all Closing Date Advances and Additional Advances
then outstanding shall not exceed the amount set forth in Section 2.2. Any
Additional Advances and any portion of the Closing Date Advances subsequently
repaid or prepaid may be reborrowed as herein provided.
SECTION 2.2 Purpose and Disbursement of Proceeds of Closing Date Advances.
On the Closing Date Advances shall be made to Borrowers in the aggregate amount
of One Hundred Eight Million Dollars ($108,000,000.00) (the "Closing Date
Advances").
SECTION 2.3 Interest Rates. The unpaid principal balance of the Loan shall
bear interest at the applicable rate per annum provided below:
(a) Initial Interest Rate. From and after the Closing Date, interest shall
accrue on the outstanding principal balance of the Loan at the Initial Interest
Rate.
(b) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, interest shall accrue on the then outstanding principal
balance of the Loan at the Default Rate. In the event the Event of Default is
cured within the Cure Period, if applicable, the interest rate on the Loan shall
revert to the Initial Interest Rate effective as of the date the cure is
effectuated. Interest which has accrued on the Obligations at the Default Rate
shall be due and payable with the next required payment hereunder or on demand
as it accrues if after the Maturity Date.
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(c) Computation of Interest. All computations of interest shall be
calculated on the basis of a year of three hundred sixty (360) days for the
actual days elapsed.
SECTION 2.4 Repayment of the Loan. The Borrowers shall repay the Loan as
follows:
(a) Interest Payments. The Borrowers shall pay to Lender semi-annual
interest payments in arrears on the aggregate outstanding principal balance of
the Note, to include all interest then due and accrued at the Initial Interest
Rate, on the first day of each June and December, commencing June 15, 1998, and
each June and December thereafter continuing to the Maturity Date when all then
outstanding Obligations shall be due and payable, unless sooner repaid. All
interest due at the Default Rate shall be paid in accordance with Section 2.3(b)
hereof.
(b) Payment of Principal and Remaining Obligations. Except as otherwise
set forth herein, all principal amounts outstanding under the Note and all other
Obligations shall be due and payable in full on the Maturity Date.
SECTION 2.5 Statements of Obligations. The Loan and the joint and several
Borrowers' obligation to repay the same shall be evidenced by the Revolving
Credit Note and this Agreement, and all payments of principal or interest with
respect to the Loan shall be evidenced by notations made by Lender on Lender's
books and records showing the date and amount of the applicable Advance and each
payment of principal or interest.
SECTION 2.6 Prepayments. In the event the Borrowers desire to repay any or
all of the then outstanding principal balance due under the Note prior to the
Maturity Date, the Borrowers may do so at any time without penalty.
SECTION 2.7 Cross-Default/Cross-Collateral Provisions. An Event of Default
hereunder shall constitute an Event of Default under the Revolving Credit Note.
SECTION 2.8 Time and Place of Payment. Each payment due on the Revolving
Credit Note shall be made to Lender in immediately available funds, not later
than 12:00 p.m., local time, on the day of payment, at the Lender's then
business office.
SECTION 2.9 Joint and Several Liability: Payment; Indemnifications.
(a) Each Borrower hereby agrees and acknowledges that the obligation of
each Borrower for payment of the Obligations shall be joint and several with the
obligations of each other Borrower
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hereunder regardless of which Borrower actually receives the proceeds of any
borrowing. Each Borrower hereby agrees and acknowledges that it will receive
substantial benefits from the Loan, including each and all Advances. The
Obligations shall not be impaired or released by any action or inaction on the
part of Lender with respect to any other Borrower, including any action or
inaction that otherwise would release a surety.
(b) In order to provide for just and equitable contribution between the
Borrowers if any payment is made by a Borrower (for purposes of this Section
2.9(b), a "Funding Borrower") in discharging any of the Obligations, that
Funding Borrower shall be entitled to a contribution from the other Borrowers
for all payments, damages and expenses incurred by that Funding Borrower in
discharging the Obligations, in the manner and to the extent required to
allocate liabilities in an equitable manner among the Borrowers on the basis of
the relative benefits received by the Borrowers. If and to the extent that a
Funding Borrower makes any payment to the Lender or any other Person in respect
of the Obligations, any claim that such Funding Borrower may have against the
other Borrowers by reason thereof shall be subject and subordinate to the prior
cash payment in full of the Obligations.
(c) The parties hereto acknowledge that the right to contribution
hereunder shall constitute an asset of the party to which such contribution is
owing. Notwithstanding any of the foregoing to the contrary, such contribution
arrangements shall not limit in any manner the joint and several nature of the
Obligations; shall not limit, release or otherwise impair any rights of the
Lender under the Credit Documents, and shall not alter, limit or impair the
obligation of any Borrower, which obligation is absolute and unconditional, to
repay the Obligations.
(d) The parties expressly agree that payment by any Borrower of amounts
due and payable on the Media Notes that is made pursuant to such Borrower's
Guaranty agreement shall to the extent and in the amount of such payment
constitute a payment and discharge of such Borrower's Obligations on the Note
and the Loan.
ARTICLE III
CONDITIONS TO BORROWING
SECTION 3.1 Disbursement of Closing Date Advances and Effectiveness of
Agreement. This Agreement shall become effective and Lender shall disburse the
Closing Date Advances in accordance with Section 2.2 above if, and only if, each
of the following conditions have been fulfilled to the satisfaction of
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Lender and its legal counsel (the occurrence of which shall be called,
collectively, the "Closing"):
(a) receipt by Lender of this Agreement and each of the other Credit
Documents, all duly executed and, where required, acknowledged; and
(b) receipt by Lender of all other documents Lender reasonably may request
be delivered by Borrowers.
SECTION 3.2 Conditions to Lender's Approval of Additional Advance(s).
Lender shall not be deemed to have approved and shall not make any Additional
Advance(s) unless and until the following conditions have been fulfilled with
respect to each such Additional Advance:
(a) Lender shall have received and approved a request from the Borrower(s)
for disbursement of such an Additional Advance;
(b) the Maturity Date shall not have occurred;
(c) the then sum of the Advances outstanding and unpaid (including the
Advance then requested) shall not exceed the amount specified in Section 2.2;
(d) no Borrower then is in default of any material term, covenant or
condition under any Credit Document; and
(e) Lender is not then in default to Brill Media on Lender's note payable
to Brill Media of even date herewith in the initial principal amount of the
Credit Facility.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each Borrower makes the following representations and warranties to
Lender, which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the payment,
performance and satisfaction in full of the Obligations.
SECTION 4.1 Legal Status. Each Borrower is an entity duly organized and
existing under the laws of the Commonwealth of Virginia.
SECTION 4.2 No Violation: Compliance. As of Closing, the execution,
delivery, and performance of this Agreement and the other Credit Documents are
within each Borrower's respective powers, are not in conflict with the terms of
any charter, bylaw, or other agreement, and do not result in a breach of or
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constitute a default under any contract, obligation, indenture, or other
instrument to which either is a party or by which either is bound or affected;
and there is no law, rule or regulation, nor is there any judgment, decree or
order of any court or governmental authority binding on any Borrower that would
be contravened by the execution, delivery, performance, or enforcement of this
Agreement or the other Credit Documents.
SECTION 4.3 Authorization; Validity. Each Borrower has taken all
partnership, corporate, limited liability company, or other action necessary to
authorize the execution and delivery of this Agreement and the other Credit
Documents, and the consummation of the transactions contemplated hereby and
thereby.
SECTION 4.4 Approvals; Consents. As of the date of this Agreement, no
approval, consent, exemption or other action by, or notice to or filing with,
any governmental authority is presently necessary in connection with the
execution, delivery, performance or enforcement of this Agreement or the other
Credit Documents except as may have been obtained by the Borrowers with
certified copies delivered to Lender.
SECTION 4.5 Binding Agreements. This Agreement and all other Credit
Documents have been duly executed and delivered by each Borrower. This Agreement
and each other Credit Document to which any Borrower is a party, constitute the
legal, valid and binding obligations of each Borrower enforceable in accordance
with their terms, except insofar as the enforceability hereof or thereof may be
limited by applicable bankruptcy, insolvency or other similar laws now or
hereafter in effect affecting the enforcement of creditors' rights generally, or
by general principals of equity.
ARTICLE V
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that until the Obligations have been paid in
full to Lender, each Borrower shall:
SECTION 5.1 Punctual Payments. Punctually pay the interest and principal
on the Loan, and any fees or other liabilities due under this Agreement and the
other Credit Documents, at the times and place and in the manner specified in
this Agreement.
SECTION 5.2 Books and Records. Maintain adequate books and records and
permit any authorized representative of Lender, or Lender, at any reasonable
time during normal business hours, to inspect, audit, and examine such books and
records, to make copies of the same, and to inspect the Borrowers' Assets.
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SECTION 5.3 Financial Statements. Deliver to Lender the following, all in
form and detail reasonably satisfactory to Lender:
(a) as soon as available but not later than thirty (30) days after
receipt, a Financial Statement for each Borrower for the Fiscal Year then ended;
and
(b) from time to time such other information as Lender may reasonably
request.
SECTION 5.4 Existence; Compliance with Law. Preserve and maintain its
existence and all of its licenses (including without limitation, all FCC
licenses), permits, governmental approvals, rights, privileges and franchises
required for the operations of the Borrowers to the extent that failure to
preserve and maintain the same could reasonably be expected to have a Material
Adverse Effect; comply with the provisions of all documents pursuant to which
each Borrower is organized that govern such Borrower's continued existence to
the extent that failure to so comply could reasonably be expected to have a
Material Adverse Effect on any Borrower; and comply with the requirements of all
applicable laws, rules, regulations, orders of any governmental authority and
requirements for the maintenance of each Borrower's insurance, licenses,
permits, governmental approvals, rights, privileges and franchises, to the
extent that failure to so comply could reasonably be expected to have a Material
Adverse Effect.
SECTION 5.5 Inspection of Assets. Allow Lender and its representatives
access to inspect the Assets, including the Radio Stations, and the Newspapers,
upon reasonable notice by Lender to the Borrowers.
SECTION 5.6 Notice to Lender. Promptly upon the Borrowers acquiring
knowledge thereof, give notice to Lender of:
(a) all litigation affecting the Borrowers where the amount claimed is in
excess of One Hundred Thousand Dollars ($100,000) for any individual matter or
in excess of Two Hundred Fifty Thousand Dollars ($250,000) in the aggregate and
when such amount is not covered by applicable insurance (less applicable
deductibles);
(b) any substantial dispute which may exist between any Borrower, on the
one hand, and any governmental regulatory body or law enforcement authority, on
the other, if the determination of such dispute could reasonably be expected to
have a Material Adverse Effect;
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(c) any labor controversy resulting in or threatening to result in a
strike against any Borrower, if the commencement of such strike could reasonably
be expected to have a Material Adverse Effect;
(d) any Default or Event of Default;
(e) any other matter that has resulted in or could reasonably be expected
to have a Material Adverse Effect upon a Borrower; and
(f) any sale or transfer of any capital stock of membership interest in,
or partnership interest in, any Borrower or any affiliate directly or indirectly
owning or owned by any Borrower.
SECTION 5.7 Compliance with Indenture. Comply in all respects with
requirements of the Indenture as applicable to each Borrower as a "Restricted
Subsidiary" as therein identified and defined.
SECTION 5.8 Notice of FCC Reports. Promptly upon their becoming available,
provide Lender with copies of each periodic or special report filed by or on
behalf of any Borrower with the FCC, if such reports indicate any material
adverse change in the business, operations, affairs, or conditions of Borrower's
business, and copies of any material notices or other communications from the
FCC that specifically relate to the operation of any Borrower's business.
ARTICLE VI
NEGATIVE COVENANTS
The Borrowers further covenant and agree that until the Obligations have
been fully paid to Lender, without Lender's prior consent and except as and to
the extent permitted to a Restricted Subsidiary under the Indenture, the
Borrowers shall not:
SECTION 6.1 Compliance with Indenture. Take any action not permitted to a
Restricted Subsidiary by the Indenture.
SECTION 6.2 Character of Business. Engage in any business activities or
operations substantially different from or unrelated to the present business
activities and operations of the Borrowers.
SECTION 6.3 Dividends, Distributions. While an Event of Default shall have
occurred and be continuing, declare, make, or pay any dividend or distribution
in cash or kind except as otherwise provided for or permitted herein or in the
Indenture.
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SECTION 6.4 Change in Ownership. Cause, permit or suffer any material
change, direct or indirect, in the capital ownership, membership, or control of
any Borrower.
SECTION 6.5 Change in Name. Cause, permit or suffer any material change in
the name of any Borrower.
SECTION 6.6 Change in Fiscal Year or Fiscal Year End. Change any
Borrower's Fiscal Year or Fiscal Year End.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
SECTION 7.1 Events of Default. The occurrence of any one or more of the
following events, acts or occurrences shall constitute an event of default (an
"Event of Default") hereunder:
(a) The Borrowers fail to timely make or cause to be made any payment of
interest due on the Revolving Credit Note;
(b) The Borrowers fail to pay the Loan when due and payable at maturity,
including the payment of any Post-Closing Lender Expenses, or any other amount
then payable hereunder;
(c) The Borrowers fail to observe or perform any covenant applicable to a
Restricted Subsidiary and set forth in the Indenture or in Article V, Article VI
or Article VIII herein or any other Credit Document;
(d) Any Borrower commences a voluntary Insolvency Proceeding seeking
liquidation, reorganization or other relief with respect to itself or seeking
the appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, or consents to any such
relief or to the appointment of or taking possession by any such official in an
involuntary Insolvency Proceeding or fails generally to pay its debts as they
become due, or takes any corporate action to authorize any of the foregoing;
(e) (1) A court of competent jurisdiction enters a decree or order for
relief in respect of any Borrower in an insolvency case under the Bankruptcy
Code or under any other applicable bankruptcy, insolvency, or similar law now or
hereafter in effect, which decree or order is not stayed; or any other similar
relief shall be granted under any applicable federal or state law; or (2) An
involuntary Insolvency Proceeding is commenced against any Borrower seeking
liquidation, reorganization or other relief with respect to it or seeking the
appointment of a trustee, receiver, liquidator, custodian or other similar
official of it or any substantial part of its property, and such
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involuntary Insolvency Proceeding remains undismissed and unstayed for a period
of sixty (60) days:
(f) A judgment creditor obtains possession of any of the Assets of any
Borrower by any means, including levy, discounts replevin, or self-help, or one
or more judgments are entered against the Borrowers involving singly or in the
aggregate a liability in excess of Five Hundred Thousand Dollars ($500,000) (to
the extent not fully covered by insurance) or any order, judgment or decree is
entered decreeing the dissolution of the Borrowers and such order remains
undischarged or unstayed for a period in excess of ninety (90) calendar days;
(g) The FCC Licenses (excluding any auxiliary licenses) are modified
adversely, revoked, suspended, canceled or otherwise rendered non-transferable
by the FCC or any other regulatory agency or court of competent jurisdiction and
such action shall have become a Final FCC Order; or
(h) Any Radio Operator shall fail to be the licensee under any or all of
the FCC Licenses other than in connection with a sale or transfer of any of the
FCC Licenses consented to by Lender.
SECTION 7.2 Remedies. Upon the occurrence and during the continuance of
any Event of Default not cured within the Cure Period or waived by the Lender,
the principal amount then due under the Note shall begin to accrue interest at
the Default Rate. In the event such Event of Default is cured within any
applicable Cure Period, the interest rate on the Loan thereupon shall revert to
the Initial Interest Rate. The Lender also shall have all remedies set forth
herein and in the other Credit Documents and all remedies at law or in equity
that are consistent with the Communications Act and the rules and regulations of
the FCC.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Notices. All notices, requests and other communications to any
party hereunder shall be in writing and shall be given to such party at its
address and to the telefax number set forth below or such other address or
telefax number as such party may hereafter specify for the purpose by notice to
the other party:
If to the Borrowers:
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Central Michigan Newspapers, Inc.
c/o Brill Media Company, L.P.
420 N.W. Fifth Street, Suite 420
P.O. Box 3353
Evansville, IN 47732
Attention: Mr. Alan R. Brill
Telephone: (812) 423-6200
Facsimile: (812) 428-4021
with a copy to:
Charles W. Laughlin, Esq.
Thompson & McMullan
100 Shockoe Slip
Richmond, VA 23219
Telephone: (804) 649-7545
Facsimile: (804) 780-1813
If to Lender:
BMC Holdings, LLC
c/o Brill Media Company, L.P.
420 N.W. Fifth Street, Suite 420
P.O. Box 3353
Evansville, IN 47732
Any notice or other communication provided for or allowed hereunder shall be
considered to have been validly given if delivered personally, and evidenced by
a receipt signed by an authorized Lender or addressee, or ten (10) hours after
being deposited in the United States mail, registered or certified, postage
prepaid, return receipt requested, or forty-eight (48) hours after being sent by
Federal Express or other courier service, or, in the case of telefaxed notice,
when telefaxed, receipt acknowledged.
SECTION 8.2 No Implied Waivers. No failure or delay by Lender in
exercising any right, power, or privilege hereunder or under any Credit Document
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 8.3 Expenses; Documentary Taxes; Indemnification. Borrower shall
pay (1) all Lender's Post-Closing Expenses; and (2) if an Event of Default
occurs, all out-of-pocket expenses incurred by Lender, including reasonable
attorneys' fees and expenses incurred in connection with such Event of Default
and
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collection and other enforcement proceedings resulting therefrom or in
connection with any refinancing or restructuring of the Obligations and the
liabilities of the Borrowers under this Agreement, any of the other Credit
Documents, or any other document, instrument or agreement subsequently entered
into.
SECTION 8.4 Amendments and Waivers. Any provision of this Agreement, or
any of the other Credit Documents to which the Borrowers are a party, may be
amended or waived at any time if, but only if, such amendment or waiver is in
writing and is signed by the Borrowers and Lender.
SECTION 8.5 No Assignment; Non-Recourse. Neither Borrowers nor Lender
shall have the right to assign or transfer to any party, in whole or in part,
any of the rights, duties or obligations of Borrower(s) or Lender under this
Agreement or any of the Credit Documents executed contemporaneously herewith, or
any subsequent amendment, renewal, extension, modification, or restatement of
this Agreement or any of the Credit Documents. Anything herein to the contrary
notwithstanding, all indebtedness on the Note, the Obligations, or this
Agreement shall be Non-Recourse Debt as defined in and meant by the Indenture.
SECTION 8.6 Counterparts; Integration; Effectiveness. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the signatures thereto and hereto were upon the same
instrument. This Agreement constitutes the entire agreement and understanding
among the parties hereto and supersedes any and all prior agreements and
understandings, oral or written, relating to the subject matter hereof. This
Agreement shall become effective upon the execution of a counterpart hereof by
each Borrower and Lender and receipt by Borrowers and Lender of written or
telephonic notification of such execution and authorization of delivery thereof.
SECTION 8.7 Governing Law; Jurisdiction.
(a) GOVERNING LAW. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (EXCEPT
TO THE EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
(b) JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN THE
COMMONWEALTH OF VIRGINIA. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES
HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE
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EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 8.7(b) AND
STIPULATE THAT ANY SUCH COURT SHALL HAVE IN PERSONAM JURISDICTION AND VENUE OVER
EACH SUCH PARTY FOR THE PURPOSE OF LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT, OR THE OTHER CREDIT
DOCUMENTS. SERVICE OF PROCESS SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION
AGAINST BORROWER MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT
REQUESTED, TO THEIR ADDRESS SPECIFIED FOR NOTICES PURSUANT TO SECTION 8.1
HEREOF. THE PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT AND THE
OTHER CREDIT DOCUMENTS SHALL FOR ALL PURPOSES BE DEEMED TO HAVE BEEN ENTERED
INTO IN THE COMMONWEALTH OF VIRGINIA.
(c) WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR THE OTHER CREDIT DOCUMENTS. 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 mater of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. The parties hereto each (1)
acknowledge that this waiver is a material inducement for the parties to enter
into a business relationship, that the parties hereto have already relied on
this waiver in entering into this Agreement or accepting the benefits thereof,
as the case may be, and that each will continue to rely on this waiver in their
related future dealings, and (2) further warrant and represent that each has
reviewed this waiver with its legal counsel, and that each 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, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 8.8 Survival of Warranties. All agreements and the representations
and warranties made herein shall survive the execution and delivery of this
Agreement.
SECTION 8.9 Severability. In case any provision in or obligation under
this Agreement 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. Neither this Agreement nor any
Credit Document nor any part or parts thereof shall create any right in any
third party that is not a party signatory hereto or thereto.
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SECTION 8.10 Maximum Interest Rate. Notwithstanding anything to the
contrary contained in the Revolving Credit Note or this Agreement, the Borrowers
shall not be obligated to pay, and Lender shall not be entitled to charge,
collect, receive, reserve, or take interest (it being understood that interest
shall be calculated as the aggregate of all charges which constitute interest
under applicable law that are contracted for, charged, reserved, received, or
paid) in excess of the maximum rate permitted by law. During any period of time
in which the interest rates specified herein exceed the maximum rate permitted
by law, interest shall accrue and be payable at such maximum rate. If from any
circumstances whatsoever, fulfillment of any provision of the Revolving Credit
Note, or this Agreement or of any other document pertaining hereto or thereto,
shall involve transcending the limit of validity prescribed by law for the
collection or charging of interest, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any such
circumstances Lender shall ever receive anything of value as interest or deemed
interest by applicable law under the Revolving Credit Note, this Agreement, any
of the other Credit Documents or any other document pertaining hereto, thereto
or otherwise an amount that would exceed the maximum rate permitted by law, such
amount that would be excessive interest shall be applied to the reduction of the
principal amount owing under the Revolving Credit Note or on account of any
other indebtedness of the Borrowers to Lender, and not to the payment of
interest, or if such excessive interest exceeds the unpaid balance of principal
of such indebtedness, such excess shall be refunded to the Borrowers. In
determining whether or not the interest paid or payable with respect to any
indebtedness of the Borrowers to Lender, under any specified contingency,
exceeds the maximum rate permitted by law, the Borrowers and Lender shall, to
the maximum extent permitted by applicable law, (a) characterize any
non-principal payment as an expense, fee or premium rather than as interest, (b)
exclude voluntary prepayments and the effects thereof, (c) amortize, prorate,
allocate, and spread the total amount of interest throughout the actual term of
such indebtedness such that it does not exceed the maximum amount permitted by
applicable law, and/or (d) allocate interest between portions of such
indebtedness, to the end that no such portion shall bear interest at a rate
greater than that permitted by applicable law.
SECTION 8.11 Headings. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
SECTION 8.12 Marshaling; Payments Set Aside. Lender shall be under no
obligation to marshal any assets in favor of the Borrowers or any other party or
against or in payment of any or
20
<PAGE>
all of the Obligations. To the extent any Borrower makes a payment or payments
to Lender, or exercises its rights of setoff, and such payment or payments or
the proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, or other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all rights and remedies therefor or
related thereto, shall be revived and continued in full force and effect as if
such payment or payments had not been made or such enforcement or setoff had not
occurred.
SECTION 8.13 Further Assurances and Release By Lender. Upon payment in
full of the Obligations, as herein provided, this Agreement and each of the
other Credit Documents (other than the Indenture) shall terminate and the Lender
shall, at the Borrowers' sole expense, execute and deliver to the Borrowers such
statements or such other instruments and further assurances as the Borrowers'
reasonably may request acknowledging satisfaction and discharge of the
Obligations and this Agreement and each of the other Credit Documents (other
than the Indenture).
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the date and year
first above written.
BORROWERS:
NORTHLAND BROADCASTING, LLC
By: Northland Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
READING RADIO, INC.
By:________________________________
a duly Authorized Officer
CENTRAL MISSOURI BROADCASTING, INC.
By:________________________________
a duly Authorized Officer
21
<PAGE>
NORTHERN COLORADO RADIO, INC.
By:________________________________
a duly Authorized Officer
TRI-STATE BROADCASTING, INC.
By:________________________________
a duly Authorized Officer
CMB II, INC.
By:________________________________
a duly Authorized Officer
NB II, INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
GRAPH ADS PRINTING, INC.
By:________________________________
a duly Authorized Officer
GLADWIN NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
CADILLAC NEWSPAPERS, INC
By:________________________________
a duly Authorized Officer
22
<PAGE>
MIDLAND BUYER'S GUIDE. INC.
By:________________________________
a duly Authorized Officer
CMN ASSOCIATED PUBLICATIONS, INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN DISTRIBUTION CO.,
INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN DISTRIBUTION CO.,
INC.
By: Central Michigan Distribution
Co., Inc., Its General
Partner
By:________________________________
a duly Authorized Officer
BRILL NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
BRILL RADIO, INC.
By:________________________________
a duly Authorized Officer
HURON HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
23
<PAGE>
NORTHERN COLORADO HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
NCR III, LLC
By:
By:________________________________
a duly Authorized Officer
NORTHLAND HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
CMN HOLDINGS, INC.
By:________________________________
a duly Authorized Officer
NCH II, LLC
By:
By:________________________________
a duly Authorized Officer
ST. JOHNS NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
NCR II, INC.
By:________________________________
a duly Authorized Officer
24
<PAGE>
HURON NEWSPAPERS, LLC
By: Huron Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
HURON P.S., LLC
By: Huron Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
LENDER:
BMC HOLDINGS, LLC, a Virginia
Limited Liability Company
By: Brill Media Company, LLC,
its Member
By: Brill Media Management, Inc.,
its Manager
By:_________________________
a duly Authorized Officer
25
<PAGE>
EX-10.11(b)
Revolving Credit Note
THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN
THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR
OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
REVOLVING CREDIT NOTE
FOR VALUE RECEIVED, at the times and place, and in the manner, below
provided, NB, II, INC.; NORTHLAND BROADCASTING, LLC; READING RADIO, INC.;
CENTRAL MISSOURI BROADCASTING, INC.; CMB II, INC.; NORTHERN COLORADO RADIO,
INC.; NCR II, INC.; TRI-STATE BROADCASTING, INC.; CENTRAL MICHIGAN NEWSPAPERS,
INC.; GRAPH ADS PRINTING, INC.; GLADWIN NEWSPAPERS, INC.; CADILLAC NEWSPAPERS,
INC.; MIDLAND BUYER'S GUIDE, INC.; CMN ASSOCIATED PUBLICATIONS, INC.; CENTRAL
MICHIGAN DISTRIBUTION CO., INC.; CENTRAL MICHIGAN DISTRIBUTION CO., L.P.; BRILL
NEWSPAPERS, INC.; BRILL RADIO, INC.; HURON HOLDINGS, LLC; NORTHERN COLORADO
HOLDINGS, LLC; NCR III, LLC; NORTHLAND HOLDINGS, LLC, CMN HOLDINGS, INC.; NCH
II, LLC; ST. JOHNS NEWSPAPERS, INC.; HURON NEWSPAPERS, LLC; and HURON P.S., LLC
(hereinafter together with their successors and assigns collectively referred to
as "Makers"), jointly and severally promise to pay to BMC HOLDINGS, LLC, a
Virginia limited liability company ("Lender"), or order, the principal sum of
One Hundred Eight Million and 00/100 Dollars ($108,000,000) together with
interest thereon as provided in the Credit Agreement defined below.
1. Defined Terms. Any and all initially capitalized terms used herein
shall have the meanings ascribed to them under that certain Revolving Credit
Agreement, dated as of December 30, 1997 ("Credit Agreement"), entered into
between the Makers, on the one hand, and the Lender, on the other hand. This
Revolving Credit Note (the "Note") is the Revolving Credit Note defined in the
Credit Agreement and is subject to, and entitled to the benefits of, the terms
and conditions of the Credit Agreement.
2. Interest Rate. This Note shall bear interest at the various rates
determined and calculated pursuant to the provisions of Section 2.3 of the
Credit Agreement.
3. Time, Place and Manner of Payments. All principal and interest due
hereunder is payable at the times and place, and in the manner, set forth in
Section 2.8 of the Credit Agreement.
<PAGE>
4. Maturity Date. This Note shall be due and payable in full on the
Maturity Date as defined in the Credit Agreement.
5. Prepayments. Makers may prepay the principal balance due under this
Note, in whole or in part, at any time or from time to time, without penalty or
permission upon three (3) Business Days' prior written notice.
6. Application of Payments. Except to the extent otherwise provided in the
Credit Agreement, all payments (including prepayments) made hereunder shall be
applied first to fees and expenses, then to the payment of accrued and unpaid
interest, with the balance remaining applied to the payment of the unpaid
principal balance of this Note.
7. Incorporation. THIS NOTE IS SUBJECT TO THE PROVISIONS OF THE CREDIT
AGREEMENT, ALL OF WHICH ARE HEREBY INCORPORATED HEREIN BY REFERENCE AND MADE A
PART HEREOF.
8. GOVERNING LAW. THIS NOTE AND THE OTHER CREDIT DOCUMENTS (EXCEPT TO THE
EXTENT OTHERWISE EXPRESSLY SET FORTH THEREIN) SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA, WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
9. JURISDICTION AND VENUE. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
PARTIES HERETO AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH
THIS SECTION OR THE OTHER CREDIT DOCUMENTS MAY BE TRIED AND LITIGATED IN THE
COMMONWEALTH OF VIRGINIA. TO THE EXTENT THEY MAY LEGALLY DO SO, THE PARTIES
HERETO HEREBY WAIVE ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON
CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN
ACCORDANCE WITH THIS SECTION AND STIPULATE THAT ANY SUCH COURT SHALL HAVE IN
PERSONAM JURISDICTION AND VENUE OVER EACH SUCH PARTY FOR THE PURPOSE OF
LITIGATING ANY SUCH DISPUTE, CONTROVERSY, OR PROCEEDING ARISING OUT OF OR
RELATED TO THIS SECTION, OR THE OTHER CREDIT DOCUMENTS. SERVICE OF PROCESS
SUFFICIENT FOR PERSONAL JURISDICTION IN ANY ACTION AGAINST BORROWER MAY BE MADE
BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO THEIR ADDRESS
SPECIFIED FOR NOTICES PURSUANT TO SECTION 8.1 OF THE CREDIT AGREEMENT. THE
PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THE CREDIT AGREEMENT AND THE OTHER
CREDIT DOCUMENTS SHALL FOR ALL PURPOSES BE DEEMED TO HAVE BEEN ENTERED INTO IN
THE COMMONWEALTH OF VIRGINIA.
10. WAIVER OF TRIAL BY JURY. THE PARTIES HERETO EACH AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THE CREDIT AGREEMENT OR THE OTHER CREDIT DOCUMENTS. 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
2
<PAGE>
mater of this transaction, including without limitation contract claims, tort
claims, breach of duty claims and all other common law and statutory claims. The
parties hereto each (1) acknowledge that this waiver is a material inducement
for the parties to enter into a business relationship, that the parties hereto
have already relied on this waiver in entering into this Agreement or accepting
the benefits thereof, as the case may be, and that each will continue to rely on
this waiver in their related future dealings, and (2) further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each 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, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, OR MODIFICATIONS OF THIS AGREEMENT. In the
event of litigation, this Note and other Credit Documents may be filed as a
written consent to a trial by the court.
11. Expenses. In addition to all other sums payable hereunder or under the
Credit Agreement, if an Event of Default occurs, Makers shall pay all reasonable
out-of-pocket expenses incurred by Lender, including fees and disbursements of
counsel, in connection with such Event of Default and collection and other
enforcement proceedings resulting therefrom or in connection with any subsequent
refinancing or restructuring of the Credit Obligations.
12. Amendments, etc. This Note may not be changed, modified, amended, or
terminated except as provided in the Credit Agreement.
13. Headings. Section headings used in this Note are solely for
convenience of reference, shall not constitute a part of this Note for any other
purpose, and shall no affect the construction of this note.
WITNESS the following MAKERS:
signatures as of December
30, 1997: NORTHLAND BROADCASTING, LLC
By: Northland Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
READING RADIO, INC.
By:________________________________
a duly Authorized Officer
3
<PAGE>
CENTRAL MISSOURI BROADCASTING, INC.
By:________________________________
a duly Authorized Officer
NORTHERN COLORADO RADIO, INC.
By:________________________________
a duly Authorized Officer
TRI-STATE BROADCASTING, INC.
By:________________________________
a duly Authorized Officer
CMB II, INC.
By:________________________________
a duly Authorized Officer
NB II, INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
GRAPH ADS PRINTING, INC.
By:________________________________
a duly Authorized Officer
GLADWIN NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
4
<PAGE>
CADILLAC NEWSPAPERS, INC
By:________________________________
a duly Authorized Officer
MIDLAND BUYER'S GUIDE. INC.
By:________________________________
a duly Authorized Officer
CMN ASSOCIATED PUBLICATIONS, INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN DISTRIBUTION CO.,
INC.
By:________________________________
a duly Authorized Officer
CENTRAL MICHIGAN DISTRIBUTION CO.,
INC.
By: Central Michigan Distribution
Co., Inc., Its General
Partner
By:________________________________
a duly Authorized Officer
BRILL NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
BRILL RADIO, INC.
By:________________________________
a duly Authorized Officer
HURON HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
5
<PAGE>
NORTHERN COLORADO HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
NCR III, LLC
By:
By:________________________________
a duly Authorized Officer
NORTHLAND HOLDINGS, LLC
By:
By:________________________________
a duly Authorized Officer
CMN HOLDINGS, INC.
By:________________________________
a duly Authorized Officer
NCH II, LLC
By:
By:________________________________
a duly Authorized Officer
ST. JOHNS NEWSPAPERS, INC.
By:________________________________
a duly Authorized Officer
NCR II, INC.
By:________________________________
a duly Authorized Officer
6
<PAGE>
HURON NEWSPAPERS, LLC
By: Huron Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
HURON P.S., LLC
By: Huron Management, Inc., a
Virginia corporation,
Managing Member
By:________________________________
a duly Authorized Officer
7
<PAGE>
EX-10.11(c)
Promissory Note
THE WITHIN NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 (THE "ACT") AND MAY NOT BE OFFERED, SOLD, OR OTHERWISE
TRANSFERRED OR DISPOSED OF UNLESS AND UNTIL (i) A REGISTRATION
STATEMENT WITH RESPECT THERETO IS EFFECTIVE UNDER THE ACT OR (ii) IN
THE OPINION OF COUNSEL, WHICH OPINION IS REASONABLY SATISFACTORY IN
FORM AND SUBSTANCE TO COUNSEL FOR THE MAKER, SUCH OFFER, SALE, OR
OTHER TRANSFER IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
BMC HOLDINGS, LLC
Promissory Note
$108,000,000.00 December 30, 1997
For value received, BMC Holdings, LLC, a Virginia limited liability
company ("Maker"), promises to pay to Brill Media Company, LLC ("Payee"), or
order, at Payee's address located at 100 Shockoe Slip, Richmond, Virginia 23219,
the principal sum of One Hundred Eight Million and no/100 Dollars
($108,000,000.00) in lawful money of the United States of America, together with
simple interest on any unpaid balance hereof in like money at the rate of 7.292%
per annum until December 15, 1999, and thereafter at the rate of 11.6666% per
annum during any period that the unpaid principal balance hereof exceeds $105
million and 12.0% per annum during any period that the unpaid principal balance
hereof is $105 million or less for so long as payment on any principal balance
hereof remains unpaid, such principal and interest to be due and payable on the
following obligatory schedule (except as and to the extent offset, anticipated,
or prepaid, in whole or in part, as hereinafter provided):
Commencing June 15, 1998, on the 15th day of December and June thereafter,
and on each ensuing anniversary thereof thereafter, Maker shall pay to the
holder hereof interest accrued on the outstanding principal balance hereof until
December 15, 2007, when final payment of all then unpaid principal and accrued
interest thereon shall be due and payable.
The Maker reserves the right to anticipate and prepay at any time or from
time to time, without penalty, all or any part of the indebtedness evidenced by
this note. Any partial prepayment of principal also shall include accrued
interest on the unpaid principal balance to the date of such prepayment, and
each prepayment shall be applied to and be deducted from the scheduled
obligatory payments falling due hereunder in the inverse order of their
scheduled due dates. All prepayments on this note shall be
<PAGE>
recorded when made on the reverse side hereof by the then holder of this note.
The following, and only the following, shall constitute an "Event of
Default" under this note:
(a) any failure of Maker to make (or to cause to be made) to the then
holder of this note any scheduled obligatory payment of principal or interest on
this note when due and payable, which failure continues for a period of at least
thirty (30) consecutive calendar days after written notice of such failure has
been given to Maker by such holder, or
(b) any uncured Event of Default (as therein defined) on the Notes issued
by Payee and Brill Media Management, Inc. pursuant to the Indenture dated
December 30, 1997, and the Offering Memorandum dated December 23, 1997, or
(c) the commencement by maker of a voluntary case under and within the
meaning of the United States Bankruptcy Code, or
(d) entry by a court of competent jurisdiction of an order in an
involuntary case commenced against Maker under and within the meaning of the
United States Bankruptcy Code that (i) forbids the Maker to continue to use,
acquire, or dispose of property as if no such involuntary case had been
commenced, or (ii) is for relief against Maker, or (iii) appoints an interim
trustee to take possession of Maker's property, or (iv) orders the liquidation
of Maker, and, in each case, sixty (60) consecutive calendar days shall have
elapsed since entry of any such order, such order shall then be unstayed and
effective, and such involuntary case shall then still be pending and not
dismissed.
Upon the occurrence and during the continuation of an Event of Default,
and not otherwise, the then holder of this note, at such holder's sole election
made by a written notice executed by such holder (expressly referring to and
describing this note and the Event of Default) and given to Maker, may declare
all of the then unpaid principal balance of this note, together with any
interest accrued thereon, to be, and they shall thereupon become, immediately
due and payable without presentment, demand, protest, or other notice of any
kind.
Any notice to Maker shall be deemed to have been given only upon the
earlier to occur of (a) actual receipt of such notice by Maker (whether by hand
delivery or facsimile transmission), or (b) the eighth day after the date of
deposit of such notice in the U.S. mail, postage prepaid, certified or
registered, with return receipt or proof of deliver required, addressed to Maker
at the address for Maker shown herein or at such other address as Maker may
theretofore establish by notice to Payee as provided in the Agreement.
<PAGE>
Mere delay or failure to act shall not preclude the exercise or
enforcement of any right or remedy hereunder; all such rights and remedies shall
be cumulative and may be exercised singularly or concurrently, and the exercise
or enforcement of any one such right or remedy shall neither be a condition to
nor bar the exercise or enforcement of any other right or remedy.
The rights of all parties hereto and of each holder hereof shall be
governed by and enforced or construed only in accordance with the domestic,
substantive laws of the Commonwealth of Virginia, excluding those relating to
conflicts of laws.
Maker agrees to pay all reasonable attorneys' fees that may be incurred in
collecting this note after an Event of Default, but not to exceed 5% of any then
due and payable principal balance.
IN WITNESS WHEREOF, Maker has caused this note to be executed by its duly
authorized officer on the day, month, and year first above written.
BMC HOLDINGS, LLC
By: BRILL MEDIA COMPANY, LLC,
By: Brill Media Management, Inc.
Its Manager
By:___________________________
a duly authorized officer
<PAGE>
Exhibit 12.1
Brill Media Company, LLC
Ratio of Earnings to Fixed Charges
($000s)
<TABLE>
<CAPTION>
Historical Pro Forma
-------------------------------------------------------------------- ------------------------
Six Months Six Months Year Six Months
Ended Ended Ended Ended
Year Ended February 28 or 29, August 31, August 31, February 28, August 31,
1993 1994 1995 1996 1997 1996 1997 1997 1997
-------- ------ -------- -------- -------- ---------- ---------- ------------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income (loss) before income taxes
and extraordinary item.......... $(2,863) $ 952 $(3,753) $(5,186) $(2,486) $ (403) $(1,464) $(8,048) $(3,471)
Fixed charges..................... 4,523 4,682 5,882 7,200 7,514 3,729 4,032 12,633 6,327
------- ------ ------- ------- ------- ------ ------- ------- -------
$ 1,660 $5,634 $2,129 $2,014 $ 5,028 $3,326 $ 2,568 $ 4,585 $ 2,856
------- ------ ------- ------- ------- ------ ------- ------- -------
------- ------ ------- ------- ------- ------ ------- ------- -------
Fixed Charges
Interest expense.................. $ 4,351 $4,466 $ 5,636 $ 6,633 $ 6,943 $3,342 $ 3,698 $11,996 $ 6,001
Portion of rent expense
representative of interest...... 39 37 40 70 82 43 51 82 51
Amortization of deferred
financing costs................. 133 179 206 497 489 344 283 555 275
------- ------ ------- ------- ------- ------ ------- ------- -------
$ 4,523 $4,682 $ 5,882 $ 7,200 $ 7,514 $3,729 $ 4,032 $12,633 $ 6,327
------- ------ ------- ------- ------- ------ ------- ------- -------
------- ------ ------- ------- ------- ------ ------- ------- -------
Ratio of earnings to fixed charges.. -- 1.20 -- -- -- -- -- -- --
------- ------ ------- ------- ------- ------ ------- ------- -------
------- ------ ------- ------- ------- ------ ------- ------- -------
</TABLE>
<PAGE>
EX-21
Subsidiaries
Subsidiaries of Brill Media Company, LLC
Brill Media Management, Inc.
BMC Holdings, LLC
Huron Holdings, LLC
Northern Colorado Holdings, LLC
NCR III, LLC
NCH II, LLC
Northland Holdings, LLC
CMN Holding, Inc.
Brill Radio, Inc.
Brill Newspapers, Inc.
Reading Radio, Inc.
Tri-State Broadcasting, Inc.
Northern Colorado Radio, Inc.
NCR II, Inc.
Central Missouri Broadcasting, Inc.
CMB II, Inc.
Northland Broadcasting, LLC
NB II, Inc.
Central Michigan Newspapers, Inc.
Cadillac Newspapers, Inc.
CMN Associated Publications, Inc.
Central Michigan Distribution Co., L.P.
Central Michigan Distribution Co., Inc.
Gladwin Newspapers, Inc.
Graph Ads Printing, Inc.
Midland Buyer's Guide, Inc.
St. Johns Newspapers, Inc.
Huron P.S., LLC
Huron Newspapers, LLC
<PAGE>
EXHIBIT 23.2
CONSENT OF ERNST & YOUNG LLP
We consent to the reference to our firm under the caption "Experts" and to
the use of our report dated November 14, 1997, except for Note 2 as to which the
date is December 12, 1997 and Note 10 and Note 12 as to which the date is
December 30, 1997, with respect to the financial statements of The Radio and
Newspaper Businesses of Alan R. Brill included in the Registration Statement
(Form S-4) and related Prospectus of Brill Media Company, LLC and Brill Media
Management, Inc. for the registration of $105,000,000 of their 12% Senior Notes
due 2007 and $3,000,000 of Appreciation Notes due 2007, and the guarantees
thereof issued by the subsidiaries of Brill Media Company, LLC.
Ernst & Young LLP
Chicago, Illinois
January 9, 1998
<PAGE>
EX-25.1
Statement of Eligibility - Series B 12% Senior
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
--------------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of principal
executive offices)
--------------------------
Brill Media Company LLC
(Exact name of obligor as specified in its charter)
Virginia 52-2071822
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Media Management, Inc
(Exact name of obligor as specified in its charter)
Virginia 54-1877458
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
c/o Brill Media Company 47732
P. O. Box 3353 (Zip code)
Evansville, IN
(Address of principal executive offices)
<PAGE>
- 2 -
--------------------------
BMC Holdings, LLC
(Exact name of registrant as specified in its charter)
Viriginia 52-2071824
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170289
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1148743
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Cadillac Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170305
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Michigan Distribution Co., Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438162
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Michigan Distribution Co., LP
(Exact name of registrant as specified in its charter)
Virginia 62-1356763
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 3 -
--------------------------
Central Michigan Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Viriginia 54-1170307
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Missouri Broadcasting, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1163979
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMB II, Inc.
(Exact name of registrant as specified in its charter)
Virginia 43-1671356
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMN Associated Publiciations, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438130
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMN Holding, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170293
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Gladwin Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170304
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 4 -
--------------------------
Graph Ads Printing, Inc.
(Exact name of registrant as specified in its charter)
Viriginia 38-2438126
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron Holdings, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1867829
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron Newspapers, LLC
(Exact name of registrant as specified in its charter)
Virginia 38-3372402
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron P.S., LLC
(Exact name of registrant as specified in its charter)
Virginia 38-3372410
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Midland Buyers Guide, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438164
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NB II, Inc.
(Exact name of registrant as specified in its charter)
Virginia 41-1803205
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 5 -
--------------------------
NCH II, LLC
(Exact name of registrant as specified in its charter)
Viriginia 54-1851918
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NCR II. Inc.
(Exact name of registrant as specified in its charter)
Virginia 84-1347311
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NCR III, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1851920
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northern Colorado Holdings, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1862076
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northern Colorado Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 84-1091274
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northland Broadcasting, LLC
(Exact name of registrant as specified in its charter)
Virginia 41-1862832
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 6 -
--------------------------
Northland Holdings, LLC
(Exact name of registrant as specified in its charter)
Viriginia 54-1838750
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Reading Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1163978
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
St. Johns Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-3299223
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Tri-State Broadcasting, Inc.
(Exact name of registrant as specified in its charter)
Virginia 35-1888093
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
c/o Brill Media Company 47732
P. O. Box 3353 (Zip code)
Evansville, IN
(Address of principal executive offices)
--------------------------
12% Series B Senior Notes due 2007
Series B Appreciation Notes due 2007
(Titles of the indenture securities)
================================================================================
<PAGE>
- 7 -
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System).
Federal Deposit Insurance Corporation, Washington, D. C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3,4,5,6,7,8,9,10,11,12,13,14 and 15.
The obligors and the registrants are currently not in default under any of
its outstanding securities for which United States Trust Company of New
York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10,
11, 12, 13, 14 and 15 of Form T-1 are not required under General
Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the State of
New York Banking Department to transact business as a Trust
Company, is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
<PAGE>
- 8 -
16. List of Exhibits
(cont'd)
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
T-1.4 -- The By-Laws of United States Trust Company of New York, as
amended, is incorporated by reference to Exhibit T-1.4 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
As of January 12, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U. S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility, as to matters
peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and
will rely on information to be furnished by the obligor and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
---------------------
<PAGE>
- 6 -
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, United States Trust Company of New York, a corporation organized
and existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New
York, on the 12th day of January, 1998.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: /s/ Patricia Stermer
-------------------------------
Patricia Stermer
Assistant Vice President
RFL/pg
(rev:PST010998)
<PAGE>
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
/s/Gerard F. Ganey
----------------------
By: Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
SEPTEMBER 30, 1997
($ IN THOUSANDS)
ASSETS
Cash and Due from Banks $ 116,582
Short-Term Investments 183,652
Securities, Available for Sale 691,965
Loans 1,669,611
Less: Allowance for Credit Losses 16,067
----------
Net Loans 1,653,544
Premises and Equipment 61,796
Other Assets 125,121
----------
Total Assets $2,832,660
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 541,619
Interest Bearing 1,617,028
----------
Total Deposits 2,158,647
Short-Term Credit Facilities 365,235
Accounts Payable and Accrued Liabilities 141,793
----------
Total Liabilities $2,665,675
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 49,542
Retained Earnings 99,601
Unrealized Gains (Losses) on Securities
Available for Sale, Net of Taxes 2,847
----------
Total Stockholder's Equity 166,985
----------
Total Liabilities and
Stockholder's Equity $2,832,660
==========
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
November 13, 1997
<PAGE>
EX-25.2
Statement of Eligibility - Series B Appreciation
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
--------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
--------------------------
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) _______
--------------------------
UNITED STATES TRUST COMPANY OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-3818954
(Jurisdiction of incorporation (I. R. S. Employer
if not a U. S. national bank) Identification No.)
114 West 47th Street 10036
New York, New York (Zip Code)
(Address of principal
executive offices)
--------------------------
Brill Media Company LLC
(Exact name of obligor as specified in its charter)
Virginia 52-2071822
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Media Management, Inc
(Exact name of obligor as specified in its charter)
Virginia 54-1877458
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
c/o Brill Media Company 47732
P. O. Box 3353 (Zip code)
Evansville, IN
(Address of principal executive offices)
<PAGE>
- 2 -
--------------------------
BMC Holdings, LLC
(Exact name of registrant as specified in its charter)
Viriginia 52-2071824
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170289
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Brill Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1148743
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Cadillac Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170305
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Michigan Distribution Co., Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438162
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Michigan Distribution Co., LP
(Exact name of registrant as specified in its charter)
Virginia 62-1356763
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 3 -
--------------------------
Central Michigan Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Viriginia 54-1170307
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Central Missouri Broadcasting, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1163979
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMB II, Inc.
(Exact name of registrant as specified in its charter)
Virginia 43-1671356
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMN Associated Publiciations, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438130
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
CMN Holding, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170293
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Gladwin Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1170304
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 4 -
--------------------------
Graph Ads Printing, Inc.
(Exact name of registrant as specified in its charter)
Viriginia 38-2438126
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron Holdings, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1867829
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron Newspapers, LLC
(Exact name of registrant as specified in its charter)
Virginia 38-3372402
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Huron P.S., LLC
(Exact name of registrant as specified in its charter)
Virginia 38-3372410
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Midland Buyers Guide, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-2438164
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NB II, Inc.
(Exact name of registrant as specified in its charter)
Virginia 41-1803205
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 5 -
--------------------------
NCH II, LLC
(Exact name of registrant as specified in its charter)
Viriginia 54-1851918
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NCR II. Inc.
(Exact name of registrant as specified in its charter)
Virginia 84-1347311
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
NCR III, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1851920
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northern Colorado Holdings, LLC
(Exact name of registrant as specified in its charter)
Virginia 54-1862076
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northern Colorado Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 84-1091274
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Northland Broadcasting, LLC
(Exact name of registrant as specified in its charter)
Virginia 41-1862832
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
<PAGE>
- 6 -
--------------------------
Northland Holdings, LLC
(Exact name of registrant as specified in its charter)
Viriginia 54-1838750
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Reading Radio, Inc.
(Exact name of registrant as specified in its charter)
Virginia 54-1163978
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
St. Johns Newspapers, Inc.
(Exact name of registrant as specified in its charter)
Virginia 38-3299223
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
--------------------------
Tri-State Broadcasting, Inc.
(Exact name of registrant as specified in its charter)
Virginia 35-1888093
(State or other jurisdiction of (I. R. S. Employer
incorporation or organization) Identification No.)
c/o Brill Media Company 47732
P. O. Box 3353 (Zip code)
Evansville, IN
(Address of principal executive offices)
--------------------------
12% Series B Senior Notes due 2007
Series B Appreciation Notes due 2007
(Titles of the indenture securities)
================================================================================
<PAGE>
- 7 -
GENERAL
1. General Information
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
Federal Reserve Bank of New York (2nd District), New York, New York
(Board of Governors of the Federal Reserve System).
Federal Deposit Insurance Corporation, Washington, D. C.
New York State Banking Department, Albany, New York
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
2. Affiliations with the Obligor
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
3,4,5,6,7,8,9,10,11,12,13,14 and 15.
The obligors and the registrants are currently not in default under any of
its outstanding securities for which United States Trust Company of New
York is Trustee. Accordingly, responses to Items 3, 4, 5, 6, 7, 8, 9, 10,
11, 12, 13, 14 and 15 of Form T-1 are not required under General
Instruction B.
16. List of Exhibits
T-1.1 -- Organization Certificate, as amended, issued by the State of
New York Banking Department to transact business as a Trust
Company, is incorporated by reference to Exhibit T-1.1 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
<PAGE>
- 8 -
16. List of Exhibits
(cont'd)
T-1.2 -- Included in Exhibit T-1.1.
T-1.3 -- Included in Exhibit T-1.1.
T-1.4 -- The By-Laws of United States Trust Company of New York, as
amended, is incorporated by reference to Exhibit T-1.4 to Form
T-1 filed on September 15, 1995 with the Commission pursuant
to the Trust Indenture Act of 1939, as amended by the Trust
Indenture Reform Act of 1990 (Registration No. 33-97056).
T-1.6 -- The consent of the trustee required by Section 321(b) of the
Trust Indenture Act of 1939, as amended by the Trust Indenture
Reform Act of 1990.
T-1.7 -- A copy of the latest report of condition of the trustee
pursuant to law or the requirements of its supervising or
examining authority.
NOTE
As of January 12, 1998, the trustee had 2,999,020 shares of Common Stock
outstanding, all of which are owned by its parent company, U. S. Trust
Corporation. The term "trustee" in Item 2, refers to each of United States
Trust Company of New York and its parent company, U. S. Trust Corporation.
In answering Item 2 in this statement of eligibility, as to matters
peculiarly within the knowledge of the obligor or its directors, the
trustee has relied upon information furnished to it by the obligor and
will rely on information to be furnished by the obligor and the trustee
disclaims responsibility for the accuracy or completeness of such
information.
---------------------
<PAGE>
- 6 -
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, United States Trust Company of New York, a corporation organized
and existing under the laws of the State of New York, has duly caused this
statement of eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New
York, on the 12th day of January, 1998.
UNITED STATES TRUST COMPANY OF
NEW YORK, Trustee
By: /s/ Patricia Stermer
-------------------------------
Patricia Stermer
Assistant Vice President
RFL/pg
(rev:PST010998)
<PAGE>
Exhibit T-1.6
The consent of the trustee required by Section 321(b) of the Act.
United States Trust Company of New York
114 West 47th Street
New York, NY 10036
September 1, 1995
Securities and Exchange Commission
450 5th Street, N.W.
Washington, DC 20549
Gentlemen:
Pursuant to the provisions of Section 321(b) of the Trust Indenture Act of 1939,
as amended by the Trust Indenture Reform Act of 1990, and subject to the
limitations set forth therein, United States Trust Company of New York ("U.S.
Trust") hereby consents that reports of examinations of U.S. Trust by Federal,
State, Territorial or District authorities may be furnished by such authorities
to the Securities and Exchange Commission upon request therefor.
Very truly yours,
UNITED STATES TRUST COMPANY
OF NEW YORK
/s/Gerard F. Ganey
----------------------
By: Gerard F. Ganey
Senior Vice President
<PAGE>
EXHIBIT T-1.7
UNITED STATES TRUST COMPANY OF NEW YORK
CONSOLIDATED STATEMENT OF CONDITION
SEPTEMBER 30, 1997
($ IN THOUSANDS)
ASSETS
Cash and Due from Banks $ 116,582
Short-Term Investments 183,652
Securities, Available for Sale 691,965
Loans 1,669,611
Less: Allowance for Credit Losses 16,067
----------
Net Loans 1,653,544
Premises and Equipment 61,796
Other Assets 125,121
----------
Total Assets $2,832,660
==========
LIABILITIES
Deposits:
Non-Interest Bearing $ 541,619
Interest Bearing 1,617,028
----------
Total Deposits 2,158,647
Short-Term Credit Facilities 365,235
Accounts Payable and Accrued Liabilities 141,793
----------
Total Liabilities $2,665,675
==========
STOCKHOLDER'S EQUITY
Common Stock 14,995
Capital Surplus 49,542
Retained Earnings 99,601
Unrealized Gains (Losses) on Securities
Available for Sale, Net of Taxes 2,847
----------
Total Stockholder's Equity 166,985
----------
Total Liabilities and
Stockholder's Equity $2,832,660
==========
I, Richard E. Brinkmann, Senior Vice President & Comptroller of the named bank
do hereby declare that this Statement of Condition has been prepared in
conformance with the instructions issued by the appropriate regulatory authority
and is true to the best of my knowledge and belief.
Richard E. Brinkmann, SVP & Controller
November 13, 1997
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RADIO
AND NEWSPAPER BUSINESSES OF ALAN R. BRILL'S FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 12-MOS
<FISCAL-YEAR-END> FEB-28-1997 FEB-28-1997
<PERIOD-START> MAR-01-1997 MAR-01-1996
<PERIOD-END> AUG-31-1997 FEB-28-1997
<CASH> 351 775
<SECURITIES> 0 0
<RECEIVABLES> 4,038 3,166
<ALLOWANCES> 0 0
<INVENTORY> 319 323
<CURRENT-ASSETS> 5,100 4,473
<PP&E> 16,855 16,398
<DEPRECIATION> 8,318 7,831
<TOTAL-ASSETS> 42,569 26,442
<CURRENT-LIABILITIES> 6,403 3,459
<BONDS> 67,317 49,593
0 0
0 0
<COMMON> 7 5
<OTHER-SE> (31,157) (26,615)
<TOTAL-LIABILITY-AND-EQUITY> 42,569 26,442
<SALES> 15,100 27,036
<TOTAL-REVENUES> 15,100 27,036
<CGS> 12,552 23,097
<TOTAL-COSTS> 12,552 23,097
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 3,981 7,432
<INCOME-PRETAX> (1,464) (2,486)
<INCOME-TAX> 78 286
<INCOME-CONTINUING> (1,542) (2,772)
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,542) (2,772)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 0 0
</TABLE>
<PAGE>
Exhibit 99.1
FORM OF
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
12% SENIOR NOTES DUE 2007
OF
BRILL MEDIA COMPANY, LLC
AND
BRILL MEDIA MANAGEMENT, INC.
PURSUANT TO THE PROSPECTUS DATED JANUARY , 1998
Offer to exchange Series B 12% Senior Notes due 2007 ("Exchange Notes"),
which are fully and unconditionally guaranteed by subsidiaries of Brill Media
Company, LLC, and Brill Media Management, Inc., and have been registered under
the Securities Act, for any and all outstanding 12% Senior Notes due 2007
("Original Notes"), which are fully and unconditionally guaranteed by
subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and
have not been so registered, pursuant to the Prospectus dated January , 1998.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed and submitted as follows:
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE UNITED STATES TRUST COMPANY OF NEW YORK
(THE "EXCHANGE AGENT")
FOR INFORMATION BY TELEPHONE:
1-800-548-6565
<TABLE>
<S> <C>
BY REGISTERED OR CERTIFIED MAIL: BY HAND BEFORE 4:30 P.M.:
The United States Trust Company The United States Trust Company
of New York of New York
P.O. Box 843 Cooper Station 111 Broadway
New York, New York 10276 New York, New York 10006
Attention: Corporate Trust Services Attention: Lower Level Corporate
Trust Window
BY OVERNIGHT COURIER AND BY FACSIMILE TRANSMISSION:
BY HAND AFTER 4:30 P.M.: (212) 780-0592
The United States Trust Company Attention: Customer Service
Of New York CONFIRM BY TELEPHONE TO:
770 Broadway, 13th Floor (800) 548-6565
New York, New York 10003
</TABLE>
(ORIGINALS OF ALL DOCUMENTS SENT BY FACSIMILE SHOULD BE
SENT PROMPTLY BY REGISTERED OR CERTIFIED MAIL, BY HAND, OR
BY OVERNIGHT DELIVERY SERVICE.)
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE
WILL NOT CONSTITUTE A VALID DELIVERY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING
ANY BOX BELOW.
List below the Original Notes to which this Letter of Transmittal relates.
If the space provided below is inadequate, the certificate number(s) and
aggregate principal of Original Notes should be listed on a separate signed
schedule affixed hereto.
DESCRIPTION OF ORIGINAL NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY
-------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
AGGREGATE
PRINCIPAL
AMOUNT OF
NAME(S) AND ADDRESS(ES) OF ORIGINAL NOTES
REGISTERED ORIGINAL NOTE AGGREGATE TENDERED IN
HOLDER(S), EXACTLY AS NAME(S) CERTIFICATE PRINCIPAL AGGREGATE EXCHANGE FOR
APPEAR(S) ON ORIGINAL NOTE NUMBER(S) OF AMOUNT PRINCIPAL CERTIFICATED
CERTIFICATE(S) (PLEASE FILL ORIGINAL REPRESENTED BY AMOUNT EXCHANGE
IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED** NOTES***
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL
- ---------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if Original Notes are being tendered by book-entry
transfer in accordance with DTC's ATOP procedures for transfer.
** Unless otherwise indicated in this column, the aggregate principal amount
represented by all Original Notes Certificates identified in Column 1 or
delivered to the Exchange Agent shall be deemed tendered.
*** Unless otherwise indicated, the holder will be deemed to have tendered
Original Notes in exchange for a beneficial interest in one or more fully
registered global certificates, which will be deposited with, or on behalf
of, The Depository Trust Company ("DTC") and registered in the name of Cede
& Co., its nominee.
2
<PAGE>
The undersigned hereby acknowledges receipt of the Prospectus dated ,
1998 (the "Prospectus") of Brill Media Company, LLC, a Virginia limited
liability company ("BMC") and Brill Media Management, Inc., a Virginia
corporation (collectively with BMC, the "Issuer")and this Letter of Transmittal
(the "Letter of Transmittal"), that together constitute the Issuer's offer (the
"Exchange Offer") to exchange its Series B 12% Senior Notes due 2007 (the
"Exchange Notes"), for an equal principal amount of its outstanding 12% Senior
Notes due 2007 (the "Original Notes"), of which $105,000,000 aggregate principal
amount is outstanding. The terms of the Exchange Notes are identical in all
material respect to the Original Notes, except that the Exchange Notes have been
registered under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to a Registration Statement, and, therefore, will not bear legends
restricting their transfer. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus.
The undersigned has completed the appropriate boxes above and below and
signed this Letter of Transmittal to indicate the action the undersigned desires
to take with respect to the Exchange Offer.
This Letter of Transmittal is to be used by holders of Original Notes to
accept the Exchange Offer if: (i) tender of Original Notes is to be made
according to the Automated Tender Offer Program ("ATOP") of the Depository Trust
Company ("DTC"), for which the transaction is eligible, pursuant to the
procedures set forth in the Prospectus under the caption "Exchange
Offer--Procedures for Tendering--Original Securities held through DTC"; (ii)
certificates representing Original Notes are to be physically delivered to the
Exchange Agent herewith by such holders, pursuant to the procedures set forth in
the Prospectus under the caption "Exchange Offer--Procedures for
Tendering--Original Securities held by Holders"; or (iii) tender of Original
Notes is to be made according to the guaranteed delivery procedures set forth in
the Prospectus under the caption "Exchange Offer--Guaranteed Delivery
Procedures."
NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE
OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A "DTC PARTICIPANT") TENDERING
ORIGINAL NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN AGENT'S MESSAGE
(AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE. ACCORDINGLY, SUCH
DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO DTC THOUGH ATOP,
AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A BOOK-ENTRY DELIVERY
TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S MESSAGE TO THE
EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC PARTICIPANTS
WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL AND AGREE TO BE
BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST
SUCH DTC PARTICIPANTS.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
DTC Participants who wish to cause their Original Notes to be tendered, but
who cannot transmit their acceptances through ATOP prior to the Expiration Date,
may effect a tender in accordance with the guaranteed delivery procedures set
forth in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery
Procedures--Original Securities held through DTC." Holders who wish to tender
their Original Notes but (i) whose Original Notes are not immediately available
and will not be available for tendering prior to the Expiration Date, or (ii)
who cannot deliver their Original Notes, the Letter of Transmittal, or any other
required documents to the Exchange Agent prior to the Expiration Date, may
effect a tender in accordance with the guaranteed delivery procedures set forth
in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery
Procedures--Original Securities Held by Holders."
The undersigned must complete the appropriate boxes above and below and sign
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
3
<PAGE>
/ / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED TO THE EXCHANGE
AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE NOTES.
Unless the undersigned (i) has completed the appropriate column in the box
entitled "Description of Original Notes Tendered" and (ii) has checked the box
above, the undersigned will be deemed to have tendered Original Notes in
exchange for a beneficial interest in one or more fully registered global
certificates, which will be deposited with, or on behalf of, DTC and registered
in the name of Cede & Co., its nominee. Beneficial interests in such registered
global certificates will be shown on, and transfers thereof will be effected
only through, records maintained by DTC and its participants. See "Book-Entry,
Delivery and Form" as set forth in the Prospectus.
/ / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY
TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH A
BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution __________________________________________________
The Depository Trust Company Account Number ____________________________________
Transaction Code Number ________________________________________________________
/ / CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A
NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND
COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): _______________________________________________
Window Ticket Number (if any): _________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Eligible Institution that Guaranteed Delivery: _________________________
If delivered by book-entry transfer:
Account Number ____________________ Transaction Code Number ____________________
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer the Original Notes indicated above.
Subject to, and effective upon, the acceptance for exchange of the Original
Notes tendered hereby, the undersigned hereby sells, assigns and transfers to,
or upon the order of, the Exchange Agent, as agent of the Issuer, all right,
title and interest in and to such Original Notes as are being tendered hereby,
and irrevocably constitutes and appoints the Exchange Agent as the agent and
attorney-in-fact of the undersigned to cause the Original Notes tendered hereby
to be transferred and exchanged.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, sell, assign and transfer the Original
Notes tendered hereby and to acquire the Exchange Notes issuable upon the
exchange of such tendered Original Notes, and that the Exchange Agent, as agent
of the Issuer, will acquire good and unencumbered title thereto, free and clear
of all liens, restrictions, charges and encumbrances and not subject to any
adverse claim when the same are accepted by the Exchange Agent, as agent of the
Issuer. The undersigned will, upon request, execute and deliver any additional
documents deemed by the Issuer or the Exchange Agent to be necessary or
desirable to complete the exchange, sale, assignment and transfer of the
Original Notes tendered hereby.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on the interpretation of the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in Exxon Capital Holdings Corporation
(available May 13, 1988) or similar no-action letters issued to third parties.
Based on such interpretation of the staff of the SEC set forth in such no-action
letters, the Issuer believes that the Exchange Notes issued in exchange for the
Original Notes pursuant to the Exchange Offer may be offered for resale, resold
and otherwise transferred by a holder thereof (other than (i) a broker-dealer
who purchases such Exchange Notes from the Issuer to resell pursuant to Rule
144A or any other available exemption under the Securities Act, or (ii) a person
that is an "affiliate" of the Issuer within the meaning of Rule 405 under the
Securities Act of 1933, as amended (the "Securities Act")) without compliance
with the registration and prospectus delivery provisions of the Securities Act,
provided that (i) such Exchange Notes are acquired in the ordinary course of
such holder's business, (ii) at the time of the commencement of the Exchange
Offer such holder has no arrangement with any person to participate in a
distribution of the Exchange Notes and (iii) such holder is not engaged in, and
does not intend to engage in, a distribution of the Exchange Notes. By tendering
Original Notes in exchange for Exchange Notes, each holder will represent to the
Issuer that: (i) it is not such an affiliate of the Issuer, (ii) any Exchange
Notes to be received by it will be acquired in the ordinary course of business
and (iii) at the time of the commencement of the Exchange Offer it had no
arrangement with any person to participate in a distribution of the Exchange
Notes. If the undersigned is not a broker-dealer or is a broker-dealer but will
not receive Exchange Notes for its own account in exchange for Original Notes,
the undersigned represents that it is not engaged in, and does not intend to
engage in, a distribution of Exchange Notes.
If the undersigned is a broker-dealer that will receive Exchange Notes for
its own account in exchange for Original Notes, where such Original Notes were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange Notes; however, by
so acknowledging and by delivering a prospectus, the undersigned will not be
deemed to admit that it is an "underwriter" within the meaning of the Securities
Act. Nevertheless a broker-dealer may be deemed to be an "underwriter" under the
Securities Act notwithstanding such disclaimer. The SEC has taken the position
that such broker-dealers may fulfill their prospectus delivery requirements with
respect to the Exchange Notes (other than a resale of Exchange Notes received in
exchange for an unsold allotment from the original sale of the Original Notes)
with the Prospectus. The Prospectus, as it may be amended or supplemented from
time to time, may be used by such broker-dealers for a period of time, starting
on the Expiration Date and ending
5
<PAGE>
on the close of business 180 days after the date the Registration Statement
relating to the Exchange Offer has become effective. The Issuer has agreed that
for such period of time, it will make the Prospectus (as it may be amended or
supplemented) available to each broker-dealer which, with the Issuer's prior
written consent, makes a market in the Original Notes and receives Exchange
Notes pursuant to the Exchange Offer (each a "Participating Broker-Dealer") for
use in connection with any resale of such Exchange Notes. By acceptance of the
Exchange Offer, each broker-dealer that receives Exchange Notes pursuant to the
Exchange Offer hereby acknowledges and agrees to notify the Issuer prior to
using the Prospectus in connection with the sale or transfer of Exchange Notes
and that, upon receipt of notice from the Issuer of the happening of any event
which makes any statement in the Prospectus untrue in any material respect or
which requires the making of any changes in the Prospectus in order to make the
statements therein not misleading, such broker-dealer will suspend use of the
Prospectus until (i) the Issuer has amended or supplemented the Prospectus to
correct such misstatement or omission and (ii) either the Issuer has furnished
copies of the amended or supplemented Prospectus to such broker-dealer or, if
the Issuer has not otherwise agreed to furnish such copies and declines to do so
after such broker-dealer so requests, such broker-dealer has obtained a copy of
such amended or supplemented Prospectus as filed with the SEC. The Issuer agrees
to deliver such notice and such amended or supplemented Prospectus promptly to
any Participating Broker-Dealer that has so notified the Issuer. Except as
described above, the Prospectus may not be used for or in connection with an
offer to resell, a resale or any other retransfer of Exchange Notes.
The undersigned represents that (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of such holder's
business, (ii) such holder has no arrangements with any person to participate in
the distribution of such Exchange Notes or, if such holder intends to
participate in the Exchange Offer for the purpose of distributing the Exchange
Notes, such holder will comply with the registration and prospectus delivery
requirements of the Securities Act to the extent applicable, and (iii) (x) such
holder is not (a) a broker-dealer that will receive Exchange Notes for its own
account in exchange for Original Notes that were acquired as a result of
market-making activities or other trading activities, or (b) an "affiliate," as
defined in Rule 405 under the Securities Act, of the Issuer or (y) if such
holder is such a broker-dealer or an affiliate, such holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable.
All authority conferred or agreed to be conferred in this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in the
instructions contained in this Letter of Transmittal.
The undersigned understands that tenders of the Original Notes pursuant to
any one of the procedures described under "The Exchange Offer--Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and the Issuer in accordance with the
terms and subject to the conditions of the Exchange Offer.
The undersigned understands that if its Original Notes are accepted for
exchange, interest on the Exchange Notes will accumulate from the last interest
payment date on which interest was paid on the Original Notes surrendered in
exchange therefore, or if no interest has been paid, from the original date of
issuance of the Original Notes.
The undersigned recognizes that unless the holder of Original Notes (i)
completes the appropriate column of the box entitled "Description of Original
Notes Tendered" above and (ii) checks the box entitled "Check here if tendered
shares of Original Notes are being delivered to the Exchange Agent in exchange
for certificated Exchange Notes" above, such holder, when tendering such
Original Notes, will be deemed to have tendered such Original Notes in exchange
for a beneficial interest in one or more fully registered global certificates,
which will be deposited with, or on behalf of, DTC and registered in the name of
Cede & Co., its nominee. Beneficial interests in such registered global
certificates will be shown on, and transfers
6
<PAGE>
thereof will be effected only through, records maintained by DTC and its
participants. See "Book-Entry, Delivery and Form" in the Prospectus.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus under "The Exchange Offer--Conditions," the Issuer may not be
required to accept for exchange any of the Original Notes tendered. Original
Notes not accepted for exchange or withdrawn will be returned to the undersigned
at the address set forth below unless otherwise indicated under "Special
Delivery Instructions" below.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptability of any tender will be determined by the Issuer, in
its sole discretion, and such determination will be final and binding. Unless
waived by the Issuer, irregularities and defects must be cured by the Expiration
Date. The Issuer shall not be obligated to give notice of any defects or
irregularities in tenders and shall not incur any liability for failure to give
any such notice.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby requests that the Exchange Notes
(and, if applicable, substitute certificates representing Original Notes for any
Original Notes not exchanged) be issued in the name of the undersigned.
Similarly, unless otherwise indicated under the box entitled "Special Delivery
Instructions" below, the undersigned hereby requests that the Exchange Notes
(and, if applicable, substitute certificates representing Original Notes for any
Original Notes not exchanged) be sent to the undersigned at the address shown
above in the box entitled "Description of Original Notes Tendered."
7
<PAGE>
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL
NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED
THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
- --------------------------------------------------------------------------------
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Date: ______________________________________________________________________
Area Code and Telephone Number: ____________________________________________
If a holder is tendering any Original Notes, this Letter of Transmittal
must be signed by the registered holder(s) as the name(s) appear(s) on the
certificate(s) for the Original Notes or by any person(s) authorized to
become registered holder(s) by endorsements and documents transmitted
herewith. If signature is by a trustee, executor, administrator, guardian,
officer or other person acting in a fiduciary or representative capacity,
please set forth full title below. See Instruction 3.
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ___________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
__________________________________________________________________________
(TITLE)
__________________________________________________________________________
(NAME OF FIRM)
Dated: _____________________________________________________________________
----------------------------------------------------------------------------
8
<PAGE>
- -------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if Exchange Notes (and, if applicable, substitute
certificates representing Original Notes for any Original Notes not
exchanged) are to be issued in the name of and sent to someone other than
the person or persons whose signature(s) appear(s) on this Letter of
Transmittal above.
Issue Exchange Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
- ------------------------------------------------------
- ------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Exchange Notes (and, if
applicable, substitute certificates representing Original Notes for any
Original Notes not exchanged) are to be sent to someone other than the
person or persons whose signature(s) appear(s) on this Letter of Transmittal
above or to such person or persons at an address other than shown in the box
entitled "Description of Original Notes Tendered" on this Letter of
Transmittal above.
Mail Exchange Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
- -----------------------------------------------------
IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF)
TOGETHER WITH CERTIFICATES REPRESENTING ORIGINAL NOTES OR (B) A BOOK-ENTRY
CONFIRMATION INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE RECEIVED BY THE
EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE
TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING HOLDER MUST
COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY TENDERING
THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER
OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO
ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--Taxpayer Identification Social Security Number
FORM W-9 Number OR ------------------------
Department of the Treasury Enter your taxpayer Employer Identification Number
Internal Revenue Service identification number in the NOTE: If the account is in more
appropriate box. For most than one name, see the chart on
individuals, this your social page 2 of the enclosed
security number. If you do not Guidelines to determine what
have a number, see how to number to give.
obtain a "TIN" in the enclosed
Guidelines.
-----------------------------------------------------------------
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
(See enclosed Guidelines)
Payor's Request for Taxpayer
Identification Number ("TIN")
and Certification
- ---------------------------------------------------------------------------------------------------
Under the penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends or the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of underreporting of
interest or dividends on your tax return. However, if after being notified by the IRS that you
were subject to backup withholding you received another notification from the IRS that you are not
longer subject to backup withholding, do not cross our item (2).
Signature Date --------------------
- ---------------------------------------------------------------------------------------------------
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number has not been issued
to me, and that I mailed or delivered an application to receive a Taxpayer Identification Number
to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I
intend to mail or deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31 percent of all payments made to me on
account of the Exchange Notes shall be retained until I provide a Taxpayer Identification Number
to the payer and that, if I do not provide my Taxpayer Identification Number within sixty (60)
days, such retained amounts shall be remitted to the Internal Revenue Service as backup
withholding and 31 percent of all reportable payments made to me thereafter will be withheld and
remitted to the Internal Revenue Service until I provide a Taxpayer Identification Number.
Signature Date --------------------
- ---------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
-----
</TABLE>
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL NOTES; GUARANTEED
DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by holders of
Original Notes to accept the Exchange Offer if: (i) tender of Original Notes is
to be made by DTC Participants through ATOP, for which the transaction is
eligible, pursuant to the procedures set forth in the Prospectus under the
caption "Exchange Offer--Procedures for Tendering--Original Securities Held
through DTC"; (ii) certificates representing Original Notes are to be physically
delivered to the Exchange Agent herewith by such holders, pursuant to the
procedures set forth in the Prospectus under the caption "Exchange Offer--
Procedures for Tendering--Original Securities Held through DTC"; or (iii) tender
of Original Notes is to be made according to the guaranteed delivery procedures
set forth in the Prospectus under the caption "Exchange Offer--Guaranteed
Delivery Procedures." Notwithstanding the foregoing, valid acceptance of the
terms of the Exchange Offer may be effected by a DTC Participant tendering
Original Notes through ATOP where the Exchange Agent receives an Agent's Message
prior to the Expiration Date. Accordingly, such DTC Participant must
electronically transmit its acceptance to DTC through ATOP, and then DTC will
edit and verify the acceptance, execute a book-entry delivery to the Exchange
Agent's account at DTC and send an Agent's Message to the Exchange Agent for its
acceptance. By tendering through ATOP, DTC Participants will expressly
acknowledge receipt of this Letter of Transmittal and agree to be bound by its
terms and the Issuer will be able to enforce such agreement against such DTC
Participants.
In order to validly tender Original Notes pursuant to the Exchange Offer,
either (i) (A) this Letter of Transmittal, or a facsimile hereof, together with
certificates representing Original Notes or (B) a Book-Entry Confirmation,
including by means of an Agent's Message, of the transfer into the Exchange
Agent's account at DTC of all Original Notes delivered electronically must be
received by the Exchange Agent at its address set forth herein prior to 5:00
p.m., New York City time, on the Expiration Date, together with all other
required documents, or (ii) the tendering holder must comply with the guaranteed
delivery procedures set forth below. Delivery of documents to DTC does not
constitute delivery to the Exchange Agent.
If a holder or DTC Participant desires to tender Original Notes pursuant to
the Exchange Offer and time will not permit this Letter of Transmittal,
certificates representing such Original Notes and all other required documents
to reach the Exchange Agent, or the procedures for book-entry transfer,
including those with respect to tenders through ATOP, cannot be completed, prior
to the Expiration Date, such holder or DTC Participant, as the case may be, must
tender such Original Notes pursuant to the guaranteed delivery procedures set
forth in the Prospectus under the caption "Exchange Offer--Procedures for
Tendering--Guaranteed Delivery Procedures." Pursuant to such procedures (i) such
tender must be made by or through an Eligible Institution; (ii) a properly
completed and duly executed Notice of Guaranteed Delivery, substantially in the
form provided by the Issuer, must be received by the Exchange Agent either by
hand delivery, mail, facsimile transmission or overnight courier, prior to the
Expiration Date; and (iii) within three NYSE trading days after the date of the
execution of the Notice of Guaranteed Delivery, (A) holders must deliver to the
Exchange Agent a properly completed and duly executed Letter of Transmittal as
well as the certificate(s) representing all tendered Original Notes in proper
form for transfer, and all other documents required by the Letter of Transmittal
or (B) DTC Participants must effect a Book-Entry Confirmation, including through
ATOP by means of an Agent's Message, of the transfer of such Original Notes into
the Exchange Agent's account at DTC as set forth in the Prospectus.
11
<PAGE>
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL NOTES AND
ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY THROUGH DTC AND ANY ACCEPTANCE
OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS AT THE OPTION AND RISK OF THE
TENDERING HOLDER. If delivery is by mail, registered mail with return receipt
requested, properly insured, is recommended. In all cases, sufficient time
should be allowed for such documents to reach the Exchange Agent prior to the
Expiration Date. Except as otherwise provided in this Instruction 1, delivery
will be deemed made only when actually received by the Exchange Agent.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of this Letter of Transmittal (or a facsimile
hereof), waive any right to receive any notice of the acceptance of their
Original Notes for exchange.
See "The Exchange Offer" in the Prospectus.
2. WITHDRAWALS. Tenders of Original Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time, on the Expiration Date. For a withdrawal of a
tender of Original Notes to be effective, a letter, telex, telegram or facsimile
transmission notice of withdrawal must be received by the Exchange Agent at its
address set forth above prior to 5:00 p.m., New York City time, on the
Expiration Date. Any such notice of withdrawal by a DTC Participant must contain
the name and number of the DTC Participant, the principal amount due at the
stated maturity of Original Notes to which such withdrawal relates and the
signature of the DTC Participant. Any such notice of withdrawal by a holder of
Original Notes must (i) specify the name of the person who tendered the Original
Notes to be withdrawn, (ii) contain a description of the Original Notes to be
withdrawn (including the certificate number or numbers and principal amount due
at the stated maturity of such Original Notes) and (iii) be signed by the holder
of such Original Notes in the same manner as the original signature on this
Letter of Transmittal (including any required signature guaranties), or be
accompanied by (x) documents of transfer in a form acceptable to the Issuer, in
its sole discretion and (y) a properly completed irrevocable proxy that
authorized such person to effect such revocation on behalf of such holder. Any
Original Notes so withdrawn will be deemed not to have been validly tendered for
exchange for purposes of the Exchange Offer. Any Original Notes which have been
tendered for exchange but which are not exchanged for any reason will be
returned to the holder thereof without cost to such holder as soon as
practicable after withdrawal, rejection of tender, or termination of the
Exchange Offer. Properly withdrawn Original Notes may be retendered by following
the procedures described above at any time on or prior to 5:00 p.m., New York
City time, on the Expiration Date.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder of the Original Notes tendered hereby, the signature must
correspond exactly with the name as written on the face of the certificates
without any change whatsoever.
If any tendered Original Notes are owned of record by two or more joint
owners, all such owners must sign this Letter of Transmittal.
If any tendered Original Notes are registered in different names on several
certificates, it will be necessary to complete, sign and submit as many separate
copies of this Letter of Transmittal as there are different registrations of
certificates.
If this Letter of Transmittal or any Original Notes or powers of attorney
are signed by trustees, executors, administrators, guardians, attorneys-in-fact,
officers of corporations or others acting in a fiduciary or representative
capacity, such persons should indicate when signing, and unless waived by the
Issuer, proper evidence satisfactory to the Issuer of their authority so to act
must be submitted.
12
<PAGE>
The signatures on this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be
guaranteed unless the Original Notes surrendered for exchange pursuant thereto
are tendered (i) by a registered holder of the Original Notes who has not
completed the box entitled "Special Issuance Instructions" or "Special Delivery
Instructions" in this Letter of Transmittal or (ii) for the account of an
Eligible Institution. In the event that the signatures in this Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantees must be by a firm which is a member of a registered
national securities exchange or a member of the National Association of
Securities Dealers, Inc., or by a commercial bank or trust company having an
office or correspondent in the United States, or an "eligible institution"
within the meaning of Rule l7Ad-l5 of the Securities Exchange Act of 1934, as
amended (each an "Eligible Institution"). If Original Notes are registered in
the name of a person other than the signer of this Letter of Transmittal, the
Original Notes surrendered for exchange must be endorsed by, or be accompanied
by a written instrument or instruments of transfer or exchange, in satisfactory
form as determined by the Issuer in its sole discretion, duly executed by the
registered holder with the signature thereon guaranteed by an Eligible
Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of Original
Notes should indicate in the applicable box the name and address to which
Exchange Notes issued pursuant to the Exchange Offer are to be issued or sent,
if different from the name or address of the person signing this Letter of
Transmittal. In the case of issuance in a different name, the employer
identification or social security number of the person named must also be
indicated. If no such instructions are given, any Exchange Notes will be issued
in the name of, and delivered to, the name or address of the person signing this
Letter of Transmittal and any Original Notes not accepted for exchange will be
returned to the name or address of the person signing this Letter of
Transmittal.
5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the
federal income tax laws, payments that may be made by the Issuer on account of
Exchange Notes issued pursuant to the Exchange Offer may be subject to backup
withholding at the rate of 31%. In order to avoid such backup withholding, each
tendering holder should complete and sign the Substitute Form W-9 included in
this Letter of Transmittal and either (a) provide the correct taxpayer
identification number ("TIN") and certify, under penalties of perjury, that the
TIN provided is correct and that (i) the holder has not been notified by the
Internal Revenue Service (the "IRS") that the holder is subject to backup
withholding as a result of failure to report all interest or dividends or (ii)
the IRS has notified the holder that the holder is no longer subject to backup
withholding; or (b) provide an adequate basis for exemption. If the tendering
holder has not been issued a TIN and has applied for one, or intends to apply
for one in the near future, such holder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I, the Issuer (or the
Transfer Agent with respect to the Exchange Notes or a broker or custodian) may
still withhold 31% of the amount of any payments made on account of the Exchange
Notes until the holder furnishes the Issuer or the Transfer Agent with respect
to the Exchange Notes, broker or custodian with its TIN. In general, if a holder
is an individual, the taxpayer identification number is the Social Security
number of such individual. If the Exchange Agent or the Issuer is not provided
with the correct TIN, the holder may be subject to a $50 penalty imposed by the
IRS. Certain holders (including, among others, all corporations and certain
foreign individuals) are not subject to these backup withholding and reporting
requirements. In order for a foreign individual to qualify as an exempt
recipient, such holder must submit a statement (generally, IRS Form W-8), signed
under penalties of perjury, attesting to that individual's exempt status. Such
statements can be obtained from the Exchange Agent. For further information
concerning backup withholding and instructions for completing the Substitute
Form W-9 (including how to obtain a taxpayer identification number if you do not
have one and how to complete the Substitute Form W-9 if Original Notes are
registered in more than one name), consult the enclosed Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9.
13
<PAGE>
Failure to complete the Substitute Form W-9 will not, by itself, cause
Original Notes to be deemed invalidly tendered, but may require the Issuer or
the Transfer Agent with respect to the Exchange Notes, broker or custodian to
withhold 31% of the amount of any payments made on account of the Exchange
Notes. Backup withholding is not an additional federal income tax. Rather, the
federal income tax liability of a person subject to backup withholding will be
reduced by the amount of tax withheld. If withholding results in an overpayment
of taxes, a refund may be obtained from the IRS.
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the transfer of Original Notes to it or its order pursuant to the
Exchange Offer. If, however, Exchange Notes and/or substitute Original Notes not
exchanged are to be delivered to, or are to be registered or issued in the name
of, any person other than the registered holder of the Original Notes tendered
hereby, or if tendered Original Notes are registered in the name of any person
other than the person signing this Letter of Transmittal, or if a transfer tax
is imposed for any reason other than the transfer of Original Notes to the
Issuer or its order pursuant to the Exchange Offer, the amount of any such
transfer taxes (whether imposed on the registered holder or any other person)
will be payable by the tendering holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted herewith, the amount of such
transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Original Notes specified in this Letter
of Transmittal.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Original Notes, by
execution of this Letter of Transmittal, shall waive any right to receive notice
of the acceptance of their Original Notes for exchange.
Neither the Issuer nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. INADEQUATE SPACE. If the space provided herein is inadequate, the
aggregate principal amount of Original Notes being tendered and the certificate
number or numbers (if available) should be listed on a separate schedule
attached hereto and separately signed by all parties required to sign this
Letter of Transmittal.
10. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL NOTES. Any holder whose
Original Notes have been mutilated, lost, stolen or destroyed should contact the
Exchange Agent at the address indicated above for further instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone number indicated above.
All tendered Original Notes, executed Letters of Transmittal and other
related documents should be directed to the Exchange Agent. Requests for
assistance and additional copies of the Prospectus, the Letter of Transmittal
and other related documents should be directed to the Exchange Agent.
14
<PAGE>
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE UNITED STATES TRUST COMPANY OF NEW YORK
BY FACSIMILE:
(212) 780-0592
(FOR ELIGIBLE INSTITUTIONS ONLY)
BY TELEPHONE:
(800) 548-6565
BY MAIL:
UNITED STATES TRUST COMPANY OF NEW YORK
P.O. BOX 843
COOPER STATION
NEW YORK, NEW YORK 10276
ATTN: CORPORATE TRUST SERVICES
BY HAND TO 4:30 P.M.:
UNITED STATES TRUST COMPANY OF NEW YORK
111 BROADWAY
NEW YORK, NEW YORK 10006
ATTENTION: LOWER LEVEL CORPORATE TRUST WINDOW
BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.:
UNITED STATES TRUST COMPANY OF NEW YORK
770 BROADWAY, 13TH FLOOR
NEW YORK, NEW YORK 10003
ATTN: CORPORATE TRUST REDEMPTION UNIT
15
<PAGE>
Exhibit 99.2
FORM OF
LETTER OF TRANSMITTAL
TO TENDER FOR EXCHANGE
APPRECIATION NOTES DUE 2007
OF
BRILL MEDIA COMPANY, LLC
AND
BRILL MEDIA MANAGEMENT, INC.
PURSUANT TO THE PROSPECTUS DATED JANUARY , 1998
Offer to exchange Series B Appreciation Notes due 2007 ("Exchange
Appreciation Notes"), which are fully and unconditionally guaranteed by
subsidiaries of Brill Media Company, LLC, and Brill Media Management, Inc., and
have been registered under the Securities Act, for any and all outstanding
Appreciation Notes due 2007 ("Original Appreciation Notes"), which are fully and
unconditionally guaranteed by subsidiaries of Brill Media Company, LLC, and
Brill Media Management, Inc., and have not been so registered, pursuant to the
Prospectus dated January , 1998.
- --------------------------------------------------------------------------------
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK
CITY TIME, ON , 1998, UNLESS EXTENDED (THE "EXPIRATION DATE").
- --------------------------------------------------------------------------------
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed and submitted as follows:
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE UNITED STATES TRUST COMPANY OF NEW YORK
(THE "EXCHANGE AGENT")
FOR INFORMATION BY TELEPHONE:
1-800-548-6565
<TABLE>
<S> <C>
BY REGISTERED OR CERTIFIED MAIL: BY HAND BEFORE 4:30 P.M.:
The United States Trust Company The United States Trust Company
of New York of New York
P.O. Box 843 Cooper Station 111 Broadway
New York, New York 10276 New York, New York 10006
Attention: Corporate Trust Services Attention: Lower Level Corporate
Trust Window
BY OVERNIGHT COURIER AND BY FACSIMILE TRANSMISSION:
BY HAND AFTER 4:30 P.M.: (212) 780-0592
The United States Trust Company Attention: Customer Service
Of New York Confirm by Telephone to:
770 Broadway, 13th Floor (800) 548-6565
New York, New York 10003
</TABLE>
(ORIGINALS OF ALL DOCUMENTS SENT BY FACSIMILE SHOULD BE SENT
PROMPTLY BY REGISTERED OR CERTIFIED MAIL, BY HAND, OR
BY OVERNIGHT DELIVERY SERVICE.)
<PAGE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OR TRANSMISSION OF
INSTRUCTIONS VIA FACSIMILE OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A
VALID DELIVERY.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL CAREFULLY BEFORE COMPLETING
ANY BOX BELOW.
List below the Original Appreciation Notes to which this Letter of
Transmittal relates. If the space provided below is inadequate, the certificate
number(s) and aggregate principal of Original Appreciation Notes should be
listed on a separate signed schedule affixed hereto.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
DESCRIPTION OF ORIGINAL APPRECIATION NOTES TENDERED (ATTACH ADDITIONAL SIGNED PAGES, IF
NECESSARY)
-------------------------------------------------------------------------------------------
(1) (2) (3) (4) (5)
AGGREGATE
PRINCIPAL
AMOUNT OF
ORIGINAL NOTES
NAME(S) AND ADDRESS(ES) OF TENDERED IN
REGISTERED ORIGINAL NOTE CERTIFICATE AGGREGATE EXCHANGE FOR
HOLDER(S), EXACTLY AS NAME(S) NUMBER(S) OF PRINCIPAL AGGREGATE CERTIFICATED
APPEAR(S) ON ORIGINAL NOTE ORIGINAL AMOUNT PRINCIPAL EXCHANGE
CERTIFICATE(S) (PLEASE FILL APPRECIATION REPRESENTED BY AMOUNT APPRECIATION
IN, IF BLANK) NOTES* CERTIFICATE(S) TENDERED** NOTES***
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
TOTAL NUMBER
OF WARRANTS
- ---------------------------------------------------------------------------------------------
</TABLE>
* Need not be completed if Original Appreciation Notes are being tendered by
book-entry transfer in accordance with DTC's ATOP procedures for transfer.
** Unless otherwise indicated in this column, the aggregate principal amount
represented by all Original Appreciation Notes Certificates identified in
Column 1 or delivered to the Exchange Agent shall be deemed tendered.
*** Unless otherwise indicated, the holder will be deemed to have tendered
Original Appreciation Notes in exchange for a beneficial interest in one or
more fully registered global certificates, which will be deposited with, or
on behalf of, The Depository Trust Company ('DTC') and registered in the
name of Cede & Co., its nominee.
2
<PAGE>
The undersigned hereby acknowledges receipt of the Prospectus dated ,
1998 (the "Prospectus") of Brill Media Company, LLC, a Virginia limited
liability company ("BMC") and Brill Media Management, Inc., a Virginia
corporation (collectively with BMC, the "Issuer")and this Letter of Transmittal
(the "Letter of Transmittal"), that together constitute the Issuer's offer (the
"Exchange Offer") to exchange its Series B Appreciation Notes due 2007 (the
"Exchange Appreciation Notes"), for an equal principal amount of its outstanding
Appreciation Notes due 2007 (the "Original Appreciation Notes"), of which
$3,000,000 aggregate principal amount is outstanding. The terms of the Exchange
Appreciation Notes are identical in all material respect to the Original
Appreciation Notes, except that the Exchange Appreciation Notes have been
registered under the Securities Act of 1933, as amended (the "Securities Act")
pursuant to a Registration Statement, and, therefore, will not bear legends
restricting their transfer. Capitalized terms used but not defined herein have
the meanings ascribed to them in the Prospectus.
The undersigned has completed the appropriate boxes above and below and
signed this Letter of Transmittal to indicate the action the undersigned desires
to take with respect to the Exchange Offer.
This Letter of Transmittal is to be used by holders of Original Appreciation
Notes to accept the Exchange Offer if: (i) tender of Original Appreciation Notes
is to be made according to the Automated Tender Offer Program ("ATOP") of the
Depository Trust Company ("DTC"), for which the transaction is eligible,
pursuant to the procedures set forth in the Prospectus under the caption
"Exchange Offer-- Procedures for Tendering--Original Securities held through
DTC"; (ii) certificates representing Original Appreciation Notes are to be
physically delivered to the Exchange Agent herewith by such holders, pursuant to
the procedures set forth in the Prospectus under the caption "Exchange
Offer--Procedures for Tendering--Original Securities held by Holders"; or (iii)
tender of Original Appreciation Notes is to be made according to the guaranteed
delivery procedures set forth in the Prospectus under the caption "Exchange
Offer--Guaranteed Delivery Procedures."
NOTWITHSTANDING THE FOREGOING, VALID ACCEPTANCE OF THE TERMS OF THE EXCHANGE
OFFER MAY BE EFFECTED BY A PARTICIPANT IN DTC (A 'DTC PARTICIPANT') TENDERING
ORIGINAL APPRECIATION NOTES THROUGH ATOP WHERE THE EXCHANGE AGENT RECEIVES AN
AGENT'S MESSAGE (AS DEFINED IN THE PROSPECTUS) PRIOR TO THE EXPIRATION DATE.
ACCORDINGLY, SUCH DTC PARTICIPANT MUST ELECTRONICALLY TRANSMIT ITS ACCEPTANCE TO
DTC THOUGH ATOP, AND THEN DTC WILL EDIT AND VERIFY THE ACCEPTANCE, EXECUTE A
BOOK-ENTRY DELIVERY TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND SEND AN AGENT'S
MESSAGE TO THE EXCHANGE AGENT FOR ITS ACCEPTANCE. BY TENDERING THROUGH ATOP, DTC
PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF THIS LETTER OF TRANSMITTAL
AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER WILL BE ABLE TO ENFORCE SUCH
AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
DELIVERY OF DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE
AGENT.
DTC Participants who wish to cause their Original Appreciation Notes to be
tendered, but who cannot transmit their acceptances through ATOP prior to the
Expiration Date, may effect a tender in accordance with the guaranteed delivery
procedures set forth in the Prospectus under the caption "Exchange
Offer--Guaranteed Delivery Procedures--Original Securities held through DTC."
Holders who wish to tender their Original Appreciation Notes but (i) whose
Original Appreciation Notes are not immediately available and will not be
available for tendering prior to the Expiration Date, or (ii) who cannot deliver
their Original Appreciation Notes, the Letter of Transmittal, or any other
required documents to the Exchange Agent prior to the Expiration Date, may
effect a tender in accordance with the guaranteed delivery procedures set forth
in the Prospectus under the caption "Exchange Offer--Guaranteed Delivery
Procedures--Original Securities held by Holders."
The undersigned must complete the appropriate boxes above and below and sign
this Letter of Transmittal to indicate the action the undersigned desires to
take with respect to the Exchange Offer.
3
<PAGE>
/ / CHECK HERE IF TENDERED ORIGINAL APPRECIATION NOTES ARE BEING DELIVERED TO
THE EXCHANGE AGENT IN EXCHANGE FOR CERTIFICATED EXCHANGE APPRECIATION NOTES.
Unless the undersigned (i) has completed the appropriate columns in the box
entitled "Description of Original Appreciation Notes Tendered" and (ii) has
checked the box above, the undersigned will be deemed to have tendered Original
Appreciation Notes in exchange for a beneficial interest in one or more fully
registered global certificates, which will be deposited with, or on behalf of,
DTC and registered in the name of Cede & Co., its nominee. Beneficial interests
in such registered global certificates will be shown on, and transfers thereof
will be effected only through, records maintained by DTC and its participants.
See "Book-Entry, Delivery and Form" as set forth in the Prospectus.
/ / CHECK HERE IF TENDERED ORIGINAL APPRECIAION NOTES ARE BEING DELIVERED BY
BOOK- ENTRY TRANSFER MADE TO AN ACCOUNT MAINTAINED BY THE EXCHANGE AGENT
WITH A BOOK-ENTRY TRANSFER FACILITY AND COMPLETE THE FOLLOWING:
Name of Tendering Institution __________________________________________________
The Depository Trust Company Account Number ____________________________________
Transaction Code Number ________________________________________________________
/ / CHECK HERE IF TENDERED ORIGINAL APPRECIATION NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s): _______________________________________________
Window Ticket Number (if any): _________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ____________________________
Name of Eligible Institution that Guaranteed Delivery: _________________________
If delivered by book-entry transfer: ___________________________________________
Account Number ____________________ Transaction Code Number ____________________
4
<PAGE>
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY
Ladies and Gentlemen:
Upon the terms and subject to conditions of the Exchange Offer, the
undersigned hereby tenders to the Issuer the Original Appreciation Notes
indicated above. Subject to, and effective upon, the acceptance for exchange of
the Original Appreciation Notes tendered hereby, the undersigned hereby sells,
assigns and transfers to, or upon the order of, the Exchange Agent, as agent of
the Issuer, all right, title and interest in and to such Original Appreciation
Notes as are being tendered hereby, and irrevocably constitutes and appoints the
Exchange Agent as the agent and attorney-in-fact of the undersigned to cause the
Original Appreciation Notes tendered hereby to be transferred and exchanged.
The undersigned hereby represents and warrants that the undersigned has full
power and authority to tender, exchange, sell, assign and transfer the Original
Appreciation Notes tendered hereby and to acquire the Exchange Appreciation
Notes issuable upon the exchange of such tendered Original Appreciation Notes,
and that the Exchange Agent, as agent of the Issuer, will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim when the same are accepted
by the Exchange Agent, as agent of the Issuer. The undersigned will, upon
request, execute and deliver any additional documents deemed by the Issuer or
the Exchange Agent to be necessary or desirable to complete the exchange, sale,
assignment and transfer of the Original Appreciation Notes tendered hereby.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on the interpretation of the staff of the Securities and Exchange
Commission (the "SEC"), as set forth in Exxon Capital Holdings Corporation
(available May 13, 1988) or similar no-action letters issued to third parties.
Based on such interpretation of the staff of the SEC set forth in such no-action
letters, the Issuer believes that the Exchange Appreciation Notes issued in
exchange for the Original Appreciation Notes pursuant to the Exchange Offer may
be offered for resale, resold and otherwise transferred by a holder thereof
(other than (i) a broker-dealer who purchases such Exchange Appreciation Notes
from the Issuer to resell pursuant to Rule 144A or any other available exemption
under the Securities Act, or (ii) a person that is an "affiliate" of the Issuer
within the meaning of Rule 405 under the Securities Act of 1933, as amended (the
"Securities Act")) without compliance with the registration and prospectus
delivery provisions of the Securities Act, provided that (i) such Exchange
Appreciation Notes are acquired in the ordinary course of such holder's
business, (ii) at the time of the commencement of the Exchange Offer such holder
has no arrangement with any person to participate in a distribution of the
Exchange Appreciation Notes and (iii) such holder is not engaged in, and does
not intend to engage in, a distribution of the Exchange Appreciation Notes. By
tendering Original Appreciation Notes in exchange for Exchange Appreciation
Notes, each holder will represent to the Issuer that: (i) it is not such an
affiliate of the Issuer, (ii) any Exchange Appreciation Notes to be received by
it will be acquired in the ordinary course of business and (iii) at the time of
the commencement of the Exchange Offer it had no arrangement with any person to
participate in a distribution of the Exchange Appreciation Notes. If the
undersigned is not a broker-dealer or is a broker-dealer but will not receive
Exchange Appreciation Notes for its own account in exchange for Original
Appreciation Notes, the undersigned represents that it is not engaged in, and
does not intend to engage in, a distribution of Exchange Appreciation Notes.
5
<PAGE>
If the undersigned is a broker-dealer that will receive Exchange
Appreciation Notes for its own account in exchange for Original Appreciation
Notes, where such Original Appreciation Notes were acquired as a result of
market-making activities or other trading activities, it acknowledges that it
will deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Appreciation Notes; however, by so
acknowledging and by delivering a prospectus, the undersigned will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.
Nevertheless a broker-dealer may be deemed to be an "underwriter" under the
Securities Act notwithstanding such disclaimer. The SEC has taken the position
that such broker-dealers may fulfill their prospectus delivery requirements with
respect to the Exchange Appreciation Notes (other than a resale of Exchange
Appreciation Notes received in exchange for an unsold allotment from the
original sale of the Original Appreciation Notes) with the Prospectus. The
Prospectus, as it may be amended or supplemented from time to time, may be used
by such broker-dealers for a period of time, starting on the Expiration Date and
ending on the close of business 180 days after the date the Registration
Statement relating to the Exchange Offer has become effective. The Issuer has
agreed that for such period of time, it will make the Prospectus (as it may be
amended or supplemented) available to each broker-dealer which, with the
Issuer's prior written consent, makes a market in the Original Appreciation
Notes and receives Exchange Appreciation Notes pursuant to the Exchange Offer
(each a "Participating Broker-Dealer") for use in connection with any resale of
such Exchange Appreciation Notes. By acceptance of the Exchange Offer, each
broker-dealer that receives Exchange Appreciation Notes pursuant to the Exchange
Offer hereby acknowledges and agrees to notify the Issuer prior to using the
Prospectus in connection with the sale or transfer of Exchange Appreciation
Notes and that, upon receipt of notice from the Issuer of the happening of any
event which makes any statement in the Prospectus untrue in any material respect
or which requires the making of any changes in the Prospectus in order to make
the statements therein not misleading, such broker-dealer will suspend use of
the Prospectus until (i) the Issuer has amended or supplemented the Prospectus
to correct such misstatement or omission and (ii) either the Issuer has
furnished copies of the amended or supplemented Prospectus to such broker-dealer
or, if the Issuer has not otherwise agreed to furnish such copies and declines
to do so after such broker-dealer so requests, such broker-dealer has obtained a
copy of such amended or supplemented Prospectus as filed with the SEC. The
Issuer agrees to deliver such notice and such amended or supplemented Prospectus
promptly to any Participating Broker-Dealer that has so notified the Issuer.
Except as described above, the Prospectus may not be used for or in connection
with an offer to resell, a resale or any other retransfer of Exchange
Appreciation Notes.
The undersigned represents that (i) the Exchange Appreciation Notes acquired
pursuant to the Exchange Offer are being obtained in the ordinary course of such
holder's business, (ii) such holder has no arrangements with any person to
participate in the distribution of such Exchange Appreciation Notes or, if such
holder intends to participate in the Exchange Offer for the purpose of
distributing the Exchange Appreciation Notes, such holder will comply with the
registration and prospectus delivery requirements of the Securities Act to the
extent applicable, and (iii) (x) such holder is not (a) a broker-dealer that
will receive Exchange Appreciation Notes for its own account in exchange for
Original Appreciation Notes that were acquired as a result of market-making
activities or other trading activities, or (b) an "affiliate," as defined in
Rule 405 under the Securities Act, of the Issuer or (y) if such holder is such a
broker-dealer or an affiliate, such holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent applicable.
All authority conferred or agreed to be conferred in this Letter of
Transmittal and every obligation of the undersigned hereunder shall be binding
upon the successors, assigns, heirs, executors, administrators, trustees in
bankruptcy and legal representatives of the undersigned and shall not be
affected by, and shall survive, the death or incapacity of the undersigned. This
tender may be withdrawn only in accordance with the procedures set forth in the
instructions contained in this Letter of Transmittal.
6
<PAGE>
The undersigned understands that tenders of the Original Appreciation Notes
pursuant to any one of the procedures described under "The Exchange
Offer--Procedures for Tendering" in the Prospectus and in the instructions
hereto will constitute a binding agreement between the undersigned and the
Issuer in accordance with the terms and subject to the conditions of the
Exchange Offer.
The undersigned understands that if its Original Appreciation Notes are
accepted for exchange, interest on the Exchange Appreciation Notes will
accumulate from the last interest payment date on which interest was paid on the
Original Appreciation Notes surrendered in exchange therefore, or if no interest
has been paid, from the original date of issuance of the Original Appreciation
Notes.
The undersigned recognizes that unless the holder of Original Appreciation
Notes (i) completes the appropriate column of the box entitled "Description of
Original Appreciation Notes Tendered" above and (ii) checks the box entitled
"Check here if tendered shares of Original Appreciation Notes are being
delivered to the Exchange Agent in exchange for certificated Exchange
Appreciation Notes" above, such holder, when tendering such Original
Appreciation Notes, will be deemed to have tendered such Original Appreciation
Notes in exchange for a beneficial interest in one or more fully registered
global certificates, which will be deposited with, or on behalf of, DTC and
registered in the name of Cede & Co., its nominee. Beneficial interests in such
registered global certificates will be shown on, and transfers thereof will be
effected only through, records maintained by DTC and its participants. See
"Book-Entry, Delivery and Form" in the Prospectus.
The undersigned recognizes that, under certain circumstances set forth in
the Prospectus under "The Exchange Offer--Conditions," the Issuer may not be
required to accept for exchange any of the Original Appreciation Notes tendered.
Original Appreciation Notes not accepted for exchange or withdrawn will be
returned to the undersigned at the address set forth below unless otherwise
indicated under "Special Delivery Instructions" below.
All questions as to the validity, form, eligibility (including time of
receipt) and acceptability of any tender will be determined by the Issuer, in
its sole discretion, and such determination will be final and binding. Unless
waived by the Issuer, irregularities and defects must be cured by the Expiration
Date. The Issuer shall not be obligated to give notice of any defects or
irregularities in tenders and shall not incur any liability for failure to give
any such notice.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby requests that the Exchange
Appreciation Notes (and, if applicable, substitute certificates representing
Original Appreciation Notes for any Original Appreciation Notes not exchanged)
be issued in the name of the undersigned. Similarly, unless otherwise indicated
under the box entitled "Special Delivery Instructions" below, the undersigned
hereby requests that the Exchange Appreciation Notes (and, if applicable,
substitute certificates representing Original Appreciation Notes for any
Original Appreciation Notes not exchanged) be sent to the undersigned at the
address shown above in the box entitled "Description of Original Appreciation
Notes Tendered."
7
<PAGE>
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF ORIGINAL
NOTES TENDERED" ABOVE AND SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED
THE ORIGINAL NOTES AS SET FORTH IN SUCH BOX(ES) ABOVE.
PLEASE SIGN HERE
(TO BE COMPLETED BY ALL TENDERING HOLDERS)
(COMPLETE ACCOMPANYING SUBSTITUTE FORM W-9)
- --------------------------------------------------------------------------------
____________________________________________________________________________
____________________________________________________________________________
SIGNATURE(S) OF OWNER(S)
Date: ______________________________________________________________________
Area Code and Telephone Number: ____________________________________________
If a holder is tendering any Original Appreciation Notes, this Letter of
Transmittal must be signed by the registered holder(s) as the name(s)
appear(s) on the certificate(s) for the Original Appreciation Notes or by
any person(s) authorized to become registered holder(s) by endorsements and
documents transmitted herewith. If signature is by a trustee, executor,
administrator, guardian, officer or other person acting in a fiduciary or
representative capacity, please set forth full title below. See Instruction
3.
Name(s): ___________________________________________________________________
____________________________________________________________________________
(PLEASE TYPE OR PRINT)
Capacity: __________________________________________________________________
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(INCLUDE ZIP CODE)
SIGNATURE GUARANTEE
(IF REQUIRED BY INSTRUCTION 3)
Signature(s) Guaranteed by
an Eligible Institution: ___________________________________________________
(AUTHORIZED SIGNATURE)
__________________________________________________________________________
__________________________________________________________________________
(TITLE)
__________________________________________________________________________
(NAME OF FIRM)
Dated: _____________________________________________________________________
----------------------------------------------------------------------------
8
<PAGE>
- ------------------------------------------------
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if Exchange Appreciation Notes (and, if applicable,
substitute certificates representing Original Appreciation Notes for any
Original Appreciation Notes not exchanged) are to be issued in the name of
and sent to someone other than the person or persons whose signature(s)
appear(s) on this Letter of Transmittal above. Issue Exchange Appreciation
Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
(COMPLETE SUBSTITUTE FORM W-9)
- ------------------------------------------------------------
- ------------------------------------------------------------
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 3 AND 4)
To be completed ONLY if certificates for Exchange Appreciation Notes
(and, if applicable, substitute certificates representing Original
Appreciation Notes for any Original Appreciation Notes not exchanged) are to
be sent to someone other than the person or persons whose signature(s)
appear(s) on this Letter of Transmittal above or to such person or persons
at an address other than shown in the box entitled "Description of Original
Appreciation Notes Tendered" on this Letter of Transmittal above.
Mail Exchange Appreciation Notes to:
Name(s): ___________________________________________________________________
(PLEASE TYPE OR PRINT)
__________________________________________________________________________
(PLEASE TYPE OR PRINT)
Address: ___________________________________________________________________
____________________________________________________________________________
____________________________________________________________________________
(ZIP CODE)
- -----------------------------------------------------
IMPORTANT: EITHER (1) (A) THIS LETTER OF TRANSMITTAL (OR A FACSIMILE HEREOF)
TOGETHER WITH CERTIFICATES REPRESENTING ORIGINAL APPRECIATION NOTES OR (B) A
BOOK-ENTRY CONFIRMATION INCLUDING BY MEANS OF AN AGENT'S MESSAGE, MUST BE
RECEIVED BY THE EXCHANGE AGENT PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE
EXPIRATION DATE TOGETHER WITH ALL OTHER REQUIRED DOCUMENTS, OR (2) THE TENDERING
HOLDER MUST COMPLY WITH THE GUARANTEED DELIVERY PROCEDURES SET FORTH HEREIN. BY
TENDERING THROUGH ATOP, DTC PARTICIPANTS WILL EXPRESSLY ACKNOWLEDGE RECEIPT OF
THIS LETTER OF TRANSMITTAL AND AGREE TO BE BOUND BY ITS TERMS AND THE ISSUER
WILL BE ABLE TO ENFORCE SUCH AGREEMENT AGAINST SUCH DTC PARTICIPANTS.
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING ANY BOX ABOVE.
9
<PAGE>
TO BE COMPLETED BY ALL TENDERING HOLDERS
(SEE INSTRUCTION 5)
PAYOR'S NAME: BRILL MEDIA COMPANY, LLC AND BRILL MEDIA MANAGEMENT, INC.
<TABLE>
<C> <S> <C>
- ---------------------------------------------------------------------------------------------------
SUBSTITUTE PART I--Taxpayer Identification Social Security Number
FORM W-9 Number OR ------------------------
Department of the Treasury Enter your taxpayer Employer Identification Number
Internal Revenue Service identification number in the NOTE: If the account is in more
appropriate box. For most than one name, see the chart on
individuals, this your social page 2 of the enclosed
security number. If you do not Guidelines to determine what
have a number, see how to number to give.
obtain a "TIN" in the enclosed
Guidelines.
-----------------------------------------------------------------
PART II--FOR PAYEES EXEMPT FROM BACKUP WITHHOLDING
(See enclosed Guidelines)
Payor's Request for Taxpayer
Identification Number ("TIN")
and Certification
- ---------------------------------------------------------------------------------------------------
Under the penalties of perjury, I certify that:
(1) The number shown on this form is my correct Taxpayer Identification Number (or I am waiting
for a number to be issued to me), and
(2) I am not subject to backup withholding either because I have not been notified by the Internal
Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to
report all interest or dividends or the IRS has notified me that I am no longer subject to backup
withholding.
CERTIFICATION GUIDELINES--You must cross out item (2) of the above certification if you have been
notified by the IRS that you are subject to backup withholding because of underreporting of
interest or dividends on your tax return. However, if after being notified by the IRS that you
were subject to backup withholding you received another notification from the IRS that you are not
longer subject to backup withholding, do not cross our item (2).
Signature Date --------------------
- ---------------------------------------------------------------------------------------------------
CERTIFICATION OF PAYEE AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify, under penalties of perjury, that a Taxpayer Identification Number has not been issued
to me, and that I mailed or delivered an application to receive a Taxpayer Identification Number
to the appropriate Internal Revenue Service Center or Social Security Administration Office (or I
intend to mail or deliver an application in the near future). I understand that if I do not
provide a Taxpayer Identification Number to the payer, 31 percent of all payments made to me on
account of the Exchange Appreciation Notes shall be retained until I provide a Taxpayer
Identification Number to the payer and that, if I do not provide my Taxpayer Identification Number
within sixty (60) days, such retained amounts shall be remitted to the Internal Revenue Service as
backup withholding and 31 percent of all reportable payments made to me thereafter will be
withheld and remitted to the Internal Revenue Service until I provide a Taxpayer Identification
Number.
Signature Date --------------------
- ---------------------------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 31% OF ANY
PAYMENTS MADE TO YOU ON ACCOUNT OF THE EXCHANGE NOTES. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR
CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
-----
</TABLE>
10
<PAGE>
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. DELIVERY OF THIS LETTER OF TRANSMITTAL AND ORIGINAL APPRECIATION NOTES;
GUARANTEED DELIVERY PROCEDURE. This Letter of Transmittal is to be completed by
holders of Original Appreciation Notes to accept the Exchange Offer if: (i)
tender of Original Appreciation Notes is to be made by DTC Participants through
ATOP, for which the transaction is eligible, pursuant to the procedures set
forth in the Prospectus under the caption "Exchange Offer--Procedures for
Tendering--Original Securities held through DTC"; (ii) certificates representing
Original Appreciation Notes are to be physically delivered to the Exchange Agent
herewith by such holders, pursuant to the procedures set forth in the Prospectus
under the caption "Exchange Offer--Procedures for Tendering--Original Securities
held by Holders"; or (iii) tender of Original Appreciation Notes is to be made
according to the guaranteed delivery procedures set forth in the Prospectus
under the caption "Exchange Offer--Guaranteed Delivery Procedures."
Notwithstanding the foregoing, valid acceptance of the terms of the Exchange
Offer may be effected by a DTC Participant tendering Original Appreciation Notes
through ATOP where the Exchange Agent receives an Agent's Message prior to the
Expiration Date. Accordingly, such DTC Participant must electronically transmit
its acceptance to DTC through ATOP, and then DTC will edit and verify the
acceptance, execute a book-entry delivery to the Exchange Agent's account at DTC
and send an Agent's Message to the Exchange Agent for its acceptance. By
tendering through ATOP, DTC Participants will expressly acknowledge receipt of
this Letter of Transmittal and agree to be bound by its terms and the Issuer
will be able to enforce such agreement against such DTC Participants.
In order to validly tender Original Appreciation Notes pursuant to the
Exchange Offer, either (i) (A) this Letter of Transmittal, or a facsimile
hereof, together with certificates representing Original Appreciation Notes or
(B) a Book-Entry Confirmation, including by means of an Agent's Message, of the
transfer into the Exchange Agent's account at DTC of all Original Appreciation
Notes delivered electronically must be received by the Exchange Agent at its
address set forth herein prior to 5:00 p.m., New York City time, on the
Expiration Date, together with all other required documents, or (ii) the
tendering holder must comply with the guaranteed delivery procedures set forth
below. Delivery of documents to DTC does not constitute delivery to the Exchange
Agent.
If a holder or DTC Participant desires to tender Original Appreciation Notes
pursuant to the Exchange Offer and time will not permit this Letter of
Transmittal, certificates representing such Original Appreciation Notes and all
other required documents to reach the Exchange Agent, or the procedures for
book-entry transfer, including those with respect to tenders through ATOP,
cannot be completed, prior to the Expiration Date, such holder or DTC
Participant, as the case may be, must tender such Original Appreciation Notes
pursuant to the guaranteed delivery procedures set forth in the Prospectus under
the caption "Exchange Offer--Procedures for Tendering--Guaranteed Delivery
Procedures." Pursuant to such procedures (i) such tender must be made by or
through an Eligible Institution; (ii) a properly completed and duly executed
Notice of Guaranteed Delivery, substantially in the form provided by the Issuer,
must be received by the Exchange Agent either by hand delivery, mail, facsimile
transmission or overnight courier, prior to the Expiration Date; and (iii)
within three NYSE trading days after the date of the execution of the Notice of
Guaranteed Delivery, (A) holders must deliver to the Exchange Agent a properly
completed and duly executed Letter of Transmittal as well as the certificate(s)
representing all tendered Original Appreciation Notes in proper form for
transfer, and all other documents required by the Letter of Transmittal or (B)
DTC Participants must effect a Book-Entry Confirmation, including through ATOP
by means of an Agent's Message, of the transfer of such Original Appreciation
Notes into the Exchange Agent's account at DTC as set forth in the Prospectus.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE ORIGINAL
APPRECIATION NOTES AND ALL OTHER REQUIRED DOCUMENTS, INCLUDING DELIVERY
11
<PAGE>
THROUGH DTC AND ANY ACCEPTANCE OR AGENT'S MESSAGE TRANSMITTED THROUGH ATOP, IS
AT THE OPTION AND RISK OF THE TENDERING HOLDER. If delivery is by mail,
registered mail with return receipt requested, properly insured, is recommended.
In all cases, sufficient time should be allowed for such documents to reach the
Exchange Agent prior to the Expiration Date. Except as otherwise provided in
this Instruction 1, delivery will be deemed made only when actually received by
the Exchange Agent.
No alternative, conditional or contingent tenders will be accepted. All
tendering holders, by execution of this Letter of Transmittal (or a facsimile
hereof), waive any right to receive any notice of the acceptance of their
Original Appreciation Notes for exchange.
See "The Exchange Offer" in the Prospectus.
2. WITHDRAWALS. Tenders of Original Appreciation Notes may be withdrawn at
any time prior to 5:00 p.m., New York City time, on the Expiration Date. For a
withdrawal of a tender of Original Appreciation Notes to be effective, a letter,
telex, telegram or facsimile transmission notice of withdrawal must be received
by the Exchange Agent at its address set forth above prior to 5:00 p.m., New
York City time, on the Expiration Date. Any such notice of withdrawal by a DTC
Participant must contain the name and number of the DTC Participant, the
principal amount due at the stated maturity of Original Appreciation Notes to
which such withdrawal relates and the signature of the DTC Participant. Any such
notice of withdrawal by a holder of Original Appreciation Notes must (i) specify
the name of the person who tendered the Original Appreciation Notes to be
withdrawn, (ii) contain a description of the Original Appreciation Notes to be
withdrawn (including the certificate number or numbers and principal amount due
at the stated maturity of such Original Appreciation Notes) and (iii) be signed
by the holder of such Original Appreciation Notes in the same manner as the
original signature on this Letter of Transmittal (including any required
signature guaranties), or be accompanied by (x) documents of transfer in a form
acceptable to the Issuer, in its sole discretion and (y) a properly completed
irrevocable proxy that authorized such person to effect such revocation on
behalf of such holder. Any Original Appreciation Notes so withdrawn will be
deemed not to have been validly tendered for exchange for purposes of the
Exchange Offer. Any Original Appreciation Notes which have been tendered for
exchange but which are not exchanged for any reason will be returned to the
holder thereof without cost to such holder as soon as practicable after
withdrawal, rejection of tender, or termination of the Exchange Offer. Properly
withdrawn Original Appreciation Notes may be retendered by following the
procedures described above at any time on or prior to 5:00 p.m., New York City
time, on the Expiration Date.
3. SIGNATURES ON THIS LETTER OF TRANSMITTAL; BOND POWERS AND ENDORSEMENTS;
GUARANTEE OF SIGNATURES. If this Letter of Transmittal is signed by the
registered holder of the Original Appreciation Notes tendered hereby, the
signature must correspond exactly with the name as written on the face of the
certificates without any change whatsoever.
If any tendered Original Appreciation Notes are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Original Appreciation Notes are registered in different
names on several certificates, it will be necessary to complete, sign and submit
as many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
If this Letter of Transmittal or any Original Appreciation Notes or powers
of attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should indicate when signing, and unless
waived by the Issuer, proper evidence satisfactory to the Issuer of their
authority so to act must be submitted.
The signatures on this Letter of Transmittal or a notice of withdrawal, as
the case may be, must be guaranteed unless the Original Appreciation Notes
surrendered for exchange pursuant thereto are tendered (i) by a registered
holder of the Original Appreciation Notes who has not completed the box
12
<PAGE>
entitled "Special Issuance Instructions" or "Special Delivery Instructions" in
this Letter of Transmittal or (ii) for the account of an Eligible Institution.
In the event that the signatures in this Letter of Transmittal or a notice of
withdrawal, as the case may be, are required to be guaranteed, such guarantees
must be by a firm which is a member of a registered national securities exchange
or a member of the National Association of Securities Dealers, Inc., or by a
commercial bank or trust company having an office or correspondent in the United
States, or an "eligible institution" within the meaning of Rule l7Ad-l5 of the
Securities Exchange Act of 1934, as amended (each an "Eligible Institution"). If
Original Appreciation Notes are registered in the name of a person other than
the signer of this Letter of Transmittal, the Original Appreciation Notes
surrendered for exchange must be endorsed by, or be accompanied by a written
instrument or instruments of transfer or exchange, in satisfactory form as
determined by the Issuer in its sole discretion, duly executed by the registered
holder with the signature thereon guaranteed by an Eligible Institution.
4. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. Tendering holders of
Original Appreciation Notes should indicate in the applicable box the name and
address to which Exchange Appreciation Notes issued pursuant to the Exchange
Offer are to be issued or sent, if different from the name or address of the
person signing this Letter of Transmittal. In the case of issuance in a
different name, the employer identification or social security number of the
person named must also be indicated. If no such instructions are given, any
Exchange Appreciation Notes will be issued in the name of, and delivered to, the
name or address of the person signing this Letter of Transmittal and any
Original Appreciation Notes not accepted for exchange will be returned to the
name or address of the person signing this Letter of Transmittal.
5. BACKUP FEDERAL INCOME TAX WITHHOLDING AND SUBSTITUTE FORM W-9. Under the
federal income tax laws, payments that may be made by the Issuer on account of
Exchange Appreciation Notes issued pursuant to the Exchange Offer may be subject
to backup withholding at the rate of 31%. In order to avoid such backup
withholding, each tendering holder should complete and sign the Substitute Form
W-9 included in this Letter of Transmittal and either (a) provide the correct
taxpayer identification number ("TIN") and certify, under penalties of perjury,
that the TIN provided is correct and that (i) the holder has not been notified
by the Internal Revenue Service (the "IRS") that the holder is subject to backup
withholding as a result of failure to report all interest or dividends or (ii)
the IRS has notified the holder that the holder is no longer subject to backup
withholding; or (b) provide an adequate basis for exemption. If the tendering
holder has not been issued a TIN and has applied for one, or intends to apply
for one in the near future, such holder should write "Applied For" in the space
provided for the TIN in Part I of the Substitute Form W-9, sign and date the
Substitute Form W-9 and sign the Certificate of Payee Awaiting Taxpayer
Identification Number. If "Applied For" is written in Part I, the Issuer (or the
Transfer Agent with respect to the Exchange Appreciation Notes or a broker or
custodian) may still withhold 31% of the amount of any payments made on account
of the Exchange Appreciation Notes until the holder furnishes the Issuer or the
Transfer Agent with respect to the Exchange Appreciation Notes, broker or
custodian with its TIN. In general, if a holder is an individual, the taxpayer
identification number is the Social Security number of such individual. If the
Exchange Agent or the Issuer is not provided with the correct TIN, the holder
may be subject to a $50 penalty imposed by the IRS. Certain holders (including,
among others, all corporations and certain foreign individuals) are not subject
to these backup withholding and reporting requirements. In order for a foreign
individual to qualify as an exempt recipient, such holder must submit a
statement (generally, IRS Form W-8), signed under penalties of perjury,
attesting to that individual's exempt status. Such statements can be obtained
from the Exchange Agent. For further information concerning backup withholding
and instructions for completing the Substitute Form W-9 (including how to obtain
a taxpayer identification number if you do not have one and how to complete the
Substitute Form W-9 if Original Appreciation Notes are registered in more than
one name), consult the enclosed Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
Failure to complete the Substitute Form W-9 will not, by itself, cause
Original Appreciation Notes to be deemed invalidly tendered, but may require the
Issuer or the Transfer Agent with respect to the
13
<PAGE>
Exchange Appreciation Notes, broker or custodian to withhold 31% of the amount
of any payments made on account of the Exchange Appreciation Notes. Backup
withholding is not an additional federal income tax. Rather, the federal income
tax liability of a person subject to backup withholding will be reduced by the
amount of tax withheld. If withholding results in an overpayment of taxes, a
refund may be obtained from the IRS.
6. TRANSFER TAXES. The Issuer will pay all transfer taxes, if any,
applicable to the transfer of Original Appreciation Notes to it or its order
pursuant to the Exchange Offer. If, however, Exchange Appreciation Notes and/or
substitute Original Appreciation Notes not exchanged are to be delivered to, or
are to be registered or issued in the name of, any person other than the
registered holder of the Original Appreciation Notes tendered hereby, or if
tendered Original Appreciation Notes are registered in the name of any person
other than the person signing this Letter of Transmittal, or if a transfer tax
is imposed for any reason other than the transfer of Original Appreciation Notes
to the Issuer or its order pursuant to the Exchange Offer, the amount of any
such transfer taxes (whether imposed on the registered holder or any other
person) will be payable by the tendering holder. If satisfactory evidence of
payment of such taxes or exemption therefrom is not submitted herewith, the
amount of such transfer taxes will be billed directly to such tendering holder.
Except as provided in this Instruction 6, it will not be necessary for
transfer tax stamps to be affixed to the Original Appreciation Notes specified
in this Letter of Transmittal.
7. WAIVER OF CONDITIONS. The Issuer reserves the absolute right to waive
satisfaction of any or all conditions enumerated in the Prospectus.
8. NO CONDITIONAL TENDERS. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering holders of Original
Appreciation Notes, by execution of this Letter of Transmittal, shall waive any
right to receive notice of the acceptance of their Original Appreciation Notes
for exchange.
Neither the Issuer nor any other person is obligated to give notice of
defects or irregularities in any tender, nor shall any of them incur any
liability for failure to give any such notice.
9. INADEQUATE SPACE. If the space provided herein is inadequate, the
aggregate principal amount of Original Appreciation Notes being tendered and the
certificate number or numbers (if available) should be listed on a separate
schedule attached hereto and separately signed by all parties required to sign
this Letter of Transmittal.
10. MUTILATED, LOST, STOLEN OR DESTROYED ORIGINAL APPRECIATION NOTES. Any
holder whose Original Appreciation Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at the address indicated above for
further instructions.
11. REQUESTS FOR ASSISTANCE OR ADDITIONAL COPIES. Questions relating to the
procedure for tendering, as well as requests for additional copies of the
Prospectus and this Letter of Transmittal, may be directed to the Exchange Agent
at the address and telephone number indicated above.
All tendered Original Appreciation Notes, executed Letters of Transmittal
and other related documents should be directed to the Exchange Agent. Requests
for assistance and additional copies of the Prospectus, the Letter of
Transmittal and other related documents should be directed to the Exchange
Agent.
14
<PAGE>
THE EXCHANGE AGENT FOR THE EXCHANGE OFFER IS:
THE UNITED STATES TRUST COMPANY OF NEW YORK
BY FACSIMILE:
(212) 780-0592
(FOR ELIGIBLE INSTITUTIONS ONLY)
BY TELEPHONE:
(800) 548-6565
BY MAIL:
UNITED STATES TRUST COMPANY OF NEW YORK
P.O. BOX 843
COOPER STATION
NEW YORK, NEW YORK 10276
ATTN: CORPORATE TRUST SERVICES
BY HAND TO 4:30 P.M.:
UNITED STATES TRUST COMPANY OF NEW YORK
111 BROADWAY
NEW YORK, NEW YORK 10006
ATTENTION: LOWER LEVEL CORPORATE TRUST WINDOW
BY OVERNIGHT COURIER AND BY HAND AFTER 4:30 P.M.:
UNITED STATES TRUST COMPANY OF NEW YORK
770 BROADWAY, 13TH FLOOR
NEW YORK, NEW YORK 10003
ATTN: CORPORATE TRUST REDEMPTION UNIT
15
