<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
COMMISSION FILE NUMBER 0-15392
REGENT COMMUNICATIONS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 31-1492857
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
50 EAST RIVERCENTER BOULEVARD
SUITE 180
COVINGTON, KENTUCKY 41011
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(606) 292-0030
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $.01 par value - 240,000 shares as of
November 12, 1999.
<PAGE> 2
REGENT COMMUNICATIONS, INC.
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1999
INDEX
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Operations for the three
months and nine months ended September 30, 1999 (unaudited)
and September 30, 1998 (unaudited)
Condensed Consolidated Balance Sheets as of September 30, 1999
(unaudited) and December 31, 1998
Condensed Consolidated Statements of Cash Flows for the nine
months ended September 30, 1999 (unaudited) and September
30, 1998 (unaudited)
Notes to Condensed Consolidated Financial Statements (unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II - OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REGENT COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
1999 1998 1999 1998
---------------- ----------------- ---------------- ------------
<S> <C> <C> <C> <C>
Gross broadcast revenues $ 7,118,643 $5,860,649 $18,747,504 $10,339,931
Less agency commissions 488,266 439,551 1,281,834 855,630
---------- ---------- --------- ----------
Net broadcast revenues 6,630,377 5,421,098 17,465,670 9,484,301
Station operating expenses 4,919,525 4,029,194 13,066,210 6,727,843
Depreciation and amortization 1,019,482 779,010 2,838,338 1,465,946
Corporate general and
administrative expenses 540,230 499,931 1,699,360 1,360,001
---------- ---------- --------- ----------
Operating income (loss) 151,140 112,963 (138,238) (69,489)
Interest expense 942,838 942,770 2,429,645 2,029,378
Other income (expense), net 1,476 (14,035) 86,516 6,738
---------- ----------- --------- ----------
Loss before extraordinary item (790,222) (843,842) (2,481,367) (2,092,129)
Extraordinary loss from debt
extinguishment, net of taxes - - - (1,170,080)
----------- ----------- ---------- ---------
Net loss $ (790,222) $ (843,842) $(2,481,367) $(3,262,209)
=========== =========== ========== ===========
Loss applicable to common shares:
Net loss $ (790,222) $ (843,842) $(2,481,367) $(3,262,209)
Preferred stock dividend requirements
and accretion (1,415,844) ( 854,231) (3,976,844) (5,947,870)
----------- ----------- ----------- ----------
Loss applicable to common shares $(2,206,066) $(1,698,073) $(6,458,211) $(9,210,079)
=========== =========== ========== ==========
Basic and diluted net loss per common share:
Before extraordinary item $ (9.19) $ (7.08) $ (26.91) $ (33.50)
Extraordinary item - - - (4.88)
---------- ---------- --------- -----------
Net loss per common share $ (9.19) $ (7.08) $ (26.91) $ (38.38)
=========== =========== ========== ===========
Weighted average number of common shares
used in basic and diluted calculations 240,000 240,000 240,000 240,000
</TABLE>
The accompanying notes are an integral part of these
financial statements.
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REGENT COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, 1999 December 31, 1998
------------------ -----------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,125,187 $ 478,545
Accounts receivable, less allowance for doubtful
accounts of $203,000 in 1999 and $268,000 in 1998 4,656,492 3,439,372
Other current assets 416,670 200,828
Assets held for sale 8,713,163 7,500,000
---------- ----------
Total current assets 15,911,512 11,618,745
Property and equipment, net 12,181,936 9,303,975
Intangibles, net 59,444,957 45,023,940
Other assets, net 1,604,685 1,671,210
---------- ----------
Total assets $89,143,090 $67,617,870
========== ==========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable $ 834,270 $ 1,005,327
Accrued expenses 1,566,457 2,772,612
Interest payable 272,661 769,367
Notes payable - 7,500,000
Current portion of long-term debt 18,888,693 980,000
---------- ----------
Total current liabilities 21,562,081 13,027,306
---------- ----------
Long-term debt, less current portion 28,046,307 34,617,500
Warrants and other long-term liabilities 2,988,452 2,643,579
---------- ----------
Total liabilities 52,596,840 50,288,385
Commitments and contingencies
Redeemable preferred stock:
Series A convertible preferred stock, $5.00 stated value, 620,000 shares
authorized; 620,000 shares issued and outstanding-liquidation value:
$3,595,413 3,595,413 3,433,109
Series B senior convertible preferred stock, $5.00 stated value, 1,000,000
shares authorized; 1,000,000 shares issued and outstanding-liquidation
value: $5,708,629 5,708,629 5,372,054
Series C convertible preferred stock, $5.00 stated value, 400,640 shares
issued and outstanding-liquidation value: $2,184,915 634,974 530,094
Series D convertible preferred stock, $5.00 stated value, 1,000,000 shares
authorized; 1,000,000 shares issued and outstanding-liquidation value:
$5,493,222 5,493,222 5,231,441
Series F convertible preferred stock, $5.00 stated value, 4,100,000 shares
authorized; 4,100,000 shares issued and outstanding-liquidation value:
$22,484,532 22,484,532 12,839,454
Series G convertible preferred stock, $5.00 stated value, 1,800,000 shares
authorized; 372,406 shares issued and outstanding-liquidation value:
$1,999,440 1,999,440 -
Series H convertible preferred stock, $5.50 stated value, 2,200,000 shares
authorized; 2,181,818 shares issued and outstanding-liquidation value:
$12,170,232 12,170,232 -
---------- ----------
Total redeemable preferred stock 52,086,442 27,406,152
Shareholders' deficit:
Preferred stock:
Series C convertible preferred stock, $5.00 stated value, 4,000,000 shares
authorized; 3,328,440 shares issued and outstanding-liquidation value:
$18,148,762 1,131,646 1,131,561
Series E convertible preferred stock, $5.00 stated value, 5,000,000 shares
authorized; 447,842 shares issued and outstanding-liquidation value:
$2,442,334 2,239,210 2,239,210
Common stock, $.01 par value, 30,000,000 shares authorized;
240,000 shares issued and outstanding 2,400 2,400
Additional paid-in capital 889,307 3,871,549
Retained deficit (19,802,755) (17,321,387)
---------- ----------
Total shareholders' deficit (15,540,192) (10,076,667)
Total liabilities and shareholders' deficit $89,143,090 $67,617,870
========== ==========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
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REGENT COMMUNICATIONS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months ended September 30,
-------------------------------
1999 1998
------------ -------------
<S> <C> <C>
Net cash used in operating activities $ (1,383,233) $ (552,933)
----------- -----------
Cash flows from investing activities:
Acquisitions of radio stations, net of cash acquired (27,073,801) (29,263,668)
Escrow deposit - (160,000)
Capital expenditures (1,327,035) (433,373)
Proceeds from sale of radio stations 7,600,000 -
----------- -----------
Net cash used in investing activities (20,800,836) (29,857,041)
----------- -----------
Cash flows from financing activities:
Proceeds from long-term debt 16,500,000 35,500,000
Proceeds from issuance of redeemable preferred stock 22,112,024 18,150,000
Principal payments on long-term debt (5,162,500) (20,733,160)
Payment of notes payable (7,500,000) -
Payments for deferred financing costs (274,558) (1,292,042)
Payments for issuance costs (1,844,255) (1,356,393)
----------- -----------
Net cash provided by financing activities 23,830,711 30,268,405
----------- -----------
Net increase (decrease) in cash and cash equivalents 1,646,642 (141,569)
Cash at beginning of period 478,545 535,312
----------- -----------
Cash at end of period $ 2,125,187 $ 393,743
=========== ===========
Supplemental schedule of non-cash investing and financing activities:
Conversion of Faircom Inc.'s convertible subordinated
promissory notes to Faircom Inc. common stock $ 10,000,000
Liabilities assumed in acquisitions $ 11,680,322
Series E convertible preferred stock issued in conjunction with the
acquisition of Alta California Broadcasting, Inc. and Topaz
Broadcasting, Inc. $ 2,239,210
Series C convertible preferred stock issued in conjunction with the
merger between Faircom Inc. and Regent $ 1,618,681
Series A and B convertible preferred stock warrants $ 310,000
</TABLE>
The accompanying notes are an integral part of these
financial statements.
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<PAGE> 6
REGENT COMMUNICATIONS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
Regent Communications, Inc. (including its wholly-owned
subsidiaries, "Regent") was formed to acquire, own and operate radio stations in
small and medium-sized markets in the United States. Regent acquired on June 15,
1998, pursuant to an agreement of merger, all of the outstanding common stock of
Faircom Inc. ("Faircom") for 3,720,620 shares of Regent's Series C convertible
preferred stock. Approximately 400,000 of those shares, upon conversion to
common stock and subject to certain other conditions, may be put back to Regent
at the option of the holder subsequent to June 15, 2003 for an amount equal to
the fair value of Regent's common stock. The acquisition has been treated for
accounting purposes as the acquisition of Regent by Faircom under the purchase
method of accounting, with Faircom as the accounting acquirer. Consequently, the
historical financial statements prior to June 15, 1998 are those of Faircom.
Faircom operated radio stations through its wholly-owned subsidiaries in Flint,
Michigan and in Mansfield, Ohio. As a result of the Faircom merger, Faircom's
historical shareholder deficit and earnings per share information has been
retroactively restated to reflect the number of common shares outstanding
subsequent to the merger, with the difference between the par value of Regent's
and Faircom's common stock recorded as an offset to additional paid-in capital.
The condensed consolidated financial statements of Regent have been
prepared pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC) and, in the opinion of management, include all adjustments
necessary for a fair presentation of the results of operations, financial
position and cash flows for each period shown. Certain prior year amounts have
been reclassified to conform to the current classification with no effect on
financial results. All adjustments are of a normal and recurring nature except
for those outlined in Notes 2 and 3. 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 SEC rules and regulations. Results for interim periods may not be
indicative of results for the full year. The December 31, 1998 condensed
consolidated balance sheet was derived from audited financial statements but
does not include all disclosures required by generally accepted accounting
principles. It is suggested that these financial statements be read in
conjunction with the financial statements and notes thereto included in Regent's
Form 10-K filed March 31, 1999.
2. CONSUMMATED AND PENDING ACQUISITIONS AND DIVESTITURES
On March 1, 1999, Regent sold to an unrelated third party the FCC
licenses and related assets used in the operations of WSSP(FM) in Charleston,
South Carolina for approximately $1,600,000 in cash. Regent had previously
issued to a third party a note for $1,500,000 which was collateralized by the
assets of the station. Upon consummation of the sale, the note was repaid. The
sale resulted in a $100,000 gain to Regent which has been included in other
income in the accompanying condensed consolidated statement of operations for
the nine months ended September 30, 1999.
On May 6, 1999, Regent purchased from an unrelated third party the FCC
licenses and related assets used in the operations of radio stations WJON(AM),
WWJO(FM) and KMXK(FM) (the "St. Cloud Stations") in the St. Cloud, Minnesota
market for approximately $12,700,000 in cash. The purchase was financed by
approximately $5,082,000 in proceeds from the issuance of Series F convertible
preferred stock (See Note 3) and borrowings under Regent's senior reducing
credit facility. Based on an independent valuation, approximately $9,033,000 of
the purchase price was allocated to the FCC licenses
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<PAGE> 7
and is being amortized over a 40-year period, and the remaining $3,667,000 was
allocated to property and equipment.
On August 1, 1999, Regent sold to an unrelated third party the FCC
licenses and related assets used in the operations of KCBQ(AM) in San Diego,
California for approximately $6,000,000 in cash. Regent had previously issued to
a third party a note for $6,000,000 which was collateralized by the assets of
the station. Upon consummation of the sale, the note was repaid.
On September 3, 1999, Regent purchased from an unrelated third party
the FCC licenses and related assets used in the operations of radio stations
WXKC(FM) and WRIE(AM) licensed to Erie, Pennsylvania and WXTA(FM) licensed to
Edinboro, Pennsylvania (the "Erie Stations") for approximately $13,500,000 in
cash. The purchase was financed by approximately $6,300,000 in proceeds from the
issuance of Series H convertible preferred stock and borrowings under Regent's
senior reducing credit facility. Approximately $12,350,000 of the purchase price
was allocated to the FCC licenses and is being amortized over a 40-year period.
The remaining $1,150,000 was allocated to property and equipment and a
non-compete agreement. An independent valuation is currently being completed and
may result in adjustments to the original purchase price allocation.
The results of operations of the acquired businesses are included in
Regent's financial statements since the respective dates of acquisition.
The following unaudited pro forma data summarizes the combined results
of operations of Regent, as though all acquisitions consummated in 1998 had
occurred at the beginning of that year, and of the St. Cloud Stations and Erie
Stations, as though their acquisitions had occurred at the beginning of each
period. Regent's 1999 dispositions of WSSP(FM) and KCBQ (AM) are not material to
the results of Regent.
<TABLE>
<CAPTION>
Nine-Month Period
Ended September 30,
---------------------------
1999 1998
---- ----
<S> <C> <C>
Net broadcast revenues $20,637,416 $19,391,207
Net loss before extraordinary item $(2,466,538) $(3,635,631)
Net loss $(2,466,538) $(4,805,711)
Net loss per common share before extraordinary item:
Basic and diluted $ (30.60) $ (52.24)
Net loss per common share:
Basic and diluted $ (30.60) $ (57.11)
</TABLE>
These unaudited pro forma amounts do not purport to be indicative of
the results that might have occurred if the foregoing transactions had been
consummated on the indicated dates.
On March 30, 1999, Regent entered into an agreement to sell to an
unrelated third party the FCC licenses and related assets used in the operations
of radio stations KZGL(FM), KVNA(AM) and KVNA(FM) in Flagstaff, Arizona (the
"Flagstaff Stations") for approximately $2,425,000 in cash. Approximately
$2,375,000 of FCC licenses and related long-lived assets are classified as
assets held for sale in the
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<PAGE> 8
accompanying September 30, 1999 condensed consolidated balance sheet. The
transaction is subject to FCC consent.
On July 29, 1999, Regent entered into an agreement to purchase from an
unrelated third party the FCC licenses and related assets used in the operations
of radio stations WODZ-FM, WLZW-FM, WFRG-FM, WIBX-AM and WRUN-AM licensed to
Utica-Rome, New York and WCIZ-FM, WFRY-FM, WTNY-AM, and WUZZ-AM licensed to
Watertown, New York for approximately $44,000,000 in cash and 100,000 shares of
Regent's $7.50 Series I convertible preferred stock. The transaction is subject
to FCC consent. Regent provided a $2,200,000 letter of credit as an escrow
deposit in this transaction.
On September 14, 1999, Regent entered into an agreement to purchase
from an unrelated third party the FCC licenses and related assets used in the
operations of radio stations KLAQ-FM, KSII-FM and KROD-AM licensed to El Paso,
Texas for approximately $23,500,000 in cash. The transaction is subject to FCC
consent. Regent provided a $1,500,000 letter of credit as an escrow deposit in
this transaction.
On October 15, 1999, Regent sold the FCC licenses and related assets
used in the operations of radio stations KAAA(AM) and KZZZ(FM) in Kingman,
Arizona and KFLG(AM) and KFLG(FM) in Bullhead City, Arizona (the "Kingman
Stations") for approximately $5,400,000 in cash to an unrelated third party.
Approximately $5,138,000 of FCC licenses and related long-lived assets are
classified as assets held for sale in the accompanying September 30, 1999
condensed consolidated balance sheet.
On November 5, 1999, Regent sold the FCC licenses and related assets
used in the operations of radio stations KRLT(FM) and KOWL(AM) in South Lake
Tahoe, California (the "Lake Tahoe Stations") for approximately $1,226,000 in
cash to an unrelated third party. Approximately $1,200,000 of FCC licenses and
related long-lived assets are classified as assets held for sale in the
accompanying September 30, 1999 condensed consolidated balance sheet.
3. CAPITAL STOCK
In January 1999, Regent issued 372,406 shares of its Series G
convertible preferred stock for $5.00 per share to certain executive officers of
Regent and to Blue Chip Capital Fund II Limited Partnership, an existing holder
of Series C convertible preferred stock. The proceeds were used to pay down
existing debt under Regent's credit agreement and fund working capital needs.
In February 1999, Regent issued 633,652 shares of its Series F
convertible preferred stock for $5.00 per share to existing Series F holders.
The proceeds were used to finance certain capital improvements, to fund deferred
transaction costs related to the Faircom merger and the other acquisitions made
by Regent on June 15, 1998, and to fund working capital needs of Regent.
In April 1999, Regent issued 1,016,348 shares of its Series F
convertible preferred stock at $5.00 per share to fund its purchase of the St.
Cloud Stations. (See Note 2)
In April 1999, Regent shareholders voted to increase the number of
authorized shares of common stock from 30,000,000 to 60,000,000 and increase the
number of authorized shares of preferred stock from 20,000,000 to 40,000,000.
These increases have not yet been implemented by an amendment to Regent's
Certificate of Incorporation, and the additional shares of preferred stock have
not been designated as a specific series.
-8-
<PAGE> 9
In June 1999, Regent issued 636,363 shares of its Series H convertible
preferred stock at $5.50 per share to certain existing preferred stockholders to
fund a reduction in bank debt and working capital requirements. The Series H
convertible preferred stock was issued with similar terms as the Series G
convertible preferred stock. In addition, holders of the Series H convertible
preferred stock were granted the right to elect one individual to Regent's Board
of Directors upon and subject to certain conditions.
In August 1999, Regent issued an additional 1,545,454 of Series H
convertible preferred stock at $5.50 per share to certain existing preferred
stockholders and two new investors to fund in part the purchase of the Erie
stations as well as working capital requirements (See Note 2).
On November 12, 1999, Regent had commitments for the purchase of
$22,000,000 of Series H convertible preferred stock (or a new series of
convertible preferred stock with terms substantially similar to the terms of the
Series H convertible preferred stock) at $5.50 per share, subject to certain
conditions being met. The net proceeds are to be used to reduce debt (see Note
6) and to fund a portion of the purchase price of Regent's pending acquisitions
of stations in El Paso, Texas, Utica-Rome, New York and Watertown, New York.
4. ASSETS HELD FOR SALE
As of September 30, 1999, Regent had signed definitive agreements to
sell the Flagstaff Stations, the Kingman Stations and the Lake Tahoe Stations
(See Note 2). Pursuant to the terms of its credit agreement, when debt is above
certain levels, Regent is required to reduce its outstanding borrowings under
its credit agreement by an amount equal to the net proceeds received from any
stations sold. As of the date of the accompanying September 30, 1999 condensed
consolidated balance sheet, Regent expected all of these dispositions to be
completed within a year (Sales of the Kingman Stations and the Lake Tahoe
Stations were, in fact, consummated in the fourth quarter of 1999. See Note 2).
As a result, approximately $8,824,000 of long-term debt were classified as
current debt and approximately $8,713,000 in long-term assets were classified as
assets held for sale in the accompanying September 30, 1999 condensed
consolidated balance sheet. The assets classified as assets held for sale were
recorded at the lower of their carrying value or estimated fair market value
less anticipated disposition costs. The results from operations related to these
properties are immaterial.
5. EARNINGS PER SHARE
SFAS 128 calls for the dual presentation of basic and diluted earnings
per share ("EPS"). Basic EPS is based upon the weighted average common shares
outstanding during the period. Diluted EPS reflects the potential dilution that
would occur if common stock equivalents were exercised. The effects of the
assumed conversion of Regent's convertible preferred stock and the assumed
exercise of outstanding options and warrants would not be dilutive for all
periods presented. Therefore, basic EPS and diluted EPS are the same for all
periods presented.
6. LONG-TERM DEBT
On November 11, 1999, Regent and its senior lenders amended the credit
agreement in order to cure non-compliance by Regent as of September 30, 1999
with the loan covenants.
Under the amendment, Regent agreed that it will (a) borrow no
additional funds during the balance of 1999, (b) obtain by no later than
November 30, 1999, written commitments in form and substance satisfactory to the
lenders for the issuance of at least $10 million of additional net equity and
(c) issue such equity no later than December 30, 1999. Of the net proceeds
raised, subject to the provisions of the credit agreement, the first $10 million
must be applied to reduce permanently the senior debt. To the extent Regent
raises more than $10,000,000, a substantial portion of the additional proceeds
must be applied to reduce permanently the senior debt. Regent has written equity
commitments dated November 12, 1999 in the total amount of $22,000,000, with
funding contemplated prior to December 30, 1999. See Note 3.
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<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
condensed consolidated financial statements. Results for the interim periods may
not be indicative of the results for the full years.
On June 15, 1998, Regent consummated a number of mergers, acquisitions,
borrowings and issuances of additional equity. The historical financial
statements of Faircom Inc., which was deemed the "accounting acquirer" in the
merger between Faircom and Regent completed June 15, 1998, became the historical
financial statements of Regent, and accordingly, the results of operations of
Regent and of the other entities that merged with or were acquired by Regent as
part of the June 15, 1998 transactions have been included in Regent's condensed
consolidated financial statements only from June 15, 1998.
On the closing date of the June 15, 1998 transactions, Regent expanded
from being a small broadcaster (represented, from an accounting standpoint, by
Faircom's six stations in two markets) to a group broadcaster operating 33
stations in ten different markets. This significant change in size of Regent's
operations led directly to substantial increases in revenues, operating
expenses, depreciation and amortization, corporate general and administrative
expenses, and interest expense in 1999 as compared to 1998. Because of the June
15, 1998 transactions, and to a lesser extent the acquisitions of the St. Cloud
Stations and Erie Stations in 1999, the results of Regent's operations for the
nine months ended September 30, 1999 are not comparable to those of the same
period in 1998, nor are they necessarily indicative of results in the future.
For the three months ended September 30, 1999 compared with the same
period in 1998, Regent experienced a 22% increase in both net broadcast revenues
and station operating expenses. The additions of the St. Cloud Stations and Erie
Stations were the primary contributors to these increases.
Depreciation and amortization expense for the three months ended
September 30, 1999 increased 31% over the same period of 1998. This increase was
a direct result of the acquisitions of the St. Cloud Stations and Erie Stations
as well as other capital additions required to improve operations.
Corporate general and administrative expenses for the three months
ended September 30, 1999 increased 8% over the same period of 1998, primarily as
a result of an increase in corporate staff and facilities expense necessary to
manage the larger operations.
The performance of a radio station group, such as Regent, is
customarily measured by its ability to generate broadcast cash flow. "Broadcast
cash flow" is defined as operating income (loss) before depreciation,
amortization and corporate general and administrative expenses, excluding barter
activity. Although broadcast cash flow is not a measure of performance
calculated in accordance with generally accepted accounting principles ("GAAP"),
Regent believes that broadcast cash flow is accepted by the broadcasting
industry as a generally recognized measure of performance and is used by
analysts who report publicly on the performance of broadcasting companies.
Nevertheless, this measure should not be considered in isolation or as a
substitute for operating income, net income, net cash provided by operating
activities or any other measure for determining Regent's operating performance
or liquidity that is calculated in accordance with GAAP.
While acquisitions have affected the comparability of Regent's
operating results over the different periods, meaningful comparisons can be made
of results of operation for those markets in which Regent has been operating for
the past five full quarters, exclusive of any markets held
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<PAGE> 11
for sale. This group is currently represented by six markets and 23 stations. In
these markets, Regent's broadcast revenues (excluding barter revenues) increased
4% for the three months ended September 30, 1999 as compared to the same period
in 1998. Broadcast cash flow in these markets increased by 2% for the three
months ended September 30, 1999 as compared to the same period in 1998.
These comparative results were adversely affected by circumstances in
the Flint, Michigan market. The competitive environment of the Flint market
changed in late 1997 with the addition of a new commercial FM radio station. The
Flint school system previously owned this station and operated it as a
non-commercial facility. The school board sold the station at auction to an
experienced commercial broadcaster. In 1998, and shortly before Regent took
control of Faircom's Flint stations, the new commercial station changed formats
and became the top station in the marketplace in terms of adult listenership in
18 months. Its success impacted advertising market rates and the distribution of
advertising dollars to stations in the market, adversely affecting Regent's
market share of revenues, along with that of other competitors. It is estimated
by an industry source that in 1999, its first full year of commercial operation,
the new station will achieve approximately 17% of the market revenue. In January
of 1999, Regent made significant changes in the management structure and
personnel at its Flint stations, which had been delayed due to certain
contractual arrangements. The acclimation of the new management team and related
operational changes have taken most of 1999 to have effect. As a result of the
significant changes in the competitive structure of the market and the timing
required for Regent to be able to take full control of the stations, management
does not believe Flint will be a comparable market until January 1, 2000.
For the 20 stations in Regent's other five comparable markets,
broadcast revenues excluding barter revenues increased approximately 9% and
broadcast cash flow increased approximately 21% for the third quarter of 1999 as
compared to the same period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
In the nine months ended September 30, 1999, Regent used net cash in
operating activities of $1,383,233 compared with $552,933 for 1998. In the nine
months ended September 30, 1999, proceeds from the issuance of convertible
preferred stock provided substantially all of the funds used in operating
activities, as well as the funds used for capital expenditures, principal
payments on long-term debt, payment of professional fees (which were mostly
incurred in connection with the June 15, 1998 transactions), and other investing
and financing activity cash requirements (except for the borrowing of $8,500,000
which was used to help finance the purchase of the St. Cloud Stations and
$7,200,000 which was used to help finance the purchase of the Erie Stations). As
a result, there was a net increase in cash of $1,646,642 in the nine months
ended September 30, 1999 compared with a net decrease of $141,569 in the same
period in 1998.
Regent's borrowings are made under a credit agreement with a group of
lenders which provides for a senior reducing revolving credit facility with an
original commitment of up to $55,000,000 expiring March 31, 2005 (the commitment
was $52,937,500 at September 30, 1999). Regent's credit agreement permits the
borrowing of available credit for working capital and acquisitions, including
related acquisition expenses. In addition, subject to available credit, Regent
may request from time to time that its lenders issue letters of credit on the
same terms as the credit facility. At September 30, 1999, Regent had borrowed
$46,935,000 under its credit agreement. The remaining unused portion of the
credit facility of $6,002,500 was available to finance other acquisitions,
subject to restrictions contained in the credit agreement.
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Under its credit agreement, Regent is required to maintain an interest
rate coverage ratio (EBITDA, defined as earnings before interest, taxes,
depreciation and amortization, to annual interest rate cost); a fixed charge
coverage ratio (EBITDA to annual fixed charges); and a financial leverage ratio
(total debt to Adjusted EBITDA, as defined in the credit agreement). To maintain
compliance with these covenants, under its credit agreement Regent must reduce
its outstanding borrowings during the fourth quarter of 1999. It intends to do
this through proceeds from the sales of the Kingman stations and the Lake Tahoe
stations, along with the proceeds from the issuance of additional equity (see
note 6).
In an amendment to its credit agreement dated November 11, 1999, Regent
agreed that it will (a) borrow no additional funds during the balance of 1999,
(b) obtain by no later than November 30, 1999, written commitments in form and
substance satisfactory to the lenders for the issuance of at least $10,000,000
of additional net equity and (c) issue such equity no later than December 30,
1999. Of the net proceeds raised, subject to the provisions of the credit
agreement, the first $10,000,000 must be applied to reduce permanently the
senior debt. To the extent Regent raises more than $10,000,000, a substantial
portion of the additional proceeds must be applied to reduce permanently the
senior debt. To meet these requirements, as of November 12, 1999, Regent had
obtained written commitments for the investment of $22,000,000 in the existing
Series H or a new Series K convertible preferred stock to be issued by Regent at
$5.50 per share. These commitments are subject to certain conditions, including
formal documentation, the receipt by Regent of a binding commitment for a senior
credit facility sufficient to meet Regent's forseeable capital needs with at
least $65,000,000 projected at the time of the investment to be available upon
closing of pending acquisitions, and customary closing conditions. This equity
funding is expected to close before December 30, 1999.
Interest under the credit agreement is payable, at the option of
Regent, at alternative rates equal to the LIBOR rate (established September 3,
1999 at 5.56%, August 23, 1999 at 5.50% and September 17, 1999 at 5.56% and
effective at those same rates at September 30, 1999) plus 1.50% to 3.50%, or the
base rate announced by the Bank of Montreal (8.25% at September 30, 1999) plus
.25% to 2.25%. The spreads over the LIBOR rate and such base rate vary from time
to time, depending upon Regent's financial leverage. Regent is required to pay
quarterly commitment fees equal to 3/8% to 1/2% per annum, depending upon
Regent's financial leverage, on the unused portion of the commitment under its
credit agreement. Regent also is required to pay certain other fees to the agent
and the lenders for the administration and use of the credit facility.
In the first quarter of 1999, Regent received approximately $5,030,000
in gross proceeds from the issuance of shares of its Series F and G convertible
preferred stock at $5.00 per share. In the second quarter of 1999, the holders
of the Series F convertible preferred stock purchased an additional $5,081,740
of Regent's Series F convertible preferred stock at $5.00 per share, to finance
a portion of the acquisition price of the St. Cloud Stations. In May 1999,
Regent borrowed $8,500,000 under the credit agreement to finance the balance of
the purchase price of the St. Cloud Stations and related transaction fees. In
June 1999, three existing shareholders purchased $3,500,000 of a new series of
convertible preferred stock, Series H convertible preferred stock, at $5.50 per
share. The proceeds were used to reduce bank debt and fund working capital
requirements. Additionally, certain existing investors and two new investors
purchased an additional $8,500,000 of Series H convertible preferred stock in
August 1999. Of the proceeds, $1,000,000 were used to pay down borrowings under
Regent's credit facility. The balance of the proceeds, along with additional
borrowings under its credit agreement, were used to finance the acquisition and
initial capital expenditure and working capital needs of the Erie Stations.
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Consummation of Regent's pending acquisitions in El Paso, Texas and
Utica-Rome and Watertown, New York, anticipated to take place in the first
quarter of 2000, will require cash of $67,500,000, not including transaction
fees and costs. The funds required to complete these acquisitions and to fulfill
additional working capital needs of the new stations will be provided through
borrowings under a new credit agreement and the proceeds of bridge financing,
both of which are currently being negotiated, and through a portion of the
proceeds from the issuance of more convertible preferred stock under the
commitments referred to above or additional equity or high yield debt offerings.
Based on current interest rates and accrued interest expense as of
September 30, 1999, Regent believes its interest payments for the remainder of
1999 will be approximately $1,043,000. Scheduled debt principal payments, in
addition to debt reduction out of proceeds of additional equity, are expected to
be $16,250 for the remainder of 1999. Corporate general and administrative
expense and capital expenditures for the remainder of 1999 are estimated to be
approximately $496,000 and $243,000, respectively. Professional and transaction
fees of $800,000 are expected to be paid in the remainder of 1999. For these
payments to be made over the balance of 1999, aggregating $2,598,250, Regent has
used or will utilize net cash provided by operations, current cash balances, and
a portion of the net proceeds from the issuance of its convertible preferred
stock under the commitments referred to above.
Regent believes net cash from operations, cash balances, net proceeds
from the issuance of additional shares of its convertible preferred stock and
net proceeds from the sales of its Kingman Stations and Lake Tahoe Stations will
be sufficient to reduce borrowings under its credit agreement to allow Regent to
maintain compliance with all covenants; to meet Regent's interest expense and
any required principal payments, corporate expenses and capital expenditures in
the foreseeable future, based on its projected operations and indebtedness; and,
when combined with borrowings available under a new credit facility and bridge
financing being negotiated, to consummate its pending acquisitions.
MARKET RISK
Regent is exposed to the impact of interest rate changes because of
borrowings under its credit agreement. It is Regent's policy to enter into
interest rate transactions only to the extent considered necessary to meet its
objectives and to comply with the requirements of its credit agreement. Regent
has not entered into interest rate transactions for trading purposes.
To satisfy the requirements of its credit agreement, Regent entered
into a two-year collar agreement with the Bank of Montreal effective August 17,
1998 for a notional amount of $34,400,000 to mitigate the risk of increasing
interest rates created by the borrowing under its credit agreement. This
agreement is based on the three-month LIBOR rate and has a Cap Rate, as defined,
of 6.50% and a Floor Rate, as defined, of 5.28%. These rates are exclusive of
additional spreads over the LIBOR rate depending upon Regent's financial
leverage. Of the $46,935,000 principal amount outstanding under Regent's credit
facility at September 30, 1999, the annual interest expense would fluctuate by a
maximum of $420,000 on the $34,400,000 based on the defined Cap and Floor rates.
Fluctuation in interest expense on the remaining $12,535,000 would be
immaterial.
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YEAR 2000 COMPUTER SYSTEM COMPLIANCE
The "Year 2000" issue results from the fact that many computer programs
were written with date-sensitive codes that utilize only the last two digits
(rather than all four digits) to refer to a particular year. As the year 2000
approaches, these computer programs may be unable to process accurately certain
date-based information, as the program may interpret the year 2000 as 1900.
Regent utilizes various information technology (IT) systems in the
operation of its business, including accounting and financial reporting systems
and local and wide area networking infrastructure. In addition to IT systems,
Regent is also reliant on several non-information technology (non-IT) systems,
which could potentially pose Year 2000 issues, including traffic scheduling and
billing systems and digital audio systems providing automated broadcasting.
Finally, in addition to the risks posed by Year 2000 issues involving its own IT
and non-IT systems, Regent could also be affected by any Year 2000 problems
experienced by its key business partners, which include local and national
advertisers, suppliers of communications services, financial institutions and
suppliers of utilities. Regent is addressing the Year 2000 issue in its existing
properties in four phases: (a) assessment of the existence, nature and risk of
Year 2000 problems affecting Regent's systems; (b) remediation of Regent's
systems, whether through repair, replacement or upgrade, based on the findings
of the assessment phase; (c) testing of the enhanced or upgraded systems; and
(d) contingency planning.
In the fourth quarter of 1998, Regent engaged the services of an
independent Year 2000 consultant in order to analyze the scope of Regent's Year
2000 compliance issues and to initiate formal communications with its
advertisers, suppliers, lenders and other key business partners to determine
their exposure to the Year 2000 issue.
During the first quarter of 1999, the assessment phase was completed
with respect to the IT-systems and non-IT systems at Regent's currently owned
properties. Based on the findings of the assessment phase, a detailed plan was
developed for the remaining phases (remediation, testing and contingency
planning).
The following is a summary of the status of Regent's Year 2000 plans in
the IT and non-IT areas relative to the stations Regent currently owns and
expects to still own on January 1, 2000.
IT Systems
During the assessment phase, Regent evaluated the level of Year 2000
compliance of IT systems and hardware in its executive offices and all markets.
All financial and networking systems that were determined to be non-compliant
have been upgraded and tested with the exception of the network in the
Mansfield, Ohio stations which will take place in November. Costs associated
with the upgrades were immaterial. Regent has assessed several of its personal
computers to be non-compliant. Several of the non-compliant personal computers
are either upgradable at a minimal cost or are used for tasks where
non-compliance will not impact their functionality. There are personal computers
which will need to be replaced in 1999 and the cost of replacement is included
in Regent's capital plan. All necessary upgrades have been completed. Some of
the necessary replacements have taken place; however, a portion will occur in
the fourth quarter.
Non-IT Systems
Regent acquired all but one of its radio stations on or after June 15,
1998 from several independent operators. As part of Regent's ongoing plan to
provide its stations with a standardized digital audio broadcast system and,
thus, to realize certain of the efficiencies of operating as a larger broadcast
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<PAGE> 15
group, Regent has been systematically upgrading the broadcast systems and other
technical equipment at its stations. Although this upgrading plan has had a
business purpose independent of the Year 2000 compliance issue, Regent has
required, as a matter of course, written assurance from its suppliers that the
new broadcast systems are Year 2000 compliant. With respect to those properties
which Regent currently owns and expects to continue to own on January 1, 2000,
the upgrading project is complete. The costs of the upgrade project have been
included in capital expenditures. Regent has conducted and completed its own
testing of the broadcast systems at all of its stations. Costs associated with
this testing were immaterial.
The traffic scheduling and billing systems currently utilized at
Regent's stations are provided by three suppliers on a Year 2000 compliant
basis, as confirmed by Regent's tests of these systems.
During the first quarter of 1999, Regent compiled a detailed inventory
of key business partners and prioritized the list based on potential impact to
Regent in the event that the business partners experienced severe operational or
financial hardship as a result of Year 2000 non-compliance. Each business
partner was contacted and asked to fill out a detailed questionnaire regarding
its own Year 2000 assessment. Follow-up on responses is ongoing. At this point,
Regent is focusing its follow-up on the most critical business partners and is
incorporating follow-up into contingency planning.
With respect to the stations which Regent has agreed to acquire, the
Year 2000 assessment phase has commenced and is continuing. Regent's agreement
to acquire stations in Utica-Rome and Watertown, New York, signed on July 29,
1999, and its agreement to acquire stations in El Paso, Texas, signed on
September 14, 1999, will not be consummated until after January 1, 2000. The
Year 2000 assessment of these stations is underway, and Regent will be
monitoring all remediation and testing activities, which the sellers have agreed
to complete. Regent has no reason to believe that all systems at these stations
will not be able to be brought into Year 2000 compliance in a timely manner.
Regent has budgeted $100,000 in 1999 for capital expenditures and
$50,000 for expenses involved in Year 2000 remediation of its existing stations.
Regent does not expect total expenditures to exceed the total budgeted amount.
To the extent that any material Year 2000 problems are discovered at the
Utica-Rome, Watertown or El Paso stations, Regent will have a contractual claim
against the seller for any material losses suffered as a result.
Although Regent has not received any information to date that would
lead it to believe its internal Year 2000 compliance issues will not be able to
be resolved on a timely basis or that the related costs will have a material
adverse effect on Regent's operations, cash flows or financial condition,
Regent's work relative to its business partner interfaces is ongoing.
Accordingly, unexpected costs associated with the interruption of operation of
Regent's stations could occur and, if significant, could have a material adverse
effect on Regent's operations, cash flows and financial condition. The most
reasonably likely worst-case scenarios include loss of power and communications
links. The impact of these uncertainties on Regent's results of operations,
liquidity and financial condition, is not determinable. Based on the assessment
of external and non-IT system risks and the testing to be undertaken by Regent,
contingency planning has commenced and is ongoing for all critical systems.
Testing of contingency plans will occur in the fourth quarter of 1999.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
This Form 10-Q includes certain forward-looking statements with respect
to Regent that involve risks and uncertainties. Such statements are influenced
by Regent's financial position, business strategy, budgets, projected costs, and
plans and objectives of management for future operations, and are expressed
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with words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend," "project" and other similar expressions. Although Regent believes its
expectations reflected in such forward-looking statements are based on
reasonable assumptions, readers are cautioned that no assurance can be given
that such expectations will prove correct and that actual results and
developments may differ materially from those conveyed in such forward-looking
statements. For these statements, Regent claims the protections of the safe
harbor for forward-looking statements contained in the Private Securities
Litigation Reform Act of 1995.
Important factors that could cause actual results to differ materially
from the expectations reflected in the forward-looking statements herein include
changes in general economic, business and market conditions, as well as changes
in such conditions that may affect the radio broadcast industry or the markets
in which Regent operates, including, in particular, increased competition for
attractive radio properties and advertising dollars, fluctuations in the cost of
operating radio properties, and changes in the regulatory climate affecting
radio broadcast companies.
Such forward-looking statements speak only as of the date on which they
are made, and Regent undertakes no obligation to update any forward-looking
statement to reflect events or circumstances after the date of this Form 10-Q.
If Regent does update or correct one or more forward-looking statements, readers
should not conclude that Regent will make additional updates or corrections with
respect thereto or with respect to other forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information required by this Item 3 is presented above under Item
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations and is incorporated herein by this reference.
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) On August 31, 1999, Regent issued a total of 1,545,454 shares of
its Series H convertible preferred stock at $5.50 per share to certain existing
preferred stockholders and two new investors to fund in part the purchase of the
Erie stations and working capital requirements.
This issuance of securities was a privately-negotiated transaction
based upon an exemption from registration under the Securities Act of 1933, as
amended (the "1933 Act"), claimed pursuant to Section 4(2) of the 1933 Act and
the rules and regulations promulgated thereunder.
The Series H convertible preferred stock is convertible into shares of
Regent's common stock on a one-for-one basis at any time at the option of the
holder and under certain circumstances at the option of Regent.
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ITEM 5. OTHER INFORMATION
On September 14, 1999, Regent entered into an agreement to purchase
from an unrelated third party the FCC licenses and related assets used in the
operations of radio stations KLAQ-FM, KSII-FM and KROD-AM licensed to El Paso,
Texas for approximately $23,500,000 in cash. The completion of this transaction
is subject to a number of conditions, including FCC consent, and is expected to
occur during the first quarter of 2000. Regent provided a $1,500,000 letter of
credit as an escrow deposit in this transaction.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following is filed herewith as an exhibit to Part I of
this Form 10-Q:
Exhibit No. 27 Financial Data Schedule
The exhibits identified as Part II Exhibits in the following Exhibit
Index, which is incorporated herein by this reference, are filed or incorporated
by reference as exhibits to Part II of this Form 10-Q.
(b) Reports on Form 8-K
On September 29, 1999, Regent filed a Report on Form 8-K to report its
acquisition of radio stations WXKC(FM), WRIE(AM) and WXTA(FM), serving the Erie,
Pennsylvania market. No financial statements were filed with that report, which
indicated that the required financial information would be filed by amendment.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
REGENT COMMUNICATIONS, INC.
Date: November 15, 1999 By: /s/ TERRY S. JACOBS
-----------------------------------------
Terry S. Jacobs, Chairman of the Board
and Chief Executive Officer
Date: November 15, 1999 By: /s/ ANTHONY A. VASCONCELLOS
----------------------------------------
Anthony A. Vasconcellos, Chief Financial
Officer and Vice President (Chief
Accounting Officer)
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EXHIBIT INDEX
The following exhibits are filed, or incorporated by reference where
indicated, as part of Part II of this Quarterly Report on Form 10-Q:
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
2(a) Asset Purchase Agreement dated as of July 9, 1999 by and among
Commonwealth Communications, LLC, Commonwealth License Subsidiary, LLC,
Regent Broadcasting of Lake Tahoe, Inc. and Regent Licensee of Lake
Tahoe, Inc.
The following exhibits and schedules to the foregoing Asset Purchase
Agreement are omitted as not material; however, copies will be provided
to the Securities and Exchange Commission upon request:
Exhibits:
A Escrow Agreement
B General Conveyance, Bill of Sale, Assignment
and Assumption Agreement
C Opinion of Seller's Counsel
D Form of FCC Opinion
E Opinion of Buyer's Counsel
Schedules:
1.2.9 Miscellaneous Excluded Assets
7.4 Licenses
7.7 Tangible Personal Property
7.8 Real Estate
7.9 Contracts
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Financials
7.14 Employees
7.17 Employee Benefit Plans
2(b) Asset Purchase Agreement dated as of September 13, 1999 by and among
New Wave Broadcasting, L.P., Regent Broadcasting of El Paso, Inc. and
Regent Licensee of El Paso, Inc.
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The following exhibits and schedules to the foregoing Asset Purchase
Agreement are omitted as not material; however, copies will be provided to the
Securities and Exchange Commission upon request:
Exhibits:
A Indemnification Escrow Agreement
B Deposit Escrow Agreement
C Assignment and Assumption Agreement
D Seller's Opinion of Counsel
E Seller's Opinion of FCC Counsel
F Non-Competition Agreement
G Buyer's Opinion of Counsel
H Form of Letter of Credit
Schedules:
1.2.10 Excluded Assets
6.4 Third Party Consents
7.4 Stations Licenses, Etc.
7.7 Tangible Personal Property
7.8 Real Property
7.9 Contracts (including identification of Material
Contracts)
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Financial Statements
7.14 Personnel Information
7.15 Litigation
7.16 Compliance With Laws
7.17 Employee Benefit Plans
9.1 Leased Real Estate not Requiring Title Commitment
3(a)* Amended and Restated Certificate of Incorporation of Regent
Communications, Inc., as amended by a Certificate of Designation,
Number, Powers, Preferences and Relative, Participating, Optional and
Other Special Rights and the Qualifications, Limitations, Restrictions,
and Other Distinguishing Characteristics of Series G Preferred Stock of
Regent Communications, Inc., filed January 21, 1999. (previously filed
as Exhibit 3(a) to the Registrant's Form 10-K for the year ended
December 31, 1998 and incorporated herein by this reference)
3(b)* Amended and Restated By-Laws of Regent Communications, Inc. (previously
filed as Exhibit 3(b) to the Registrant's Form S-4 Registration
Statement No. 333-46435 effective May 7, 1998 and incorporated herein
by this reference)
3(c)* Certificate of Decrease of Shares Designated as Series G Convertible
Preferred Stock of Regent Communications, Inc., filed with the Delaware
Secretary of State on June 21, 1999 amending the Amended and Restated
Certificate of Incorporation of Regent Communications, Inc., as amended
(previously filed as Exhibit 3(c) to the Registrant's Form 10-Q Fourth
Quarter Ended June 30, 1999 and incorporated herein by this reference)
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3(d)* Certificate of Designation, Number, Powers, Preferences and Relative,
Participating, Optional and Other Special Rights and the
Qualifications, Limitations, Restrictions, and Other Distinguishing
Characteristics of Series H Preferred Stock of Regent Communications,
Inc., filed with the Delaware Secretary of State on June 21, 1999
amending the Amended and Restated Certificate of Incorporation of
Regent Communications, Inc., as amended (previously filed as Exhibit
3(d) to the Registrant's Form 10-Q for the Quarter Ended June 30, 1999
and incorporated herein by this reference)
3(e) Certificate of Decrease of Shares Designated as Series G Convertible
Preferred Stock of Regent Communications, Inc., filed with the Delaware
Secretary of State on August 23, 1999 amending the Amended and Restated
Certificate of Incorporation of Regent Communications, Inc., as amended
3(f) Certificate of Increase of Shares Designated as Series H Convertible
Preferred Stock of Regent Communications, Inc., filed with the Delaware
Secretary of State on August 23, 1999 amending the Amended and Restated
Certificate of Incorporation of Regent Communications, Inc., as amended
4(a)* Second Amended and Restated Stockholders' Agreement dated as of June
15, 1998 among Regent Communications, Inc., Terry S. Jacobs, William L.
Stakelin, Waller-Sutton Media Partners, L.P., William H. Ingram, WGP
Corporate Development Associates V, L.L.C., WGP Corporate Development
Associates (Overseas) V, L.P., River Cities Capital Fund Limited
Partnership, BMO Financial, Inc., General Electric Capital Corporation,
Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, and
Blue Chip Capital Fund II Limited Partnership (excluding exhibits not
deemed material or filed separately in executed form) (previously filed
as Exhibit 4(c) to the Registrant's Form 8-K filed June 30, 1998 and
incorporated herein by this reference).
4(b)* Stock Purchase Agreement dated June 15, 1998 among Regent
Communications, Inc., Waller-Sutton Media Partners, L.P., WPG Corporate
Development Associates V, L.C.C., WPG Corporate Development Associates
(Overseas) V, L.P., General Electric Capital Corporation, River Cites
Capital Fund Limited Partnership and William H. Ingram (excluding
exhibits not deemed material or filed separately in executed form)
(previously filed as Exhibit 4(d) to the Registrant's Form 8-K filed
June 30, 1998 and incorporated herein by this reference).
4(c)* Registration Rights Agreement dated June 15, 1998 among Regent
Communications, Inc., PNC Bank, N.A., Trustee, Waller-Sutton Media
Partners, L.P., WPG Corporate Development Associates V, L.C.C., WPG
Corporate Development Associates (Overseas) V, L.P., BMO Financial,
Inc., General Electric Capital Corporation, River Cites Capital Fund
Limited Partnership, Terry S. Jacobs, William L. Stakelin, William H.
Ingram, Blue Chip Capital Fund II Limited Partnership, Miami Valley
Venture Fund L.P. and Thomas Gammon (excluding exhibits not deemed
material or filed separately in executed form) (previously filed as
Exhibit 4(e) to the Registrant's Form 8-K filed June 30, 1998 and
incorporated herein by this reference).
4(d)* Warrant for the Purchase of 650,000 Shares of Common Stock issued by
Regent Communications, Inc. to Waller-Sutton Media Partners, L.P. dated
June 15, 1998 (See Note 1 below) (previously filed as Exhibit 4(f) to
the Registrant's Form 8-K filed June 30, 1998 and incorporated herein
by this reference).
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4(e)* Warrant for the Purchase of 50,000 Shares of Common Stock issued by
Regent Communications, Inc. to General Electric Capital Corporation
dated June 15, 1998 (previously filed as Exhibit 4(g) to the
Registrant's Form 8-K filed June 30, 1998 and incorporated herein by
this reference).
4(f)* Agreement to Issue Warrant dated as of June 15, 1998 between Regent
Communications, Inc. and General Electric Capital Corporation
(excluding exhibits not deemed material or filed separately in executed
form) (previously filed as Exhibit 4(h) to the Registrant's Form 8-K
filed June 30, 1998 and incorporated herein by this reference).
4(g)* Warrant for the Purchase of 80,000 Shares of Common Stock issued by
Regent Communications, Inc. to River Cities Capital Fund Limited
Partnership dated June 15, 1998 (previously filed as Exhibit 4(k) to
the Form 10-Q for the Quarter Ended June 30, 1998, as amended, and
incorporated herein by this reference).
4(h)* Stock Purchase Agreement dated as of May 20, 1997 between Terry S.
Jacobs and Regent Communications, Inc. (previously filed as Exhibit
4(b) to the Registrant's Form S-4 Registration Statement No. 333-46435
effective May 7, 1998 and incorporated herein by this reference).
4(i)* Stock Purchase Agreement dated as of May 20, 1997 between River Cities
Capital Fund Limited Partnership and Regent Communications, Inc.
(previously filed as Exhibit 4(c) to the Registrant's Form S-4
Registration Statement No. 333-46435 effective May 7, 1998 and
incorporated herein by this reference).
4(j)* Stock Purchase Agreement dated as of November 26, 1997 and Terry S.
Jacobs and Regent Communications, Inc. (previously filed as Exhibit
4(d) to the Registrant's Form S-4 Registration Statement No. 333-46435
effective May 7, 1998 and incorporated herein by this reference).
4(k)* Stock Purchase Agreement dated as of December 1, 1997 between William
L. Stakelin and Regent Communications, Inc. (previously filed as
Exhibit 4(e) to the Registrant's Form S-4 Registration Statement No.
333-46435 effective May 7, 1998 and incorporated herein by this
reference).
4(l)* Stock Purchase Agreement dated as of December 8, 1997 between Regent
Communications, Inc. and General Electric Capital Corporation
(previously filed as Exhibit 4(f) to the Registrant's Form S-4
Registration Statement No. 333-46435 effective May 7, 1998 and
incorporated herein by this reference).
4(m)* Stock Purchase Agreement dated as of December 8, 1997 between Regent
Communications, Inc. and BMO Financial, Inc. (previously filed as
Exhibit 4(g) to the Registrant's Form S-4 Registration Statement No.
333-46435 effective May 7, 1998 and incorporated herein by this
reference).
4(n)* Credit Agreement dated as of November 14, 1997 among Regent
Communications, Inc., the lenders listed therein, as Lenders, General
Electric Capital Corporation, as Documentation Agent and Bank of
Montreal, Chicago Branch, as Agent (excluding exhibits not deemed
material or filed separately in executed form) (previously filed as
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Exhibit 4(j) to the Registrant's Form S-4 Registration Statement No.
333-46435 effective May 7, 1998 and incorporated herein by this
reference).
4(o)* Revolving Note issued by Regent Communications, Inc. to Bank of
Montreal, Chicago Branch dated November 14, 1997 in the principal
amount of $20,000,000 (See Note 2 below) (previously filed as Exhibit
4(k) to the Registrant's Form S-4 Registration Statement No. 333-46435
effective May 7, 1998 and incorporated herein by this reference).
4(p)* Agreement to Issue Warrant dated as of March 25, 1998 between Regent
Communications, Inc. and River Cities Capital Fund Limited Partnership
(previously filed as Exhibit 4(1) to the Registrant's Form S-4
Registration Statement No. 333-46435 effective May 7, 1998 and
incorporated herein by this reference)
4(q)* First Amendment to Credit Agreement dated as of February 16, 1998 among
Regent Communications, Inc., the financial institutions listed therein,
as lenders, General Electric Capital Corporation, as Documentation
Agent, and Bank of Montreal, Chicago Branch as Agent (previously filed
as Exhibit 4(w) to the Registrant's Form 8-K/A (date of report June 15,
1998) filed September 3, 1998 and incorporated herein by reference)
4(r)* Second Amendment and Limited Waiver to Credit Agreement dated as of
June 10, 1998 among Regent Communications, Inc., the financial
institutions listed therein, as lenders, General Electric Capital
corporation, as Documentation Agent, and Bank of Montreal, Chicago
Branch, as Agent (previously filed as Exhibit 4(x) to the Registrant's
Form 8-K/A (date of report June 15, 1998) filed September 3, 1998 and
incorporated herein by reference)
4(s)* Third Amendment to Credit Agreement dated as of August 14, 1998 among
Regent Communications, Inc., the financial institutions listed therein,
as lenders, General Electric Capital Corporation, as Documentation
Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed
as Exhibit 4(y) to the Registrant's Form 10-Q for the Quarter Ended
September 30, 1998, as amended, and incorporated herein by this
reference)
4(t)* Amendment to Second Amended and Restated Stockholders' Agreement, dated
as of January 11, 1999, among Regent Communications, Inc., Terry S.
Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P.,
William H. Ingram, WGP Corporate Development Associates V, L.L.C., WGP
Corporate Development Associates (Overseas) V, L.P., River Cities
Capital Fund Limited Partnership, BMO Financial, Inc., General Electric
Capital Corporation, Joel M. Fairman, Miami Valley Venture Fund II
Limited Partnership, and Blue Chip Capital Fund II Limited Partnership
(excluding exhibits not deemed material or filed separately in executed
form) (previously filed as Exhibit 4(t) to the Registrant's Form 10-K
for the year ended December 31, 1998 and incorporated herein by this
reference)
4(u)* Stock Purchase Agreement dated January 11, 1999 between Regent
Communications, Inc. and Blue Chip Capital II Limited Partnership
relating to the purchase of 315,887 shares of Regent Communications,
Inc. Series G Convertible Preferred Stock (excluding exhibits not
deemed material or filed separately in executed form) (previously filed
as Exhibit 4(u) to the Registrant's Form 10-K for the year ended
December 31, 1998 and incorporated herein by this reference)
E-5
<PAGE> 24
4(v)* Stock Purchase Agreement dated January 11, 1999 between Regent
Communications, Inc. and Terry S. Jacobs relating to the purchase of
50,000 shares of Regent Communications, Inc. Series G Convertible
Preferred Stock (See Note 3) (excluding exhibits not deemed material or
filed separately in executed form) (previously filed as Exhibit 4(v) to
the Registrant's Form 10-K for the year ended December 31, 1998 and
incorporated herein by this reference)
4(w)* Fourth Amendment, Limited Consent and Limited Waiver to Credit
Agreement, First Amendment to Subsidiary Guaranty and First Amendment
to Pledge and Security Agreement, dated as of October 16, 1998 among
Regent Communications, Inc., the financial institutions listed therein,
as lenders, General Electric Capital Corporation, as Documentation
Agent, and Bank of Montreal, Chicago Branch, as Agent. (previously
filed as Exhibit 4(w) to the Registrant's Form 10-K for the year ended
December 31, 1998 and incorporated herein by this reference)
4(x)* Fifth Amendment to Credit Agreement, dated as of November 23, 1998,
among Regent Communications, Inc., the financial institutions listed
therein, as lenders, General Electric Capital Corporation, as
Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent.
(previously filed as Exhibit 4(x) to the Registrant's Form 10-K for the
year ended December 31, 1998 and incorporated herein by this reference)
4(y)* Sixth Amendment and Limited Consent to Credit Agreement, dated as of
February 24, 1999, among Regent Communications, Inc., the financial
institutions listed therein, as lenders, General Electric Capital
Corporation, as Documentation Agent, and Bank of Montreal, Chicago
Branch, as Agent. (previously filed as Exhibit 4(y) to the Registrant's
Form 10-K for the year ended December 31, 1998 and incorporated herein
by this reference)
4(z)* Second Amendment to Second Amended and Restated Stockholders'
Agreement, dated as of June 21, 1999, among Regent Communications,
Inc., Terry S. Jacobs, William L. Stakelin, Waller-Sutton Media
Partners, L.P., Joel M. Fairman, Miami Valley Venture Fund II Limited
Partnership, Blue Chip Capital Fund II Limited Partnership and PNC
Bank, N.A., Trustee (excluding exhibits not deemed material or filed
separately in executed form) (previously filed as Exhibit 4(z) to the
Registrant's Form 10-Q for the Quarter Ended June 30, 1999 and
incorporated herein by this reference)
4(aa)* Stock Purchase Agreement dated June 21, 1999 between Regent
Communications, Inc. and Waller-Sutton Media Partners, L.P. relating to
the purchase of 90,909 shares of Regent Communications, Inc. Series H
Convertible Preferred Stock (See Note 4) (excluding exhibits not deemed
material or filed separately in executed form) (previously filed as
Exhibit 4(aa) to the Registrant's Form 10-Q for the Quarter Ended June
30, 1999 and incorporated herein by this reference)
4(bb)* Stock Purchase Agreement dated June 21, 1999 between Regent
Communications, Inc. and WPG Corporate Development Associates V, L.L.C.
and WPG Corporate Development Associates V (Overseas), L.L.C. relating
to the purchase of 1,180,909 and 182,727 shares, respectively, of
Regent Communications, Inc. Series H Convertible Preferred Stock
(excluding exhibits not deemed material or filed separately in executed
form) (previously filed as Exhibit 4(bb) to the Registrant's Form 10-Q
for the Quarter Ended June 30, 1999 and incorporated herein by this
reference)
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<PAGE> 25
4(cc)* Seventh Amendment to Credit Agreement, dated as of June 30, 1999, among
Regent Communications, Inc., the financial institutions listed therein,
as lenders, General Electric Capital Corporation, as Documentation
Agent, and Bank of Montreal, Chicago Branch, as Agent (previously filed
as Exhibit 4(cc) to the Registrant's Form 10-Q for the Quarter Ended
June 30, 1999 and incorporated herein by this reference)
4(dd) Eighth Amendment, Limited Consent and Limited Waiver to Credit
Agreement, dated as of November 11, 1999, among Regent Communications,
Inc., the financial institutions listed therein, as lenders, General
Electric Capital Corporation, as Documentation Agent, and Bank of
Montreal, Chicago Branch, as Agent
4(ee) Stock Purchase Agreement dated as of August 31, 1999 among Regent
Communications, Inc., The Roman Arch Fund L.P. and The Roman Arch Fund
II L.P. relating to the purchase of 109,091 and 72,727 shares,
respectively, of Regent Communications, Inc. Series H Convertible
Preferred Stock (excluding exhibits not deemed material or filed
separately in executed form)
4(ff) Third Amendment to Second Amended and Restated Stockholders' Agreement,
dated as of August 31, 1999, among Regent Communications, Inc., Terry
S. Jacobs, William L. Stakelin, Waller-Sutton Media Partners, L.P.,
Joel M. Fairman, Miami Valley Venture Fund II Limited Partnership, Blue
Chip Capital Fund II Limited Partnership, PNC Bank, N.A., Trustee, WPG
Corporate Development Associates V, L.C.C., WPG Corporate Development
Associates (Overseas) V, L.P., BMO Financial, Inc., General Electric
Capital Corporation, River Cites Capital Fund Limited Partnership,
William H. Ingram, The Roman Arch Fund L.P. and The Roman Arch Fund II
L.P. (excluding exhibits not deemed material or filed separately in
executed form)
4(gg) First Amendment to Registration Rights Agreement dated as of August 31,
1999 among Regent Communications, Inc., PNC Bank, N.A., Trustee,
Waller-Sutton Media Partners, L.P., WPG Corporate Development
Associates V, L.C.C., WPG Corporate Development Associates (Overseas)
V, L.P., BMO Financial, Inc., General Electric Capital Corporation,
River Cites Capital Fund Limited Partnership, Terry S. Jacobs, William
L. Stakelin, William H. Ingram, Blue Chip Capital Fund II Limited
Partnership, Miami Valley Venture Fund L.P. and Thomas P. Gammon
(excluding exhibits not deemed material or filed separately in executed
form)
The following exhibit is filed as part of Part I of this Quarterly Report on
Form 10-Q:
27 Financial Data Schedule
- ----------------
* Incorporated by reference.
1. Six substantially identical Warrants for the purchase of shares of
Registrant's common stock were issued as follows:
Waller-Sutton Media Partners, L.P. 650,000
WPG Corporate Development Associates V, L.P. 112,580
WPG Corporate Development Associates (Overseas) V, L.P. 17,420
General Electric Capital Corporation 50,000
E-7
<PAGE> 26
River Cities Capital Fund Limited Partnership 20,000
William H. Ingram 10,000
2. Two substantially identical notes were issued to Bank of Montreal,
Chicago Branch, in the principal amounts of $15,000,000 and
$20,000,000.
3. Two substantially identical Stock Purchase Agreements were entered into
for the purchase of Series G Convertible Preferred Stock as follows:
Joel M. Fairman 3,319 shares
William L. Stakelin 3,200 shares
4. Two substantially identical Stock Purchase Agreements were entered into
for the purchase of Series H Convertible Preferred Stock as follows:
Blue Chip Capital Fund II Limited Partnership 363,636 shares
PNC Bank, N.A., Trustee 181,818 shares
E-8
<PAGE> 1
EXHIBIT 2(a)
ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 9th day of July, 1999 by and between COMMONWEALTH COMMUNICATIONS, LLC., a
Delaware limited liability company ("CC Ltd"), COMMONWEALTH LICENSE SUBSIDIARY,
LLC, a Delaware limited liability company ("CLS" and with CC Ltd collectively
referred to as "Buyer") and REGENT LICENSEE OF LAKE TAHOE, INC., a Delaware
corporation ("RLT") and REGENT BROADCASTING OF LAKE TAHOE, INC. ("RBT," and with
RLT collectively referred to as "Seller"). Each reference to Buyer or Seller
herein shall mean CC Ltd and CLS, or RBT and RLT, respectively, jointly and
severally, unless the context specifies otherwise.
RECITALS
WHEREAS, Seller owns and operates radio stations KRLT-FM and KOWL-AM
licensed to South Lake Tahoe, California (together the "Stations" and each
individually, a "Station") pursuant to licenses issued by the Federal
Communications Commission ("FCC"), and
WHEREAS, Seller desires to sell, and Buyer desires to purchase, certain
assets and assume certain obligations associated with the ownership and
operation of the Stations, all on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
------------------
1.1 TRANSFER OF ASSETS. On the terms and subject to the conditions
hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined),
Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer
shall purchase and assume from Seller, all of the right, title and interest of
Seller in and to all of the assets, properties, interests and rights of Seller
of whatsoever kind and nature, real and personal, tangible and intangible, owned
or leased (to the extent of Seller's leasehold interest) by Seller as the case
may be, wherever situated, which are used or held for use in the operation of
the Stations (the "Stations Assets"), including but not limited to all of
Seller's right, title and interest in and to the assets, properties, interests
and rights described in this Section 1.1:
1.1.1 all licenses, permits and other authorizations issued to
Seller by any governmental or regulatory authority including without limitation
those issued by the FCC (the licenses, permits and authorizations issued by the
FCC are hereafter referred to as the "Stations Licenses") used or useful in
connection with the operation of the Stations, including but not
<PAGE> 2
limited to those described in SCHEDULE 7.4, along with renewals or modifications
of such items between the date hereof and the Closing Date;
1.1.2 all equipment, electrical devices, antennae, cables,
tools, hardware, office furniture and fixtures, office materials and supplies,
inventory, motor vehicles, spare parts and all other tangible personal property
of every kind and description, and Seller's rights therein, owned, leased (to
the extent of Seller's leasehold interest) or held by Seller and used or held
for use in connection with the operations of the Stations, including but not
limited to those items described or listed in SCHEDULE 7.7, together with any
replacements thereof and additions thereto, made between the date hereof and the
Closing Date, and less any retirements or dispositions thereof made between the
date hereof and the Closing Date in the ordinary course of business and
consistent with past practices of Seller; provided, however, Seller agrees that
the fair market value of all such assets retired or disposed of and not replaced
with an asset of like kind and quality shall not exceed $1,000 individually or
$5,000 in the aggregate unless Seller has obtained the prior written approval of
Buyer which shall not be unreasonably withheld.
1.1.3 all time sales agreements which are in effect on the
Closing Date; all Trade Agreements (time sales agreements for consideration
other than cash) listed on SCHEDULE 7.9; all contracts, agreements, leases and
legally binding contractual rights of any kind, written or oral, relating to the
operation of the Stations and which are listed in SCHEDULE 7.8 or SCHEDULE 7.9;
and all other contracts, agreements, leases and legal binding contractual rights
entered into or acquired by Seller between the date hereof and the Closing Date
which (i) are terminable on no more than thirty (30) days notice for either no
or nominal consideration or (ii) the Buyer specifically agrees at Closing to
assume (all of the foregoing are collectively referred to herein as the
"Contracts").
1.1.4 all of Seller's rights in and to the call letters KRLT
and KOWL, as well as all of Seller's rights in and to all trademarks, trade
names, service marks, franchises, copyrights, patents, including registrations
and applications for registration of any of them, computer software programs and
programming material of whatever form or nature (to the extent transferable),
jingles, slogans, the Stations' logos and all other logos or licenses to use
same and all other intangible property rights of Seller, which are used or
useful in connection with the operation of the Stations, including but not
limited to those listed in SCHEDULE 7.12 (collectively, the "Intellectual
Property") together with any associated goodwill and any additions thereto
between the date hereof and the Closing Date;
1.1.5 all programming materials and elements of whatever form
or nature owned by Seller, whether recorded on tape or other medium or intended
for live performance, and all copyrights owned by or licensed to Seller that are
used or useful in connection with the operation of the Stations, including all
such programs, materials, elements and copyrights acquired by Seller between the
date hereof and the Closing Date;
1.1.6 all of Seller's rights in and to all the files,
documents, records, and books of account relating to the operation of the
Stations or to the Stations Assets, including, without limitation, the Stations'
local public files, programming information and studies, blueprints, technical
information and engineering data, news and advertising studies or consulting
reports,
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<PAGE> 3
marketing and demographic data, sales correspondence and account files, lists of
advertisers, promotional materials, credit and sales reports and filings with
the FCC and all written contracts, whether current or expired, including without
limitation, the Contracts to be assigned hereunder, logs, books and records
relating to employees, financial, accounting and operation matters, but
excluding records relating solely to any Excluded Asset (as hereinafter
defined);
1.1.7 all of Seller's rights under manufacturers' and vendors'
warranties relating to items included in the Stations Assets and all similar
rights against third parties relating to items included in the Stations Assets;
1.1.8 the leasehold interests in the real property and
fixtures thereon described in Section 7.8;
1.1.9 all goodwill relating to the Stations;
1.1.10 all non-cash accounts receivable in respect of assumed
Trade Agreements;
1.1.11 except for Excluded Assets, such other assets,
properties, interests and rights owned by Seller that are located at the
Station's facilities and used or held for use in connection with the operation
of the Stations.
The Stations Assets shall be transferred to Buyer free and clear of all
debts, security interests, mortgages, trusts, claims, pledges or other liens,
liabilities, encumbrances or rights of third parties whatsoever
("Encumbrances"), except for Permitted Encumbrances (AS DEFINED IN SECTION 7.7)
and except as set forth in SCHEDULE 7.4, SCHEDULE 7.7 and SCHEDULE 7.8.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
herein, it is expressly understood and agreed that the Stations Assets shall not
include the following assets along with all rights, title and interest therein
(the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Seller on hand and/or
in banks, including without limitation investment securities, certificates of
deposit, commercial paper, treasury bills, marketable securities, asset or money
market accounts and all such similar accounts or investments;
1.2.2 all investment securities and accounts receivable or
notes receivable existing on the Closing Date arising from services performed by
Seller in connection with the operation of the Stations prior to the Closing
Date;
1.2.3 all property owned by Seller or any Affiliate of Seller
not located at the Stations' facilities and not used by Seller in connection
with the operation of the Stations;
1.2.4 subject to the limitation set forth in Section 1.1.2 of
this Agreement, all tangible and intangible personal property of Seller disposed
of or consumed in the ordinary course of business consistent with the past
practices of Seller between the date of this Agreement and the Closing Date;
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<PAGE> 4
1.2.5 all Contracts that have terminated or expired prior to
the Closing Date in the ordinary course of business consistent with the past
practices of Seller;
1.2.6 Seller's corporate minute books and records, corporate
stock record books and such other books and records as pertain to the
organization, existence or share capitalization of Seller and duplicate copies
of such records as are necessary to enable Seller to file its tax returns and
reports, as well as any other records or materials relating to Seller generally
and not involving or relating to the Stations Assets or the operation or
operations of the Stations;
1.2.7 except as otherwise provided in Section 17.1(a),
contracts of insurance of, and any insurance proceeds or claims made by, Seller
relating to property or equipment repaired, replaced or restored by Seller prior
to the Closing Date;
1.2.8 all pension, profit sharing or cash or deferred (Section
401 (k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Seller; and
1.2.9 any right, property or asset described in SCHEDULE
1.2.9.
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
-------------------------
2.1 ASSUMPTION OF OBLIGATIONS. Subject to the provisions of this
Section 2. 1, Section 2.2 and Section 3.3, on the Closing Date, Buyer shall
assume the obligations of Seller arising or to be performed on and after the
Closing Date (except to the extent such obligations represent liabilities for
activities, events or transactions occurring, or conditions existing, on or
prior to the Closing Date) under (a) the Contracts (each an "Assumed Contract");
(b) all property taxes and other governmental charges on the Stations Assets
(only to the extent such property taxes or governmental charges are allocable to
the Stations Assets for the period after the Cut-Off Time, as hereinafter
defined) ; and (c) all vacation and other fringe benefits for Seller's employees
who are hired by Buyer (only to the extent that the vacation pay and other
fringe benefits for such employees who are hired by Buyer are allocable for the
period after the Cut-Off Time). All of the foregoing liabilities and obligations
shall be referred to herein collectively as the "Assumed Liabilities."
2.2 RETAINED LIABILITIES. Notwithstanding anything contained in this
Agreement to the contrary, Buyer expressly does not, and shall not, assume or
agree to pay, satisfy, discharge or perform and will not be deemed by virtue of
the execution and delivery of this Agreement or any agreement, instrument or
document delivered pursuant to or in connection with this Agreement or otherwise
by reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Seller of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed to Buyer, other than the Assumed
Liabilities. Seller will retain and pay, satisfy, discharge and perform in
accordance with the terms thereof, all liabilities and obligations of the
Seller, other than the Assumed
-4-
<PAGE> 5
Liabilities, including but not limited to, the obligation to assume, perform,
satisfy or pay any liability, obligation, agreement, debt, charge, claim,
judgment or expense incurred by or asserted against Seller related to taxes,
environmental matters, stock option, pension or retirement plans or trusts,
profit-sharing plans, employment contracts, employee benefits, severance of
employees, product liability or warranty, negligence, contract breach or
default, or other obligations, claims or judgments asserted against Buyer as
successor in interest to Seller or otherwise relating to the operation of the
Stations prior to the Cut-Off Time. All of such liabilities, obligations and
commitments of Seller described in this Section 2.2 shall be referred to herein
collectively as the "Retained Liabilities."
ARTICLE 3
CONSIDERATION; ACCOUNTS RECEIVABLE
----------------------------------
3.1 PURCHASE PRICE. The total purchase price for the Stations Assets
shall be One Million Two Hundred Fifty Thousand Dollars ($1,250,000.00) (the
"Purchase Price")., subject to adjustment pursuant to the provisions of Sections
3.2, 3.3 and 3.4 below.
3.2 ESCROW DEPOSIT; PAYMENTS AT CLOSING. (a) Upon the execution and
delivery of this Agreement, Buyer, Seller and Security Title & Guaranty Agency,
Inc., as Escrow Agent (the " Escrow Agent"), shall enter into a Escrow Agreement
in the form of EXHIBIT A hereto (the "Escrow Agreement") pursuant to which Buyer
shall deposit the amount described below as a deposit on the amount of the
Purchase Price. Such amounts held in escrow shall be applied as set forth herein
and in the Escrow Agreement.
(b) Pursuant to the terms of the Escrow Agreement, Buyer shall
wire transfer Sixty Two Thousand Five Hundred Dollars ($62,500.00) to an escrow
account established pursuant to the Escrow Agreement (the "Escrow Deposit"). At
the Closing, the Buyer shall cause to be paid to Seller in immediately available
funds by wire transfer an amount equal to $1,187,500, plus or minus, as
applicable, any adjustments made pursuant to Section 3.3. At the Closing, all
the interest accrued on the Escrow Deposit to date shall be paid to Buyer, and
the balance (the "Post Closing Escrow") will be retained by the Escrow Agent as
security for Seller's obligations to Buyer following the Closing Date pursuant
to the terms of the Escrow Agreement. Pursuant to the Escrow Agreement, (i) 180
days following the Closing Date, $31,250 of the Post Closing Escrow together
with the earnings thereon less the amount of any then unresolved pending claims
by the Buyer shall be released from the Post Closing Escrow and paid to Seller;
and (ii) 360 days following the Closing Date, the balance of the Post Closing
Escrow together with earnings thereon less the amount of any then unresolved
pending claims by Buyer shall be released from the Post Closing Escrow and paid
to the Seller. As more fully described in the Escrow Agreement: (i) in the event
this Agreement is terminated because of Buyer's material breach of this
Agreement and all other conditions to Closing are at such time satisfied or
waived (other than such conditions as can reasonably be expected to be satisfied
by the Closing), the Escrow Deposit shall be paid to Seller as liquidated
damages as provided in Section 16.4 hereto for Buyer's material breach of this
Agreement (the payment of such sum to Seller thereby discharging in full any
liability Buyer may have to Seller), and the interest accrued on the Escrow
Deposit shall be paid to Buyer; and (ii) in the event this Agreement is
terminated under
-5-
<PAGE> 6
any circumstances other than those set forth in the immediately preceding clause
(a), the Escrow Deposit and the interest accrued thereon shall be paid or
returned to Buyer.
3.3 PRORATION OF INCOME AND EXPENSES.
3.3.1. Except as otherwise provided herein, all deposits, reserves and
prepaid and deferred income and expenses relating to the Stations Assets or the
Assumed Liabilities and arising from the conduct of the business and operations
of the Stations shall be prorated between Buyer and Seller in accordance with
generally accepted accounting principles as of 11:59 p.m. local California time,
on the date immediately preceding the Closing Date (the "CUT OFF TIME"). Such
prorations shall include, without limitation, all ad valorem, real estate,
property taxes and other governmental charges on the Stations Assets (but
excluding taxes arising by reason of the transfer of the Stations Assets as
contemplated hereby which shall be paid as set forth in Section 13.2), business
and license fees, including any FCC Regulatory Fees (and any retroactive
adjustments thereof) frequency discounts, music and other license fees
(including any retroactive adjustments thereof, which retroactive adjustments
shall not be subject to the sixty-day limitation set forth in Section 3.3.2),
utility expenses, wages, salaries, vacation and sick pay and benefits of
employees (including accruals up to the Cut Off Time for insurance premiums,
bonuses, commissions and the like and related payroll taxes), amounts due or to
become due under Contracts, any negative balances in excess of $15,000 under
Trade Agreements to be assigned and assumed hereunder, property and equipment
rentals, applicable copyright or other fees, rents, additional rents and other
items payable under lease, contract or other agreements assigned hereunder, and
similar prepaid and deferred items. Taxes to be apportioned pursuant to this
Section 3.3 shall be apportioned in proportion to (i) the number of days in the
taxable period before and including the Cut-Off Time and (ii) the number of days
in the taxable period after the Cut-Off Time. No apportionment shall be made
pursuant to this Section 3.3 of any federal, state, foreign or local income
taxes.
3.3.2 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 3.3, to the extent practicable, shall
be made on the Closing Date. As to those prorations and adjustments not capable
of being ascertained on the Closing Date, an adjustment and proration shall be
made within sixty (60) calendar days after the Closing Date.
3.3.3 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 3.3.2 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties whose
determination shall be final, and the fees and expenses of such accountant shall
be paid one-half by Seller and one-half by Buyer.
3.4 ADJUSTMENT FOR REDUCTION OF REVENUE. In the event the gross revenue
of the Stations, for the twelve-month period ended most recently prior to the
Closing Date as makes such calculation practicable in time for the Closing, is
less than $748,754 then for each dollar such gross revenue is less than
$748,754, the Purchase Price shall be reduced by $1.67. On the Closing Date,
Seller shall deliver to Buyer all financial statements reflecting the Stations'
gross revenue for said twelve-month period and other information as Buyer may
reasonably request to support any adjustment, or lack of adjustment, to the
Purchase Price.
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<PAGE> 7
3.5 ALLOCATION OF PURCHASE PRICE. The parties shall endeavor in good
faith to agree upon an allocation of the Purchase Price among the Stations
Assets, on or prior to the Closing Date. In the event the parties are unable to
reach agreement on such allocation, then such allocation shall be based upon an
appraisal of the Station Assets by a reputable appraiser acceptable to all of
the parties. Seller and Buyer agree to use the allocation for all tax purposes,
including without limitation, those matters subject to Section 1060 of the
Internal Revenue Code of 1986, as amended. Buyer and Seller agree to use such
allocation on completing and filing Internal Revenue Service Form 8594 for
federal income tax purposes. Buyer and Seller further agree that they shall not
take any position inconsistent with such allocation upon examination of any
return, in any refund claim, in any litigation, or otherwise.
3.6 ADJUSTMENT FOR BARTER. As of the Closing Date, Buyer shall be
entitled to a credit against the Purchase Price, for the amount, if any, by
which the aggregate net value of the Stations' Barter Payable (as defined below)
as of the Closing Date exceeds by more than $15,000 the aggregate net value of
the Stations' Barter Receivable (as defined below) as of the Closing Date.
"Barter Payable" means the aggregate value of time owed pursuant to
each of the Trade Agreements. "Barter Receivable" means the aggregate value of
goods and services to be received pursuant to each of the Trade Agreements.
3.7 ACCOUNTS RECEIVABLE. Buyer acknowledges that all accounts
receivable arising prior to the Closing Date in connection with the operation of
the Stations, including but not limited to accounts receivable for advertising
revenues for programs and announcements performed prior to the Closing Date,
shall remain the property of RBT ("Seller Accounts Receivable") and that Buyer
shall not acquire any beneficial right or interest therein or responsibility
therefor under this Agreement. For a period of ninety (90) days following the
Closing Date (the "Collection Period"), Buyer shall for no remuneration use
reasonable efforts to collect the Seller Accounts Receivable, and Buyer will
apply all such amounts collected in connection with the Seller Accounts
Receivable collected in connection with the Seller Accounts Receivable to the
debtor's oldest account receivable first, except that any such accounts
collected by Buyer who are also indebted to Buyer for programs and announcements
broadcast on any of the Stations may be applied to Buyer's account if so
directed by the debtor or under circumstances in which there is a bona fide
dispute between RBT and such account debtor with respect to such account.
Buyer's obligation and authority shall not extend to the institution of
litigation, employment of counsel or a collection agency or any other
extraordinary means of collection. Buyer agrees to reasonably cooperate with
RBT, at RBT's expense, as to any litigation or other collection efforts
instituted by RBT to collect any delinquent Seller Accounts Receivable. During
the Collection Period, neither Seller nor its agents shall make any direct
solicitation of any account debtor for collection purposes or institute
litigation for the collection of amounts due. Any amounts relating to the Seller
Accounts Receivable that are paid directly to Seller shall be retained by
Seller, but Seller shall provide Buyer with prompt notice of any such payment.
Except as otherwise provided herein, amounts collected by Buyer on account of
Seller Accounts Receivable shall be remitted in full to RBT on a monthly basis,
by the fifteenth (15) day of the month following the month for which remittance
is due. Buyer shall deliver to RBT
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an accounting showing the amount it received during each period on each account.
At the conclusion of the Collection Period and after remittance of all amounts
collected, Buyer will thereafter have no further responsibility with respect to
the collection of the Seller Accounts Receivable, and Buyer may apply all
collections received by Buyer from any party who continues business with Buyer
to obligations owing to Buyer, except for any payment received by Buyer which
such party specifies is for amounts owed to RBT, in which event such specified
amounts shall be paid over to RBT. Buyer shall not have the right to compromise,
settle or adjust the amounts of any one of the Seller Accounts Receivable
without RBT's prior written consent. RBT shall promptly pay all sales
commissions relating to all of its accounts receivable whenever RBT receives
payment thereon.
ARTICLE 4
CLOSING
-------
4.1 CLOSING. Except as otherwise mutually agreed upon by Buyer and
Seller, the consummation of the transactions contemplated herein (the "Closing")
shall occur within ten (10) business days after the later to occur of (a) the
satisfaction or waiver of each condition to closing contained herein, other than
such conditions as are reasonably anticipated to be satisfied at Closing
(provided that each party hereto shall use its reasonable best efforts to cause
each condition to closing to be satisfied so that the Closing may occur at the
earliest possible date); and (b) the issuance of the Final Order (as defined
below), or such other date as may be mutually agreed by the parties hereto (the
"Closing Date"); provided, however, that unless Seller's senior lenders object
Buyer may in its sole discretion waive the requirement that a Final Order be
issued and elect (subject to clause (a) above) to close at any time (upon not
less than ten (10) business days' notice to Seller) after the release of initial
FCC approval on public notice that it has consented to the transaction
contemplated hereby (the "Initial Approval"). For purposes of this Agreement,
"Final Order" means an order or grant by the FCC which is no longer subject to
appeal, reconsideration, review, petition for re-hearing, stay or judicial
action by the FCC or a court of competent jurisdiction (for which the time for
filing such appeal, petition or other action has expired or, if filed, has been
denied, dismissed or withdrawn) and pursuant to which the FCC consents, as the
case may be, to the assignments of the FCC Licenses contemplated by this
Agreement, each such order or grant being without the imposition of any
conditions materially adverse to Buyer or any Affiliate (as hereinafter defined)
of Buyer with respect to the assignment of the FCC Licenses to Buyer or the
continued operation by Buyer of the Stations or the Stations Assets. In the
event that the parties close before the Initial Approval has become a Final
Order, the parties shall enter into an Unwind Agreement mutually acceptable to
the parties and their respective senior lenders. The Closing shall be held in
the offices of Seller's counsel in Cincinnati, Ohio, or at such place and in
such manner as the parties hereto may agree.
ARTICLE 5
GOVERNMENTAL CONSENTS
---------------------
5.1 FCC CONSENT. It is specifically understood and agreed by Buyer and
Seller that the Closing and the assignment of the Stations Licenses and the
transfer of the Stations Assets are expressly conditioned on and are subject to
the prior consent and approval of the FCC
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without the imposition of any conditions materially adverse to Buyer or any
Affiliate of Buyer (the "FCC Consent").
5.2 FCC APPLICATION. Within five (5) business days after the execution
of this Agreement, CLS and RLT shall file an application with the FCC for the
FCC Consent (the "FCC Application"). CLS and RLT shall prosecute the FCC
Application with all reasonable diligence and otherwise use their best efforts
to obtain the FCC Consent as expeditiously as practicable. Neither CLS nor RLT
shall take or omit to take any action that will cause the FCC to deny, delay, or
fail to approve the application for such consents and approvals or cause such
consents and approvals not to become a Final Order.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYER
---------------------------------------
Buyer hereby makes the following representations and warranties to
Seller, each of which is true and correct on the date hereof, shall survive the
Closing and shall be unaffected by any investigation heretofore or hereafter
made by Seller:
6.1 ORGANIZATION AND STANDING. Each Buyer is a limited liability
company duly organized and validly existing under the laws of the State of
Delaware.
6.2 AUTHORIZATION AND BINDING OBLIGATIONS. Each Buyer has all necessary
legal power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and to own or lease the Stations Assets and to
carry on the business of the Stations upon the consummation of the transactions
contemplated by this Agreement. Each Buyer's execution, delivery and performance
of this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary action on its part and, assuming the due
authorization, execution and delivery of this Agreement by Seller, this
Agreement will constitute the legal, valid and binding obligation of each Buyer,
enforceable against it in accordance with its terms, except as limited by laws
affecting creditors' rights or equitable principles generally.
6.3 QUALIFICATION AS ASSIGNEE. To the best of each Buyer's knowledge,
there are no facts which, under the Communications Act of 1934, as amended, or
the existing rules and regulations of the FCC, would disqualify CLS as an
assignee of the Stations Licenses. Buyer has, and will continue to have to the
Closing, funds committed and readily available to it sufficient to pay all
amounts due at the Closing.
6.4 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 hereof with respect to governmental consents, the
execution, delivery and performance of this Agreement by Buyer: (a) do not
conflict with the provisions of the articles of organization or operating
agreement of Buyer; (b) do not require the consent of any third party; (c) will
not violate any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which Buyer or any of its
affiliates is a party; and (d) will not, either alone or with the giving of
notice or the passage of time, or both, conflict with, constitute grounds for
termination of or result in a breach of the terms, conditions or provisions of,
or
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constitute a default under, any agreement, instrument, license or permit to
which Buyer is now subject.
6.5 COMMISSIONS OR FINDER'S FEES. Neither Buyer nor any person or
entity acting on behalf of Buyer has agreed to pay a commission, finder's fee or
similar payment in connection with this Agreement or any matter related hereto
to any person or entity.
6.6 LITIGATION. Buyer is not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree prohibiting the consummation of
the transactions contemplated by this Agreement, and there are no suits, legal
proceedings or investigations of any nature pending, or to the best knowledge of
Buyer, threatened against or affecting Buyer that would affect Buyer's ability
to carry out the transactions contemplated by this Agreement.
6.7 FULL DISCLOSURE. No representation or warranty made by Buyer
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Buyer pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or shall omit to state any
material fact required to make any statement contained herein or therein not
misleading. To the best of Buyer's knowledge, there is no impending or
contemplated event or occurrence that would cause any of the foregoing
representations not to be true and complete on the date of such event or
occurrence as if made on that date.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyer,
each of which is true and correct on the date hereof, shall survive the Closing
and shall be unaffected by any investigation heretofore or hereafter made by
Buyer:
7.1 ORGANIZATION AND STANDING. Each of RBT and RLT is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware, RBT is authorized to conduct business within the State of
California, and each of RBT and RLT has the requisite power and authority to
own, lease and operate the Stations Assets owned or leased by it and to carry on
the business of the Stations as now being conducted by it and as proposed to be
conducted by it between the date hereof and the Closing Date.
7.2 AUTHORIZATION AND BINDING OBLIGATION. Seller has the power and
authority, and has taken all necessary and proper action to enter into and
perform this Agreement and to consummate the actions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery of this Agreement by
Buyer, constitutes the legal, valid and binding obligation of each Seller
enforceable against it in accordance with its terms, except as limited by laws
affecting the enforcement of creditors' rights or equitable principles
generally.
7.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 with respect to governmental consents and in SCHEDULE 7.9
with respect to required consents, the execution, delivery and performance of
this Agreement by Seller: (a) do not require
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<PAGE> 11
the consent of any third party (including, without limitation, the consent of
any governmental, regulatory, administrative or similar authority); (b) will not
conflict with, result in a breach of, or constitute a violation of or default
under, the provisions of Seller's certificate of organization or bylaws, or any
applicable law, judgment, order, injunction, decree, rule, regulation or ruling
of any governmental authority to which Seller is a party or by which Seller or
any of the Stations Assets are bound; (c) will not either alone or with the
giving of notice or the passage of time, or both, conflict with, constitute
grounds for termination of or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any Contract, agreement,
instrument, license or permit to which Seller or any of the Stations Assets is
now subject; and (d) will not result in the creation of any lien, charge or
encumbrance on any of the Stations Assets.
7.4 GOVERNMENT AUTHORIZATIONS.
7.4.1 SCHEDULE 7.4 hereto contains a true and complete list of
the Stations Licenses which are required for the lawful conduct of the business
and operations of the Stations in the manner and to the full extent they are
presently conducted (including, without limitation, auxiliary licenses
associated with each Station and all tower registrations), except for such
non-FCC licenses, permits and authorizations the failure of which to obtain
would not have a material adverse effect on Buyer or the Stations. Seller has
delivered to Buyer true and complete copies of the Stations Licenses listed in
SCHEDULE 7.4, including any and all amendments and other modifications thereto.
7.4.2 RLT is the authorized legal holder of the Stations Licenses.
Except as set forth SCHEDULE 7.4, none of the Stations Licenses is subject to
any restrictions or conditions which would materially limit the full operation
of the Stations as now operated.
7.4.3 Except as set forth in SCHEDULE 7.4, and except for matters
relating to FCC rules, regulations, and policies affecting the radio broadcast
industry generally, there are no complaints, petitions or proceedings pending
or, to the best of Seller's knowledge, threatened as of the date hereof before
the FCC or any other governmental or regulatory authority relating to the
business or operations of the Stations. Except as set forth on SCHEDULE 7.4,
there are no applications pending by RLT before the FCC. Except as set forth in
SCHEDULE 7.4, the Stations Licenses are in good standing, are in full force and
effect and are unimpaired by any act or omission of Seller or its directors,
officers, or employees, and the operations of the Stations are in accordance
with the Stations Licenses. Except as set forth on SCHEDULE 7.4, no proceedings
are pending or, to the best of Seller's knowledge, threatened, and to the best
of Seller's knowledge there has not been any act or omission of either Seller or
any of its directors, officers, or employees, which may result in the
revocation, modification, non-renewal or suspension of any of the Stations
Licenses, the denial of any pending applications, the issuance of any cease and
desist order, the imposition of any administrative actions by the FCC or any
other governmental or regulatory authority with respect to the Stations Licenses
or which may affect Buyer's ability to continue to operate the Stations as they
are currently operated.
7.4.4 Seller has no reason to believe that the Stations
Licenses will not be renewed in their ordinary course.
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7.4.5 All reports, forms, and statements required to be filed
by RLT with the FCC with respect to the Stations since the grant of the last
renewal of the Stations Licenses have been filed and are substantially complete
and accurate.
7.4.6 To the best knowledge of Seller, there are no facts
which, under the Communications Act of 1934, as amended, or the existing rules
and regulations of the FCC, would disqualify RLT as assignor of the Stations
Licenses or cause the Stations Licenses not to be renewed in their ordinary
course.
7.5 COMPLIANCE WITH FCC REGULATIONS. Except as specified in SCHEDULE
7.4, the operation of the Stations and all of the Stations Assets are in
compliance in all material respects with: (a) all applicable engineering
standards required to be met under applicable FCC rules; and (b) all other
applicable federal, state and local rules, regulations, requirements and
policies, including, but not limited to, equal employment opportunity policies
of the FCC, and all applicable painting and lighting requirements of the FCC and
the Federal Aviation Administration to the extent required to be met under
applicable FCC rules and regulations, and to the best of Seller's knowledge,
there are no filed claims to the contrary.
7.6 TAXES. Seller has filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and other tax returns
required by law to be filed by it and has paid in full all taxes, estimated
taxes, interest, assessments, and penalties due and payable by it. All returns
and forms which have been filed have been true and correct in all material
respects and no tax or other payment in an amount other than as shown on such
returns and forms is required to be paid by Seller and has not been paid by
Seller. There are no present disputes as to taxes of any nature payable by
Seller which in any event could adversely affect any of the Stations Assets or
the operation of the Stations by Buyer. Seller has not been advised that any of
its tax returns, federal, state, local or foreign, have been or are being
audited. Seller does not and will not in the future have any liability, fixed or
contingent, for any unpaid federal, state or local taxes or other governmental
or regulatory charges whatsoever (including without limitation withholding and
payroll taxes) which could result in a lien on the Stations Assets after
conveyance thereof to Buyer or in any other form of transferee liability to
Buyer.
7.7 PERSONAL PROPERTY. Without material omission, SCHEDULE 7.7 hereto
contains a list of all items of tangible personal property owned by RBT and used
in the conduct of the business and operations of the Stations. SCHEDULE 7.7,
also separately lists without material omission all tangible personal property
leased by RBT pursuant to leases included within the Contracts. Except as
disclosed in SCHEDULE 7.7, RBT has, and following the Closing, Buyer will have,
good and marketable title to all of the items of tangible personal property
which are included in the Stations Assets (other than those subject to lease)
and, except as set forth in SCHEDULE 7.7, all of which will be paid at or prior
to Closing, none of such Stations Assets is, or at the Closing will be, subject
to any security interest, mortgage, pledge, lease, license, lien, encumbrance,
title defect or other charge, except for (a) liens for taxes not yet due and
payable, (b) easements, agreements, and restrictions of record which do not
materially detract from the existing use of the property affected or affect the
marketability of the same, (c) zoning laws and other land use restrictions that
do not impair the full use of the owned Real Estate in the same or substantially
similar manner as such is currently used, and (d) the Assumed Liabilities
(collectively,
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"Permitted Encumbrances"). The properties listed in SCHEDULE 7.7, along with
those properties subject to lease and included among the Contracts, constitute
all material tangible personal property necessary to operate the Stations as the
same are now being operated. To the best of Seller's knowledge, the Stations
Assets include all of the property rights used in the operation of the Stations
as presently conducted and are in compliance in all material respects with all
applicable laws and regulations. Except as set forth in SCHEDULE 7.7, all items
of tangible personal property included in the Stations' Assets are in good
operating condition and repair (ordinary wear and tear excepted), are free from
all material defect and damage, are suitable for the purposes for which they are
now being used, and have been maintained by Seller in a manner consistent with
generally accepted standards of customary engineering practice.
7.8 REAL PROPERTY.
7.8.1 SCHEDULE 7.8 hereto contains a complete and accurate
list and description of all real property (including without limitation, real
property relating to the towers, transmitters, studio sites and offices of the
Stations) owned or leased by RBT and used by RBT in connection with the
operations of the Stations (the "Real Estate"). The Real Estate is all of the
real property used in or necessary for the lawful operation of the Stations.
7.8.2 RBT enjoys quiet possession of all Real Estate. There
are no present disputes or claims with respect to offsets or defenses by any
party against the other under any of the Contracts relating to the leased Real
Estate. Seller has delivered to Buyer true and complete copies of all Contracts
relating to the leased Real Estate. Except as set forth in SCHEDULE 7.9 hereto,
the assignment of the Contracts relating to the leased Real Estate to Buyer will
not permit the other party to accelerate the rent, cause the terms thereof to be
renegotiated or constitute a default thereunder, and will not require the
consent of any such party to the assignment thereof to Buyer.
7.8.3 Except as described in SCHEDULE 7.8, to the best of
Seller's knowledge none of the buildings, structures, improvements or fixtures
constructed on any leased Real Estate, in connection with the operation of the
Stations, including, but not limited to, all towers, guy wires and guy anchors
and ground radials, encroach upon adjoining real property, and all such
buildings, structures, improvements and fixtures are constructed and are
operated and used in conformance with all "set back" lines, easements,
covenants, restrictions and all applicable building, fire, zoning, health and
safety laws and codes. To the best of Seller's knowledge, no utility lines
serving such leased Real Estate pass over the lands of a third party except
where appropriate easements have been obtained. To the best of Seller's
knowledge, except as described in SCHEDULE 7.8, all buildings, structures,
towers, antennae, improvements and fixtures situated on the leased Real Estate
are in good operating condition, ordinary wear and tear excepted, have no latent
structural, mechanical or other defects of material significance, are reasonably
suitable for the purposes for which they are being used and each has adequate
rights of ingress and egress, utility service for water and sewer, telephone,
electric and/or gas, and sanitary service for the conduct of the business and
operations of the Stations as presently conducted. The transmitters for the
Stations are operating in compliance with and within the parameters established
by the FCC and the Stations Licenses. To the best of Seller's knowledge, the
broadcast towers for the Stations are in compliance in all material respects
with all applicable
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laws, including without limitation, the Federal Aviation Act and all rules and
regulations promulgated thereunder. There is no pending or, to the best
knowledge of Seller, threatened condemnation or other legal proceeding or action
of any kind relating to such real property and/or title thereto. If required by
Buyer's senior lender, memoranda of leases will be recorded prior to the Closing
Date. True and correct copies of such Leases have been delivered to Buyer.
7.9 CONTRACTS. SCHEDULE 7.9 lists all Contracts to which Seller is a
party, or which are binding on Seller, as of the date of this Agreement. Those
Contracts listed on SCHEDULE 7.9, if any, requiring the consent of a third party
to assignment are identified by an asterisk in the left margin of SCHEDULE 7.9.
Those Contracts, if any, that Seller and Buyer have agreed are material to the
operation of the Stations Assets and the valid assignment of which and receipt
by Buyer of consents thereto (along with appropriate estoppel certificates for
the leases related to the leased Real Estate) is a condition to the consummation
of the transactions contemplated hereby (the "Fundamental Contracts") are
identified by an "F" in the left margin of Schedule 7.8 or 7.9.
7.10 STATUS OF CONTRACTS, ETC. Seller has delivered to Buyer true and
complete copies of all written Contracts (excluding time sales agreements) and
true and complete memoranda of all oral Contracts, including any and all
amendments and other modifications thereto. All of such Contracts are in full
force and effect and are valid, binding and enforceable in accordance with their
respective terms, except as limited by laws affecting creditors' rights or
equitable principles generally. Seller has complied in all material respects
with all Contracts and is not in default beyond any applicable grace periods
under any thereof and, to the best of Seller's knowledge, no other contracting
party is in default under any thereof.
7.11 ENVIRONMENTAL. To the best of Seller's knowledge, except as set
forth in SCHEDULE 7.11, Seller has complied with all federal, state and local
environmental laws, rules and regulations as in effect on the date hereof
applicable to each of the Stations and its operations, including but not limited
to the FCC's guidelines regarding RF radiation. To the best of Seller's
knowledge, no hazardous or toxic waste, substance, material or pollutant (as
those or similar terms are defined under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.ss.
9601 ET seq., Toxic Substances Control Act. 15 U. S. C. ss.ss. 2601 et seq., the
Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss.ss. 6901 et seq. or
any other applicable federal, state and local environmental law, statute,
ordinance, order, approval, plan, authorization, policy, judgment, rule or
decree, regulation relating to the environment or the protection of human health
("Environmental Laws")), including but not limited to, any asbestos or
asbestos-related products, oils, or petroleum-derived compounds, CFCs, PCBs, or
underground storage tanks (collectively Hazardous Materials"), have been
released, emitted or discharged by Seller or any predecessor of Seller in
violation of applicable laws or regulations, or are currently located in
quantities in violation of applicable laws and regulations in, on, or under or
about the real property on which the Stations Assets are situated, including
without limitation the transmitter sites, or contained in the tangible personal
property included in the Stations Assets which were placed there by Seller or
any predecessor of Seller. To the best of Seller's knowledge, the Stations
Assets and RBT's use thereof are not in violation of any Environmental Laws or
any occupational, safety and health or other applicable law now in effect.
Nothing herein shall be interpreted to limit Buyer's right to indemnification by
Seller
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under this Agreement for noncompliance with Environmental Laws arising by reason
of acts or omissions prior to Closing.
7.12 INTELLECTUAL PROPERTY. SCHEDULE 7.12 hereto is a true and complete
list of all Intellectual Property applied for, registered or issued to, and
owned by RBT or under which RBT is a licensee and which is used in the conduct
of Seller's business and operations, except for computer software licensed for
use by the Stations. Except as set forth on SCHEDULE 7.12, to the best of
Seller's knowledge: (a) RBT's right, title and interest in the Intellectual
Property as owner or licensee, as applicable, is free and clear of all liens,
claims, encumbrances, rights, or equities whatsoever of any third party and, to
the extent any of the Intellectual Property is licensed to RBT, such interest is
valid and uncontested by the licensor thereof or any third party; (b) all
computer software located at the Stations' facilities or used in the Stations'
business or operations is properly licensed to RBT, and all of RBT's uses of
such computer software are authorized under such licenses; (c) all of RBT's
right, title and interest in and to the Intellectual Property and computer
software shall be assignable to Buyer at Closing, and upon such assignment,
Buyer shall receive complete and exclusive right, title, and interest in and to
all tangible and intangible property rights existing in the Intellectual
Property; and (d) there are no infringements or unlawful use of such
Intellectual Property by RBT in connection with RBT's business or operations.
7.13 FINANCIAL STATEMENTS. Set forth in SCHEDULE 7.13 are complete
copies of the income statements of RBT relating to the Stations for the
twelve-month period ended December 31, 1998, together with monthly income
statement for the Stations for the months of January - May, 1999 (collectively,
the "Financial Statements"). The Financial Statements were prepared in
accordance with the books and records of RBT and in accordance with generally
accepted accounting principles consistently applied and maintained throughout
the periods indicated except for the absence of footnotes and customary year-end
adjustments and as has been disclosed in SCHEDULE 7.13. In all material
respects, the Financial Statements present fairly the results of operations of
the Stations for the periods indicated.
7.14 PERSONNEL INFORMATION.
7.14.1 SCHEDULE 7.14 contains a true and complete list of all
persons employed at the Stations, including date of hire, a description of all
compensation arrangements (other than employee benefit plans set forth in
SCHEDULE 7.17) and a list of other material terms of any and all agreements
affecting such persons and their employment by RBT. As of the date of this
Agreement, Seller has received no notice that, and Seller is not aware of, any
individual employee who intends to terminate his or her employment relationship
with the Stations upon the execution of this Agreement or after the Closing.
7.14.2 Seller, with respect to the Stations, is not a party to
any contract or agreement with any labor organization, nor has Seller agreed to
recognize any union or other collective bargaining unit, nor has any union or
other collective bargaining unit been certified as representing any employees of
RBT at the Stations. Seller has no knowledge of any organization effort
currently being made or threatened by or on behalf of any labor union with
respect to employees of RBT at the Stations.
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7.14.3 To the best of Seller's knowledge, except as disclosed
in SCHEDULE 7.14, Seller, with respect to the Stations, has complied in all
material respects with all laws relating to the employment of labor, including,
without limitation, the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and those laws relating to wages, hours, collective
bargaining, unemployment insurance, workers' compensation, equal employment
opportunity and payment and withholding of taxes.
7.15 LITIGATION. Seller is not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree relating to the conduct of the
business or the operation of the Stations or any of the Stations Assets, and
there is no litigation, administrative action, arbitration, proceeding or
investigation pending or, to the best knowledge of Seller, threatened against
Seller with respect to, related to or in connection with the operation of the
Stations in any federal, state or local court, or before any administrative
agency or arbitrator (including, without limitation, any proceeding which seeks
the forfeiture of, or opposes the renewal of, any of the Stations Licenses), or
before any other tribunal duly authorized to resolve disputes. In particular,
but without limiting the generality of the foregoing, to the best knowledge of
Seller, there are no applications, complaints or proceedings pending or
threatened before the FCC or any other governmental organization with respect to
the business or operations of the Stations.
7.16 COMPLIANCE WITH LAWS. (i) Seller is not in violation of, nor has
Seller received any notice asserting any non-compliance by it in connection with
the operation of the Stations or use or ownership of any of the Stations Assets
with, any applicable statute, rule or regulation, whether federal, state or
local except for any violation or non-compliance which will not result in a
material adverse effect on the Stations Assets or the operation of the Stations;
and (ii) Seller is not in default with respect to any judgment, order,
injunction or decree of any court administrative agency or other governmental
authority or any other tribunal duly authorized to resolve disputes which
relates to the transactions contemplated hereby.
7.17 EMPLOYEE BENEFIT PLANS. SCHEDULE 7.17 contains a true and complete
list as of the date of this Agreement of all employee benefit plans applicable
to the employees of RBT employed at the Stations, and a brief description
thereof. Seller does not maintain any other employee benefit plan as the term is
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended, applicable to the employees of RBT employed at the Stations.
7.18 COMMISSIONS OR FINDER'S FEES. Neither Seller nor any person or
entity acting on behalf of Seller has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity.
7.19 CONDUCT OF BUSINESS IN ORDINARY COURSE: ADVERSE CHANGES. Since the
date Seller acquired the Stations, (a) Seller has conducted the business of the
Stations only in the ordinary course consistent with Seller's past practices;
(b) there has not been any material adverse change in the physical condition of
the tangible assets of the Stations, nor any damage, destruction, or physical
loss affecting any of the Stations Assets; and (c) Seller has not created,
assumed, or suffered any mortgage, pledge, lien or encumbrance on any of the
Stations Assets.
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7.20 INSTRUMENTS OF CONVEYANCE: GOOD TITLE. The instruments to be
executed by Seller and delivered to Buyer at the Closing, conveying the Stations
Assets to Buyer, will transfer good and marketable title to the Assets free and
clear of all liabilities (absolute or contingent), security interests,
mortgages, pledges, liens, obligations and encumbrances, except for Permitted
Encumbrances and except as set forth in SCHEDULE 7.4, SCHEDULE 7.7 and SCHEDULE
7.8 hereto and those obligations referred to in the first sentence of Section
2.1 hereof.
7.21 UNDISCLOSED LIABILITIES. Excepting only for the Assumed
Liabilities, no liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, relating to Seller, the Stations or the
Stations Assets exists which could, after discharging any indebtedness therefor
at or prior to the Closing, result in any form of transferee liability against
Buyer or subject the Stations Assets to any lien, encumbrance, claim, charge,
security interest or imposition whatsoever or otherwise affect the full, free
and unencumbered use of the Stations Assets by Buyer.
7.22 FULL DISCLOSURE. No representation or warranty made by Seller
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or shall omit to state any
material fact required to make any statement contained herein or therein not
misleading. To the best of Seller's knowledge, there is no impending or
contemplated event or occurrence that would cause any of the foregoing
representations not to be true and complete on the date of such event or
occurrence as if made on that date.
Whenever in this Article 7 a warranty or representation is qualified by
a word or phrase referring to the best of Seller's knowledge (or similar terms),
it shall mean to the actual knowledge of Terry S. Jacobs, William L. Stakelin,
Anthony Vasconcellos (Seller's chief financial officer), David Remund (Seller's
engineer), and Paul Middlebrook (Seller's General Manager).
ARTICLE 8
COVENANTS OF BUYER
------------------
8.1 CLOSING. Subject to Article 11 hereof, on the Closing Date, Buyer
shall purchase the Stations Assets from Seller as provided in Article I hereof
and shall assume the Assumed Liabilities of Seller as provided in Article 2
hereof.
8.2 NOTIFICATION. Buyer will provide Seller prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 6. Buyer shall also notify Seller of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against Buyer which challenges the transactions contemplated hereby.
8.3 NO INCONSISTENT ACTION. Buyer shall not take any action which is
materially inconsistent with its obligations under this Agreement or take any
action which would cause any representation or warranty of Buyer contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
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8.4 REMOVAL OF IMPEDIMENTS. Should any fact relating to Buyer which
would cause the FCC to deny its consent to the transactions contemplated by this
Agreement come to Buyer's attention, Buyer will promptly notify Seller thereof
and will use its reasonable efforts to take such steps as may be necessary to
remove any such impediment to the FCC's consent to the transactions contemplated
by this Agreement.
ARTICLE 9
COVENANTS OF SELLER
-------------------
9.1 PRE-CLOSING COVENANTS. Seller covenants and agrees with respect to
the Stations that, between the date hereof and the Closing Date or the earlier
termination of this Agreement in accordance with its terms, except as expressly
permitted by this Agreement or as otherwise consented to in writing by Buyer
(which consent shall not be unreasonably withheld or delayed) Seller shall act
in accordance with the following:
9.1.1 Seller shall conduct the business and operations of the
Stations in the ordinary course of business consistent with past practice and
with the intent of preserving the ongoing operations and assets of the Stations,
including but not limited to maintaining the independent identity of the
Stations.
9.1.2 Seller shall use its reasonable best efforts to: (i)
preserve the operation of the Stations intact; (ii) preserve the business of the
Stations' advertisers, customers, suppliers and others having business relations
with the Stations; and (iii) continue to conduct financial operations of the
Stations, including without limitation, their credit and collection and pricing
policies and practices, all in the ordinary course of business consistent with
past practices.
9.1.3 Except for conditions described in SCHEDULE 7.4, Seller
shall operate the Stations in all respects in accordance with FCC rules and
regulations and the Stations Licenses and with all other laws, regulations,
rules and orders, and shall not cause or permit by any act, or failure to act,
any of the Stations Licenses to expire, be surrendered, adversely modified, or
otherwise terminated, or the FCC to institute any proceedings for the
suspension, revocation or adverse modification of any of the Stations Licenses,
or fail to prosecute with due diligence any pending applications to the FCC.
9.1.4 Should any fact relating to Seller which would cause the
FCC to deny its consent to the transactions contemplated by this Agreement come
to Seller's attention, including the institution or written threat of any action
against the Seller involving any Station or receipt of any administrative or
court order relating to the Stations Assets or the Stations, Seller will
promptly notify Buyer thereof and will use its reasonable best efforts to take
such steps as may be necessary to remove any such impediment to the FCC's
consent to the transactions contemplated by this Agreement.
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9.1.5 Seller shall
(a) refrain from making any sale, lease, transfer or other
disposition of any of the Stations Assets having a value per item in excess of
$1,000, individually, and valued in excess of $5,000 in the aggregate, other
than in the normal course of business at fair market value in connection with
replacements of equal or greater value;
(b) refrain from modifying, amending, altering or terminating
any of the Assumed Contracts or waiving any default or breach thereunder or
modifying, altering or terminating, any other right relating to or included in
the Stations Assets;
(c) maintain insurance on the Stations Assets against loss or
damage by fire and all other hazards and risks in an amount consistent with the
existing policy amounts described in SCHEDULE 9.1.5;
(d) maintain its books and records in accordance with prior
practice; maintain the Stations Assets in their present condition, ordinary wear
and tear excepted; maintain supplies of inventory and spare parts relating to
the Stations consistent with past practices; and, except as otherwise
specifically provided in this Agreement, otherwise operate the Stations in the
ordinary course in accordance with past practices;
(e) refrain from taking any action which is not in the usual
and ordinary course of business regarding the Stations Assets or which could
reasonably be expected to materially adversely affect the value of the Stations
Assets;
(f) refrain from hiring, firing, releasing or transferring any
employee of the Station identified by an asterisk on Schedule 7.14;
(g) refrain from (i) increasing the compensation payable or to
become payable to any of Seller's employees in a manner inconsistent with past
practices, or (ii) entering into any renewal or amendment of any existing
contract for the employment of any employee identified by an asterisk on
Schedule 7.14 other than in the ordinary course of business;
(h) promptly notify Buyer upon Seller's becoming aware of the
resignation or contemplated resignation of any employee identified by an
asterisk on Schedule 7.14;
(i) refrain from changing its charter in any way which would
adversely affect its corporate power or authority to enter into and perform this
Agreement or which would otherwise adversely affect its performance of this
Agreement;
(j) refrain from subjecting any of the Stations Assets to any
new or increased lien, claim, charge, or encumbrance (other than minor liens,
claims, charges or encumbrances which will not materially interfere with the
occupation, use and enjoyment by
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Buyer of the Stations Assets in the normal course of its business or impair the
value of the Stations Assets and which shall be discharged as of the Closing
Date);
(k) refrain from doing or omitting to do any act which will
cause a breach of, or default under, or termination of, any material Assumed
Contract;
(l) refrain from entering into any Trade-Out Agreement not in
effect on the date hereof and listed on SCHEDULE 7.9, having a value in excess
of $1,000, individually, or an aggregate value in excess of $5,000 (except for
Trade-Out Agreements which are fully performed by Seller prior to the Closing
Date);
(m) refrain from entering into any other contract or agreement
not in effect on the date hereof and listed on SCHEDULE 7.8 OR 7.9, except for
(i) contracts entered into in the ordinary course of business which do not
involve consideration having an aggregate value in excess of $10,000 and which
may be terminated on not more than ninety (90) day's notice without premium or
penalty and (ii) contracts for the sale of advertising time for cash entered
into in the ordinary course of business;
(n) provide to Buyer, concurrently with filing thereof, copies
of all reports to and other filings with the FCC relating to the Stations;
(o) not permit any of the Stations Licenses to expire or to be
surrendered or voluntarily modified, or take any action (or fail to take any
action) which could cause the FCC or any other governmental authority to
institute proceedings for the suspension, revocation or limitation of rights
under any Station License; or fail to prosecute with due diligence any pending
applications to any governmental authority with respect to the Stations or any
such Stations Licenses, except for proceedings affecting the radio broadcasting
industry generally;
(p) provide to Buyer, promptly upon receipt thereof by Seller,
a copy of (i) any notice from the FCC or any other governmental authority of the
revocation, suspension, or limitation of the rights under, or of any proceeding
for the revocation, suspension, or limitation of the rights under (or that such
authority may in the future, as the result of failure to comply with laws or
regulations or for any other reason, revoke, suspend or limit the rights under)
any Station License, or any other license or permit held by Seller respecting
any Station, and (ii) copies of all protests, complaints, challenges or other
documents filed with the FCC by third parties concerning any Station and,
promptly upon the filing or making thereof, copies of Seller's responses to such
filings;
(q) notify Buyer in writing immediately upon learning of the
institution or written threat of any material action against Seller involving
any Station in any court, or any action against Seller before the FCC or any
other governmental agency, and notify Buyer in writing promptly upon receipt of
any administrative or court order relating to the Stations Assets or the
Stations;
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<PAGE> 21
(r) pay or cause to be paid or provided for when due (except
to the extent contested in good faith for which proper reserves shall have been
established) all income, property, use, franchise, excise, social security,
withholding, worker's compensation and unemployment insurance taxes and all
other taxes of or relating to Seller, the Stations Assets and the employees
required to be paid to city, county, state, Federal and other governmental units
up to the Closing Date;
(s) if requested by Buyer, with respect to any Assumed
Contract (other than a real property lease) which can be terminated or not
renewed by Seller in compliance with the terms thereof, notify the other parties
to such Assumed Contract that Seller elects to terminate (or, if applicable,
elects not to renew) such Assumed Contract;
(t) not change the advertising rates in effect as of the date
hereof other than in the ordinary course of business; and
(u) use its reasonable best efforts to reduce by the Closing
Date the trade payables of the Stations to less than $15,000; and
(v) within thirty (30) days following the end of each calendar
month, provide Buyer with a statement of income for each Station for such month
and for the year-to-date period then ended (including a comparison to budget).
9.1.6 Seller shall give or cause the Stations to give Buyer
and Buyer's counsel, accountants, engineers and other representatives, at
Buyer's reasonable request and upon reasonable notice, full and reasonable
access during normal business hours to all of Seller's personnel, properties,
books, Contracts, reports and records (including, without limitation, financial
information and tax returns relating to the Stations, and environmental audits
in existence with respect to the Stations Assets), real estate, buildings and
equipment relating to the Stations and to the Stations' employees, and to
furnish Buyer with information and copies of all documents and agreements
relating to the Stations and the operation thereof (including but not limited to
financial and operating data and other information concerning the financial
condition, results of operations and business of the Stations, and any
engineering materials in Seller's possession regarding the operations of the
Stations) that Buyer may reasonably request. The rights of Buyer under this
Section 9.1.6 shall not be exercised in such a manner as to interfere
unreasonably with the business of the Stations.
9.1.7 Seller shall use its reasonable best efforts to obtain
any third party consents necessary for the assignment of any Contract (which
shall not require any payment to any such third party except for such amounts
contemplated by the Contract to be assigned, and any amount then owing by Seller
to such third party).
9.2 NOTIFICATION. Seller will provide Buyer prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 7 or any Schedule. Seller agrees to notify Buyer of
any litigation, arbitration or administrative proceeding pending or, to the best
of its knowledge, threatened, which challenges the transactions contemplated
hereby. Seller shall promptly notify Buyer if any of the normal broadcast
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<PAGE> 22
transmissions of any Station are interrupted, interfered with or in any way
impaired, and shall provide Buyer with prompt written notice of the problem and
the measures being taken to correct such problem.
9.3 NO INCONSISTENT ACTION. Seller shall not take any action which is
materially inconsistent with its obligations under this Agreement nor take any
action which would cause any representation or warranty of Seller contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
9.4 CLOSING. Subject to Article 12 hereof, on the Closing Date, Seller
shall transfer, convey, assign and deliver to Buyer the Stations Assets and the
Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this
Agreement.
9.5 OTHER ITEMS. Until the Closing Date or the earlier termination of
this Agreement in accordance with the terms hereof, except with Buyer's prior
written consent, Seller shall not: (a) waive or release any right relating to
the business or operations of the Stations, except for adjustments or
settlements made in the ordinary course of business consistent with its past
practices; (b) transfer or grant any rights under any of the Stations Licenses;
(c) enter into any commitment for capital expenditures for which Buyer would
become liable after the Closing Date; (d) introduce any material changes in the
broadcast hours or in the format of the Stations or any other material change in
the Station's programming policies; (e) change the call letters of any of the
Stations; and (f) enter into any transaction or make or enter into any contract
or commitment with respect to any of the Stations or the Stations Assets which
by reason of its size or otherwise is not in the ordinary course of business
consistent with past practices.
9.6 EXCLUSIVITY. Seller agrees that, commencing on the date hereof
through the Closing or earlier termination of this Agreement, Buyer shall have
the exclusive right to consummate the transactions contemplated herein, and
during such exclusive period, Seller agrees that neither Seller, nor any
director, officer, employee or other representative of Seller: (a) will
initiate, solicit or encourage, directly or indirectly, any inquiries, or the
making or implementation of any proposal or offer with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of,
all or any portion of the Stations Assets (any such inquiry, proposal or offer
being hereinafter referred to as an "Acquisition Proposal" and any such
transaction being hereinafter referred to as an "Acquisition"); (b) will engage
in any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; or (c) will continue any existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal or Acquisition and will take the necessary steps to inform
the individuals or entities referred to above of the obligations undertaken by
them in this Section 9.6. Notwithstanding the foregoing, in the event that Buyer
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
default shall not be cured within ten (10) business days of notice of default
served by Seller, Seller's obligations under this Section 9.6 shall be null and
void.
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9.7. NONCOMPETITION. During the period commencing on the Closing Date
through the third anniversary of the date thereof, Seller will not directly or
indirectly through one or more intermediaries, either as partner or sole
proprietor, or as an employee, agent, officer, director, shareholder or
consultant, engage in the ownership or operation of any radio station which has
its primary transmitter located anywhere within a fifty (50) mile radius of the
main post office in South Lake Tahoe, California; provided, however, this
limitation shall not prohibit Seller from engaging in the ownership or operation
of any radio station whose primary signal courage is directed to either the
Sacramento, California or Reno, Nevada broadcasting market.
ARTICLE 10
JOINT COVENANTS
---------------
Buyer and Seller each covenant and agree that between the date hereof
and the Closing Date, they shall act in accordance with the following:
10.1 CONFIDENTIALITY. Subject to the requirements of applicable law,
Buyer and Seller shall each keep confidential all information obtained by them
with respect to the other parties hereto in connection with this Agreement and
the negotiations preceding this Agreement, and will use such information solely
in connection with the transactions contemplated by this Agreement, and if the
transactions contemplated hereby are not consummated for any reason, each shall
return to each other party hereto, without retaining a copy thereof, any
schedules, documents or other written information obtained from such other party
in connection with this Agreement and the transactions contemplated hereby.
Notwithstanding the foregoing, no party shall be required to keep confidential
or return any information which: (a) is known or available through other lawful
sources, not bound by a confidentiality agreement with the disclosing party; (b)
is or becomes publicly known through no fault of the receiving party or its
agents; (c) is required to be disclosed pursuant to an order or request of a
judicial or governmental authority (provided the non-disclosing party is given
reasonable prior notice of the order or request and the purpose of the
disclosure); or (d) is developed by the receiving party independently of the
disclosure by the disclosing party. Notwithstanding anything to the contrary
herein, either party may in accordance with its legal obligations, including but
not limited to filings permitted or required by the Securities Act of 1933 and
the Securities and Exchange Act of 1934, make such press releases and other
public statements and announcements as it deems necessary and appropriate in
connection with this Agreement and the transactions contemplated hereby;
provided, however, that prior to making any such unilateral press release or
announcement, such party shall first communicate the same in writing to the
other.
10.2 COOPERATION. Subject to express limitations contained elsewhere
herein, Buyer and Seller agree to cooperate fully with one another in taking any
reasonable actions (including without limitation, reasonable actions to obtain
the required consent of any governmental instrumentality or any third party and
to permit Buyer to take such steps as it may desire to take prior to the Closing
Date to remedy those conditions described in SCHEDULE 7.4 as exceptions to
Seller's warranties and representations) necessary or helpful to accomplish the
transactions contemplated by this Agreement, including but not limited to the
satisfaction of any condition to closing set forth herein.
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10.3 CONTROL OF STATIONS. Buyer shall not, directly or indirectly,
control, supervise or direct the operations of the Stations prior to the
Closing. Such operations, including complete control and supervision of all
Station programs, employees and policies, shall be the sole responsibility of
Seller.
10.4 CONSENTS TO ASSIGNMENT. To the extent that any Contract identified
in the Schedules is not capable of being sold, assigned, transferred, delivered
or subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, offer, delivery or sublease thereof. Subject to the provisions
of Section 11.5 with respect to Contracts marked with an asterisk in Schedule
7.8 or 7.9, in those cases where consents, assignments, releases and/or waivers
have not been obtained at or prior to the Closing relating to the assignment to
Buyer of the non-asterisked Contracts, this Agreement and any assignment
executed pursuant hereto, to the extent permitted by law, shall constitute an
equitable assignment by Seller to Buyer of all of Seller's rights, benefits,
title and interest in and to the Contracts, and where necessary or appropriate,
Buyer shall be deemed to be Seller's agent for the purpose of completing,
fulfilling and discharging all of Seller's rights and liabilities arising after
the Closing Date under such Contracts. Seller shall use its reasonable best
efforts to provide Buyer with the financial and business benefits of such
Contracts (including, without limitation, permitting Buyer to enforce any rights
of Seller arising under such Contracts), and Buyer shall, to the extent Buyer is
provided with the benefits of such Contracts, assume, perform and in due course
pay and discharge all debts, obligations and liabilities of Seller allocable for
the period after the Cut-Off Time under such Contracts to the extent that Buyer
was to assume those obligations pursuant to the terms hereof.
10.5 FILINGS. In addition to the covenants of the parties set forth in
Article 5 hereto, as promptly as practicable after the execution of this
Agreement, Buyer and Seller shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, consents,
orders and approvals of any governmental authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any governmental authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, any reports
or notifications that may be required to be filed with the FCC, and each shall
furnish to one another all such information in its possession as may be
necessary for the completion of the reports or notifications to be filed by the
other.
10.6 BULK SALES LAWS. Buyer hereby waives compliance by Seller with the
provisions of the "bulk sales" or similar laws of any state. Seller agrees to
indemnify Buyer and hold it harmless from any and all loss, cost, damage and
expense (including but not limited to, reasonable attorney's fees) sustained by
Buyer as a result of any failure of Seller to comply with any "bulk sales" or
similar laws.
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10.7 EMPLOYEE MATTERS. RBT shall be responsible for the payment of all
compensation and accrued employee benefits payable to all employees up to the
Closing Date. RBT acknowledges and agrees that it, and not Buyer, is and shall
be solely responsible for any and all insurance, supplemental pension, deferred
compensation, retirement and any other benefits, and related costs, premiums and
claims, due, to become due, committed or otherwise promised to any person who,
as of the Closing Date is a retiree, former employee, or current employee of
RBT, relating to the period up to the Closing Date. Buyer, as a purchaser of the
Stations Assets, shall assume no employee benefit plans, programs or practices,
whether or not set forth in writing, maintained by Seller at any time.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYER
------------------------------
The obligations of Buyer hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
11.1.1 All representations and warranties of Seller made in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, shall be true and complete in all material respects as of the date
hereof and on and as of the Closing Date as if made on and as of that date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
11.1.2 All of the terms, covenants and conditions set forth in
this Agreement to be complied with and performed by Seller on or prior to the
Closing Date shall have been complied with or performed in all material
respects.
11.1.3 Buyer shall have received a certificate, dated as of
the Closing Date, from Seller, executed by an officer of Seller to the effect
that: (a) the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date, except for changes expressly
permitted or contemplated by the terms of this Agreement; and (b) Seller has
complied with or performed in all material respects all terms, covenants and
conditions set forth in this Agreement to be complied with or performed by it on
or prior to the Closing Date.
11.2 GOVERNMENTAL CONSENTS. The FCC Final Approval shall have
been obtained.
11.3 GOVERNMENTAL AUTHORIZATIONS. RLT shall be the holder of the
Stations Licenses and there shall not have been any modification of any of such
Licenses which has a material adverse effect on any of the Stations or the
operations thereof. No application shall be pending for the renewal of any of
the Stations Licenses. No proceeding shall be pending which seeks, or the effect
of which reasonably could be, to revoke, cancel, fail to renew, suspend or
adversely modify any of the Stations Licenses.
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11.4 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened in writing against, and no order,
decree or judgment of any court, agency or other governmental authority shall
have been rendered (and remain in effect) against, any party hereto which: (a)
would render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; (d) seeks material damages on account of
the consummation of any transaction contemplated hereby; or (e) is a petition of
bankruptcy by or against Seller, an assignment by Seller for the benefit of its
creditors, or other similar proceeding.
11.5 THIRD-PARTY CONSENTS. All Fundamental and other material Contracts
shall be in full force and effect on the Closing Date, and Seller shall have
obtained and shall have delivered to Buyer all appropriate third-party consents
in form and substance acceptable to Buyer (including estoppel certificates for
the leases related to the Leased Real Estate) in connection with the assignment
of the Fundamental Contracts to Buyer.
11.6 CLOSING DOCUMENTS. Seller shall have delivered or caused to be
delivered to Buyer, on the Closing Date, all bills of sale, general warranty
deeds, endorsements, assignments and other instruments of conveyance reasonably
satisfactory in form and substance to Buyer, effecting the sale, transfer,
assignment and conveyance of the Stations Assets to Buyer, including, without
limitation, each of the documents required to be delivered by it pursuant to
Article 14.
11.7 NO ADVERSE CHANGE IN PHYSICAL CONDITION OF TANGIBLE ASSETS. No
material adverse change in physical condition of any of the tangible assets
included in the Station Assets, which change is caused by or arises out of any
breach by Seller of any of its representations, warranties, covenants or
agreements hereunder shall have occurred.
11.8 SURVEYS AND ENVIRONMENTAL STUDIES. Buyer shall have obtained at
Buyer's cost and expense within sixty (60) days following the date of this
Agreement surveys and Phase I environmental assessment reports with respect to
the Real Estate confirming in all material respects the representations and
warranties of Seller with respect to the Real Estate on matters which are
ascertainable from a survey thereof (the "Surveys") and with respect to
environmental matters ("Phase I Reports"); provided, however, if Buyer elects
not obtain such Surveys (or if it is impracticable under existing conditions for
such Surveys to be obtained) and/or Phase I Reports on all or any of the Real
Estate, as to such Real Estate, Buyer shall be deemed to have waived this
condition. The Seller shall be listed among the parties who are to receive a
reliance letter upon the Phase I Reports. If the Surveys or Phase I Reports
disclose any condition which is materially inconsistent with the representations
and warranties of Seller, and such is capable of being cured by Seller, Seller
shall have the options to cause the same to be cured or remediated at Seller's
expense prior to the Closing Date or to reduce the Purchase Price by the costs
to cure or remediate such condition in which event Buyer shall acquire Seller's
interest in the Real Estate subject to such condition. In the event Seller
selects neither option, either Buyer or Seller may terminate this Agreement, in
which event the Escrow Deposit shall be returned to Buyer.
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ARTICLE 12
CONDITIONS OF CLOSING BY SELLER
-------------------------------
The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
12.1.1 All representations and warranties of Buyer made in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, shall be true and complete in all material respects as of the date
hereof and on and as of the Closing Date as if made on and as of that date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
12.1.2 All the terms, covenants and conditions set forth in
this Agreement to be complied with and performed by Buyer on or prior to the
Closing Date shall have been complied with or performed in all material
respects.
12.1.3 Seller shall have received a certificate, dated as of
the Closing Date, executed by an officer of Buyer, to the effect that: (a) the
representations and warranties of Buyer contained in this Agreement are true and
complete in all material respects on and as of the Closing Date as if made on
and as of that date; and (b) Buyer has complied with or performed in all
material respects all terms, covenants and conditions to be complied with or
performed by it on or prior to the Closing Date.
12.2 GOVERNMENTAL CONSENTS. The FCC Initial Approval shall
have been obtained.
12.3 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened in writing against, and no other
decree or judgment of any court, agency or other governmental authority shall
have been rendered (and remain in effect) against, any party hereto which: (a)
would render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; or (d) seeks material damages on account of
the consummation of any transaction contemplated hereby.
12.4 CLOSING DOCUMENTS. Buyer shall have delivered or caused to be
delivered to Seller, on the Closing Date, the Purchase Price and each of the
documents required to be delivered by it pursuant to Article 14.
ARTICLE 13
TRANSFER TAXES: FEES AND EXPENSES
---------------------------------
13.1 EXPENSES. Except as set forth in SECTION 13.2 hereof or otherwise
expressly set forth in this Agreement, each party hereto shall be solely
responsible for all costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance
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<PAGE> 28
with the terms of this Agreement including, but not limited to, the costs and
expenses incurred pursuant to Article 5 hereof and the fees and disbursements of
counsel and other advisors.
13.2 SPECIFIC CHARGES. All costs of transferring the Stations Assets in
accordance with this Agreement, including recordation, transfer and documentary
taxes and fees, and any excise, sales or use taxes, shall be shared equally by
Buyer and Seller. Each party shall pay any filing or grant fees imposed upon it
by any governmental authority the consent of which or the filing with which is
required for the consummation of the transactions contemplated hereby, with the
exception of filing fees of the FCC which shall be shared equally by Buyer and
Seller.
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
------------------------------------
14.1 SELLER'S DOCUMENTS. At the Closing, Seller shall deliver or cause
to be delivered to Buyer the following:
14.1.1 Certified resolutions of the directors and sole
shareholder of each Seller approving the execution and delivery of this
Agreement and authorizing the consummation of the transactions contemplated
hereby;
14.1.2 A certificate of each Seller, dated the Closing Date,
in the form described in Section 11.1.3;
14.1.3 Governmental certificates showing that (a) each of RBT
and RLT is duly organized, validly existing and in good standing in the State of
Delaware, (b) RBT is qualified to transact business and in good standing in the
State of California; and (c) each of RBT and RLT has filed all returns, paid all
taxes due' thereon and is currently subject to no assessment, each certified as
of a date not more than thirty (30) days before the Closing Date;
14.1.4 Such certificates, bills of sale, general warranty
deeds, assignments, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents to
conveyance, assignment or transfer required to be delivered hereunder), and lien
releases, all in form satisfactory to Buyer and Buyer's counsel, as shall be
effective to vest in Buyer good and marketable title in and to the Stations
Assets, free, clear and unencumbered except for Permitted Encumbrances, if any,
as set forth on SCHEDULE 7.7 and SCHEDULE 7.8. Without limitation of the
foregoing, if such are to be recorded pursuant to Section 7.8.3 the real estate
leases relating to the leased Real Estate (or memoranda thereof) shall have been
executed by Seller and each landlord and duly recorded with the recorder's
office.
14.1.5 An Assignment and Assumption Agreement in the form of
Exhibit E effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
14.1.6 At the time and place of Closing, originals and all
copies of all program, operations, transmission or maintenance logs and all
other records required by the FCC to be
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<PAGE> 29
maintained with respect to the Stations, including the public files of the
Stations, shall be left at the Stations and thereby delivered to Buyer;
14.1.7 A written opinion of Seller's corporate counsel
substantially in the form attached as Exhibit E, dated as of the Closing Date;
14.1.8 A written opinion of Seller's FCC counsel confirming
the matters set forth in Exhibit E, dated as of the Closing Date;
14.1.9 Such additional information, materials, agreements,
documents and instruments as Buyer and its counsel may reasonably request in
order to consummate the Closing, including any information requested by Buyer
pursuant to Section 3.4; and
14.1.10 At Seller's expense, a written commitment to issue
owner's and lessee's policies of title insurance naming Commonwealth as the
insured, written by a responsible title insurance company authorized to write
title insurance with respect to California real estate, covering Commonwealth's
interest in the Real Estate, which policies shall guarantee such title to be in
the condition called for by this Agreement and shall otherwise be reasonably
satisfactory to Buyer, subject only to Permitted Encumbrances and those liens
and encumbrances set forth on SCHEDULE 7.7 which are designated to continue
after the Closing (except for mortgages, judgments or other liens which will be
satisfied out of the proceeds of the sale of the Stations Assets hereunder), and
shall show no rights of occupancy or use by third parties, encroachments, no
gaps in the chain of title and no violations of any applicable zoning or other
ordinance, statute, rule or regulation.
14.2 BUYER'S DOCUMENTS. At the Closing, Buyer shall deliver or cause to
be delivered to Seller the following:
14.2.1 Certified resolutions of the directors of each Buyer
approving the execution and delivery of this Agreement and authorizing the
consummation of the transactions contemplated hereby;
14.2.2 A certificate of each Buyer, dated the Closing Date, in
the form described in SECTION 12.1.3;
14.2.3 The Assignment and Assumption Agreement;
14.2.4 A written opinion of Buyer's counsel substantially in
the form attached as Exhibit F, dated as of the Closing Date;
14.2.5 The Purchase Price in accordance with Section 3. 1
hereof; and
14.2.6 Such additional information, materials, agreements,
documents and instruments as Seller and its counsel may reasonably request in
order to consummate the Closing.
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<PAGE> 30
ARTICLE 15
SURVIVAL, INDEMNIFICATION. ETC.
-------------------------------
15.1 SURVIVAL OF REPRESENTATIONS, ETC. It is the express intention and
agreement of the parties to this Agreement that all covenants and agreements
(together, "Agreements") and all representations and warranties (together,
"Warranties") made by Buyer and Seller in this Agreement shall survive the
Closing (regardless of any knowledge, investigation, audit or inspection at any
time made by or on behalf of Buyer or Seller) as follows:
15.1.1 The Agreements shall survive the Closing for a period
from the Closing Date equal to the statute of limitations for written contracts
in California.
15.1.2 The Warranties in Sections 6.2, 6.5, 7.2, the third
sentence of 7.5, 7.7, 7.18 and 7.20 shall survive the Closing without
limitation.
15.1.3 The Warranties in SECTION 7.6 or otherwise relating to
the federal, state, local or foreign tax obligations of Seller shall survive the
Closing for the period of the applicable statute of limitations plus any
extensions or waivers granted or imposed with respect thereto.
15.1.4 The Warranties in Section 7.11 shall survive for a
period of thirty (30) months from the Closing Date.
15.1.5 All other Warranties shall survive for a period of
eighteen (18) months from the Closing Date.
15.1.6 The right of any party to recover Damages (as defined
in Section 15.2. 1) pursuant to Section 15.2 shall not be affected by the
expiration of any Warranties as set forth herein, provided that notice of the
existence of any Damages (but not necessarily the fixed amount of any such
Damages) has been given by the indemnified party to the indemnifying party prior
to such expiration.
15.1.6 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyer or Seller may bring any
action for actual fraud (a "Fraud Action"), regardless of whether such actual
fraud also included a breach of any Agreement or Warranty; provided, however,
that any Fraud Action must be brought within the period of the applicable
statute of limitations plus any extensions or waivers granted or imposed with
respect thereto.
15.1.7. Notwithstanding the foregoing, Seller agrees that the
provisions of Section 9.7 shall survive the Closing for three (3) years.
15.2 INDEMNIFICATION.
----------------
15.2.1 Seller shall defend, indemnify and hold harmless Buyer
from and against any and all losses, costs, damages, liabilities and expenses,
including reasonable attorneys' fees and expenses ("Damages") incurred by Buyer
arising out of or related to: (a) any breach of the
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<PAGE> 31
Warranties given or made by Seller in this Agreement; (b) any breach of the
Agreements made by Seller in this Agreement; (c) the Retained Liabilities; and
(d) any failure of the parties to comply with any "bulk sales" laws applicable
to the transactions contemplated hereby.
15.2.2 Buyer shall defend, indemnify and hold harmless Seller
from and against any and all Damages incurred by Seller arising out of or
related to: (a) any breach of the Warranties given or made by Buyer in this
Agreement; (b) any breach of the Agreements made by Buyer in this Agreement, and
(c) the Assumed Liabilities.
15.3 PROCEDURES: THIRD PARTY AND DIRECT INDEMNIFICATION CLAIMS. The
indemnified party agrees to give written notice, within thirty (30) days
following its discovery thereof, to the indemnifying party of any demand, suit,
claim or assertion of liability by third parties or other circumstances that
could give rise to an indemnification obligation hereunder against the
indemnifying party (hereinafter collectively "Claims," and individually a
"Claim"), it being understood that the failure to give such notice shall not
affect the indemnified party's right to indemnification and the indemnifying
party's obligation to indemnify as set forth in this Agreement, unless the
indemnifying party's ability to contest, defend or settle with respect to such
Claim is thereby demonstrably and materially prejudiced. The parties also agree
that any claim for Damages arising directly between the parties relating to this
Agreement may be brought at any time within the applicable survival period
specified in Section 15. 1.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to Section 15.2 resulting from any Claim
shall be subject to the following additional terms and conditions:
15.3.1 The indemnifying party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
or opposition to such Claim.
15.3.2 In the event that the indemnifying party shall elect
not to undertake such defense or opposition, or within (10) days after notice of
any such Claim from the indemnified party shall fail to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
15.3.3 Anything in this Section 15.3 to the contrary
notwithstanding: (a) the indemnified party shall have the right, at its own cost
and expense, to participate in the defense, opposition, compromise or settlement
of the Claim; (b) the indemnifying party shall not, without the indemnified
party's written consent, settle or compromise any Claim or consent to entry of
any judgment which does not include as an unconditional term thereof the giving
by the claimant or the plaintiff to the indemnified party of a release from all
liability in respect of such Claim, and (c) in the event that the indemnifying
party undertakes defense of or opposition to any Claim, the indemnified party,
by counsel or other representative of its own choosing and at its sole cost and
expense, shall have the right to consult with the indemnifying party and its
counsel
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<PAGE> 32
or other representatives concerning such Claim and the indemnifying party and
the indemnified party, and their respective counsel or other representatives,
shall cooperate in good faith with respect to such Claim.
15.3.4 No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
15.3.5 No indemnified party shall be entitled to assert a
claim for indemnification under Section 15.2.1(a) or Section 15.2.2(a) unless
and then only to the extent that the aggregate damages for all such claims
exceed $15,000, and the maximum liability of either party for indemnification
under such Subsections shall be $250,000, except with respect to claims relating
to title, taxes, License revocation, and environmental matters (which shall not
be so limited) or as otherwise set forth in Sections 16.2, 16.3 and 16.4 hereof.
ARTICLE 16
TERMINATION RIGHTS
------------------
16.1 TERMINATION. This Agreement may be terminated at any time prior to
Closing as follows:
16.1.1 Upon the mutual written consent of Buyer and Seller,
this Agreement may be terminated on such terms and conditions as so agreed; or
16.1.2 By written notice of Buyer to Seller if Seller breaches
in any material respect any of its representations or warranties or defaults in
any material respect in the observance or in the due and timely performance of
any of its covenants or agreements herein contained and such breach or default
shall not be cured within thirty (30) days of the date of notice of breach or
default served by Buyer; or
16.1.3 By written notice of Seller to Buyer if Buyer breaches
in any material respect any of its representations or warranties or defaults in
any material respect in the observance or in the due and timely performance of
any of its covenants or agreements herein contained and such breach or default
shall not be cured within thirty (30) days of the date of notice of breach or
default served by Seller; or
16.1.4 By written notice of Buyer to Seller or by Seller to
Buyer if the FCC denies the FCC Application;
16.1.5 By written notice of Buyer to Seller, or by Seller to
Buyer, if any court of competent jurisdiction shall have issued an order, decree
or ruling (which then remains in effect) or taken any other action restraining,
enjoining or otherwise prohibiting the transactions contemplated by this
Agreement, or by Buyer, if any court, legislative body or governmental or
regulatory authority has taken, or is reasonably expected to take, action that
would make
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<PAGE> 33
the consummation of the transactions contemplated hereby inadvisable or
undesirable as determined by Buyer in its sole discretion reasonably exercised;
16.1.6 By written notice of Buyer to Seller, or by Seller to
Buyer, if the Closing shall not have been consummated on or before June 30,
2000.
16.1.7 By written notice of Buyer to Seller if it shall become
apparent in both Seller's and Buyer's judgment reasonably exercised that any
condition to Buyer's obligation to close as set forth in Article 11 hereof will
not be satisfied on or before June 30, 2000.
16.1.8 By written notice of Buyer to Seller under the
conditions set forth in Section 9.2 hereof.
Notwithstanding the foregoing, no party hereto may effect a termination
hereof if such party is in material default or breach of this Agreement.
16.2 LIABILITY. Except as set forth in Section 16.4 below, the
termination of this Agreement under Section 16.1 shall not relieve any party of
any liability for breach of this Agreement prior to the date of termination.
16.3 MONETARY DAMAGES. Specific Performance and Other Remedies. The
parties recognize that if Seller refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate Buyer for
its injury. Buyer shall therefore be entitled to obtain specific performance of
the terms of this Agreement in addition to any other remedies, including but not
limited to monetary damages, that may be available to it. If any action is
brought by Buyer to enforce this Agreement, Seller shall waive the defense that
there is an adequate remedy at law. In the event of a default by Seller, which
results in the filing of a lawsuit for damages, specific performance, or other
remedy, Buyer shall be entitled to reimbursement by Seller of reasonable legal
fees and expenses incurred by Buyer.
16.4 SELLER'S LIQUIDATED DAMAGES. As more fully described in the Escrow
Agreement, in the event this Agreement is terminated because of Buyer's material
breach of this Agreement, and all other conditions to Closing are at such time
satisfied or waived (other than such conditions as can reasonably be satisfied
by Closing), then the Escrow Deposit shall be delivered to Seller, and the
proceeds thereof shall constitute liquidated damages. It is understood and
agreed that such liquidated damages amount represents Buyer's and Seller's
reasonable estimate of actual damages and does not constitute a penalty.
Recovery of liquidated damages shall be the sole and exclusive remedy of Seller
against Buyer for failing to consummate this Agreement as a result of Buyer's
material breach hereof, and shall be applicable regardless of the actual amount
of damages sustained and all other remedies are deemed waived by Seller.
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<PAGE> 34
ARTICLE 17
MISCELLANEOUS PROVISIONS
------------------------
17.1 RISK OF LOSS. (a) The risk of loss or damage to any of the
Stations Assets prior to the Closing Date, shall be upon Seller. Seller shall
repair, replace and restore any such damaged or lost Stations Asset to its prior
condition as soon as possible and in no event later than forty-five (45) days
following the loss or damage; provided, however, that in the event any such loss
or damage of the Stations Assets exists on the Closing Date, then
notwithstanding any other provision hereto, Buyer at its option may, at its
election, (i) extend the Closing Date for a period of up to sixty (60) days
until such time as Seller shall have repaired, replaced and restored any such
damaged or lost Stations Asset to its prior condition, (ii) deduct from the
Purchase Price that amount which Buyer and Seller reasonably determine to be
sufficient to cover any such loss or damage and close the transaction on the
Closing Date, or (iii) require Seller to pay to Buyer all proceeds of insurance
received by Seller and not then paid by Seller for such repair, replacement or
restoration, and assign to Buyer all rights to receive proceeds of insurance on
account of such damage or destruction.
(b) In the event of any material damage to any Station or upon the
occurrence of any other event which materially impairs broadcast transmissions
of any Station in the normal and usual manner and substantially in accordance
with the respective Station Licenses of the Stations, Seller shall provide
prompt notice thereof to Buyer and the Closing Date shall be postponed until
such transmission in accordance with the applicable Station Licenses has been
resumed. The postponed Closing Date shall be such date within the effective
period of the FCC's consent to transfer of the Stations Licenses to Buyer as
Buyer may designate by not less than five (5) days' prior notice to Seller. In
the event Seller's facilities cannot be restored within the effective period of
the FCC's consent to transfer of the Stations Licenses to Buyer unless, in
either Buyer's reasonable judgment, the damage to the Station(s) could
materially adversely affect the operations of the Station(s) on a continuing
basis, the parties shall join in an application or applications requesting the
FCC to extend the effective period of its consent for a period not to exceed one
hundred twenty (120) days. If no such application is filed with the FCC, or if
any such application is filed with the FCC and the facilities have not been
restored so that the Closing Date may occur within such extended period or any
agreed extension thereof, Buyer shall have the right, by providing written
notice of termination to Seller within ten (10) days after the expiration of the
effective period or such 120-day period or any agreed extension hereof, as the
case may be, to terminate this Agreement forthwith without any further
obligation to either party and, upon such termination, the Escrow Deposit and
the earnings thereon shall be paid to Buyer pursuant to the Escrow Agreement.
The foregoing notwithstanding, if any damage to the business or property of
Seller requires any Station to be taken off the air or if broadcast
transmissions of such Station in accordance with the applicable FCC Licenses is
interrupted for any other reason or if such Station is operated at less than 80%
of its authorized licensed aural effective radiated power, in any such case for
a total of 240 hours (whether or not consecutive) and such Station has not been
restored within the effective period of the FCC's consent, then the Buyer may
terminate this Agreement upon written notice to Seller without any further
obligation to either party and, upon such termination, the Escrow Deposit and
the earnings thereon shall be paid to Buyer.
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<PAGE> 35
17.2 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. Unless the context
otherwise requires: (a) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof, (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule l2b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to '$' or dollar amounts will be to lawful currency of the United
States of America.
17.3 FURTHER ASSURANCES. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyer, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order more effectively to
consummate the transactions contemplated hereby to vest in Buyer good and
marketable title to the Stations Assets being transferred hereunder in
accordance with the terms hereof, and Buyer shall from time to time, at the
request of and without further cost or expense to Seller, execute and deliver
such other instruments and take such other actions as may reasonably be
requested in order more effectively to relieve Seller of any obligations being
assumed by Buyer hereunder.
17.4 PRESERVATION OF RECORDS. Subject to Section 10. 1 hereof, Buyer
hereby agrees that it will preserve and make available to Seller and its
attorneys and accountants (including the right to inspect and copy at Seller's
cost), during normal business hours and upon reasonable advance notice, for
three (3) years after the Closing Date, such of the books, records, files,
correspondence, memoranda and other documents referred to in this Agreement as
Seller may reasonably require for the preparation of tax reports and returns,
the preparation of financial statements, or the preparation of a response to any
claim by a third party against Seller.
17.5 BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Neither Buyer nor Seller may voluntarily or involuntarily
assign its interest under this Agreement without the prior written consent of
the other; provided, however, that no such permitted assignment shall relieve
Buyer of its obligations hereunder in the event that its assignee fails to
perform the obligations delegated. All covenants, agreements, statements,
representations, warranties and indemnities in this Agreement by and on behalf
of any of the parties hereto shall bind and inure to the benefit of their
respective successors and permitted assigns of the parties hereto. In the event
Buyer finds it necessary or is required to provide to a third party a collateral
assignment of the Buyer's interest in this Agreement and/or any related
documents, Seller shall cooperate with the Buyer and any third party requesting
such assignment including but not limited to signing a consent and
acknowledgment of such assignment.
17.6 AMENDMENTS. No amendment, waiver of compliance with any provision
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
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<PAGE> 36
17.7 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.8 GOVERNING LAW. The construction and performance of this Agreement
shall be governed by the laws of the State of California, without giving effect
to the choice of law provisions thereof.
17.9 NOTICES. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been duly delivered and received on the
date of personal delivery, on the third day after deposit in the U.S. mail if
mailed by registered or certified mail, postage prepaid and return receipt
requested, on the day after delivery to a nationally recognized overnight
courier service if sent by an overnight delivery service for next morning
delivery or when dispatched by facsimile transmission (with the facsimile
transmission confirmation being deemed conclusive evidence of such dispatch) and
shall be addressed to the following addresses, or to such other address as any
party may request, in the case of Seller, by notifying Buyer, and in the case of
Buyer, by notifying Seller:
To Buyer: Commonwealth Communications, LLC
2550 Fifth Avenue, Suite 630
San Diego, California 92103
Attn: Dex Allen
Fax: (619) 233-3461
Copy to: Edwards & Angell, LLP
101 Federal Street
Boston, Massachusetts 02110
Attn: Stephen O. Meredith, Esq.
Fax: (617) 439-4170
To Seller: Regent Broadcasting of
Lake Tahoe, Inc.
50 East RiverCenter Blvd.
Suite 180
Covington, Kentucky 41011
Attn: Terry S. Jacobs, Chairman
Fax: (606) 292-0352
Copy to: Strauss & Troy
The Federal Reserve Building
150 East Fourth Street
Cincinnati, Ohio 45202
Attn: Alan C. Rosser, Esq.
Fax: (513) 241-8259
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<PAGE> 37
17.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile, each of which will be deemed an original and all
of which together will constitute one and the same instrument.
17.11 NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns any
rights or remedies under or by reason of this Agreement.
17.12 SEVERABILITY. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.13 ENTIRE AGREEMENT. This Agreement and the schedules and exhibits
hereto embody the entire agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and understandings relating
to the matters provided for herein.
17.14. CHANGES TO FACILITIES. Seller agrees that with Seller's consent,
which consent shall not be unreasonably withheld, Buyer may, at Buyer's expense,
file with the FCC applications, petitions, or other papers (herein "FCC
Filings") as deemed necessary by Buyers to change the facilities of the
Stations. Upon request of Buyers, and as often as required by Buyers, Seller
shall promptly provide to Buyers (pursuant to Section 73.3517 of the FCC's
Rules) a written statement or statements which specifically grant Seller's
permission to Buyers (a) to file such application, petition, or other papers,
and (b) to file the statement with the application, petition or other papers.
Any FCC action in response to any application filed by Buyers pursuant to this
Section 17.14 shall not be deemed to constitute a condition precedent to the
Buyers' obligation to consummate the transactions contemplated by this
Agreement.
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<PAGE> 38
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT LICENSEE OF LAKE TAHOE, INC.
By: /s/ Terry S. Jacobs
-------------------------------------
Name: Terry S. Jacobs
-------------------------------------
Title: Chairman
-------------------------------------
REGENT BROADCASTING OF LAKE TAHOE, INC.
By: /s/ Terry S. Jacobs
-------------------------------------
Name: Terry S. Jacobs
-------------------------------------
Title: Chairman
-------------------------------------
COMMONWEALTH COMMUNICATIONS, LLC
By: Commonwealth II, LLC, its sole member
By: Alta/Commonwealth, Inc., its Manager
By: /s/ Dex Allen
-------------------------------------
Name: Dex Allen
-------------------------------------
Title: President
-------------------------------------
COMMONWEALTH LICENSEE SUBSIDIARY, LLC
By: Commonwealth Communications, LLC,
its sole member
By: Commonwealth II, LLC, its sole member
By: Alta/Commonwealth, Inc., its Manager
By: /s/ Dex Allen
-------------------------------------
Name: Dex Allen
-------------------------------------
Title: President
-------------------------------------
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<PAGE> 1
EXHIBIT 2(b)
ASSET PURCHASE AGREEMENT
by and among
NEW WAVE BROADCASTING, L.P.
("Seller")
and
REGENT BROADCASTING OF EL PASO, INC.
and
REGENT LICENSEE OF EL PASO, INC.
(collectively, "Buyers")
<PAGE> 2
TABLE OF CONTENTS
-----------------
Page
ARTICLE I - PURCHASE OF ASSETS
1.1 Transfer of Assets ...................................1
1.2 Excluded Assets ......................................3
ARTICLE 2 ASSUMPTION OF OBLIGATIONS
2.1 Assumption of Obligations ............................4
2.2 Retained Liabilities .................................4
ARTICLE 3 CONSIDERATION
3.1 Delivery of Consideration ............................5
3.2 Escrow Deposit .......................................5
3.3 Proration of Income and Expenses .....................6
3.4 Allocation of Purchase Price .........................6
3.5 Adjustment for Barter ................................7
3.6 Collection of Accounts Receivable ....................7
ARTICLE 4 CLOSING
4.1 Closing ..............................................8
ARTICLE 5 GOVERNMENTAL CONSENTS
5.1 FCC Consent ..........................................8
5.2 FCC Application ......................................9
5.3 Antitrust ............................................9
ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF BUYERS
6.1 Organization and Standing ............................9
6.2 Authorization and Binding Obligation .................9
6.3 Qualification As Assignee ............................9
6.4 Bankruptcy ..........................................10
6.5 Committed Sources of Financing ......................10
6.6 Absence of Conflicting Agreements or
Required Consents ...................................10
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6.7 Commissions or Finder's Fees ........................10
6.8 Litigation ..........................................10
ARTICLE 7 REPRESENTATIONS AND WARRANTIES OF SELLER
7.1 Organization and Standing ...........................11
7.2 Authorization and Binding Obligation ................11
7.3 Absence of Conflicting Agreements or
Required Consents ...................................11
7.4 Government Authorizations ...........................11
7.5 Compliance with FCC Regulations .....................12
7.6 Taxes .............................................13
7.7 Personal Property ...................................13
7.8 Real Property .......................................13
7.9 Contracts ...........................................14
7.10 Status of Contracts, etc. ...........................15
7.11 Environmental .......................................15
7.12 Intellectual Property ...............................15
7.13 Financial Statements ................................16
7.14 Personnel Information ...............................16
7.15 Litigation ..........................................17
7.16 Compliance With Laws ................................17
7.17 Employee Benefit Plans ..............................17
7.18 Commissions or Finder's Fees ........................17
7.19 Conduct of Business in Ordinary Course;
Adverse Changes ......................................18
7.20 Instruments of Conveyance; Good Title ...............18
7.21 Undisclosed Liabilities .............................18
7.22 Full Disclosure .....................................18
ARTICLE 8 COVENANTS OF BUYERS
8.1 Closing .............................................18
8.2 Notification ........................................19
8.3 No Inconsistent Action 19
ARTICLE 9 COVENANTS OF SELLER
9.1 Pre-Closing Covenants .................................19
9.2 Notification ..........................................21
9.3 No Inconsistent Action ................................21
9.4 Closing.................................................21
9.5 Other Items ...........................................21
9.6 Exclusivity ...........................................21
9.7 Extension of Tower Lease ..............................22
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ARTICLE 10 JOINT COVENANTS
10.1 Confidentiality .....................................22
10.2 Cooperation .........................................23
10.3 Control of Stations .................................23
10.4 Consents to Assignment ..............................23
10.5 Filings .............................................23
10.6 Bulk Sales Laws .....................................24
10.7 Employee Matters ....................................24
ARTICLE 11 CONDITIONS OF CLOSING BY BUYERS
11.1 Representations, Warranties and
Covenants ...........................................24
11.2 Governmental Consents ...............................25
11.3 Governmental Authorizations .........................25
11.4 Adverse Proceedings .................................25
11.5 Third-Party Consents ................................25
11.6 Closing Documents ...................................25
11.7 Environmental Studies ...............................25
11.8 No Adverse Change ...................................26
11.9 Engineering Inspection ..............................26
ARTICLE 12 CONDITIONS OF CLOSING BY SELLER
12.1 Representations, Warranties and Covenants ...........27
12.2 Governmental Consents ...............................27
12.3 Adverse Proceedings .................................27
12.4 Closing Documents ...................................27
ARTICLE 13 TRANSFER TAXES; FEES AND EXPENSES
13.1 Expenses ............................................28
13.2 Specific Charges ....................................28
ARTICLE 14 DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 Seller's Documents ..................................28
14.2 Buyers' Documents ...................................29
ARTICLE 15 SURVIVAL, INDEMNIFICATION, ETC.
15.1 Survival of Representations, Etc ....................30
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15.2 Indemnification .....................................31
15.3 Procedures: Third Party and Direct
Indemnification Claims ..............................31
ARTICLE 16 TERMINATION RIGHTS
16.1 Termination .........................................32
16.2 Liability ...........................................33
16.3 Monetary Damages, Specific Performance
and Other Remedies ..................................33
16.4 Seller's Liquidated Damages .........................33
ARTICLE 17 MISCELLANEOUS PROVISIONS
17.1 Risk of Loss ........................................34
17.2 Certain Interpretive Matters and Definitions ........34
17.3 Further Assurances ..................................34
17.4 Preservation of Records .............................34
17.5 Benefit and Assignment ..............................35
17.6 Amendments ..........................................35
17.7 Headings ............................................35
17.8 Governing Law .......................................35
17.9 Notices .............................................35
17.10 Counterparts ........................................36
17.11 No Third Party Beneficiaries ........................36
17.12 Severability ........................................36
17.13 Entire Agreement ....................................36
17.14 Disclosure Exhibits and Schedules ....................36
17.15 Partnership Equity ...................................37
LIST OF SCHEDULES AND EXHIBITS
------------------------------
Schedule 1.2.10 Excluded Assets
6.4 Third Party Consents
7.4 Stations Licenses, Etc.
7.7 Tangible Personal Property
7.8 Real Property
7.9 Contracts (including identification of Material
Contracts)
7.11 Environmental Matters
7.12 Intellectual Property
7.13 Financial Statements
7.14 Personnel Information
7.15 Litigation
7.16 Compliance With Laws
7.17 Employee Benefit Plans
9.1 Leased Real Estate not Requiring Title Commitment
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Exhibit A Indemnification Escrow Agreement
B Deposit Escrow Agreement
C Assignment and Assumption Agreement
D Seller's Opinion of Counsel
E Seller's Opinion of FCC Counsel
F Non-Competition Agreement
G Buyers' Opinion of Counsel
H Form of Letter of Credit
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ASSET PURCHASE AGREEMENT
------------------------
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
this 13th day of September, 1999 by and among NEW WAVE BROADCASTING, L.P., a
Delaware limited partnership ("Seller") and REGENT BROADCASTING OF EL PASO,
INC., a Delaware corporation ("RBI"), and REGENT LICENSEE OF EL PASO, INC., a
Delaware corporation ("RLI") (RBI and RLI collectively referred to as "Buyers").
RECITALS
--------
WHEREAS, Seller owns and operates radio stations KLAQ-FM, KSII-FM, and
KROD-AM, licensed to El Paso, Texas (together the "Stations" and each
individually, a "Station"), pursuant to licenses issued by the Federal
Communications Commission ("FCC"), and
WHEREAS, Seller desires to sell, and Buyers desire to purchase, certain
assets and assume certain obligations associated with the ownership and
operation of the Stations, all on the terms and subject to the conditions set
forth herein.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements hereinafter set forth, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE I
PURCHASE OF ASSETS
------------------
1.1 TRANSFER OF ASSETS. On the terms and subject to the conditions
hereof and subject to Section 1.2, on the Closing Date (as hereinafter defined),
Seller shall sell, assign, transfer, convey and deliver to Buyers, Buyers shall
purchase, and RBI shall assume from Seller, all of the right, title and interest
of Seller in and to all of the assets, properties, interests and rights of
Seller of whatsoever kind and nature, real and personal, tangible and
intangible, owned or leased (to the extent of Seller's leasehold interest) by
Seller as the case may be, wherever situated, which are used or useful in the
operation of the Stations (the "Stations Assets"), including but not limited to
all of Seller's right, title and interest in and to the assets, properties,
interests and rights described in this Section 1. 1:
1.1.1 all licenses, permits and other authorizations issued to
Seller by any governmental or regulatory authority including without limitation
those issued by the FCC (the licenses, permits and authorizations issued by the
FCC are hereafter referred to as the "Stations Licenses") used or held for use
in connection with the operation of the Stations, including but not limited to
those described in SCHEDULE 7.4, along with renewals or modifications of such
items, and all applications pertaining thereto, between the date hereof and the
Closing Date;
1.1.2 all equipment, electrical devices, broadcast towers,
antennae, cables, tools, hardware, office furniture and fixtures, office
materials and supplies, inventory, motor vehicles, spare parts and all other
tangible personal property of every kind and description, and Seller's rights
therein, owned, leased (to the extent of Seller's leasehold interest) or held by
Seller and
<PAGE> 8
used or held for use in connection with the operations of the
Stations, including but not limited to those items described or listed in
SCHEDULE 7.7, together with any replacements thereof and additions thereto, made
between the date hereof and the Closing Date, and less any retirements or
dispositions thereof made between the date hereof and the Closing Date in the
ordinary course of business and consistent with past practices of Seller;
provided, however, Seller agrees that the value of all such assets retired or
disposed of and not replaced with an asset of like kind and quality shall not
exceed $25,000 in the aggregate unless Seller has obtained the prior written
approval of RBI which shall not be unreasonably withheld;
1.1.3 all contracts, agreements, leases and legally binding
contractual rights of any kind, written or oral, relating to the operation of
the Stations and which are listed in SCHEDULE 7.8 and SCHEDULE 7.9, together
with (a) all advertising contracts entered into or acquired by Seller between
the date hereof and the Closing Date in the ordinary course of business,
consistent with past practices of Seller; and (b) any other contracts,
agreements, leases and legally binding contractual rights entered into or
acquired by Seller between the date hereof and the Closing Date, which RBI
specifically agrees at Closing to assume (collectively the "Contracts");
provided, however, Buyers shall be entitled to a credit against the Purchase
Price for the amount, if any, by which the aggregate net value of the Stations'
Barter Payable as of the Closing Date exceeds the aggregate net value of the
Stations' Barter Receivable as of the Closing Date by more than $20,000.
1.1.4 all of Seller's rights in and to the call letters of the
Stations, and any variation thereof, as well as all of Seller's rights in and to
all trademarks, trade names, service marks, franchises, copyrights, including
registrations and applications for registration of any of them, computer
software, programs and programming material of whatever form or nature, jingles,
slogans, the Stations' logos and all other logos or licenses to use same and all
other intangible property rights of Seller, which are used or held for use in
connection with the operation of the Stations, including but not limited to
those listed in SCHEDULE 7.12 (collectively, the "Intellectual Property")
together with any associated goodwill and any additions thereto between the date
hereof and the Closing Date;
1.1.5 all programming materials and elements of whatever form
or nature owned by Seller, whether recorded on tape or other medium or intended
for live performance, and all copyrights owned by or licensed to Seller that are
used or useful in connection with the operation of the Stations, including all
such programs, materials, elements and copyrights acquired by Seller between the
date hereof and the Closing Date;
1.1.6 all of Seller's rights in and to all the files,
documents, records, and books of account relating to the operation of the
Stations or to the Stations Assets, including, without limitation, the Stations'
local public files, programming information and studies, blueprints, technical
information and engineering data, news and advertising studies or consulting
reports, marketing and demographic data, sales correspondence, lists of
advertisers, promotional materials, credit and sales reports and copies of
filings with the FCC and all written Contracts to be assigned hereunder, logs,
software programs and copies of books and records relating to employees,
financial, accounting and operation matters, but excluding records relating
solely to any Excluded Asset (as hereinafter defined);
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1.1.7 all of Seller's rights under manufacturers' and vendors'
warranties relating to items included in the Stations Assets and all similar
rights against third parties relating to items included in the Stations Assets;
and
1.1.8 the real property and fixtures thereon described in
Section 7.8 (including all real property owned or in the process of being
acquired by Seller).
The Stations Assets shall be transferred to RBI (except for the
Stations' Licenses which shall be transferred to RLI) free and clear of all
debts, security interests, mortgages, trusts, claims, pledges or other liens,
liabilities, encumbrances or rights of third parties whatsoever
("Encumbrances"), except for Permitted Encumbrances, if any, as provided for in
Section 7.8.2 and except as set forth in SCHEDULE 7.7. and SCHEDULE 7.8.
1.2 EXCLUDED ASSETS. Notwithstanding anything to the contrary contained
herein, it is expressly understood and agreed that the Stations Assets shall not
include the following assets along with all rights, title and interest therein
(the "Excluded Assets"):
1.2.1 all cash and cash equivalents of Seller on hand and/or
in banks, including without limitation certificates of deposit, commercial
paper, treasury bills, marketable securities, notes or other entitlements
evidencing loan receivables, asset or money market accounts and all such similar
accounts or investments;
1.2.2 all investment securities and accounts receivable, notes
receivable, or other entitlements evidencing notes receivables for services
performed by Seller in connection with the operation of the Stations prior to
the Closing Date;
1.2.3 subject to the limitation set forth in Section 1.1.2 of
this Agreement, all tangible and intangible personal property of Seller disposed
of or consumed in the ordinary course of business consistent with the past
practices of Seller between the date of this Agreement and the Closing Date;
1.2.4 all Contracts that have terminated or expired prior to
the Closing Date in the ordinary course of business consistent with the past
practices of Seller and any contract not listed on SCHEDULE 7.8 or 7.9 unless
RBI agrees, in writing, to assume such contract;
1.2.5 Seller's partnership minute books and records, and such
other books and records as pertain to the organization, existence or
capitalization of Seller and duplicate copies of such records as are necessary
to enable Seller to file its tax returns and reports, as well as any other
records or materials relating to Seller generally and not involving or relating
to the Stations Assets or the operation or operations of the Stations;
1.2.6 contracts of insurance, and any insurance proceeds or
claims made by, Seller relating to property or equipment repaired, replaced or
restored by Seller prior to the Closing Date;
1.2.7 all pension, profit sharing or cash or deferred (Section
401 (k)) plans and trusts and the assets thereof and any other employee benefit
plan or arrangement and the assets thereof, if any, maintained by Seller;
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1.2.8 any and all claims of Seller for tax refunds;
1.2.9 Seller's partnership name and the right to the name "New
Wave" or any variant of the foregoing; and
1.2.10 any right, property or asset described in SCHEDULE
1.2.10 (including without limitation any assets personally owned by the general
partner or employees of Seller and listed on said Schedule).
ARTICLE 2
ASSUMPTION OF OBLIGATIONS
-------------------------
2.1 ASSUMPTION OF OBLIGATIONS. Subject to the provisions of this Section
2.1, Section 2.2 and Section 3.3, on the Closing Date, RBI shall assume the
obligations of Seller arising or to be performed on and after the Closing Date
(except to the extent such obligations represent liabilities for activities,
events or transactions occurring, or conditions existing, on or prior to the
Closing Date) under: (a) the Contracts; (b) COBRA for employees of Seller at the
Stations who are not hired by RBI if Seller terminates its existing medical
policy within ninety (90) days after the Closing Date; and (c) all property
taxes and other governmental charges on the Stations Assets. All of the
foregoing liabilities and obligations shall be referred to herein collectively
as the "Assumed Liabilities."
2.2 RETAINED LIABILITIES. Notwithstanding anything contained in this
Agreement to the contrary, Buyers expressly do not, and shall not, assume or
agree to pay, satisfy, discharge or perform and will not be deemed by virtue of
the execution and delivery of this Agreement or any agreement, instrument or
document delivered pursuant to or in connection with this Agreement or otherwise
by reason of or in connection with the consummation of the transactions
contemplated hereby or thereby, to have assumed or to have agreed to pay,
satisfy, discharge or perform, any liabilities, obligations or commitments of
Seller of any nature whatsoever whether accrued, absolute, contingent or
otherwise and whether or not disclosed to Buyer, other than as to RBI the
Assumed Liabilities. Seller will retain and pay, satisfy, discharge and perform
in accordance with the terms thereof, all liabilities and obligations of the
Seller, other than the Assumed Liabilities, including but not limited to, the
obligation to assume, perform, satisfy or pay any liability, obligation,
agreement, debt, charge, claim, judgment or expense incurred by or asserted
against Seller related to taxes, environmental matters, pension or retirement
plans or trusts, profit-sharing plans, employment contracts, employee benefits,
severance of employees, product liability or warranty, negligence, contract
breach or default, or other obligations, claims or judgments asserted against
Buyers as successor in interest to Seller. All of such liabilities, obligations
and commitments of Seller described in this Section 2.2 shall be referred to
herein collectively as the "Retained Liabilities."
ARTICLE 3
CONSIDERATION
-------------
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3.1 DELIVERY OF CONSIDERATION. In consideration for the sale of the
Stations Assets to Buyers, in addition to the assumption of certain obligations
of Seller pursuant to Section 2.1 above, Buyers shall, at the Closing (as
hereinafter defined), deliver to Seller consideration in the amount of
$23,500,000.00, subject to adjustment pursuant to the provisions of Sections 3.2
and 3.3 below (the "Purchase Price") in cash by wire transfer. Notwithstanding
the foregoing, the parties agree that at the Closing, Buyers, Seller and Star
Media Group, Inc., as Escrow Agent (the "Indemnification Escrow Agent"), shall
enter into an Indemnification Escrow Agreement in the form of EXHIBIT A hereto
(the "Indemnification Escrow Agreement") pursuant to which Seller shall deposit
with the Indemnification Escrow Agent $250,000.00, which funds shall be held in
escrow for a period of up to twenty-four (24) months following the Closing Date
and will be used to satisfy indemnification claims of Buyers pursuant to Section
15.2.1 hereof, and which funds shall otherwise be administered and released as
specifically provided for in the Indemnification Escrow Agreement. Pursuant to
the Indemnification Escrow Agreement, (a) at the end of 14 months after the
Closing Date and provided Seller then has a "Partnership Equity" (as calculated
in accordance with Section 17.15) of at least $2,000,000, as confirmed by a
certificate delivered to Buyers and the Indemnification Escrow Agreement showing
the calculation thereof, $125,000.00 of the Indemnification Escrow, together
with the earnings thereon less the amount of any then unresolved pending claims
by the Buyers shall be released from the Escrow and paid to Seller; and (b) on
the second anniversary of the Closing Date, the balance of the Indemnification
Escrow together with earnings thereon less the amount of any then unresolved
pending claims by Buyer shall be released from the Escrow and paid to the
Seller.
3.2 ESCROW DEPOSIT. (a) Within ten business days of the execution and
delivery of this Agreement, Buyers, Seller and Star Media Group, Inc., as Escrow
Agent (the "Deposit Escrow Agent"), shall enter into a Deposit Escrow Agreement
in the form of EXHIBIT B hereto (the "Deposit Escrow Agreement") pursuant to
which Buyers shall deposit the amount described below as a deposit on the amount
of the Purchase Price. Such amounts held in escrow shall be applied as set forth
herein and in the Deposit Escrow Agreement.
(b) Pursuant to the terms of the Deposit Escrow Agreement,
Buyers shall wire transfer $1,500,000.00, or alternatively, deliver an
irrevocable, stand-by letter of credit for such amount in substantially the form
attached as Exhibit H to an escrow account established pursuant to the Deposit
Escrow Agreement (the "Escrow Deposit"). At the Closing, the Escrow Deposit, if
in the form of cash, shall be applied to the Purchase Price to be paid to Seller
and the interest accrued thereon shall be paid to Buyers, or if in the form of a
letter of credit, shall be returned to Buyers. As more fully described in the
Deposit Escrow Agreement: (a) in the event this Agreement is terminated solely
because of Buyers' material breach of this Agreement and all other conditions to
Closing are at such time satisfied or waived (other than such conditions as can
reasonably be expected to be satisfied by the Closing), the Escrow Deposit shall
be paid to or delivered for draw thereon to Seller as liquidated damages as
provided in Section 16.4 hereto for Buyers' material breach of this Agreement
(the payment of such sum to Seller shall discharge any liability Buyers may have
to Seller), and the interest accrued on the Escrow Deposit, if any, shall be
paid to Seller; and (b) in the event this Agreement is terminated under any
circumstances other than those set forth in the immediately preceding clause
(a), the Escrow Deposit and any interest accrued thereon shall be paid or
returned to Buyers.
3.3 PRORATION OF INCOME AND EXPENSES.
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3.3.1 Except as otherwise provided herein, all items of income
and expense, deposits, reserves and prepaid and deferred income and expenses
relating to the Stations Assets or the Assumed Liabilities and arising from the
conduct of the business and operations of the Stations shall be prorated between
Buyers and Seller in accordance with generally accepted accounting principles as
of 11:59 p.m. local time, on the date immediately preceding the Closing Date.
Such prorations shall include, without limitation, all ad valorem, real estate,
property taxes and other governmental charges on the Stations Assets (but
excluding taxes arising by reason of the transfer of the Stations Assets as
contemplated hereby which shall be paid as set forth in Section 13.2), business
and license fees, frequency discounts, music and other license fees (including
any retroactive adjustments thereof, which retroactive adjustments shall not be
subject to the ninety-day limitation set forth in Section 3.3.2), utility
expenses, wages, salaries, vacation and sick pay and other employee benefits for
employees hired by RBI, amounts due or to become due under Contracts, any
negative barter balance in excess of $20,000, rents and similar prepaid and
deferred items.
3.3.2 Except as otherwise provided herein, the prorations and
adjustments contemplated by this Section 3.3, to the extent practicable, shall
be made on the Closing Date. As to those prorations and adjustments not capable
of being ascertained on the Closing Date, an adjustment and proration shall be
made within ninety (90) calendar days after the Closing Date.
3.3.3 In the event of any disputes between the parties as to
such adjustments, the amounts not in dispute shall nonetheless be paid at the
time provided in Section 3.3.2 and such disputes shall be determined by an
independent certified public accountant mutually acceptable to the parties, and
the fees and expenses of such accountant shall be paid one-half by Seller and
one-half by Buyers.
3.4 ALLOCATION OF PURCHASE PRICE. Seller and Buyers have agreed to
allocate $5,000 of the Purchase Price to the Non-Competition Agreement. The
parties shall in good faith attempt to agree prior to Closing upon an allocation
of the balance of the Purchase Price among the Stations Assets. If the parties
are unable to agree, such allocation shall be based upon an appraisal prepared
by an appraiser mutually selected by Buyers and Seller, and such appraisal and
allocation shall be completed as soon after Closing as reasonably possible.
Seller and Buyers agree to use the agreed upon allocation, if any, for all tax
purposes, including without limitation, those matters subject to Section 1060 of
the Internal Revenue Code of 1986, as amended.
3.5 ADJUSTMENT FOR BARTER. As of the Closing Date, Buyers shall be
entitled to a credit against the Purchase Price for the amount, if any, by which
the aggregate net value of the Stations' Barter Payable (as defined below) as of
the Closing Date exceeds the aggregate net value of the Stations' Barter
Receivable (as defined below) as of the Closing Date by more than $20,000.00
with respect to Contracts for the sale of advertising in exchange, in whole or
in part, for merchandise or services ("Trade Agreements").
"Barter Payable" means the aggregate value of time owed pursuant to
each of the Trade Agreements. "Barter Receivable" means the aggregate value of
goods and services to be received pursuant to each of the Trade Agreements.
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3.6 COLLECTION OF ACCOUNTS RECEIVABLE. The accounts receivable of
Seller are not included among the Stations Assets. Nevertheless, at Closing,
Seller shall supply RBI with a list of Seller's accounts receivable as of the
Closing Date (the "Accounts"), and RBI shall use the same diligence it uses to
collect its own accounts in the ordinary course of business to collect the
Accounts on Seller's behalf for a period of 120 days from the Closing Date (the
"Collection Period"). This obligation, however, shall not extend to the
institution of litigation, employment of counsel, or any other extraordinary
means of collection. During the Collection Period, Seller shall not solicit any
monies from a local account debtor who, after Closing, continues to do business
with the Stations, provided that during such period Seller may act to preserve
its rights against a bankrupt debtor or commence suit or otherwise take action
against any debtor that disputes the amount of, or liability for, an Account. If
Seller receives a payment from an account debtor during the Collection Period,
it shall so notify RBI. RBI may endorse and deposit in its own name and collect
any and all checks and other instruments for the payment of money that RBI may
receive in payment of Accounts. RBI shall receive no remuneration for its
services and shall not be liable for non-collection, or failure of any such
collection, except due to its own gross negligence or intentional misconduct.
Upon termination of its duties hereunder, RBI shall deliver to Seller all of its
correspondence and files concerning the collection of the Accounts and all
reports of attempts to collect the same. Except as otherwise provided herein,
amounts collected by RBI during any month during the Collection Period on
account of Seller's Accounts shall be remitted in full to Seller by the tenth
(10th) day of the following month. Buyer shall deliver to Seller an accounting
showing the amount it received during each monthly period on each account. If
both Seller and RBI are entitled to accounts receivable from the same account
debtor, all payments received during the Collection Period shall be first
applied to Seller's Accounts from such account debtor until the same are paid in
full, unless such account debtor has disputed such account receivable in writing
to the Seller, in which event RBI shall be entitled to apply the payment made by
the account debtor to RBI's account receivable. If during the Collection Period
an account debtor disputes an amount, Seller may request the reassignment of the
Account and proceed against that account debtor. At the conclusion of the
Collection Period and after remittance of all amounts collected, RBI will
thereafter have no further responsibility with respect to the collection of the
Accounts, and RBI may apply all collections received by RBI from any Account
party who continues business with RBI to obligations owing to RBI, except for
any payment received by RBI which such Account party specifies is for amounts
owed to Seller, in which event such specified amounts shall be paid over to
Seller. RBI shall not have the right to compromise, settle or adjust the amounts
of any one of the Accounts without Seller's prior written consent. Seller shall
promptly pay all sales commissions relating to all of its accounts receivable
whenever Seller receives payment thereon; provided, however, RBI may do so on
Seller's behalf for employees who are hired by RBI and pay the net commission to
Seller. Notwithstanding anything contained herein to the contrary, RBI shall
submit to Seller a detailed description of the calculation of commissions and
any dispute with respect thereto shall be settled in accordance with the
procedures set forth in Section 3.3. If RBI fails to timely pay any amounts due
hereunder, then RBI shall pay Seller interest calculated at the rate of ten
percent (10%) per annum on such past due amount.
ARTICLE 4
CLOSING
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4.1 CLOSING. Except as otherwise mutually agreed upon by Buyers and
Seller, the consummation of the transactions contemplated herein (the "Closing")
shall occur within ten (10) business days after the later to occur of (a) the
satisfaction or waiver of each condition to closing contained herein, other than
such conditions as are reasonably anticipated to be satisfied at Closing
(provided that each party hereto shall use its reasonable best efforts to cause
each condition to closing to be satisfied so that the Closing may occur at the
earliest possible date), (b) the issuance of the Final Order (as defined below);
or (c) such other date as may be mutually agreed by the parties hereto (the
"Closing Date"); provided, however, that Buyers may in their sole discretion
waive the requirement that a Final Order be issued and elect (subject to clause
(a) above) to close at any time (upon not less than ten (10) business days'
notice to Seller) after the release of a public notice of initial FCC approval
consenting to the transaction contemplated hereby (the "Initial Approval"). For
purposes of this Agreement, "Final Order" means an order or grant by the FCC
which is no longer subject to reconsideration or review by the FCC or a court of
competent jurisdiction and pursuant to which the FCC consents to the assignments
of the FCC Licenses contemplated by this Agreement, such order or grant being
without the imposition of any conditions not imposed upon the radio broadcast
industry generally adverse to Buyers or any Affiliate (as hereinafter defined)
of Buyers with respect to the assignment of the FCC Licenses to RLI or the
continued operation by Buyers of the Stations or the Stations Assets. In the
event that the parties close before the Initial Approval has become a Final
Order, the parties shall enter into a mutually acceptable Unwind Agreement. The
Closing shall be held in the offices of Strauss & Troy, The Federal Reserve
Building, 150 East Fourth Street, Cincinnati, Ohio, or at such place and in such
manner as the parties hereto may agree.
ARTICLE 5
GOVERNMENTAL CONSENTS
---------------------
5.1 FCC CONSENT. It is specifically understood and agreed by Buyers and
Seller that the Closing and the assignment of the Stations Licenses and the
transfer of the Stations Assets are expressly conditioned on and are subject to
the prior consent and approval of the FCC without the imposition of any
conditions not imposed upon the radio broadcast industry generally adverse to
Buyers or any Affiliate of Buyers (the "FCC Consent").
5.2 FCC APPLICATION. Within seven (7) business days after the execution
of this Agreement, Buyers and Seller shall file an application with the FCC for
the FCC Consent (the "FCC Application"). Buyers and Seller shall prosecute the
FCC Application with all reasonable diligence and otherwise use their best
efforts to obtain the FCC Consent as expeditiously as practicable (but neither
Buyers nor Seller shall have any obligation to satisfy complainants or the FCC
by taking any steps which would have a material adverse effect upon Buyers or
Seller or upon any of their respective Affiliates). If the FCC Consent imposes
any condition on Buyers or Seller or any of their respective Affiliates, such
party shall use its best efforts to comply with such condition; provided,
however, that neither Buyers nor Seller shall be required hereunder to comply
with any condition that would have a material adverse effect upon it or any of
its Affiliates. If reconsideration or judicial review is sought with respect to
the FCC Consent, the party affected shall vigorously oppose such efforts for
reconsideration or judicial review; provided, however, that nothing herein shall
be construed to limit either party's right to terminate this Agreement pursuant
to Article 16 hereof.
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<PAGE> 15
5.3 ANTITRUST. Seller and Buyers shall cooperate in preparing and
filing any necessary notification and report forms and related material that may
be required to be filed with the Federal Trade Commission and the Antitrust
Division of the United States Department of Justice under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, and each will use its best efforts to obtain
an early termination of the applicable waiting period and will make any further
filings pursuant thereto that may be necessary, proper or advisable.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF BUYERS
----------------------------------------
Buyers hereby make the following representations and warranties to
Seller, each of which is true and correct on the date hereof, shall survive the
Closing and shall be unaffected by any investigation heretofore or hereafter
made by Seller:
6.1 ORGANIZATION AND STANDING. Buyers are corporations duly organized
validly existing and in good standing under the laws of the State of Delaware,
and by the Closing Date will be authorized to conduct business within the State
of Texas.
6.2 AUTHORIZATION AND BINDING OBLIGATIONS. Buyers have all necessary
corporate power and authority to enter into and perform this Agreement and the
transactions contemplated hereby, and to own or lease the Stations Assets and to
carry on the business of the Stations upon the consummation of the transactions
contemplated by this Agreement. Buyers' execution, delivery and performance of
this Agreement and the transactions contemplated hereby have been duly and
validly authorized by all necessary action on their part and, assuming the due
authorization, execution and delivery of this Agreement by Seller, this
Agreement will constitute the legal, valid and binding obligation of Buyers,
enforceable against them in accordance with its terms, except as limited by laws
affecting creditors' rights or equitable principles generally.
6.3 QUALIFICATION AS ASSIGNEE. To the best of Buyers' knowledge, RLI is
qualified under the Communications Act of 1934, as amended, and the rules,
regulations and policies promulgated thereunder to obtain FCC approval of the
FCC Application and serve as the licensee of the Stations, and Buyers have no
knowledge of any material reason, fact, allegation or claim not stated herein
which may impair RLI's qualifications and know of no reason why the FCC would
not approve the FCC Application. Between the date hereof and the Closing, Buyers
will take no action knowingly that would substantially delay FCC approval or
make RLI not qualified to be the licensee of the Station.
6.4 BANKRUPTCY. No insolvency proceedings of any character, including,
without limitation, bankruptcy, receivership, reorganization, composition or
arrangement with creditors, voluntary or involuntary, against Buyers or any of
their Affiliates are pending or threatened, and neither Buyers nor any of their
Affiliates have made any 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.
6.5 COMMITTED SOURCES OF FINANCING. Buyers have funds available from
committed sources of financing, subject to customary closing conditions,
sufficient to consummate the transaction contemplated by this Agreement.
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<PAGE> 16
6.6 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 hereof with respect to governmental consents or on
SCHEDULE 6.4, the execution, delivery and performance of this Agreement by
Buyers: (a) do not conflict with the provisions of the articles of incorporation
or by-laws of Buyers; (b) do not require the consent of any third party; (c)
will not violate any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which either Buyer is a
party; and (d) will not, either alone or with the giving of notice or the
passage of time, or both, conflict with, constitute grounds for termination of
or result in a breach of the terms, conditions or provisions of, or constitute a
default under, any agreement, instrument, license or permit to which either
Buyer is now subject.
6.7 COMMISSIONS OR FINDER'S FEES. Neither Buyers nor any person or
entity acting on behalf of Buyers has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity.
6.8 LITIGATION. Buyers are not subject to any judgment, award, order,
writ, injunction, arbitration decision or decree prohibiting the consummation of
the transactions contemplated by this Agreement, and there are no suits, legal
proceedings or investigations of any nature pending, or to the best knowledge of
Buyers, threatened against or affecting Buyers that would affect Buyers' ability
to carry out the transactions contemplated by this Agreement.
ARTICLE 7
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller makes the following representations and warranties to Buyers,
each of which is true and correct on the date hereof, shall survive the Closing
and shall be unaffected by any investigation heretofore or hereafter made by
Buyers:
7.1 ORGANIZATION AND STANDING. Seller is a limited partnership duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Seller is authorized to conduct business within the State of Texas,
and has the requisite power and authority to own, lease and operate the Stations
Assets owned or leased by it and to carry on the business of the Stations as now
being conducted by it and as proposed to be conducted by it between the date
hereof and the Closing Date.
7.2 AUTHORIZATION AND BINDING OBLIGATION. Seller has the power and
authority, and has taken all necessary and proper action to enter into and
perform this Agreement and to consummate the actions contemplated hereby. This
Agreement has been duly authorized, executed and delivered by Seller and,
assuming the due authorization, execution and delivery of this Agreement by
Buyers, constitutes the legal, valid and binding obligation of Seller
enforceable against it in accordance with its terms, except as limited by laws
affecting the enforcement of creditors' rights or equitable principles
generally.
7.3 ABSENCE OF CONFLICTING AGREEMENTS OR REQUIRED CONSENTS. Except as
set forth in Article 5 with respect to governmental consents and in SCHEDULE 7.9
with respect to consents required in connection with the assignment of certain
Contracts, the execution, delivery and
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<PAGE> 17
performance of this Agreement by Seller: (a) do not require the consent of any
third party (including, without limitation, the consent of any governmental,
regulatory, administrative or similar authority); (b) will not conflict with,
result in a breach of, or constitute a violation of or default under, the
provisions of Seller's partnership agreement (or other organizational
documents), or any applicable law, judgment, order, injunction, decree, rule,
regulation or ruling of any governmental authority to which Seller is a party or
by which Seller or any of the Stations Assets are bound; (c) will not either
alone or with the giving of notice or the passage of time, or both, conflict
with, constitute grounds for termination of or result in a breach of the terms,
conditions or provisions of, or constitute a default under, any Contract,
agreement, instrument, license or permit to which Seller or any of the Stations
Assets is now subject; and (d) will not result in the creation of any lien,
charge or encumbrance on any of the Stations Assets.
7.4 GOVERNMENT AUTHORIZATIONS.
7.4.1 Except as stated therein, SCHEDULE 7.4 hereto contains a
true and complete list of the Stations Licenses and other licenses, permits or
other authorizations from governmental and regulatory authorities which are
required for the lawful conduct of the business and operations of the Stations
in the manner and to the full extent they are presently conducted (including,
without limitation, auxiliary licenses associated with each Station). Seller has
delivered to Buyers true and complete copies of the Stations Licenses and the
other licenses, permits and authorizations listed in SCHEDULE 7.4, including any
and all amendments and other modifications thereto.
7.4.2 Seller is the authorized legal holder of the Stations
Licenses and other licenses, permits and authorizations listed in SCHEDULE 7.4.
Except as set forth SCHEDULE 7.4, none of the Stations Licenses and other
licenses, permits and authorizations listed in SCHEDULE 7.4 is subject to any
restrictions or conditions which would limit the full operation of the Stations.
7.4.3 Except as set forth in SCHEDULE 7.4, and except for
matters affecting the radio broadcast industry generally, there are no
applications, complaints, petitions or proceedings pending or, to the best of
Seller's knowledge, threatened as of the date hereof before the FCC or any other
governmental or regulatory authority relating to the business or operations of
the Stations. Except as set forth in SCHEDULE 7.4, the Stations Licenses and the
other licenses, permits and authorizations listed in SCHEDULE 7.4 are in good
standing, are in full force and effect and are unimpaired by any act or omission
of Seller or its partners, managers, officers, or employees. Except as set forth
in SCHEDULE 7.4, the operations of the Stations are in accordance with the
Stations Licenses and the underlying construction permits and the other
licenses, permits and authorizations listed in SCHEDULE 7.4. No proceedings are
pending or, to the best of Seller's knowledge, threatened, and to the best of
Seller's knowledge there has not been any act or omission of Seller or any of
its partners (limited or general), agents, representatives, or employees, which
may result in the revocation, modification, non-renewal or suspension of any of
the Stations Licenses or the other licenses, permits and authorizations listed
in SCHEDULE 7.4, the denial of any pending applications, the issuance of any
cease and desist order, the imposition of any administrative actions by the FCC
or any other governmental or regulatory authority with respect to the Stations
Licenses or the other licenses, permits and authorizations listed in SCHEDULE
7.4 or which may affect Buyers' ability to continue to operate the Stations as
they are currently operated.
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<PAGE> 18
7.4.4 Except as set forth in SCHEDULE 7.4, each Station is
operating with the maximum power and facilities specified in the respective
Station License.
7.4.5 None of the Stations is causing objectionable
interference to the transmissions of any other broadcast station or
communications facility nor has any of the Stations received any complaints with
respect thereto, and no other broadcast station or communications facility is
causing objectionable interference to respective transmissions of any Station or
the public's reception of such transmissions.
7.4.6 Seller has no reason to believe that the Stations
Licenses and the other licenses, permits, or authorizations listed in SCHEDULE
7.4 will not be renewed in their ordinary course.
7.4.7 Subject only to insignificant omissions, all reports,
forms, and statements required to be filed by Seller with the FCC with respect
to the Stations since the grant of the last renewal of the Stations Licenses
have been filed and are substantially complete and accurate.
7.4.8 The operation of the Stations and all of the Stations
Assets are in compliance in all respects with ANSI Radiation Standards
C95.1-1992.
7.5 COMPLIANCE WITH FCC REGULATIONS. Except as specified in SCHEDULE 7.4,
the operation of the Stations and all of the Stations Assets are in compliance
in all respects with: (a) all applicable engineering standards required to be
met under applicable FCC rules, including, but not limited to, all applicable
painting and lighting requirements of the FCC and the Federal Aviation
Administration to the extent required to be met under applicable FCC rules and
regulations, and (b) all other applicable federal, state and local rules,
regulations, requirements and policies (except where the failure to comply is
immaterial and will be of no meaningful or monetary consequence to Buyers or to
the operation of any of the Stations by Buyers after the Closing Date),
including, but not limited to, equal employment opportunity policies of the FCC,
and to the best of Seller's knowledge, there are no filed claims to the
contrary.
7.6 TAXES. Seller has filed all federal, state, local and foreign
income, franchise, sales, use, property, excise, payroll and other tax returns
required by law to be filed by it, and has paid in full all taxes, estimated
taxes, interest, assessments, and penalties due and payable by it. All returns
and forms which have been filed have been true and correct in all material
respects and no tax or other payment in an amount other than as shown on such
returns and forms is required to be paid by Seller and has not been paid by
Seller. There are no present disputes as to taxes of any nature payable by
Seller which in any event could adversely affect any of the Stations Assets or
the operation of the Stations by Buyers. Seller has not been advised that any of
its tax returns, federal, state, local or foreign, have been or are being
audited. Seller does not and will not in the future have any liability, fixed or
contingent, for any unpaid federal, state or local taxes or other governmental
or regulatory charges whatsoever (including without limitation withholding and
payroll taxes) which could result in a lien on the Stations Assets after
conveyance thereof to Buyers or in any other form of transferee liability to
Buyers.
7.7 PERSONAL PROPERTY. Without material omission, SCHEDULE 7.7 hereto
contains a list of all items of tangible personal property owned by Seller and
used or held for use in the conduct
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<PAGE> 19
of the business and operations of the Stations other than the Excluded Assets.
SCHEDULE 7.7 also separately lists any material tangible personal property
leased by Seller pursuant to leases included within the Contracts. Except as
disclosed in SCHEDULE 7.7, Seller has, and following the Closing, RBI will have,
good and marketable title to all of the items of tangible personal property
which are included in the Stations Assets (other than those subject to lease)
and none of such Stations Assets is, or at the Closing will be, subject to any
security interest, mortgage, pledge, lease, license, lien, encumbrance, title
defect or other charge, except for liens for taxes not yet due and payable, and
except for the Assumed Liabilities. The properties listed in SCHEDULE 7.7, along
with those properties subject to lease and included among the Contracts,
constitute all material tangible personal property necessary to operate the
Stations as the same are now being operated. Except as set forth in SCHEDULE
7.7, all items of tangible personal property included in the Stations Assets are
in good and technically sound operating condition and repair (ordinary wear and
tear excepted), are free from all material defect and damage, and have been
properly maintained in a manner consistent with generally accepted standards of
good engineering practice.
7.8 REAL PROPERTY.
7.8.1 SCHEDULE 7.8 hereto contains a complete and accurate
list and description of all real property (including without limitation, real
property relating to the towers, transmitters, studio sites and offices of the
Stations) used or contemplated for use by Seller in connection with the
operations of the Stations, identifying thereon the real property that is owned
by Seller (the "Owned Real Estate") or leased by Seller (the "Leased Real
Estate") (collectively, the "Real Estate").
7.8.2 Seller has, and by the Closing Date will have, good and
marketable title in fee simple to all of the Owned Real Estate, free and clear
of all liens, mortgages, security interests, charges and encumbrances, except
for (i) liens for taxes and other governmental charges which are not yet due and
payable, and (ii) restrictions and easements of record common for properties of
such nature which do not, and are unlikely to, detract from the existing or
future use of the property affected or affect the marketability of the same
("Permitted Encumbrances") and except for such liens described in SCHEDULE 7.8.
7.8.3 Seller enjoys quiet possession of all Owned and Leased
Real Estate. There are no present disputes or claims with respect to offsets or
defenses by any party against the other under any of the Contracts relating to
the Leased Real Estate. Except as stated in SCHEDULES 7.8 AND 7.9, Seller has
delivered to Buyers true and complete copies of all Contracts relating to the
Real Estate. Except as set forth in SCHEDULE 7.9 hereto, the assignment of the
Contracts relating to the Leased Real Estate to RBI will not permit the other
party to accelerate the rent, cause the terms thereof to be renegotiated or
constitute a default thereunder, and will not require the consent of any such
party to the assignment thereof to RBI.
7.8.4 Seller has full legal and practical access to all of the
Owned and Leased Real Estate. The Owned Real Estate includes all the real
property, easements, rights of way, and other real property interests necessary
to conduct the business and operations of the Stations as they are now
conducted. Except as described in SCHEDULE 7.8, none of the buildings,
structures, improvements or fixtures constructed on any Owned Real Estate in
connection with the operation of the Stations, including, but not limited to,
all towers, guy wires and guy anchors and ground
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<PAGE> 20
radials, encroach upon adjoining real property, and all such buildings,
structures, improvements and fixtures are constructed and are operated and used
in conformance with all "set back" lines, easements, covenants, restrictions and
all applicable building, fire, zoning, health and safety laws and codes. No
utility lines serving the Owned Real Estate pass over the lands of a third party
except where appropriate easements have been obtained. Except as described in
SCHEDULE 7.8, all buildings, structures, towers, antennae, improvements and
fixtures situated on the Real Estate and owned by Seller are in good and
technically sound operating condition, ordinary wear and tear excepted, have no
latent structural, mechanical or other defects of material significance, and
each has adequate rights of ingress and egress, utility service for water and
sewer, telephone, electric and/or gas, and sanitary service for the conduct of
the business and operations of the Stations as presently conducted. There is no
pending or, to the best knowledge of Seller, threatened condemnation or other
legal proceeding or action of any kind relating to the Real Estate.
7.9 CONTRACTS. SCHEDULE 7.9 lists all Contracts to which Seller is a
party, or which are binding on Seller, as of the date of this Agreement, other
than time sales for cash entered into in the ordinary course of business. Those
Contracts listed on SCHEDULE 7.9, if any, requiring the consent of a third party
to assignment are identified by an asterisk in the left margin of SCHEDULE 7.9.
Those Contracts, if any, that Seller and Buyers have agreed are material to the
operation of the Stations Assets and the valid assignment of which and receipt
by Buyers of consents thereto (along with appropriate estoppel certificates for
the leases related to the Leased Real Estate) is a condition to the consummation
of the transactions contemplated hereby (the "Material Contracts") are
identified by an "M" in the left margin of SCHEDULE 7.9.
7.10 STATUS OF CONTRACTS, ETC. Seller has delivered to Buyers true and
complete copies of all written Contracts and true and complete memoranda of all
oral Contracts, including any and all amendments and other modifications
thereto. All of the Contracts are in full force and effect and are valid,
binding and enforceable in accordance with their respective terms, except as
limited by laws affecting creditors' rights or equitable principles generally.
Seller has complied in all respects with all Contracts and is not in default
beyond any applicable grace periods under any thereof and, to the best of
Seller's knowledge, no other contracting party is in default under any thereof.
All advertising time committed under Trade Agreements is preemptible for cash
sales and none is subject to any fixed position.
7.11 ENVIRONMENTAL. Except as set forth in SCHEDULE 7.11, to the best
of Seller's knowledge Seller has complied with all federal, state and local
environmental laws, rules and regulations as in effect on the date hereof
applicable to each of the Stations and its operations, including but not limited
to the FCC's guidelines regarding RF radiation. Except as set forth on SCHEDULE
7.11, to the best of Seller's knowledge, the technical equipment included in the
Stations Assets does not contain any PCBs. No hazardous or toxic waste,
substance, material or pollutant (as those or similar terms are defined under
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. ss.ss. 9601 ET seq., Toxic Substances Control Act.
15 U. S. C. ss. ss. 2601 ET seq., the Resource Conservation and Recovery Act of
1976, 42 U.S.C. ss.sS. 6901 et seq. or any other applicable federal, state and
local environmental law, statute, ordinance, order, judgment rule or regulation
relating to the environment or the protection of human health ("Environmental
Laws")), including but not limited to, any asbestos or asbestos-related
products, oils, or petroleum-derived compounds, CFCs, PCBs, or underground
storage tanks (collectively Hazardous Materials"), have been released, emitted
or discharged by Seller, or to the best of Seller's knowledge, by any other
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<PAGE> 21
person or entity, in violation of applicable laws or regulations, or to the best
of Seller's knowledge are currently located in quantities in violation of
applicable laws and regulations in, on, under or about the real property on
which the Stations Assets are situated, including without limitation the
transmitter sites, or contained in the tangible personal property included in
the Stations Assets. To the best of Seller's knowledge, the Stations Assets and
Seller's use thereof are not in violation of any Environmental Laws or any
occupational, safety and health or other such law now in effect. With respect to
Buyers, Seller shall be as of the Closing Date and thereafter solely responsible
for all environmental liabilities, of whatsoever kind and nature, arising out of
or attributable to the operation or ownership of the Stations Assets prior to
the Closing Date.
7.12 INTELLECTUAL PROPERTY. SCHEDULE 7.12 hereto is a true and complete
list of all material Intellectual Property applied for, registered or issued to,
or owned by Seller or under which Seller is a licensee and which is used in the
conduct of Seller's business and operations with regard to the Stations. Except
as set forth on SCHEDULE 7.12, to the best of Seller's knowledge: (a) Seller's
right, title and interest in the Intellectual Property as owner or licensee, as
applicable, is free and clear of all liens, claims, encumbrances, rights, or
equities whatsoever of any third party and, to the extent any of the
Intellectual Property are licensed to Seller, such interest is valid and
uncontested by the licensor thereof or any third party; (b) all computer
software located at the Stations' facilities or used in the Stations' business
or operations is properly licensed to Seller, and all of Seller's uses of such
computer software are authorized under such licenses; (c) all of Seller's right,
title and interest in and to the Intellectual Property and computer software
shall be assignable to RBI at Closing, and upon such assignment, RBI shall
receive complete and exclusive right, title, and interest in and to all tangible
and intangible property rights existing in the Intellectual Property; and (d)
there are no infringements or unlawful use of such Intellectual Property by
Seller in connection with Seller's business or operations. All material hardware
and software products used by Seller in the operation of the Stations will be
able to accurately process date data (including, but not limited to calculating,
comparing and sequencing) from, into and between the twentieth century (through
the year 1999), the year 2000 and the twenty-first century, including leap year
calculations when used in accordance with the product documentation accompanying
such hardware and software products.
7.13 FINANCIAL STATEMENTS. Seller has delivered complete copies of the
income statements of the Stations and consolidated balance sheets of Seller as
of and for the three (3) months ended December 31, 1997 and fiscal year ended
December 31, 1998 (the "Financial Statements"). In addition, Seller will deliver
monthly income statements for the Stations for each month ended after January 1,
1999 and prior to the Closing Date (collectively, the "Additional Financial
Statements"). The Financial Statements and Additional Financial Statements are
true, correct and complete and have been, and in the case of the Additional
Financial Statements will be, prepared in accordance with generally accepted
accounting principals consistently applied and maintained throughout the periods
indicated, except as disclosed on SCHEDULE 7.13. The Financial Statements and
Additional Financial Statements present and will present fairly the results of
operations of the Stations for the periods indicated. The financial information
within the Additional Financial Statements does not include and will not include
financial information unrelated to the operations of the Stations. None of the
Financial Statements or Additional Financial Statements understates nor will it
understate the true costs and expenses of conducting the business and operations
of the Stations, fails to disclose any material liability, or inflates or will
it inflate the revenues of the Stations for any reason.
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<PAGE> 22
7.14 PERSONNEL INFORMATION.
7.14.1 SCHEDULE 7.14 contains a true and complete list of all
persons employed at the Stations as of the date of this Agreement, including
date of hire, a description of material compensation arrangements (other than
employee benefit plans set forth in SCHEDULE 7.17) and a list of other material
terms of any and all agreements affecting such persons and their employment by
Seller. Seller has received no notice that, and Seller is not aware of, any
individual employee who shall or is likely to terminate his or her employment
relationship with the Stations upon the execution of this Agreement or after the
Closing.
7.14.2 Except as set forth in SCHEDULE 7.14, Seller, with
respect to the Stations, is not a party to any contract or agreement with any
labor organization, nor has Seller agreed to recognize any union or other
collective bargaining unit, nor has any union or other collective bargaining
unit been certified as representing any employees of Seller at the Stations.
Seller has no knowledge of any organization effort currently being made or
threatened by or on behalf of any labor union with respect to employees of
Seller at the Stations.
7.14.3 Except as disclosed in SCHEDULE 7.14, Seller, with
respect to the Stations, has complied in all material respects with all laws
relating to the employment of labor, including, without limitation, the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and those laws
relating to wages, hours, collective bargaining, unemployment insurance,
workers' compensation, equal employment opportunity and payment and withholding
of taxes.
7.15 LITIGATION. Except as set forth in SCHEDULE 7.15, Seller is not
subject to any judgment, award, order, writ, injunction, arbitration decision or
decree relating to the conduct of the business or the operation of the Stations
or any of the Stations Assets, and there is no litigation, administrative
action, arbitration, proceeding or investigation pending or, to the best
knowledge of Seller, threatened against Seller with respect to, related to or in
connection with the operation of the Stations in any federal, state or local
court, or before any administrative agency or arbitrator (including, without
limitation, any proceeding which seeks the forfeiture of, or opposes the renewal
of, any of the Stations Licenses), or before any other tribunal duly authorized
to resolve disputes where the outcome or effect thereof could reasonably have a
material adverse effect upon the value, operations or market share of any of the
Stations or a meaningful or monetary consequence to Buyers or the operation of
any of the Stations by Buyers after the Closing Date. In particular, but without
limiting the generality of the foregoing, to the best knowledge of Seller, there
are no applications, complaints or proceedings pending or threatened before the
FCC or any other governmental organization with respect to the business or
operations of the Stations.
7.16 COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 7.16: (i)
Seller is not in violation of, nor has Seller received any notice asserting any
non-compliance by it in connection with the operation of the Stations or use or
ownership of any of the Stations Assets with, any applicable statute, rule or
regulation, whether federal, state or local; (ii) Seller is not in default with
respect to any judgment, order, injunction or decree of any court administrative
agency or other governmental authority or any other tribunal duly authorized to
resolve disputes which relates to the transactions contemplated hereby; and
(iii) Seller is in compliance with all laws, regulations and governmental orders
applicable to the conduct of the business and operations of
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<PAGE> 23
the Stations, and its present use of the Stations Assets does not violate any of
such laws, regulations or orders, except with respect to subparts (i) and (iii)
for violations or noncompliance which are immaterial and will be of no
meaningful or monetary consequence to Buyers or to the operation of any of the
Stations by Buyers after the Closing Date.
7.17 EMPLOYEE BENEFIT PLANS. SCHEDULE 7.17 contains a true and complete
list as of the date of this Agreement of all employee benefit plans applicable
to the employees of Seller employed at the Stations, and a brief description
thereof. Seller does not maintain any other employee benefit plan as the term is
defined in Section 3 of the Employee Retirement Income Security Act of 1974, as
amended, applicable to the employees of Seller employed at the Stations.
7.18 COMMISSIONS OR FINDER'S FEES. Neither Seller nor any person or
entity acting on behalf of Seller has agreed to pay a commission, finder's fee
or similar payment in connection with this Agreement or any matter related
hereto to any person or entity, with the exception of Star Media Group, Inc.,
whose fees shall be paid entirely by Seller.
7.19 CONDUCT OF BUSINESS IN ORDINARY COURSE; ADVERSE CHANGES. Since
December 31, 1998: (a) Seller has conducted the business of the Stations only in
the ordinary course consistent with Seller's past practices; (b) there has not
been any material adverse change in the business, assets, properties, prospects
or condition (financial or otherwise) of the Stations, or any damage,
destruction, or loss affecting any of the Stations Assets; and (c) Seller has
not created, assumed, or suffered any mortgage, pledge, lien or encumbrance on
any of the Stations Assets.
7.20 INSTRUMENTS OF CONVEYANCE: GOOD TITLE. The instruments to be
executed by Seller and delivered to Buyers at the Closing, conveying the
Stations Assets to Buyers, will transfer good and marketable title to the Assets
free and clear of all liabilities (absolute or contingent), security interests,
mortgages, pledges, liens, obligations and encumbrances, except for Permitted
Encumbrances and except as set forth in SCHEDULE 7.7 and SCHEDULE 7.8 hereto and
those obligations referred to in the first sentence of Section 2.1 hereof.
7.21 UNDISCLOSED LIABILITIES. Excepting only for the Assumed
Liabilities, no liability or obligation of any nature, whether accrued,
absolute, contingent or otherwise, relating to Seller, the Stations or the
Stations Assets exists which could, after the Closing result in any form of
transferee liability against Buyers or subject the Stations Assets to any lien,
encumbrance, claim, charge, security interest or imposition whatsoever or
otherwise affect the full, free and unencumbered use of the Stations Assets by
Buyers.
7.22 FULL DISCLOSURE. No representation or warranty made by Seller
contained in this Agreement nor any certificate, document or other instrument
furnished or to be furnished by Seller pursuant hereto contains or will contain
any untrue statement of a material fact, or omits or shall omit to state any
material fact required to make any statement contained herein or therein not
misleading. To the best of Seller's knowledge, there is no impending or
contemplated event or occurrence that would cause any of the foregoing
representations not to be true and complete on the date of such event or
occurrence as if made on that date.
Whenever in this Article 7 a warranty or representation is qualified by
a word or phrase referring to the best of Seller's knowledge (or similar terms),
it shall mean to the actual
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knowledge of Mr. Jon Ferrari and Seller's chief financial officer and engineer,
after having made due inquiry of the employees, representatives and agents of
Seller who would be expected to have knowledge of the matter, and with respect
to the condition of any Stations Assets, records or other object, after having
inspected it.
ARTICLE 8
COVENANTS OF BUYERS
-------------------
8.1 CLOSING. Subject to Article 11 hereof, on the Closing Date, Buyers
shall purchase the Stations Assets from Seller as provided in Article I hereof
and RBI shall assume the Assumed Liabilities of Seller as provided in Article 2
hereof.
8.2 NOTIFICATION. Buyers will provide Seller prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 6. Buyers shall also notify Seller of any litigation,
arbitration or administrative proceeding pending or, to its knowledge,
threatened against Buyers which challenges the transactions contemplated hereby.
8.3 NO INCONSISTENT ACTION. Buyers shall not take any action which is
materially inconsistent with its obligations under this Agreement or take any
action which would cause any representation or warranty of Buyers contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
ARTICLE 9
COVENANTS OF SELLER
-------------------
9.1 PRE-CLOSING COVENANTS. Seller covenants and agrees with respect to
the Stations that, between the date hereof and the Closing Date or the earlier
termination of this Agreement in accordance with its terms, except as expressly
permitted by this Agreement or with the prior written consent of Buyers, Seller
shall act in accordance with the following:
9.1.1 Seller shall use its reasonable best efforts to conduct
the business and operations of the Stations in the ordinary and prudent course
of business consistent with past practice and with the intent of preserving the
ongoing operations and assets of the Stations, including but not limited to
maintaining the independent identity of the Stations, retaining the current
format and programming (including the content thereof) of the Stations,
continuing at historical levels and frequencies spending for promotions,
advertising, and survey testing, and using its reasonable best efforts to retain
at the Stations the services of all active employees, consultants and agents of
the Stations.
9.1.2 Seller shall use its reasonable best efforts to: (i)
preserve the operation of the Stations intact; (ii) preserve the business of the
Stations' advertisers, customers, suppliers and others having business relations
with the Stations; and (iii) continue to conduct financial operations of the
Stations, including without limitation, their credit and collection and pricing
policies and practices, all in the ordinary course of business consistent with
past practices.
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9.1.3 Seller shall operate the Stations in all respects in
accordance with FCC rules and regulations and the Stations Licenses and with all
other laws, regulations, rules and orders, and shall not cause or permit by any
act, or failure to act, any of the Stations Licenses or other licenses, permits
or authorizations listed in SCHEDULE 7.4 to expire, be surrendered, adversely
modified, or otherwise terminated, or the FCC to institute any proceedings for
the suspension, revocation or adverse modification of any of the Stations
Licenses, or fail to prosecute with due diligence any pending applications to
the FCC.
9.1.4 Should any fact relating to Seller which would cause the
FCC to deny its consent to the transactions contemplated by this Agreement come
to Seller's attention, Seller will promptly notify Buyers thereof and, subject
to Section 5.2, will use its reasonable best efforts to take such steps as may
be necessary to remove any such impediment to the FCC's consent to the
transactions contemplated by this Agreement.
9.1.5 Except for actions in the ordinary course of business
consistent with past practices, Seller shall not: (a) sell broadcast time on a
prepaid basis (other than in the course of existing credit practices); (b)
except as required by the applicable law or written agreements currently in
effect, grant or agree to grant any general increases in the rates of salaries
or compensation payable to employees of the Stations (provided that no such
increases in fixed compensation to any employee shall in the aggregate exceed 5%
of such employee's compensation as set forth on SCHEDULE 7.14 hereto), (c)
except as required by written agreements currently in effect, grant or agree to
grant any specific bonus (other than a bonus for remaining as an employee until
the Closing Date) or increase in compensation to any executive management
employee of the Stations (provided that no such increases to any employee shall
in the aggregate exceed 5 % of such employee's fixed compensation as set forth
on SCHEDULE 7.14 hereto); (d) provide for any new pension, retirement or other
employment benefits for employees of the Stations or any increases in any
existing benefits, (e) modify, change or terminate any Contract; (f) change the
advertising rates in effect as of the date hereof, or (g) enter into any Trade
Agreements.
9.1.6 Seller shall give or cause the Stations to give Buyers
and Buyers' counsel, accountants, engineers and other representatives, at
Buyers' reasonable request and upon reasonable notice, full and reasonable
access to all of Seller's personnel, properties, books, Contracts, reports and
records (including, without limitation, financial information and tax returns
relating to the Stations, and environmental audits in existence with respect to
the Stations Assets), real estate, buildings and equipment relating to the
Stations and to the Stations' employees; to furnish Buyers with financial
statement consents, certifications, information and copies of all documents and
agreements relating to the Stations and the operation thereof (including but not
limited to financial and operating data and other information concerning the
financial condition, results of operations and business of the Stations) that
Buyers may reasonably request. The rights of Buyers under this Section 9.1.6
shall not be exercised in such a manner as to interfere unreasonably with the
business of the Stations.
9.1.7 Seller shall use its reasonable best efforts to obtain
any third party consents necessary for the assignment of any Contract (which
shall not require any payment to any such third party except for such amounts
contemplated by the Contract to be assigned, and any amount then owing by Seller
to such third party).
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9.1.8 Seller shall provide to Buyers within forty-five (45)
days after the date of this Agreement (a) title insurance commitments, issued by
a title insurance company reasonably satisfactory to Buyers, agreeing to issue
to Buyers and its senior lender, on the most current standard ALTA form,
leasehold, owners and lenders policies of title insurance with respect to all
Owned Real Estate and to all Leased Real Estate which is used as a tower/antenna
site (except as otherwise specifically agreed in SCHEDULE 9.1), together with a
copy of each document to which reference is made in such commitments, insuring
title in full accordance with the representations and warranties set forth
herein and subject only to such conditions and exceptions, and with such
endorsements, as Buyers or their senior lenders may approve or require, and (b)
up-to-date surveys of all Owned Real Estate and to all Leased Real Estate which
is used as a tower/antenna site, each prepared in accordance with ALTA/ASCM
standards and each detailing the legal description, the perimeter boundaries,
all improvements thereon, all easements and encroachments affecting each parcel,
and such other matters as may be reasonably requested by Buyers or the title
insurance company, each containing a surveyor certificate of recent date
reasonably acceptable to Buyer an the title insurance company, and each prepared
by a registered land surveyor. The cost of the title commitments shall be paid
by Seller; the cost of the insurance policy premiums and surveys shall be paid
by Buyers.
9.2 NOTIFICATION. Seller will provide Buyers prompt written notice of
any change in any of the information contained in the representations and
warranties made in Article 7 or any Schedule. Seller agrees to notify Buyers of
any litigation, arbitration or administrative proceeding pending or, to the best
of their knowledge, threatened, which challenges the transactions contemplated
hereby. Seller shall promptly notify Buyers if any of the normal broadcast
transmissions of any Station are interrupted, interfered with or in any way
impaired, and shall provide Buyers with prompt written notice of the problem and
the measures being taken to correct such problem. If such Station is not
restored so that operation is resumed to full licensed power and antenna height
within five (5) days of such event, or if more than five (5) such events occur
within any thirty (30) day period, or if any of the Stations shall be off the
air for more than ninety-six (96) consecutive hours, then Buyers shall have the
right to terminate this Agreement.
9.3 NO INCONSISTENT ACTION. Seller shall not take any action which is
materially inconsistent with its obligations under this Agreement nor take any
action which would cause any representation or warranty of Seller contained
herein to be or become false or invalid or which could hinder or delay the
consummation of the transactions contemplated by this Agreement.
9.4 CLOSING. Subject to Article 12 hereof, on the Closing Date, Seller
shall transfer, convey, assign and deliver to Buyers the Stations Assets and the
Assumed Liabilities as provided in Articles 1 and 2 and Section 7.20 of this
Agreement.
9.5 OTHER ITEMS. Until the Closing Date or the earlier termination of
this Agreement in accordance with the terms hereof, Seller shall not: (a) waive
or release any right relating to the business or operations of the Stations,
except for adjustments or settlements made in the ordinary course of business
consistent with their past practices; (b) transfer or grant any rights under any
of the Stations Licenses; (c) enter into any commitment for capital expenditures
for which Buyers would become liable after the Closing Date; (d) introduce any
material changes in the broadcast hours or in the format of the Stations or any
other material change in the Stations'
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programming policies; (e) change the call letters of any Station; and (f) enter
into any transaction or make or enter into any contract or commitment with
respect to any of the Stations or the Stations Assets which by reason of its
size or otherwise is not in the ordinary course of business consistent with past
practices.
9.6 EXCLUSIVITY. Seller agrees that, commencing on the date hereof
through the Closing or earlier termination of this Agreement, Buyers shall have
the exclusive right to consummate the transactions contemplated herein, and
during such exclusive period, Seller agrees that neither Seller, nor any
shareholders, director, officer, employee or other representative of Seller: (a)
will initiate, solicit or encourage, directly or indirectly, any inquiries, or
the making or implementation of any proposal or offer with respect to a merger,
acquisition, consolidation or similar transaction involving, or any purchase of,
all or any portion of the Stations Assets (any such inquiry, proposal or offer
being hereinafter referred to as an "Acquisition Proposal" and any such
transaction being hereinafter referred to as an "Acquisition"); (b) will engage
in any negotiations concerning, or provide any confidential information or data
to, or have any discussions with, any person relating to an Acquisition
Proposal, or otherwise facilitate any effort or attempt to make or implement an
Acquisition Proposal; or (c) will continue any existing activities, discussions
or negotiations with any parties conducted heretofore with respect to any
Acquisition Proposal or Acquisition and will take the necessary steps to inform
the individuals or entities referred to above of the obligations undertaken by
them in this Section 9.6. Notwithstanding the foregoing, in the event that
Buyers default in any material respect in the observance or in the due and
timely performance of any of its covenants or agreements herein contained and
such default shall not be cured within ten (10) business days of notice of
default served by Seller, Seller's obligations under this Section 9.6 shall be
null and void.
9.7 EXTENSION OF TOWER LEASE. Seller shall use its reasonable best
efforts to obtain an amendment to the Lease Agreement, dated May 11, 1993,
between Seller (as successor to the original lessee) and the City of El Paso for
the lease of a portion of Tract 18, Section 31, Block 80, TSP 1, El Paso, El
Paso County, Texas for the KROD-AM tower site to provide for at least one
additional option to the lessee to extend the Lease Agreement for one additional
three (3) year period at the rent payable during the last year of the current
term, with an annual adjustment during such renewal term to relate to the CPI-U
as provided in the Lease Agreement.
ARTICLE 10
JOINT COVENANTS
---------------
Buyers and Seller each covenant and agree that between the date hereof
and the Closing Date, they shall act in accordance with the following:
10.1 CONFIDENTIALITY. Subject to the requirements of applicable law,
Buyers and Seller shall each keep confidential all information obtained by it
with respect to the other parties hereto in connection with this Agreement and
the negotiations preceding this Agreement, and will use such information solely
in connection with the transactions contemplated by this Agreement, and if the
transactions contemplated hereby are not consummated for any reason, each shall
return to each other party hereto, without retaining a copy thereof, any
schedules, documents or other written information obtained from such other party
in connection with this Agreement and the
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transactions contemplated hereby. Notwithstanding the foregoing, no party shall
be required to keep confidential or return any information which: (a) is known
or available through other lawful sources, not bound by a confidentiality
agreement with the disclosing party; (b) is or becomes publicly known through no
fault of the receiving party or its agents; (c) is required to be disclosed
pursuant to an order or request of a judicial or governmental authority
(provided the disclosing party is given reasonable prior notice of the order or
request and the purpose of the disclosure); or (d) is developed by the receiving
party independently of the disclosure by the disclosing party. Notwithstanding
anything to the contrary herein, either party may in accordance with its legal
obligations, including but not limited to filings permitted or required by the
Securities Act of 1933 and the Securities and Exchange Act of 1934, make such
press releases and other public statements and announcements as it deems
necessary and appropriate in connection with this Agreement and the transactions
contemplated hereby; provided, however, that prior to making any such unilateral
press release or announcement, such party shall first communicate the same in
writing to the other.
10.2 COOPERATION. Subject to express limitations contained elsewhere
herein, Buyers and Seller agree to cooperate fully with one another in taking
any reasonable actions (including without limitation, reasonable actions to
obtain the required consent of any governmental instrumentality or any third
party) necessary or helpful to accomplish the transactions contemplated by this
Agreement, including but not limited to the satisfaction of any condition to
closing set forth herein.
10.3 CONTROL OF STATIONS. Buyers shall not, directly or indirectly,
control, supervise or direct the operations of the Stations prior to the
Closing. Such operations, including complete control and supervision of all
Station programs, employees and policies, shall be the sole responsibility of
Seller.
10.4 CONSENTS TO ASSIGNMENT. To the extent that any Contract identified
in the Schedules is not capable of being sold, assigned, transferred, delivered
or subleased without the waiver or consent of any third person (including a
government or governmental unit), or if such sale, assignment, transfer,
delivery or sublease or attempted sale, assignment, transfer, delivery or
sublease would constitute a breach thereof or a violation of any law or
regulation, this Agreement and any assignment executed pursuant hereto shall not
constitute a sale, assignment, transfer, delivery or sublease or an attempted
sale, assignment, offer, delivery or sublease thereof. Subject to the provisions
of Section 11.5, in those cases where consents, assignments, releases and/or
waivers have not been obtained at or prior to the Closing relating to the
assignment to RBI of the Contracts, this Agreement and any assignment executed
pursuant hereto, to the extent permitted by law, shall constitute an equitable
assignment by Seller to RBI of all of Seller's rights, benefits, title and
interest in and to the Contracts, and where necessary or appropriate, RBI shall
be deemed to be Seller's agent for the purpose of completing, fulfilling and
discharging all of Seller's rights and liabilities arising after the Closing
Date under such Contracts. Seller shall use its reasonable best efforts to
provide RBI with the financial and business benefits of such Contracts
(including, without limitation, permitting RBI to enforce any rights of Seller
arising under such Contracts), and RBI shall, to the extent RBI is provided with
the benefits of such Contracts, assume, perform and in due course pay and
discharge all debts, obligations and liabilities of Seller under such Contracts
to the extent that RBI was to assume those obligations pursuant to the terms
hereof.
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10.5 FILINGS. In addition to the covenants of the parties set forth in
Article 5 hereto, as promptly as practicable after the execution of this
Agreement, Buyers and Seller shall use their reasonable best efforts to obtain,
and to cooperate with each other in obtaining, all authorizations, consents,
orders and approvals of any governmental authority that may be or become
necessary in connection with the consummation of the transactions contemplated
by this Agreement, and to take all reasonable actions to avoid the entry of any
order or decree by any governmental authority prohibiting the consummation of
the transactions contemplated hereby, including without limitation, any reports
or notifications that may be required to be filed with the FCC, and each shall
furnish to one another all such information in its possession as may be
necessary for the completion of the reports or notifications to be filed by the
other.
10.6 BULK SALES LAWS. Buyers hereby waive compliance by Seller with the
provisions of the "bulk sales" or similar laws of any state. Seller agrees to
indemnify Buyers and hold them harmless from any and all loss, cost, damage and
expense (including but not limited to, reasonable attorney's fees) sustained by
Buyers as a result of any failure of Seller to comply with any "bulk sales" or
similar laws.
10.7 EMPLOYEE MATTERS. Seller shall be responsible for the payment of
all compensation and accrued employee benefits payable to all employees up to
the Closing Date. Seller acknowledges and agrees that it, and not Buyers, is and
shall be solely responsible for any and all severance, insurance, supplemental
pension, deferred compensation, retirement and any other benefits, and related
costs, premiums and claims, due, to become due, committed or otherwise promised
to any person who, as of the Closing Date, is a retiree, former employee, or
current employee of Seller, relating to the period up to the Closing Date.
Buyers, as purchaser of the Stations Assets, shall assume no employee benefit
plans, programs or practices, whether or not set forth in writing, maintained by
Seller at any time except for obligations under COBRA that are Assumed
Liabilities.
ARTICLE 11
CONDITIONS OF CLOSING BY BUYERS
-------------------------------
The obligations of Buyers hereunder are, at their option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
11.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
11.1.1 All representations and warranties of Seller made in this
Agreement or in any Exhibit, Schedule or document delivered pursuant hereto,
shall be true and complete in all material respects as of the date hereof and on
and as of the Closing Date as if made on and as of that date, except for changes
expressly permitted or contemplated by the terms of this Agreement.
11.1.2 All of the terms, covenants and conditions to be
complied with and performed by Seller on or prior to the Closing Date shall have
been complied with or performed in all material respects.
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11.1.3 Buyers shall have received a certificate, dated as of
the Closing Date, from Seller, executed by Seller's general partner to the
effect that: (a) the representations and warranties of Seller contained in this
Agreement are true and complete in all material respects on and as of the
Closing Date as if made on and as of that date except for changes expressly
permitted or contemplated by the terms of this Agreement; and (b) Seller has
complied with or performed in all material respects all terms, covenants and
conditions to be complied with or performed by it on or prior to the Closing
Date.
11.2 GOVERNMENTAL CONSENTS. The FCC Consent shall have been
obtained and shall have become a Final Order.
11.3 GOVERNMENTAL AUTHORIZATIONS. Seller shall be the holder of the
Stations Licenses and all other licenses, permits and other authorizations
listed in SCHEDULE 7.4, and there shall not have been any modification of any of
such licenses, permits and other authorizations which has a material adverse
effect on any of the Stations or the operations thereof. No application shall be
pending for the renewal of any of the Stations Licenses. No proceeding shall be
pending which seeks, or the effect of which reasonably could be, to revoke,
cancel, fail to renew, suspend or adversely modify any of the Stations Licenses
or any other licenses, permits or other authorizations listed in SCHEDULE 7.4.
11.4 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no order, decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; (d) seeks material damages on account of
the consummation of any transaction contemplated hereby; or (e) is a petition of
bankruptcy by or against Seller, an assignment by Seller for the benefit of its
creditors, or other similar proceeding.
11.5 THIRD-PARTY CONSENTS. All Material Contracts shall be in full
force and effect on the Closing Date, and Seller shall have obtained and shall
have delivered to RBI all appropriate third-party consents in form and substance
acceptable to RBI (including estoppel certificates for the leases related to the
Leased Real Estate) in connection with the assignment of the Material Contracts
to RBI.
11.6 CLOSING DOCUMENTS. Seller shall have delivered or caused to be
delivered to Buyers, on the Closing Date, all bills of sale, general warranty
deeds, endorsements, assignments and other instruments of conveyance reasonably
satisfactory in form and substance to Buyers, effecting the sale, transfer,
assignment and conveyance of the Stations Assets to Buyers, including, without
limitation, each of the documents required to be delivered by it pursuant to
Article 14.
11.7 ENVIRONMENTAL STUDIES. Buyers shall have obtained within thirty
(30) days following the date of this Agreement Phase I environmental assessment
reports (the "Environmental Audits") on the Real Estate confirming the
representations and warranties of Seller on environmental matters; provided,
however, if Buyers elect not to obtain such Environmental Audits, Buyers shall
be deemed to have waived the condition of Closing
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contained in this Section 11.7. Buyers shall provide Seller with a copy of such
Environmental Audits within fifteen (15) business days of receipt by Buyers and
at the same time shall give Seller notice of any matter disclosed by the
Environmental Audits that requires remediation under any Environmental Law.
Seller shall be required to complete such remediation within a period of
forty-five (45) days from the date of the Buyers' notice; provided, however,
that if Seller reasonably determines the cost of such required remediation
(including post-remediation and reporting) would exceed One Hundred Thousand
Dollars ($100,000.00) or that Seller will be unable to complete the remediation
within such 45-day period, Seller shall give notice to Buyers within fifteen
(15) business days after such determination. Within fifteen (15) days after
receipt of such notice from Seller, Buyers shall give Seller notice of Buyers'
election of one of the following: (a) to accept the Real Estate as is with
respect to such environmental matters, together with a reduction of the Purchase
Price by One Hundred Thousand Dollars ($100,000.00) and to relieve Seller from
any responsibility for indemnification under Section 15.2.1 for claims relating
to Environmental Laws; or (b) to terminate this Agreement. If Buyers fail to
elect option (a) or (b) above, then Buyers shall be deemed to have elected
option (a). Nothing in this Section 11.7 shall be deemed to extend the Closing
Date.
11.8 NO ADVERSE CHANGE. No material adverse change in operations,
condition or status of the Stations or the Stations Assets shall have occurred
since the date of this Agreement or be reasonably likely to occur. The term
"material adverse change" means an event, condition, circumstance, act, omission
or effect which, individually or in the aggregate with other similar events,
conditions, circumstances, acts, omission or effects, is, in the opinion of a
reasonably prudent buyer, likely to have such an adverse effect on the
transactions contemplated hereby or operations, condition or status of the
Stations taken as a whole that it would be of such significance that such buyer
would consider it a factor in its purchase decision; provided, however, that the
following shall not constitute a material adverse change, changes in (i)
Seller's cash flow for the Stations, (ii) the economy, (iii) the radio industry
generally or locally, (iv) the Stations' Arbitron ratings, or (v) changes in
revenues for the Stations, provided Seller's revenues for the Stations in the
trailing twelve (12) month period ending as close to the Closing Date as
possible to reasonably allow for a calculation by the Closing Date exceed such
revenues for the corresponding period of the prior twelve (12) month period.
11.9 ENGINEERING INSPECTION. It is agreed that within thirty (30) days
prior to the Closing Date, Buyers' engineer may reinspect the tangible personal
property to insure that its equipment complies with all warranties and
conditions set forth herein. Seller agrees to extend full cooperation to said
engineer, including such access to the equipment and to logs pertaining thereto
at such time or times as said engineer shall reasonably request. Buyers shall
furnish Seller with a copy of the report of any inspection prior to the Closing
Date. If Buyers' engineer reports that the equipment fails to comply with said
warranties, Buyers may either: (a) elect to consummate the purchase of the
Stations Assets, in which case Seller shall bear the cost of equipment repair in
an amount not to exceed $90,000 and such amount shall be deducted from the
Purchase Price; or (b) elect to consummate the purchase of the Stations Assets
exclusively of the equipment which fails to materially comply with said
warranties, in which case the Purchase Price shall be reduced by the fair market
value of such equipment excluded.
ARTICLE 12
CONDITIONS OF CLOSING BY SELLER
-------------------------------
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The obligations of Seller hereunder are, at its option, subject to
satisfaction, at or prior to the Closing Date, of each of the following
conditions:
12.1 REPRESENTATIONS, WARRANTIES AND COVENANTS.
12.1.1 All representations and warranties of Buyers made in
this Agreement or in any Exhibit, Schedule or document delivered pursuant
hereto, shall be true and complete in all material respects as of the date
hereof and on and as of the Closing Date as if made on and as of that date,
except for changes expressly permitted or contemplated by the terms of this
Agreement.
12.1.2 All the terms, covenants and conditions to be complied
with and performed by Buyers on or prior to the Closing Date shall have been
complied with or performed in all material respects.
12.1.3 Seller shall have received a certificate, dated as of
the Closing Date, executed by the President of Buyers, to the effect that: (a)
the representations and warranties of Buyers contained in this Agreement are
true and complete in all material respects on and as of the Closing Date as if
made on and as of that date except for changes expressly permitted or
contemplated by the terms of this Agreement; and (b) Buyers have complied with
or performed in all material respects all terms, covenants and conditions to be
complied with or performed by it on or prior to the Closing Date.
12.2 GOVERNMENTAL CONSENTS. The FCC Initial Approval shall have been
obtained.
12.3 ADVERSE PROCEEDINGS. No suit, action, claim or governmental
proceeding shall be pending or threatened against, and no other decree or
judgment of any court, agency or other governmental authority shall have been
rendered (and remain in effect) against, any party hereto which: (a) would
render it unlawful, as of the Closing Date, to effect the transactions
contemplated by this Agreement in accordance with its terms; (b) questions the
validity or legality of any transaction contemplated hereby; (c) seeks to enjoin
any transaction contemplated hereby; or (d) seeks material damages on account of
the consummation of any transaction contemplated hereby.
12.4 CLOSING DOCUMENTS. Buyers shall have delivered or caused to be
delivered to Seller, on the Closing Date, the Purchase Price and each of the
documents required to be delivered by them pursuant to Article 14.
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ARTICLE 13
TRANSFER TAXES: FEES AND EXPENSES
---------------------------------
13.1 EXPENSES. Except as set forth in Section 13.2 hereof or otherwise
expressly set forth in this Agreement, each party hereto shall be solely
responsible for all costs and expenses incurred by it in connection with the
negotiation, preparation and performance of and compliance with the terms of
this Agreement including, but not limited to, the costs and expenses incurred
pursuant to Article 5 hereof and the fees and disbursements of counsel and other
advisors.
13.2 SPECIFIC CHARGES. All costs of transferring the Stations Assets in
accordance with this Agreement, including recordation, transfer and documentary
taxes and fees, and any excise, sales or use taxes, shall be paid equally by
Seller and Buyers. Each party shall pay any filing or grant fees imposed upon it
by any governmental authority the consent of which or the filing with which is
required for the consummation of the transactions contemplated hereby, except
that any filing fees with the FCC shall be shared equally by the parties, and
any fees payable pursuant to the Hart-Scott-Rodino Act, if applicable, shall be
paid by Buyers. Any fees or commission due Star Media Group, Inc. as a result of
this transaction shall be paid by Seller.
ARTICLE 14
DOCUMENTS TO BE DELIVERED AT CLOSING
14.1 SELLER' DOCUMENTS. At the Closing, Seller shall deliver or cause
to be delivered to Buyers the following:
14.1.1 Certified resolutions of all requisite corporate or
other action of Seller approving the execution and delivery of this Agreement
and authorizing the consummation of the transactions contemplated hereby;
14.1.2 A certificate of Seller, dated the Closing Date, in the
form described in Section 11.1.3;
14.1.3 Governmental certificates showing that Seller: (a) is
duly organized and in good standing in the State of Delaware; and (b) has filed
all returns, paid all taxes due thereon and is currently subject to no
assessment and is in good standing in the State of Texas, each certified as of a
date not more than thirty (30) days before the Closing Date;
14.1.4 Such certificates, bills of sale, general warranty
deeds, assignments, documents of title and other instruments of conveyance,
assignment and transfer (including without limitation any necessary consents to
conveyance, assignment or transfer required to be delivered hereunder), and lien
releases, all in form satisfactory to Buyers and Buyers' counsel, as shall be
effective to vest in Buyers good and marketable title in and to the Stations
Assets in accordance with the terms of this Agreement, free, clear and
unencumbered except for Permitted Encumbrances, if any, as set forth on SCHEDULE
7.7 and SCHEDULE 7.8.
14.1.5 An Assignment and Assumption Agreement in the form of
EXHIBIT C effectuating the assignment and assumption of the Assumed Liabilities
(the "Assignment and Assumption Agreement");
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14.1.6 The Indemnification Escrow Agreement;
14.1.7 At the time and place of Closing, originals and all
copies of all program, operations, transmission or maintenance logs and all
other records required by the FCC to be maintained with respect to the Stations,
including the public files of the Stations, shall be left at the Stations and
thereby delivered to Buyers;
14.1.8 A written opinion of Seller's corporate counsel, on
which Buyers' lenders shall be entitled to rely, substantially in the same form
as attached as EXHIBIT D, dated as of the Closing Date;
14.1.9 A written opinion of Seller's FCC counsel, on which
Buyers' lenders shall be entitled to rely, in a form reasonably acceptable to
Buyers covering the matters listed on EXHIBIT E, dated as of the Closing Date;
14.1.10 A Non-Competition Agreement in the form of EXHIBIT F
(the "Non-Competition Agreement") executed by Seller, Jon Ferrari, Charles Cohn,
and Kirk Warshaw; and
14.1.11 Such additional information, materials, agreements,
documents and instruments as Buyers and their counsel may reasonably request in
order to consummate the Closing.
14.2 BUYERS' DOCUMENTS. At the Closing, Buyers shall deliver or cause
to be delivered to Seller the following:
14.2.1 Certified resolutions of the Board of Directors of
Buyers approving the execution and delivery of this Agreement and authorizing
the consummation of the transactions contemplated hereby;
14.2.2 A certificate of Buyers, dated the Closing Date, in the
form described in Section 12.1.3;
14.2.3 The Assignment and Assumption Agreement;
14.2.4 The Indemnification Escrow Agreement;
14.2.5 A written opinion of Buyers' counsel in substantially
the same form as attached as EXHIBIT G, dated as of the Closing Date;
14.2.6 The Purchase Price in accordance with Section 3. 1
hereof;
14.2.7 The Non-Competition Agreement; and
14.2.8 Such additional information, materials, agreements,
documents and instruments as Seller and its counsel may reasonably request in
order to consummate the Closing.
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<PAGE> 35
ARTICLE 15
SURVIVAL, INDEMNIFICATION, ETC.
-------------------------------
15.1 SURVIVAL OF REPRESENTATIONS, ETC. It is the express intention and
agreement of the parties to this Agreement that all covenants and agreements
(individually, "Covenant/Agreement" and collectively, "Covenants/Agreements")
and all representations and warranties (individually, "Warranty" and
collectively, "Warranties") made by Buyers and Seller in this Agreement shall
survive the Closing (regardless of any knowledge, investigation, audit or
inspection at any time made by or on behalf of Buyers or Seller) as follows:
15.1.1 The Covenants/Agreements shall survive the Closing for
a period from the Closing Date equal to the statute of limitations for written
contracts in Texas; provided, however, where any claim or action brought
relating to any Covenant/Agreement is actually for a breach of Warranty, such
claim shall be brought within the earlier to expire of (a) the applicable
statute of limitations or (b) the applicable survival period with respect to
such Warranty.
15.1.2 The Warranties in Section 7.6 or otherwise relating to
the federal, state, local or foreign tax obligations of Seller shall survive the
Closing for the period of the applicable statute of limitations plus any
extensions or waivers granted or imposed with respect thereto.
15.1.3 The Warranties in Sections 6.2, 6.7, 7.2, the third
sentence of 7.7, 7.8.2, 7.13, 7.18 and 7.20 shall survive for a period of two
(2) years from the Closing Date.
15.1.4 All other Warranties shall survive for a period of one
(1) year from the Closing Date.
15.1.5 The right of any party to recover Damages (as defined
in Section 15.2.1) pursuant to Section 15.2 shall not be affected by the
expiration of any Warranties as set forth herein, provided that notice of the
existence of any Damages (but not necessarily the fixed amount of any such
Damages) has been given by the indemnified party to the indemnifying party prior
to such expiration.
15.1.6 Notwithstanding any provision hereof to the contrary,
there shall be no contractual time limit in which Buyers or Seller may bring any
action for actual fraud (a "Fraud Action"), regardless of whether such actual
fraud also included a breach of any Agreement or Warranty; provided, however,
that any Fraud Action must be brought within the period of the applicable
statute of limitations plus any extensions or waivers granted or imposed with
respect thereto.
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<PAGE> 36
15.2 INDEMNIFICATION.
15.2.1 Seller shall defend, indemnify and hold harmless Buyers
from and against any and all losses, costs, damages, liabilities and expenses,
including reasonable attorneys' fees and expenses ("Damages") incurred by Buyers
arising out of or related to: (a) any breach of the Warranties given or made by
Seller in this Agreement; (b) any breach of the Agreements made by Seller in the
Agreement; (c) the Retained Liabilities; (d) any failure of the parties to
comply with any "bulk sales" laws applicable to the transactions contemplated
hereby; and (e) the conduct of the business and operations of the Stations or
any portion thereof or the use or ownership of any of the Stations Assets prior
to the Closing Date.
15.2.2 RBI shall defend, indemnify and hold harmless Seller
from and against any and all Damages incurred by Seller arising out of or
related to: (a) any breach of the Agreements and Warranties given or made by
Buyers in this Agreement; (b) the Assumed Liabilities; and (c) the conduct of
the business and operations of the Stations or any portion thereof or the use or
ownership of any of the Stations Assets on or after the Closing Date.
15.3 PROCEDURES: THIRD PARTY AND DIRECT INDEMNIFICATION CLAIMS. The
indemnified party agrees to give written notice within a reasonable time to the
indemnifying party of any demand, suit, claim or assertion of liability by third
parties or other circumstances that could give rise to an indemnification
obligation hereunder against the indemnifying party (hereinafter collectively
"Claims," and individually a "Claim"), it being understood that the failure to
give such notice shall not affect the indemnified party's right to
indemnification and the indemnifying party's obligation to indemnify as set
forth in this Agreement, unless the indemnifying party's ability to contest,
defend or settle with respect to such Claim is thereby demonstrably and
materially prejudiced. The parties also agree that any claim for Damages arising
directly between the parties relating to this Agreement may be brought at any
time within the applicable survival period specified in Section 15.1, and that
the only notice required with respect thereto shall be as specified in Section
15.1.5.
The obligations and liabilities of the parties hereto with respect to
their respective indemnities pursuant to Section 15.2 resulting from any Claim
shall be subject to the following additional terms and conditions:
15.3.1 The indemnifying party shall have the right to
undertake, by counsel or other representatives of its own choosing, the defense
or opposition to such Claim.
15.3.2 In the event that the indemnifying party shall elect
not to undertake such defense or opposition, or within (10) days after notice of
any such Claim from the indemnified party shall fail to defend or oppose, the
indemnified party (upon further written notice to the indemnifying party) shall
have the right to undertake the defense, opposition, compromise or settlement of
such Claim, by counsel or other representatives of its own choosing, on behalf
of and for the account and risk of the indemnifying party (subject to the right
of the indemnifying party to assume defense of or opposition to such Claim at
any time prior to settlement, compromise or final determination thereof).
15.3.3 Anything contained in this Section 15.3 to the contrary
notwithstanding: (a) the indemnified party shall have the right, at its own cost
and expense, to participate in the
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<PAGE> 37
defense, opposition, compromise or settlement of the Claim; (b) the indemnifying
party shall not, without the indemnified party's written consent, settle or
compromise any Claim or consent to entry of any judgment which does not include
as an unconditional term thereof the giving by the claimant or the plaintiff to
the indemnified party of a release from all liability in respect of such Claim,
and (c) in the event that the indemnifying party undertakes defense of or
opposition to any Claim the indemnified party, by counsel or other
representative of its own choosing and at its sole cost and expense, shall have
the right to consult with the indemnifying party and its counsel or other
representatives concerning such Claim and the indemnifying party and the
indemnified party, and their respective counsel or other representatives, shall
cooperate in good faith with respect to such Claim.
15.3.4 No undertaking of defense or opposition to a Claim
shall be construed as an acknowledgment by such party that it is liable to the
party claiming indemnification with respect to the Claim at issue or other
similar Claims.
15.3.5 Notwithstanding the provisions in Section 15.2, (a)
neither Seller nor RBI shall have the obligation to defend, indemnify and hold
harmless under Section 15.2.1(a) and 15.2.2(a) until the aggregate Damages on
account thereof exceed $35,000, and then for the full amount of all Damages, and
(b) Seller's liability under Section 15.2.1(a) shall not exceed $4,700,000
except with respect to Claims relating to taxes, title, and the Stations
Licenses for which Seller's maximum liability shall be the Purchase Price.
ARTICLE 16
TERMINATION RIGHTS
------------------
16.1 TERMINATION. This Agreement may be terminated at any time prior to
Closing as follows:
16.1.1 Upon the mutual written consent of Buyers and Seller,
this Agreement may be terminated on such terms and conditions as so agreed; or
16.1.2 By written notice of Buyers to Seller if Seller
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Buyers; or
16.1.3 By written notice of Seller to Buyers if either Buyer
breaches in any material respect any of its representations or warranties or
defaults in any material respect in the observance or in the due and timely
performance of any of its covenants or agreements herein contained and such
breach or default shall not be cured within thirty (30) days of the date of
notice of breach or default served by Seller; or
16.1.4 By written notice of Buyers to Seller or by Seller to
Buyers if the FCC denies the FCC Application; or
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<PAGE> 38
16.1.5 By written notice of Buyers to Seller, or by Seller to
Buyers, if any court of competent jurisdiction shall have issued an order,
decree or ruling (which then remains in effect) or taken any other action
restraining, enjoining or otherwise prohibiting the transactions contemplated by
this Agreement, or by Buyers, if any court, legislative body or governmental or
regulatory authority has taken, or is reasonably expected to take, action that
would make the consummation of the transactions contemplated hereby inadvisable
or undesirable as determined by Buyers in their sole discretion reasonably
exercised; or
16.1.6 By written notice of Buyers to Seller, or by Seller to
Buyers, if the Closing shall not have been consummated on or before July 31,
2000; or
16.1.7 By written notice of Buyers to Seller under the
conditions set forth in Section 9.2 hereof; or
16.1.8 By written notice of Seller to Buyers under the
conditions set forth in Section 11.9 hereof.
Notwithstanding the foregoing, no party hereto may effect a termination
hereof if such party is in material default or breach of this Agreement.
16.2 LIABILITY. Except as set forth in Section 16.4 below, the
termination of this Agreement under Section 16.1 shall not relieve any party of
any liability for breach of this Agreement prior to the date of termination.
16.3 MONETARY DAMAGES, SPECIFIC PERFORMANCE AND OTHER REMEDIES. The
parties recognize that if Seller refuses to perform under the provisions of this
Agreement, monetary damages alone will not be adequate to compensate Buyers for
their injury. Buyers shall therefore be entitled to obtain specific performance
of the terms of this Agreement in addition to any other remedies, including but
not limited to monetary damages, that may be available to them. If any action is
brought by Buyers to enforce this Agreement, Seller shall waive the defense that
there is an adequate remedy at law. In the event of a default by Seller, which
results in the filing of a lawsuit for damages, specific performance, or other
remedy, the prevailing party shall be entitled to reimbursement by the
non-prevailing party of reasonable legal fees and expenses incurred by the
prevailing party.
16.4 SELLER'S LIQUIDATED DAMAGES. As more fully described in the
Deposit Escrow Agreement, in the event this Agreement is terminated solely
because of Buyers' material breach of this Agreement, and all other conditions
to Closing are at such time satisfied or waived (other than such conditions as
can reasonably be satisfied by Closing), then the Escrow Deposit shall be
delivered to Seller, and the proceeds thereof shall constitute liquidated
damages. It is understood and agreed that such liquidated damages amount
represents Buyers' and Seller's reasonable estimate of actual damages and does
not constitute a penalty. Recovery of liquidated damages shall be the sole and
exclusive remedy of Seller against Buyers for failing to consummate this
Agreement as a result of Buyers' material breach hereof, and shall be applicable
regardless of the actual amount of damages sustained and all other remedies are
deemed waived by Seller.
ARTICLE 17
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<PAGE> 39
MISCELLANEOUS PROVISIONS
------------------------
17.1 RISK OF LOSS. The risk of loss or damage to any of the Stations
Assets prior to the Closing Date shall be upon Seller. Seller shall repair,
replace and restore any such damaged or lost Stations Asset to its prior
condition as soon as possible and in no event later than forty-five (45) days
following the loss or damage; provided, however, that in the event any such loss
or damage of the Stations Assets exists on the Closing Date, then
notwithstanding any other provision hereto, Buyers at their option may extend
the Closing Date for a period of up to sixty (60) days until such time as Seller
shall have repaired, replaced and restored any such damaged or lost Stations
Asset to its prior condition or deduct from the Purchase Price that amount which
Buyers and Seller reasonably determine to be sufficient to cover any such loss
or damage and close the transaction on the Closing Date.
17.2 CERTAIN INTERPRETIVE MATTERS AND DEFINITIONS. Unless the context
otherwise requires: (a) all references to Sections, Articles, Schedules or
Exhibits are to Sections, Articles, Schedules or Exhibits of or to this
Agreement; (b) each term defined in this Agreement has the meaning assigned to
it; (c) each accounting term not otherwise defined in this Agreement has the
meaning assigned to it in accordance with generally accepted accounting
principles as in effect on the date hereof, (d) "or" is disjunctive but not
necessarily exclusive; (e) words in the singular include the plural and vice
versa; (f) the term "Affiliate" has the meaning given it in Rule 12b-2 of
Regulation 12B under the Securities Exchange Act of 1934, as amended; and (g)
all references to "$" or dollar amounts will be to lawful currency of the United
States of America.
17.3 FURTHER ASSURANCES. After the Closing, Seller shall from time to
time, at the request of and without further cost or expense to Buyers, execute
and deliver such other instruments of conveyance and transfer and take such
other actions as may reasonably be requested in order more effectively to
consummate the transactions contemplated hereby to vest in Buyers good and
marketable title to the Stations Assets being transferred hereunder in
accordance with the terms hereof, and RBI shall from time to time, at the
request of and without further cost or expense to Seller, execute and deliver
such other instruments and take such other actions as may reasonably be
requested in order more effectively to relieve Seller of any obligations being
assumed by RBI hereunder.
17.4 PRESERVATION OF RECORDS. Subject to Section 10.1 hereof, RBI
hereby agrees that it will preserve and make available to Seller and its
attorneys and accountants (including the right to inspect and copy at Seller's
cost), during normal business hours and upon reasonable advance notice, for
three (3) years after the Closing Date, such of the books, records, files,
correspondence, memoranda and other documents referred to in this Agreement as
Seller may reasonably require for the preparation of tax reports and returns,
the preparation of financial statements, or the preparation of a response to any
claim by a third party against Seller.
17.5 BENEFIT AND ASSIGNMENT. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns. Seller may not voluntarily or involuntarily assign its
interest under this Agreement without the prior written consent of Buyers.
Buyers shall have the right to assign and/or delegate all or any portion of
their rights and obligations under this Agreement, including without limitation,
assignments as collateral, provided that no such assignment and/or delegation
shall relieve Buyers of their obligations hereunder in the event that its
assignee fails to perform the obligations delegated. All
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<PAGE> 40
covenants, agreements, statements, representations, warranties and indemnities
in this Agreement by and on behalf of any of the parties hereto shall bind and
inure to the benefit of their respective successors and permitted assigns of the
parties hereto. In the event Buyers find it necessary or are required to provide
to a third party a collateral assignment of the Buyers' interest in this
Agreement and/or any related documents, Seller shall cooperate with the Buyers
and any third party requesting such assignment including but not limited to
signing a consent and acknowledgment of such assignment.
17.6 AMENDMENTS. No amendment, waiver of compliance with any provision
or condition hereof or consent pursuant to this Agreement shall be effective
unless evidenced by an instrument in writing signed by the party against whom
enforcement of any waiver, amendment, change, extension or discharge is sought.
17.7 HEADINGS. The headings set forth in this Agreement are for
convenience only and will not control or affect the meaning or construction of
the provisions of this Agreement.
17.8 GOVERNING LAW. The construction and performance of this Agreement
shall be governed by the laws of the State of Texas, without giving effect to
the choice of law provisions thereof.
17.9 NOTICES. Any notice, demand or request required or permitted to be
given under the provisions of this Agreement shall be in writing, including by
facsimile, and shall be deemed to have been duly delivered and received on the
date of personal delivery, on the third day after deposit in the U.S. mail if
mailed by registered or certified mail, postage prepaid and return receipt
requested, on the day after delivery to a nationally recognized overnight
courier service if sent by an overnight delivery service for next morning
delivery or when dispatched by facsimile transmission (with the facsimile
transmission confirmation being deemed conclusive evidence of such dispatch) and
shall be addressed to the following addresses, or to such other address as any
party may request, in the case of Seller, by notifying Buyers, and in the case
of Buyers, by notifying Seller:
To Seller: New Wave Broadcasting, L.P.
79 Chestnut Ridge Road
Saddle River, New Jersey 07458
Fax: (201) 818-4376
Attn: Mr. Jon Ferrari
Copy to: Barton P. Blumberg, P.C.
205 Lexington Avenue
New York, New York 10016
Fax: (212) 779-7424
Attn: Barton P. Blumberg, Esq.
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<PAGE> 41
To Buyers: Regent Broadcasting of El Paso, Inc.
c/o Regent Communications, Inc.
50 East RiverCenter Blvd.
Suite 180
Covington, KY 41011
Fax: (606) 292-0352
Attn: Mr. Terry S. Jacobs
Copy to: STRAUSS & TROY
The Federal Reserve Building
150 East Fourth Street
Cincinnati, OH 45202
Fax: (513) 241-8259
Attn: Alan C. Rosser, Esq.
17.10 COUNTERPARTS. This Agreement may be executed in one or more
counterparts and by facsimile, each of which will be deemed an original and all
of which together will constitute one and the same instrument.
17.11 NO THIRD PARTY BENEFICIARIES. Nothing herein expressed or implied
is intended or shall be construed to confer upon or give to any person or entity
other than the parties hereto and their successors or permitted assigns any
rights or remedies under or by reason of this Agreement.
17.12 SEVERABILITY. The parties agree that if one or more provisions
contained in this Agreement shall be deemed or held to be invalid, illegal or
unenforceable in any respect under any applicable law, this Agreement shall be
construed with the invalid, illegal or unenforceable provision deleted, and the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected or impaired thereby.
17.13 ENTIRE AGREEMENT. This Agreement and the schedules and exhibits
hereto embody the entire agreement and understanding of the parties hereto and
supersede any and all prior agreements, arrangements and understandings relating
to the matters provided for herein.
17.14 DISCLOSURE EXHIBITS AND SCHEDULES. Notwithstanding anything to
the contrary contained in this Agreement or in any of the Exhibits and
Schedules, any information disclosed in one Exhibit or Schedule, as the case may
be, shall be deemed to be disclosed in all Exhibits and Schedules. Certain
information set forth in the Exhibits and Schedules, as the case may be, is
included solely for informational purposes and may not be required to be
disclosed pursuant to this Agreement. The disclosure of any information shall
not be deemed to constitute an acknowledgement that such information is required
to be disclosed in connection with the representations and warranties made by
Sellers in this Agreement or is material, nor shall such information be deemed
to establish a standard of materiality. Except as expressly set forth in this
Agreement, there are no representations or warranties, express or implied, being
made by Seller.
17.15 PARTNERSHIP EQUITY. For purposes of a partial release of the
Indemnification Escrow pursuant to Section 3.1 hereof and Section 3(b) of the
Indemnification Escrow Agreement, the term "Partnership Equity" shall mean and
be calculated as the fair market value,
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as of the first anniversary of the Closing Date, of the radio stations then
wholly-owned by Seller (as agreed to by Seller and Buyers, or if they are unable
to agree, then by an appraisal conducted by an appraiser mutually-acceptable to
Seller and Buyers, whose fees shall be borne equally by Seller on the one hand
and Buyers on the other hand), PLUS accounts receivable (less appropriate
allowance for doubtful accounts), cash and cash equivalents, and LESS all
liabilities (as determined under generally-accepted accounting principles
consistently applied).
[SIGNATURES APPEAR ON THE FOLLOWING PAGE]
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<PAGE> 43
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
REGENT BROADCASTING OF
EL PASO, INC.
By: /s/ Terry S. Jacobs
------------------------------
Name: Terry S. Jacobs
------------------------------
Title: Chairman and Ceo
------------------------------
REGENT LICENSEE OF EL PASO, INC.
By: /s/ Terry S. Jacobs
------------------------------
Name: Terry S. Jacobs
------------------------------
Title: Chairman and Ceo
------------------------------
NEW WAVE BROADCASTING, L.P.
By: NEW WAVE BROADCASTING, INC.,
its General Partner
By: /s/ Jon Ferrari
------------------------------
Name: Jon Ferrari
------------------------------
Title: CEO
------------------------------
<PAGE> 1
EXHIBIT 3(e)
CERTIFICATE OF DECREASE
OF
SHARES DESIGNATED
AS
SERIES G CONVERTIBLE PREFERRED STOCK
OF
REGENT COMMUNICATIONS, INC.
Regent Communications, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That the Certificate of Incorporation of said corporation was filed in
the office of the Secretary of State of Delaware on November 4, 1996, a
Certificate of Amendment was filed on May 16, 1997, a Certificate of Designation
was filed on November 26, 1997, an Amended and Restated Certificate of
Incorporation was filed on December 5, 1997, a Certificate of Designation was
filed on March 31, 1998, a Certificate of Decrease was filed on June 8, 1998, an
Amended and Restated Certificate of Incorporation was filed on June 11, 1998, a
Certificate of Designations, Preferences and Rights of the Series G Convertible
Preferred Stock was filed in said office of the Secretary of State on January
21, 1999 and a Certificate of Decrease and a Certificate of Designation were
filed on June 21, 1999.
That in a writing signed by all of the members of the Board of
Directors of said corporation, the Board of Directors duly adopted a resolution
authorizing and directing a decrease in the number of shares designated as
Series G Convertible Preferred Stock of the corporation, from 2,000,000 shares
to 1,800,000 shares, in accordance with the provisions of section 151 of the
General Corporation Law of the State of Delaware. The 200,000 shares eliminated
from the Series G Convertible Preferred Stock shall revert to the status of
authorized and unissued shares of Preferred Stock of the corporation,
undesignated as any series of Preferred Stock.
IN WITNESS WHEREOF, the said Regent Communications, Inc. has caused
this Certificate to be executed by its Chairman/Chief Executive Officer this
23rd day of August, 1999.
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
-----------------------------
Terry S. Jacobs, Chairman and
Chief Executive Officer
<PAGE> 1
EXHIBIT 3(f)
CERTIFICATE OF INCREASE
OF
SHARES DESIGNATED
AS
SERIES H CONVERTIBLE PREFERRED STOCK
OF
REGENT COMMUNICATIONS, INC.
Regent Communications, Inc., a corporation organized and existing under
the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
That the Certificate of Incorporation of said corporation was filed in
the office of the Secretary of State of Delaware on November 4, 1996, a
Certificate of Amendment was filed on May 16, 1997, a Certificate of Designation
was filed on November 26, 1997, an Amended and Restated Certificate of
Incorporation was filed on December 5, 1997, a Certificate of Designation was
filed on March 31, 1998, a Certificate of Decrease was filed on June 8, 1998, an
Amended and Restated Certificate of Incorporation was filed on June 11, 1998, a
Certificate of Designations, Preferences and Rights of the Series G Convertible
Preferred Stock was filed in said office of the Secretary of State on January
21, 1999 and a Certificate of Decrease and a Certificate of Designation were
filed on June 21, 1999.
That the Board of Directors of the corporation, by the unanimous
written consent of its members, filed with the minutes of the Board, duly
adopted resolutions authorizing and directing an increase in the number of
shares designated as Series H Convertible Preferred Stock of the corporation,
from 2,000,000 shares to 2,200,000 shares, in accordance with the provisions of
section 151 of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the said Regent Communications, Inc. has caused
this Certificate to be executed by its Chairman/Chief Executive Officer this
23rd day of August, 1999.
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
-----------------------------
Terry S. Jacobs, Chairman and
Chief Executive Officer
<PAGE> 1
Exhibit 4(dd)
REGENT COMMUNICATIONS, INC.
EIGHTH AMENDMENT, LIMITED CONSENT AND LIMITED WAIVER TO CREDIT AGREEMENT
This EIGHTH AMENDMENT, LIMITED CONSENT AND LIMITED WAIVER TO CREDIT
AGREEMENT (this "AMENDMENT") is dated as of November 11, 1999 and entered into
by and among Regent Communications, Inc., a Delaware corporation ("COMPANY"),
the financial institutions listed on the signature pages hereof ("LENDERS"),
General Electric Capital Corporation, as documentation agent ("DOCUMENTATION
AGENT") and Bank of Montreal, Chicago Branch, as agent for Lenders ("AGENT"),
and the Credit Support Parties (as defined in Section 5 hereof) listed on the
signature pages hereof, and is made with reference to that certain Credit
Agreement dated as of November 14, 1997, as amended by that certain First
Amendment to Credit Agreement dated as of February 16, 1998, that certain Second
Amendment and Limited Waiver to Credit Agreement dated as of June 10, 1998, that
certain Third Amendment to Credit Agreement dated as of August 14, 1998, that
certain Fourth Amendment, Limited Consent and Limited Waiver to Credit
Agreement, First Amendment to Subsidiary Guaranty and First Amendment to Pledge
and Security Agreement dated as of October 16, 1998, that certain Fifth
Amendment to Credit Agreement dated as of November 23, 1998, that certain Sixth
Amendment and Limited Consent to Credit Agreement dated as of February 24, 1999
and that certain Seventh Amendment to Credit Agreement dated as of June 30, 1999
(as so amended, the "CREDIT AGREEMENT"), by and among Company, Lenders and
Agent. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, Company and Lenders desire to amend the Credit Agreement to
make certain amendments as set forth below;
WHEREAS, Company and Lenders desire to waive compliance with the
provisions of subsections 7.8 and 7.16 of the Credit Agreement in the manner and
to the limited extent described herein;
WHEREAS, Company has requested that Lenders consent to (i) outstanding
Letters of Credit not being treated as Indebtedness for purposes of calculating
Consolidated Total Debt in the manner and to the limited extent described herein
and (ii) the issuance of additional equity in Company on terms and conditions
satisfactory to Agent (the "ADDITIONAL EQUITY") during the period from the date
hereof through December 30, 1999 (the "ISSUE PERIOD") and the application of the
net proceeds of such Additional Equity as set forth herein.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
<PAGE> 2
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SECTION 2: AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
Subsection 2.1A of the Credit Agreement is hereby amended by deleting
subdivision (ii) of the last paragraph thereof in its entirety and substituting
therefor the following:
"(ii) during the period from the date of the Eighth Amendment to this
Agreement to December 31, 1999, no additional Revolving Loans shall be
made hereunder"
1.2 AMENDMENT TO SECTION 6: AFFIRMATIVE COVENANTS
Section 6 of the Credit Agreement is hereby amended by deleting
subsection 6.13 in its entirety and substituting therefor the following:
"6.13 SALE OF CERTAIN STATIONS.
[RESERVED]"
1.3 AMENDMENTS TO SECTION 7: NEGATIVE COVENANTS
A. Subsection 7.6D of the Credit Agreement is hereby amended by
deleting subdivision (iii) in its entirety and substituting therefor the
following:
" (iii) Sale of Assets. For purposes of calculating the Consolidated
Total Debt Ratio only for any relevant period through (i) September 30,
1999, in the case of the Assets Sales of the Kingman Stations and the
Lake Tahoe Stations or (ii) the date (the "END DATE") which is the
earlier of (x) December 30, 1999 or (y) the date of termination or
abandonment of the Asset Sale pending for the Flagstaff Stations under
the sale agreement in effect as of the date of the Eighth Amendment to
this Agreement, in the case of the Asset Sale of the Flagstaff
Stations: Company and its Subsidiaries may calculate Consolidated Total
Debt and Consolidated Operating Cash Flow on a pro forma basis as if
such Asset Sales had been consummated and the Net Cash Proceeds which
Company in good faith reasonably expects to result from the
consummation of such Asset Sales (as certified by Company to Lenders
pursuant to an Officers' Certificate no later than June 30, 1999, or
July 15, 1999 with respect to the Lake Tahoe Stations only) had been
applied to repay Loans as required hereunder, in each case as of the
first date of such period."
B. Subsection 7.6D(iv) of the Credit Agreement is hereby amended by
deleting the reference to "September 30, 1998" contained therein and
substituting therefor "the End Date".
C. Subsection 7.7 of the Credit Agreement is hereby amended by deleting
subdivision (vii) thereof in its entirety.
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<PAGE> 3
1.4 AMENDMENT TO SECTION 8: EVENTS OF DEFAULT
A. Subsection 8.3 of the Credit Agreement is hereby amended by deleting
the reference to ", 6.13" contained therein.
B. Section 8 of the Credit Agreement is hereby further amended by (i)
deleting the "or" at the end of subsection 8.16, (ii) adding "or" at the end of
subsection 8.17 and (iii) adding a new subsection 8.18 as follows:
"8.18 ADDITIONAL EQUITY.
Company shall fail (i) to obtain by no later than November 30,
1999, a written commitment in form and substance satisfactory to Agent
for the issuance no later than December 30, 1999 of additional equity
in the Company for net proceeds of not less than $10,000,000 on terms
and conditions satisfactory to Agent; or (ii) to issue such equity and
apply not less than $10,000,000 of the net proceeds thereof to repay
the Loans and reduce the Commitments in accordance with subsection
2.4B(iii)(c) no later than December 30, 1999."
SECTION 2. LIMITED CONSENTS
2.1 LETTERS OF CREDIT
Lenders hereby consent to the Company not treating currently
outstanding Letters of Credit under the Credit Agreement as Indebtedness for
purposes of calculating Consolidated Total Debt ; provided, however, that (i)
any Letters of Credit issued after the date hereof and (ii) commencing December
31, 1999, all outstanding Letters of Credit shall be deemed to be Indebtedness
for purposes of calculating Consolidated Total Debt for all purposes under the
Credit Agreement.
2.2 ADDITIONAL EQUITY
Lenders hereby consent to the issuance of Additional Equity during the
Issue Period; provided that the net proceeds of such issuance are applied to
prepay the Loans and reduce the Commitments in accordance with subsection
2.4B(iii)(c) and in the amount of the following percentages of such net
proceeds: (i) 100% of any such net proceeds up to and including the first
$10,000,000 thereof, (ii) 75% of any such net proceeds in excess of $10,000,000
but less than or equal to $15,000,000 in the aggregate, and (iii) 50% of any
such net proceeds in excess of $15,000,000 in the aggregate.
SECTION 3. LIMITED WAIVERS
3.1 WAIVER OF SUBSECTION 7.8: CAPITAL EXPENDITURES
Lenders hereby waive compliance with the provisions of subsection 7.8
of the Credit Agreement prohibiting the Credit Parties or any of their
respective Subsidiaries from making or incurring Consolidated Capital
Expenditures in excess of $1,750,000 in the aggregate for any twelve consecutive
month period ending as of the last day of any Fiscal Quarter during
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<PAGE> 4
Fiscal Year 1999 with respect to the Fiscal Quarter ending as of September 30,
1999; provided that the aggregate amount of such Consolidated Capital
Expenditures shall not exceed $1,786,000.
3.2 WAIVER OF SUBSECTION 7.16: OVERHEAD
Lenders hereby waive compliance with the provisions of subsection 7.16
of the Credit Agreement prohibiting the aggregate amount of Overhead of Company
during the period April 1, 1999 through September 30, 1999 to exceed $1,900,000;
provided that the aggregate amount of such Overhead shall not exceed $1,945,000.
SECTION 4. LIMITATION OF AMENDMENTS, CONSENTS AND WAIVERS
Without limiting the generality of the provisions of subsection 10.6 of
the Credit Agreement, the amendments, consents and waivers set forth above shall
be limited precisely as written and relate solely to the matters expressly set
forth in Sections 1, 2 and 3 hereof, in the manner and to the extent described
above, and nothing in this Amendment shall be deemed to:
(a) constitute a waiver of compliance by Company with respect to the
Credit Agreement in any other instance or any other term, provision or
condition of the Credit Agreement or any other instrument or agreement
referred to therein; or
(b) prejudice any right or remedy that Agent or any Lender may now have
(except to the extent such right or remedy was based upon existing
defaults that will not exist after giving effect to this Amendment) or
may have in the future under or in connection with the Credit Agreement
or any other instrument or agreement referred to therein.
Except as expressly set forth herein, the terms, provisions and
conditions of the Credit Agreement and the other Loan Documents shall remain in
full force and effect and in all other respects are hereby ratified and
confirmed.
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, each Credit Party represents
and warrants to each Lender that the following statements are true, correct and
complete:
A. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Amendment Effective Date to the same extent as though
made on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case they were true,
correct and complete in all material respects on and as of such earlier date.
B. ABSENCE OF DEFAULT. No event has occurred and is continuing or will
result from the consummation of the transactions contemplated by this Amendment
that would constitute an Event of Default or a Potential Event of Default.
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<PAGE> 5
SECTION 6. ACKNOWLEDGEMENT AND CONSENT
Each of the Company and the Subsidiaries (each individually a "CREDIT
SUPPORT PARTY" and collectively, the "CREDIT SUPPORT PARTIES") hereby
acknowledges that it has reviewed the terms and provisions of the Credit
Agreement and this Amendment and consents to the amendments of the Credit
Agreement effected pursuant to this Amendment. The Pledge and Security
Agreement, the Collateral Account Agreement and the Subsidiary Guaranty are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS". Each Credit
Support Party hereby confirms that each Credit Support Document to which it is a
party or otherwise bound and all Collateral encumbered thereby will continue to
guaranty or secure, as the case may be, to the fullest extent possible the
payment and performance of all "Guarantied Obligations" and "Secured
Obligations", as the case may be (in each case as such terms are defined in the
applicable Credit Support Document), including without limitation the payment
and performance of all such "Guarantied Obligations" and "Secured Obligations",
as the case may be, in respect of the Obligations of Company now or hereafter
existing under or in respect of the Credit Agreement and the Notes.
SECTION 7. RELEASE
Each Credit Party, hereby knowingly, voluntarily, intentionally and
irrevocably releases and discharges Agent, each Lender and each of their
respective officers, directors, agents and counsel (each a "RELEASEE") from any
and all actions, causes of action, suits, sums of money, controversies,
variances, trespasses, damages, judgements, extents, executions, losses,
liabilities, costs, expenses, debts, dues, demands, obligations or other claims
of any kind whatsoever, known or unknown, in law, admiralty or equity, which
such Credit Party ever had, now have or hereafter can, shall or may have against
any Releasee for, upon or by reason of any matter, cause or thing whatsoever
from the beginning of the world to and including the date hereof.
SECTION 8. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
(i) On and after the effectiveness of this Amendment, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof" "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Loan Documents to the
"Credit Agreement", "thereunder", "thereof" or words of like import
referring to the Credit Agreement shall mean and be a reference to the
Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full
force and effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of Agent or any Lender under, the Credit Agreement or any of
the other Loan Documents.
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<PAGE> 6
(iv) All grammatical and technical corrections required in the
Credit Agreement and the other Loan Documents in order to effect the
substance of the amendments set forth herein shall be deemed made upon
the effectiveness of this Amendment.
B. FEES AND EXPENSES.
(i) Company acknowledges that all costs, fees and expenses as
described in subsection 10.2 of the Credit Agreement incurred by Agent
and its counsel with respect to this Amendment and the documents and
transactions contemplated hereby shall be for the account of Company.
(ii) In addition, Company agrees to pay to Agent for
distribution to each Lender that executes this Amendment a
non-refundable amendment fee equal to .075% of its Pro Rata Share (the
"AMENDMENT FEE") (i) on November 30, 1999, if on or before November 30,
1999, Company has not received a written commitment in form and
substance satisfactory to Agent for the issuance of the Additional
Equity on terms and conditions satisfactory to Agent or (ii) on
December 30, 1999, if on or before December 30, 1999, the net proceeds
of such Additional Equity shall not have been applied to repay the
Loans and permanently reduce the Commitments as provided herein;
provided, that the obligation to pay such Amendment Fee shall be
terminated on December 30, 1999 if the net proceeds of such Additional
Equity shall have been applied to repay the Loans and permanently
reduce the Commitments as provided herein.
C. HEADINGS. Section and subsection headings in this Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW
YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Amendment shall become effective upon the execution of a
counterpart hereof by Company, each Credit Support Party and Requisite Lenders
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and receipt by Agent of written or telephonic notification of such execution and
authorization of delivery thereof (the "AMENDMENT EFFECTIVE DATE").
[Remainder of page intentionally left blank]
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<PAGE> 8
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
REGENT COMMUNICATIONS, INC.
By: /s/ Anthony A. Vasconcellos
---------------------------------------------------
Name: Anthony A. Vasconcellos
Title: Vice President and Chief Financial Officer
S-1
<PAGE> 9
CREDIT SUPPORT PARTIES
REGENT BROADCASTING OF LEXINGTON, INC.,
REGENT BROADCASTING OF SAN DIEGO, INC.,
REGENT BROADCASTING OF CHICO, INC., REGENT
BROADCASTING OF FLAGSTAFF, INC., REGENT
BROADCASTING OF KINGMAN, INC., REGENT
BROADCASTING OF LAKE TAHOE, INC., REGENT
BROADCASTING OF PALMDALE, INC., REGENT
BROADCASTING OF REDDING, INC., REGENT
BROADCASTING OF VICTORVILLE, INC., REGENT
BROADCASTING OF SOUTH CAROLINA, INC., REGENT
BROADCASTING MIDWEST, INC., REGENT
BROADCASTING OF FLINT, INC., REGENT
BROADCASTING OF MANSFIELD, INC., REGENT
BROADCASTING OF ST. CLOUD, INC., REGENT
BROADCASTING OF ERIE, INC., REGENT
BROADCASTING OF UTICA/ROME, INC.,
REGENT BROADCASTING OF WATERTOWN, INC.,
REGENT BROADCASTING OF EL PASO, INC.,
each a Delaware corporation
By: /s/ Anthony A. Vasconcellos
-----------------------------------------
Name: Anthony A. Vasconcellos
Title: Vice President and Chief Financial
Officer of each of the forgoing
REGENT BROADCASTING WEST COAST, INC.,
a California corporation
By: /s/ Anthony A. Vasconcellos
-----------------------------------------
Name: Anthony A. Vasconcellos
Title: Vice President and
Chief Financial Officer
S-2
<PAGE> 10
REGENT LICENSEE OF SAN DIEGO, INC.,
REGENT LICENSEE OF KINGMAN, INC,
REGENT LICENSEE OF VICTORVILLE, INC.,
REGENT LICENSEE OF LEXINGTON, INC.,
REGENT LICENSEE OF LAKE TAHOE, INC.,
REGENT LICENSEE OF PALMDALE, INC.,
REGENT LICENSEE OF REDDING, INC.,
REGENT LICENSEE OF CHICO, INC.,
REGENT LICENSEE OF FLAGSTAFF, INC.,
REGENT LICENSEE OF FLINT, INC.,
REGENT LICENSEE OF MANSFIELD, INC.,
REGENT LICENSEE OF SOUTH CAROLINA, INC.,
REGENT LICENSEE OF ST. CLOUD, INC.,
REGENT LICENSEE OF ERIE, INC.,
REGENT LICENSEE OF UTICA/ROME, INC.,
REGENT LICENSEE OF WATERTOWN, INC.,
REGENT LICENSEE OF EL PASO, INC.,
each a Delaware corporation
By: /s/ Anthony A. Vasconcellos
-----------------------------------------
Name: Anthony A. Vasconcellos
Title: Vice President and Chief Financial
Officer of each of the forgoing
S-3
<PAGE> 11
BANK OF MONTREAL, CHICAGO BRANCH,
individually and as Agent
By: /s/ Christopher Young
----------------------------------------
Name: Christopher Young
Title: Director
S-4
<PAGE> 12
GENERAL ELECTRIC CAPITAL CORPORATION,
individually and as Documentation Agent
By: /s/ Kenneth M. Gacevich
----------------------------------------
Name: Kenneth M. Gacevich
Title: Vice President
S-5
<PAGE> 13
BANK ONE, INDIANA, NATIONAL ASSOCIATION
By: (signature not required)
----------------------------------------
Name:
Title:
S-6
<PAGE> 1
EXHIBIT 4(ee)
STOCK PURCHASE AGREEMENT
------------------------
This Stock Purchase Agreement (this "Agreement") dated as of the 31st
day of August, 1999 among REGENT COMMUNICATIONS, INC., a Delaware corporation
(the "Company"), THE ROMAN ARCH FUND L.P., a Delaware limited partnership
("Roman Arch") and THE ROMAN ARCH FUND II L.P., a Delaware limited partnership
("Roman Arch II") (Roman Arch and Roman Arch II collectively referred to as the
"Buyers").
1. AUTHORIZATION. The Company will authorize the sale and issuance
under this Agreement of 181,818 shares (the "Shares") of its Series H
Convertible Preferred Stock (the "Series H Preferred Stock"), having the rights,
privileges and preferences as set forth in the Certificate of Designation (the
"Certificate") in the form attached to this Agreement as EXHIBIT A. The shares
of Common Stock into which the Shares will be convertible are referred to herein
as the "Conversion Stock."
2. SALE AND PURCHASE OF THE SERIES H PREFERRED STOCK. On and subject to
the terms and conditions set forth herein, the Company agrees that it will sell,
issue and deliver to Buyers, and Buyers agree that they will purchase from the
Company on the Closing Date, 181,818 shares of the Series H Convertible
Preferred Stock, as follows:
Roman Arch 109,091 shares
Roman Arch II 72,727 shares
3. CLOSING DATE. The closing of the purchase and sale of the Series H
Preferred Stock hereunder shall be on or before August 31, 1999 (the "Closing")
or at such other time upon which the Company and Buyers shall agree (the date of
the Closing is hereinafter referred to as the "Closing Date").
4. PURCHASE PRICE. The purchase price for the Series H Preferred Stock
is Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine Dollars
($999,999.00) ($5.50 per share) (the "Purchase Price"), which sum Buyers will
pay to the Company by wire transfer of immediately available funds on the
Closing Date.
5. DELIVERIES BY THE COMPANY. At the Closing, the Company will deliver
to Buyers the following:
(a) a stock certificate or certificates representing the
Series H Preferred Stock duly issued in the name of Buyers and bearing the
legends set forth in Section 7(j) hereof;
(b) an opinion of Strauss & Troy, as counsel to the Company,
in the form attached as EXHIBIT B; and
(c) a certificate, dated as of the Closing Date, signed by the
Chairman of the Board, the President of the Company or the Company's Chief
Financial Officer, certifying that the
<PAGE> 2
representations and warranties of the Company contained herein are true and
correct in all material respects at and as of the Closing Date.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to Buyers as follows:
(a) ORGANIZATION AND QUALIFICATION. The Company is a
corporation duly organized and existing under, and by virtue of, the laws of the
State of Delaware and is in good standing under such laws. The Company has
requisite power and authority to own and operate its properties and assets, and
to carry on its business as presently conducted. The Company is authorized to
transact business as a foreign corporation in good standing in those
jurisdictions in which the nature of its activities or the property owned by it
make such qualification necessary.
(b) AUTHORIZATION. All corporate action on the part of the
Company necessary for the authorization, execution, delivery and performance of
this Agreement by the Company, the authorization, sale, issuance and delivery of
(i) the Shares and (ii) the Conversion Stock and the performance of all of the
Company's obligations hereunder has been taken or will be taken prior to the
Closing. This Agreement, when executed and delivered by the Company, shall
constitute the valid and binding obligation of the Company, enforceable in
accordance with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement is subject to general
principles of equity regardless of whether enforcement is considered in a
proceeding at law or in equity. The Shares, when issued in compliance with the
provisions of this Agreement, will be validly issued, fully paid and
nonassessable. The Conversion Stock has been duly and validly reserved and, when
issued in compliance with the provisions of this Agreement, will be validly
issued, fully paid and nonassessable. The Shares and the Conversion Stock will
be free of any liens or encumbrances, other than any liens or encumbrances
created by or imposed upon the holders thereof through no action of the Company;
provided, however, that the Shares and the Conversion Stock will be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein. The issuance of the Shares will not violate any preemptive rights
available to the holders of any of the Company's securities. The Series H
Preferred Stock shall have the rights, preferences, privileges and restrictions
set forth in the Certificate.
(c) COMPLIANCE WITH LAWS. The Company is not in violation of
(i) any applicable order, judgment, injunction, award or decree, or (ii) any
federal, state, local or foreign law, statute, rule, ordinance or regulation or
any other requirement of any governmental or regulatory body, court or
arbitrator applicable to the business of the Company except for violations which
reasonably could not have a material adverse effect on the business or
properties of the Company. The Company has obtained all licenses, permits,
orders and approvals of any federal, state, local or foreign governmental
regulatory body (collectively, "Permits") that are material to or necessary for
the conduct of the business of the Company. All of such Permits are in full
force and effect, no violations are or have been recorded in respect of any
Permit and no proceeding is pending or, to the best of the Company's knowledge,
threatened to revoke or limit any such Permit.
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<PAGE> 3
(d) COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
The Company is not in violation of any term of its Amended and Restated
Certificate of Incorporation or By-Laws, or of any term or provision of any
material mortgage, indebtedness, indenture, contract, agreement, instrument,
judgment or decree. The execution, delivery and performance of and compliance
with this Agreement and the issuance of the Series H Preferred Stock and the
Conversion Stock have not resulted and will not result in any violation of, or
conflict with, or constitute a default under, the Company's existing Amended and
Restated Certificate of Incorporation or By-Laws or any of its agreements or
result in the creation of, any mortgage, pledge, lien, encumbrance or charge
upon any of the properties or assets of the Company.
(e) LITIGATION. Except as set forth on SCHEDULE 1 hereto,
there are no actions, suits, proceedings or investigations pending against the
Company or its properties before any court or governmental agency (nor, to the
best of the Company's knowledge, is there any reasonable basis therefor or
threat thereof).
(f) GOVERNMENTAL CONSENT, ETC. No consent, approval or
authorization of (or designation, declaration of filing with) any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement, or the offer, sale or issuance of the
Series H Preferred Stock and the Conversion Stock, or the consummation of any
other transaction contemplated hereby, except (i) filing of the Certificate in
the office of the Secretary of State of the State of Delaware, and (ii)
qualification (or taking such action as may be necessary to secure an exemption
from qualification, if available) of the offer and sale of the Series H
Preferred Stock and the Conversion Stock under applicable state securities laws,
which filings and qualifications, if required, will be accomplished in a timely
manner.
(g) OFFERING. Subject to the accuracy of the Buyers'
representations in Section 7 hereof, the offer, sale and issuance of the Series
H Preferred Stock to be issued in conformity with the terms of this Agreement,
and the issuance of the Conversion Stock upon conversion of the Series H
Preferred Stock, constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act of 1933, as amended (the
"Securities Act").
(h) BROKERS OR FINDERS. The Company has not incurred, and will
not incur, directly or indirectly, as a result of any action taken by the
Company, any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement.
(i) DISCLOSURE. No representations or warranty by the Company
in this Agreement, nor any statement, document, or certificate, furnished or to
be furnished, to the Buyers in connection herewith, or pursuant hereto, contains
or will contain any untrue statement of a material fact, or omits or will omit
to state any material fact necessary to make any statement herein or therein not
misleading.
(j) NO MATERIAL ADVERSE CHANGE. Between the date of the
financial statements filed as part of the Company's 1999 second quarter 10-Q and
the Closing Date, there has not been any change in the assets, liabilities,
financial condition or operations of the Company from that reflected in
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<PAGE> 4
such financial statements, except changes in the ordinary course of business
which have not been, either in any case or in the aggregate, materially adverse.
(k) FINANCIAL CONDITION. The financial statements of the
Company filed as part of the Company's 1999 second quarter 10-Q ("the Financial
Statements") fairly present, in all material respects, the financial position of
the Company and its subsidiaries as of the dates thereof, and the results of
operations and cash flows of the Company and its subsidiaries as of the dates or
for the periods set forth therein, all in conformity with GAAP consistently
applied during the period involved, except as otherwise set forth in the notes
thereto and subject, in the case of the unaudited financial statements, to the
absence of footnotes and normal year-end audit adjustments.
(l) SECURITIES AND EXCHANGE COMMISSION DOCUMENTS. The Company
has filed all registration statements, proxy statements, reports and other
documents required to be filed by it under the Securities Act of 1933, as
amended, or the Securities and Exchange Act of 1934, and all amendments thereto
(collectively, the "Commission Documents"). Each Commission Document when filed
with the Securities and Exchange Commission was true and accurate in all
material respects and in compliance in all material respects with the
requirements of its respective report form.
(m) CREDIT AGREEMENT. The Company is not in default and no
event has occurred which, with notice or lapse of time or both, would constitute
a default, in the due performance or observance of any term, covenant or
condition contained in that certain Credit Agreement between the Company,
certain lenders and The Bank of Montreal, dated as of November 14, 1997, as
amended (the "Credit Agreement").
7. REPRESENTATIONS AND WARRANTIES OF BUYERS. Buyers hereby represent
and warrant to the Company with respect to the purchase of the Shares as
follows:
(a) NON-REGISTRATION. Buyers understand that the offering and
sale of the Series H Preferred Stock is intended to be exempt from registration
under the Securities Act of 1933, as amended (the "1933 Act"), by virtue of
Section 4(2) of the Act and the provisions of Regulation D promulgated
thereunder, that the Series H Preferred Stock has not been registered under the
1933 Act or under the securities laws of any state, and that the Company will be
under no obligation to effect any such registration.
(b) INVESTMENT INTENT. Buyers are purchasing the Series H
Preferred Stock and the Conversion Stock for their own account, for investment
and not with a view to resale, distribution, or other disposition, and Buyers
have no present plans to enter into any contract, undertaking, agreement or
arrangement for any such resale, distribution or other disposition. They
understand that the Shares and the Conversion Stock have not been, and will not
be, registered under the Securities Act by reason of a specific exemption from
the registration provisions of the Securities Act, the availability of which
depends upon, among other things, the bona fide nature of the investment intent
and the accuracy of such Buyers' representations as expressed herein. Buyers
will not sell or otherwise transfer the Series H Preferred Stock without
registration under the 1933 Act and applicable state securities laws, or
-4-
<PAGE> 5
pursuant to an exemption from the registration requirements thereof which, in
the opinion of counsel reasonably acceptable to the Company, is available for
the transaction.
(c) RULE 144. Buyers acknowledge that the Shares and the
Conversion Stock must be held indefinitely unless subsequently registered under
the Securities Act or unless an exemption from such registration is available.
They are aware of the provisions of Rule 144 promulgated under the Securities
Act which permit limited resale of shares purchased in a private placement
subject to the satisfaction of certain conditions, including, among other
things, the existence of a public market for the shares, the availability of
certain current public information about the Company, the resale occurring not
less than one year after a party has purchased and paid for the security to be
sold, the sale being effected through a "broker's transaction" or in
transactions directly with a "market maker" and the number of shares being sold
during any three-month period not exceeding specified limitations.
(d) NO PUBLIC MARKET. Buyers understand that no public market
now exists for the Shares and that the Company has made no assurances that a
public market will ever exist for the Shares.
(e) STATUS OF BUYERS. Buyers: (i) are "accredited investors,"
as that term is defined in Rule 501(a) of Regulation D promulgated under the
1933 Act, inasmuch as Buyers meet the requirements of subparagraph (a)(3) of
Rule 501; (ii) were not formed for the primary purpose of evading federal or
state securities laws, and (iii) are "Qualified Institutional Buyers" as defined
in 17 CFR .144A(a).
(f) OPPORTUNITY TO REVIEW BOOKS AND RECORDS. Buyers have had a
reasonable opportunity to inspect all documents, books and records pertaining to
the Company and the Series H Preferred Stock and confirm that the Series H
Preferred Stock is being purchased without Buyers' receipt of any offering
literature.
(g) OPPORTUNITY FOR QUESTIONS. Buyers have had a reasonable
opportunity to ask questions of and receive answers from a person or persons
acting on behalf of the Company concerning the Company, its business and
operations, the terms of the Series H Preferred Stock and all other aspects of
investment in the Company, and all such questions have been answered to the full
satisfaction of Buyers.
(h) MANNER OF PURCHASE. Buyers are not subscribing for the
Series H Preferred Stock as a result of or pursuant to any advertisement,
article, notice or other communication published in any newspaper, magazine, or
similar media or broadcast over television or radio, or presented at any seminar
or meeting, or any solicitation of a subscription by a person other than a
representative of the Company.
(i) BROKERS OR FINDERS. Buyers have not incurred, and will not
incur, directly or indirectly, as a result of any action taken by the Company,
any liability for brokerage or finders' fees or agents' commissions or any
similar charges in connection with this Agreement.
-5-
<PAGE> 6
(j) LEGENDS. Buyers understand that the certificate(s)
representing the Series H Preferred Stock shall bear legends in substantially
the following forms, and Buyers shall not transfer any of the shares of Series H
Preferred Stock, or any shares of common stock that may be issued on conversion
thereof, or any interest therein, except in accordance with the terms of such
legends:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or the
securities laws of any state (the "Securities Laws"). These securities
may not be offered, sold, transferred, pledged or hypothecated in the
absence of registration under applicable Securities Laws, or the
availability of an exemption therefrom. This certificate will not be
transferred on the books of the Corporation or any transfer agent
acting on behalf of the Corporation except upon the receipt of an
opinion of counsel, satisfactory to the Corporation, that the proposed
transfer is exempt from the registration requirements of all applicable
Securities Laws, or the receipt of evidence, satisfactory to the
Corporation, that the proposed transfer is the subject of an effective
registration statement under all applicable Securities Laws."
"The issuer is subject to restrictions contained in the Federal
Communications Act, as amended. The securities evidenced by this
certificate may not be sold, transferred, assigned or hypothecated if,
as a result thereof, the issuer would be in violation of that act."
(k) AUTHORITY OF BUYERS. This Agreement, when executed and
delivered by the Buyers will constitute the legal, valid and binding obligation
of Buyers, enforceable against Buyers in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar laws affecting enforcement of creditors' rights generally and except
as enforcement is subject to general principles of equity regardless of whether
enforcement is considered in a proceeding at law or in equity.
(l) NO CONFLICTS. The execution, delivery and performance of
this Agreement by Buyers will not violate in any material respect any provision
of law or any rule or regulation of any federal, state or local governmental
authority to which Buyers are subject, nor result in a breach or violation by
Buyers of any of the terms or provisions of, or constitute an event of default
under, any material indenture, mortgage, trust (constructive or otherwise), loan
agreement, lease or other agreement or instrument to which Buyers are parties or
by which Buyers or their assets are bound. Buyers are not parties to, or subject
to, or bound by, any judgment, award, injunction, order or decree of any court
or governmental authority, or any arbitration award which may restrict or
interfere with the performance by Buyers of this Agreement or such other
documents as may be delivered by Buyers in connection herewith.
(m) LEGAL PROCEEDINGS. There is no action, suit, proceeding or
investigation pending (or, to the knowledge of Buyers, threatened) against
Buyers in, before or by any court, administrative agency or arbitrator affecting
the ability of Buyers to carry out the provisions of this Agreement and the
transactions contemplated hereby.
-6-
<PAGE> 7
8. BUYERS' CONDITIONS TO CLOSING. The Buyers' obligation to purchase
the Shares at the Closing is subject to the fulfillment of the following
conditions:
(a) REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by the Company in Section 6 hereof shall be
true and correct, if limited by materiality, in accordance with the terms
thereof in all respects, and if not so limited by materiality, in all material
respects, as of the Closing Date.
(b) COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with in all material
respects.
(c) COMPLIANCE WITH STATE SECURITIES LAWS. The Company shall
have obtained all permits and qualifications required by any state for the offer
and sale of the Shares and the Conversion Stock, or shall have the availability
of exemptions therefrom.
(d) LEGAL MATTERS. All material matters of a legal nature
which pertain to this Agreement and the transactions contemplated hereby shall
have been reasonably approved by counsel to Buyers.
9. COMPANY'S CONDITIONS TO CLOSING. The Company's obligation to sell
and issue the Shares at the Closing Date is, at the option of the Company,
subject to the fulfillment as of the Closing Date of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES CORRECT. The
representations and warranties made by Buyers in Section 7 hereof shall be true
and correct when made, and shall be true and correct on the Closing Date.
(b) COMPLIANCE WITH STATE SECURITIES LAWS. The Company shall
have obtained all permits and qualifications required by any state for the offer
and sale of the Shares and the Conversion Stock, or shall have the availability
of exemptions therefrom.
(c) LEGAL MATTERS. All material matters of a legal nature
which pertain to this Agreement, and the transactions contemplated hereby, shall
have been reasonably approved by counsel to the Company.
10. REIMBURSEMENT OF LEGAL FEES. The Company hereby agrees to reimburse
Buyers for their legal fees incurred in connection with the negotiation,
execution and performance of this Agreement.
-7-
<PAGE> 8
11. MISCELLANEOUS.
(a) NOTICES. Any notice, request or other document to be given
hereunder to any party shall be effective upon receipt (or refusal of receipt)
and shall be in writing and delivered personally or sent by telecopy or
certified or registered mail, postage prepaid:
(i) if to the Company, addressed to:
Regent Communications, Inc.
50 East RiverCenter Boulevard, Suite 180
Covington, KY 41011
Attn: Terry S. Jacobs, Chairman of the Board
Facsimile: (606) 292-0352
with a copy to:
Strauss & Troy
The Federal Reserve Building
150 East Fourth Street
Cincinnati, Ohio 45202-4018
Attn: Alan C. Rosser, Esq.
Facsimile: (513) 241-8289
(ii) if to Buyers, addressed to:
The Roman Arch Fund
c/o Prudential Securities
One New York Plaza, 18th Floor
New York, New York 10292
Attention: Robert Willard
Facsimile: (212) 778-4677
or to such other address or telecopy number as any party shall have specified by
notice given to the other parties in the manner specified above.
(b) ENTIRE AGREEMENT; AMENDMENT. This Agreement, including the
Exhibits and Schedules hereto, and the other agreements expressly contemplated
by this Agreement, contain the entire agreement between the parties with respect
to the subject matter hereof and supersede all prior oral and written
agreements, memoranda, term sheets, understandings and undertakings among the
parties hereto relating to the subject matter hereof. This Agreement may be
modified or amended only by a written instrument executed by or on behalf of the
parties hereto.
(c) GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Ohio without
regard to the application of its conflicts
-8-
<PAGE> 9
of laws principles. The parties hereby waive all right to trial by jury in any
action, suit or proceeding brought to enforce or defend any rights or remedies
under this Agreement or the transactions contemplated hereby.
(d) SEVERABILITY. In case any provision in this Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions hereof shall not in any way be
affected or impaired thereby.
(e) CONSTRUCTION. The section and subsection headings used
herein are for convenience of reference only, are not a part of this Agreement
and are not to affect the construction of, or be taken into consideration in
interpreting, any provision of this Agreement. As used in this Agreement, the
masculine, feminine and neuter gender each includes the other, unless the
context otherwise dictates. Any and all schedules and exhibits referred to in
this Agreement and attached hereto are and shall be deemed to be incorporated in
this Agreement as if fully set forth herein.
(f) COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same instrument.
(g) SPECIFIC PERFORMANCE. The parties hereto acknowledge that
damages may be an inadequate remedy for any breach of the provisions of this
Agreement and agree that the obligations of the parties hereunder may be
specifically enforceable, and no party will take any action to impede the other
from seeking to enforce such right of specific performance after any such
breach.
(h) SUCCESSORS AND ASSIGNS: ASSIGNABILITY. Except as otherwise
provided herein, this Agreement shall be binding upon and inure to the benefit
of and be enforceable by the parties hereto and their respective successors and
permitted assigns; provided, however, that the right of the Buyers to purchase
the Series H Preferred Stock shall not be assignable without the consent of the
Company. This Agreement (i) shall not confer upon any person other than the
parties hereto and their respective successors and permitted assigns any rights
or remedies hereunder; and (ii) shall not be assignable by either party without
the prior written consent of the other.
(i) FURTHER ASSURANCES. Subject to the terms and conditions
herein provided, each of the parties hereto agrees to use all reasonable efforts
to take, or cause to be taken, all action and to do, or cause to be done, all
things necessary proper or advisable to consummate and make effective the
transactions contemplated by this Agreement.
(j) SURVIVAL. The representations and warranties of the
parties contained herein shall survive execution and delivery of this Agreement
and issuance and delivery of the Series H Preferred Stock hereunder.
-9-
<PAGE> 10
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered, as of the day and year first above written.
COMPANY:
REGENT COMMUNICATIONS, INC.
By: /s/ Terry S. Jacobs
------------------------------
Its: Chairman and CEO
------------------------------
BUYERS:
THE ROMAN ARCH FUND L.P., a Delaware limited
partnership
By: /s/ Robert Willard
------------------------------
Robert Willard, Executive Vice President
THE ROMAN ARCH FUND II L.P., a Delaware limited
partnership
By: /s/ Robert Willard
------------------------------
Robert Willard, Executive Vice President
<PAGE> 1
EXHIBIT 4(ff)
THIRD AMENDMENT
TO
SECOND AMENDED AND RESTATED
STOCKHOLDERS' AGREEMENT
THIS THIRD AMENDMENT TO SECOND AMENDED AND RESTATED STOCKHOLDERS'
AGREEMENT (this "Third Amendment") is made and entered into effective as of
August 31, 1999, by and among Regent Communications, Inc. (as so amended, the
"Company") and the undersigned stockholders (the "Stockholders").
W I T N E S S E T H:
THAT, WHEREAS, the Company and the Stockholders are parties to a
certain Second Amended and Restated Stockholders' Agreement dated as of June 15,
1998, as amended (as so amended, the "Stockholders' Agreement"); and
WHEREAS, on the effective date hereof, The Roman Arch Fund L.P. and The
Roman Arch Fund II L.P. (collectively, "The Roman Arch Funds") purchased shares
of the Company's Series H Convertible Preferred Stock; and
WHEREAS, it is in the best interests of the Company and the
Stockholders that The Roman Arch Funds purchase such shares; and
WHEREAS, as an inducement to The Roman Arch Funds to purchase such
shares, the Company and the Stockholders are willing to cause the Stockholders'
Agreement to be amended to add The Roman Arch Funds as parties to the Agreement.
NOW, THEREFORE, in consideration of the premises and the agreements
contained herein, it is agreed as follows:
1. AMENDMENT. The Stockholders' Agreement is hereby amended to add The
Roman Arch Funds as parties thereto.
2. AGREEMENT TO BE BOUND. The Roman Arch Fund L.P. and The Roman Arch
Fund II L.P., by their execution hereof, agree to be bound by all of the
provisions of the Stockholders' Agreement, as amended.
3. TERMS OF AGREEMENT UNAFFECTED. The terms, conditions and provisions
of Stockholders' Agreement remain in full force and effect.
4. COUNTERPARTS. This Third Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
<PAGE> 2
IN WITNESS WHEREOF, the signatories below have caused this Amendment to
be executed and delivered effective as of the date first above written.
<TABLE>
<CAPTION>
REGENT COMMUNICATIONS, INC. WALLER-SUTTON MEDIA PARTNERS,
L.P.
<S> <C>
By: /s/ Terry S. Jacobs By: Waller-Sutton Media, L.L.C.,
------------------------------
Its: Chairman & CEO Its: /s/ William H. Ingram, Chairman
------------------------------ -------------------------------
/s/ Terry S. Jacobs
- -----------------------------------
TERRY S. JACOBS BLUE CHIP CAPITAL FUND II
LIMITED PARTNERSHIP
/s/ William L. Stakelin By: Blue Chip Venture Company, Ltd.,
- ----------------------------------- its General Partner
WILLIAM L. STAKELIN
/s/ Joel M. Fairman By: /s/ John H. Wyant
- ----------------------------------- -----------------
JOEL M FAIRMAN Its: Manager
--------
MIAMI VALLEY VENTURE FUND, L.P. PNC BANK, N.A., AS TRUSTEE
By: Blue Chip Venture Company of Dayton, By: /s/ Louis E. Valker
Ltd., its Special Limited Partner -------------------------------
Its: Vice President
By: /s/ John H. Wyant
-------------------------------
John H. Wyant, Manager
WPG CORPORATE DEVELOPMENT RIVER CITIES CAPITAL FUND LIMITED
ASSOCIATES V, L.L.C. PARTNERSHIP
By: /s/ Kenneth J. Hanau By: /s/ R. Glen Mayfield
------------------------------ ---------------------------------------
Its: Member Its: Vice President of Mayson, Inc., General
------------------------------ -----------------------------------------
Partner of River Cites Management Limited
-----------------------------------------
Partnership, General Partner of River
-----------------------------------------
Cities Capital Fund Limited Partnership
-----------------------------------------
WPG CORPORATE DEVELOPMENT
ASSOCIATES V (OVERSEAS), L.P. BMO FINANCIAL, INC.
By: /s/ Kenneth J. Hanau By: Yvonne Bos
--------------------------------- -----------------------------------------
Its: Member Its: Senior Vice President
------------------------------ -----------------------------------------
</TABLE>
-2-
<PAGE> 3
<TABLE>
GENERAL ELECTRIC CAPITAL THE ROMAN ARCH FUND L.P.
CORPORATION
<S> <C>
By: /s/ Robert Willard
---------------------------------------
By: /s/ Kenneth M. Gacevich
------------------------------
Its: Executive Vice President
--------------------------------------
Its: Duly Authorized Signatory
------------------------------
THE ROMAN ARCH FUND II L.P.
By: /s/ Robert Willard
-----------------------------------------
Its: Executive Vice President
-----------------------------------------
/s/ William H. Ingram
------------------------------
WILLIAM H. INGRAM
</TABLE>
-3-
<PAGE> 1
EXHIBIT 4(gg)
FIRST AMENDMENT
TO
REGISTRATION RIGHTS AGREEMENT
This First Amendment to Registration Rights Agreement ("this
Amendment") is dated effective as of August 31, 1999, by and among Regent
Communications, Inc. (the "Company") and the undersigned stockholders (the
"Stockholders").
W I T N E S S E T H:
THAT, WHEREAS, the Company and the Stockholders are parties to a
certain Registration Rights Agreement dated as of June 15, 1998 (the
"Agreement") under which the Stockholders have been granted certain registration
rights; and
WHEREAS, on the effective date hereof, The Roman Arch Fund L.P. and The
Roman Arch Fund II L.P. (collectively, "The Roman Arch Funds") purchased shares
of the Company's Series H Convertible Preferred Stock; and
WHEREAS, it is in the best interests of the Company and the
Stockholders that The Roman Arch Funds purchase such shares; and
WHEREAS, as an inducement to The Roman Arch Funds to purchase such
shares, the Company and the Stockholders are willing to cause the Agreement to
be amended to add The Roman Arch Funds as parties to the Agreement.
NOW, THEREFORE, it is hereby agreed as follows:
1. AMENDMENT. The Agreement is hereby amended to add The Roman Arch
Funds as parties thereto.
2. AGREEMENT TO BE BOUND. The Roman Arch Fund L.P. and The Roman Arch
Fund II L.P., by their execution hereof, agree to be bound by all of the
provisions of the Agreement.
3. TERMS OF AGREEMENT UNAFFECTED. The terms, conditions and provisions
of the Agreement remain in full force and effect.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
-1-
<PAGE> 2
IN WITNESS WHEREOF, the signatories below have caused this Amendment to
be executed and delivered effective as of the date first above written.
<TABLE>
<CAPTION>
REGENT COMMUNICATIONS, INC. WALLER-SUTTON MEDIA PARTNERS,
L.P.
<S> <C>
By: /s/ Terry S. Jacobs By: Waller-Sutton Media, L.L.C.,
------------------------------
Its: Chairman & CEO Its: /s/ William H. Ingram, Chairman
------------------------------ ---------------------------------------
/s/ Terry S. Jacobs
- -----------------------------------
TERRY S. JACOBS BLUE CHIP CAPITAL FUND II
LIMITED PARTNERSHIP
/s/ William L. Stakelin By: Blue Chip Venture Company, Ltd.,
- ----------------------------------- its General Partner
WILLIAM L. STAKELIN
By: /s/ John H. Wyant
Its: Manager
MIAMI VALLEY VENTURE FUND, L.P. PNC BANK, N.A., AS TRUSTEE
By: Blue Chip Venture Company of Dayton, By: /s/ Louis E. Valker
Ltd., its Special Limited Partner ----------------------------------------
Its: Vice President
By: /s/ John H. Wyant
-------------------------------
John H. Wyant, Manager
WPG CORPORATE DEVELOPMENT RIVER CITIES CAPITAL FUND LIMITED
ASSOCIATES V, L.L.C. PARTNERSHIP
By: /s/ Kenneth J. Hanau By: /s/ R. Glen Mayfield
------------------------------ ---------------------------------------
Its: Member Its: Vice President of Mayson, Inc., General
------------------------------ -----------------------------------------
Partner of River Cites Management Limited
-----------------------------------------
Partnership, General Partner of River
-----------------------------------------
Cities Capital Fund Limited Partnership
-----------------------------------------
WPG CORPORATE DEVELOPMENT
ASSOCIATES V (OVERSEAS), L.P. BMO FINANCIAL, INC.
By: /s/ Kenneth J. Hanau By: Yvonne Bos
--------------------------------- -----------------------------------------
Its: Member Its: Senior Vice President
------------------------------ -----------------------------------------
</TABLE>
-2-
<PAGE> 3
<TABLE>
GENERAL ELECTRIC CAPITAL THE ROMAN ARCH FUND L.P.
CORPORATION
<S> <C>
By: /s/ Robert Willard
---------------------------------------
By: /s/ Kenneth M. Gacevich
------------------------ Its: Executive Vice President
--------------------------------------
Its: Duly Authorized Signatory
------------------------------
THE ROMAN ARCH FUND II L.P.
/s/ William H. Ingram By: /s/ Robert Willard
------------------------------ -----------------------------------------
WILLIAM H. INGRAM
Its: Executive Vice President
-----------------------------------------
/s/ Thomas P. Gammon
- ----------------------------------
THOMAS P. GAMMON
</TABLE>
-3-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM REGENT
COMMUNICATION INC.'S FINANCIAL STATEMENTS AS OF AND FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,125,187
<SECURITIES> 0
<RECEIVABLES> 4,859,492
<ALLOWANCES> (203,000)
<INVENTORY> 0
<CURRENT-ASSETS> 15,911,512
<PP&E> 19,177,149
<DEPRECIATION> 6,995,213
<TOTAL-ASSETS> 89,143,090
<CURRENT-LIABILITIES> 21,562,081
<BONDS> 28,046,307
52,086,042
3,370,856
<COMMON> 2,400
<OTHER-SE> (18,913,448)
<TOTAL-LIABILITY-AND-EQUITY> 89,143,090
<SALES> 17,465,670
<TOTAL-REVENUES> 17,465,670
<CGS> 0
<TOTAL-COSTS> 17,603,908
<OTHER-EXPENSES> (86,516)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,429,695
<INCOME-PRETAX> (2,481,367)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,481,367)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,481,367)
<EPS-BASIC> (26.91)
<EPS-DILUTED> (26.91)
</TABLE>
